Morgans analysts have revised their stance on ANZ’s shares following the bank’s announcement of a significant restructuring plan. This initiative is projected to incur a pre-tax restructuring charge of $560 million, which has positively influenced the stock’s performance in the morning trading session.
As of 10:29 AM AEST, ANZ’s shares saw an increase of 1.5%, bringing the share price to $33.38. In response to these developments, Morgans has raised its 12-month target price for the stock from $26.84 to $29.24 and upgraded its rating from ‘sell’ to ‘trim’.
The context surrounding this upgrade is rooted in the bank’s recent decision to reduce its workforce by 3,500 full-time equivalent positions by September 2026. This measure is paired with a decrease in reliance on consultants and other third-party services, impacting approximately 1,000 contractors.
The anticipated pre-tax restructuring charge of $560 million is expected to be recorded in the second half of 2025. However, ANZ has not yet disclosed the specific cost savings it anticipates from these changes.
Morgans analyst Nathan Lead speculates that the reduction in full-time staff could yield an annual cost reduction approximately equivalent to the restructuring charge noted for the second half of 2025, based on projections from the bank’s first half of 2025 results. Additionally, Lead predicts that variable costs may decline alongside staff reductions, particularly through decreased technology licensing expenses, although he acknowledges that these savings are likely to be less significant compared to reductions in wage expenses.
In their analysis, Morgans noted that while ANZ currently possesses lower trading multiples compared to its domestic major bank counterparts, the bank’s complexity is somewhat heightened due to its substantial exposure to institutional and international markets, particularly in New Zealand and the United States. ANZ’s greater dependence on wholesale and term deposit funding further compounds this complexity.
