ANZ has confirmed it will plough the proceeds from its stake in Shanghai Rural Commercial Bank into a $1.5 billion share buyback.
The lender on Monday said it had completed the $1.8 billion sale of its 20 per cent holding – which was announced in January – and confirmed the buyback chief executive Shayne Elliott flagged in October while unveiling a $6.94 billion full-year profit.
ANZ shares closed up 66.5 cents, or 2.4 per cent, at $28.88 on the news, making them the best performing of the big four banks on Monday.
ANZ, which has already purchased $500 million of shares to offset the impact of its dividend reinvestment program, on Monday said there could be more to come following the continued divestment of assets including its Australian life insurance business.
“ANZ’s strong capital position combined with the progress made in simplifying our business means we are now in a position to commence returning surplus capital to shareholders while still complying with APRA’s unquestionably strong capital requirements,” chief financial officer Michelle Jablko said.
ANZ lifted its common equity Tier 1 capital ratio 0.96 percentage points over the 12 months to September 30 to 10.6 per cent.
That’s above the 10.5 per cent ‘unquestionably strong’ benchmark the Australian Prudential Regulation Authority has told banks to reach by 2020.