ANZ shares push higher amid asset sale and dividend bump hopes

ANZ Group Holdings Ltd (ASX: ANZ) shares are on the move on Wednesday.

In morning trade, the banking giant’s shares are up 1% to $28.95.

ANZ shares higher on asset sale

Investors have been buying the bank’s shares on Wednesday after it announced the sell down of an Southeast Asian asset.

According to the release, the bank has agreed to sell 16.5% of the issued capital in AMMB Holdings Bhd (AmBank) via a block trade at a price of MYR3.85 per share (A$1.25 per share).

AmBank is a leading financial services group with over 40 years of expertise in supporting the economic development of Malaysia. It has over three million customers and employs over 9,000 people.

This sale will reduce the bank’s shareholding in AmBank from 21.7% to 5.2%. Management notes that this transaction is in line with its strategy of simplifying the bank.

Following the sale, ANZ will still have one nominated director on the AmBank Board.

What now?

The release notes that the sale proceeds will increase ANZ’s CET1 ratio by approximately 16bps and is not expected to have a material impact on its profit. Settlement is anticipated to occur on 8 March 2024.

The good news for shareholders is that the sale could have implications for future dividend payments.

The bank has advised that ANZ’s capital management considerations will include the capital release from this sale, subject to regulatory approvals.

This could mean an even bigger dividend yield than expected over the next 12 months. Not that it isn’t already among the most generous on the market.

At present, Goldman Sachs is forecasting fully franked dividends per share of $1.62 in FY 2024 (as well as FY 2025 and FY 2026). This equates to a dividend yield of approximately 5.6% for income investors based on current prices.

The post ANZ shares push higher amid asset sale and dividend bump hopes appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs Group. 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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