Elliott: record result driven by all divisions

ANZ Chief Executive Officer Shayne Elliott says the highest ever revenue and cash profit the bank delivered in its record full year result for 2023 was driven by consistent performance across all divisions.

ANZ released an audited cash profit for the September 2023 financial year of $7,405 million, up 14 per cent on the previous year. Statutory profit after tax was $7,098 million, flat on the previous year. The final dividend is comprised of an 81 cent per share dividend partially franked at 65 per cent and an additional one-off unfranked dividend of 13 cents per share. Totalling 94 cents per share, 56 per cent franked.

“ANZ is really well positioned because we have this diversified portfolio to be able to lean in where there's more opportunity and lean back where there's a little bit more risk.” – Shayne Elliott, ANZ CEO 

Click here to read the transcript

Speaking with bluenotes on video, Elliott said the result was due to the “consistent” strong performance of the four divisions – New Zealand, Institutional, Australia Retail and Australia Commercial. Work over the last seven years to simplify the business had positioned it to prosper despite geopolitical ructions, higher inflation and rising interest rates.

“It was a consistently strong across the board. Really showing the benefit of the portfolio of businesses that we have, which is pretty unique and different, particularly to our domestic peers here,” Elliott said.

The process to simplify the bank had proven it is possible for large companies to be “over diversified”.

“You can be doing too many things with too many people and too many places,” Elliott said. “So we streamlined back to the core businesses that we know and love, the businesses where we feel we have something unique, something great to offer our customers.”

“We have diversification and this is a perfect time to really benefit from that. There's a lot going on in the world.”

Elliott noted that the adaptability of the ANZ model meant as the world changed and customers’ appetites shifted, the bank was able to quickly change tack.

“ANZ is really well positioned because we have this diversified portfolio to be able to lean in where there's more opportunity and lean back where there's a little bit more risk,” Elliott said. “That's precisely what we did over this year and that really came through strongly into the result.”

Building for the future

In Australia Retail, 2023 saw acceleration in the progress of the ANZ Plus digital platform, which after 18 months in the market has welcomed 500,000 customers and more than $10 billion in deposits. Elliott said while the initial focus was on catering to savers, it was now ready to introduce a suite of new tools for customers, including protection from scams. After starting as a project, ANZ Plus was now a “new business line”.

“We've invested and we've essentially built a whole new bank using the best-in-class technology that we can and that is now out in the market,” Elliott said. “From our perspective, it's the most contemporary, fastest-growing proposition from a major bank for retail savers.”

“We've got a rolling series of features that'll come out pretty soon and I think that speaks to exactly the value of this platform.”

While there is an array of services available to customers over the ANZ Plus platform, it is also a less expensive business to operate. The cost of acquiring new customers is about 55 per cent lower than ANZ’s traditional business, he said.

Once they’ve joined ANZ Plus, Elliott said the cost of servicing those customers was about 25 per cent lower than the traditional bank.

International perspective

As the geopolitical order shifted in the last year, Elliott said ANZ’s international focus meant it was well placed to help customers to find and maintain trade partners in the Asia Pacific.

Companies were also rethinking their supply chains and deciding where to place resources and capital.

“That change has only gathered pace. And there are places in the region where we operate, that stand to benefit,” Elliott said. “One of them is India, pretty obviously it's well positioned geopolitically, it's got this growing reformist economy where there's lots of opportunity. But there are others like Singapore and Vietnam that stand to benefit.”

Elliott said much of the year saw many people across the globe get used to the “shock” of rising inflation and higher lending rates.

“Central banks have had to respond by increasing interest rates. That has real impacts on our customers. Whether you're a homeowner or a business owner, whatever you do in the community that really changes your life and it's pretty profound.”

“It's changing a lot of business models, it's changing people's view about housing and what they can afford and how they have to make really difficult decisions to balance the budget.”

However, ANZ data showed many of its customers entered this period in relatively “robust” financial position.

“We have a million homeowners here in Australia, or people who have a home loan with us. Only 2000 of them are in hardship. Now it’s dreadful for the 2000 and we’ll do everything we can to help them through. But in the scheme of things, it’s relatively modest. And it speaks to the strength of the economy.”

On the bank’s proposed acquisition of Suncorp Bank, Elliott said ANZ would soon make its case to the Australian Competition Tribunal and a decision was expected in late February. ANZ also requires formal approval from the Queensland Government and the Federal Treasurer.

“We strongly believe our case is a good one, that this really is in the best interests of consumers.”

You can listen to the full conversation by watching the video above.

Brett Foley is Managing Editor of bluenotes.

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