By Jenny Ruth
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Thursday 6th May 2010 |
Text too small? |
ANZ Bank's 22% increase in first-half earnings confirms his positive view on the stock, says David Ellis, an analyst at Aegis Equities Research.
"The key earnings drivers are pointing in the right direction and we expect to see further solid growth in earnings and dividends over the next few years at least," Ellis says.
"Margins continue to improve, earnings from New Zealand have started to recover, lending growth in the institutional book is set to move forward, bad debts should stabilise, the Asian growth strategy is falling into place and the key Australian banking and wealth management businesses are increasing earnings momentum," he says.
While earnings had been significantly impacted by bad debts in recent years, there are now more positive signs of stabilisation.
"The decisive leadership of chief executive Mike Smith ensured the bank was well-placed to deal with the difficult market conditions, bead debts and funding difficulties over the recent past," Ellis says.
ANZ's future earnings outlook is considerably brighter and its regional growth strategy, organisational restructure and focus on underlying business momentum will support earnings growth, he says.
"The bank is very well capitalised and looking for more opportunistic acquisitions in Asia and/or Australia."
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