ANZ Shares Outperforming, Despite Profit Miss: Here’s Why

ANZ shares (ASX:ANZ) are the best performing big bank on the week, with a 4.89% gain today putting the stock 1.17% higher on the week so far. This is in stark contrast to big four peers this week, where CBA shares have fallen 4.89%, WBC has given back 5.6%, and NAB sits 1.73% lower.

The rally came after the bank delivered a much lighter-than-expected bad debt charge in its third-quarter trading update, overshadowing a marginal miss on cash profit and highlighting improving asset quality in a sector under pressure.

The ANZ share price rounded out the penultimate session of the week at A$38.17, up 4.89%, and outperforming both the broader market and its major bank peers. The rally came as Commonwealth Bank traded 2.0% lower following its own relatively in-line result released the previous day, underscoring a clear rotation within the banking sector toward the relative winner. The split in path for the two largest banks reflected market relief that ANZ’s credit book remains healthier than feared, even as concerns about a broader banking sector correction continue.

What Was Reported?

ANZ reported cash profit of A$1.90 billion for the quarter ended 31 March 2026, marginally below consensus expectations of A$1.923 billion, a miss of 1%. However, the headline profit figure masked several positive surprises that drove the share price reaction.

The standout metric was the individual provision charge of just A$65 million, roughly half the A$130 million analysts had pencilled in. This significantly lower impairment expense signals that credit quality across ANZ’s mortgage and business lending portfolios remains more resilient than modelled, despite an environment of higher-for-longer interest rates and slowing economic growth. The lower provisions translate directly to higher near-term earnings and suggest management sees limited stress in its loan book, at least for now.

The bank’s group net interest margin came in at 1.54%, one basis point ahead of expectations and up one basis point on the prior quarter. Excluding the markets division, the NIM expanded by four basis points, indicating that deposit pricing pressure may be moderating and lending margins are holding better than feared. This stabilisation is particularly significant given widespread concerns that Australian bank margins have peaked and are entering a period of structural decline.

Markets revenue of A$507 million beat expectations of A$498 million by 2%, countering the narrative that trading income would normalise sharply lower after a strong fiscal 2025. The institutional and markets franchise continues to provide a support to group earnings rather than acting as a drag.

What Next For ANZ Bulls?

Price Targets

Despite today’s strong result, ANZ is not immune to the structural headwinds facing the entire Australian banking sector. Slowing housing credit growth, ongoing deposit competition, and potential further regulatory or tax changes remain on the horizon. The bank’s ability to offset volume and regulatory headwinds through cost discipline, technology investment, and efficiency gains will be critical to sustaining returns.

ANZ’s outperformance today reflects relief that asset quality is holding up better than feared and that the bank is navigating a difficult environment more successfully than some peers, but the jury remains out on whether this marks a sustainable turning point or simply a good quarter in an otherwise challenging cycle for Australian bank stocks.

The low A$38 level has been a stubborn wall of resistance for bulls, with a firm hold and sustained buying above the psychological threshold potentially helping shift the narrative.