OPINION: A middling result and the end of ANZ’s cost reduction target will challenge the market’s confidence in Shayne Elliott’s growth strategy, even as rates rise.
Four years ago, ANZ chief executive Shayne Elliott said something he’s always regretted. On Wednesday, it became clear why.largely unimpressive results for the six months to March
“We are already feeling an impact on wages and staff turnover, which makes cost management more difficult.”While ANZ isn’t giving up on improving productivity, Elliott says an absolute cost target no longer makes sense. “I don’t think we could have achieved what we have achieved without it. It’s served its purpose and it’s time to move on.”which he has admitted put a target on his head
Strip out the impact of credit impairments, tax and large and notable items, and core profit was down 10 per cent. But the flow of new loans was down 11 per cent year-on-year, with ANZ’s market share falling from 14.4 per cent at March 2021 to 13.2 per cent in March 2022.That market share decline isn’t over, with ANZ not predicted to grow in line with the broader market until towards the end of the financial year. And Elliott and chief financial officer Farhan Faruqui stressed that the bank will be very careful about how it balances growth and loan profitability in a highly competitive market.
That platform – ANZ Plus – earlier this year launched its first product, a deposit and transaction function, which meant investment in existing systems and capacity didn’t grow. Over the past five years, Elliott argues, ANZ has simplified its operations, moved to an agile workforce, built up a strong balance sheet, and invested in a range of growth initiatives.
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