ANZ (ASX:ANZ) share price on watch after announcing $1.5bn buy-back

ANZ isn’t letting recent COVID-19 outbreaks stop it from returning funds to shareholders…
The post ANZ (ASX:ANZ) share price on watch after announcing $1.5bn buy-back appeared first on The Motley Fool Australia. –

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch closely on Tuesday.

This follows the release of an announcement after the market close on Monday.

Why is the ANZ share price on watch?

After the market close on Monday, ANZ released an update on its capital management plans.

According to the release, ANZ intends to buy-back up to $1.5 billion of shares on-market as part of its capital management plan.

This news could give the ANZ share price a boost, especially given how many analysts felt the recent COVID-19 outbreak could mean the banks postpone capital management plans.

ANZ’s Chair, Paul O’Sullivan, commented: “Despite the very real challenges being experienced by many of our customers, we have the financial strength to continue to support our customers, while also returning surplus capital to shareholders. After reviewing options, we consider an on-market buy-back to be the most prudent, fairest and flexible method to return capital in the current environment.”

Positively, the capital returns may not stop there. Mr O’Sullivan commented: “Our capital position may allow future capital returns to be considered, however we will continue to focus on balanced and prudent outcomes for all stakeholders.”

ANZ’s Chief Executive Officer, Shayne Elliott, advised that the bank took into account the current lockdowns when making the decision to undertake an on-market buy-back.

He said: “After taking into consideration the ongoing pressures in some parts of the economy due to COVID, including the current lockdowns in parts of the country, the strength of our balance sheet and ongoing financial performance means we are in a position to return a modest amount of surplus capital to shareholders through a buy-back of shares on-market.”

“Just as we supported our customers through previous lockdowns we stand ready and able to provide assistance to those that need it. The strength of our business means we are well placed to fulfil needs of our customers and the broader community while still actively managing our capital,” Mr Elliott added.

The bank expects to begin purchasing shares on-market in August 2021.

Capital impact

The good news for shareholders and the ANZ share price is that ANZ’s balance sheet will remain strong even after this capital return.

The release explains that ANZ’s reported Level 2 and Level 1 Common Equity Tier 1 capital (CET1) ratios were 12.4% and 12.2% respectively, at the end of March. This was well in excess of APRA’s stated unquestionably strong capital requirement of 10.5%.

Following this on-market buy-back, ANZ’s March 2021 CET1 ratio would reduce by approximately 35 basis points. This would mean ratios of 12.05% and 11.85%, respectively.

The ANZ share price is up 18% since the start of the year.

The post ANZ (ASX:ANZ) share price on watch after announcing $1.5bn buy-back appeared first on The Motley Fool Australia.

Should you invest $1,000 in ANZ right now?

Before you consider ANZ, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ANZ wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

5 things to watch on the ASX 200 on Tuesday

ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher

Does Google plan to disrupt the ASX banks of CBA, ANZ, NAB and Westpac?

It hasn’t been a great week for the ANZ (ASX:ANZ) share price so far
Why are ASX 200 bank shares in focus on Wednesday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!