Owners of ANZ Group Holdings Ltd (ASX: ANZ) shares will want to know what the ASX bank share is expected to deliver in terms of its earnings in the next few years.
The bank has had a number of challenges to work through in the last few years, including interest rates going from almost 0% to above 4%, elevated competition and a lower credit growth environment because of the high interest rates.
ANZ recently reported its FY25 half-year result, which had a few positives for investors, including cash profit growth of 12% to $3.57 billion and statutory net profit growth of 16% to $3.64 billion.
Let's have a look at what broker UBS thought of the result and where earnings could go from here.
FY25
UBS said that the ANZ half-year result was in line with what market analysts were expecting at a cash earnings per share (EPS) and dividend per share level. The broker also points out that it has lower-than-forecast bad debts and ANZ beat its expected costs.
The broker said ANZ "presents as the most interesting name" among its ASX bank share peers and is trading at a steep discount to peers and its own historical ratings.
UBS outlined some of the focuses for ANZ's new management:
ANZ – with its new leadership – is expected to change significantly from its current state. Investors are looking ahead, considering whether ANZ can improve its ROE and provide better returns to shareholders. Besides the obvious areas where action is needed, such as the ANZ Plus initiative, the integration with Suncorp, and managing non-financial risks, the new CEO Nuno Matos will also face several other challenges. These include high costs, capital and dividend management (with a Common Equity Tier 1 ratio of 11.8%), and overall provisions that are lower than those of its competitors.
The broker is forecasting that ANZ could generate reported net profit after tax (NPAT) of $6.7 billion in FY25.
FY26
The 2026 financial year could show improvement for owners of ANZ shares.
UBS is projecting the ASX bank share could generate a slightly stronger level of profit in FY26. Its net profit could increase by 1.2% to $6.8 billion, according to the broker.
FY27
The 2027 financial year could see another improvement for the bank's profitability.
FY27 could see ANZ's reported profit rise by a further 1.6% to $6.9 billion. While the profit growth isn't fast, it's an improvement for owners of ANZ shares.
FY28
However, UBS is projecting that the 2027 financial year could be the last year of profit increases during this series of forecasts.
UBS is projecting that ANZ's net profit could fall by 18.5% to $5.64 billion.
FY29
The final year of these financial year forecasts could be the worst of the lot, if the broker ends up being right.
UBS is forecasting that ANZ's net profit may decline by another 3% to $5.49 billion. A declining profit may not be helpful for ANZ shares – time will tell how accurate the expert is.
