Graham Turley: The first thing I noticed was staff safety was of paramount concern and really top of mind. A whole sense of community really came through. The other thing that helped was the government's stimulus which came through really quickly. But the way our businesses reacted was amazing. They reacted very quickly and what shone through was the way they reacted.
"We asked: "What is your plan A? What is your plan B?" because unless you've thought about it, you won't know how to react if that scenario happens.” – Turley
We asked our customers to do lots of scenario testing because we had some who woke up one day and had no revenue - but they had a fundamentally good business. One of the things that really helped us in dealing with them and the speed of their reaction was most of our customers were genuinely in a good financial position going into the pandemic so it gave them flexibility in a number of cases. As a whole the responsibility and the way the business community worked was amazing.
Shayne Elliott: You've been around for a while in banking and sadly we go through crises every now and again. But it is very different this time, isn't it? You made a point that businesses were strong, people had done all the right things, people had been prudent, mitigated risk, diversified, shortened their balance sheets. And then this happens and it's completely out of your control.
If I go back to the GFC (global financial crisis) or other crises and crashes we've had, typically those things expose bad business models - people who took on too much risk, concentrated on one area, overstretched, their business model was fundamentally not great. So it's a really different impact to what we've seen in the past.
Graham Turley: We talk a lot about discipline, sticking to the strategy, good customer selection. And every customer is the same - although they may have different variables, of course. And that's actually put us in a really good state because the bank itself has done that too.
We trimmed down our Institutional business when you came in as CEO and the customers that have done that too and thought about sustainability, purpose and a sense of community have come through this really well.
They've got a long way to go, there's no question, but if you only have one driver which is make as much money as possible then you'll probably find yourself in these situations.
Shayne Elliott: So what does that mean in terms of our role as a bank? I often see that the "right thing" for banks to do is essentially write cheques, to let people borrow more as though that is somehow always the right thing to do. But it isn’t, though.
Graham Turley: That's right. If you look at the COVID-19 situation it is a prime example. ANZ lent out a lot of money in a very short space of time during March and April to customers we know really well and have built up relationships with over a number of years. But we didn't lend it to them without asking any questions.
So we asked: "What is your plan A? What is your plan B?" because unless you've thought about it, you won't know how to react if that scenario happens. It made them think about how they manage themselves through those scenarios. So the role we had was as much about supporting them as asking the right questions.
Another role we have which is hard - and fortunately, we haven't had to do this - but if some customers were really weak going into the pandemic, we would have to say “no we can't help and you have to do something else to raise that equity”. But 99 per cent of the time that it hasn't been the case. So our job is to ask questions, make sure people are aware and thinking about what a worst case could be and what would you do at that point?
Shayne Elliott: Now in your business, relationships have traditionally been very much face-to-face spending a lot of time out with customers. Seeing the factory, seeing the plant being built, talking to the people on the shop floor, really getting a sense of the customer's culture and values and asking how do they manage themselves? That must be a bit harder in today's world? You can video conference but it's not quite the same so how have you led your team and adapted your relationship management approach?
Graham Turley: The operating rhythm was thrown out the door, there's no question about that. When you visit a customer you understand and see how management interact with their staff and how they run the business which is really important. And we haven't been able to do that.
The first thing we did was react to the situation - helping and supporting the customers through their time of need and making sure they had what they needed to get through. That was something that could be done on video conference. But what we're starting to see now is there is a need to get back out there. If you're developing property, you need to have a look and see what and how much has been done. So we're working through protocols for how we do that so everybody is safe.
People-to-people is really important but what COVID-19 has taught us is that we don't need to rely on it is as much as we had been. There is a balance. We've done great webinars and sessions where speakers come with hundreds of customers dialing in. We can communicate in a different way with our customers to share information in a more effective, shorter, sharper and time-efficient way.
So the pandemic is going to teach us to work differently going forward. Of course there is going to be face-to-face, but we’ll be able to support more customers, much faster and more often.
Shayne Elliott: Now Graham after a long-term career in banking, you're going to retire and do something different. So what brought that on and what are you thinking about for the future?
Graham Turley: I've had a great banking career and I work with amazing people in my team, customers, competitors and people like yourself Shayne. I've been at ANZ for almost five years and I've really enjoyed it.
But part of me feels like it's getting to the point where banking is changing all the time and somebody else can come in and take this to another level. We've got an awesome business, I love this business and its people but I also want to create something for myself so that when I get to 80 years old I'm still relevant. I want to get up in the morning and have something to do. I don't want to work until I'm 65 and have nothing to do when I'm 66.
So part of my retirement is taking what I have learnt and creating something to keep me going. I had the option to keep helping innovate the business for the future but I thought it was time to step away. We've done a fantastic job and there are some fresh faces coming into the business. The business is in a really strong space so somebody will come and keep that going.
Shayne Elliott: You've done a great job and you'll leave the business in incredibly good shape - the best it’s been in my time. But that's an important point about being self-aware of what's really your interests and when is time to naturally go onto something else - whether that's in the same organisation, frankly, or in a different organisation or even a different industry.
Institutional is really the heart of ANZ - it's the thing that differentiates us in terms of our business, more than anything else. We are number one in that business and have been for a while. Under your leadership and the broader institutional team, that has strengthened in recent times.
It's times of crisis and stress that customers remember for literally generations and this pandemic is one of those times. Standing shoulder to shoulder with our customers will be remembered for long periods of time and it's the opportunity for us to show what we do well. This is when it really matters.
Shayne Elliott is Chief Executive Officer at ANZ