Australia and New Zealand Banking Group Ltd
ANZ Details
UDC sale scrapped by the bank:Australia and New Zealand Banking Group (ASX: ANZ) has announced that they are not proceeding with the sale of UDC Finance to HNA Group as the agreement with HNA has now been terminated in accordance with the contracted timeframe. Previously, New Zealand’s Overseas Investment Office had declined HNA Group’s application to acquire UDC Finance. Moreover, the bank will continue to assess the strategic options regarding the future of UDC. It is interesting to note that UDC is a very profitable business, has a strong capital position and a growing loan portfolio across a range of industries.
Improving CET1 ratio over the years (Source: Company Reports)
Meanwhile, ANZ stock has fallen 5.06% in three months as on January 12, 2018 owing to the banking sector headwinds and royal commission, and still trades at a reasonable level. Based on the recent announcement on share buyback of $1.5 million, ANZ might enhance its buyback program to a value of up to $2.5 million to $3 billion in FY18. This coupled with asset sales will help the group witness an improved Common Equity Tier 1 ratio. The group is also focusing on its digital capability and this with low cost and better customer experience will provide effective business platforms. With a long-term positive view on this income stock, we give a “Buy” recommendation at the current price of 28.65
.png)
ANZ Daily Chart (Source: Thomson Reuters)
National Australia Bank Ltd
NAB Details
Efforts on cost savings:With 2.5% rise in cash earnings for FY17, National Australia Bank Ltd (ASX: NAB) has continued on its journey to stay competitive with peers on return on equity. The group’s efforts also were reflected in terms of productivity savings of $301 million. During the year, NAB formed MLC Super Fund by merging five of the super funds into one to create Australia’s largest retail super fund. This has led to cost savings through lower fees and offering more investment options to the investors for managing their retirement savings. The Australia’s government is looking to boost the competition among funds in the world's fifth largest pension market, that is currently valued at $1.5 trillion. Moreover, NAB has planned an estimated $1.5 billion increase in investment over the next three years and has a key focus to drive a major uplift in innovation and capabilities in the Group’s leading Australian SME franchise. NAB is currently targeting greater than $1 billion of cumulative cost savings by 30th September 2020, as the bank is significantly simplifying and automating processes, that reduces procurement and third-party costs, and gets closer to its customers with a flatter organizational structure. On the other hand, NAB stock has fallen 7.89% in three months as on January 12, 2018 and is also trading at a reasonable level. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of 29.47
.png)
NAB Daily Chart (Source: Thomson Reuters)
Bank of Queensland Ltd
BOQ Details
Raised $350 million through the Capital Notes offer:Bank of Queensland Ltd (ASX: BOQ) through the Capital Notes offer has raised $350 million by the issue of 3.5 million Capital Notes for $100 each. After a strong investor demand, the size of the offer was increased from $325 million to $350 million. Further, BOQ has also confirmed the allocation policy applicable to the Offer and the Distribution Rate applicable to the first Distribution in respect of the Capital Notes, that is expected to be paid on 15 February 2018. Moreover, BOQ has seen a 30% uplift in mortgage application volumes in recent weeks that gives the bank confidence of a return to growth in the second half. The bank has attained its 1% underlying expense growth target and have embarked on a transformation program to find further productivity efficiencies across the organisation. Additionally, the increased mortgage momentum, outlook for revenue growth and capital optionality will all provide a strong framework to deliver on the full year targets. The industry is facing the challenges of low credit growth, low interest rates, regulatory uncertainty, rapidly changing consumer expectations and increased scrutiny of conduct and culture. However, based on the recent developments and trading levels and the macro landscape, we give a “Hold” recommendation on the stock at the current price of $12.59
.png)
BOQ Daily Chart (Source: Thomson Reuters)
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.