ANZ's risky business
As the bad news keeps piling up for ANZ, investors are watching closely to see if CEO Shayne Elliott can prevent the bank's reputation from collapsing.
Banks are highly leveraged institutions. That’s true financially — for every dollar of equity they make $10 of loans — but it’s also true reputationally. And that has financial consequences.
For the last couple of years, ANZ has had some decent headlines. A $5 billion bid for Suncorp Bank has gone through, there’s a new tech platform, and the bank’s institutional division, a long-term basket case, has become its star business, offering a rare point of differentiation in Australian banking.
But the headlines in the last two weeks have been dire: multiple scandals and potentially malfeasance in that same institutional division and, what's worse, in the same bond trading room that has delivered scandal after scandal and was supposed to have been cleaned up.
According to ANZ’s latest statement today, there are three separate issues: botched data reporting; an investigation into a particular transaction; and conduct and behaviour issues.
