CHAIRMAN’S MESSAGE: ANZ 2023 Annual Report

This produced a well-balanced result and a full-year statutory profit of $7.1 billion, flat on the prior year. Cash profit was $7.4 billion, up 14 per cent on the prior year.

"ANZ produced a strong outcome for our shareholders in the 2023 financial year with all four core divisions performing well."

Our total 2023 dividend was 175 cents per share with the final dividend of 94 cents partially franked at 56 per cent. The final dividend comprised an 81 cents dividend partially franked at 65 per cent and an additional one-off unfranked dividend of 13 cents. The dividend outcome reflects our geographic diversity and the particularly strong results of our businesses outside of Australia.

Globally this year saw a combination of rapidly rising interest rates and higher inflation. Central banks continue to grapple with those trends as consumers deal with the associated cost-of-living increases.

While the inflationary pressures have moderated and central banks have largely paused interest rate tightening, considerable uncertainty remains and we know many of our customers are feeling the impacts.

Against this backdrop, ANZ is well prepared with high levels of provision balance, capital, liquidity and funding. This allows us to help those customers in need.

Furthermore, while the financial services industry continues to change rapidly, we have been investing for several years now to enable ANZ to better compete in the emerging world.

Digital technology

Your Board recognise that banking is changing and doing so rapidly. Key to that change is the growing use of digital technology across the business including improved customer assistance, faster application approvals, better operational efficiency and importantly the protection of your information.

The investments we have made in new technology and improved processes include our new digital retail banking platform in Australia, ANZ Plus, migration to more flexible cloud-based applications and the increased capacity of our Institutional platforms services business and payments technology.

Suncorp Bank

In July 2022 we announced the acquisition of Suncorp Bank to add significant scale to our retail business and to our digital bank platform allowing ANZ to more effectively compete in the Australian market.

ANZ has filed an application with the Australian Competition Tribunal for authorisation for the proposed acquisition. A decision is likely in February 2024.

The acquisition then remains subject to approval from the Federal Treasurer and the passage of legislative amendments by the Queensland Parliament. We continue preparations to integrate Suncorp Bank into the ANZ Group, subject to these conditions being met.

Environment Social and Governance (ESG)

ANZ is a leader in acting on climate change. Our consistent strategy is to support and encourage our customers, especially in the energy sector, to set and pursue net zero aligned transition plans.

Our goal is to be the leading Australia and New Zealand bank supporting customers’ transition to net zero by 2050. Our social and environmental sustainability target to fund and facilitate a further $100 billion by the end of 2030 makes our aspiration clear.

We were the Australian first bank to formally engage with 100 of our largest emitting business customers on their transition plans and disclose progress – both since followed by our domestic and global peers.

We were also the first Australian bank to publish commitments on emissions reduction pathways linked to our lending for energy intensive industries – including power generation, commercial real estate, oil & gas, aluminium, cement and steel.

We are expanding these commitments to include 2030 targets for four new industries: thermal coal, aviation, shipping and auto manufacturing.

We have high expectations for our customers, especially in the energy sector, and we expect plans to be net-zero aligned, public, specific and measurable.

We recognise we can have the most impact by working with our customers to reduce their emissions. Our policy is to back their plans by providing more finance for less emissions.

We believe it is in our shareholders’ interests for the bank to support companies genuinely committed to implementing their climate transition plans.

More broadly, ESG helps determine how we manage relationships with suppliers, customers, staff and the wider community.

We set high standards in these areas and produce a range of reports for a wide range of stakeholders, including our ESG supplement and Climate Related Financial Disclosures (TCFD report) which are released at the same time as our Annual Report.

Board Renewal

Your board continues its process of renewal as we continue to attract the skills and expertise required for the evolving financial services industry.

I would like to acknowledge the enormous contributions of Ilana Atlas and John Macfarlane who will be retiring from the Board at the upcoming Annual General Meeting (AGM).

Ilana has been an invaluable member of the board since 2014, most recently as Chair of the Human Resources Committee and a member of the Audit Committee, Ethics, Environment, Social and Governance Committee and Nomination and Board Operations Committee.

John has provided tireless service during his nine years as a Non-Executive Director, particularly in his role chairing the Risk Committee and as a member of the Audit Committee, Digital Business and Technology Committee and Nomination and Board Operations Committee.

I will personally miss their insight, experience, professionalism and wise counsel.

I am also pleased to formally welcome Holly Kramer, who joined the Board in August and will stand for election at the AGM.

Holly has extensive experience as a director and has served on a range of major listed and unlisted boards in Australia and New Zealand. She has chaired remuneration, sustainability, and audit and risk committees.

As an executive, Holly was Chief Executive Officer of retailer Best & Less and served in a range of senior customer-facing roles at Telstra, Ford and Pacific Brands.

Holly brings a strong focus on people, customers and culture, as well as extensive experience in retail and digital channels.

Finally, I would like to thank our customers and my fellow shareholders for their support in what has been a successful year for the Group against a backdrop of significant uncertainty.

I would also like to acknowledge the more than 40,000 people who come to work at ANZ each day, who embody our purpose and culture and who work tirelessly for our customers.

Paul O’Sullivan is Chairman at ANZ