The bonus cuts came as ANZ Bank’s cash profits dropped 14 per cent to $5.8 billion last financial year, weighed down by charges from new chief executive Nuno Matos’ move to axe 3500 jobs earlier this year and settle a string of cases with the corporate watchdog.
In the bank’s first results under Matos, ANZ on Monday said profits had taken a hit from $1.1 billion in previously announced significant items, including restructuring charges from mass job cuts, and a record $240 million fine it had agreed to pay to settle four separate regulatory cases.
ANZ chief executive Nuno Matos says ANZ’s retail and business banking units are underperforming.Credit: Renee Nowytarger
The bank said that excluding the significant items, its profits were flat for the year to September 30, as Matos reiterated that “action is needed” to improve the bank’s financial returns and catch up to rivals.
“Looking at our four main divisions, Institutional and New Zealand have performed consistently well, however Australia Retail and Business & Private Bank have underperformed,” Matos said.
“Despite growth in both assets and deposits, intense competition and a falling interest rate environment impacted margins.”
Loading
Profits from ANZ’s Australian retail bank fell 35 per cent in the year due to the previously announced significant items, while profits fell 3 per cent in commercial banking.
Matos said the bank was making progress on its priorities, including a “culture reset”, accelerating the integration of Suncorp Bank (which ANZ bought last year), improving its digital offering and reducing duplication.
The results come after an investor day last month, where Matos revealed his “ANZ 2030” strategy that included targeting the “mass affluent segment” and plans to write more loans through its own channels, rather than via mortgage brokers.
“The results we have announced today demonstrate our franchise is strong, but action is needed. We are absolutely committed to executing ANZ 2030 and are on the right path. As we deliver our strategy, we will accelerate growth and outperform the market, while delivering more for our customers,” Matos said.
ANZ’s operating income rose 5 per cent in the year, but this was more than offset by a 20 per cent jump in its operating expenses, as a result of the significant items. The bank raised its provisions for bad and doubtful debts, saying there had been an increase in individual provisions for soured loans in the half. Overall loan quality, it said, was “sound”.
ANZ kept its final dividend unchanged at 83¢, as flagged by Matos at the recent investor day.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
