ANZ Group Holdings (ASX: ANZ) — Investment Research Report

3-Year / 5-Year Price Scenarios

Base EPS: $2.44 — Annualised 1H26 statutory basic EPS of A$1.2176; this is a starting point, not a forecast. Bank earnings remain sensitive to net interest margin, credit costs, capital and competition.

0. Information Richness & AI Limitations

Grade A for information richness, not certainty. ANZ publishes an annual report, half-year consolidated report, results releases and key-financial-data workbooks. The official financial calendar shows FY2025 results on 10 November 2025 and 1H2026 results on 1 May 2026; therefore 1H2026 is the latest published interim result at the 31 July 2026 cutoff. The analysis is more confident about reported history than about credit losses, rates, competition or long-run returns.

1. Data & Cross-Validation

The ASX company header returned A$37.505 and market capitalisation of A$113.127B on 31 July 2026. A derived 3,016.4M shares reconciles price × shares to the header market cap within rounding. The latest independent market-data transport (Yahoo Finance) was throttled in this run, so the ASX header is the live-price source rather than an invented substitute.

The official FY2025 workbook reports statutory operating income A$22.186B, attributable profit A$5.891B, basic EPS A$1.9818 and total ordinary dividends A$1.66. The official 1H2026 workbook reports operating income A$11.079B, attributable profit A$3.650B, basic EPS A$1.2176 and interim dividend A$0.83. 1H26 cash profit was A$3.780B, net interest income A$8.888B, customer deposits A$770.724B, net loans A$821.777B and CET1 12.4%; reported net interest margin was 1.53%.

Sources: ANZ results announcement, 2025 Annual Report, 1H26 Results Announcement, 1H26 Key Financial Data, and ASX header.

2. Business Essence — Duan Yongping

ANZ gathers deposits and converts them into mortgages, business loans, institutional financing and payments across Australia, New Zealand and the Pacific. The customer value is trusted balance-sheet intermediation, liquidity and transaction infrastructure. Deposits and primary banking relationships are recurring, but not contractually locked: customers can refinance and banks compete on price. Operating leverage is meaningful when volume and fee income grow, while credit losses create the reverse operating leverage.

3. Moat — Buffett

The moat is a combination of regulated deposit funding, transaction data, branch and digital distribution, risk systems, brand and scale. Capital and prudential regulation make new entry difficult, while customer relationships and payments create modest switching costs. Network effects are limited and mortgages are highly price-competitive. ANZ's diversified institutional and New Zealand franchises reduce single-market dependence, but they also add complexity. The moat is durable rather than widening: technology lowers distribution costs for challengers, and open banking and mortgage comparison tools reduce friction.

4. Reverse Thinking & Risks — Munger

The failure path is straightforward: a housing or business downturn raises impairments, competition compresses lending spreads, funding costs rise, and a regulatory response limits capital returns. Suncorp integration can consume management attention or deliver less than planned. A sharp fall in rates can reduce asset yields faster than deposit costs reprice. The disconfirming evidence to watch is stable or falling arrears, disciplined underwriting, CET1 above requirements and sustained 1H26 productivity gains. Historical bank analogies warn that a seemingly safe dividend can be cut precisely when credit losses peak.

5. Management — Duan Yongping + Buffett

The 1H26 result shows a strong rebound from the unusually weak September 2025 half: statutory attributable profit rose to A$3.650B and cash profit to A$3.780B, while operating expenses fell to A$5.595B. That supports a provisional positive view on execution, not a permanent conclusion. Incentives should favour risk-adjusted returns and capital discipline; investors should judge management on Suncorp integration, cost delivery, underwriting and whether dividends remain covered by sustainable earnings. Bank management cannot control the cycle, so integrity is best tested by provisioning and capital conservatism before the cycle turns.

6. Industry & Civilizational Trend — Li Lu

Banking remains core financial infrastructure: households and companies need payments, savings, credit and risk transfer. The total addressable market is constrained by population, housing turnover, business formation and leverage, not by unlimited digital demand. AI and cloud technology can improve underwriting and service but may also commoditise interfaces and intensify competition. ANZ sits between depositors, borrowers, markets and regulators; its long-run value depends less on a technology narrative than on earning an adequate return on a prudently leveraged balance sheet.

7. Valuation & Scenarios — Buffett + Duan

At A$37.505, the share is about 18.9x annualised FY2025/1H26 statutory EPS and about 1.73x the A$21.72 NTA per share. The dividend yield is approximately 4.43% using A$1.66 FY2025 dividends, but bank dividends are not bond coupons. The scenario base EPS of A$2.435 annualises 1H26 statutory EPS. Three-year cases use 8%/4%/−2% EPS growth and 17x/14x/10x P/E; five-year cases use 8%/4%/−5% and 17x/14x/9x. Probabilities are 25%/50%/25% for bull/base/bear. Weighted targets are approximately A$37.90 in three years and A$40.13 in five years, before dividends. These are sensitivity cases, not forecasts; the largest uncertainties are credit losses, net interest margin, rates, regulation and Suncorp execution.

8. Decision Memo

Stance: Hold; accumulate only with a margin of safety. ANZ has a useful moat, diversified earnings and a strong 12.4% CET1 ratio, but the current price already discounts a substantial portion of the 1H26 recovery. A buy zone of A$30–34 would better compensate for bank cyclicality and the possibility of multiple compression. Holders should monitor arrears, impairment charges, NIM, deposits, CET1 and integration savings. The thesis is invalidated by sustained capital destruction, a structural loss of deposit franchise, or credit losses that overwhelm normalised earnings.

Four-Master Commentary

These are analytical simulations, not real quotations.

Buffett: A bank can be a good business when its deposit franchise and underwriting discipline earn through the cycle, but price still matters; I want evidence that the recovery is durable before paying a premium.

Munger: Invert it: the risk is not that banking disappears, but that a housing downturn, spread competition and provisioning turn today's dividend into yesterday's comfort.

Duan Yongping: The operating franchise is understandable and recurring, yet the best entry is when the market gives a wide margin of safety rather than when recent earnings momentum is most visible.

Li Lu: Banking is civilisational infrastructure, but leverage magnifies both prosperity and mistakes; long-term ownership requires respect for regulation, cycles and balance-sheet resilience.