Australia and New Zealand Banking Group Ltd

Interim Result: Australia and New Zealand Banking Group Ltd.’s(ASX: ANZ) stock fell 0.478% on August 13, 2018 while the bank gave interim results for the June 2018 quarter and nine months (three quarters) performance of FY 18. For nine months of 2018, ANZ has delivered 3.7% growth in the net interest income to NZ$2,352 million and 12.4% rise in profit after tax to NZ$1,432 million. In the June quarter, the company has reported net interest income of NZ$796 million and profit after tax of NZ$474 million compared to NZ$755 million and NZ$428 million respectively in the corresponding quarter last year. Moreover, ANZ has increased its current on-market share buy-back, commenced on 15 January 2018, by a further $1.5 billion to a total of $3 billion. The bank has reported Level 2 Common Equity Tier 1 capital (CET1) ratio as at 31 March 2018 of 11.04%. This would expand by approximately 56bp on a pro forma basis after the adjustment for completion of the buy-back, receipt of the reinsurance proceeds and completion of announced asset sales. Meanwhile, ANZ stock has risen 4.38% in three months as on August 10, 2018  and is trading at a reasonable P/E of 12.52x. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $29.170.
 

Bendigo and Adelaide Bank Ltd

Net Profit lower than the market expectations in 2018: Bendigo and Adelaide Bank Ltd.’s (ASX: BEN) stock fell 0.35% on August 13, 2018 after the group for FY18 delivered 1.1% growth in the statutory profit to $434.5m while the market was expecting the net profit after tax of $453.9 million, according to the consensus estimate. For the FY18, BEN has reported 6.4% rise in cash earnings to $445.1m, net interest margin (before revenue share arrangements) expanded by 14 basis point to 2.36% compared to the prior corresponding period. The net interest margin rose mainly due to repricing activity both in the lending and deposit portfolio. Other operating income fell 9.2% primarily due to a reduction in trading book revaluation income and a reduction in ATM and transaction fees charged to customers. Further, in 2018, Common Equity Tier 1 ratio was up 35 basis points to 8.62% compared to June 2017 and the total capital was 12.85% compared to 12.46% in June 2017. The bank has increased the final dividend by 1 cent to 35 cents compared to the final dividend for June 2017. Meanwhile, BEN stock has risen 6.13% in three months as on August 10, 2018. Based on the foregoing and the trading level, we give an “Expensive” recommendation on the stock at the current price of $ 11.390.
 

FY 18 Financial Performance (Source: Company Reports)

 
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.