Why Did ANZ’s Cash Profit Fall 10% Despite Rising Income?

ANZ’s Financial Performance Overview

ANZ Group Holdings Limited has released its full year results for the year ended 30 September 2025, revealing a mixed financial picture. The bank reported an 8% increase in statutory operating income to AUD 22.186 billion, reflecting growth across its lending and investment portfolios. However, cash profit, the bank’s preferred measure of core business performance, declined by 10% to AUD 5.891 billion. Statutory profit attributable to shareholders also fell by 2%, underscoring the impact of several significant charges during the year.

Dividend and Shareholder Returns

Despite the profit decline, ANZ has maintained its final dividend at 83 cents per share, partially franked at 70%, consistent with the interim dividend earlier in the year. The dividend payout ratio exceeded 100% for the half year, driven by the inclusion of significant one-off items. The bank continues to offer a Dividend Reinvestment Plan and Bonus Option Plan, encouraging shareholder participation in capital growth.

Significant Charges and Restructuring

The year was marked by several substantial charges that weighed on profitability. ANZ recognised a AUD 585 million pre-tax charge related to staff redundancies as part of a strategic simplification and cost reset initiative, with approximately 3,500 employees expected to depart by September 2026. Additionally, the bank settled regulatory investigations with the Australian Securities and Investments Commission (ASIC), incurring AUD 271 million in penalties and associated costs. Other notable charges included a AUD 285 million impairment of its investment in PT Panin, a AUD 97 million cost related to accelerating the integration of Suncorp Bank, and a AUD 78 million goodwill impairment on the Cashrewards acquisition.

Suncorp Bank Acquisition and Integration

ANZ completed the acquisition of Suncorp Bank in July 2024, and the full year results include 12 months of Suncorp’s financials. The bank finalised its purchase price allocation in 2025, adjusting goodwill and intangible assets accordingly. The integration timeline has been brought forward to June 2027 to accelerate value creation and reduce operational complexity, with associated costs recognised in the current period. Suncorp Bank contributed positively to net interest income but also added to operating expenses and credit impairment charges.

Capital, Liquidity, and Credit Quality

ANZ’s capital position remains robust, with a Common Equity Tier 1 (CET1) ratio of 12.0%, comfortably above regulatory minimums. Liquidity metrics such as the Liquidity Coverage Ratio and Net Stable Funding Ratio remain strong, reflecting prudent balance sheet management. However, credit impairment charges increased, driven by both individually and collectively assessed provisions, with gross impaired assets rising 50% year on year. The bank’s allowance for expected credit losses also increased, reflecting economic uncertainties and portfolio growth.

Outlook and Strategic Focus

ANZ is navigating a challenging operating environment marked by competitive lending markets, regulatory scrutiny, and integration complexities. The bank’s focus on simplifying operations, managing costs, and accelerating the Suncorp Bank integration signals a commitment to long-term shareholder value. While the current year’s results reflect transitional pressures, the maintenance of dividends and strong capital metrics provide a degree of confidence for investors.