Elliott: boosting investment for growth

This focus allowed the bank to invest more in the last six months to strengthen the business for “long-term, sustainable value creation”.

"Depending on what's happening in the environment, either economically or with our customers, we're able to deploy capital differently, move resources around, invest in a differentiated way.”  - Shayne Elliott 

ANZ today announced a Statutory Profit after tax for the half year ended 31 March 2024 of $3,407 million. Cash Profit was $3,552 million, down 1 per cent on the previous half. The interim dividend is 83 cents per share, partially franked at 65 per cent.

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Speaking with bluenotes on video, Elliott said the half year result continued the momentum of the “fantastic” 2023 financial year, in which the bank recorded its highest ever revenue and cash profit.

“There's been a lot of repositioning of the bank over the last seven to eight years. We’ve sold a lot of businesses, we've restructured, we've got real momentum. And that's what we're really pleased with in the half,” Elliott said.

Elliott said all four divisions – Institutional, New Zealand, Australia Retail and Australia Commercial – performed strongly and made a positive contribution to the result. It also gave ANZ options on how to deploy capital to those businesses.

“It's great to have those options and that's what's really come through in this result. It's about how we leverage that differentiation to drive value for our customers and for our shareholders.” Elliott said. “This time the Institutional bank really outperformed.’’

A higher inflation environment required a keen focus on costs as businesses incurred higher expenses across the economy. ANZ’s focus on efficiency and productivity meant costs had not risen as much as they might have otherwise.

“We've driven a lot of productivity gains and we take those gains by getting more efficient and some of those go back to our shareholders in the form of dividends,” Elliott said. “But a lot of it gets reinvested into the business and that's what we're able to do again this year.”

After eight years of simplification, ANZ was spending more on growth investments than it had for “many, many years” – including key strategic priorities like ANZ Plus, the proposed acquisition of Suncorp Bank and more.

“I'm really excited about where we are with ANZ Plus. We've got over 650,000 customers on the Plus platform and about $13 billion in deposits. That's already more than 8 per cent of all our Retail bank deposits,” Elliott said.

“We're also investing in areas like our Commercial bank, which is a great opportunity where we service about 650,000 small businesses across Australia. But we need to invest in terms of technology, people and processes to make sure we've got the very best propositions in the market.”

Hundreds of millions of dollars are also being spent on cybersecurity and to help customers navigate the threat of frauds and scams. The cybersecurity investment is designed to keep ANZ's systems are safe while funding is also going to develop tools and education for customers to protect themselves against scams and fraud.

“Right from day one, we've been in the security business. That's what banks do. Of course, the way we do that has changed a lot,” Elliott said. “We have to keep it safe from cyber hackers who try to attack our systems. And also now, we have to help keep our customers’ money safe from scammers.”

Higher inflation and interest rates meant cost of living challenges were still causing issues for some customers, Elliott said. Despite this, the number of ANZ customers contacting the bank for assistance remained “remarkably low” – even lower than before COVID.

“Despite the stress, there's still resilience and people are being very prudent in how they manage their money. Still, we expect the number of people under stress to increase somewhat,” Elliott said. “The reality is that banks are in a really strong position to help those customers that do find themselves in a difficult position.”

On the proposed acquisition of Suncorp Bank, Elliott said ANZ was pleased to receive the decision from the Australian Competition Tribunal. Further approvals remained including the passage of legislation through the Queensland Parliament and the approval from the Federal Treasurer.

"There’s still some steps to work through. Once we get there, we'll be in a position to update the market on our plans and how we‘ll bring those 1.2 million Suncorp Bank customers into the ANZ fold."

Brett Foley is the Managing Editor of bluenotes