ANZ boss sees silver lining in COVID cloud

While Shayne Elliott said that ANZ’s job was to protect its customers from the devastating economic damage of COVID-19, he also sees the potential for the virus to drive a boom in innovation and opportunity.

“Some of the world’s greatest companies were founded, or really grew a lot, in times of stress,” Mr Elliott said. “Microsoft, Apple, Uber. All of these companies, GE, some of the older ones, came out of times of war, of recession, depression. Why? Because in times like this when there’s a lot of change happening customers suddenly have new needs that are unmet.”

Mr Elliott said that ANZ was taking an optimistic approach to its mortgage deferral program, a cornerstone of the ABA’s COVID-19 response, and noted that many customers who had requested a deferral hadn’t experienced job or income loss but “thought it might be a safe thing to do while it was still available”. However, the bank has still opted to top up its loan-loss provisions by some $250 million – breaking with big four peers CBA and NAB – even as it reported a strong performance during the crisis.

“There are still high degrees of uncertainty, we’ve seen that in Auckland, we’ve seen that in Victoria, sadly, and we don’t know where this is going to go,” Mr Elliott said. “So it’s just prudent, let’s just keep putting some money aside and as I said before, I think we got the balance right. There’s some money aside for a rainy day, strengthen our capital base for the [long-term] and a small amount being paid to shareholders.”

Mr Elliott also said that COVID-19 had created an opportunity to engage with its customers, strengthening key relationships that have suffered in the wake of the royal commission. 

“We know our customers today better than we’ve ever known them, we’re spending more time with them, we’re really understanding their character as much as their balance sheets,” Mr Elliott said. “How are they behaving? Are these people who understand and embrace change who can roll with the times, try new things? So we’re really doing that, getting that foundation right.”

ANZ reported Q3 unaudited cash profits of $1.498 billion and paid out a 25 cent dividend after opting to defer the dividend in April – something Mr Elliott says was a “very balanced decision”. 

“We think the decision we made is right, obviously, and the reason we’ve done that is we think it’s right that we do pay a dividend and the reason is because we have the capacity to do so,” Mr Elliott said. “And that capacity not only takes into account today’s position – we have the capital – we’re generating profits [everyday], let’s not forget that.”