ANZ has posted a cash profit of $3.57 billion for six months ending 31 March, up 12 per cent compared to 2H24, but flat on the prior corresponding period when the cash profit came in at $3.55 billion.
In its half-year results filed with the ASX on Thursday, ANZ reported a statutory profit after tax of $3.64 billion, an increase of 16 per cent on 2H24, and 7 per cent on 1H24.
Operating income added 7 per cent on the prior period and 10 per cent on 1H24, coming in at $11.2 billion, while operating expenses expanded 5 per cent and 12 per cent, respectively, to $5.8 billion.
“Our strong performance has again been driven by our continued momentum across each of our divisions, demonstrating the benefits of a stable, consistent strategy combined with sensible, targeted investment,“ said outgoing chief executive Shayne Elliot, who is set to be replaced by Nuno Matos next Monday.
The bank also posted its highest-ever half-year revenue, driven by a “step change” in earnings after recording its first full half of Suncorp Bank’s contributions since completing the acquisition in July, the CEO said.
“As I hand over to our incoming CEO Nuno Matos, the bank is well placed for the future. Our strong balance sheet, along with our diversified portfolio, leave the bank well placed to navigate ongoing volatility,” said Elliot.
The big four bank’s net interest margin, while stable at 1.56 per cent compared with March last year, narrowed 2 basis points from 2H24. This, combined with a flat interim dividend of 83 cents per share (partially franked at 70 per cent), saw its share price contract by some 3 per cent by 1 pm.
Confronting uncertainty
Also on Thursday, ANZ announced it has completed $1.2 billion of its $2 billion on-market share buyback and has filed with ASIC to extend the program by another 12 months.
“Given the increased uncertainty regarding global conditions, ANZ will adopt slightly more conservative capital settings, including the flexibility to adjust the pace of the remaining buyback.”
Moreover, the bank’s common equity tier 1 (CET1) was recorded at 11.8 per cent, 0.4 per cent below 2H24’s 12.2 per cent.
Looking forward, Elliot said that as the future of global conditions remains uncertain, there will inevitably be bouts of volatility.
“It is times like these that our strong balance sheet, including capital, provisions and liquidity, is critical,” he said.
“The portfolio derisking over several years adds further to our balance sheet strength, and we have experienced another half of extremely low credit losses of only 4 basis points. This strength will allow us to navigate the uncertainty – and importantly continue to support our customers.”
The CEO also highlighted opportunities in volatile markets, pointing to strong growth in its markets business.
“Our diversified business is a key strength, and we will continue to follow our customers as they adjust their strategy and seek to move capital, taking advantage of our global reach, quality customers and simpler business,” he said.
He confirmed that work is additionally underway to strengthen the banks non-financial risk management practices and risk culture to meet the Australian Prudential Regulation Authority’s expectations.
This comes after ANZ in March entered into a court-enforceable undertaking (CEU) with APRA, committing to a sweeping overhaul of its risk framework. The regulator also increased ANZ’s capital requirement to $1 billion, escalating concerns over the bank’s ongoing weaknesses in non-financial risk management and risk culture.
Elliot bids farewell
In his outgoing remarks, Elliot said that it has been his “honour” to lead the bank over the last decade.
“I am confident that ANZ today is a simpler, stronger and better bank as I hand the mantle over to our new chief executive,” he said.
“Over this time we have focused our strategy, strengthened the balance sheet, tightened customer selection, delivered significant productivity benefits, improved capital efficiency, reduced risk intensity and made a material shift in our culture. In doing so, we returned about $48 billion to shareholders, while retaining sufficient capital to build a better bank for the long term.
“I am grateful to my colleagues across the world who work to support our customers and the community every day and I wish Nuno the very best as he leads the next phase of ANZ’s journey,” Elliott concluded.
