Thanks Shayne and good morning everyone.
As Shayne mentioned, 2024 has been a pivotal year in terms of progress on strategic goals.
Our financial performance this year showed resilience coming off a record year for the sector in FY23. When we look through what was in many ways a highly unusual year, our trends have been consistently strong.
Since FY21, Group Revenue has increased 19% with Profit Before Provisions up 20% and Cash Profit up 12%. This has been delivered in an environment characterized by inflation, heightened competition, and macro uncertainty.
In addition, we have taken steps in the year to optimize Group ROE including the divestment of our stake in AmBank, continuing the announced on-market share buyback and finally being able to deploy capital raised in FY22 towards Suncorp Bank.
This builds on the work we have done since 2016 to optimize capital allocation and productivity including:
Exiting of non-core businesses such as Asia Retail, Partnerships, Wealth, Insurance, and Dealer Finance
Reshaping Institutional to optimize ROE and reduce risk, with the business achieving a record RoE this year.
And delivering over $1.7 billion in cumulative cost savings. To put this in perspective this is equivalent to 16% of our current expense base.
Collectively, these initiatives have given us the capacity to invest in value accretive opportunities which have added capability and scale such as Transactive and ANZ Plus, and the acquisition of Suncorp Bank while returning capital to shareholders via buybacks and dividends.
Suncorp acquisition – Financial Impact
Suncorp Bank joined the Group on August 1 this year. Therefore, our financial results include two months of Suncorp Bank earnings as well as acquisition-related adjustments which we announced last week.
Group Revenue for the year on a constant currency basis was broadly flat compared to a record FY23 driven by strong ANZ performance and with only two months of Suncorp Bank financials included in FY24 results.
Additionally, the acquisition has increased scale in both our Australia Retail and Commercial businesses. On a consolidated basis, ANZ now holds the second highest customer deposit base relative to our domestic peers.
It is important to mention that the second half of FY24 includes two months of Suncorp Bank expenses affecting both half-on-half and year-on-year comparisons.
I realize that comparisons this year are somewhat complicated by the Suncorp Bank acquisition and accounting adjustments required so to be clear: "the Group Cash Profit for FY24 excluding Accounting Adjustments was $6.92 billion."
Further details on Suncorp Bank will be provided later but I will now focus on ANZ's financial performance excluding contributions from Suncorp Bank.
ANZ Group Overview
I'll begin by discussing our business performance aligning it with how we think about the Group. Essentially ANZ consists of two main businesses – Banking & Markets.
Around 90% of revenue comes from Banking Business offering lending trade deposits payment services to eleven million Retail Commercial customers across Australia New Zealand globally serving approximately six thousand five hundred Institutional clients worldwide managing optimal net interest margin return equity focusing primarily optimizing those metrics within Market intermediary nature maintaining stable attractive RoE averaging around eleven percent over last five years providing complementary solutions deepening relationships lifting average customer returns operating group center similar size corporate centers domestic peers managing shared services allocating operating divisions costs related central functions like Financial Policy Control Risk Modelling Asian Partnerships Completion Share Buyback reduced capital held effect reducing investments focusing optimization opportunities further asset disposals completing Share Buy Back aggregate producing attractive CTI margin outcomes comparable major domestic peers supported high proportion low risk high return activity supporting strong funding base Payments Cash Management business operational deposits Australia Commercial book relatively low-cost deposits surplus funding supports Australian Retail loan book de-risked portfolio lifting credit margins improving return risk delivering strong growth time focusing higher marginal RoE areas example per annum deposit volume growth Payments Cash Management pre provision profit New Zealand moving performance underpinned Average Interest Earning Asset growth Divisions continued margin discipline seeing highest Risk Adjusted Margin decade constant currency grew PBP focus productivity resulting stable CTI outcome despite inflationary pressures managing banking optimize future continuity today waterfall explaining changes Headline NIM pointing key minimal impact Home Loan growth mortgage books repricing slowing course front margins improved continued competition deposits largely felt asset deposit movements offset residual wholesale funding impacts retiring TFF conjunction modest increase short term basis spreads drove compression liability shifts significant factor slowed substantially unchanged increase asset partly due lower balances Treasury completion Transaction reduced volume result ITOC volumes benefitted rolling maturities higher rates Replicating hedges continue provide benefit moving Customer organically mix stable total Customer largest acknowledging competition rate cycle uncertainties challenge response backdrop significant investments developing scalable platforms Transactive becoming simpler platform bank lower unit costs FUM reduces sensitivity further pressure rates or Payments example invested developing scale capability driven reduction unit cost FUM period PCM deposits digital payments increased performing powered multi-year investments regional footprint high-quality global franchise making resilient difficult replicate investment developing platform delivered lower acquire serve-date relative classic benefits continue improve scaled migration starting structurally reducing generate same earnings interest rate environment making resilient cycle manage Markets total measures delivered result total revenue supported strong volume ended momentum fourth strongest number profitable FX digitization processes price updates turnover higher flows digital maintained track record management underlying cost increase sustaining strategic investment primary drivers salary third-party vendor moderated slightly prior expenditure seasonality acceleration integration post completion continued support priorities enhancing technology capacity capability sustainable create capacity investments sharp focus productivity achieving highest full benefit nearly outside underlying movements areas restructuring integration restructuring support reduction represents largest annual organic reduction investment spend included build stack powering regulatory program along strategic programs cloud programs met milestones completed case expenditures allocated going report baseline importantly op-ex continue spend front depreciation amortization unchanged lowest software balance quality leading loss rate charge less third peer average remained reflecting benign environment proactive evident embedded lending Setting aside residential mortgages secured sovereign exposures expected average weight corporate retail portfolios see top below-peers line impairment experience consistent broader following levels delinquency seeing pockets weakness uptick analytics allowing proactively identify hardship engage identify solutions importantly secured dynamic Borrowers past negative represent implying limited risk collective balance steady coverage moved models implemented appropriately reflect underlying looking coverage consider split performing As performing exposures comprise comparable bottom right hand default relative intensity confident appropriately Moving position remains ratio impact captured end completed expect complete remaining portion efficiency priority Board management addition generation benefits emerged sale released centrally updated models especially mortgage appropriately portfolios aggregate generated deployed return accretive growth foot dividends shown include set Acquisition synergies spoke momentum led step pre-synergy shareholder driven doubling dedicated worked throughout period announcement finalization prepare transition people work accomplished promptly approvals complex smoothly progress believe derive value sooner initially remarks largely Excluding relatively brief ownership forecast slide consider position consolidated Based Excluding results annualized based ownership baseline approximately revenue costs equating broadly similar outcome speak performance spend synergies First Summary closing positioned move exiting momentum businesses key focus remains continuing deliver outcomes focus profitability driving transaction balance sheet Thank hand back Download PDF