ANZ Group Earnings: Home Loan Growth Eats Into Margins but Still a Solid Result

ANZ Group’s 14% increase in fiscal 2023 cash profit to a record AUD 7.4 billion is largely as we expected. The result was driven by net interest margins up 7 basis points to 1.7%, loan growth of 5%, and bad debt expenses remaining low at 4 basis points of average loans. Earnings weakened over the year, with second-half profit down 6% on the first half, and this negative earnings trajectory likely why ANZ Group continues to trade at a material discount to our unchanged AUD 31 fair value estimate.