ANZ’s common equity Tier 1 capital ratio was 11.4 per cent, a rise of 87 basis points. Return on equity fell to 11.0 per cent, largely on the back of a decision to hold well above the regulatory minimum level of capital, Jablko said.
“We’ve continued to have really strong capital flexibility,” she said, “well and truly ahead of where we need to be.”
“We’ve continued to show discipline on costs. Costs are down 1.5 per cent and we’ve had five halves in a row… of absolute cost reduction.”
From a revenue perspective ANZ was pleased with the result in its New Zealand and institutional businesses, Jablko said, although the Australian business faced tough conditions.
“It’s been a difficult environment, particularly in the second part of the year,” she said. “But… we’ve been really focussed on where we want to grow. So while it has a short-term revenue impact we think that focus is the right thing to do.”
The benefits of more rigorous focus and simplification on credit quality was a highlight, Jablko said, on the back of solid conditions in the economy.
“Clearly the environment has helped us,” she said. “We know that won’t go on indefinitely but we think we’re making some good strategic choices in our business that do make us less risky.”
She also touched on the impact of changes to ANZ’s institutional business on the bank’s risk-adjusted returns and the high levels of capital the group has on hand. Watch the video above to find out more.
Andrew Cornell is managing editor at bluenotes