ANZ Reports $3.78 Billion Cash Profit with 12.4% CET1 Ratio

Robust Profit Growth Amid Strategic Reset

ANZ Group Holdings Limited (ASX:ANZ) has delivered a solid first half for FY2026, reporting a 14% increase in cash profit to AUD 3.78 billion when excluding significant items from the prior half. This follows a 70% surge from the immediately preceding half, reflecting a successful simplification of operations and resolution of regulatory matters. Statutory profit remained stable at AUD 3.65 billion year-on-year.

The bank’s Chief Executive Officer, Nuno Matos, highlighted that the transformation program is progressing swiftly, underpinning improved returns for shareholders. Key financial metrics showed a cash return on tangible equity (RoTE) of 11.6% and a cost-to-income ratio reduced to 49.4%, signaling enhanced operational efficiency. The interim dividend was maintained at 83 cents per share, with franking increasing from 70% to 75%, supported by improved performance in Australia.

Balance Sheet Strength and Capital Position

ANZ’s Common Equity Tier 1 (CET1) ratio rose 36 basis points to 12.39% at 31 March 2026, reflecting organic capital generation and the cessation of the remaining share buy-back program. The bank’s APRA leverage ratio improved to 4.5%, comfortably above regulatory minimums. Customer deposits grew 3% to AUD 771 billion, while net loans and advances edged down 1% to AUD 822 billion, excluding Markets activities.

Capital management remains a priority, with ANZ targeting a RoTE of 12% by FY28 and 13% by FY30, alongside a cost-to-income ratio in the mid-40s percent. The bank is on track to realise AUD 800 million in gross cost savings in FY26 and anticipates AUD 500 million in annual synergies from the Suncorp Bank integration by FY29.

Credit Quality Resilient Despite Global Uncertainty

Credit quality remains robust, with portfolio losses low and non-performing exposures down slightly to 0.55% of total credit exposure. The individual provision charge decreased by 7% year-on-year to AUD 148 million, while the collective provision charge was AUD 126 million, incorporating a charge related to the Middle East conflict. ANZ’s collective provision balance increased to AUD 4.45 billion, representing 1.22% of credit risk-weighted assets.

ANZ New Zealand (ANZ NZ) reported a cash profit of NZD 1.24 billion, up 2% on the previous half, with net loans and advances increasing 2% and customer deposits growing 4%. Margin pressure saw a 5 basis point decline in net interest margin, but operating expenses fell 3%, driven by productivity gains and lower restructuring costs. ANZ NZ continues to invest in technology and product innovation, including a cloud migration project and new home loan offerings.

Strategic Progress and Shareholder Returns

ANZ is advancing its ANZ 2030 strategy with five immediate priorities: embedding new leadership and cultural reset, accelerating Suncorp Bank integration, delivering a single customer front-end, reducing duplication, and enhancing non-financial risk management. As of April 2026, 78% of the planned 3,500 role exits have been completed, contributing to cost savings and simplification.

The bank also announced a binding agreement to acquire Worldline S.A’s 51% stake in Worldline Australia Pty Ltd for AUD 89 million, aligning with its transaction banking growth ambitions. Completion is subject to regulatory approval expected in the second half of FY26.

ANZ declared an interim dividend of 83 cents per share, partially franked at 75%, payable on 1 July 2026, with New Zealand imputation credits attached. The Dividend Reinvestment Plan (DRP) and Bonus Option Plan (BOP) will operate without discount, and ANZ intends to neutralise DRP share issuance through on-market purchases.

As ANZ navigates ongoing geopolitical and economic uncertainties, including the Middle East conflict and global inflationary pressures, its diversified portfolio, strong capital base, and operational resilience position it well to support customers and deliver shareholder value.

Investors may note the bank’s continued focus on non-financial risk management, with independent assurance reports confirming progress under its Root Cause Remediation Plan. The evolving regulatory landscape, including APRA’s planned capital and liquidity reforms, will be key areas to monitor in coming periods.

ANZ’s 1H26 results build on the momentum from its recent Q1 cash profit surge and precede the forthcoming Worldline stake acquisition which will deepen its payments capabilities as part of the 2030 strategy.