ANZ issues dividend despite challenges from coronavirus pandemic

One of Australia’s major banks has decided it will pay shareholders an interim dividend despite ongoing challenges caused by coronavirus.

ANZ has decided to pay its shareholders an interim dividend despite warning challenges still remain within the banking industry due to the coronavirus pandemic.

In an update to the Australian Stock Exchange, the major bank posted an unaudited cash profit of $1.5 billion for the June quarter. The bank’s statutory profit was $1.33 billion.

ANZ’s decision to issue an interim dividend of 25 cents per share comes after Westpac on Tuesday announced it would not provide shareholders with a dividend, saying the economic outlook remains too uncertain due to COVID-19.

ANZ’s dividend represents 46 per cent of its statutory profit.

ANZ chief executive Shayne Elliott said the bank has been able to grow the size of its home lending portfolio over the quarter despite a challenging backdrop induced by the virus.

“During the quarter we have grown home loans in Australia well above the rest of the

market. We are also pleased with the strong deposit growth, demonstrating customers are

taking a prudent approach in shoring up their personal finances,” he said.

“We are better placed than when we went into the global financial crisis with investments in data analytics and real-time monitoring systems allowing us to spot trends quickly and respond to our customers’ needs promptly.”

ANZ CEO Shayne Elliott said the bank had been able to grow the size of its home lending portfolio over the quarter despite a challenging backdrop induced by the virus. Picture: AAP Image/Attila Csaszar

ANZ’s total provision charge was $500 million, which is lower than the average provision charges in the previous two quarters.

Incumbents within the banking industry had experienced higher provision expenses as a result of the coronavirus pandemic, which increased estimated bad and doubtful debts.

ANZ said approximately 84,000 home loan accounts had repayments suspended through COVID-19 hardship assistance measures.

The six-month loan deferrals on repayments are valued at $31 billion and represent 9 per cent of the bank’s home lending portfolio.

At July 31, roughly 22,000 business loan repayments, valued at $9.5 billion, had been deferred, representing 14 per cent of the bank’s commercial lending book.

ANZ was also able to boost its liquidity buffers, improving its common equity tier one capital ratio by 37 basis points to 11.1 per cent.

“We’ve been able to build on our strong capital position this quarter, and this has enabled us

to pay a dividend that balances the needs of our shareholders with the uncertain economic

environment,” ANZ chairman David Gonski said.