Australia and New Zealand Banking Group Limited, together with its subsidiaries, provides various banking and financial products and services to individual and business customers. More info.
The calculations below outline how an intrinsic value for Australia and New Zealand Banking Group is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
Note the calculations below are per share.
See our documentation to learn about this calculation.
Excess Returns = (Stable Return on equity – Cost of equity) (Book Value of Equity per share)
A$0.76 = (12.14% – 8.62%) * A$21.64)
Terminal Value of Excess Returns = Excess Returns / (Cost of Equity - Expected Growth Rate)
A$12.97 = A$0.76 / (8.62% - 2.76%)
Value of Equity = Book Value per share + Terminal Value of Excess Returns
A$34.61 = A$21.64 + A$12.97Inputs used in model:
Stable EPS = Stable Book Value * Return on Equity
A$2.63 = A$21.64 * 12.14%
Source: Weighted future Return on Equity estimates from 11 analysts.
Book Value of Equity per Share: A$21.64
Source: Weighted future Book Value estimates from 9 analysts.
Expected Growth Rate: 2.76%
Source: Risk Free Rate/ 10 year Government Bond Rate in AUD.
Value per share:
Current discount (share price of A$29.24): 15.52%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.62% = 2.76% + (0.81 * 7.24%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (A$85,226,290,664).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.81 = 0.331 (1 + (1- 30%) (199.73%))
Levered Beta used in calculation = 0.81
This company is a bank or financial institution, which is analysed accordingly below.
Mr. Shayne Cary Elliott, B.Com has been Chief Executive Officer and Executive Director of Australia and New Zealand Banking Group Limited since January 1, 2016 and served as its Member of Management Board. Mr. Elliott was appointed Chief Financial Officer at Australia and New Zealand Banking Group Limited since June 1, 2012 until December 31, 2015. Mr. Elliott was responsible for all aspects of Finance as well as Legal, Treasury and Investor Relations. Mr. Elliott has responsibility for Group Strategy and Mergers and Acquisitions. Prior to this role, Mr. Elliott served as Chief Executive Officer of Institutional at Australia and New Zealand Banking Group Limited from June 1, 2009 to 2012. Mr. Elliott joined ANZ in June 2009. Previously, he served as Chief Operating Officer of EFG Hermes Holding S.A.E., the largest investment bank in the Middle East. Mr. Elliott was previously with Citigroup where he held various senior positions across geographies and business sectors over the course of 20 years. He held during his time at Citigroup include: Chief Executive Officer Global Transaction Services Asia Pacific, Chief Executive Officer Corporate Bank Australia/New Zealand & Country Corporate Officer, Vice President Strategic Planning New York, Head of Investor Derivative Sales London and Head of New Zealand Derivatives Sales & Trading. He served as an Executive Director of ANZ Bank New Zealand Limited since August 11, 2009 and serves Non-Executive Director. He served as a Director of Australia and New Zealand Banking Group Limited. He served as a Non Independent & Non Executive Director of AMMB Holdings Berhad from June 18, 2013 to October 15, 2015.
Average tenure and age of the Australia and New Zealand Banking Group management team in years:
Average tenure and age of the Australia and New Zealand Banking Group board of directors in years:
Australia and New Zealand Banking Group Limited, together with its subsidiaries, provides various banking and financial products and services to individual and business customers. The company’s Australia division offers retail products and services to consumer and private banking customers in Australia through the branch network, mortgage specialists, the contact center, and various self-service channels, such as Internet banking, phone banking, ATMs, Website, and digital banking; and corporate and commercial banking services comprising financial solutions through dedicated managers focusing on privately owned small, medium, and large enterprises, as well as the agricultural business segment. Its Institutional division provides working capital and liquidity solutions, including documentary trade, supply chain financing, cash management solutions, deposits, payments, and clearing; loan products, loan syndication, specialized loan structuring and execution, project and export finance, debt structuring and acquisition finance, structured trade and asset finance, and corporate advisory services; and risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets, and wealth solutions. The company's New Zealand division offers retail and commercial banking and wealth management services to consumer, private banking, and small business customers. Its Wealth Australia division provides life, general, and mortgage insurance; and fund management services. The company's Asia Retail & Pacific division offers general banking and wealth management services; and products and services to retail customers, small to medium-sized enterprises, institutional customers, and governments. It operates in Australia, New Zealand, the Asia Pacific, Europe, and the Americas. The company was founded in 1835 and is headquartered in Melbourne, Australia.
|Name:||Australia and New Zealand Banking Group Limited|
Australia and New Zealand Banking Group Limited
ANZ Centre Melbourne,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|ASX||ANZ||Ordinary Shares||Australian Securities Exchange||AU||AUD||02. Jan 1980|
|OTCPK||ANEW.F||Ordinary Shares||Pink Sheets LLC||US||USD||02. Jan 1980|
|DB||ANB||Ordinary Shares||Deutsche Boerse AG||DE||EUR||02. Jan 1980|
|NZSE||ANZ||Ordinary Shares||New Zealand Stock Exchange||NZ||NZD||02. Jan 1980|
|OTCPK||ANZB.Y||SPON ADR NPV (1 FOR 1 SHS)||Pink Sheets LLC||US||USD||06. Dec 1994|
|ASX||ANZPC||CNV PREF NPV CPS3 DEF SETTLEMENT||Australian Securities Exchange||AU||AUD||29. Sep 2011|
|DB||ANB1||SPON ADR NPV (1 FOR 1 SHS)||Deutsche Boerse AG||DE||EUR||06. Dec 1994|
|ASX||ANZPE||FRN RVCV SUB 03/2024 AUD100||Australian Securities Exchange||AU||AUD||01. Apr 2014|