Australia and New Zealand Banking Group Limited (ANZ) has reported a robust start to the 2026 financial year, delivering strong earnings growth, improved efficiency metrics and a solid capital position. The Company’s 2026 First Quarter Trading Update highlights early progress under its ANZ 2030 strategy, with management emphasising productivity, simplification and sustainable returns. The announcement increased ANZ’s share price by 8.44% (as of 2:43 pm AEDT).
ANZ operates across Australia and New Zealand, with established positions in Institutional banking and the New Zealand market, supported by a diversified presence in Asia. This broad footprint provides exposure across multiple markets and customer segments, strengthening earnings resilience.
Strong Profit Growth and Improved Returns
ANZ reported an unaudited Statutory Profit of $1.87 billion and Cash Profit of $1.94 billion for the quarter ended 31 December 2025. Cash Profit rose 75% compared to the 2H25 quarterly average, which had been impacted by significant items. Excluding those items, Cash Profit increased 17%, reflecting disciplined cost management and revenue growth.
Key highlights include:
- Cash Profit: $1.94 billion (+75% vs 2H25 quarterly average)
- Return on Tangible Equity (RoTE):7% (+173bps vs 2H25 quarterly average excluding significant items)
- Cost-to-Income Ratio:5% (down 505bps)
- Operating Income: $5.7 billion (+4%)
- Operating Expenses: $2.8 billion (-21%)
Profit before provisions rose 52% to $2.9 billion, demonstrating the impact of cost reduction initiatives and revenue expansion. The Company’s cost-to-income ratio fell below 50%, a significant milestone that underscores improved operational efficiency.
ANZ Chief Executive Officer Nuno Matos said: “The quarterly result highlights the early progress we are making in executing our ANZ 2030 strategy.
“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%.
“Looking ahead, we continue to be fully engaged in executing our ANZ 2030 strategy. This is the beginning of our five-year journey to become the best bank for customers and shareholders in Australia and New Zealand,” Mr Matos concluded.
Figure 1: Overview of the financial performance of ANZ in the First Quarter of 2026 [ANZ]
Revenue Growth and Deposit Expansion
Suggested Image Placement: Bar chart showing revenue, deposits and loan growth for 1Q26.
Revenue increased 1% excluding significant items, supported by:
- 0.4% growth in net interest income
- 5% growth in other operating income
- Markets income of $557 million (+5%)
Group Net Interest Margin improved 2 basis points to 1.56%. Excluding Markets, NIM rose 3bps, benefiting from a favourable funding mix shift towards operational deposits and higher earnings on replicating portfolios. These gains offset central bank rate reductions and competitive asset pricing pressures.
Customer deposits rose strongly, increasing $39 billion (up 5%) to $787 billion at 31 December 2025. Excluding Markets, deposits grew $12 billion across all divisions. Net loans and advances increased $8 billion (up 1%) to $837 billion, with Institutional lending contributing $5 billion of growth.
Balance Sheet Strength and Capital Position
ANZ continues to maintain a strong capital and liquidity profile.
- CET1 Ratio (Level 2): 12.15% (+12bps vs September 2025)
- Liquidity Coverage Ratio (LCR): 133%
- Net Stable Funding Ratio (NSFR): 116%
The increase in the CET1 ratio reflects quarterly earnings and the return of surplus capital to ANZBGL, including capital from ceasing the remaining ~$800 million share buy-back. These were partly offset by dividend payments and risk-weighted asset growth.
The Company also issued $11.2 billion of term wholesale debt since 1 October 2025, maintaining diversified funding sources.
Credit Quality Remains Sound
Credit performance remained stable in 1Q26. Portfolio losses stayed low, supported by customer resilience and relatively stable economic conditions.
Key credit metrics:
- Individual provision charge: $64 million (3bps annualised loss rate)
- Collective provision balance: $4.38 billion
- CP coverage ratio: 1.19%
- Non-performing exposures: 0.78% of total credit exposure
- Australian Housing 90+ DPD: 81bps
- NZ Housing 90+ DPD: 82bps
The Company noted it remains cautious given global economic uncertainty and interest rate movements, but asset quality indicators remain well controlled.
Progress Under ANZ 2030 Strategy
The first quarter reflects tangible steps in executing the ANZ 2030 strategy. Management continues to focus on simplification, integration and digital acceleration.
Strategic progress includes:
- Integration of Suncorp Bank, with migration targeted by June 2027
- More than 60% of 3,500 announced roles exited by end-December 2025
- Delivery of a single customer digital front-end on track by September 2027
- Strengthening non-financial risk management and remediation initiatives
The productivity program has already delivered an 8% reduction in expenses for the quarter, reinforcing the Company’s cost discipline while maintaining investment in strategic initiatives.
Figure 2: Progress pursuant to the ANZ 2030 strategy [ANZ]
Share Price Performance
ANZ shares have responded positively to the improved operating momentum.
- Last Price (ASX): $40.34 (up 8.44%)
- 1 Week: +8.82%
- 1 Month: +13.79%
- 2026 YTD: +11.01%
- 1 Year: +29.17%
- Market Capitalisation: ~$121.6 billion
The stock has outperformed both its sector (+22.53% vs sector over one year) and the ASX 200 (+23.25% vs index over one year), reflecting improved investor confidence in execution and returns.
Investors Outlook
ANZ’s 1Q26 result signals a strong operational reset under the ANZ 2030 strategy. The Company has delivered material cost reductions, improved return metrics and strengthened capital buffers within a single quarter. Revenue growth remains modest but stable, supported by deposit expansion and Institutional performance.
Investors will closely monitor:
- Sustainability of sub-50% cost-to-income ratio
- Ongoing margin resilience amid competitive lending conditions
- Execution of Suncorp integration
- Credit performance under evolving macroeconomic conditions
Strong liquidity metrics, an improving RoTE of 11.7%, and a CET1 ratio of 12.15% give ANZ a strong balance sheet and operational momentum as it enters FY26. In the medium term, the company seems well-positioned to provide increased shareholder returns if management maintains revenue growth and productivity gains under the ANZ 2030 framework.
