Are ANZ’s shares due for a re-rate?
The big four banks are taking turns leading the pack, with CBA, NAB and Westpac trading places at the front. Could ANZ be the next to surge?
If you’ve been following the ASX banking sector, a clear pattern has emerged.
Over the long run, the Commonwealth Bank of Australia is the undisputed leader for total shareholder returns. Often described as the “Steven Bradbury” of the Big Four, it stuck to core Australian mortgages and maintained strong risk management while rivals tripped over costly mergers and questionable offshore acquisitions.
But as the table below shows, CBA isn’t in front anymore - at least not in recent times. Coming out of COVID and the missteps of the 2010s, both National Australia Bank and Westpac are finally getting their act together.
As we covered recently, NAB has climbed to record highs under CEO Andrew Irvine, while Westpac surged 6.3% to a decade-high and has continued advancing briskly after its Q3 quarterly in August reassured investors its turnaround was taking hold.
Dig deeper and the cycle is clear: today’s leader slows, investors rotate into the laggard. Banks may surf the same ocean, but the performance gaps and catch-up rallies can be staggering - when conditions are right.
So, is it ANZ’s (ASX: ANZ) turn to catch the wave and reward value investors? Let's unpack whether the bank has what it takes.
Why has ANZ underperformed?
ANZ has long been the laggard among the majors. Several factors explain why:
- Strategic missteps: The “super-regional” push into Asia in the 2000s and 2010s tied up billions in capital with little payoff.
- Weaker retail franchise: Unlike CBA’s dominance in mortgages, NAB’s grip on business banking, or Westpac’s scale in consumer lending, ANZ has lacked a clear anchor.
- Execution gaps: While CBA poured money into digital platforms and NAB streamlined operations, ANZ was slower to modernise. Its returns on equity lagged peers and its valuation multiple followed suit.
- Late to the party: NAB and Westpac have already launched credible turnaround plans that investors have rewarded. ANZ is only now beginning that process.
Yet this backdrop also creates opportunity. ANZ currently trades on the lowest P/E of the group and offers the highest dividend yield, a mix that could prove attractive if its turnaround gains traction.
Key fundamentals of the major banks
What has CEO Nuno Matos done so far?
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A fresh chapter began in May 2025 with the arrival of Nuno Matos, a veteran of HSBC (LSE: HSBA) with deep global experience. His mandate: simplify the bank, sharpen its focus on Australia and New Zealand, and rebuild investor confidence.
Matos has wasted no time, swinging the axe on 3,500 jobs and 1,000 contractors this week - one of the biggest restructures in recent banking history. “I hate to do this, but it’s for the future of a company which incorporates many customers, many employees and many shareholders,” he said.
Three priorities stand out:
- Non-financial risk - fixing long-running issues under regulatory scrutiny.
- Suncorp integration - absorbing the newly acquired business to expand scale in key markets.
- ANZ Plus - delivering results from a costly digital platform that has yet to meet expectations.
He has set ambitious timelines on transforming ANZ, but the how will be the key. All eyes will be on Matos when he unveils his strategy update on 13 October 2025.
Brokers are calling out 'upside' risks
Broker research is starting to tilt more positively on ANZ following its latest restructure announcement.
Macquarie lifted its price target from $30 to $31, arguing this is likely the beginning of a series of changes as Matos seeks to reshape the business and significantly reduce costs. Analysts added:“With ANZ trading at 15x P/E and 1.4x P/NTA, we believe execution risks are balanced with the potential upside of improving franchise performance and returns. While ANZ is no longer cheap, it is worth noting that peers have re-rated and now trade at 19–28x P/E and 1.8–3.6x P/B.”
Citi remains neutral but has made ANZ its top pick among the majors, calling it a “self-help” story. Analysts said the 3,500 job cuts were more aggressive than expected and that the $560 million upfront cost clears the way for a new narrative on “better medium-term returns in October,” potentially in the form of a ROTE target.
“…we think investors will positively receive the strong intent to drive better efficiency in the bank," Citi analysts said.
Morgan Stanley has a probability-weighted target of $29.70 but sees upside as high as $39.32 if execution improves. That scenario would depend on “robust Australian mortgage growth, new productivity initiatives, and a better near-term cost growth profile under the new CEO.”
Ord Minnett views Matos’s leadership as positive so far, with a $30 price target and a hold rating.
“If the strategy is successfully executed, it should boost returns and put the smallest of the big four banks on a path to a valuation re-rating," Ord analysts said.
With the other banks already re-rated, brokers suggest ANZ could be next to catch the wave. The challenge lies in execution. If Matos can persuade the market with a ‘back to basics’ strategy, as NAB’s Irvine and Westpac’s Miller have done, shareholders may well be rewarded in the medium term.
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Vishal has over 15 years' experience in financial journalism and has a particular interest in property, exchange-traded funds (ETFs), investing strategy and financial history.
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Vishal has over 15 years' experience in financial journalism and has a particular interest in property, exchange-traded funds (ETFs), investing strategy and financial history.
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Vishal has over 15 years' experience in financial journalism and has a particular interest in property, exchange-traded funds (ETFs), investing strategy and financial history.
Expertise
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