Category: Banking and Finance

Source: ANZ statements

Consumer confidence increased 0.4pts, but the four-week moving average decreased 0.9pt.

Among the mainland states, confidence rose in Victoria, SA and WA, while it fell in NSW and Queensland.

‘Weekly inflation expectations’ rose 0.1ppt to 5.6%, while the four-week moving average remained at 5.5%.

‘Current financial conditions’ fell 1.5pts, while ‘future financial conditions’ were up 0.3pts.

‘Current economic conditions’ decreased 2.8pts. ‘Future economic conditions’ rose 1.5pts after three straight weeks of declines.

The ‘time to buy a major household item’ subindex rebounded 4.5pts, partially reversing the 7.6pts decline the week before.

Source: ANZ statements

The new end-to-end digital home lending process can be completed quickly and easily within the ANZ Plus mobile app. It is initially available to eligible owner-occupier applicants in metro New South Wales and Victoria for refinancing, with a competitive variable lending rate of 6.14%.

Maile Carnegie, Group Executive, Australia Retail said: “Owning a home is one of the biggest financial commitments most people will make in their lifetime. We believe the process should help customers to find the right loan for them, as easy and fast as possible.

“Additional features, more complex loan types and insights and tools to help customers own their home sooner will be added over time,” Ms Carnegie said.  

 

The ANZ Plus home lending process provides customers with an up-to-date value of their home up front, a fast approval process, access to expert coaches, the ability to track settlement from start to finish and in-app access to a redraw facility.

Alongside home lending, additional features for the ANZ Plus transact and save products have also been released. These include secure in-app video chat with an ANZ Plus Coach, the ability to securely transfer high-value payments and a default block on screen sharing inside the app to provide additional protection from scams.

“This is the first in a series of capabilities being rolled out over coming months to enhance scam protection for customers. We’re continuously working to build and deliver innovative ways to make banking safer, by putting practical tools into our customers’ hands,” Ms Carnegie said.

Built by ANZ, ANZ Plus continues to be one of the fastest growing digital banking platforms in Australia, with more than $10 billion in deposits and 500,000 customers, 37% of whom are new to ANZ.

For more information visit: https://www.anz.com.au/plus

About ANZ Plus:

 

• ANZ Plus utilises modern technology, resulting in the delivery of not just a new app or new product offering, but a new retail banking platform for ANZ.
• ANZ Plus launched its first transact and save products to customers in 2022.
• ANZ Plus offers customers one of the most competitive savings rates in the market on ANZ Save at 4.90% p.a. if your ANZ Save balance is under $250,000, and 3.75% for balances over $250,000.

 

About ANZ Plus home lending:

 

• The ANZ Plus Home Loan Variable is digital-first, data-driven, highly automated and supported by ANZ Plus Coaches. With ANZ Plus home lending eligible customers in metro New South Wales and Victoria who wish to refinance can:
  • Verify their identity in a few minutes via the app with no paper required.
  • See a valuation of their home, so they can apply with confidence knowing it’s the valuation used to assess their application.
  • Be approved in minutes for most loans.
  • Receive their loan documents – written in simple language – in seconds.
  • Access ANZ Plus Coaches who are on hand to help via chat, phone or secure in-app video call.
• Applications for customers who wish to refinance are only available through the ANZ Plus app and to a narrow set of customers initially in metro New South Wales and Victoria. Eligibility will expand over time.

 

New ANZ Plus transact and save features include:

• Scam Safe – Screen Sharing: The first in a series of ‘Scam Safe’ enhanced controls, this feature disables screen sharing within the ANZ Plus app. Customers may enable screen sharing purposes for 15 minutes, and turning this on will trigger educational content regarding the scam risks involved.

• Card on File: Customers can view merchants (i.e. Netflix, Amazon, Apple, and others) who have stored their ANZ Plus Visa debit card on file to process future transactions, helping them to keep on top of where their money is going.

