Shares of Australia and New Zealand Banking Group (ASX: ANZ) have been pummeled so far in 2015.
In fact, they're down 14.6% compared to a fall of just 6.9% in the broader S&P/ASX 200 (index: ^AXJO) (ASX: XJO).
But while some shareholders are likely getting itchy fingers at the sight of their falling portfolios, there are a number of reasons to be bullish on ANZ over the long-term.
Here're three of my favourite:
- Market share. ANZ is the third largest lender to Australia's booming property market, having grown its mortgage portfolio above the market average for five consecutive years. In New Zealand, ANZ controls an enormous 31% of all net loans and advances. So although credit markets will rise and fall over time, ANZ's dominance is unlikely to go away anytime soon.
- Asian strategy.ANZ is unique among Australia's banks since it is rapidly expanding into Asia. As part of its Super Regional Strategy, ANZ intends to generate 25% to 30% of profits from outside Australia and New Zealand by 2017. Risks are evident in the strategy, but over the long-term it could prove to be a significant advantage for ANZ.
- Dividends.Bank profits — and dividends – will rise and fall over time, but so long as ANZ can continue to grow its loan book and keep profit margins steady, dividends will be a key feature for shareholders.
Buy, hold or sell
The short-term outlook for each of Australia's major banks is uncertain and likely to be volatile. However, ANZ shares may hold promise for shareholders over the long-term. While I'm not a buyer of at today's prices, if I held ANZ shares I'd be happy to see out the near-term volatility and enjoy its juicy bi-annual fully franked dividends.
