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ANZ (ASX:ANZ) share price on watch after revealing $129 million profit hit

Here’s what will be impacting this banking giant’s profits…
The post ANZ (ASX:ANZ) share price on watch after revealing $129 million profit hit appeared first on The Motley Fool Australia. –

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

This follows the release of an announcement by the banking giant after the market close.

Why is the ANZ share price on watch?

All eyes will be on the ANZ share price after it revealed a couple of large notable items that will impact its second half profits.

According to the release, the banking giant expects its second half statutory and cash profit for FY 2021 to be impacted by two charges totalling $129 million after tax. It notes that this is the equivalent of 3 basis points of CET1 capital at level two.

What are the charges?

The majority of the notable items relate to remediation charges. ANZ expects remediation charges of $113 million after tax in the second half. This reflects banking product reviews in the Australia Retail and Commercial division.

The remaining $16 million after tax is for unspecified restructuring charges.

While this may disappoint some shareholders, others may be relieved that it isn’t anywhere near as bad as what rival Westpac Banking Corp (ASX: WBC) recently announced.

Last week, Australia’s oldest bank revealed that its second half results would be hit by $1.3 billion of notable items.

This comprises $965 million for asset write downs, $172 million in additional provisions relating to customers refunds, $267 million for separation and transaction costs for the Westpac Life Insurance business, and $24 million for costs relating to other divestments.

The ANZ share price is up 23% since the start of the year. Shareholders will no doubt be hoping this announcement doesn’t stifle its impressive run.

The post ANZ (ASX:ANZ) share price on watch after revealing $129 million profit hit appeared first on The Motley Fool Australia.

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More reading

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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.

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