ANZ Group Holdings delivered a substantially improved half year result, with cash profit reaching $3,780 million and a return on tangible equity of 11.6%, demonstrating material progress in its transformation programme. The 14% increase in cash profit when excluding prior period significant items, combined with a 161 basis point improvement in return metrics, signals that the bank’s operational improvements are gaining traction beyond one-off gains.
The cost-to-income ratio compressing to 49.4%, down from 54.6% in the prior half, represents one of the most tangible evidence of the transformation’s effectiveness. This 520 basis point improvement reflects both the simplification of the business and the reduction of duplicative functions that management has been emphasising. For investors, this matters because it shows ANZ is moving towards becoming a more efficient operator, which typically supports sustainable earnings growth and margin expansion over time. The absolute improvement in operating expenses to $5,534 million from $6,107 million illustrates genuine cost discipline rather than just relative improvements from revenue growth.
Capital management also improved measurably, with the Common Equity Tier 1 ratio reaching 12.39%, up 36 basis points from September 2025. This modest increase despite the bank returning capital to shareholders through an increased interim dividend suggests ANZ is generating capital faster than it is deploying it, a positive signal for future shareholder returns. The dividend itself increased to 83 cents per share with franking rising from 70% to 75%, reflecting improved profitability and confidence in the earnings trajectory. Fully franked dividends hold particular appeal for Australian investors seeking tax-effective income.
The bank’s geographic and divisional performance remains mixed, with the Institutional division and New Zealand operations continuing to perform well, while the Australia Retail and Business divisions are clearly the focal point of transformation efforts. Customer deposits grew 3% and net loans advanced grew 1% when excluding markets activities, suggesting underlying demand remains resilient even as the business structure changes. The provision charge of $274 million remained modest relative to the profit base, indicating the bank is not signalling acute stress in its loan portfolio.
Investors should monitor several factors in the period ahead. The sustainability of the cost-to-income ratio improvement will be critical, as will progress in the Retail and Business divisions where transformation is most evident. The bank’s ability to grow revenue organically, particularly through net interest margin expansion in a changing rate environment, deserves close attention. Additionally, management commentary on regulatory capital requirements and the ongoing impact of prior significant items will provide clarity on the run-rate profitability investors can expect. The 11.6% return on tangible equity, while improved, remains below the cost of equity for a bank of ANZ’s profile, so evidence of further momentum will be important for validating the transformation thesis. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About ANZ Group Holdings Limited (ASX: ANZ)
ANZ Group Holdings operates one of Australia’s four major banks, with a strong presence in retail and commercial banking across Australia, New Zealand, and parts of Asia-Pacific.
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