ANZ Sets 4.53% Annual Distribution Rate on CAP NOTE AN3PK for Q1 2026
Australia and New Zealand Banking Group Limited (ANZ) has announced a quarterly distribution of AUD 1.2013 per security on its CAP NOTE AN3PK, payable in March 2026. The payment is 70% franked and subject to standard conditions and ANZ’s discretion.
- Quarterly distribution of AUD 1.2013 per CAP NOTE AN3PK security
- Distribution is 70% franked, with a 30% unfranked component
- Payment date set for 20 March 2026, ex-date 5 March 2026
- Distribution rate based on 3-month BBSW plus 2.75% margin, adjusted for tax
- Payment subject to ANZ’s discretion and standard conditions
ANZ’s Latest Distribution Announcement
Australia and New Zealand Banking Group Limited (ANZ) has confirmed a quarterly distribution payment of AUD 1.2013 per security on its capital note AN3PK, officially known as CAP NOTE 3-BBSW+2.75% PERP NON-CUM RED T-03-30. This payment is scheduled for 20 March 2026, with the ex-date set for 5 March 2026 and the record date on 6 March 2026.
Understanding the Distribution Components
The announced distribution is 70% franked, meaning that portion carries a tax credit reflecting corporate tax already paid by ANZ. The remaining 30% is unfranked but sourced from ANZ’s conduit foreign income account, which means Australian resident holders should provide their Tax File Number or Australian Business Number to avoid withholding tax on this component.
The distribution rate is calculated based on the 3-month Bank Bill Swap Rate (BBSW) plus a margin of 2.75%, adjusted for the prevailing corporate tax rate of 30%. This results in an annualised distribution rate of approximately 4.53%, reflecting the hybrid nature of the capital note.
Discretion and Conditions Surrounding Payment
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 this capital note series, underscoring the contingent nature of such hybrid securities. No external approvals, such as court or regulatory consents, are required for this distribution.
Implications for Investors
For investors, this announcement confirms a steady income stream from ANZ’s capital notes, with the added benefit of partial franking credits. However, the discretionary nature of the payment means investors should remain attentive to any future announcements that might affect distribution certainty. Additionally, Australian resident holders need to ensure their tax details are up to date with ANZ’s share registrar to optimise their tax position.
Looking Ahead
This distribution announcement aligns with ANZ’s ongoing capital management strategy and provides insight into the bank’s approach to hybrid securities. Market participants will be watching closely for any changes in the BBSW rate or margin adjustments that could influence future distribution amounts.
Bottom Line?
ANZ’s latest distribution underscores steady income from hybrid capital notes but keeps investors alert to discretionary payment risks.
Questions in the middle?
- Will ANZ maintain the current margin and BBSW-linked distribution rate amid changing market conditions?
- How might shifts in corporate tax policy affect the franking component of future distributions?
- What are the implications if ANZ exercises its discretion to withhold or reduce distributions?
