ANZ Faces Margin Pressure and Regulatory Costs Amid Strategic Reset
ANZ reported a 10% decline in statutory profit for FY2025, impacted by significant regulatory and restructuring charges, while reaffirming its ANZ 2030 strategy and maintaining a strong capital position.
- Statutory profit down 10% to $5.89 billion
- Cash profit excluding significant items steady at $6.9 billion
- Final dividend maintained at 83 cents per share, 70% franked
- Strong capital ratio of 12.0% CET1 despite regulatory costs
- Underperformance in Australia Retail and Business & Private Bank segments
ANZ Navigates Regulatory Headwinds and Market Challenges
Australia and New Zealand Banking Group (ANZ) has released its full-year results for the fiscal year ended September 30, 2025, revealing a 10% drop in statutory profit to $5.89 billion. This decline was largely driven by $1.1 billion in significant items, including a costly settlement with the Australian Securities and Investments Commission (ASIC) and restructuring expenses. When these one-off charges are excluded, ANZ’s cash profit held steady at $6.9 billion, underscoring the resilience of its core operations.
Dividend and Capital Strength Signal Confidence
Despite the profit dip, ANZ’s board has proposed a final dividend of 83 cents per share, maintaining the full-year dividend at 166 cents, partially franked at 70%. This decision reflects management’s confidence in the bank’s underlying performance and strategic direction. ANZ’s Common Equity Tier 1 (CET1) capital ratio remains robust at 12.0%, a slight improvement over the previous period, providing a solid buffer to support growth and absorb future shocks.Mixed Divisional Performance Highlights Strategic Priorities
CEO Nuno Matos highlighted the bank’s strong competitive position in its two main markets, Australia and New Zealand, as well as its growing footprint in Asia. However, he acknowledged underperformance in the Australia Retail and Business & Private Bank divisions, where intense competition and a declining interest rate environment pressured margins despite asset and deposit growth. Conversely, the Institutional and New Zealand businesses delivered consistent results, reinforcing their leadership positions.Focus on Simplification and Risk Management
ANZ is actively pursuing its ANZ 2030 strategy, aimed at simplifying operations, embedding cultural change, and enhancing risk management. The bank is accelerating the integration of Suncorp Bank and rolling out the ANZ Plus digital platform to improve customer experience. A key priority remains strengthening non-financial risk controls, with the Australian Prudential Regulation Authority approving ANZ’s Root Cause Remediation Plan, signaling progress in addressing past regulatory concerns.Credit Quality and Provisioning Remain Sound
Credit impairment charges totaled $441 million for the year, reflecting a modest increase in individually assessed provisions but overall sound credit quality. The collective provision coverage ratio edged up slightly to 1.18%, indicating prudent risk management amid evolving economic conditions.Looking ahead, ANZ’s leadership is focused on executing its strategic roadmap to drive productivity improvements and sustainable growth, while navigating a competitive and regulatory landscape that remains complex and dynamic.
Bottom Line?
ANZ’s FY25 results underscore a bank in transition; balancing regulatory remediation and strategic renewal with steady capital and dividend policies.
Questions in the middle?
- How will ANZ accelerate turnaround in its Australia Retail and Business & Private Bank divisions?
- What impact will ongoing regulatory scrutiny have on future earnings and capital?
- How effectively will ANZ’s ANZ 2030 strategy translate into market share gains and improved profitability?
