2020 Full Year Result & Proposed Final Dividend

ANZ today announced an unaudited[1] Statutory Profit after tax for the Full Year ended 30 September 2020 of $3.58 billion, down 40% on the prior comparable period.

Cash Profit[2] for its continuing operations was $3.76 billion, down 42% on the prior comparable period.

This decrease was primarily driven by Full Year credit impairment charges of $2.74 billion, which increased from prior year due to the impact of COVID-19 and a first half impairment of Asian associates of $815 million, also related to the pandemic.

ANZ’s Common Equity Tier 1 Capital Ratio remained strong at 11.3%, while Return on Equity decreased to 6.2%. The proposed Final Dividend is 35 cents per share, fully franked.

CEO COMMENTARY

ANZ Chief Executive Shayne Elliott said: “We could never have forecast 2020, a year that started with devastating bushfires in Australia and unwound with the waves of a pandemic that continues today. While we still cannot predict its course, we remain confident we can deal with its impacts.

“As a bank, we entered 2020 in robust condition. We have a strong balance sheet with record levels of capital and liquidity as well as provisions for potential future losses. We want our customers to know we will continue to do all we can to support them through the tough times.

“In Australia, we achieved strong growth in our targeted home loan segments with above system growth in the owner-occupier market. Deposits remained strong as customers took a sensible approach to managing their household balance sheets. We also saw an accelerated shift away from the use of cash and we introduced new processes to help many customers move to online banking.

“Institutional performed well in a market defined by high levels of liquidity, low interest rates and geopolitical tensions. Increased volatility led to strong activity in Markets demonstrating the benefits of a diversified business. As Australia’s leading international bank, we remain well positioned to assist customers as the global economy improves.

“COVID-19 is contained in New Zealand and we remain well positioned to benefit from its subsequent economic recovery. While it was a tough revenue environment, given low interest rates and a focus on reducing or simplifying fees, we have maintained market leadership in our targeted segments.

“While our immediate focus has been on assisting customers, we have also taken steps to protect the interests of our shareholders by maintaining our strong capital position, tightly managing costs and bolstering credit reserves, while still managing to pay a prudent dividend without diluting their holdings,” Mr Elliott said.

DIVIDEND & CAPITAL

ANZ’s capital position remains strong and has improved further in the fourth quarter with a Level 2 Common Equity Tier 1 capital ratio of 11.3% (11.4% on a pro-forma basis). This outcome includes the impact of the 25 cents per share interim dividend, and additional provisions for potential credit losses.

This capital strength and ANZ’s underlying profitability has enabled us to announce a proposed fully-franked 2020 final dividend of 35 cents per share which will be paid to shareholders on Wednesday, 16 December 2020. This represents a dividend payout ratio of 35% on a Cash Profit basis for the Second Half (ex-large/notables) and 49% on a Statutory earnings basis for the same period.

Outgoing ANZ Chairman David Gonski, who retired as Chairman at the conclusion of yesterday’s Board meeting, said: “We have focused on supporting our customers while also building the strength of our balance sheet. The Board is pleased capital ratios are largely unchanged from a year ago, despite the economic conditions and without the need for an equity raise which would have diluted existing shareholders.

“This gradual increase in our dividend from the deferred half-year dividend paid in September will also help support our shareholders who we know rely on dividends, while remaining in line with APRA’s guidance on dividends,” Mr Gonski said.

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