ANZ Grou (ASX: ANZ) slips lower despite a solid result
ANZ Group (ASX: ANZ) is trading down ~4% following its FY26 results, with investors looking beyond a modest profit beat to focus on weaker-than-expected capital levels and ongoing margin pressure.
- Cash profit of $7.59bn was slightly ahead of consensus, supported by better cost control, but the bank’s CET1 capital ratio of 11.99% fell short of the 12.3% expected.
Group net interest margins slipped 2 basis points to 1.53%, reflecting intense lending competition, while New Zealand cash profit declined 12%. The result has triggered profit-taking after ANZ’s strong recent performance, with shares still up around 9% over the past year.
- The market’s concern is less about FY26 earnings and more about ANZ’s ability to deliver sustainable growth and stronger shareholder returns in FY27.
Australian retail earnings improved significantly and costs were well managed, but guidance for broadly flat margins in the first half of FY27 suggests competitive pressures are unlikely to ease quickly. The weaker capital position also reduces near-term flexibility for additional capital returns.
- Overall, this was a case of a headline profit beat masking some disappointing underlying trends, leaving investors looking for evidence of improving margins and capital generation before pushing the shares higher.
ANZ remains our favourite ASX bank but after outperforming through 2026 some profit taking isn’t surprising.
