ANZ Group Holdings Ltd (ASX: ANZ) shares are up around 0.3% in early morning trade on Wednesday, and changing hands for $36.21 a piece.
After a tough start to the year, the bank shares are down around 0.5% for the year-to-date, but they’re still nearly 20% higher than 12 months ago.
Despite ongoing global volatility, interest rate uncertainty, and a slowdown in lending, the banking giant’s shares are now up 2.3% for the year-to-date and 39% above their trading levels this time last year.
For context, the S&P/ASX 200 Index (ASX: XJO) is up around 2% for the year-to-date, and roughly 3% higher than 12 months ago.
Brokers are relatively optimistic about ANZ shares for FY27. TradingView data shows that 7 of 16 analysts have a hold rating on the stock. Another six have a buy or strong buy rating while three have a sell or strong sell rating.
The average $34.91 target price, however, implies a potential 4% downside at the time of writing.
Regardless of where ANZ shares will be in 12 months time, there are a few other reasons I think the ASX bank shares are a screaming buy right now.
Here are three of them
1. Cost saving initiatives are working
As part of the bank’s half-year FY26 financial update, it confirmed it has now achieved 49% of its gross cost-savings target of $800 million for FY26.
ANZ has made significant progress reducing costs and simplifying operations, improving its cost-to-income ratio under its ANZ 2030 strategy.
ANZ’s 2030 cost-saving strategy focuses on simplifying operations, eliminating duplication, and heavily reducing its physical and technological footprint. This includes job cuts, and integration of Suncorp Bank.
2. Earnings are stable and cash flow is growing
As one of Australia’s major four banks, ANZ is generally considered to have stable earnings and predictable cash flow. The bank has a strong deposit base and a diversified portfolio that means it has defensive qualities.
In early May, the bank reported a 70% jump in its cash profit for the first half of FY26. Statutory profit was also up 62%, operating income was up 3%, and the bank’s operating expenses were 22% lower.
The news beat expectations, delighted investors and instilled some renewed confidence into the stock. ANZ shares spiked higher following the announcement.
The update also followed ANZ’s impressive first-quarter cash profit in February. At the time, it revealed $1.94 billion, up a huge 75% from the second-half average of FY25. Operating income was up 4% and cash return on tangible equity climbed 11.7% over the quarter.
3. The bank pays a great passive income
The bank’s strong performance means it is able to make a reliable and regular dividend payment to shareholders every six months, payable in July and December.
It also offers both a dividend reinvestment plan (DRP) and a bonus option plan (BOP) as alternatives to receiving cash dividends on ANZ ordinary shares.
Earlier this month ANZ paid its shareholders an 83-cent per share interim dividend payment, franked at 75%. At the time of writing, this translates to a forward dividend yield of around 4.6%.
The 83-cent dividend is the same payout that investors have been receiving every six months since July 2024. Although the latest payout received an additional 5% franking (previously 70%).
Forecasts suggest that ANZ could pay an annual dividend of $1.66 in FY26, and the same again in FY27. At the time of writing that translates to a forward dividend yield of 4.6% for each year.
That’s a decent passive income. It also puts ANZ at the front of the pack with the highest dividend yield offering among the big 4 major banks.
The post 3 reasons why ANZ shares are a screaming buy right now appeared first on The Motley Fool Australia.
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More reading
- What are experts tipping for the big four bank shares in the back half of 2026?
- How much passive income can I earn off a $50,000 portfolio?
- ANZ, NAB, Westpac and CBA shares: Brokers rate 2 a sell, and 2 a hold
- Here’s the earnings forecast out to 2027 for ANZ shares
- Here’s the dividend forecast out to 2027 for ANZ shares
Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.