It certainly was a tough month for the ANZ Group Holdings Ltd (ASX: ANZ) share price.
During the period, the banking giant's shares lost 7% of their value to end at $22.93.
This was notably worse than the performance of the ASX 200 index, which dropped 1.1% in March.
Image source: Getty Images
What happened to the ANZ share price?
The weakness in the ANZ share price was driven by the sudden collapse of a number of international banks. This includes Silicon Valley Bank and Signature Bank in the United States and Credit Suisse in Europe.
Investors appeared concerned that the crisis could spread to Australia and quickly reduced their exposure to the banks. That's despite the big four banks being some of the safest in the world based on their capital positions and liquidity.
Is this a buying opportunity?
One broker that is likely to see this pullback as a buying opportunity is Citi.
That's because its analysts recently named ANZ as their top pick in the banking sector. The broker commented:
ANZ's 1Q23 disclosures exhibited strong trends in both lending growth and asset quality. No earnings disclosure was provided, but we think that after backing out RWA movements from capital, it comfortably implies above market earnings, although subject to movements in deductions/reserves.
Despite fears of deteriorating asset quality, impaired assets declined again in the quarter, although this could be the bottom as seasonally mortgages and personal credit arrears tick higher in the March quarter. Institutional lending momentum continued and accelerated in the Dec qtr, which we expect was driven by more available liquidity and pricing vs debt markets.
ANZ remains our top pick in the sector, and we expect the lending momentum, particularly in institutional, to continue to differentiate vs peers.
Citi has a buy rating and $29.25 price target on the bank's shares. Based on the current ANZ share price, this implies potential upside of almost 28% for investors over the next 12 months.
In addition, it is expecting a fully franked 7.3% dividend yield this year, sweetening the deal even further!
