The ANZ Group Holdings Ltd (ASX: ANZ) share price has started the week in the red.
In early trade, the banking giant's shares are down 3.5% to $23.65.
Image source: Getty Images
Why is the ANZ share price under pressure?
The good news is that today's decline has nothing to do with a broker downgrade, another bank collapse, nor fears that a recession is coming.
The even better news is that this decline is, in many respects, actually a positive for shareholders.
That's because the pullback in the ANZ share price is in response to the rights for the bank's upcoming dividend payment becoming settled after its shares traded ex-dividend.
When a share trades ex-dividend, it tends to drop in value with the amount of the dividend. This is to reflect the fact that new buyers won't be receiving this payment. Instead, the rights to the dividend will remain with the seller come pay day.
The ANZ dividend
When ANZ released its half-year results earlier this month, the bank reported record first-half cash earnings of $3,821 million. This was up 12% on the second half of FY 2022.
In light of this solid earnings growth, the ANZ board decided to increase its fully franked interim dividend by 9.5% to 81 cents per share.
Eligible shareholders can now look forward to receiving this dividend in their nominated accounts in a little over six weeks on 3 July.
What's next?
More good news for shareholders is that a similar dividend is expected in the second half by analysts at Citi.
According to a note from last week, the broker has pencilled in a full-year dividend of $1.64 per share.
If this estimate is on the money, it will mean a fully franked 83 cents per share final dividend later this year. It will also mean a very attractive 6.7% dividend yield based on where the ANZ share price closed on Friday.
