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Check against delivery
Thank you Nuno and good morning to everyone joining us today.
Overview
We are six months into Phase 1 of our ANZ 2030 strategy – and we have made solid progress this half.
As I noted at the end of last half, our focus is on sustainably improving our performance, and that means:
simplifying our organisation to drive more efficient outcomes,
maintaining a strong balance sheet and capital position,
and improving returns for our investors.
We have delivered on each of these with progress across all our key financial metrics:
Return on tangible equity increased by 161 basis points to 11.6%
CET1 capital ratio increased by 36 basis points to 12.39%
Cost to income ratio improved by 519 basis points to 49.4%, and
Revenue to risk weight assets increased 15 basis points to 4.88%.
Importantly, our performance delivered value for our shareholders, with a total shareholder return of 10.7% in the half. Dividends were maintained at 83 cents per share, and the franking rate increased from 70 to 75%.
As a result of our strong capital position at the end of this half, we will now not be undertaking a second discounted DRP and the interim DRP will be neutralised.
Cash profit & FX impacts
In the first half of 26, the Group delivered a cash profit after tax of $3.8 billion.
Excluding the significant items announced in the prior half, cash profit increased by 14% and Profit Before Provisions increased 12% half on half.
I want to particularly call out the FX movements which were more pronounced in this half.
As previously reported, we hedge a large portion of our non-AUD earnings and over this half these hedges helped offset the adverse FX translation impact.
In revenue we had a negative translation impact of $205m and a hedge benefit of $99m in Other Operating Income.
In expenses we benefited from a positive translation impact of $107m.
Therefore, at a Profit Before Provisions level the net FX impact was fully neutralised by our hedging strategy.
I’ll now step through the key drivers of results, starting with revenue. Our half on half comments will be based on comparisons to second half ’25 financials excluding significant items.
Revenue
Revenue was flat in the half however, on a constant currency basis and excluding the hedge benefit, Group revenue increased 1%.
On this basis, Net Interest Income was broadly flat. Deposit volume growth and margin management were offset by lending revenue. In addition, lending volume growth was softer in the half, particularly in Australia Home Lending and the Business Bank.
Other Operating Income ex Markets increased by 2% and Markets delivered another solid result with revenue growth at 8%.
I will talk more to deposits and lending volume, as well as markets income shortly.
Now, moving to margins.
Net Interest Margin (NIM)
Headline margin was one basis point lower in the half while margin ex Markets was up 2 basis points reflecting our disciplined approach to margin management. I’ll walk through the key factors that impacted NIM this half.
We continued to optimise deposit pricing offsetting the impact of rate cuts in offshore markets in the half, delivering an overall flat margin outcome for deposit pricing.
Asset and funding mix added 2 basis points, with growth in Save and Transact deposits as well as overall deposit growth outpacing lending growth.
Our replicating portfolios added 2 basis points, benefiting from higher rates and our decision to modestly lengthen the duration of the portfolio. And,
timing impacts from RBA rate changes, as well as continued Australia home loan pricing competition drove a 3 basis points asset pricing reduction in the half.
When adjusted for temporary factors, we exited March with Group NIM consistent with the overall first half average of 1.53%.
In terms of outlook, we remain disciplined in our execution. Looking forward we face both tailwinds and headwinds.
We anticipate that higher term rates and our house view of further RBA and RBNZ cash rate increases will be supportive to NIM. In particular, a further 7 basis points of tailwind to NIM from replicating portfolio earnings is expected over the next 12 to 18 months
However, sustained levels of competition and customers shifting to term deposits as rates increase, presents potential margin headwinds.
Based on these factors and noting that margin outcomes may vary from quarter to quarter, we see a bias to the upside in NIM ex Markets in the next half.
Balance sheet: Customer deposits
Moving to the balance sheet.
Ex Markets, customer deposits grew by $11 billion in the half.
And the performance was stronger on a constant currency basis, with deposits up $20 billion.
Volumes grew in all divisions with the exception of Suncorp Bank where deposits were broadly flat.
