ANZ.NZX - Anyone holding?

[Grimy]

ANZ quite a bit under NTA today. I'm having to sit on my hands so I don't push the buy button...….

[BlackPeter]

ANZ quite a bit under NTA today. I'm having to sit on my hands so I don't push the buy button...….

Always difficult to pick bottoms, but I think the chances are you can buy them next week still cheaper ;

[Grimy]

And possibly cheaper still the week after that!
Perhaps I should just go outside and mow the lawns. I've already done the housework and replaced a toilet seat and had an hour's walk.

[Mr Slothbear]

Both ANZ and Westpac are looking very undervalued. In a vacuum I would be jumping into both of these with both feet. The only issue is evaluating them relative to the opportunity cost when everything else is similarly dropping significantly and for some things undervalue territory

[BlackPeter]

Both ANZ and Westpac are looking very undervalued. In a vacuum I would be jumping into both of these with both feet. The only issue is evaluating them relative to the opportunity cost when everything else is similarly dropping significantly and for some things undervalue territory

Clearly - currently fear is controlling the stock exchanges, but not quite sure whether the drop of the banking industry as a whole is so surprising. Just think about the risks:

Tourism worldwide just fall of a cliff - it is now fair to assume that most of the industry is loosing now at least one full season. Many tourism operators might not have the financial headroom to survive and bite the dust. The banks who gave them money might not look that flash afterwards either.

Many highly indebted countries are currently pumping huge additional funds into some first aid of their economies. Some might be able to afford this additional debt, many will do it anyway and some will crumble, particularly considering that tax take will drop at the same time. Bankrupt companies don't pay taxes anymore. Just wondering whats happening with the banks holding large amount of bonds of the countries (some of the obvious might be e.g. Italy, Spain, Greece, Turkey) which won't make it financially.

Unemployment will rise worldwide. No need to employ waiters, maids, cleaning staff, chefs, airline staff and so on if nobody is travelling and hardly anybody going out. Unemployed people will have problems to repay their loans. Some might have enough financial headroom but most will not.

I am not saying this is the end of the world, but the value of our banks is currently dependent on a lot of things we can't really assess. While I think that ANZ is one of the stronger and less impacted banks ... only time will tell.

Pretty sure lower loan repay rates and higher unemployment will make life for ANZ and Westpac uncomfortable as well. Not sure about them holding sub prime bonds of indebted countries (but they well might - remember NZ Super fund loosing money in a Portuguese bond?).

I hold a small amount of ANZ shares, but I am not sure now is the best time to top up.

[Mr Slothbear]

Thanks for your reply BP.

Clearly - currently fear is controlling the stock exchanges, but not quite sure whether the drop of the banking industry as a whole is so surprising. Just think about the risks:

Tourism worldwide just fall of a cliff - it is now fair to assume that most of the industry is loosing now at least one full season. Many tourism operators might not have the financial headroom to survive and bite the dust. The banks who gave them money might not look that flash afterwards either.

Many highly indebted countries are currently pumping huge additional funds into some first aid of their economies. Some might be able to afford this additional debt, many will do it anyway and some will crumble, particularly considering that tax take will drop at the same time. Bankrupt companies don't pay taxes anymore. Just wondering whats happening with the banks holding large amount of bonds of the countries (some of the obvious might be e.g. Italy, Spain, Greece, Turkey) which won't make it financially.

Unemployment will rise worldwide. No need to employ waiters, maids, cleaning staff, chefs, airline staff and so on if nobody is travelling and hardly anybody going out. Unemployed people will have problems to repay their loans. Some might have enough financial headroom but most will not.

I am not saying this is the end of the world, but the value of our banks is currently dependent on a lot of things we can't really assess. While I think that ANZ is one of the stronger and less impacted banks ... only time will tell.

Pretty sure lower loan repay rates and higher unemployment will make life for ANZ and Westpac uncomfortable as well. Not sure about them holding sub prime bonds of indebted countries (but they well might - remember NZ Super fund loosing money in a Portuguese bond?).

I hold a small amount of ANZ shares, but I am not sure now is the best time to top up.

Loans to the tourism industry are certainly a potential risk. Quite a bit will depend on how much govt. support they are given to make sure the can see it through.

in terms of traditional home mortgage lending I really see this as very low risk. 35% minimum deposit for investors or 20% for most owner occupiers and 10% for a very small number with higher margins and strict criteria. Most would rather skip meals and cut other expenses than lose their house.

both ANZ and westpac are very well capitalised. ANZ having 11% of CET1 capital.

the biggest risk I see is the interest rate cut in Australia which will put pressure on margins but also most likely reduce stress on some loans.

I like ANZ divesting their non core businesses like the JV in cambodia and sticking to Aus and NZ

statutory profit for both companies was significantly negatively impacted in 2019 due to remediation costs so once we add that back in for fy20 I think things should be looking much rosier.

[stoploss]

Thanks for your reply BP.




Loans to the tourism industry are certainly a potential risk. Quite a bit will depend on how much govt. support they are given to make sure the can see it through.

in terms of traditional home mortgage lending I really see this as very low risk. 35% minimum deposit for investors or 20% for most owner occupiers and 10% for a very small number with higher margins and strict criteria. Most would rather skip meals and cut other expenses than lose their house.

both ANZ and westpac are very well capitalised. ANZ having 11% of CET1 capital.

the biggest risk I see is the interest rate cut in Australia which will put pressure on margins but also most likely reduce stress on some loans.

I like ANZ divesting their non core businesses like the JV in cambodia and sticking to Aus and NZ

statutory profit for both companies was significantly negatively impacted in 2019 due to remediation costs so once we add that back in for fy20 I think things should be looking much rosier.

30 % deposit for Investment properties currently

[macduffy]

30 % deposit for Investment properties currently

It's not recent/current lending that may be a problem. Rather, it's all those low deposit loans made in previous years.

[Entrep]

Look at that spread today - what the heck happened?

[Biscuit]

Market seems reasonably comfortable with the interim, despite the rather large fall in cash profit, dividend decision deferred, and provisions.