ANZ FY25 Results Recap: Is It Time to Sell?

Here’s our ANZ FY25 Results Recap! Its financial results have raised concerns for investors. The bank’s yearly profit fell by 10%, partly due to big one-off costs like a $240 million fine and spending over $400 million on cutting 3,500 jobs. Its cash profit also dropped by 14%, which was worse than analysts expected. Inside the company, staff have called the restructure “chaotic”, adding to worries about how things are being managed.

More broadly, ANZ’s problems reflect a bigger issue across Australia’s major banks. Profit margins are shrinking, competition is rising, and costs are climbing. These pressures are making investors wonder if it’s time to reduce their holdings in the Big Four banks. The next few months will be important to see if this is just a rough patch or a sign of deeper trouble in the sector.

What are the Best Bank stocks to invest in right now?

Check our buy/sell tips

ANZ FY25 Results Recap: ANZ is feeling the squeeze too!

Australia’s Big Four banks are under pressure, with ANZ’s latest results highlighting sector-wide challenges. Intense competition for home loans has squeezed profit margins, with ANZ’s net interest margin falling to 1.55%. Its retail and business banking profits dropped sharply, and institutional lending also declined.

Other major banks like NAB (ASX: NAB) and Westpac (ASX: WBC) are facing similar issues. Earlier this year, their results triggered a $26 billion selloff as investors reacted to falling margins and rising costs.

ANZ’s situation is especially worrying due to internal disruptions and worsening loan quality. Bad debts have climbed, and operating costs jumped 20%, putting further strain on profits. Rising arrears in New Zealand and a spike in impaired assets suggest credit stress may be building. If these trends continue, investors may need to brace for more volatility across the sector.

Major Banks Face Structural Headwinds Through 2026

Australia’s major banks face ongoing challenges heading into 2026. Bond markets expect more rate cuts, which will further squeeze net interest margins. Despite this, banks are trading at high valuations, around 19.5 times forward earnings, raising concerns about limited upside.

Commonwealth Bank (ASX: CBA) remains the strongest of the Big Four, but even CBA is feeling margin pressure. Analysts at Macquarie Group (ASX: MQG) see modest short-term gains but warn of medium-term risks, especially for banks heavily exposed to mortgages.
ANZ’s issues go beyond financials. A recent staff survey revealed poor communication around job cuts, with many employees learning about layoffs through the media. Nearly half said the stress affected their family life. Such internal disruption makes strong execution difficult.

Small-Cap Alternatives Worth Watching

While Australia’s Big Four banks face margin pressure and internal disruption, some smaller financial players are showing strong growth:

Judo Capital (ASX: JDO)

– Reported 70% profit growth to $40.9 million in its latest half-year.
– Achieved loan growth at twice the industry rate.
– Maintained a strong net interest margin of 2.81%, with full-year guidance raised to 2.90–3.00%.
– Focuses on relationship-based lending for small and medium businesses, filling gaps left by major banks.
– Total loans and advances reached $11.6 billion.

HUB24 (ASX: HUB)

– Delivered 25% revenue growth to $195.2 million.
– Upgraded its FY2026 funds under administration target to $123–135 billion.
– Benefits from the shift away from traditional bank-owned wealth platforms.
– Its independent model is gaining market share as financial services evolve.

These focused, agile businesses are proving that smaller players can thrive, even as larger banks face headwinds.

Investor Takeaway: Hold, But Reallocate Carefully

For those holding ANZ, CBA, NAB, or Westpac, a HOLD strategy makes sense, especially for income-focused investors relying on fully franked dividends (2.8%–4.5% yields). However, fresh capital may be better directed elsewhere. Margin pressure, high valuations, and execution risks limit upside over the next 12–18 months.
Smaller players like Judo Capital and HUB24 offer growth without the same structural headwinds. Key risks to watch include worsening credit quality, regulatory penalties, and whether bank transformation plans deliver real efficiency or just add cost. Until these uncertainties are cleared, a cautious stance on major banks is wise.