After axing 3500 jobs, ANZ chief’s grand plan has a long way to go

“I must confess, it’s a very emotional moment to me. This is a moment where you feel you achieve your dreams.”

It was just before Christmas 2024 and ANZ Bank’s incoming chief executive Nuno Matos was giving his 40,000 future colleagues a taste of how much passion and ambition he would bring to the role in his first interview with the bank’s communications platform Bluenotes.

The veteran Portuguese-born banker had been overlooked for the top job at HSBC, and had been picked by ANZ’s board as the next boss, to replace former chief executive Shayne Elliott.

While ANZ will never be mistaken for a global giant like HSBC, Matos noted it has bank businesses of significant scale in two developed economies, Australia and New Zealand, plus a world-class institutional business for corporate and government clients which is a serious player in Asia.

In the right hands, he said in 2024, it has a lot of potential.

“Now to capture that, we will need to execute fast, with pace, with precision, trying to get the last mile with the performance-driven approach, with a lot of passion. And I would like to invite everybody to that journey,” he said before wishing everyone a Merry Christmas. “I wish to see you all very, very soon.”

Yet for thousands of employees and contractors, this would be their last festive season at ANZ. The warning signs were there.

ANZ chairman Paul O’Sullivan had spent years helming a bank that underwhelmed the market with a performance that lagged its Big Four rivals.

ANZ had also faced a long-running regulatory probe into alleged misconduct in the bank’s markets business, and ANZ’s role in a government bond deal. (In 2025 this culminated in a record $240 million penalty agreed to in a settlement of four legal cases from the Australian Securities and Investments Commission).

ANZ needed a cultural and business revamp, and O’Sullivan clearly was not bringing Matos on board to play Father Christmas.

It soon became apparent what Matos meant by executing fast and at pace.

He was on board months earlier than expected, taking the helm in May last year.

By September, ANZ announced it would slash costs by sacking 3500 employees and another 1000 contractors.

This brutal cull, which Matos has described as very difficult but necessary for the bank’s long-term viability, is on track to be finished by the end of this month.

It has already delivered a pay-off for ANZ investors. Shares, which were trading around $28 when he joined, soared above $40 in February as the market realised the almost immediate impact of Matos’ reset of the bank’s wages bill.

Brian Johnson, a veteran banking analyst at MST Financial, says that “there were some jobs that needed to be cut” at ANZ, and points out the effect on the bank’s profitability was almost instant.

But as the deep job-cutting reaches it end, the much tougher part of his task now awaits.

When Matos unveiled his ambitious plans for ANZ to close the gap on peers – ANZ 2030 – in October last year, the thousands of job losses were just part of the grander plan meant to simplify the business and pave the way for his growth agenda. It was as much about resetting the focus of what the bank needed to do as well as transforming the culture to one based on performance and execution.

This would then create the platform for a bank ready to provide a suite of banking services to a “mass affluent” segment of the Australian market and wealthy ex-pats, with an Asian focus for the latter. The details of these plans have not yet been released, though the bank is promising a revamp of its all-important app by September 2027.

The productivity gains had to be delivered first, with key metrics including ANZ’s flabby cost-to-income ratios needing improvement.

As the share price indicates, Matos has delivered in spades with the cost-cutting, but investors and analysts who have covered the bank for years emphasise how hard it gets from this point onwards.

“He has delivered on the first bit, which is cost out. Instead of just thinking and talking about things, he has done it,” Johnson says. But he believes Matos’ strategy of lowering the bank’s cost-to-income ratio to 45 per cent by 2028 will be much tougher to achieve, as it relies on growing revenue.

“It feels to me as if it all gets harder going forward,” the analyst says.

It’s a line echoed by Andrew Martin, co-chief executive at fund manager Alphinity. He, too, says growing revenue is “much harder” than cutting costs, adding ANZ has found it difficult to compete in domestic retail and business banking because it is smaller than key rivals.

“The unanswered question is: what does it mean for next year and the year after?” he says.

ANZ is the third-biggest mortgage lender in Australia after its $4.9 billion deal to snap up Queensland bank Suncorp, and it has total market share of about 15.5 per cent. This compares with 25.4 per cent for Commonwealth Bank, 20.6 per cent for Westpac, 14 per cent for NAB and 7.4 per cent for Macquarie, according to UBS analysis.

And speaking of Suncorp, its customer base – including a sizeable contingent of parochial Queenslanders – were told this week that their accounts are moving en masse to ANZ. That was always the plan – the logic being that ANZ could extract benefits of greater scale, while also moving these customers onto a better technology platform.

Even so, banking integrations are notoriously complex, and it’s another risk for Matos to be monitoring. The bank has said its Suncorp integration is proceeding as planned.

ANZ is also re-investing, with plans afoot for a revamped mobile app and customer relationship system to help entice the new customers needed to grow the business again.

But Financial Services Union national president Wendy Streets, who has been critical of Matos over the sweeping job cuts, has a question for analysts, investors and ANZ’s board: How do you lift morale among the remaining staff enough to attract new business?

A recent FSU survey pointed to a rising workload for ANZ’s remaining employees.

“We’ve just done a workload survey of our members in ANZ to see … six months later, after most of the people had gone, what effect that’s had on them. And there’s some pretty stark figures coming out from that survey,” Streets says.

Around 80 per cent of respondents said they’ve had additional work added to their role in the past 12 months. Around 67 per cent said they felt pressure to work when they were unwell or on leave, and more than half are working between one and five hours unpaid overtime every week.

Streets says the work of the thousands who were sacked could not “just magically stop without any repercussions”.

Streets, who has worked with Matos’ two predecessors, says there is a marked difference in the new CEO’s willingness to engage with the union and workers. “We don’t want an adversarial relationship with him [Matos] and ANZ … but that’s a two-way street, and he’s got to communicate, and his senior people have to communicate, better,” he says.

An ANZ spokesperson said it had not seen the union’s survey of staff, and said it engaged respectfully with the FSU. Matos has met with the FSU twice in his first year as chief.

“While making changes to our organisation structure as we set the bank up for the future, we have remained focused on treating our people with care and respect, and providing them with appropriate support,” the spokesperson said.

“We continue to respectfully and openly engage with the FSU, including during regular meetings. We are yet to receive a copy of the survey they refer to.”

Interestingly, the views of the unionist, analyst and professional investor are fairly united on one point: Technology.

Matos’ strategy has scaled back the bank’s original technology ambitions to create ANZ Plus as a standalone digital platform.

Many staff members working on that project have left, and it has been downgraded to a front-end customer system that plugs into legacy technology.

“It’s interesting because he’s also not really chasing AI (artificial intelligence) in a big way at this point in time,” Streets says.

While Johnson praises Matos’ impact on ANZ’s culture, noting it has “certainly changed for the better”, he also questions whether ANZ’s approach on technology is the right one. Especially given the big emphasis the market is putting on AI.

But the big issue for the next 12 months – for a bank looking to woo new, wealthier customers, or get more of their business – is how it can match the clear technology leader, Commonwealth Bank, and the service edge it has.

“Commbank have been doing this for a long time and are a long way ahead, and it’s hard to see anyone catching up to this,” Johnson says.

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