• Video chat with a Coach: A first among the major Australian banks, video chat gives customers peace of mind that conversations about their finances are taking place in a secure setting inside the ANZ Plus app.

• Higher payment limits, protected by SelfieID: ANZ Plus has enabled high-value, self-service payments via BPAY and Pay Anyone. Customers need to successfully step-up using SelfieID to authenticate when changing a Pay Anyone or BPAY limit. Payments are protected by behavioural biometrics and FalconX controls.
• Round Ups (coming soon): When enabled, ANZ Plus will roundup eligible card purchases and transfer the extra amount to the customers ANZ Save account. Round Ups dollar preference will be set by default to the nearest $2 but can be changed to the nearest $1, $5 or $10.

Source: ANZ statements

In 2022, the Black Friday – Cyber Monday shopping period generated more than $3 billion in retail spending, overtaking the Christmas and Boxing Day weekend by 24 per cent.

Sales for Black Friday, which falls on Friday 24 November, are again expected to increase in 2023, with spending over this period trending up by 9 per cent year on year since 2021.

According to ScamWatch, the same period is also the most lucrative for scammers. Australians lost almost $1.2 million to online shopping scams in November 2022.

ANZ Scams Portfolio Lead, Ruth Talalla said: “Scammers use hot button events like Black Friday to target people who may be trying to get a good deal online. During these key shopping events, we see an increase in spoofing and phishing scams.”

“We also see online ads and fake websites purporting to be reputable Australian retailers attempting to catch shoppers with incredible deals, such as 75 per cent off recommended retail price. We encourage customers to pause before buying anything online, whether during a sale or not, and check the website to ensure the details being presented are genuine,” she said.

Tips to stay safe online during Black Friday and Cyber Monday sales:

• Think before you click – a legitimate organisation will never ask you for personal information via a link in an email or by text and will always be accessible through an independent desktop search.
• Check the URL – make sure links begin with https and end with a reputable domain name like .org, .com, or .au. If you followed a link to get to the site, do a secondary search to confirm the site is genuine.  
• Read independent reviews – read reviews of the website you’re using before entering your card details at check out. Scammers may copy the branding and formatting of a reputable brand to trick shoppers.
• Check the payment method – question why an organisation would request payment with a gift card. Cryptocurrency and gift cards are often preferred by cyber-criminals because they’re difficult to trace.
• If it seems too good to be true, it probably is – while your favourite brand offering popular items at a heavily discounted rate may be enticing, always consider whether the offer is real before proceeding through the check out. If the same discount is not being offered by the brand in store, it is unlikely to be a genuine deal.

ANZ’s customer protection teams and systems operate 24/7. Customers who believe they may have been a victim of a scam should contact us immediately, on 13 33 50 or visit us at http://www.anz.com.au/security/report-fraud/ for more information.

For more information on the types of scams and how to protect yourself visit http://www.anz.com.au/security/types-of-scams.

Source: ANZ statements

The program, which is now in its 21^st year, provides grants to community groups across remote, rural and regional Australia. The awarded funds will support projects that improve access to housing, financial wellbeing, and environmental sustainability.

ANZ General Manager, Strategic Delivery, Jenefer Stewart said: “During the past 21 years, Seeds of Renewal has helped more than 800 communities in remote and regional Australia to thrive, while promoting community vibrancy and sustainability.

“The program is something we are really proud of, and it was very pleasing to see a diverse mix of applications, all with strong alignment to the four focus areas; environmental sustainability, financial wellbeing, housing access and projects that assist local communities to thrive.”

FRRR CEO, Natalie Egleton said: “Many Australians are presently facing uncertainty and environmental, financial, housing or wellbeing concerns. For people living outside of metro regions, practical support is harder to access and sustainable solutions require both committed funds and local people with the capacity to lead the change.

“Across remote, rural and regional Australia, local organisations continue to show up for their communities, to help address the critical needs of locals that would otherwise likely be unmet.

