Whelan: very tough conditions but refocus already showing results

ANZ’s institutional business dragged back stronger earnings from other divisions in the bank but division boss Mark Whelan said the bank was already well advanced in reshaping the business with early returns promising.

“It is very disappointing”, he told BlueNotes on video, adding “it is probably the toughest conditions in 25 years, almost a perfect storm. Low margins, widening credit spreads, trade volumes down, lots of volatility, interest rates down. It’s been a difficult market.”

"If you get through some of the noise even in this half’s result, there is some very good things there."
Mark Whelan, Group Executive, Institutional ANZ

In response Whelan, who has been in the job since the start of the year, has worked at simplification and taking costs out while moving away from customers who provide low value.

Whelan: very tough conditions but refocus already paying dividends

“If you get through some of the noise even in this half’s result, there is some very good things there,” he said. “Underlying expense numbers we are seeing come off, that will continue.”

Whelan characterised the renovation of the business as a two-to three-year project but strong results will be seen throughout as long as the bank stays disciplined.

While risk weighted assets were coming down as the bank looked at returns, new RWAs were being added which Whelan described as “good returns from strong customers”.

Other positives in the tough result were the cash performance and signs the bank was building higher return on equity and lower capital lines like transactional banking.

Despite the restructuring of the business mix, Whelan emphasised the importance of Asia to the bank where it had a competitive advantage, noting 35 per cent of earnings from Australian businesses were related to Asia.

Watch the video for the full interview.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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