MELBOURNE, May 5, 2026, 06:44 AEST
ANZ Group Holdings Limited (ASX: ANZ) shares closed 1.91% higher at A$36.29 on Monday after UBS upgraded the stock to neutral from sell and set a A$36.50 price target, putting Nuno Matos’ bank reset back in view after last week’s results.
The timing matters. Australia’s S&P/ASX200 fell 32.7 points to 8,697.1 as investors waited for Tuesday’s Reserve Bank of Australia decision, while financial stocks were kept in check by National Australia Bank’s earnings miss. AAP said ANZ “bounced modestly” from its post-reporting sell-off. AAP News
ANZ is now an early report card on Matos, almost one year into the chief executive role. The bank’s cash profit — a non-IFRS measure that strips out non-core items — beat the average estimate in a Bloomberg survey, but the market question has shifted to whether cost cuts can turn into stronger lending growth, especially in mortgages.
ANZ said on May 1 that statutory profit for the six months ended March 31 was A$3.65 billion and cash profit was A$3.78 billion. Cash profit rose 70% from the second half of fiscal 2025, or 14% excluding significant items, while return on tangible equity rose to 11.6% and the Common Equity Tier 1 ratio, a core capital buffer, reached 12.39%.
Matos said the result showed ANZ’s transformation was “running at pace” and that the bank was already delivering “materially better returns for shareholders.” He also said lending and deposits grew moderately, while “active margin management” kept margins stable despite intense competition. ANZ
The cost line is doing much of the work. ANZ reduced costs by 9% half-on-half, excluding significant items, and cut its cost-to-income ratio, a gauge of bank efficiency, to 49.4% from 54.6%. By the end of April, 78% of its announced 3,500 employee exits had taken place, along with more than 1,000 managed-services consultant departures.
Execution still has a long runway. ANZ said the Suncorp Bank migration was 34% complete at the end of March and should reach 57% by the end of the financial year, with full migration due by June 2027. A single customer front-end, meant to bring ANZ Plus together with its wider retail and business platforms, was 13% complete by March.
“On paper, it looks like a solid start,” Morningstar analyst Nathan Zaia in Sydney said, adding that upgraded cost-saving guidance was encouraging. But Zaia said ANZ still needed to be more competitive to gain home-lending share. The Business Times
Peer pressure is not theoretical. NAB reported weaker first-half cash earnings of A$2.64 billion, missing a Visible Alpha estimate of A$2.93 billion, and warned that the U.S.-Israeli war on Iran and domestic inflation were becoming major economic risks. Reuters said NAB shares fell after the result, while AAP said Commonwealth Bank eased and Westpac edged higher ahead of its own earnings call.
But the risk is that macro stress eats into the operating gains. ANZ took a collective provision charge — money set aside for potential loan losses — of A$126 million, including A$175 million for possible Middle East conflict impacts, partly offset by better underlying credit quality. Matos warned that a longer constraint on oil flows could turn the crisis from mainly an inflation problem into a supply and growth problem.
The shareholder payout gives the stock some support. ANZ kept its interim dividend at 83 cents a share and lifted franking, the tax credit attached to some Australian dividends, to 75% from 70%. Chief Financial Officer Farhan Faruqui said the stronger capital position meant ANZ would not run a second discounted dividend reinvestment plan and would neutralise the interim plan through market purchases.
For ANZ shares, the next test is narrow: show that lower costs can fund better customer growth without giving up margins. Monday’s close sat just below UBS’s new A$36.50 target, leaving little room for another stumble on home loans, Suncorp integration or credit costs.
