ANZ Group cash profit jumps, shares hit record high on cost cutting program

By Scott Murdoch and Roushni Nair Feb 12 (Reuters) – ANZ Group shares shot to a record high on Thursday after its first-quarter cash profit topped expectations and showed signs of early benefits from a cost-cutting overhaul under new CEO Nuno Matos.  Cash profit for the three months to December 31 was A$1.94 billion ($1.38 billion), up 17% on the quarterly average of the 2025 second half. Statutory profit came in at A$1.87 billion. Cash return on tangible equity was up 173 basis points to 11.7% — a key measure of how efficiently the bank converts capital into earnings. ANZ said 60% of its the 3,500 staff cuts had occurred by the end of 2025, which helped it to deliver an 8% reduction in expenses in the quarter. "Our productivity program aimed at removing duplication and simplifying the bank is well underway, delivering a significant reduction in expenses while growing revenue," Matos said in a statement. ANZ shares jumped as much as 7.9% in early trade to a record A$40.14 before easing to A$39.80 by 1142 GMT. The S&P/ASX200 was up 0.3% on Thursday. The profit was 6% ahead of Citigroup's expectations, while ANZ's A$5.7 billion revenue was in line with forecasts. "The beat was largely driven by faster than expected progress on costs, with with costs about 3% below our expectations in the quarter," Citigroup analyst Thomas Strong said. "We expect the result will be well received given the progress on strategy and signs that improving macro environment is being experienced broadly across the sector." The higher than expected drop in expenses follows a broad reorganisation Matos launched soon after he joined mid last year, including redundancies and a move to simplify the bank. Reuters reported the overhaul included 3,500 job cuts by September this year, 1,000 contractor roles, and an A$560 million restructuring charge, with Matos saying the the company would also end projects not aligned to priorities. ANZ's common equity tier 1 (CET1) ratio, a closely watched measure of its spare cash, edged up to 12.15% at December 31 from 12.03% at September 30.  Its cost-to-income ratio fell to 49.5%, as operating expenses dropped 21% from the second-half quarterly average. Revenue for the quarter rose 1% from the second-half quarterly average excluding significant items, with net interest margin up 2 basis points to 1.56% as funding mix shifts helped offset central bank rate cuts and loan competition. Credit quality remained resilient, the bank said, with an easing of Australian housing loans 90+ days past due. ($1 = 1.4033 Australian dollars) (Reporting by Scott Murdoch in Sydney, Roushni Nair and Rajasik Mukherjee in Bengaluru; Editing by Alan Barona, Vijay Kishore and Kim Coghill)

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