ANZ full-year earnings snapshot
Nicholas Grove  |  25/10/2012Text size  Decrease  Increase  |  

Nicholas Grove: ANZ has announced its results for the 2012 financial year and here to give investors his initial impressions of the bank's earnings, I'm joined by Morningstar's David Ellis. David, thanks very much for joining us.

David Ellis: Pleasure Nick.

Grove: First of all, David, were ANZ's earnings and dividend above, in line with, or below what you were expecting?

Ellis: $5.66 billion, that's a touch higher than what we were expecting but pretty much in line. The surprise was the dividend, which was a solid increase. They are 4 per cent higher but we were looking for about 5 per cent higher. So, the final dividend was just a touch under what we were expecting.

Grove: David, what were the key drivers of this result?

Ellis: Good top-line revenue growth made up of interest income, about 4 per cent, 5 per cent growth in interest income, 3 per cent growth in non-interest income, so it was good to see some top-line revenue growth, particularly in the economic conditions that we're in with relatively modest credit growth. Cost control was good, particularly in the second half. Second-half costs were flat on first half, and so the equation of pretty solid revenue growth with lower cost growth means good upside, uplift in underlying earnings.

Grove: Finally David, was there anything about the result that surprised you or that will alter your outlook for the bank?

Ellis: The dividends were a little bit lower than we were expecting and also there was guidance from ANZ that they're going to maintain their payout ratio at round about 65 per cent. We were forecasting a little bit higher than that, so we've had to pull back our forecast a bit to account for that. Credit growth, also credit quality, loan quality, ANZ guided for some weakness there and with expectations of higher bad debt - not much higher but a little bit higher bad debts in the next few reporting periods. So, we've increased our bad debt provisions, we've pulled back our dividend forecast a touch, but importantly, we still maintain that ANZ and all four major banks are going to continue to grow dividends and maybe in 2013 or 2014 we might see some capital management initiatives, which could be special dividends or share buybacks for the major banks.

Grove: David, thanks very much for your time.

Ellis: Pleasure Nick.

Video Archive...

Taxing times for trustees?
05/03/2015  The government may have moved to address the tax concessions into super but trustees face a number of potential taxing issues.
Trustees under the spotlight
--  SMSF Association’s Andrea Slattery talks about the growing professionalism of the industry and what it means for trustees.
An insight into 4 top managers
02/03/2015  Morningstar’s Tom Whitelaw outlines the qualities behind this year’s fund manager of the year awards.
1 top stock set to open doors
27/02/2015  Morningstar's Peter Warnes shares his thoughts on results from the likes of QBE, BHP, Ramsay Health Care and Woolworths as the curtains close on the half-year earnings season.
Telstra picks right man for top job
20/02/2015  Morningstar's Peter Warnes gives his take on the most recent batch of corporate earnings, while also sharing his views on the appointment to the top job at Telstra.
2 stocks in earnings sweet spot
13/02/2015  Morningstar's Peter Warnes takes a look at the latest results from two big names in healthcare, as well as earnings from CBA and Telstra.
A further rate cut?
11/02/2015  Further rate cuts are expected while the Australian dollar will remain overvalued, according to Ibbotson’s Brad Bugg.
What's in store for listed investments?
05/02/2015  While the growth in LICs is more cyclical, ETFs continue to develop from stronger structural growth.
Key issues for SMSFs
02/02/2015  A government inquiry and tax concessions are among the key issues confronting trustees.
Emerging supermarket competitors
22/01/2015  Recent increased sales numbers from global supermarket chain Aldi continues to add competitive pressure on Australia’s big players.
Top SMSF tips for 2015
21/01/2015  Keeping up-to-date on legislative changes, avoiding excess contributions and ensuring sufficient cash flow is in place are just some of the simple things trustees can do to get a better handle on their SMSF.
Overcoming home bias
15/01/2015  Beyond Australia's borders and within the global investment universe lies a much more diverse range of opportunities across multiple sectors.
3 investment ideas for 2015
09/01/2015  What are the key themes investors should be aware of over the next 12 months? We identify the red flags and opportunities facing investors in 2015
Get your game on with this stock pick
05/01/2015  Crown's long duration licenses will allow the casino operator to continue to earn returns above its cost of capital over the next decade and beyond.
Opportunities in internet stocks
23/12/2014  Focused on sustainable competitive advantages, Morningstar StockInvestor's Matt Coffina sees potential in a handful of Internet stocks today.
Market outlook for 2015
18/12/2014  Morningstar's Peter Warnes gives investors an idea of what to expect from the Australian share market over the coming year, while also providing some tips for a stronger portfolio.
Morningstar's new ETF ratings
10/12/2014  Morningstar’s Tim Murphy discusses the new ETF analyst ratings and reports that are now available to investors.
Top opportunities in hybrids
09/12/2014  After a recent broad widening in pricing, investors may find opportunities in some of the older-style bank notes and high-quality corporate issuers.
Iron ore's changing landscape
03/12/2014  With small, high-cost miners set to struggle, Chinese growth to flatten and the low-cost majors pushing hard on expansion, the face of iron-ore mining is set to look very different.
Will QE boost European stocks?
28/11/2014  As ECB members hint quantitative easing could come sooner than expected in the Eurozone, we examine the prospects for European stock markets. From Morningstar UK.