ANZ Chief Executive Officer Shayne Elliott recently addressed stakeholders, highlighting the bank's resilience and strategic positioning amidst recent challenges. Speaking from Sydney, Elliott acknowledged the traditional owners of the land and expressed satisfaction at returning to in-person meetings.
Elliott commended ANZ's efforts in supporting its employees and customers during difficult times, emphasizing the bank's commitment to providing financial assistance to those affected by floods in New South Wales and Queensland, as well as waiving fees for payments to charities aiding Ukraine.
Reflecting on ANZ's first half performance, Elliott noted that while cash profit increased by 4% compared to the previous year, it decreased by 3% half-on-half. The proposed dividend stands at 72 cents per share fully franked. The bank remains strongly capitalized with a Common Equity Tier 1 ratio of 11.5%.
Elliott outlined ANZ's strategy focused on simplification and capital return, having completed a $1.5 billion buyback bringing total shareholder returns over five years to $5.5 billion through repurchasing shares and neutralizing the dividend reinvestment plan.
On productivity, Elliott recalled an earlier aspiration of reducing costs by about 10%, closer to $8 billion annually. Despite rising industry costs, ANZ managed a significant reduction with run-the-bank costs remaining flat at $7.4 billion on an annualized basis.
Investments have increased beyond initial expectations due to regulatory changes and new growth opportunities. Notably, investments are directed towards growth initiatives such as ANZ Plus retail platform and sustainable finance capabilities.
In terms of risk management, customers strengthened their balance sheets leading to a provision release of nearly $300 million. This is attributed to divestments and disciplined customer selection which improved risk-adjusted returns.
ANZ reported strong revenue growth across its New Zealand operations while maintaining risk vigilance. Institutional revenues also saw robust growth with emphasis on sustainability.
In Australia, modest home loan volume growth was noted alongside improvements in processing times. The Commercial division stopped acquiring asset finance loans via third-party channels for better risk-adjusted returns.
Elliott shared insights into ANZ’s long-term strategy aimed at building strong franchises across different sectors including Institutional Banking and Retail Banking with emphasis on financial wellbeing and sustainability.
Plans were revealed for implementing a Non-Operating Holding Company structure allowing flexibility in technology acquisition without traditional banking constraints subject to regulatory approval later this year.
Finally, Elliott reiterated confidence in ANZ’s future prospects amid changing economic conditions influenced by inflationary pressures noting that higher interest rates could expand industry margins while challenging some customers accustomed to lower rates historically.
"I’m very confident in what the future holds for ANZ," said Elliott underscoring ongoing investment focus aligning with long-term goals rather than immediate results.