ANZ has released its Q3 update today…
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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be on watch today.
This follows the release of the banking giant’s third quarter update this morning.
What happened in the third quarter?
At the end of the third quarter, ANZ finished the period in a very strong capital position, which could bode well for the ANZ share price today.
The banking giant’s CET1 ratio stood at 12.2%. And while the recently announced $1.5 billion on-market share buy-back will cause it to fall by 35 basis points, this is still well-ahead of APRA’s unquestionably strong benchmark of 10.5%. This could potentially mean further capital returns in the near future.
The bank also revealed a total provision release of $32 million for the quarter. This comprises a provision charge of $21 million and a collective provision release of $53 million.
At the end of the period, the company’s provision balance was $4.25 billion. This gives it a collective provision coverage ratio 1.24%.
COVID loan deferrals
ANZ provided the market with an update on customer loan repayment deferral support related to current lockdowns. Pleasingly for the ANZ share price, the data is very positive.
The bank advised that it has provided ~1,300 loan deferrals during the current lockdowns. Positively, this reflects just ~$600 million or ~0.2% of loans on a total housing loan portfolio of ~$280 billion. Furthermore, the current deferrals are the equivalent to just ~1% of total deferrals provided in the prior 2020/2021 deferral period.
It is a similar story for Australian Business Lending, with just ~50 loan deferrals in place. This represents less than 0.3% of its total business loans. This is well below the ~24,000 business loans provided with repayment deferrals in the prior deferral period.
Unsurprisingly, approximately 80% of the housing and business loan deferrals are on loans in New South Wales.
What about its earnings?
As with the third quarter update by Westpac Banking Corp (ASX: WBC) yesterday, but unlike National Australia Bank Ltd (ASX: NAB) last week, ANZ elected not to provide the market with details on its earnings for the third quarter.
Investors will have to wait patiently for its full year results later this year for details on that.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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.