Australia and New Zealand Banking Group Limited (ANZ) has announced a quarterly distribution of AUD 1.4438 per security on its capital notes, payable in June 2026, with a 70% franking component and tax considerations for investors.
- Quarterly distribution of AUD 1.4438 per ANZ capital note
- Distribution is 70% franked, with 30% unfranked sourced from conduit foreign income
- Payment date set for 22 June 2026, with ex-date on 9 June
- Distribution rate based on 3-month BBSW plus 3.00% margin, annualised at 5.1013%
- Payment subject to ANZ’s discretion and standard conditions
ANZ Announces Quarterly Distribution on Capital Notes
Australia and New Zealand Banking Group Limited (ANZ) has confirmed a quarterly distribution payment of AUD 1.4438 per security on its capital notes (ASX code AN3PI), scheduled for 22 June 2026. This announcement follows the bank’s established practice of providing steady income streams to holders of its hybrid capital instruments.
The distribution is 70% franked, meaning that a significant portion of the payment carries a tax credit for Australian investors, reflecting corporate tax already paid by ANZ. The remaining 30% is unfranked but is sourced from ANZ’s conduit foreign income account, which exempts non-resident investors from withholding tax on that portion. This structure is designed to optimise tax efficiency for a diverse investor base.
Calculation and Conditions of the Distribution
The distribution rate is calculated based on the three-month Bank Bill Swap Rate (BBSW) plus a margin of 3.00%, resulting in an annualised rate of approximately 5.10%. This reflects prevailing market conditions and the terms set out in the ANZ CN6 Prospectus dated June 2021. The payment period for this distribution covers 94 days, from 20 March to 21 June 2026.
Importantly, the payment remains subject to ANZ’s absolute discretion and the absence of any payment conditions on the distribution payment date. These conditions are standard for every quarterly distribution on these capital notes, ensuring that payments align with the bank’s financial health and regulatory requirements.
Tax and Compliance Considerations for Investors
Australian resident holders are advised to provide their Tax File Number (TFN), Australian Business Number (ABN), or applicable exemptions to ANZ’s share registrar. This step is crucial to avoid withholding tax on the unfranked component of the distribution. The bank has reiterated that any changes to the franking rate before the payment date will be announced on the ASX, potentially impacting the final distribution amount.
This announcement underscores ANZ’s ongoing commitment to maintaining transparent communication with investors and managing its capital instruments prudently amid evolving market and regulatory landscapes.
Bottom Line?
Investors should monitor any updates on franking rates and ensure tax documentation is current to optimise their returns.
Questions in the middle?
- Will ANZ maintain the 70% franking rate for future distributions?
- How might changes in the BBSW rate affect upcoming distribution payments?
- What impact could ANZ’s discretion over payment conditions have on capital note valuations?