The strategy centres on simplifying legacy systems, integrating Suncorp Bank and raising return on equity to 12%. However, with growing cost pressures and fierce competition, the plan carries considerable risk.
Currently, ANZ is the smallest and weakest of Australia’s major banks, despite its rising share price reaching a ten-year high. The bank intends to lift efficiency by making major cost cuts in 2026 and 2027 and moving all customers to a consolidated technology platform known as ANZ Plus. This single interface is designed to replace three separate tech systems, although ANZ has a patchy track record in delivering major technology projects, including a $1.6 billion error and long delays on the ANZ Plus rollout.
On the financial side, ANZ starts with $11.85 billion in operating costs and aims to achieve $800 million in gross savings in 2026. After factoring in inflation, this results in just $445 million in net savings and leads to a projected $1 billion cost increase by 2028. The acquisition of Suncorp Bank is expected to generate $500 million in annual savings from 2029, but it hinges on successful system integration and cultural alignment, which is a challenging task.
ANZ anticipates growth through better customer segmentation and improving performance in its underwhelming retail division. However, its market share continues to slip to competitors like Macquarie, and internal technology delays make progress uncertain. The bank must address past mistakes, resolve compliance shortcomings and enhance customer-facing operations to secure a 16% revenue increase that brokers consider necessary to meet strategic targets.
Additional pressure comes from regulatory demands, including rising capital requirements and scrutiny from the Australian Prudential Regulation Authority over investment lending. ANZ must also grow its capital reserves by $9 billion by 2028. Internal cultural challenges and complicated compliance efforts raise further doubts about the plan's feasibility.
With $1.5 billion allocated annually for investment, much of which is directed at regulatory and risk obligations, ANZ is making a major bet on a technology-led revival. It is also expanding its retail and business banking workforce. Although its institutional and New Zealand divisions provide some stability, success hinges on noticeable improvement in the retail arm. Without it, the ambitious goals may be out of reach.
