The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a strong performer this week.
Despite experiencing a couple of days of declines, the banking giant's shares are up 5% for the week.
Why is the ANZ share price charging higher this week?
There have been a couple of catalysts for the positive performance by the ANZ share price this week.
The first is of course Monday's news that a potential COVID-19 vaccine has performed exceptionally well in phase three trials.
The early data from Pfizer's vaccine showed that it was 90% effective against COVID-19, which was better than even the most optimistic experts were hoping for.
This news caused an almighty rotation from large investors, who dumped COVID-winners like tech stocks and snapped up beaten down COVID-losers such as travel and bank shares.
Given how far the ANZ share price has fallen during the pandemic, it wasn't at all surprising to see investors piling in on the news.
What else is driving it higher?
Also giving the bank's shares a boost was a better than expected set of results from the big four over the last couple of weeks.
For example, for the 12 months ended 30 September, ANZ reported a 42% decline in cash profit from continuing operations to $3.76 billion. While this was a sizeable decline, some analysts were expecting an even greater decline.
It is also worth noting that ANZ's profit decline was driven primarily by full year credit impairment charges of $2.74 billion, which increased almost $2 billion year on year. This was due largely to the impact of COVID-19 and a first half impairment of Asian associates of $815 million, also related to the pandemic.
One broker that was particularly pleased with the result was Credit Suisse. It put an outperform rating and $26.20 price target on ANZ's shares in response to it.
Based on the current ANZ share price, this price target implies potential upside of over 26%.
The broker believes the tail risk relating to COVID-19 bad debts is diminishing and notes that its deferred loan repayments are better than feared. It also likes the bank for its robust capital position and the prospect of a strong recovery in its earnings over the coming years.
In light of this, the 5% gain by the ANZ share price could only be the beginning as far as this broker is concerned.
