Shayne Elliott told shareholders that simplifying ANZ had already delivered $1.3 billion cost savings since 2015 – “over and above” the $900 million of benefits driven by divestments – but that further cost cutting “will not be a straight line”.
“Setting targets is easy. Delivering them is hard. In fact, targets can be dangerous. We could easily achieve $8 billion by underinvesting and focusing on the short term,” Mr Elliott said.
“We are not doing that. In fact, our level of investment has never been higher. And in order to build a sustainable business, we need to retain the capacity to invest where we see growth and opportunity.”
Mr Elliott said that ANZ was targeting a future cost base of $8 billion – not a target “in of itself” but an “aspiration for what a simpler better bank would cost to run well”. BAU costs were down for the half but an increase in investment spend in the second half could result in expenses being up around 1-2 per cent for the full year.
“While we made a strong start, there is more to be achieved and we have strong momentum. And I should point out, it’s as much about the shape or the composition of the cost base, rather than just the quantum,” Mr Elliott said.
“The reality is the shape will change with regards to being more variable, more correlated to revenue and a greater weight on technology investment.”
The comments come as Westpac CEO Peter King promised to slash up to $2 billion in costs by “redesigning” many of its processes as the bank exits all specialist businesses and accelerates its digital transformation.