“Through partnerships such as this one with ANZ, we can support these organisations to fill these gaps. For example, in Bairnsdale, Victoria, the community’s Recycling Enterprise is building local capacity to recycle. With their $10,000 grant, the Enterprise will purchase the machinery needed to process polystyrene and promote waste reduction practices across the region,” Ms Egleton said.

Since 2003, ANZ Seeds of Renewal has awarded $5.75 million to more than 800 community groups for approximately 900 projects. Some examples of the projects funded this year include:

Improving access to housing:

• Office AU Limited, Wilya Janta: Making Bricks on Country, Tennant Creek, NT – Enhance local housing and employment opportunities through supporting a community house build designed for the Tennant Creek climate using locally produced bricks. $15,000.

Improving environmental sustainability:

 

• ReForest Now Limited, Expansion of the ReForest Now Nursery, Mullumbimby, NSW – Build organisational capacity to increase rainforest regeneration, engage local community in environmental sustainability, and create new local employment opportunities via the expansion of native plant nursery operations. $10,000.

 

• Trillion Trees Australia Inc., Healing West Australia’s Wheatbelt – One Tree at a Time, Westdale, WA – Restore Indigenous plants and shrubs to regenerate cleared landscape to benefit the environment and the local community with volunteer planting of 20,000 saplings. $14,400.

 

Improving Financial Wellbeing:

 

• South West Community Foundation, Financial Know-how in the Digital World, Warrnambool, VIC – Improve financial literacy to reduce vulnerability to digital fraud and increase money management skills through local workshops in South West Victorian communities. $15,000.

Assisting local communities to thrive:

 

• Warialda Cultural Community Centre Craft Shop, Building Capacity and Helping Volunteers, Warialda, NSW – Enhance community facilities and volunteer safety at the Warialda Cultural Community Centre Craft Shop with kitchen equipment, chairs, tables, a shade tent, and security cameras. $14,932.

• PCYC Innisfail Braking the Cycle (BTC), Innisfail, QLD – A learner driver mentoring program that empowers young people facing barriers to undertake the mandatory 100 hours of supervised driving required to obtain their licence. $15,000.

The full list of the recipients is available on FRRR’s website.

About Seeds of Renewal: Over the past 21 years the ANZ Seeds of Renewal program has provided more than $5 million to support more than 800 community groups achieve their goals. Administered independently by the Foundation for Rural and Regional Renewal (FRRR), the ANZ Seeds of Renewal program offers grants of up to $15,000 to community groups for projects that support environmental sustainability; improve access to housing; or financial wellbeing in regional communities of fewer than 15,000 people.

About FRRR: The Foundation for Rural & Regional Renewal – FRRR – (phonetically:
F-triple-R) – is the only national foundation specifically focused on ensuring the social and economic strength of remote, rural and regional communities. FRRR’s unique model connects common purposes and investment with locally prioritised needs, to create communities that are vital and resilient. Since FRRR’s start in 2000, it has delivered more than $177 million to more than 14,000 projects.

Source: ANZ statements

Consumer confidence decreased 3.5pts, but the four-week moving average decreased 0.5pts.

Among the mainland states, confidence rose only in WA, while it fell in NSW, Victoria, Queensland, and SA.

‘Weekly inflation expectations’ was unchanged at 5.5 per cent, while the four-week moving average increased from 5.4 per cent to 5.5 per cent.

All the confidence subindices registered losses. ‘Current financial conditions’ fell 1.9pts, while ‘future financial conditions’ were down 1.3pts.

‘Current economic conditions’ decreased 1.7pts, while ‘future economic conditions’ dropped 4.7pts.

The ‘time to buy a major household item’ subindex plunged 7.6pts after a 6pts jump the week before.

Source: ANZ statements

CEO COMMENTARY[1]

ANZ Chief Executive Officer, Shayne Elliott, said: “This is a strong annual result, with record revenue[2] and cash profit following several years of transformation, enabling us to continue to support our customers and improve their banking experience.

