Why is this top broker tipping the scales 27% for ANZ share price?

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The Australia and New Zealand Banking Group Ltd (ASX:ANZ) the stock price is currently trading in the bargain, according to a leading broker.

Citi tipped shares of the smallest of the “big four” banking giants to rise 27%, as my colleague James reports. He also slapped the stock with a buy rating.

ANZ stock price closed Friday’s trade at $22.75.

Let’s take a closer look at why Citi thinks now is the time to jump on board the bank.

Citi slaps ANZ shares with $29 price target

Broker Citi tips ANZ share price to add another quarter – and more – after bank announces buyout plan Suncorp Group Ltd. (ASX: SUN) banking.

Both S&P/ASX 200 Index (ASX: XJO) the financial giants announced the planned acquisition in July.

ANZ is set to buy Suncorp’s banking business for $4.9 billion. It will also likely pay Suncorp a base $50 million to continue using its brand for at least five years after the acquisition.

ANZ’s share price rose 2.1% as it resumed trading following a $1.7 billion capital raise to help fund the purchase.

Announcing the acquisition, ANZ CEO Shayne Elliott said it represented “a fundamental investment for ANZ”. And it will give a decent boost to the bank’s loan portfolio.

Suncorp Bank will offer $47 billion in home loans, $45 billion in deposits and $11 billion in commercial loans, my colleague Fool Tristan reported at the time.

Elliott also said at a press conference:

We are acquiring a customer base of 1.2 million, 700,000 of whom live here in Queensland, 400,000 of whom consider Suncorp Bank their primary bank. This is a very, very valuable franchise… Since March 2020, Queensland has seen better economic growth, better labor force participation and more interstate migration than any other state or territory in Australia. It contributes 18% to Australia’s GDP and we believe we can use the resources at our disposal to further contribute to its continued success.

Citi says the deal makes strategic sense and offers a reasonable price. The broker slapped ANZ shares with a price target of $29 after its announcement.

It also advises the big four banks to offer $1.44 per share in dividends for fiscal year 2022 (ending Sept. 30) and $1.65 per share for fiscal year 2023.

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