The Report of Capital Structure and Dividend Payouts Policies - ANZ | 1 |
8 | The Report of Capital Structure and Dividend Payouts Policies - ANZ |
The Report of Capital Structure and Dividend Payouts Policies - ANZ | 7 |
Introduction
The Australian and New Zealand Banking Group Limited (ANZ) is a regional bank that mainly operates in Australia and New Zealand. ANZ has strong domestic markets and intend to grow its presence in the Asia Pacific region. This report's aim is to analyze ANZ's capital structure and dividend policies by using relevant theories.
Dividend Policy Discussion
ANZ pays regular cash dividends to their shareholders by direct credit to their local accounts in their local currency, though the dividends are set in Australian dollars. The exchange rate used to translate the dividends to local currency is determined by ANZ base on the record date of the dividend. From the observation of ANZ's historically data, the shareholders are paid twice a year the end and the end of year dividend is often higher than the interim dividend.
English: Metropolitan Life Bldg., Manhattan, New Y...
English: Chart of the annual dividends on the comm...
English: ANZ Bank Headquarters, Docklands, Melbour...ANZ's pays fully or partially franked dividends, which may provide a tax-offset effect that benefits Australian resident shareholders, while the New Zealand resident shareholder may receive New Zealand imputation credits to dividends. Both would provide shareholders the benefit of offsetting their tax liability and avoid paying double tax. Regarding tax benefit, ANZ has its focus in Australia and New Zealand since it mainly operates in these two countries, but surely did not provide much tax benefit to overseas shareholders. (booklet, Apr 2013)
The graph below shows ANZ had a dividend payout ratio between 57 to 83 percent during 2000-2012. Overall, it indicates that ANZ has a fairly consistent payout ratio, except in 2008 and 2009 when the ratio spiked almost 83%. The probable...