Elliott wants a smaller ANZ with fewer offerings

ANZ chief executive Shayne Elliott spoke to BlueNotes managing editor Andrew Cornell following the sale of the bank’s life insurance business to Zurich Financial Services Australia.

Mr Elliott explained that the divestment was part of a simplification strategy as the major lender aims to become “the best bank we can be for our customers”.

“In a fast-changing world, particularly with new technology and new disruptive competitors, we want to win by doing the very, very best thing for our customers and being totally focused on them,” the CEO said. 

“So, we said we should do a few things and do them really well. The best way to do that is partnering with the world’s best. And so we said, hey, we’ve got a great banking business in terms of being the best bank for home owners and people running a small business, but in terms of some of the periphery businesses, like wealth, we didn’t really have a winning proposition there, and we were there, we were good.

“So, we had a different way forward and that’s about partnering. And so we said we want to be talking to customers, but we don’t want to be manufacturing product.”

Asked about the earnings implication for the group, Mr Elliott conceded that simplifying the major bank through the sale of its Asian banking assets and wealth arm will create a smaller organisation.

“As we sold these assets, these assets go to these new partners. So, the earnings go with it,” the CEO said.

“But net-net, so we’ll be a slightly smaller company as a result, so we’ll have less capital out there and we’ll have slightly less earnings. But in terms of returns, the returns on that capital really don’t change the whole lot.

“So, it’s a kind of net-square from that perspective. But we believe that being slightly smaller but more focused ultimately is in the interests of our shareholders and our customers.”

The major bank boss said that ANZ’s efforts to streamline the organisation are based on a “simple philosophy” that in a complex world, customers are busy and just want the bank to help them out.

Customer service is at the heart of the group’s strategy.

“The way to win for our customers and our shareholders is to do a few things and do them incredibly well,” Mr Elliott said.

“We’re really clear on what those few things are and essentially we are just exiting, shrinking or partnering on everything else. We’re more than halfway through. But we still have a long way to go.”

[Related: ANZ offloads life insurance business for $2.85bn]