ANZ Bank has responded to the final Reserve Bank of New Zealand reforms noting there is a reduced impact on CET1 capital for the group and remains confident it can meet the requirements without the need to raise additional capital.
The total impact on CET1 is expected to be $4.5bn. While Morgan Stanley did not believe the bank would require a capital raising, it did estimate the net NZ pay-out ratio would need to fall to 30% from 80% to meet the tier 1 target by 2023.
Based on these proposals, the pay-out ratio will not need to fall as much. Equal-weight rating maintained. Target is $24.80. Industry view: In-Line.
Target price is $24.80.Current Price is $24.70. Difference: $0.10 - (brackets indicate current price is over target). If ANZ meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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