Core to our strategy is deepening customer relationships and improving the quality of our deposit base. With this focus, we grew our Save & Transact deposits by $16 billion on a constant currency basis this half, delivering a positive mix shift.
Operational deposit growth of 8% on a constant currency basis was a particular highlight in our Payments and Cash Management business. On the same basis these deposits have grown 28% over the past two years as we continue to prioritise serving the transactional banking needs of our Institutional clients.
While deposit growth and mix were positive this half, Australia Retail deposit growth remained below system and remains a focus as Nuno has highlighted.
Balance sheet: Lending (NLA)
Turning to lending.
On a constant currency basis, customer loans and advances increased by $16 billion in the half, with all divisions contributing to the growth.
In Australia Retail, home loans grew $5 billion, reflecting below system housing growth. As Nuno has said, we expect to be at or around system in April and in the second half.
Growth across Business Bank was mixed and below the broader market. This business is in transformation and we are investing to accelerate growth.
In New Zealand, Business and Agri lending grew at 1.1 times system, and home lending grew 0.8 times system in a highly competitive market characterised by a record level of customer switching, and migration to lower margin fixed rate lending.
In Institutional, growth this half was in shorter-tenor supply chain trade finance. This was pronounced towards particularly the end of the quarter as customers started to secure their supply chain inventories given the current geopolitical environment.
Markets revenue
Turning to Markets.
The business again delivered consistent, high-quality earnings with income of $1.1b, up 8% this half, and up 7% on the prior first half, on a constant currency basis.
This outcome reflects increased customer activity across key products. FX, Rates and Commodities income all increased compared with the same period last year. In FX and Rates, customer demand for structured products increased as customers sought to mitigate downside risks in this environment. In Commodities, demand for gold underpinned performance this half. These positive contributions were partly offset by lower franchise credit income due to wider credit spreads.
Balance Sheet revenues also grew driven by higher liquid asset volumes and improved yields.
The result was further supported by geographic diversification, with 72% of Markets income generated outside Australia, providing an important and resilient source of earnings diversification for the Group.
Looking ahead, our Markets business remains well placed to continue to support our customers as they navigate volatile markets.
That said, in periods of extreme volatility in financial markets, customers tend to step back from risk management activity and adopt a wait and see approach. This could be a headwind in a prolonged Middle East conflict.
Operating Expenses
Now turning to expenses.
At the full year results last year, we outlined actions to remove duplication and simplify the organisation. We delivered a 9% half on half reduction in operating expenses and 8%, on a constant currency basis.
This reflects a substantive shift in how we manage cost and drive operational efficiency across the organisation – representing a structural reset of our cost base.
Specifically:
78% of the 3,500 FTE reductions have exited the Group as at April 30. More than 1,000 managed service contractors were exited at the start of the financial year.
We also optimised third party spend by consolidating and rationalising our vendor base, reducing total vendors by 8%.
We exited non-core businesses and activities at pace. Those exits reduced complexity and lowered costs in the half.
Together these actions are delivering a step change in cost discipline and realising approximately $392 million of productivity in the first half.
Suncorp Bank synergies contributed a further $29 million of first half productivity, primarily from the removal of duplicative project spend.
Investment spend overall was lower this half, reflecting both the seasonal phasing of spend and stopping initiatives not aligned with our strategy. We will remain within our full year investment envelope of approximately $1.5 billion. Our expense rate for investment continues to be a sector leading approximately 80%.
At the full year results, we outlined an expectation that FY26 costs would be down approximately 3% from the $11.85 billion baseline, which reflects the FY25 cost base adjusted for significant items.
Our productivity program is now on track to deliver an estimated $875 million of savings this year, up from our previous target of $800 million.
In addition, we expect a FX translation benefit of $210 million this year, if FX rates remain consistent with the first half average.
As a result of our recent agreement to acquire Worldline shares, in the ANZ-Worldline merchant acquiring joint venture, we will consolidate the expense base of the business, post regulatory approvals. We remain confident that this expense impact can be absorbed within our overall outlook.
Taken together, we are updating our expense outlook. We now expect costs to be down approximately 5% in FY26 from our FY25 cost base adjusted for significant items of $11.85 billion.
