ANZ Group Holdings Ltd (ASX: ANZ) shares are 0.53% higher at the time of writing in Tuesday lunchtime trade, at $34.38 a piece. Over the past month the bank's shares have fallen 6.99% and they're now 20.25% higher for the year-to-date.
While the major bank's share price has been mostly positive over the past year, analysts at Macquarie think ANZ is showing early signs of revenue underperformance.
Here's what the broker had to say in a recent note to investors.
Headwinds ahead for ANZ shares
Overall, analysts said that business credit remains strong, at around 9% annualised and on a three-month rolling rate. This is primarily driven by agriculture and real estate credit growth.
Meanwhile, investor mortgage growth continues to surge, annualising at over 10%, the highest level since 2015.
Term deposit costs are also favorable. With the banks focusing their competition on savings deposits, term deposits have become less competitive.
But when it comes to winners and losers among the bunch of Australian banks, ANZ falls short.
"ANZ is showing early signs of revenue underperformance, lagging behind peers in mortgage (~0.5x), business (~0x) and deposit growth," Macquarie analysts said in the investor note.
While still early, and consistent with ANZ's guidance for below system mortgage growth in 2026, it could suggest ANZ's strategy reset is weighing on underlying performance.
Elsewhere, the broker said Commonwealth Bank of Australia (ASX: CBA) is arguably the best performer, gaining share in all segments. Meanwhile National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corporation (ASX: WBC) see strong growth in their business lending.
Mortgage credit growth remains negative for regional banks, with Bendigo and Adelaide Bank Ltd (ASX: BEN) shrinking 5-9% over the three-month period. The broker notes that Bank of Queensland Ltd (ASX: BOQ) has continued to grow its business credit by around 10%.
What's Macquarie's outlook for the bank sector?
The broker said that pre-provision earnings trends were generally better across the banks. It added that recent data has been incrementally positive, including better credit growth and lower funding costs (although this has been partly offset by deposit switching), which suggests a potential upside risk to FY26 consensus earnings.
ANZ and NAB remain our preferred exposures in the sector; however, if ANZ's balance sheet underperformance continues, it could suggest risk to consensus revenue expectations.
Macquarie has a neutral rating on ANZ shares with a target price of $35.00. At the time of writing this implies a potential 1.8% upside for investors over the next 12 months.
