ANZ will hold back the payment of an interim dividend to shareholders after first-half cash earnings fell 62 percent on a $ 1 billion COVID 19 success.
The four major lenders announced on Thursday that they had postponed their first-half payout according to instructions from APRA, which banks and insurers should take seriously until the economic outlook is clearer.
A year ago, it paid shareholders 80 cents per share.
The deferral results from a 51 percent decrease in ANZ’s statutory net income in the six months ended March 31 to $ 1.54 billion due to $ 1.674 billion in impairment charges, including an increase in credit reserves by $ 1.031 billion for COVID-19 impact.
The bank said that the valuation of investments in Asian associates was also impacted by $ 815 million in the half year, mainly due to the effects of COVID-19. Cash profit decreased 62 percent to $ 1.32 billion and operating income decreased 4.0 percent to $ 8.89 billion.
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ANZ chairman David Gonski said the decision to delay paying a dividend does not reflect the bank’s financial health.
He said ANZ had received no concerns about capital levels from APRA.
“The Board agrees with the regulator’s guidelines that postponing a decision on the 2020 interim dividend is prudent given the current economic uncertainty and that a decision would not have been appropriate at the time,” said Gonski.
“This was a very difficult decision and the board of directors has been reviewing all of the options available as we understand the impact this will have on those shareholders who are dependent on dividends.”
ANZ said it would “consider all factors” in the coming months and continue to assess the evolving situation, including the severity of the closures, before a final position on the interim dividend is determined.
FIRST HALF OF COVID-19
* Operating income decreased 4.0 percent to $ 8.89 billion
Cash profit decreased 62 percent to $ 1.32 billion
* Net income decreased 51 percent to $ 1.54 billion
* Deferred interim dividend
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