ANZ ready to buy back $1.5b shares
ANZ is launching a $1.5 billion share buyback after finalising the sale of its 20 per cent stake in Shanghai Rural Commercial Bank.
Shares in the bank rallied more than 2 per cent yesterday — outstripping gains among other big-four lenders — following the revelation.
The shares purchase follows ANZ selling life insurance and wealth management businesses in recent months for $3.8 billion.
Chief executive Shayne Elliott flagged the possibility of a buyback last week after inking a $2.85 billion deal to sell ANZ’s life insurance division to Swiss titan Zurich.
It agreed in October to sell its pensions and investments operations to wealth manager IOOF for almost $1 billion.
The stake in the Shanghai Rural Commercial Bank was sold for about $1.8 billion this year to China Cosco Shipping Corporation and Baoshan Iron and Steel Co.
ANZ chief financial officer Michelle Jablko said the bank was in a strong financial position and making progress in simplifying its business.
That meant it was “now in a position to commence returning surplus capital to shareholders while still complying with ... capital requirements [imposed by regulators]”, Ms Jablko said.
ANZ plans to buy “up to” $1.5 billion in its own stock from next month, subject to market conditions.
The bank has already shelled out $500 million buying its own stock to “neutralise the effect of the dividend reinvestment program for both the interim and final 2017 dividends as well as the impact of the bank’s share-based em- ployee compensation plans”.
ANZ said yesterday that the sale of the life insurance division should give the lender “flexibility to consider further capital management initiatives in the future”.
Nearly two years into the job, Mr Elliott has taken the knife to ANZ’s various businesses and international operations after former chief executive Mike Smith expanded heavily into Asia.
The bank has ditched several minority stakes in Asian banks, but is yet to sell its stakes in Malaysia’s AMMB bank and Indonesia’s Panin.