ANZ putting resources where it counts most: Jablko

Andrew Cornell

Past Managing Editor, bluenotes

ANZ’s commitment to discipline and execution in how it manages costs helped drive the bank to an increase in half-year profit, according to ANZ chief financial officer Michelle Jablko.

Speaking to bluenotes on video on the morning of the result, Jablko said the bank’s continued focus on simplification had helped reduce costs, a key figure in the result.

"We can take the benefits of simplification and really put our dollars to work where they most count.” - Jablko

“[There] really is a focus on sustainable simplification and sustainable-cost reduction,” she said. “We want to do things that are right for the business.”

ANZ posted a cash profit of $A3.49 billion in the six months to May, a 4.1 per cent rise on the previous corresponding period.

Statutory profit after tax for the same period rose 14 per cent to $A3.32 billion and the bank’s CET capital ratio was 11 per cent.

Jablko called the capital increase a “really strong outcome”, particularly given its follow-on impact on risk-adjusted returns.

“[The capital result] was partly driven by divestments but also by the work we’ve done within the business to generate capital and use it more effectively,” she said. “As a result of that, our risk-adjusted returns continue to increase. That’s a really important measure as we look at our business.”

Four halves

The CFO said expenses had now fallen at the bank for four halves in a row.

“At the same time we’re investing more and more proportionally in our ongoing businesses,” she said. “That shows we can take the benefits of simplification and really put our dollars to work where they most count.”

Jablko said provision charges were lower through the half while admitting a benign credit environment had helped.

‘But we’ve also done some really serious work over the past couple of years,” she said, including offloading assets and exiting businesses. “As I look at it I think we will benefit from having a lower risk portfolio into the future.”

Jablko said she expected credit growth will continue to slow across the industry as a whole and short-term funding costs had “really picked up”.

“All things being equal… if rates stayed where they were today and our balance-sheet mix stayed, it would have an impact in the second half,” she said.

You can watch the video above to find out more.

Andrew Cornell is managing editor at bluenotes

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