ANZ Bank has reported a 51% drop in statutory profit for the first half of 2020 to A$1.5 billion. The decline was primarily due to credit impairment charges of A$1.67 billion.
Confident the group is better positioned to navigate the COVID-19 pandemic effects, the big bank remains committed to $8bn cost base ambitions. “In the short-term, we are tightly managing costs, while providing as much job security as we can for our people.”
Australian business saw revenue drop by 3% to A$4.7bn and a reduction in cash profit to A$1.4bn. The customer lending declined by 2% while the deposits increased by 5%. The NZ business reported a 20% cash profit even as revenue remained flat for the period.
Investments in Digital Initiatives
Technology expenses increased by 10% as a result of a change in accounting treatment associated with the new leasing standard and an increase in tech investment.
Technology spending was about A$75 million on tech infrastructure, and AU$155 million on digital, data, and payments. ANZ also revealed it’s analysing client behaviour and investing in digital initiatives for future opportunities.
Rewarding ANZ bank’s technology leadership for the digital strategy, current Chief Data Officer Mrs Emma Gray has been appointed Group Executive, Data and Automation.
Commenting on the appointment, CEO Shayne Elliott said: “The effective use of data, insights and automation will be a key in preparing the bank for the future, particularly as we respond to the challenges presented by COVID-19.
COVID-19 impact
The CEO confirmed ANZ has implemented a four-pronged plan focused on protecting the things that matter, adapting for a new world, engaging with key stakeholders, while still preparing for the future.
The coming months will be difficult. The COVID-19 crisis has already evolved at such a pace it is difficult to predict how deep the economic crisis will be or how long the recovery will take.
Shayne Elliott
Excluding branch staff, ANZ confirmed to have more than 95% of employees are working from home while still providing the essential banking services required by the community. This changeover to new ways of working was supported by recent investments in technology and agile work practices.
ANZ’s Board also determined it will defer its decision on the 2020 Interim Dividend until there is greater clarity regarding the economic impact of COVID-19. Salary increases for the period 2020/21 have been impacted. However, ANZ confirmed those on the frontline (branch and call centres staff) are rewarded.
Key Messages:
- Our long term strategy remains intact
- In a strong position to manage the crisis
- Remain committed to our $8b cost ambition
- Short-term use of CET1 buffers are prudent and appropriate given what we know today
