ANZ mimics Macquarie
The bank is promising a simpler tech platform, lower risk and Suncorp acquisition benefits — but with margins tight, costs rising and competition fierce, will a new story help?
One should never read too much into share price movements on results day — and ANZ CEO Shayne Elliott doesn’t. Still, he believes the price movement on Friday reflects a story ANZ is keen to tell.
ANZ shares opened sharply lower, underperforming the broader index, before regaining ground throughout the day to finish above it. The recovery gained momentum as analysts and investors read through the detail of the result, particularly during the morning analyst presentation.
The message was straightforward: ANZ is different. It has reduced complexity more than the other majors, removed risk from its balance sheet more comprehensively, demonstrated superior bad debt performance, and set out a clear roadmap for a simplified technology future. Critically, the volatile financial markets trading for which ANZ is often discounted accounts for just 10% of the bank's operations.
“The markets business, in our mind, has polluted the way people think about [the institutional bank] because [markets] is not a margins business. It's not assets, liabilities, and so it tended to confuse,” Elliott explained to me after the result.
