ANZ’s cash profit was down 42 per cent for the full year, but chief executive Shayne Elliott says there are plenty of reasons to be optimistic while taking aim at institutions that used capital raisings to get them through.
ANZ’s cash profit was $3.76 billion, down 42 per cent due to COVID-19 credit impairment charges of $2.74 billion and a first-half impairment of Asian associates of $815 million. And while the bank only paid a reduced dividend – 35 cents per share, fully franked – CEO Mr Elliott believes ANZ has never been better.
“The business continues to run profitably every single day – not as profitably as it used to be – but still very, very decent,” Mr Elliott said.
“So we’ve got the resources. We’ve got the management depth. Yes, our people are really, really busy dealing with thousands of customers who are going through a hard time, but we’ve got the capacity and we hired more people to be able to do that.”
Mr Elliott also noted that ANZ had invested around $500 million more in new systems and maintenance than in previous years and “didn’t put (its) hand out to shareholders for more capital” – a thinly veiled jab at big four counterpart NAB, which launched a capital raising in April as the COVID-19 shock rolled through the economy.
“What we’ve showed through this year is our ability to maintain extremely high capital levels, while still putting more money away for potential future credit losses, and having sufficient left over to pay a modest, and albeit reduced, dividend,” Mr Elliott said.
“…we’ve kept our share count the same and I think it’s a pretty balanced and good result to be able to do all of that. More capital, credit reserves up and be able to pay a modest dividend.”
Mr Elliott also noted a massive bounce back in consumer demand in reopening state economies, particularly Western Australia, where discretionary spending on cafes and restaurants is 18 per cent higher than it was last year.
“There will be a bounce back….We’re very, very confident it will happen here in Victoria. Our job is actually to enable that,” Mr Elliott said.
“Businesses have to stock up, get their inventory, get their staff back. There’ll be a lot of need for working capital and all sorts of other things and that’s exactly what we do. So there is a sense of optimism and it’ll be great to have the great state of Victoria – which is a quarter of the Australian economy – back on its feet and growing again.”