“We continued to strengthen our balance sheet and closed the year with provisions for potential credit losses higher than prior to the pandemic, and with more capital than ever before. This is critical as we enter a period of continued high interest rates, rising costs and geopolitical tensions.

“While our first half was stronger, the second half delivered an outstanding revenue and profit result, demonstrating the benefits of our diversified franchise.”

“We carefully managed costs to partially offset the high inflation environment, while continuing to invest in initiatives that will set us up for sustainable long-term success. These investments include our Institutional payments platforms that supported $164 trillion in transaction flows through the year, the continued migration of services to the cloud and our new retail business ANZ Plus.

“Importantly, each of our core divisions contributed positively to the result. They all have a clear strategy and a funded roadmap to deliver sustainably better outcomes for customers, in line with our purpose.

“In Australia Retail, our ongoing investment in home loan processing supported consistent turnaround times which, coupled with ongoing digitisation for deposit account opening, resulted in high-quality growth in our retail balance sheet. Investments to protect customers from scams and fraud continue. Pleasingly, we detected and prevented more than $100 million of potential customer losses, up 38% from last year.

“Just 18 months since launching, ANZ Plus has become one of the fastest growing digital banking platforms in Australia. As of today, it has attracted more than 500,000 customers and over $10 billion in deposits. The cost of operating ANZ Plus is materially lower than our existing retail business and we are seeing high levels of customer engagement and satisfaction. Importantly, the advanced security measures on ANZ Plus resulted in one of the lowest incidences of digital fraud in the industry.

 

“This month we have released our new ANZ Plus digital home loan refinance product to eligible customers, designed to make home lending faster and simpler for Australian homeowners.

“Australia Commercial is our highest returning division and delivered 11% revenue growth in the year. Lending grew to a record high of $62 billion. Deposits also grew, showing the underlying resilience of our SME customers. We were pleased to have supported over 1,000 small businesses through our online unsecured lending platform, GoBiz, which like ANZ Plus delivers better customer outcomes at lower cost.

“Our Institutional Division produced record financial results, reflecting the benefits of long-term investment and transformation. For the first time, all three of its core businesses, Transaction Banking, Corporate Finance and Markets, generated more than $2 billion each in revenue. “Transaction Banking recorded its highest ever annual revenue, servicing some of the world’s largest companies and financial institutions.

“The strength of our New Zealand Division was once again evident as we maintained our leading market position in home loans, retail deposits, business banking, agriculture and funds management. ANZ New Zealand delivered consistent financial results while helping customers navigate a difficult environment due to continued inflation, high interest rates and extreme weather events.

“Overall, this is a strong result reflecting the benefits of our consistent strategy and a well-diversified portfolio of businesses,” Mr Elliott said.

CREDIT QUALITY 

The total credit provision result for the full year on a cash continuing basis was a net charge of $245 million comprising:

• a collective provision (CP) charge of $152 million 
• an individually assessed provision (IP) charge of $93 million

There was a small release of $11 million in CP in the second half, which combined with an IP charge of $123 million resulted in a second half net credit impairment charge of $112 million.

CP overlays for increased risks associated with rising inflation, higher interest rates as well as increased geopolitical tensions have been largely retained. As a result, our CP balance at 30 September 2023 was $4,032 million.

DIVIDEND & CAPITAL

ANZ Banking Group’s capital position remains strong, with a Common Equity Tier 1 Ratio of 13.3%, an increase of 16 basis points since March 2023. This includes capital being held for the proposed acquisition of Suncorp Bank.

The proposed 2023 Final Dividend is 94cps, partially franked at 56%. This comprises an 81cps dividend partially franked at 65%, and an additional one-off unfranked dividend of 13cps.

The level of franking reflects the geographically diverse nature of our business, as well as the timing of the proposed Suncorp Bank transaction. The Board recognised that lower franking may not have been anticipated by some shareholders. In recognition of this, and given our strong performance, the Board agreed that the one-off unfranked dividend was appropriate.

