ANZ Group Holdings Limited (ASX: ANZ) has been a dividend staple to Australian investors looking to find a safe source of income. As the ANZ dividend yield is now at around 4.6-4.8, this large bank is still appealing to income seekers despite recent modifications made to the so-called franking structure. It is important to know what is behind the ANZ performances in terms of dividends to make informed investment decisions in the current market.
What is the current Dividend Yield of ANZ?
ANZ shares will be trading at around 36 in October 2025 to provide a dividend yield on shares of around 4.61 to 4.76, given the current bank payout of 1.66 per share/year. This is among the largest dividend yields of the four largest banks in Australia, being more than the two other Morgan Stanley (National Australia Bank) and Westpac, as well as close to two and a half times the 2.88 per cent dividend yield of the Commonwealth Bank.
Its last interim dividend of 83 cents per share was paid in July 2025, which was franchised 70 percent. The last dividend is due in December 2025, and it will be paid according to the common semiannual schedule of ANZ.
Exploring the Dividend Payment Schedule of ANZ.
ANZ has a regular dividend calendar that facilitates planning for the Australian investors. The bank is paying dividends twice a year, in July and in December; it is an interim dividend and a final dividend, respectively. This is a bi-annual structure that is in line with the half-year and full-year financial results announcements of the bank.
In the 2025 financial year, ANZ continued to pay its dividend of 83 cents per half-year period, which amounted to 1.66 a year. Moving forward to 2026, the CommSec analysts forecast an increment of a small fraction to 1.68 per share, and this will translate to a grossed-up dividend yield of 6.5 percent, inclusive of franking credit.
Is ANZ Dividend Fully Franked?
This is where ANZ stands out dramatically compared to its big four counterparts: the ANZ dividend is not 100 percent franked. Indeed, ANZ is the only large Australian bank that does not practice the habit of fully franking its dividends.
The interim dividend was partially franked at 70 percent, and the unfranked part was taken as a conduit foreign income account of ANZ. Past dividends have been at a different level of franking- the final dividend of December 2024 has a 70% frank, and the interim dividend of July 2024 had 65% franking.
ANZ Dividend Only Partially Franked, why?
The solution is found in the business structure of ANZ. ANZ is an international banking institution, unlike Commonwealth Bank, NAB, and Westpac, which are mainly domestic banks, especially in Asia and the Pacific. The offshore profits are usually taxed in those countries, not in Australia, and as such,h they do not create Australian franking credits.
According to ANZ, the explanation is as follows: The franking percentage of the dividend indicates the geographic diversity of ANZ’s business, specifically the percentage of our profit that is generated beyond Australia and hence, does not create any Franking Credits.
But it is not in vain that there is a ray of hope. According to ANZ, the acquisition of Suncorp Bank, completed in July 2024, will help in the generation of the franking credits in the long term since more operations based in Australia will be incorporated.
Better than Fully Franked Dividends?
To the average Australian investor, fully franked dividends tend to be more preferable than semi-franked or non-franked dividends. Here’s why:
Franking credits are a tax that has been paid by the company at a 30% corporate rate. In case you are issued a fully franked dividend, you can offset these credits in your personal income tax. A tax refund can be received in case your marginal tax rate does not exceed 30. This helps especially retirees, SMSF trustees, as well as low-income investors.
ANZ, however, offsets the low levels of franking by generally providing a high headline dividend yield as compared to its fully-franked counterparts. The market will change the share price of ANZ to incorporate the lower franking benefit, and investors will be more likely to receive a higher upfront yield to compensate for lower tax credits.
Australian Companies With Fully Franked Dividends?
NAB, Commonwealth Bank, and Westpac are the largest banks, and all of them are 100 percent fully franked. This is on top of the latest interim dividend of 85 cents per share issued by NAB with 100% frankin,g which is in line with the same track record.
Other established Australian firms that previously had fully franked dividends, other than in the banking sector, are Woolworths, Telecommunication Company of Australia (Telstra), BHP, Rio Tinto, and energy firm Woodside. Most of their profits are made by these companies at home, allowing them to offer the full benefits of franking to the shareholders.
Is ANZ a Good Dividend Stock?
ANZ, despite the partial franking caveat, is still a good dividend stock to a number of Australian investors, although there are considerations to it.
Strengths:
- The highest dividend yield amongst the top four banks: 4.6-4.8.
- Good semi-annual payment history.
- Rational distribution of dividends that is 73, which indicates that the ratio is reasonable, indicating that the dividends are well met by the earnings.
- Franking levels to increase with further growth of the Suncorp integration.
Concerns:
Other analysts have sounded an alarm over the sustainability of dividends. JPMorgan analyst Andrew Triggs recently estimated that ANZ could reduce its dividend to 76 cents per share, and MST analyst Brian Johnson said that a dividend cut was inevitable because of corporate fines and strategic changes under a new CEO, Nuno Matos. This would reduce the yield in terms of annualized returns to approximately 4.64.
Also, ANZ has a payout ratio that is nearing its upper limit of 60-65% target range, and it is expected to go to 73% in FY25. In the past, high payout ratios have been followed by dividend reductions, as occurred in 2016 and during the COVID-19 pandemic.
How to Check Franking of your dividends.
Franking of dividends can be checked by Australian investors in various ways. The dividend statement provided by ANZ will indicate the percentage of franking on each payment. Otherwise, the Australian Taxation Office asks companies to declare franking information, which is reflected on your annual tax statements.
ANZ also puts detailed information on its shareholder centre website; details on the amount of dividends paid out (including the amount of the franking level) on all past payments. Alternatively, CommSec, Morningstar, and Intelligent Investor are financial data sources that show extensive dividend histories, including a percentage of franking.
Making Your Decision
ANZ dividend yield offers Australian investors a compelling income opportunity, particularly for those seeking higher upfront returns and who may not fully benefit from franking credits. While the partial franking reduces tax advantages compared to competitors, ANZ’s superior yield and the potential for improved franking levels following the Suncorp acquisition make it worth considering in a diversified dividend portfolio.
As with any investment decision, consider your personal tax situation, income needs, and risk tolerance. The bank’s dividend has historically been reliable, though near-term uncertainty around potential dividend adjustments warrants careful monitoring through 2025 and beyond.
Ready to optimize your dividend strategy? Consult with a licensed financial adviser who can assess how ANZ’s dividend structure aligns with your specific financial goals and tax circumstances.
