ANZ Bank’s interim dividend of 25 cents per share has won over the share market, even though management set aside another $500 million for the costs of the pandemic.
The bank’s interim dividend was well down on its 80 cents per share payout for the same period last year. Yet a dividend was a relief to shareholders, after bosses postponed a decision in view of COVID-19.
Rival Westpac on Tuesday said it would not pay an interim dividend, while the Commonwealth and NAB reduced their payouts.
Investors had raised ANZ shares by 3.87 per cent to $18.77 at 1510 AEST.
The bank had third quarter cash earnings of $1.59 billion. It did not provide earnings results for the same period last year.
Management was wary of the ongoing pandemic, and the $500 million provision in the June quarter to guard against bad debts adds to $1,674 million taken in the first half.
Loan deferrals were the main area of concern.
There were 84,000 home loan accounts with repayments deferred as of July 31.
These home loan balances are worth $31 billion, or 12 per cent of the bank’s $268 billion home loan portfolio.
The bank claims two thirds of these account holders have stable or improved income.
More customers with deferrals were from Victoria than other state or territory, showing the impact of stage four restrictions in Melbourne.
Victorians accounted for 32 per cent of the 84,000 home loan deferrals, followed by New South Wales residents (27 per cent).
There were also 22,000 business accounts with deferrals, worth $9.5 billion.
Chief executive Shayne Elliot said the bank was better placed than it had been for the Global Financial Crisis, as data analytics technology allowed staff to identify trends quickly and respond.
However he believed there could be more obstacles to come.
“You only need to look at the reintroduction of community lockdowns in Victoria and Auckland to realise we all still have a way to go before this virus is behind us,” he said.