Co-owners,

We've spun the wheel for the Developed Asia-Pacific bucket, and this week it landed in Australia.

A bulk carrier eases out of Port Hedland heavy with iron ore, bound for a steel mill in China. A refrigerated container of Australian beef leaves the Port of Brisbane for a supermarket shelf in Singapore. Behind each of those shipments, out of sight, someone has to move the money: the payment, the currency swap, the guarantee that lets a buyer in one country trust a seller in another. A surprising share of that work, across nearly thirty markets, runs through a bank most of us picture as a row of branches on an Australian high street.

This week we drew ANZ.

Before we dive in, a reminder of what the index itself has delivered over time.

Every week, we pull one company at random from the FTSE All-World with ~4,200 companies representing 90% of global stock market wealth. We share the index's long-term returns since inception in 1986 as a reminder of why we're here: the long game. New to the newsletter? Start here.

Traces its roots to 1835 and the Bank of Australasia. Took its present shape through mergers in 1951 and 1970. Listed on the Australian Securities Exchange (ASX: ANZ) and in New Zealand (NZX: ANZ). Headquartered in Melbourne.

A few key facts:

ANZ predates the nation in its own name. The Bank of Australasia was chartered in London in 1835 and opened its first branch in Sydney that same year, when the Australian colonies were still six separate British outposts and "Australia" was a place on a map rather than a country. Federation was another 66 years away.

For the next century and a half the bank did what banks do in a young country: it followed the wool, the gold and the ports. In 1951 the Bank of Australasia joined with the Union Bank of Australia to form ANZ Bank. In 1970 that bank merged with the English, Scottish and Australian Bank, the largest banking merger in Australian history at the time, and out came the group we know today, Australia and New Zealand Banking Group. In 2023 it tidied itself under a holding company, ANZ Group Holdings, which is the exact entity now sitting in your fund.

Ask most people what ANZ does and they will describe a branch: a home loan, a savings account, a card. That business is real and it is big. It is also, to almost everyone's surprise, the smallest of the bank's four main divisions by profit.

Here is where the money was actually made in 2025 (on the bank's cash-profit measure):

The institutional arm is the part no retail customer ever sees. Through a platform called ANZ Transactive, big companies and governments run their cash, pay their suppliers, hedge their currencies and finance their trade across borders, all from one place.

When an Australian miner sells ore to a Chinese mill, or a Kiwi exporter ships dairy into South-East Asia, a bank has to move the payment, convert the currency and often stand behind both sides of the deal. ANZ has spent decades building the network to do that, with staff on the ground in more than ten Asian markets and hubs in Singapore, Hong Kong and Shanghai.

By its own reckoning, and by the industry surveys that rank it the leading institutional bank in Australia and New Zealand, its footprint reaches markets that carry roughly three-quarters of global trade flows.

Regular readers might remember DSV, the Danish freight forwarder we drew a while back, whose job is to move the physical box from one country to the next. ANZ sits on the other side of the very same trade: not the goods, but the money and the paperwork that let the goods move at all.

The first is a big purchase. In 2024 ANZ paid A$4.9bn (~US$3.2bn) for Suncorp Bank, a Queensland lender whose roots run back to a state agricultural bank founded in 1902. Overnight it took on about 1.2 million customers along with tens of billions in Queensland mortgages and deposits, and it leapfrogged into third place in Australia's home-loan market. The competition regulator tried to block the deal before a tribunal waved it through in 2024. Folding those customers fully onto ANZ's systems is meant to finish by June 2027.

The second is a new boss with a broom. In May 2025 ANZ hired an outsider to run it, Nuno Matos, a Portuguese banker who spent years at Santander and HSBC and most recently ran HSBC's retail and wealth arm, tens of thousands of staff serving around 40 million customers. His plan, badged ANZ 2030, is a large tidy-up. The bank is cutting roughly 3,500 roles, chasing A$875m of cost savings in this financial year alone, and building a single new digital front end, ANZ Plus, that every retail and small-business customer in Australia is meant to be using by September 2027.

ANZ's financial year ends on 30 September, not in December. So its "full year 2025" covers October 2024 to September 2025.

In that year the bank earned operating income of ~A$21.9bn (~US$15.5bn) and a statutory profit of A$5.9bn (~US$4.2bn), down about 10% on the year before. The dip was not the core business falling apart. A bundle of one-off costs, a regulatory settlement, redundancy charges and a couple of write-downs, took more than A$1.1bn off the result. Strip those out and profit was roughly flat.

The scale is hard to overstate. About A$1.30 trillion (~US$921bn) in total assets, around A$786bn in customer deposits and A$846bn of loans as of mid-2026. The dividend held at 166 cents for the year, about US$1.18 a share, and and part of it comes with Australian tax credits attached. Which is the reason Australian banks are a favourite of income investors back home. By the June 2026 quarter, with the tidy-up under way, profitability was ticking back up.

A co-owner should hold a few things in mind. This is a bank, so it lives and dies with the Australian and New Zealand economies, with house prices and with interest rates. It has had a rough run with regulators: a settlement with the corporate watchdog in Australia, an ongoing capital add-on over its risk controls, and, in May 2026, a New Zealand court ruling in a class action over historic lending disclosures, which ANZ has provisioned for and is appealing.

The transformation is a genuine execution bet, because cutting thousands of roles and rebuilding core technology while swallowing Suncorp is a lot to run at once. And the competition is fierce: three other majors, plus Macquarie and a swarm of smaller lenders, all chasing the same mortgages and deposits.

None of this is visible from your fund. You see one line, an Australian bank among thousands of holdings. But behind that line sits a 190-year-old institution that is older than the country it is named after, and whose biggest single business is not the branch on the corner but the network that moves money and trade across nearly thirty markets. When Australian ore, New Zealand milk or Asian manufactured goods change hands around the region, there is a fair chance ANZ is somewhere in the payment. Through your index fund, a small piece of that is yours.

We're building 90 Percent out in the open. Follow us on LinkedIn where we tease each week's company before it lands here.

Data and images sourced from the ANZ 2025 Annual Report (year ended 30 September 2025) and the ANZ Third Quarter 2026 Trading Update (quarter ended 30 June 2026). Share price, market cap and exchange rate as of writing.

Next week, we head into Emerging Markets.