Australia and New Zealand Bank- Deep Financial Analysis

AUSTRALIA
AND
NEWZEALAND
BANK LIMITED

Contents
Industry description..................................................................................................................................3
Company description................................................................................................................................4
Financial Instruments Analysis.................................................................................................................5
Financial Ratio Analysis.............................................................................................................................6
Three Key financial ratios for the bank are:..........................................................................................6
Part B – Competitor Analysis................................................................................................................7
Financial Market Analysis.........................................................................................................................8
Findings, Conclusion and Recommendations...........................................................................................9
References..............................................................................................................................................10

Australia and New Zealand Bank- Deep Financial Analysis
Industry description
Australia’s banking industry contributes a major share in the financial system.It also comprised of
147 authorised deposit-taking institutions which aggregate hold $4.6 trillion in assets, around two-
and-a-half times the size of Australia’s $1.8 trillion nominal economy. The major banks like
Australia and New Zealand Bank (ANZ), Bank of Queensland, Commonwealth Bank of Australia etc.
aggregate makes up 44% of the market capitalisation of the S&P/ASX20 and approximately 27% of
the market capitalisation of the S&P/ASX100.2 in terms of value. (S&P Dow Jones Indices LLC,
2019)
The main regulators of this high-profile industry are:
i)Australian Prudential Regulation Authority (APRA) – An integrated prudential regulator which
acts as watchdog for ADIs and some other insurance and superannuation. (Thomson Reuters. ,
2019)
ii) Australian Securities and Investments Commission (ASIC) – It develops policies, guidance,
enforcing legislative compliances and promotes honesty and fairness in company affairs.
(Thomson Reuters. , 2019)
iii) Reserve Bank of Australia (RBA) – Being the central bank of the country, it is responsible for
framing and implementation of monetary policy and maintenance of financial stability.
(Thomson Reuters. , 2019)
iv) Extent of Regulators Powers in the context of ensuring compliance:
 APRA has strong statutory powers to ensure compliance to prudential standards framed by
it and even revoke an entity’s license for breach of these standards.
 ASIC enforces the provisions of the Corporations Act, thus, controlling malpractices like
insider trading and market manipulation.
 RBA functioning under the Reserve Bank Act 1959 (RBA Act) governs the ADIs in terms of
aligning their objectives with the goals of monetary policy, however interfering only in
matters of public concern.
It is critical for the industry to maintain its housing loan portfolios as it represents a substantial
portion of the market for all ADIs. Thus, it can be reasonably asserted that the construction
industry exercises significant influence over this industry as it supplies around 60% customer base
for the banks. (Reserve Bank Of Australia, 2019)

Company description1
a) The business has four divisions:
v) Australia – Offers full range of banking services at a retail level
vi) Institutional – Mainly serving global institutional and corporate customers in Australia, New
Zealand, Europe, America, Middle East etc. with three products, viz Transaction Banking,
Loans & Specialised Finance and Markets.
vii) Wealth Australia – Provides investment, superannuation, insurance and financial advice
services
viii) Asia Retail & Pacific – Basically, the collection of business units in the Asia-Pacific region
b) Ownership Structure
Top Shareholders Capital (%)
HSBC Custody Nominees (Australia) Limited 24.3
J P Morgan Nominees Australia Limited 15.53
Citicorp Nominees Pty Limited 6.84
National Nominees Limited 3.71
BNP Paribas Nominees Pty Ltd <Agency Lending Drp
A/C> 2.11
c) Being a bank, ANZ is a prominent institution in the industry playing the role of a financial
intermediary. It is designated as an ADI as per the Australian banking legislations.
Overall, it basically plays the following roles:
12018 Annual Report
24.3
15.53
6.84
3.71
2.11
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Nominees Pty Ltd <Agency Lending Drp A/C>