ANZ announces $1.1 billion profit downgrade under new CEO Nuno Matos

ANZ’s new cost-cutting CEO Nuno Matos is making his mark by revealing some bad news early and getting it out of the way quickly - but it comes with big risks, banking analysts say.

The ANZ Bank took a $1.1 billion profit hit to cover staff redundancies, penalties for manipulating bonds, new costs for buying Suncorp, problems with an Indonesian investment and a cash rewards program write-off.

Mr Matos’ plan to cut 3500 technology jobs over the coming year, so more mortgage and business bankers can be hired, was the biggest component of the charge reported to the Australian Securities Exchange on Friday.

The staff redundancies will cost Australia’s fourth-biggest bank $414 million after tax — or 37 per cent of the overall $1.109 billion impairment for the second half of ANZ’s 2025 financial year.

The bank has listed five significant items that will affect its statutory and cash profits, for the six months ended September 30.

They include a $264 million penalty for incorrectly reporting bond trading data to the Federal Government, which affected 65,000 customers, following a settlement with the Australian Securities and Investments Commission, the corporate regulator.

The faster migration of Suncorp Bank into ANZ, following a $4.9 billion acquisition last year, is set to cost another $68 million related to the cost of existing contracts that extend beyond the June 2027 integration deadline to incorporate the assets of the Brisbane-based bank.

ANZ’s 38.3 per cent stake in the PT Bank Pan Indonesia is also proving costly, wiping $285 million from its earnings as a result of an impairment in its value.

ANZ will also write down the goodwill of its Cashrewards program for retail spending at a cost of $78 million, a month after Mr Matos announced ANZ would exit non-bank activities that lack economic or strategic rationale.

Moomoo chief market strategist Michael McCarthy said Mr Matos, a Portuguese-born career banker who has also worked in France, Brazil and Mexico, was getting the bad news out of the way as he slashed costs, less than six months after replacing Shayne Elliott.

“This is a clearing of the decks. The new CEO is taking out the rubbish and he’s cleaning up the matters that predated him,” he told The Nightly.

“This is something that ANZ has required. It’s been lagging its peers. Radical surgery was required.”

ANZ’s share price dipped by 0.54 per cent to $36.66 on Friday. The broader S&P/ASX200 was 0.04 per cent weaker.

“We are seeing the share price under modest pressure today - never good to be writing off billions of dollars,” Mr McCarthy said.

“Market hasn’t taken it well but shareholders should have been expecting this.”

MST Financial senior banking analyst Brian Johnson said Mr Matos was taking a big risk in cutting back on technology costs in the ANZ Plus platform, as the Commonwealth Bank, Australia’s biggest home lender, cemented its position as Australia’s most technologically advanced bank.

“My fundamental problem is, however, that anyone can take costs out, like you just do it,” he told The Nightly.

“It’s how well the business performs when the costs come out, so that’s a real issue. That remains to be seen whether he can generate the revenue they require to hit the target. It’s risky, but I think it’s certainly good to see some decisive action.”

ANZ also relies on mortgage brokers for two thirds of its home loans, making it much more reliant on this channel than the Commonwealth Bank, which leads to higher commission fees.

Mr Johnson said ANZ could still lose market share, even as it hired more mortgage bankers, after ending $2000 cashback offers for some refinancing customers.

“They’ve no longer got the lowest rates. They’ve no longer got the mortgage cashbacks. You lose market share,” he said.

“But the flipside is that the previous strategy where they were writing home loans at low rates with the mortgage cashbacks through the broker channel, that wasn’t earning their cost of capital.”

ANZ’S full results for the second half of the financial year will be announced on November 10.