The ANZ Group Holdings Ltd (ASX: ANZ) share price has started the week in the red.
In early trade, the banking giantâs shares are down 3.5% to $23.65.
Why is the ANZ share price under pressure?
The good news is that todayâs decline has nothing to do with a broker downgrade, another bank collapse, nor fears that a recession is coming.
The even better news is that this decline is, in many respects, actually a positive for shareholders.
Thatâs because the pullback in the ANZ share price is in response to the rights for the bankâs upcoming dividend payment becoming settled after its shares traded ex-dividend.
When a share trades ex-dividend, it tends to drop in value with the amount of the dividend. This is to reflect the fact that new buyers wonât be receiving this payment. Instead, the rights to the dividend will remain with the seller come pay day.
The ANZ dividend
When ANZ released its half-year results earlier this month, the bank reported record first-half cash earnings of $3,821 million. This was up 12% on the second half of FY 2022.
In light of this solid earnings growth, the ANZ board decided to increase its fully franked interim dividend by 9.5% to 81 cents per share.
Eligible shareholders can now look forward to receiving this dividend in their nominated accounts in a little over six weeks on 3 July.
Whatâs next?
More good news for shareholders is that a similar dividend is expected in the second half by analysts at Citi.
According to a note from last week, the broker has pencilled in a full-year dividend of $1.64 per share.
If this estimate is on the money, it will mean a fully franked 83 cents per share final dividend later this year. It will also mean a very attractive 6.7% dividend yield based on where the ANZ share price closed on Friday.
The post Why is the ANZ share price sinking on Monday? appeared first on The Motley Fool Australia.
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More reading
- 5 things to watch on the ASX 200 on Monday
- These are the best ASX 200 bank shares to buy now: analysts
- Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
- The top 10 ASX shares held by millionaires
- Want to score the boosted ANZ dividend? You better hurry!
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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