ANZ Group Holdings Ltd (ASX: ANZ) saw a slight uplift in its share price on Tuesday following the release of its third-quarter results. The share price rose 0.64% to $29.93, showcasing a positive reception from investors who appeared content with the bank’s latest performance metrics.
During this quarter, ANZ demonstrated solid growth across a number of key financial areas. Notably, customer deposits increased by 2% from the previous quarter, signaling healthy liquidity and consumer trust. A significant portion of this upsurge was attributed to growth in Institutional deposits, which can offer the bank greater financial stability due to their often larger deposit size and longevity.
Further underpinning the bank’s performance was a substantial 3% growth in net loans and advances (NLA), which equated to a $19 billion rise. This increase in lending activities was witnessed across all major divisions, including Australia Retail, Australia Commercial, New Zealand, and the Institutional business. Such an across-the-board advance stresses the bank’s robust market activity and could point to an encouraging broad-based demand for credit.
Additionally, ANZ reported a 1% increment in exposure at default (EAD), bolstering its risk profile. The major contributors to this upward trend were residential mortgages and Sovereigns and Financial Institutions, reflecting a growing portfolio and, potentially, a heightened confidence in the bank’s risk management capabilities.
ANZ’s approach to risk management was further apparent through its provisions in the past quarter. The total provision charge stood at $45 million, with individual and collective provision charges amounting to $27 million and $18 million, respectively. These figures indicate a strategic cushioning against potential credit losses.
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The bank also noted a decrease in gross impaired assets (GIA), reducing from $1.5 billion to $1.4 billion. This suggests an improvement in the quality of the bank’s asset portfolio. However, on a less positive note, the Australian Housing 90+ Days Past Due (DPD) increased to 84bps, indicating that some borrowers have become less prompt with their repayments, a situation that warrants close monitoring.
Investors have generally demonstrated support for ANZ’s strategic direction and financial health, as evidenced by a 23% increase in its share price over the past 12 months. This year-on-year climb reflects the collective market judgment that the bank is navigating its operational and competitive challenges with commendable proficiency.
This quarter’s update further cements the notion that ANZ is moving forward with a strong lending growth and a firm handle on its risk profile. Nonetheless, while the current period’s outcomes are promising, the bank and its shareholders will remain vigilant of any macroeconomic changes that could influence financial performance in the forthcoming periods.
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