The ANZ Group Holdings Ltd (ASX: ANZ) share price is under the spotlight after reporting its FY26 half-year result.
ANZ is one of the largest banks in Australia and New Zealand.
FY26 half-year result
Here are some of the highlights for the six months to 31 March 2026 compared to the second half of FY25:
- Operating income up 3% to $11.2 billion
- Underlying cash profit before provisions up 12%
- Cash profit up 70% to $3.8 billion
- Underlying cash profit up 14% to $3.8 billion
- Statutory net profit grew 62% to $3.65 billion
- Dividend per share flat at $0.83
What drove these numbers?
There were significant items in the FY25 second half, so there comparing the statutory numbers doesn’t give at true picture of performance in the first half, so the ‘underlying’ numbers give a better view.
Excluding those significant items in the second half of FY25, operating income was flat, operating expenses declined 9%, underlying cash profit rose 14% and underlying statutory profit increased 9%.
Compared to the balances at 30 September 2025, the March 2026 figures excluding ‘markets’ showed 2% customer deposit growth and 1% net loan and advance (NLA) growth.
Some of the bank’s profitability metrics increased significantly. The cost to income ratio improved from an underlying 54.6% in the FY25 second half to 49.4% in HY26.
Return on tangible equity (ROTE) improved from an underlying 10% in the FY25 second half of 11.6% in HY26.
NIM
Excluding ‘markets’, its lending profitability – the net interest margin (NIM) – saw a slight improvement. NIM is a key metric for profit generation and gives insights into the level of lending and deposit competition in the market.
The NIM increased from 1.54% in the second half of FY25 to 1.56% in the first half of FY26. Higher reinvestment rates and favourable deposit growth and mix more than offset the negatives of the timing of rate changes and home loan competition.
But, including market activities, NIM declined slightly to 1.53%.
Credit quality
The bank said that portfolio losses remain low, reflecting “continued strong overall credit quality and limited impact from the Middle East conflict during the half”.
It said its HY26 individual provision charge was $148 million, $20 million lower than the FY25 second half. This represents a 0.04% (4 basis points) annualised individual provision loss rate, in line with FY25.
For the half, it has taken a collective provision charge of $126 million, including a $175 million charge for potential Middle East impacts.
The Middle East conflict is expected by ANZ to lead to greater economic uncertainty, with expectations of lower growth, higher inflation and interest rates “likely to challenge some customers”.
Outlook for the ANZ share price
The ASX bank share said it’s continuing to work on its 2030 five immediate priorities.
It said its new executive committee and corporate values are in place.
ANZ noted it’s on track to complete a safe and secure migration of Suncorp Bank customers to ANZ by June 2027.
In terms of accelerating the delivery of a single customer ‘front-end’, it’s on track to deliver to all retail and small business customers by September 2027.
Its goal to reduce duplication and simplify the organisation has seen 78% of 3,500 announced roles to exit the bank by the end of April 2028.
Its final target is enhancing non-financial risk management to improve resilience – it’s on track to deliver the ‘root cause remediation plan’.
Is the ANZ share price a buy?
If I were a shareholder, I’d be happy with the numbers. The underlying profit growth was strong for a bank and its loan (and deposit) balances continue to grow.
However, most of the earnings growth appears to have been driven by expense reduction, rather than income growth, so I’m not sure how repeatable that level of profit growth would be in FY27.
There are other ASX dividend shares I’d rather buy, but ANZ is doing well for shareholders.
