Australia and New Zealand Banking Group (ANZ), one of the nation’s big four lenders, has delivered a robust 9% jump in half-year statutory profit to AU$3.65 billion, outpacing national inflation twice over, as the bank pushes forward with a sweeping internal restructuring and cultural reset under a year-old leadership team.
Released on Friday morning, the latest financial results covering the six months to March 31 show steady growth across core banking metrics: total customer deposits rose 3% to add AU$23 billion to the bank’s balance sheet, while aggressive cost-cutting measures brought operating expenses down 22% year-on-year. The cost reductions have been tied to a widely publicized plan to cut 3,500 roles, announced in September 2023, with full implementation of the layoffs scheduled for September 2024.
Nuno Matos, ANZ’s chief executive who will mark his first year in the role later this month, framed the strong results as proof the bank’s overhaul is on track. “We have refreshed our leadership team and commenced our cultural reset with new corporate values,” Matos said in a statement accompanying the results. “We have also made significant progress to reduce duplication and simplify the bank’s operations.”
Against a backdrop of rising interest rates, persistent inflation, and intensifying competition across Australia’s retail banking sector, where consumers are increasingly shopping around for better loan and deposit terms, Matos noted that the bank’s active margin management kept profit margins stable through the half-year, even as lending and deposit growth remained moderate. Statutory profit, which excludes one-off significant items, hit the AU$3.65 billion mark, while the bank’s preferred cash profit metric recorded a stronger 14% year-on-year increase.
Shareholders will receive an 83-cent dividend per share, fully franked to 75% — an increase from the prior period’s 70% franking, though the total dividend amount has held steady from the last reporting cycle. All key performance metrics improved over the period: return on tangible equity rose and the bank’s cost-to-income ratio also moved in a positive direction, in line with the lender’s cost-cutting targets.
Matos, whose first year in charge has been defined by mass layoffs, structural streamlining and cultural reform, acknowledged the challenging operating environment facing the global and domestic economy, singling out the ongoing Iran crisis as a growing risk to global growth and inflation. “As Australia’s most international bank we have a front-row seat to global developments,” he said. “Much of the potential impacts of this crisis in Iran remains ahead of us, but the longer the flow of oil is constrained, the greater the chance the crisis shifts from being primarily an inflation challenge to much more of a supply and growth challenge.”
On the domestic front, Matos noted that both corporate and household balance sheets have held up well through the current period of economic volatility. ANZ’s corporate clients have been proactive about building capital and liquidity buffers, boosting flexibility and strengthening supply chain resilience, he said. For households in both Australia and New Zealand, he added, most entered the current period of financial shock with strong balance sheets and elevated savings buffers accumulated during the pandemic.
“ We have not seen any material increase in new customers entering hardship or receiving assistance,” Matos said. “However, we recognise that some individuals and businesses are navigating these challenging circumstances. We urge customers who may need assistance to contact us.”
Matos is scheduled to answer questions from financial analysts and reporters later on Friday, where further details on the timeline of restructuring, future cost-cutting plans, and the bank’s outlook for the second half of 2024 are expected to be revealed.