By Gareth Vaughan
New Zealand's big four Australian owned banks have almost trebled annual dividends.
The four - ANZ NZ, ASB, BNZ and Westpac NZ - paid dividends totaling a combined $2.561 billion for their 2014 financial years, up from $920 million last year.
The increases came against the backdrop of an expectation their Australian parents would be required to hold more regulatory capital, which appears set for confirmation following the release of the final report by the Australian Government's Financial System Inquiry.
Leading the way was ANZ NZ with a net dividend of $1.366 billion, a record high that was up from $720 million last year. The National Australia Bank (NAB) owned BNZ paid $420 million, up from $110 million, the Commonwealth Bank of Australia (CBA) owned ASB paid $400 million, up from $90 million, and Westpac NZ paid $375 million versus no dividend last year.
The dividends from the four were equivalent to 59.4% of their combined annual net profit after tax of $4.308 billion.
However, in comparison to their sharemarket listed parents, renowned as generous dividend payers, only ANZ NZ had a higher dividend payout ratio as a percentage of cash profit after tax. ANZ NZ's was 81% versus the the Australia and New Zealand Banking Group's 67.4%. ASB's was 51.5% versus CBA's 75%, BNZ's was 52% versus NAB's 90.1%, and Westpac NZ's was 43.4% versus the Westpac Banking Corporation's 74.2%.
ANZ NZ's annual dividends actually reached $2.335 billion, but it issued $969 million of redeemable preference shares to its parent during the year, effectively reducing the dividend to $1.366 billion. And as previously reported by interest.co.nz, in another form of capital return Westpac NZ repurchased $900 million worth of its own shares during its September financial year.
The trend of rising dividends looks set to continue into the banks' new financial years. ASB, which has a June 30 balance date compared to the September 30 balance date of the other three banks, paid a $440 million dividend in the September quarter versus just $20 million in the same period last year.
The latest disclosures from the big four banks show they all have regulatory capital ratios comfortably above the Reserve Bank mandated minimums.
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