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ANZ 2022 Full Year Results – Chief Executive Officer Shayne Elliott speaking notes

I am joining you today from the lands of the Wurundjeri people of the Kulin Nation and would like to pay my respects to them as the traditional custodians of this land.


I pay my respects to their Elders past and present.


I also pass that respect onto any Aboriginal and Torres Strait Islander people that are joining us today.


Before we start, it’s troubling that we have needed to start recent years results by acknowledging those impacted by natural disaster – flood, fire, tornado, and drought.


This time our thoughts are with those who have been impacted by the floods, particularly those in regional Victoria and New South Wales who are still cleaning up from the worst flooding in decades.


This is yet another tough time, and I can assure everybody listening, we are doing all we can to support our customers in need and will continue to do so.



Turning to the result, its pleasing to report Statutory profit up 16%.


Cash profit increased 5% year-on-year and 9% in the second half.


Our balance sheet is strong with a CET1 of 12.3%, while return-on-equity was up 47 basis points to 10.4%.


This is one of the best set of results we have delivered. Underlying Profit before provisions was up 20% in the second half, the highest half-on-half increase in over a decade.


The recent environment is supportive, but the result reflects many years of reshaping, de-risking and repositioning ANZ.


Each division made a positive contribution, with good volume growth across the group, margins recovering in all businesses, and importantly risk-adjusted margins improving across the board, demonstrating the benefits of a simpler, well-balanced portfolio.  


We start the new financial year with strong momentum in all businesses, a solid balance sheet, financially healthy customers, and a highly engaged team.


Reflecting that strength, the Board announced a dividend of 74 cents per share, an increase of 2 cents despite the higher share count arising from the Capital Raising.



  • Looking back on the year, we had five clear priorities:
  • Restoring momentum in Home Loans,
  • Launching ANZ Plus,
  • Disciplined growth in Institutional and Commercial,
  • Completing major regulatory programs, and
  • Continuing the hard work on simplification.
  • We have done what we said we would do.




Growth has been restored in Australian home loans.


Approval times are back in line with peers, and we have grown the business with an eye firmly on risk adjusted margins.

We built processing capacity and improved operational flexibility so we can respond better when volumes surge. We are confident we can maintain growth in Home Lending, but our focus will remain on utilising that capacity wisely.



The re-positioning of the Australian retail bank onto ANZ Plus continues apace and the early signs are terrific. We are very pleased with how it is performing, both technically and in terms of customer engagement.


Deposits are growing at a rate faster than any bank ever launched in Australia.


Deposits reached over $1.2 billion yesterday and currently around a third of customers joining are new to ANZ.


While some deposit growth reflects customers moving funds from their existing ANZ accounts, total ANZ retail deposits on either platform continue to grow.


Net Promoter Scores for the joining experience are approaching 50, already materially higher than peers and still getting better.


But ANZ Plus is more than just a new app –it is a new bank - an entirely new stack of technology built by our ANZx team, sitting on a simplified existing core.


It’s also a new business model built around improving the financial wellbeing of our customers. That’s good for customers, but also good for ANZ, driving greater lifetime value per customer.


Research shows that the best way to improve financial wellbeing is to establish a good savings habit. That’s why we launched Plus with a savings proposition at its heart and the ability to set multiple savings goals without the need to open a new account.


This has really taken off with 45% of active customers setting themselves a goal, and a significant number setting more than one. To put this into better perspective, around 5% of customers set goals on our traditional platform, so we’re confident the financial wellbeing benefits of Plus are resonating with customers.


It’s also worth reflecting on the value of knowing what our customers are saving for, a deposit on a home perhaps, so we can offer them appropriate products and services at the right time.




It’s too early to share granular detail on performance, but you can see the type of metrics we monitor in real time to check the resilience, effectiveness, engagement, and financial performance of Plus.


We will be sharing many of these with you from early next year as we reach scale.


In addition, we have a series of automated control bots that run real-time health checks on our most critical controls and we are adding new bots regularly.


That level of monitoring and control just isn’t available in legacy systems, and it allows us to grow safely at pace.


We are confident ANZ Plus is more attractive to customers, more engaging, more efficient to run, more secure and resilient with more attractive economics for shareholders.


To date we have been focused on testing the proposition and acquiring new customers, but the task shortly will be the migration of existing customers.


At the same time, we will continue to enrich the savings experience and launch true end-to-end digital home loans.


Digital home loans will be piloted with staff in a matter of weeks before launching in market next year.


This will not be a digital frontend and analogue backend, but a fully digital end to end experience from application through to settlement.


However, we know buying a home is the biggest financial transaction most people do in their lifetime, so we’ll continue to offer coaching and support at any stage in the process for those that need it.




