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Although a portion of the bank’s investment spend did go to regulation and compliance, Jablko said the bank is using those requirements to make the bank better.
“There is real upside for the business that will come from [this investment],” she said. “We can use them to make our businesses a lot better – to improve our internal processes [and] improve the way we use our data.”
Touching on capital, Jablko said the bank’s position remains very strong despite a number of regulatory changes and the potential for more.
ANZ’s Common Equity Tier 1 Capital Ratio was broadly flat at 11.4 per cent, almost $A4 billion above the Australian Prudential Regulation Authority’s (APRA) ‘unquestionably strong’ measure. Return on Equity decreased 10 basis points to 10.9 per cent.
“Our core equity is [well] above ‘unquestionably strong’ so a really strong position to start with,” Jablko said.
“[The regulatory changes] may provide some challenges in terms of capital allocation and efficiency but given where we start from, the strength of our capital position and the capital we generate every year, the issue for us is more about the efficiency.”
On the topic of interest rates trending towards zero, the CFO said bank margins were impacted this year, due to both limits on deposit repricing and lower returns on the bank’s own investments.
“As interest rates come down, it reduces the earnings we achieve [on capital investments],” she said.
You can hear more of the conversation in the video above.
Andrew Cornell is managing editor of bluenotes