Portfolio quality
Let me turn now to portfolio quality.
We recorded an individual provision charge for the half of $148m. Including $79m for our wholesale and small business exposures.
This resulted in an annualised individual provision loss rate of 4 basis points, which has now remained stable for three consecutive halves and is well below our long run loss rate of 11 basis points.
Our low individual provisions are the product of portfolio derisking over several years to strengthen our asset quality.
We have been monitoring developments in the Middle East where we have limited exposure, less than 0.5% of total Group exposure.
This exposure is focused on investment grade government-related entities, central banks, sovereign wealth funds and sovereign backed corporates. We believe these customers are well placed to withstand stress and we continue to support them.
Our Institutional portfolio continues to be high quality with over 92% of our institutional exposure investment grade. Importantly, nearly two thirds of this exposure is to financial institutions and sovereigns where we’ve had near 0 bps loss experience since the GFC.
For Business & Private Bank we continue to focus on ensuring strong levels of collateral coverage with 83% of exposure being fully covered by collateral and a loss rate of 13 basis points in the half, down from 20 basis points in the second half ‘25.
Our Australian Mortgage customers delinquencies decreased 3 basis points in the half to 83 bps, and our mortgage customers continue to show resilience with 88% of accounts ahead on repayments, and approximately 70% of customers holding savings buffers of 3 months or more.
Similarly, our New Zealand mortgage portfolio delinquencies decreased by 6 basis points in the half down to 80 basis points.
Now, while we have not seen a material increase in customer requests for hardship relief, we are very conscious of the stress from higher interest rates and cost of living pressures. We are closely monitoring and providing support for our customers against this evolving macroeconomic backdrop.
Provisioning
Now moving to Collective Provisions, where we considered the Middle East conflict and took a balanced view at the end of March.
Transmission to the broader economy is still at an early stage and our portfolio is strong, but there are clearly risks to both the domestic and global economies especially if the conflict is not resolved in the near term.
We have reflected this view by increasing the weighting to our severe scenario, by 2.5%. This increased our collective provision charge by $175m. Over the half we also made adjustments to our overlays and together with portfolio growth, credit quality improvements and model changes, our resultant collective provision charge for the half was $126 million. Overall, the collective provision balance has increased to $4.45 billion, lifting coverage by 4 basis points to 1.22% of credit risk weighted assets.
This new collective provision balance represents a post-COVID high in coverage levels, with the collective provision balance now around $2.5b above our base case scenario and $65m above our downside scenario.
In reviewing the adequacy of our settings, we also considered:
One, our scenario weights are now skewed 52.5% to our two downside scenarios reflecting the current volatile geopolitical environment.
Two, existing collective provision balance levels cover 13x the individual provision losses taken in FY25, and 20x based on the average of individual provision losses taken since FY23. This is well above peers.
Three, the continued resilience of our high quality onshore and offshore portfolios as evident by consistently low IP loss rates.
Overall, these settings reflect an appropriate approach, and we will continue to actively review our provision balances as conditions evolve.
Capital
Now turning to Capital. As I noted earlier, we have taken decisive action to strengthen our Capital position, and this is reflected in our CET1 ratio increasing to 12.39% as at March.
The dividend remains stable at 83 cents per share and franking increases from 70% to 75%. This higher franking reflects the improving performance of the Australian geography.
At FY25 results, we had announced the potential to discount the 1H26 interim dividend subject to our capital position and needs at the time.
As I mentioned, this discount will now not occur and the DRP will be neutralised. This is reflective of our improved capital position, including the benefit of higher participation in the FY25 discounted DRP and, clarity on the direction of the RBNZ capital changes.
It is also our intention to continue to neutralise future DRPs.
With a stable dividend and improving profit, the Pay Out Ratio has reduced to 66%, and is now broadly in our target range of 60% to 65%. A Payout Ratio at this level, retains capital for the underlying growth capacity to deliver on our ANZ 2030 strategy.
We welcome the announcements in recent months from both the RBNZ and APRA regarding capital settings and capital reviews, and agree that these will encourage better capital management and importantly better alignment between risk settings and capital allocation.
