Australia’s banking sector remains highly profitable, but higher interest rates are beginning to show more clearly in credit provisioning and customer stress.
ANZ reported full-year cash profit of A$7.59 billion, up 31% from a year earlier and 10% higher excluding significant items recorded in FY25.
Statutory profit rose 23% to A$7.27 billion, while the bank declared a final dividend of 83 cents per share, taking the full-year payout to A$1.66.
ANZ’s collective provision charge almost doubled to A$222 million from A$114 million, reflecting portfolio growth and emerging risks from higher interest rates and cost-of-living pressure.
Total credit impairment charges were A$582 million.
The bank said overall credit quality remained strong, with non-performing exposures unchanged at 0.57% of total credit exposure.
ANZ also reported a Common Equity Tier 1 ratio of 11.99%, indicating the bank remains well capitalised.
The result comes less than a week after the RBA lifted the cash rate to 4.85%.
Higher rates can support bank margins, but the rising provision charge shows the other side of the equation: greater financial pressure on households and businesses.