This half we separated out our small business segment, creating a stand-alone Australia Commercial division.


With Institutional and NZ executing well, ANZ Plus in market and Australia Retail back to growth, the time was right to focus attention on the next biggest opportunity.


Banking small businesses has always been attractive and ANZ has a customer mix positioned perfectly for the current cycle. We bank over 650,000 small businesses, across a wide array of segments, but with a heavy focus on deposit and transaction heavy, trading businesses.


In aggregate, for every dollar we take in deposits, we lend about 50c, of which 80% is secured. In addition, our commercial customers are also great home loan customers and a significant number utilise institutional services like Foreign Exchange and Trade Finance.


At a total customer revenue level, they contribute around 25% of all Group revenue, generating the highest overall returns of any customer segment.


Servicing these customers is more about data and digital tools than boots on the ground.  While we have increased our banker cohort, our primary investment has been, and will continue to be, in technology and providing better tools for customers and bankers.


We have focused the business back to the basics that customers value, exiting non-core, high risk propositions, like Margin lending, financial planning, and broker originated asset finance.


At the same time, we have entered the partnership with Worldline to provide the world’s best point-of-sale and online payment technology at lower cost and reduced risk. This is a globally competitive technology race and taking a domestic only approach in terms of product development just isn’t credible.


It’s not surprising that in this point in the cycle, the Commercial division is growing very strongly, with revenue up 20% in the second half, operating costs well managed, delivering cash profit up 15%. Both deposit beta and operating leverage are very favourable.  




Institutional is a strong customer franchise with our multi-year transformation driving better outcomes.


This is not the same business you were analysing years ago.


Loan quality has improved dramatically with the investment grade loan book increasing 50% since I became CEO.


The transition from a lending driven business to a provider of banking infrastructure and services has been dramatic.


Today, our largest customer segment is high quality, globally diversified financial institutions, and we are the largest provider of banking infrastructure in Australia and New Zealand.


Underlying payment and foreign exchange transaction volumes are growing strongly, driving core balances and favourable deposit beta.


Our customer franchise in markets, which typically contributes around two-thirds of Global Markets revenue, had a solid year, although trading conditions were tough, leading to a lower overall markets outcome than we would have liked.


Sustainable finance and adjacencies are a global mega trend with ANZ already a significant player. As Institutional repositions around transaction services and sustainability, it will deliver quality growth, with better, more stable returns for shareholders.




In New Zealand, we’ve maintained industry leading positions across key segments and improved risk adjusted margins.

The business is well diversified, high quality and extremely well managed.


It’s worth reminding shareholders that ANZ is also New Zealand’s largest private sector fund manager, providing further diversification, overseeing $34bn in FUM. We see good growth opportunities as the Funds and Kiwisaver industry expands, where we currently hold around 20% market share.


Finally, it was pleasing to reach the very final stages of the BS11 implementation. This has been an enormously complex task and better to have this behind us than ahead. As the first bank to reach this milestone, we are well positioned to focus on the future and further build the franchise.




Critically, we continued the systematic de-risking of the bank with the final step in the formal separation of our Wealth business to Zurich and Insignia completed just a few weeks ago.


While we signed the sale agreements in 2017, we have been working hard to transfer $36bn of Funds Under Management across 48 products for 762,000 members, and 2.2million policies along with 2000 group plans with over 500 thousand members, safely to their new owners, not to forget the almost 2000 people who moved across in 15 transitions. We did so on time, without incident and below budget.


We remain the only major bank to have fully exited these businesses and removed this risk.


We have also essentially completed the Wealth remediation program, sold the margin lending book, exited financial planning, and launched the partnership with Worldline to manage our Merchant Acquiring business, we are a much safer bank, and better able to grow in a focused and targeted way.




Looking ahead, we all know the world has entered a period of significant uncertainty.


Central banks are battling to control inflation, while geopolitical uncertainty, most notably the war in Ukraine, continues to weigh heavily.


Closer to home, there are many factors at play.  While some indicators are weakening, many support the strong underlying health of the economy.


There is particular stress with regard to cost of living, and the resulting rise in inflation expectations and drag on consumer confidence.


I can’t over emphasize the impact that cost-of-living pressures are having in the community.


It’s clearly an issue, not only at the supermarket and petrol station but also with household utilities, and now the cost of housing – whether rent or mortgage repayments. Energy is a major challenge given the costs of transition and impacts on energy security.


As a major Institutional bank, we have an important role to play funding the transition and support security of supply.


These factors are certainly having an impact on our retail and small business customers; however our data shows that they are entering this period of stress in strong shape.


Households in Australia and New Zealand are wealthier, more liquid, and more employed than ever.


