Key Points

  • ANZ has agreed to pay A$240 million in regulatory penalties related to misconduct in bond trading and failures in retail operations.
  • UBS estimates ANZ could cut its dividend by up to 25%, and cancel part of its share buyback program.
  • The restructuring carries a one-off cost of A$560 million.
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A Clean-Up Strategy Underway

Since becoming CEO in May 2025, Nuno Matos has moved swiftly to initiate sweeping changes at ANZ. The workforce cutbacks total 4,500 roles, with 3,500 permanent staff jobs and 1,000 contractors affected. These reductions aim to streamline operations, eliminate duplication, and drive cost efficiency. The bank will incur a one-time restructuring charge of A$560 million as part of this effort.

Alongside the job cuts, ANZ has accepted regulatory penalties totaling A$240 million. These stem from “unconscionable conduct” in a government bond deal and “widespread misconduct” in the retail arm. The penalties represent one of the largest ever levied by the Australian Securities & Investments Commission on a single company.

Financial Performance and Competitive Lag

ANZ’s share price has underperformed compared with its peer group. Over the past year, its shares rose by only about 5.7%, while Commonwealth Bank has gained around 18.1%, Westpac 12.7%, and National Australia Bank approximately 12.7%. Analysts say the bank’s valuation—at about 1.3 times book value—is well below that of its rivals, which trade at higher multiples.

The bank’s net interest margin (NIM) is reported at 1.56% in the most recent half-year, down slightly (by 2 basis points) from the same period a year ago. That remains the lowest among Australia’s major banks, adding to pressure on profitability.

Dividends, Buybacks, and Investor Expectations

Investors are bracing for measures that may impact returns in the near term. UBS has forecast a possible dividend cut of up to 25%. The yield currently sits at about 5.7%, and any reduction would bring it closer to yields offered by other large Australian banks, which are around 4.5%.

There is also speculation that ANZ may cancel a portion of its share buyback program. Of the A$2 billion buyback announced in May 2024, around A$832 million remains unexecuted. Preserving capital seems likely to be a priority under Matos’s cost-cutting regime.

What to Watch Next

A strategy update is expected on October 13, when Matos will lay out his long-term plan to restore ANZ’s competitive standing. Investors will look for clarity on how ANZ plans to grow margins, improve risk and compliance culture, and address structural inefficiencies.

Regulatory compliance and cultural reform are also under close scrutiny. The bank must rebuild trust following past misconduct, and demonstrate that its overhaul is not just cosmetic but has substance.

Finally, whether ANZ can achieve its cost savings without materially damaging customer experience or employee morale will be critical. Stakeholders are watching closely to see whether the short-term pain translates into sustainable gains over the longer run.


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