Reporter's view: ANZ is no longer like-for-like
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Reporters View: Associate editor, banking and finance Andrew Cornell writes:
On a like for like basis, ANZ’s result today was slightly below expectations. The challenge is that ANZ is no longer like-for-like. Since 1 August it has owned an extra 1.3 million customers from Suncorp Bank. And its retail platform of the future, ANZ Plus, has become a significant part of the bank.
Those two transformational developments, together with ANZ’s industry-leading transactional banking capability for institutional, represent the future of the bank.
Speaking to analysts today, chief executive Shayne Elliott set the scene for the “new” ANZ to really emerge in 2026 and particularly by 2027. That’s the challenge for investors to understand and a set of unknowables analysts tried to pick apart today.
Elliott’s tone was bullish, some analysts bought into that, others remain sceptical until they see more hard evidence.
That was evident in the immediate share price reaction with ANZ sold off on opening due to the headline miss but recovering ground strongly as Elliott and chief financial officer Farhan Faruqui talked through the opportunities emerging in coming years.
ANZ's share price was up 0.76% to $31.95 by midday.
The key positives are the Suncorp acquisition is now forecast to deliver more synergies, earlier, and it has already benefited from being part of a larger bank in both mortgage sales and cost of funding. The growth in Plus is accelerating and the process of migrating ANZ legacy customers is also accelerating.
Plus grew customers 84% and now accounts for nearly one in five of ANZ’s active retail customers in Australia. In the year deposits have grown 70% to almost $16 billion. Ultimately, ANZ aims to only have two platforms — Plus for ANZ (and Suncorp) retail and small business; and it’s Transactive account for Institutional.
The negatives at one level are the same as peer banks — margin pressure in mortgages, higher costs, credit quality declining — but also cover the huge unknown of ANZ’s bond scandal which may yet have serious implications for senior management.
Like NAB and Westpac, ANZ’s result looked weaker compared with 12 months ago but that, largely, was because all banks’ margins benefited from rising interest rates.
ANZ posts 8% slide in full-year profit
The news: ANZ reported an 8% decline in profit in the 2024 financial year, citing "intense" competition in the sector.
The numbers: The big four lender reported statutory profit after tax of $6.5 billion, down 8% on FY23. Excluding the bank’s acquisition of Suncorp Bank, cash profit totalled $6.92 billion, short of last year's $7.1 billion profit.
Revenue lowered 2% year over year to $20.8 billion while expenses climbed 4% to $10.7 billion.
ANZ declared a total dividend of $1.66 per share, up from $1.62 in FY23, though last year's figure excludes an additional dividend of 13 cents per share.
The context: ANZ CEO Shayne Elliot described FY24 as a "pivotal year" for the group, following the acquisition of Suncorp Bank, which contributed two months of earnings to the full-year result. He noted that the bank is placed to deliver synergies "faster than originally expected".
He flagged "industry-wide challenges" in retail banking, while ANZ's institutional banking business saw record revenue, record profit before provisions and record return on equity during the year.
What they said: "Competition in the sector has continued to be intense, particularly in home lending and deposits," Elliott said.
"Despite competition and inflation impacting profits, we reported our second strongest revenue performance ever [...]" he said.
The source: ASX announcement