I realise we are talking in averages, and the risk lies in the tails, but nonetheless the data is instructive.


Aggregate Australian Household debt, net of liquid assets is around zero – the lowest in 15 years – and that excludes superannuation and property assets. The number of customers behind on debt repayments continues to fall, although that is likely to turn soon.


Home loan balances for our Australian customers are up ~10% on average from pre-Covid, but more expensive personal loan and credit card balances are down around 5% and 12% respectively.


Home Loan offsets are up about 50% on average and deposits overall up 27% per customer.


Australian small business customers are equally robust. Average loan size for our customers has increased by about a third, reflecting the need for working capital in a nominally growing economy, but that growth is highly secured and at the same time, small businesses have grown their deposit base by 23%.


If we look at the cohort of Australian Home Loan customers who have been with ANZ over the past year, where we can track salaries, the average customer has experienced a 5.5% increase in income. The New Zealand experience is the same with an increase of 6.6%. In both cases, that’s about the same level as inflation and so customers can maintain lifestyle and for many, increase savings or paydown debt.


But our focus is on those customers most exposed to stress.


For example, those first-time homeowners who bought at the peak of the market, borrowed above 80% loan to value, with high debt to income levels, and who are already experiencing a fall in their house price. Or those in areas experiencing higher than average unemployment or exaggerated house price declines. Fortunately, these stress spots are few and far between.


One of the great lessons of COVID was the value of data and the ability to analyse at a granular level and proactively intervene. We invested heavily to build that capability and we are now able to leverage that as we enter another period of volatility.


For example, we can quickly identify home loans located in a postcode experiencing falling house values who are already in or approaching, negative equity, actively monitor them and help as needed.


It’s worth noting that 13% of Australian postcodes have already experienced average house prices falls of more than 10%. Our total exposure in those postcodes to those currently in negative equity is around 0.4% of our book, or $780million. That exposure would rise to around 1% should values fall a further 10%. While that can be stressful for some customers, we stand ready to help and are well prepared financially.


The equity in one’s home is important but is not what drives customers willingness or ability to repay. Stable and predictable income is the ultimate protection for homeowners and banks, and with unemployment at historic lows, and average hourly earnings rising faster then before, there is significant buffer in the system.


For those few that will experience stress, we have kept in place the additional hardship resources we invested in during COVID.  So, while the future is uncertain, both the bank and our customers are well positioned for what may come.




With much of the work to simplify and strengthen the bank completed, we agreed on the acquisition of Suncorp Bank in July.

As the fastest growing state in Australia, and a young population with a diversifying economy, why wouldn’t we take action to improve our presence in Queensland? It’s a good bank and we are excited about the opportunities.


We are still in the process of obtaining regulatory and government approvals, and I want to stress it will be up to them to test the merits of this acquisition, but we believe a stronger ANZ will be able to compete more effectively in Queensland offering better outcomes for customers.


We have a team in place already planning for integration and growth, should the deal be approved.



And to help us better compete in the future, we are introducing a new corporate structure that will be a subject of a shareholder vote in December.


This is not about us becoming a fintech or a venture capital firm.


We are proposing this structure, which is very common for financial institutions around the world, to make our core bank stronger and unlock shareholder value.


To better serve customers, we need to invest in capabilities outside, but adjacent to banking – like the Worldline JV. While we can operate those within a bank, the current legal structure makes that much slower and harder to operate at the pace required.

We are on track to a tight deadline and with shareholder support, hope to have the structure up and running early in the new year.


So, to finish, I wanted to reiterate a few key points.


This was an outstanding result with key financial metrics heading in the right direction and all businesses contributing to growth and return.


We have done what we said we would do:


  • We improved momentum in Australian home loans
  • ANZ Plus is in market, growing strongly and on track to launch digital home loans later next year
  • We delivered disciplined growth in Institutional and Commercial
  • BS11 is largely behind us, the Wealth business fully separated, and we took further action to simplify the bank


Looking ahead, we will maintain our focus on strategy and disciplined execution.

  • We are already preparing well for the Suncorp approval and ultimate integration,
  • We will get the NOHC structure in place to strengthen the core bank,
  • We will continue to invest in ANZ Plus, with a focus on migrating existing ANZ customers and launching a digital home loan,
  • We will continue to grow Commercial and Institutional, particularly around Sustainability and payments infrastructure,
  • And our work on productivity will continue.


To be clear, there are economic risks ahead, but we are entering 2023 in great shape, with positive momentum, and well prepared for whatever challenges lie ahead. I take comfort from the ongoing support of our people.


They believe in our purpose and industry leading engagement is no accident. Its something we are passionate about and will continue to invest in.


With that I will hand over to Farhan to talk through the results in more detail.

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