ANZ capital management update

ANZ today announced it intends to buy-back up to $1.5 billion of shares on-market as part of its capital management plan.

ANZ Chairman Paul O’Sullivan said: “Despite the very real challenges being experienced by many of our customers, we have the financial strength to continue to support our customers, while also returning surplus capital to shareholders. After reviewing options, we consider an on-market buy-back to be the most prudent, fairest and flexible method to return capital in the current environment.

“Our capital position may allow future capital returns to be considered, however we will continue to focus on balanced and prudent outcomes for all stakeholders,” Mr O’Sullivan said.

ANZ Chief Executive Officer Shayne Elliott said: “After taking into consideration the ongoing pressures in some parts of the economy due to COVID, including the current lockdowns in parts of the country, the strength of our balance sheet and ongoing financial performance means we are in a position to return a modest amount of surplus capital to shareholders through a buy-back of shares on-market.

“Just as we supported our customers through previous lockdowns we stand ready and able to provide assistance to those that need it. The strength of our business means we are well placed to fulfil needs of our customers and the broader community while still actively managing our capital,” Mr Elliott said.

Capital impact

ANZ’s reported Level 2 and Level 1 Common Equity Tier 1 capital (CET1) ratios as at 31 March 2021 were 12.4% and 12.2% respectively, well in excess of APRA’s stated unquestionably strong capital requirement of 10.5%.

The on-market buy-back is expected to reduce ANZ’s March 2021 CETI ratio by approximately 35 basis points.

A purchase of shares is likely to begin in August 2021.

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