ANZ posted an interim cash profit of $A2.8 billion, a 24 per cent fall on the previous corresponding period, on the back of $A717 million in repositioning “specified” charges. The bank will pay a dividend of 80 cents per share, bringing its payout ratio more into line with a newly articulated dividend policy. The interim payout ratio on an adjusted proforma basis is 67 per cent.
Elliott said the payout move was not about this particular result but more about resetting market expectations.
“It’s part of the repositioning of the bank and setting it up for growth in the future,” he said. “We’ve had to make some decisions about how we see the environment in a subdued, lower-growth world. Part of that is getting the dividend on a sustainable, conservative and fully frankable basis.”
Elliott said the bank had encountered stubborn cost pressures in its institutional bank around regulation and technology, in a sector doing it tough around the world.
“It’s a really tough set of ingredients,” he said. “We’ve decided to not just let that happen, to really try to get ahead of it and to make some hard calls about the business we want to be in.”
Elliott also touched on the bank's confidence in the quality of its loan book, the rationale behind specified items and provisions, its ongoing commitment to Asia and the reality of the markets in which the bank operates. Watch the video above to find out more.
Andrew Cornell is managing editor at BlueNotes