ANZ Bank’s profit jumps to $1.94b, share price hits record high on cost cuts and rising revenues

ANZ Bank shares hit a record high on Thursday after posting a cash profit of $1.94 billion for the quarter ending December 31, up 6 per cent on the same period a year earlier.

The bank said profits climbed as it benefited from a significant cost reduction on a lower headcount and as revenues rose 3 per cent to $5.7b over the quarter.

Shares in the bank have surged nearly 38 per cent since Portuguese banker Nuno Matos took the chief executive role in May 2025 and promised investors he would turn around years of poor performance by slashing costs, shaking up its leadership team, integrating Suncorp Bank, and improving the online experience for customers.

ANZ shares were up 8.4 per cent at midday to $40.31.

Mr Matos claimed his plan to transform the bank by 2030 was on track.

“Our productivity program aimed at removing duplication and simplifying the bank is well under way, delivering a significant reduction in expenses while growing revenue,” he said.

“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.”

Costs fall

The bank’s total cost-to-income ratio fell 1.9 per cent to 49.5 per cent for the December quarter versus the prior corresponding period as it sees the financial benefits of plans to cut about 10 per cent of its total workforce - equal to 4500 staff. Its long-term target is to reduce its cost-to-income ratio to 45 per cent of operating revenues by 2030.

The bank’s cash profit of $1.94b was up 17 per cent versus the average over the final six months of 2025. Total costs were also down 8 per cent versus the average of the last six months of 2025 in results that impressed professional banking analysts.

“ANZ’s results show strong cost management and robust capital growth, earnings per share upgrades are likely,” UBS’ John Storey said.

“In our view, the ability of the group to hold onto revenue and market share as it goes though this period of cost out and restructuring is key to delivering cost to income targets.”

Australian economy resilient, banks climb

Despite the strong result, ANZ said it remains cautious on the broader economic outlook given the Reserve Bank’s move to lift official interest rates to 3.85 per cent earlier in February.

It reported that bad debt expenses on its loans remain lower than average and that total bad debts as a percentage of outstanding loans equalled 0.78 per cent in the December quarter, at the same level as the March quarter.

Total retail customers deposits climbed 3.9 per cent to $188b, versus $181b in the prior corresponding quarter. Its business bank saw total deposits climb 2 per cent to $124b.

ANZ added that it continues to progress plans to enhance its operational and non-financial risk management. Under previous chief executive Shayne Elliott it was plagued by a series of scandals, which resulted in corporate cop the Australian Securities and Investments Commission imposing a $240 million fine in September 2025.

Last December, Mr Elliott announced he would sue the bank he previously led to force it to pay him about $13.5m in bonuses he had stripped from him by the bank’s board as a result of the regulatory misdemeanours.

On Thursday, shares in rival Commonwealth Bank jumped 3.4 per cent to $175.62 to extend the bank’s two-day gain to more than 10 per cent. The move came after CBA’s profit report for the six months to December 30 beat the market’s expectations when released on Wednesday.

The broader financials sector dominated by the big four banks climbed 2.1 per cent on Thursday, versus a horror 4.9 per cent fall for the technology sector under ongoing pressure.