The results were also helped by good margin management, a rebound in our markets business and a record result for the international business.
It was also a balanced result. Our three product pillars – markets, corporate finance and transaction banking – produced roughly a third of the revenue each.
In the markets business, a key contributor to the broader ANZ result, revenue jumped more than 50 per cent in the half, driven by strong results from foreign exchange, rates and debt capital markets.
People often say you can’t shrink to greatness but the opportunities that come from operating a more focused, less risky business cannot be underestimated – particularly when the business spans more than 20 major markets around the world.
It allows you to focus on the right customers, the right markets and the right transactions without trying to be all things to all people.
ANZ’s institutional division delivers this focus, while providing diversification in terms of products and geographies for the broader ANZ group. It is an important point of difference compared with our local peers. Moreover, we can provide global insights and expertise to benefit our clients.
Diversification is more important than ever and ANZ is now reaping the benefits. The international business contributed nearly 60 per cent of the overall institutional revenue growth this half – making it one of the strongest performers in the group.
One of the other benefits of running a leaner business is it presents fewer concerns at times of global market volatility, like we have seen in recent months.
In fact, rising interest rates globally were a tailwind for our payments and cash-management (PCM) business. We’ve invested heavily here to deliver services to customers, including payments and collections, information management, account and clearing services, and liquidity management.
We built up the PCM business at a time when interest rates were low globally and returns from such businesses were challenging. Margins were tight. But we saw a market opportunity and had faith in our teams to focus on the long-term strategy and execute in a disciplined fashion.
This half, the PCM business posted increased market share and improved margins. As interest rates rose around the globe, it improved the returns on deposits we held. We were successful in tenders to provide payments and clearing services for domestic and international players – many times becoming the provider of choice to other financial services companies.
Banking other banks
Part of ANZ Institutional’s core strategy is to focus on providing PCM services to other financial services companies. This business is growing rapidly. New Payments Platform agency payments increased 31 per cent year-on-year while platform cash management accounts were up 32 per cent.
Payments & currency processing