 

SUNCORP BANK

 

In July 2022, we announced plans to acquire Suncorp Bank to add scale to our Retail and Commercial businesses and enable ANZ to more effectively compete in the Australian market. In August this year, the Australian Competition and Consumer Commission (ACCC) announced its decision not to grant authorisation.

ANZ has filed an application with the Australian Competition Tribunal for review of the ACCC’s decision, and a decision is expected in February 2024. If ANZ’s application is successful, completion would then remain subject to approval from the Federal Treasurer and the passage of legislative amendments by the Queensland Parliament. We continue preparations to integrate Suncorp Bank into ANZ Group, subject to these conditions being met.

FURTHER COMMENTS

 

Mr Elliott said: “Looking ahead, we will continue to manage costs to create capacity for further investment in ANZ Plus, growing our Commercial business and enhancing our sustainability, currency and payments platforms.

“The external environment is likely to remain challenging. The full impact of higher interest rates is expected to continue to impact economic activity as well as household and business budgets.

“Despite these challenges, we expect the economy will be supported by strong household savings, resilient housing markets, low unemployment, solid business investment intentions and strong migration in Australia and New Zealand.

“Our customers have so far proven resilient, with a relatively low level of delinquencies despite the current interest rate tightening cycle. That said, we know circumstances can change quickly.

“We will continue to focus on supporting customers through what will likely be another year of cost-of-living pressures. We encourage customers experiencing financial difficulty to contact us, and we will continue to proactively reach out and check in with customers who may be struggling.

“Our strong balance sheet means ANZ is well placed to assist those in need, and we stand ready to do so,” Mr Elliott said.

Interviews with relevant executives, including Shayne Elliott, can be found at bluenotes.anz.com.

[1]    The Group’s Annual Report will be available on 13 November 2023 and will include a copy of KPMG’s audit report dated 10 November 2023

[2]    Cash Profit excludes non-core items included in Statutory Profit with the net after tax adjustment an increase to Statutory Profit of $307 million

[3]    The proposed 2023 Final Dividend of 94 cents per share is partially franked at 56%. See details on page 3

[4]   All commentary is presented on a Cash Profit continuing basis with growth rates compared with the full year ended 30 September 2022 unless otherwise stated

[5]    Revenue up 13% to $20.9 billion

Approved for distribution by ANZ’s Continuous Disclosure Committee

Source: ANZ statements

Consumer confidence increased 2.8pts, but the four-week moving average decreased 0.6pts.

Among the mainland states, confidence rose in NSW, Victoria, Queensland, and SA, while it fell slightly in WA.

‘Weekly inflation expectations’ rose 0.3ppt to 5.5%, while the four-week moving average increased from 5.3% to 5.4%.

‘Current financial conditions’ gained 6.5pts after a cumulative 11pts decline over the previous three weeks. ‘Future financial conditions’ rose 0.2pts.

‘Current economic conditions’ increased 1.9pts, while ‘future economic conditions’ softened 0.8pts.

The ‘time to buy a major household item’ subindex jumped 6pts to its highest since early February.

Source: ANZ statements

ANZ Economist, Madeline Dunk said: “ANZ-Indeed Australian Job Ads has declined 3.5% over the last two months, taking the series to its lowest level since January 2022. The number of Job Ads, however, is still elevated compared to historical levels. Slack is slowly creeping into the labour market. Hours worked have been falling, recent jobs growth has been driven by part-time employment, youth unemployment has been rising and the underemployment rate has been moving up. This, along with the modest unwinding in job ads numbers, suggests the unemployment rate will rise further.”

Indeed Senior Economist Callam Pickering said: “The imbalance between labour demand and supply is gradually easing. Job Ads are down 11.4% over the past year, while Australia’s population aged 15+ increased 2.8% over the year to September. Recent weakness in Job Ads has been concentrated in NSW and Victoria, with a more modest subtraction from Queensland. Driving this year’s decline in Job Ads is fewer opportunities in food preparation & service, software development and personal care, which offset more opportunities in healthcare and education.”

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