It has been a robust year for ANZ shares.
The post How is the ANZ (ASX:ANZ) share price performing against its sector in 2021? appeared first on The Motley Fool Australia. –
The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price surged to a multi-year high last month. The potential permanent reopening of Australia’s economy following the accelerated vaccination program has led to positive investor sentiment.
ANZ shares are up 23% in 2021. In comparison, CBA shares are hovering around 24% higher, with NAB and Westpac up 26% and 34%, respectively.
When measured against the S&P/ASX 200 Index (ASX: XJO), the index has risen about 14% over the same period.
What’s driving ANZ shares forward?
There are a couple of reasons why the ANZ share price has moved forward in recent times.
First and foremost, the bank released its third-quarter business update to the market on 18 August.
ANZ highlighted its CET1 ratio came in at 12.2%, a slight reduction from the 12.4% recorded in the previous period. In addition, the $1.5 billion buyback, which commenced on 4 August, is expected to reduce its CET1 ratio by 35 basis points.
The company also revealed a total provision release of $32 million for the quarter. This comprises an individual provision charge of $21 million and a collective provision release of $53 million.
The provision balance stood at $4.25 billion, with a collective provision coverage ratio of 1.24%.
In terms of the COVID-19 impact, ANZ noted that it has handed out roughly 1,300 customer loan deferrals during the current lockdown. This reflects about $600 million in value or 0.2% on its total home loan portfolio.
The other possible catalyst for the ANZ share price rise is, as mentioned above, Australia’s speedy vaccination program. The federal government has acknowledged that once vaccination targets of 70% are met, relaxed restrictions will follow. This will see businesses get back to work and restart Australia’s economy. In turn, people will be able to service their loans, and the default rates will drop.
A number of brokers weighed in on the company’s share price last month with similar price points.
Analysts at Goldman Sachs raised their outlook on ANZ shares by 0.8% to $30.74. However, JPMorgan recently cut its price target by 4.9% to $29.10 with a “neutral rating”.
ANZ share price snapshot
It’s been a blissful 12 months for ANZ shareholders, with the share price posting a multi-year high of $29.64 on 13 August.
When looking at a longer time frame, the company’s share price is up around 85% since March 2020.
ANZ commands a market capitalisation of roughly $79.9 billion, making it the sixth-largest company on the ASX.
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Motley Fool contributor Aaron Teboneras 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.