SYDNEY — ANZ fell short of expectations for net interest margin and net interest income on Monday, dragging on its share price, as its CEO warned that global competition for capital from AI and other sectors would keep interest rates higher for longer.
Australia’s fourth-largest lender by market capitalization posted a 31-percent surge in cash profit of AU$7.6 billion ($5.2 billion) for the year ended Sept. 30, in line with a Visible Alpha consensus.
But the bank’s net interest margin, a key measure of profitability, fell to 1.53 percent from 1.55 percent in 2025, hurt by competition across most divisions and the timing of the Reserve Bank of Australia’s rate changes. Net interest income of AU$9 billion in the second half was also about 2 percent below analysts’ expectations.
Chief Executive Nuno Matos said a “supercycle of investment” around the world was creating global economic consequences.
Developed-economy governments, he said, were comfortable running budget deficits, which meant they were increasingly taking on debt at a time when major corporates were also hiking borrowing.
“Renewables, defense, and AI compete for long-term capital, which means they compete with the administrations with governments for long-term capital,” Matos told reporters.
“We are in a world that, from a funding perspective, with so much projects going on, is in a tough situation, which is creating inflation and high rates,” he added.
ANZ is projecting Australia’s economy will grow 1.6 percent next year, which compares with 1.1 percent expected for this year, but Matos also said that the economy would be able to weather “a benign environment.”
ANZ’s operating expenses declined 14 percent in 2026 due to lower restructuring expenses and the absence of the Australian Securities and Investments Commission settlement amount.
Its Australian retail division’s annual cash profit climbed to AU$1.71 billion from AU$771 million last year, lifted by higher home loan volumes.
