Thank you, Paul, and good morning.
I would also like to extend my welcome to you today and acknowledge the Wurundjeri People as the traditional owners of the land from which we are broadcasting this morning.
As already mentioned, the ongoing pandemic has created challenges for all of us. While many uncertainties remain, there are good reasons to be optimistic about the economies in our key markets.
Hopefully, high community vaccination rates will contribute to a rebound in summer trading and deliver a substantial economic bounce in the coming months.
And while the initial damage of COVID has receded and life is slowly getting back to normal, the emergence of the Omicron variant in the last couple of weeks is an important reminder that unpredictable challenges remain.
There will be new variants, and governments will need to take the necessary steps to adjust to living with the virus.
There are also COVID-induced labor shortages and supply chain bottlenecks with which we will all need to contend.
As we know, when confronted with rapid change, many in the community will adapt and thrive. But some will continue to struggle.
Fortunately, at ANZ, our strong sense of purpose, robust balance sheet, and experienced management team mean we are well-positioned to help our customers through the uncertain period ahead.
Whether it’s our support of government-backed loan schemes or working with individual customers on what’s right for them…we will continue to support our customers and the economic recovery of Australia and New Zealand and all our markets.
While Paul has covered our financial performance in some detail, I want to give my perspective on how we performed in financial year ‘21, particularly at a divisional level.
In our largest business, Australian Retail & Commercial, we delivered a good margin performance and grew pre-provision and after-tax profit. Home Loan revenue grew more than 10%, and while this was a good outcome, the total number of home loans we have on our books fell during the second half. This was due to a couple of factors. Firstly, customers were paying down loans faster. Secondly, the speed with which we were able to process an increasing number of applications just wasn’t sufficient.
As shareholders would expect, we took urgent action to fix these processing issues by materially increasing our assessment capacity as well as simplifying and automating processes. We also appointed our Chief Data Officer Emma Grey, an expert in data and automation, to temporarily lead the Australian operations team. While it is still early days and there is still much to do, I’m pleased to see improvements in our processing times and a modest return to balance sheet growth.
Turning to New Zealand where we had one of our strongest performances ever. Revenue and profit were both up strongly while investment required complying with Reserve Bank’s BS11 regulation will finish in 2022 - well ahead of schedule. Our bank in New Zealand remains a well-run business providing critical diversification at an important time. Institutional had another good year delivering earnings well above cost capital. As you know significant work undertaken recent years simplify focus Institutional business now positioned take advantage ‘structural tailwinds’ impacting sector over coming years
The most significant these tailwinds rapid transformation world produces distributes consumes energy Literally trillions dollars invested 2050 making global mega-trends impacting banking society more generally reason decarbonise series things taking place sectors decarbonise vehicle fleets manufacturing doing so rapid rate considerable investment same time new sources green electricity improved battery storage different distribution networks hydrogen solutions developed increased urgency Again significant investment required change impacting financial markets particularly around climate risk assessed managed reported priced Your bank embracing challenge Australia’s only truly regional bank well placed shape support required transition strength natural resources sector means deep relationships companies lead transition dominant position trade finance debt capital markets syndicated loans starting position strength fact estimate already share around 5% global flows Sustainable Finance market better perspective year alone participated 81 transactions total deal size $119bn direct lending renewables increased significantly $1 billion isn’t shift happening big-end-of-town helped finance around 1 SME business customers reduce emissions partnership Clean Energy Finance Corporation finance zero emission electric city buses NSW
I also wanted share today progress building better retail commercial bank here Australia longer-term forces shaping industry leading structurally lower returns lower growth driving unbundling traditional banking new reality required different approach material transformation way operate response spent last couple years working program internally referred ‘ANZx’ using latest technology help people better save manage money effectively based pillars financial well-being spending less earn protecting can’t afford lose paying most expensive debt first program progressing currently testing first proposition staff ready launch new customers early under new ANZ Plus brand Pleasingly absorbed cost associated driving productivity benefits elsewhere probably best describe works short video prepared today Now ANZ Plus foundation new allow provide non-bank services deepen engagement Much delivered strategic partnerships building ventures incubator business named after year forbear bank first traded Through invest path acquire more deepen relationships co-develop propositions couldn’t develop example recently announced entered Deed take over Cashrewards leader “buy-now-save-now” great fit customer proposition financial wellbeing brings over million new additional value retail hospitality Through invested eight FinTechs like Lendi Airwallex launched three start-ups intended drive acquisition deepen Another example digital solutions rapidly improve operations launch GoBiz GoBiz allows plug major accounting software packages straight systems reducing takes money hands small businesses days two early making life easier driving solid growth commercial
We have come through incredibly tough two very good shape one most strongly capitalised banks world protected interests focussing improving earnings per share immediate period ahead continue uncertain Credit conditions benign generation last Customers demanding more banks Competition increasing regulation becoming pervasive Put simply tailwinds beginning emerge still tough environment some laser focussed important regain momentum home loans launch releasing digital towards end seed further profitable high return growth particularly sustainability invest franchise complete regulatory work continue improve returns prudently manage shareholders capital seek invest decent sustainable simplification enable low resilience Whatever eventuates next prudent methodical guided purpose summary placed outlook remains uncertain another big change confident team deliver such acknowledge colleagues unwavering support community extraordinarily challenging time everyone people true embody culture thank ongoing commitment Finally going period significant disruption should acknowledge years ago modern born merger Bank Australasia Union Bank At time largest corporate merger took foresight ambition manage future generations spirit