ANZ Group Holdings Limited (ANZ) is one of Australia’s largest banks, serving retail, small business, and institutional customers across Australia, New Zealand, and Asia. The bank operates through core segments, including retail banking, commercial lending, institutional banking, and wealth. With a long operating history and deep deposit base, ANZ plays a central role in the country’s financial system.
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Heading into 2026, ANZ is coming off a steadier year marked by improving capital ratios, disciplined lending settings, and more predictable credit trends. Investors are watching how effectively the bank can translate stable conditions into consistent earnings, especially as competition in mortgages and deposits remains intense. Margin resilience, cost control, and credit behavior remain the swing factors that will determine whether ANZ can outperform peers in a slower-growth environment.
The latest valuation work shows moderate upside potential if ANZ can maintain its operating rhythm while continuing to invest in digital capabilities and targeted growth areas. With CET1 levels comfortably above regulatory minimums and conservative provisioning settings, the bank has strategic room to reinforce earnings durability. The key to 2026 will be execution across deposits, costs, and capital deployment.
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Financial Story
ANZ delivered a steady financial performance with revenue growing 5.1% year over year. Lending growth in core Australian and New Zealand markets helped support the top line while rising deposit volumes offset some of the funding pressure seen across the sector. A disciplined approach to loan pricing and mix contributed to relatively stable net interest margins, a key anchor in a competitive landscape.
| Metric (FY25) | Value |
|---|---|
| Revenue | A$31.18B |
| Cash Net Profit After Tax | A$7.27B |
| EPS | Down 12.5% YoY |
| Net Interest Margin | 1.67% (stable) |
| ROE | ~10.7% |
| CET1 Ratio | 13.3% |
| Dividend | Maintained at steady payout levels |
Profitability held up well thanks to strong expense discipline and benign credit conditions. Cash earnings were supported by lower-than-expected impairment charges and restrained cost growth despite continued investment in digital transformation. These elements helped protect returns through the year and contributed to the bank’s ability to maintain a healthy dividend profile. ROE moved in the right direction, aided by better capital efficiency.
Capital strength remains a highlight. With CET1 above 13%, ANZ has optionality in balance sheet management, potential buybacks, and targeted reinvestment. The steady capital build gives investors confidence as the bank navigates what is likely to be a slower credit-growth environment. Overall, ANZ enters 2026 with a balanced financial foundation and a clearer earnings profile than it had several years ago.
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Broader Market Context
The Australian banking landscape has become more predictable as rate volatility has cooled and consumer conditions have stabilized. With inflation easing and credit trends remaining benign, most major banks are shifting their strategic attention toward efficiency and digital scale. Investors are seeking banks that can show consistent cost control, resilient margins, and disciplined capital allocation.
ANZ compares favorably in several of these areas. The bank’s multi-year simplification initiatives, combined with strong deposit traction and a well-managed credit book, give it a steadier runway than during earlier parts of the cycle. Still, macro conditions remain modest, making operational execution a key determinant of investor confidence in the year ahead.
1. Margin Shape and Interest Rate Dynamics
Margins remain the core swing factor for ANZ. While net interest margin was relatively stable through FY25, competitive pressures remain intense across both mortgages and deposits. The bank’s ability to preserve spread without overextending on volume will define how consistently it can grow earnings. Investors will focus closely on repricing actions and deposit mix development.
Strong deposit performance acts as a key stabilizer. ANZ demonstrated healthy growth in lower-cost deposits, which helps offset funding cost volatility. Continued momentum here would meaningfully boost visibility on margins through 2026. The challenge is maintaining this deposit strength in an environment where consumers remain rate-sensitive and competitors remain aggressive.
2. Credit Quality and Provisions
Credit performance continues to be a bright spot. Arrears across housing and business lending remain low, and early indicators show little stress emerging. Provisioning remains conservative, reflecting a cautious stance despite benign conditions. This conservative posture strengthens ANZ’s resilience if macro conditions soften.
Heading into 2026, investors will track whether credit charges remain contained as household budgets face lingering cost pressures. If ANZ can maintain its current credit trajectory, it will support both earnings stability and valuation upside. The bank’s consistent underwriting discipline remains one of its stronger competitive advantages.
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3. Capital Strength, Costs, and Returns
Capital resilience stands out. The CET1 ratio above 13% provides a comfortable buffer for regulatory requirements and positions ANZ well for future capital deployment. With strong capital, the bank has greater flexibility in managing dividends, strategic investment, or potential buybacks.
Cost discipline also improved during the year. The bank is balancing investment in digital systems with a sharper focus on efficiency. Investors want to see these efforts translate into operating leverage as revenue grows at a measured pace. If ANZ demonstrates sustained cost control, its return profile has room to strengthen further.
The TIKR Takeaway
ANZ enters 2026 from a position of cautious strength. Margin stability, benign credit conditions, and above-average capital metrics provide a solid foundation. Investors will watch how effectively the bank manages competition, costs, and deposit mix as economic growth remains modest. If execution stays consistent, ANZ has room to deliver steady, incremental upside.
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The setup appears balanced heading into 2026. ANZ offers stable credit quality, strong capital, and improving cost efficiency, but earnings growth will depend on margin stability and execution. The stock’s potential return profile looks reasonable, supported by a clearer strategic path but still tied to disciplined delivery.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
