From Merrill:
Strong result driven by a big jump in net interest income, a good trading outcome, and lower expenses, which together drove a 31% beat at pre-tax profit. A significantly higher tax rate meant the post tax beat was only 6%. Payout ratio surprises on upside, and franking the dividend by 40% is also a surprise. Expect some upgrades to FY14 numbers, and dividend forecasts will increase. Stock will be over $40 on this result.
Expect FY14 to be better than FY13 – annuity divisions to be broadly in-line for FY13, but market-facing divisions to be up (subject to the usual caveats). Tax rate in mid-30s range
Annual dividend payout ration to be in the range of 60-80%.
Intends to purchase approximately $A250 million of shares on-market to satisfy the requirements of the MEREP. Buying will commence on 13 May 2013 and is expected to be completed early July 2013.
NPAT of $490mn is 9% above BofAMLe and 6-7% above consensus.
Strong performance on NII ($723mn vs. BofAMLe $639mn) a key driver. Trading income also looks robust at $679mn vs. forecast of $559mn
Continue to do a strong job on costs – down 11% on the pcp and 3% below us. Comp ratio pushed down to 45%.
DPS of $1.25 significantly higher and starting to frank again (40%).
Tax rate up to 43.5% due to increased profitability in US, write-down of certain international group assets and increased provisioning for tax uncertainties.
