And the dividend yield will improve each time the price goes down too!
Until you buy some, of course.
Printable View
Just remember ANZ have the largest chunk of loans in the ASX Mining sector of the Big Aussie banks some 12-13 billion outstanding ..how much of this will default will be interesting with very few miners making a profit currently ..
http://www.barrons.com/articles/dont...cks-1452579741
Yes we will find out on 17 Feb what the fwd guidance is for the half yr result due out in early May.......
I actually would like to BUY a position in ANZ ,,,but not yet more round Tax loss selling MAY-JUNE (low 20's NZX) ...good yield ....and a good play on AUD weakness that will rebound on better AUS economy going forward .....
And also very interested to see how ANZ would value themselves when I borrowing funds from them ?
IMHO ANZ the best of the Big four ...using P/E ratio /divi payout ratio/Yield and personal banking experience
but they may have more risky a loan book
Citi rates ANZ a "Buy".
"Citi rates ANZ as Buy (1) - Citi analysts note how investors have started to price Australian banks differently with CommBank leading the pack in terms of relative valuation. The analysts argue this sector bifurcation doesn't appear justified. In their view, current circumstances are making operational performances more uniform across the sector.
Negative capital generation is driving CET1 ratios lower for all banks with little or no buffer, point out the analysts. They believe share price falls add to valuation support for the sector in general.
Citi's Major Bank order of preference has ANZ Bank (Buy) first, then National Australia Bank (Buy), then Westpac (Neutral) and finally CBA (Neutral); in complete opposite order of current market pricing.
Target price is $33.25 Current Price is $24.41 Difference: $8.84 If ANZ meets the Citi target it will return approximately 36% (excluding dividends, fees and charges). Current consensus price target is $30.90, suggesting upside of 26.6%(ex-dividends)The company's fiscal year ends in September.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 184.00 cents and EPS of 257.50 cents . At the last closing share price the estimated dividend yield is 7.54%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.48. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 254.2, implying annual growth of -6.4%.Current consensus DPS estimate is 182.9, implying a prospective dividend yield of 7.5%.Current consensus EPS estimate suggests the PER is 9.6.Forecast for FY17:
Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of 256.90 cents . At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.50. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 261.9, implying annual growth of 3.0%.Current consensus DPS estimate is 185.5, implying a prospective dividend yield of 7.6%.Current consensus EPS estimate suggests the PER is 9.3."
There was an odd story on Stuff suggesting ANZ New Zealand might still using Windows XP and Office 2003? More importantly while Citi are ranking ANZ a buy but Morgan Stanley think they will cut second half dividends.
The December 15th 2015 UDC Prospectus release, at last gets the details of what happened at UDC during FY2015 out into the public arena.
https://www.udc.co.nz/pdf/UDC_Prospectus_69.pdf
The 'profit before tax' is listed as $79.323m (p34). But this includes a provision for credit impairment of $10.427m which I would remove to get the picture of ongoing operational performance. So I get EBT of $89.750m.
Now go to note 4 (p43) on interest expense. There is underlying interest over and above what is due to debenture holders of $18.951m.
So total underlying EBIT = $89.750m + $18.951m = $108.701m
Now turn to page 45 (note 6) and you will see total net loans and advances of: $2,347.163m
So the operating margin based on the end of year loan balance book is:
$108.701m/$2,347.163m = 4.63%
A significant improvement on FY2014 and it continues the improvement from a 3.87% margin in FY2012
SNOOPY
Time to normalise the UDC figures for 2015 so they can be compared more directly with the likes of Heartland Bank.
Heartland in FY2015 had selling and administration expenses of $68.403m (Heartland FY2015 report 'Selling & Administration Expenses', note 5). UDC had total operating expenses of $32.278m (UDC prospectus note 4). That is a difference of $36.125m. The two are comparable in that they have a similarly sized loan book (UDC:$2,347.183m, Heartland $2,862.070m). If we add the operating cost difference figure onto the UDC cost structure, what would that do to the UDC operating margin on assets?
