ANZ

 ANZ Bank

29/06/26

Fundamentals

https://stockanalysis.com/quote/asx/anz/statistics/

https://www.tradingview.com/symbols/ASX-ANZ/financials-overview/

book value vs Earnings

A bank book value (also known as the carrying value) represents the net worth of a bank according to its balance sheet. It is calculated by subtracting total liabilities from total assets. This metric reveals the theoretical amount shareholders would receive if the bank liquidated all assets and paid all debts.

Asset Liquidity: Unlike manufacturing companies, banks primarily deal in highly liquid financial assets (like cash and loans). Because of this, a bank's book value is often considered a highly accurate reflection of its actual liquidation value.

Though the book value is steadily increasing, earnings are all over the shop.

P/B ratio

Valuation Analysis: Analysts and investors compare a bank’s book value to its market value (the total price of all its outstanding shares) using the Price-to-Book (P/B) ratio.

A P/B ratio below 1.0 can indicate that the bank's stock is undervalued or that the market expects some of its loans to default.

A P/B ratio above 1.0 suggests investors are willing to pay a premium for the bank's operational strength and brand.

A P/B ratio > 1.5: Indicates the market expects strong, above-average growth and profitability, though it could also mean the stock is overvalued.

ANZ's current P/B ratio is 1.47

https://stockanalysis.com/quote/asx/ANZ/financials/ratios/

The PB ratio has been rising from 2022

2022- 1.02

2023- 1.10

2024- 1.28

2025- 1.38

2026- 1.47

The PE ratio has been steadily rising too.

2026- 17.79

2025- 16.80

2024- 13.87

2023- 10.84

2022-   9.56

2021- 12.83

.....

Key Indicators of a Healthy Bank

High Tangible Common Equity (TCE): This measures physical and highly liquid capital, excluding intangible assets like "goodwill". A strong TCE ratio (typically > 7-10%) proves a bank can absorb heavy financial losses.

Low Non-Performing Loans (NPL): The bank's book value is only as strong as its loans. A healthy bank has an NPL ratio well below 2% to 3%, meaning borrowers are paying back their debt.

Stable Net Interest Margin (NIM): A profitable bank book value grows when the institution makes more money off interest rates than it pays out to depositors.

Warning Signs (Risks to Book Value)

Unrealized Losses in Bond Portfolios: 

If a bank heavily invested in long-term bonds when interest rates were low, rising interest rates mean those bonds are worth less if sold prematurely. These paper losses weaken the "health" of the book value.

Regulatory Capital Erosion: Banks operate under strict government rules. A healthy bank must maintain predefined regulatory capital adequacy ratios based on its book value of equity to ensure it doesn't face a liquidity crisis