ANZ Group's new-CEO turnaround story splits fund managers on bank valuations

A cost-out and simplification strategy under new leadership has convinced several fund managers ANZ Group can close the efficiency gap to its big four peers, even as others warn the entire domestic banking sector is trading at valuations that unprecedented new competition cannot justify.

31 May 2026 · 5 min read

ANZ Group Holdings Ltd (ASX: ANZ) has become a genuine test case for whether a new-CEO turnaround story can outrun broader concerns about stretched banking sector valuations. Infinity Asset Management explained its decision to add ANZ in September 2025 despite an underweight stance on the major banks generally, arguing the macro backdrop was improving thanks to a resilient consumer and solid business credit growth, while ANZ specifically offered a cost-out and turnaround opportunity under new leadership at an inexpensive valuation relative to peers.

Under a new CEO, we believe ANZ is positioned as a cost-out and turnaround story, with clear potential to streamline operations, lift efficiency, and re-prioritise growth... ANZ also trades on a significant discount relative to its big four peers, which we believe accurately reflect some near-term execution risk but provide opportunity for a re-rate.

Infinity Asset Management, Monthly Report, September 2025

A well-received investor day sets out the 2030 strategy

The turnaround thesis gained concrete substance in October 2025. Sterling Managed Investments and Clime Investment Management both reported ANZ's investor day was well received, focused on the opportunity to improve returns through cost efficiency, with early initiatives including digital investment, reduced duplication, and cost synergies from the Suncorp Bank acquisition already showing promise in closing the gap to domestic peers on cost-to-income ratio and return on equity. Yarra Capital Management, holding an underweight position, acknowledged the stock outperformed following the announcement of ANZ's refreshed 2030 strategy centred on simplification, cost reduction and stronger risk management, which also addressed dividend sustainability concerns by committing to halt the remaining $800 million share buyback while maintaining payouts via a dividend reinvestment plan.

Conviction holds through a pullback

Tyndall Asset Management's experience through the following month illustrated how committed some holders had become to the new management story. The fund noted ANZ detracted from performance in November 2025 following a retracement after strong outperformance, but said it continued to own and like the stock based on the potential earnings and returns improvement that should accrue if the new management's strategy proved effective, citing the new CEO's track record of execution in prior roles as giving it high confidence in the chance of success.

A sector-wide valuation warning

Not every manager shares that confidence in the broader banking sector, even if their concerns are aimed more at the group than at ANZ specifically. Auscap Asset Management warned in March 2026 that the big four banks, including ANZ, account for 24% of the ASX200 and are trading at near-record multiples of near-term earnings at precisely the moment they face unprecedented competition in the mortgage market from Macquarie, alongside broader technology disruption and economic uncertainty. The fund argued that with one in every four dollars passively invested into Australian equities buying the big four banks, the situation reflects the weight of passive capital flows rather than fundamentals, and does not expect it to continue indefinitely.

It is baffling that at a time of unprecedented competition, technology disruption and economic uncertainty the big four banks are trading at near record multiples of near-term earnings... We do not think this situation will continue indefinitely.

Auscap Asset Management, Quarterly Report, March 2026

What managers are watching next

With Paradice Investment Management reporting in March 2026 that it had reduced its bank underweight following better sector conditions, the question dividing ANZ's fund manager base is whether the new CEO's cost-out and simplification execution can deliver the earnings and returns improvement bulls expect quickly enough to justify holding a bank sector trading, in Auscap's view, at valuations increasingly disconnected from the competitive threats it faces.