Elliott: growth opportunities emerging but caution persists

Speaking to bluenotes in-person for the first time in over 12 months, Elliott said ANZ had a “very strong” performance in the first-half of 2021 which was linked to a better than expected economic recovery and solid operational performance in Australia and New Zealand.

"You want a business that can respond at-pace, continue to operate, do the right thing by customers and quickly adapt to the times.” – Shayne Elliott

“To put it in perspective… in order to participate in that economic rebound it’s really down to the operational performance of the bank,” he said.

“Did we have the right settings in terms of capital? Did we have the right responses to customers? Were we able to operate successfully through a very difficult period of time? We were able to… stand by customers [and] get things done for them in a really unusual set of circumstances.”

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Click here to read the transcript

ANZ’s statutory profit after tax for the half year ended 31 March 2021 was $A2,943 million, up 45 per cent on the previous half. The proposed interim dividend is A70 cents per share, fully franked.

Elliott says the inherent agility that has been the focus for ANZ’s operations over the past five years came to the fore as the bank had to move 95 per cent of its staff to working from home and switch customers onto newly created digital platforms in a matter of weeks.

“You want a business that can respond at-pace, continue to operate, do the right thing by customers and quickly adapt to the times,” he said.

On capital allocation, Elliott says the bank has maintained a strong focus on shareholder value for the long-term which has guided the bank’s prudential response to capital.

“We haven’t asked [our shareholders] to put their hands in their pockets for more [capital],” he said.

“Yes, last year we didn’t distribute capital through dividends to the extent we have in the past because the prudent thing to do was to be a little bit cautious and I think that has worked extraordinarily well and in the interest of those shareholders.”

Elliott noted the bank was sitting on record levels of capital with CET1 ratio of 12.5 per cent on a pro forma basis: “about $A7 billion more than we would normally require to be ‘unquestionably strong’. It is a sense of safety and prudence in a time of uncertainty and… when we’ve got more confidence about the future… we would explore options to invest in the business for growth or [return capital] into the pockets of our shareholders.”

Elliott also discussed the areas in which the business can continue to increase market share such as the New Payments Platform and clearing technologies for other institutions as well as his feelings about returning to the bank’s Melbourne headquarters.

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

Andrew Cornell is Managing Editor of bluenotes