ANZ Posts AUD 1.90 Billion Cash Profit with CET1 at 12.51%
ANZ posted a 3Q26 cash profit of AUD 1.90 billion, modestly up on the half-year quarterly average despite a NZD125 million legal provision. The bank’s capital position strengthened, and strategic integration efforts progress on schedule.
- 3Q26 cash profit rose 1% excluding NZ legal provision
- NZD125 million pre-tax provision booked for NZ class action
- CET1 capital ratio improved to 12.51%
- Customer deposits and net loans increased 2-3%
- Suncorp integration and digital front-end on track
Profit Holds Firm Amid Legal Headwind
ANZ (ASX:ANZ) delivered a cash profit of AUD 1.90 billion for the quarter ended 30 June 2026, marking a 1% increase on the average quarterly result for the first half of the year. This steady performance came despite the bank taking a NZD125 million (AUD 103 million) pre-tax provision linked to a New Zealand class action ruling, which ANZ is actively appealing. Excluding this provision, cash profit would have risen 5% to AUD 1.98 billion, underscoring underlying operational resilience.
Capital Strength and Balance Sheet Growth
ANZ’s Common Equity Tier 1 (CET1) ratio ticked up 12 basis points to 12.51%, reflecting continued capital discipline. Customer deposits rose 2% to AUD 786 billion, while net loans and advances grew 3% to AUD 846 billion. Lending growth was notably strong in the Business & Private Bank segment, expanding 4% over the quarter. The group’s net interest margin improved by 1 basis point to 1.54%, helped by volume growth and margin expansion outside of Markets income.
Cost Management and Credit Quality
Operating expenses increased by 1%, but excluding the NZ legal provision, expenses actually fell 3%, reflecting ongoing productivity gains and simplification efforts. The cost-to-income ratio nudged higher by 27 basis points to 49.66%. Credit quality remained stable with the individual provision charge falling to AUD 65 million and non-performing exposures steady at 0.55%. Housing loan arrears in Australia and New Zealand saw minor increases but stayed within manageable levels.
Progress on Strategic Priorities
CEO Nuno Matos highlighted solid progress against ANZ’s 2030 strategy, including the integration of Suncorp Bank and the rollout of a single customer digital front-end. The Suncorp migration is 45% complete with a target of 57% by September 2026, while the digital front-end delivery stands at 24%, on track for 45% completion by the same date. The bank has exited 84% of 3,500 announced roles and realised 73% of its targeted AUD 875 million cost savings for FY26. Efforts to enhance non-financial risk management continue as part of a Root Cause Remediation Plan.
Legal Risks and Outlook
The NZD125 million provision relates to a May 2026 High Court decision against ANZ Bank New Zealand in a class action concerning consumer credit laws. ANZ has lodged an appeal, leaving the ultimate financial impact uncertain. The bank’s statement emphasises close monitoring of the external environment and ongoing customer support initiatives. With capital and liquidity ratios comfortably above regulatory minimums, ANZ appears positioned to navigate both operational challenges and legal uncertainties as it advances its strategic transformation.
Bottom Line?
ANZ’s 3Q results show operational steadiness underpinned by disciplined cost control and capital strength, but the unresolved NZ class action injects a layer of legal uncertainty to watch.
Questions in the middle?
- How will the NZ class action appeal outcome affect ANZ’s future earnings and provisions?
- Can ANZ sustain loan and deposit growth amid evolving macroeconomic conditions?
- What impact will the ongoing Suncorp integration and digital front-end rollout have on cost efficiency and customer experience?
