ANZ mum on dividends despite most borrowers resuming payments

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    ANZ is keeping its options open when it comes to shareholder dividends.

    ANZ chair Paul O’Sullivan said at the bank’s annual general meeting Wednesday that its dividend policy will be guided by the COVID-19 crisis, despite the fact that most of its customers affected by the pandemic have started making loan repayments again.

    O’Sullivan said that he was “acutely aware” that dividends were important to shareholders, and promised to review the bank’s approach next year, according to a report by The Sydney Morning Herald.

    “Ultimately, our final decision as a board will be influenced by how the remainder of the crisis evolves, particularly from a macro-economic perspective, and our views on the longer-term sustainability of the dividend,” O’Sullivan said.

    At the onset of the pandemic in March, banks coordinated with the federal government and regulators to offer customers the ability to halt loan repayments for six months. The repayment deferral period was subsequently extended by another four months.

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    However, 80% of ANZ borrowers have now begun making repayments on loans paused in March, the Herald reported.

    The steepest drop in ANZ loan deferrals came in October, with 95,000 frozen accounts reported mid-month falling to 33,000 in November, then 31,000 as of Dec. 11.

    O’Sullivan said that the drops show an improving environment, but “there’s still a lot of uncertainty out there.”

    In October, ANZ set aside $1.1 billion for bad loans as chief executive Shayne Elliott predicted that customers would feel the real economic pain in mid-2021, the Herald reported. However, O’Sullivan told shareholders that ANZ was monitoring conditions and said that previous projections may have been overly cautious.

    “Your board will continue to keep an eye on the provisions, continue to estimate whether or not they are adequate, or indeed, whether they may have been over-provided for,” he said.

    Original Article