ANZ Group Posts 14% Profit Drop Amid Job Cuts, Regulatory Penalty, and Margin Pressure

ANZ Group, one of Australia’s major banks, reported a 14% decline in full-year cash earnings, weighed down by hefty one-off costs related to job cuts and a regulatory settlement. The lender’s net cash profit for the year ended September 30 fell to A$5.79 billion, missing analyst expectations of A$6.17 billion and down from A$6.73 billion a year earlier. Excluding the one-time charges, ANZ’s cash profit reached A$6.90 billion.

The Melbourne-based bank took a significant post-tax hit of A$1.11 billion, which included A$414 million in expenses for 3,500 staff redundancies and A$264 million in penalties to settle a lawsuit with the Australian Securities and Investments Commission (ASIC). The one-off charges reflect the challenges facing new CEO Nuno Matos, who is leading efforts to streamline operations, strengthen risk management, and integrate Suncorp Bank following its acquisition.

Despite growth in lending and deposits, ANZ’s Australian retail and institutional divisions saw profit declines of 35% and 9%, respectively, due to narrowing margins. The bank’s net interest margin slipped 2 basis points to 1.55%, highlighting the ongoing competition in Australia’s mortgage market. The Reserve Bank of Australia’s three rate cuts this year have boosted housing demand, but intense price competition among lenders has squeezed profitability.

Operating costs climbed 20% to A$2.14 billion, adding further pressure to earnings. ANZ declared a final dividend of 83 Australian cents per share, unchanged from the previous year.

The results echo similar challenges faced by rivals Westpac and National Australia Bank, which have also been grappling with shrinking margins, regulatory costs, and fierce competition. Australian lenders continue to focus on core domestic banking operations, trimming non-essential businesses to drive sustainable growth.