FY2015: ($108.701-$36.125+ $10.464)/$2,347.183 = 3.53%
Note: UDC do not have a branch network of their own, but operate through ANZ bank branches in New Zealand. The $10.464m added back represents the adding back of 'fees paid to related parties' (ANZ). These are part of the $36.125m 'extra operating expenses (p43 note 4). The $10.464m could be thought of as a contribution to the ANZ branch network that allows UDC to carry on business as normal. But what I am interested in is the difference in operating cost of a finance company with and without a branch network. So this $10.464m which largely reflects a branch network allowance must be removed from my comparison.
This calculation shows the underlying margin at UDC to be slightly improved from FY2014's 3.37%.
SNOOPY
An update on the post financial crisis profitability trends. The Heartland comparative figures only start from FY2012, because that is when Heartland started to exist in its current form.
UDC Heartland EBT Loan Book EBT/Loan Book EBT Loan Book EBT/Loan Book FY2009 $34.024m $1,829.156m 1.86% FY2010 $45.012m $1,968.771m 2.29% FY2011 $46.382m $1,948.552m 2.38% FY2012 $58.476m $2,014.473m 2.90% $29.377m $2,078.276m 1.41% FY2013 $66.787m $2,065.117m 3.23% $36.540m $2,010.376m 1.82% FY2014 $83.501m $2,272.081m 3.68% $57.416m $2,607.393m 2.20% FY2015 $89.750m $2,347.163m 3.82% $76.304m $2,862.070m 2.67%
Reference for data (UDC): (p32 of 2015 prospectus (No.69) , p33 of 2014 prospectus) (Profit before Income tax & Credit Impairment, Net loans and advances)
Reference for data (Heartland): AR2015, AR2014 Statement of Comprehensive Income Operating profit, Statements of Financial Position)
SNOOPY
Updating the actual bad debt write offs in relation to the size of the loan book at the end of FY2015. Section 7 in the UDC 2015 prospectus is named "Provision for Credit Impairment". Bad debts actually written off are compared against the 'provision for loan impairment' stated on page 32, the 'Summary Financial Statement', which were $10.427m (FY2015) and $11.733m (FY2014).
UDC Bad Debt Write Off New Bad Debt Provision FY2010 $17.343m FY2011 $4.891m FY2012 $10.164m $6.031m FY2013 $12.399m $7.123m FY2014 $18.633m $11.733m FY2015 $12.162m $10.427m
Actual write offs are down, coming off a spike from FY2014
Putting these actual write offs as a percentage of the end of year loan book gives them better context.
FY2012: $10.164m/$2,014.473m = 0.505%
FY2013: $12.399m/$2,065.117m = 0.600%
FY2014: $18.633m/$2,272.081m = 0.820%
FY2015: $12.162m/$2,347.163m = 0.518%
This is an improvement back towards FY2012 values.
For comparative purposes, it is informative to look 'over the fence' to Heartland Bank. Note 6 (AR2015) details impaired asset expense as follows:
FY2012: $5.642m
FY2013: $22.527m
FY2014: $5.895m
FY2015: $12.105m
Normalize these against the total finance receivables
FY2012: $5.642m/ $2078.3m = 0.271%
FY2013: $22.527m/ $2010.4m = 1.12%
FY2014: $5.895m/ $2607.4m = 0.226%
FY2015: $12.105m/ $2862.1m = 0.423%
It is interesting to see that Heartland's write offs are increasing whereas UDC write offs are decreasing. The overall write offs for Heartland are nevertheless still less in percentage terms than UDC.
UDC Debt Write Off Heartland Debt Write Off FY2012 0.505% 0.271% FY2013 0.600% 1.12% FY2014 0.820% 0.226% FY2015 0.518% 0.423%
SNOOPY