ASX-listed ANZ Group Holding Limited (AU:ANZ) reported a rise in its home loan arrears as inflation bites borrowers’ ability to repay. In its Q3 update, the bank revealed that the percentage of Australian housing loans overdue by 90 days or more increased by 5 basis points to 84 basis points. Overall, ANZ’s update underscores the operational challenges faced by Australian banks as they navigate inflation, high interest rates, and borrower distress. ANZ shares gained 0.47% as of writing.
ANZ ranks among the top four banks in Australia, with operations in around 30 markets.
ANZ Reports Q3 Financial Highlights
In Q3 FY24, ANZ reported a 2% quarter-over-quarter growth in its customer deposits, with institutional deposits (excluding Markets) increasing by 6%. Meanwhile, net loans and advances grew 3% for the same period.
Additionally, ANZ’s common equity tier 1 (CET1) ratio, an important indicator of a bank’s financial strength, declined slightly to 13.3% at the end of June from 13.5% at the end of March.
By the end of the June quarter, ANZ’s total provision charge for bad and doubtful debts reached approximately AU$45 million. This provision is a precautionary measure to cover potential future loan defaults, reflecting the bank’s cautious approach in the face of economic uncertainties.
Is ANZ a Good Stock to Buy Now?
Post-update, Citi analyst Brendan Sproules reiterated his Sell rating on the stock, predicting a downside of 18%.
According to TipRanks’ analyst consensus, ANZ stock has received a Hold rating based on three Buy, one Hold, and three Sell recommendations. The ANZ share price forecast is AU$28.19, which is 5.75% below the current trading price.
