ANZ Bank’s profit misses forecasts on soaring cost hit

Regulatory fines and redundancy costs totalling $1.1 billion pushed Australia & New Zealand Bank’s cash profit down 10 per cent to $5.89 billion for the 12 months September 30.

Chief executive Nuno Matos blamed soaring costs and intense competition in the lending space for hurting its profit margins as the bank targets an ANZ 2030 turnaround strategy to overhaul its operating performance.

The bank’s cash profit tumbled 14 per cent to $5.88 billion, short of analysts’ forecasts, as operating expenses jumped 20 per cent versus the prior year to $12.88 billion.

“We continue to make progress on our immediate priorities at pace, including embedding our leadership team and our culture reset,” said Mr Matos.

The bank is targeting cost savings of $800 million in financial year 2026, as it cycles through the redundancies of 4,500 staff from a total base of around 42,000 employees.

The bank’s other strategic priorities include integrating Suncorp Bank after it completed a $4.9 billion deal to acquire the Queensland-based business that sees it gain another 1.2 million retail customers.

“The results we have announced today demonstrate our franchise is strong, but action is needed,” said Mr Matos. “We are absolutely committed to executing ANZ 2030 and are on the right path. As we deliver our strategy, we will accelerate growth and outperform the market, while delivering more for our customers.”

ANZ will pay a final dividend of 83 cents per share for the six months ending September 30, flat on the prior half, to take full year dividends to $1.66 per share.

It will also offer a dividend reinvestment plan at a 1.5 per cent discount and cancel the remainder of its $800 million share buyback to help bolster its capital position.

Rising costs sink profit

The lender’s cash return on equity - as a measure of loans’ profitability - dropped 157 basis points to 8.1 per cent.

Provisions for bad debts over the financial year rose to $414 million. versus $406 million in financial 2024.

Shares last closed at $36.80 and have added 28.7 per cent over 2025 as investors cheer Mr Matos’ plans to slash costs, with a renewed focus on its core strengths of institutional banking and home loans growth.

More to come....