3 reasons I would buy ANZ Bank shares at under $40

Detailed summary

There's still work ahead, but I think the improvements underway could lead to stronger profits over time. The post 3 reasons I would buy ANZ Bank shares at under $40 appeared…

I think ANZ Group Holdings Ltd (ASX: ANZ) shares could be worth a closer look following its recent full-year results.

The banking giant has made some encouraging progress with its turnaround strategy, and I believe there's more to come.

With its shares sitting below $40, here are three reasons I'd be happy to buy.

The first reason I'd buy ANZ shares is the progress it is making in becoming a more efficient business.

For several years, ANZ has struggled to generate returns comparable to some of its major banking rivals. However, I think management is finally making meaningful improvements.

During FY26, the bank delivered $902 million in productivity benefits, helping reduce its cost base by 7% compared with the previous year, excluding significant items.

And these improvements are starting to show up in profitability. ANZ's cash profit increased 10% to $7.59 billion on a comparable basis, while its return on tangible equity improved to 11.56%.

I believe this could be the beginning of a longer period of improving returns.

Management is targeting a cost-to-income ratio in the mid-40s by FY28, compared with 49.3% in FY26. If ANZ achieves that target while continuing to grow revenue, I think earnings could increase considerably over the next few years.

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