Operational efficiency pushes HY profit: Elliott

Andrew Cornell

Past Managing Editor, bluenotes

ANZ’s continued success in simplifying its business has helped the group to a solid interim profit, according to CEO Shayne Elliott, driven by a reduction in expenses and growth in the bank’s share of the home-loan market.

Speaking to bluenotes on video on the morning of the result, Elliott put the result down to “operational excellence”, doing “fewer things” and doing them very well, despite the presence of market headwinds.

"We’re continuing to pick up market share where we want to.” – Elliott

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.

“Our core business continues to do really quite well,” Elliott said. “More customers are choosing ANZ. We’re continuing to pick up market-share where we want to.”

The CEO said market share gain was particularly strong among owner-occupier home loans. He also cited the bank’s success in cleanly selling its Asian retail businesses given the complex nature of those deals.

“The way we’ve been disposing of some of the businesses has shown we have a team that are really on top of their game and know how to get things done,” Elliott said, adding the sale allowed ANZ to focus on its institutional business in Asia.

“We were able to do that ahead of schedule and under budget and actually ended up with a better financial result than we had indicated.”

The bank was benefitting as strength in the economy continued to hold up, Elliott said, while also pointing to both existing and approaching tailwinds.

“There’s still strong business formation in Australia and New Zealand,” he said. “Despite a lot of rhetoric around trade wars, trade volumes are on the rise, particularly in our part of the world.”

Elliott said banking had enjoyed a two-decade “golden period” which was unlikely to continue.

“It is going to be harder,” he said. “Only the fit will really survive and prosper and that’s what we’ve been about, getting fit.”

Elliott also touched on the importance of integrated reporting for its investors and the ongoing Royal Commission into banking. 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.