ASX-listed ANZ Group Holding Limited (AU:ANZ) saw an 8% year-over-year drop in its annual cash profit to AU$6.73 billion in FY24. The bottom line was mainly hit by intense competition in the mortgage market and a rise in loan repayment delays. Loan repayments more than 90 days overdue surged 47% year-over-year, reaching their highest level since 2020. ANZ shares rose 1.32% in today’s trading.
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ANZ ranks among the top four banks in Australia, with operations in around 30 markets.
Australian Banks Report Lower Profits
Yesterday, another major Australian bank, National Australia Bank Limited (AU:NAB), reported a decline in cash profit and cautioned about inflationary pressures ahead. Meanwhile, last week, Westpac Banking (AU:WBC) reported a 3% drop in its annual profit for FY24, as rising costs offset the growth in its margins.
The latest results highlight the challenging times for Australian banks as they begin to lose the advantages of a high interest rate environment. With the possibility of rate cuts in Australia next year, pressure on profit margins may increase, further intensifying competition for home loan customers.
ANZ Reveals FY24 Numbers
In FY24, ANZ revealed a slight decline in its total operating income to AU$20.8 billion, while expenses rose nearly 6% to reach AU$10.7 billion. Within its segments, the company reported a 7% increase in home loans and a similar rise in customer deposits in the Australian Retail division.
Meanwhile, the bank’s net interest income fell 3% year-over-year to A$505 million, primarily due to a 13 basis points decline in net interest margin.
Additionally, the bank unveiled a full-year dividend of $1.66 per share, down 5% over last year’s payments.
Is ANZ a Good Stock to Buy Now?
According to TipRanks’ analyst consensus, ANZ stock has received a Hold rating based on three Buy, four Hold, and two Sell recommendations. The ANZ share price forecast is AU$28.49, which is 11.25% below the current trading price.
