ANZ share price hits 52-week high following Q1 update

The ANZ Group Holdings Ltd (ASX: ANZ) share price is having a positive start to the week.

In morning trade, the banking giant’s shares are up over 1% to $28.03.

Why is the ANZ share price rising?

Investors have been bidding the ANZ share price higher today in response to the release of the bank’s quarterly update.

While the update provides only limited financial information, it does give the market a good idea of how the bank is performing in FY 2024.

According to the release, first quarter group revenue was in line with the first half FY 2023 quarterly average of $5.26 billion. This reflects broadly flat Non-Markets revenue, assisted by growth in average interest earning assets.

Management also advised that its Institutional Division’s Markets business had a good start to the year with revenues a little better than the first half FY 2023 quarterly average of $575 million.

Costs, lending, and debts

Another positive was commentary around its expenses, which remain under control. Management said:

ANZ has demonstrated a proven ability over many years to manage our expenses well and while facing into ongoing inflationary pressures, we continue to execute on productivity initiatives to partially offset these headwinds.

In respect to lending, its growth remains robust across its Australia Retail and Commercial franchises. Management highlights that its investment in home loan processing capability and capacity and improved broker experience is providing ongoing benefits.

Furthermore, ANZ is continuing to grow its Australian Home Loan book profitably by continuing to offer reliable turnaround times, and competitive but not market leading pricing. Pleasingly, lending growth was substantially self-funded across both Divisions by deposits.

Finally, the bank’s total provision charge was $53 million, comprising a $27 million individual provision charge and a $26 million collective provision charge. Australian Housing 90+ days past due is 70 basis points, which remains well below pre-Covid levels.

What are analysts saying?

Goldman Sachs has run the rule over the update and was pleased with what it saw. This may explain why the ANZ share price is lifting today. It said:

ANZ released its 1Q24 and Pillar 3 disclosure for the quarter ended 31-Dec-23. ANZ’s 1Q24 Group revenue was in line with the 1H23 quarterly average (1H23QA of A$5.26 bn) with Non-Markets revenue broadly in line (1H23QA A$4.69 bn). 1Q24 BDDs (A$53 mn charge) were better than what was implied by prior 1H24 forecasts, and we note that while asset quality has continued to normalize, across various metrics it remains remain better than pre-Covid levels. 1Q24 CET1 ratio of 13.06% was broadly in line with what was implied by our prior forecasts.

The post ANZ share price hits 52-week high following Q1 update 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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