CHAIRMAN’S MESSAGE: ANZ 2024 Annual Report

In a year of global uncertainty and challenging conditions for Australia there was significant downward pressure on industry profitability.

Despite these challenges, our full-year statutory profit of $6.5 billion was 8% less than last year’s record financial performance and the second strongest revenue outcome on record. Along with financial risk being well managed, this year’s cash profit was the next highest for ANZ since 2017. We also achieved a total shareholder return of 27% this financial year, resulting in a return of approximately 50% across the last two financial years.

Our performance was driven by a solid performance in our core banking businesses, reinforcing the benefits of our diversified portfolio. Furthermore, our strong capital position, along with the successful sale of our stake in AmBank, enabled us to reduce our share count by over 30 million through $883 million of our ongoing $2 billion share buyback.

The significance of the year was highlighted by our successful acquisition of Suncorp Bank. This acquisition reshapes our presence and scale in the fast-growing Queensland market, and along with the progress of our new banking platform in Australia, ANZ Plus, the bank is well positioned for the future.

As a result of our performance, your Board was pleased to declare a total dividend of 166 cents per share, which was down 5% on 2023, meaning more than $4.9 billion will be returned to you, our shareholders.

The final dividend was partially franked which reflects the shape of our portfolio and percentage of ANZ’s profit generated outside of Australia.

While we are pleased with the returns provided to shareholders, we have also made a meaningful contribution throughout the year to customers and the community. We are proud of this work, which is covered in our Chief Executive’s letter on the following pages.

Capital

The global economy passed through the most sustained cycle of rising interest rates in decades. While deep recessions have not been apparent, inflation challenges persist with many customers and businesses confronting higher costs.

Against this backdrop, ANZ is well prepared with sound levels of credit provision, capital, liquidity and funding. While the number of customers in hardship remains relatively low, our financial position allows us to stand ready to help customers in need.

In the first half of the year, the Board approved an on-market share buyback of up to $2 billion – one of our largest ever capital management exercises – reflecting our strong capital position.

We continued to protect and strengthen the balance sheet with your bank remaining among the best capitalised banks in the world. ANZ’s Common Equity Tier 1 Ratio was 12.2%.

Non-financial Risk

While the bank has a track record of prudently managing financial risk, we are still building capability in the management of non-financial risk (NFR).

This has been emphasised by the Australian Prudential Regulation Authority (APRA) requiring ANZ to hold an additional operational risk capital overlay, due to concerns about our progress in this space, including issues within our Markets business.

We have made progress in the delivery of our NFR program, I.AM Amplified, however it is clear there is more to do and ongoing vigilance is required.

This will continue to be a significant focus in 2025. The actions we are taking on NFR are outlined in Box 1, while the Board’s response on the specific matters arising within the Markets business is covered in Box 2.

As shareholders would expect, the Board has also taken these matters into account when assessing the performance of our Chief Executive Officer, Shayne Elliott, and the executive team this year.

While there has been no finding of any direct accountability for members of the Executive Committee, as CEO, Shayne is ultimately responsible for all aspects of the Bank’s performance.

This is why the Board applied its discretion and assessed Shayne’s performance to be below target and determined the appropriate 2024 Short Term Variable Remuneration (STVR) outcome was 65% of target opportunity (52% of maximum opportunity). 

In addition, the Board considered it appropriate to hold the Executive Committee collectively accountable for the issues relating to NFR and this has been reflected in their final outcomes. More details of the Board’s actions are outlined in the Remuneration Report.

Board Renewal

There has been ongoing renewal of our Board in recent times with a particular focus on appointing Non-Executive Directors with experience in financial services. This has been particularly beneficial as we have managed the NFR and Markets issues.

In February, Richard Gibb joined the Group Board, while John Cincotta was appointed a Non-Executive Director of the Banking Group.

Before joining ANZ’s board, Richard was Chief Executive of Credit Suisse Australia and previously held senior global roles at Deutsche Bank and Merrill Lynch. John, who was one of the founders of Barrenjoey Capital Partners had a long career at Deutsche Bank Australia and New Zealand.

Then in March we welcomed the Chair of ANZ New Zealand, Scott St John, to the Group Board as a Non-Executive Director. Scott has served on our New Zealand Board since 2021. Scott currently chairs Mercury NZ Limited and was formerly the CEO of First NZ Capital (now Jarden) and Chair of Fisher and Paykel Healthcare.

This year Sir John Key retired from ANZ having served as both a Non- Executive Director for the Group and Chairman of ANZ New Zealand since 2018. Sir John made an enormous contribution with his unparalleled international business and political experience playing a critical role in our ongoing success. As a Board, we will miss his wise counsel and global insights and we wish him the very best for the future.

In closing, I would like to acknowledge the many thousands of ANZ employees who come to work every day to do their best for their customers and colleagues as we continue to build a bank that benefits all our stakeholders.