The Australian and New Zealand Banking Group (ANZ) has reported a significant increase in its net profits for the first half of 2021, doubling to nearly $3 billion. This improvement is partly due to funds set aside during the crisis that were ultimately not needed. ANZ's shareholders received a higher-than-expected dividend of 70 cents per share, more than double the interim dividend paid last year.
Shayne Elliott, CEO of ANZ, stated, "Banks are a leveraged play on the economy. When the economy does well, we do well." He noted that both Australia and New Zealand's economies are performing strongly.
Despite positive financial results, ANZ shares fell as analysts expressed concerns over an 8% decline in revenue. Elliott explained that while core banking revenue increased by 3%, their trading business experienced a normalization after a record performance in 2020.
ANZ has become the third-largest home loan provider in Australia, benefiting from the surging housing market. However, Elliott acknowledged concerns about affordability: "We've got no interest in lending money to people who can't ultimately afford to pay it back."
Elliott also addressed worries about potential disruptions from new competitors and technologies. "We worry about disruption... fintech, big tech," he said. He highlighted the importance of adapting to changes in technology and customer preferences.
With digital transactions increasing significantly—42% of retail sales now occur online—ANZ has closed several branches. Elliott explained this decision: "We're closing bank branches because our customers have made a decision that they don't want to use them."
During the interview with Brooke Corte on Money News, Elliott humorously responded to feedback on corporate jargon used in their reports: "That sounds like utter nonsense, doesn't it?" He assured listeners that cost management is focused on creating a simpler and safer bank for customers.