Notwithstanding some of the recent volatility in the markets, and a modest increase in funding costs, we have continued to have good access to funding markets and a strong liquidity position. Key funding and liquidity metrics remain well above regulatory minimums.
However, uncertainty is heightened and this is an area we will continue to monitor closely.
Financial targets + Tracking our progress
In closing, I wanted to reiterate the financial targets we have set for ourselves, including the upward revision to our Productivity target for FY26.
Phase 1 is progressing as intended, and the delivery is now evident in the numbers – improved returns, higher efficiency and strong balance sheet settings, while continuing to invest in the franchise.
As conditions evolve, including ongoing geopolitical uncertainty, we will continue to actively manage our balance sheet and risk settings and support customers as needed.
Our priorities and targets under ANZ 2030 remain very clear. We will continue to report transparently at every result, and we will be held to account on delivery.
Thank you.
For media enquiries contact:
Lachlan McNaughton
Head of External Communications
Tel: +61 457 494 414Siobhan Jordan
Senior Media Relations Manager
Tel: +61 403 988 326For analyst enquiries contact:
Kylie Bundrock
Group General Manager, Investor Relations and M&A
Tel: +61 403 738 809Cameron Davis
Executive Manager, Investor Relations
Tel: +61 421 613 819Important Information
References to “ANZ” and “ANZ Group” are to ANZ Group Holdings Limited ABN 16 659 510 791 and its controlled entities.
This document contains general background information about the activities of the ANZ Group current as at 30 April 2026. It is information given in summary form and does not purport to be complete.
It is not intended to be and should not be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.
This document may contain certain forward-looking statements or opinions including statements regarding our intent, belief or current expectations with respect to the ANZ Group’s business operations, market conditions, results of operations and financial condition, capital adequacy, sustainability objectives or targets, specific provisions and risk management practices. These matters are subject to risks and uncertainties that could cause the actual results and financial position of the ANZ Group to differ materially from the information presented herein. When used in this document, the words ‘guidance’, ‘forecast’, ‘estimate’, 'goal', 'target', 'indicator', 'plan', 'pathway', ‘ambition’, ‘modelling’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to the ANZ Group and its management, are intended to identify forward-looking statements or opinions. Forward-looking statements or opinions may also be otherwise included in this document, including by the use of footnotes. Those statements, including in respect of ANZ’s 2030 Strategy, immediate priorities and financial targets, are not guarantees or predictors of future performance, and may be affected by inaccurate assumptions or unknown risks and uncertainties or other factors, many of which are beyond the control of the ANZ Group or may not be known to the ANZ Group at the time of the preparation of this content, such as instability in global economic conditions, external exchange rates, competition in the markets in which the ANZ Group will operate, and the regulatory environment. Each of these statements and related actions is also subject to a range of assumptions and contingencies, including the actions of third parties, interdependencies between strategic and regulatory programs of work, management decisions, execution risk, and are based on corporate plans that are subject to change and may vary materially as plans continue to be developed. As such, these statements should not be relied upon when making investment decisions.
There can be no assurance that actual outcomes will not differ materially from any forward-looking statements or opinions contained herein.
The forward-looking statements or opinions only speak as at 30 April 2026 and no representation is made as to their correctness after this date. No member of the ANZ Group undertakes to publicly release the result of any revisions to these statements to reflect events or circumstances after this date.
Financial information in this document is presented on a cash profit basis unless otherwise stated. Cash profit, a non-IFRS measure, represents the Group’s preferred measure of the result of its core business activities, enabling readers to assess Group and divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory profit (refer to pages 69 to 71 of ANZ Group Holdings Limited First Half 31 March 2026 Consolidated Financial Report Dividend Announcement and Appendix 4D for analysis of the adjustments between statutory profit and cash profit and Definitions on pages 127 to 130 for further information).
All amounts in this document are in Australian dollars unless otherwise stated. Sum of parts within charts and commentary may not equal totals due to rounding.
anzcomau:newsroom/mediacentre/speeches-presentations
ANZ CFO Farhan Faruqui Remarks, Investor Briefing, ANZ 2026 Half Year Results
2026-05-01
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