Ann: ANZ Wealth Management updated financial information, page-21

@daicosisgod,

Thanks for the analysis on the historical cash P/E's.

But, as @Just_a_guy 's post subsequent to yours indicates, by comparing historical P/E ranges with the current P/E is a bit of a case of comparing apples with an orange.

Because the "E" in the current P/E includes the impact of the 50m additional shares issued (corresponding to a 17% increase in the shares on issue) to fund the ANZ wealth business, but it excludes any commensurate financial contribution from the acquired business.

In other words, if you want to make a meaningful like-for-like comparison with historical P/E multiples, then you need to either:

a) include the ANZ Wealth business earnings, on a pro forma basis, or

b) if you want to adopt a more conservative position in terms of a scenario in which the acquisition fails to proceed, then you really need to make some sort of adjustment for the ~$500m of net cash (equivalent to $1.40/share) that currently sits on the balance sheet.

In the case of b), then - using FY2018's Underlying EPS of 57cps - the apples-with-apples P/E today becomes:

($7.00 less $1.40) / $0.57
=> Adjusted P/E = 9.8x

(Of course, if we adjust for the surplus cash, then we should also reduce EPS to reflect to lower interest income associated with that surplus cash, but given how low cash deposit rates are today the impact is around 0.4cps, which is really a rounding error.)