ANZ shares soar nearly 9% as bank gains on ambitious targets
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More news: ANZ shares have surged almost 9% at the open to hit $39.90 in early trading as the efficiency drive under Nuno Matos pushes the bank closer to its ambitious return on equity targets.
What they said: Jarden analyst Matt Wilson said the aim to slash $800 million in costs in FY26 was being delivered as he maintained an 'Overweight' rating on the stock.
"Targets under ANZ's 2030 strategy remain on track and possibly ahead, with early signs of cost-out execution in effect. Nuno appears to be deploying a pragmatic plan in sound fashion," Wilson wrote in a note.
It comes as the bank remains hyper-focused on its simplification strategy, targeting expenses even as it looks to sacrifice short-term growth. Revenue rose just 1% in line with subdued growth in loan volumes.
That is largely part of the strategy as Matos seeks to bring together ANZ Classic and Plus to avoid the costs of running two seperate banking platforms, and cut 3,500 full-time jobs out of its workforce alongside the 1,000 contractors it has already axed.
"It's clear from the APRA data that volume growth has suffered whilst ANZ readies its platform for growth," Wilson said, noting ANZ trailed system growth even as it grew net interest margins.
He reiterated his target of $35 per share on ANZ, well below where the bank is trading on Thursday.
ANZ posts 6% rise in first-quarter cash profit to $1.94b
The news: ANZ has posted a 6% increase in first quarter cash profit to $1.94 billion from a year earlier, as the bank's cost cutting campaign starts to bear fruit.
The numbers: Excluding significant items, the bank said the metric was up 17% compared to the $1.7 billion average quarterly result in the second half of last year.
Cash profit for the quarter ended December 31 was up 75% on the quarterly average of the second half of the financial year ended last September. Statutory profit was $1.87 billion.
The context: The result was driven by lower costs after aggressive job cuts. ANZ said that compared to the quarterly average of the previous half and excluding significant items, expenses were 8% lower in the quarter, thanks to “actions to reduce duplication and simplify the organisation.”
The strategy has helped lift ANZ's return on equity from a quarterly average of 6.1% to 10.8%. But it comes as the bank records reasonably weak topline growth. Revenue increased 1% compared to the quarterly average and operating income rose marginally from $5.5 billion to $5.7 billion as ANZ remains focused on simplifying the bank and remedying historic underperformance.
What they said: “The quarterly result highlights the early progress we are making in executing our ANZ 2030 strategy,” ANZ Chief Executive Officer Nuno Matos said.
“Our productivity program aimed at removing duplication and simplifying the bank is well underway, delivering a significant reduction in expenses while growing revenue.
There was an improvement across our key financial metrics, including the return on tangible equity which rose to 11.7% and cost to income ratio to below 50%.
“This is the beginning of our five-year journey to become the best bank for customers and shareholders in Australia and New Zealand.”
The source: ANZ release
