ANZ out with annual results.

Similar to WBC, it’s all about the “sweeteners”, the rise in the payout, plus the buyback, to gloss over the relatively flat financial outcomes, with NPAT down a touch, NIM’s, ROE’s, also down.

ANZ are still preparing to swallow the SUN banking arm, so some ROE dilution is to be expected, and adjusting for that does make the ROE look better at the margin.

Arrears are rising, as they are for all players; having spent years fearing a material rise in arrears due to struggling households, now that it’s happening I find myself in the somewhat curious position of thinking “well, it really requires falling house prices to get worried”.

After all, for now at least, you can always sell your way out of trouble, and given the massive equity cushions out there (and, nationally, house prices continue to rise! ; let alone fall…) there’s little risk to the banks themseleves.

We are underweight the banks, but it is mostly a relative value call on CBA, which is (as everyone who isn’t long will tell you) the most expensive bank in the world.

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