Mr Elliott has claimed that tougher market conditions and industry probes, including the Hayne royal commission, have signalled the end of a golden age of banking.
“For the last couple of years, we’ve talked about headwinds. I think our sector has had a golden period for 20-plus years and we don’t think that’s going to continue, [that] it is going to be harder,” Mr Elliott said.
“And so in a tough world with headwinds, [only] the fit will really survive and prosper and that’s what we have been about, getting fit for that.”
Speaking to Mortgage Business following the announcement of ANZ’s 2018 half-year results (HY18), Mr Elliott noted that the big four bank plans to simplify its operations in order to navigate through increasingly challenging market conditions.
“Our strategy is about doing a few things and doing them well,” the CEO said.
“In those areas where we have a natural competitive advantage, we want to do those things extraordinarily well — helping people buy and own a home; helping people start, run and grow a small business; and helping institutional customers move goods and money around the region.
“That’s what we want to do and we want to have the right network, people, products and platforms that allow us to do that.
“[We question why anything else would be] part of the ANZ family and that’s why we’ve been selling businesses, shrinking businesses and exiting segments.”
“Credit growth will continue to slow”
ANZ chief financial officer Michelle Jablko has also noted that she expects credit growth to continue slowing.
“[Credit growth] probably will continue to slow a bit. That’s for the industry and system as a whole. Different players and different participants in the industry will be able to do a bit better or a bit worse than that based on what their starting point is and things they’re doing in their business,” the CFO said.
Ms Jablko also noted the rise in funding costs, amid concerns that such cost pressures would prompt lenders to impose out-of-cycle interest rate hikes.
“[Short-term] funding costs have really picked up in recent weeks. It didn’t have a big impact in the first half. In terms of the future impact on that, there are a few moving parts, not just the level of the costs themselves, but also what the mix of our balance sheet is and how certain assets and liabilities behave over time,” the CFO added.
“All things being equal, if I look at it today and say if rates stayed where they were today and our balance sheet mix stayed, it would have an impact in the second half.”
ANZ to undertake self-assessment
In light of the release of a damning report from the Australian Prudential Regulation Authority into the governance, culture and accountability within the CBA Group, Mr Elliott claimed that ANZ plans to undertake its own self-assessment.
“I’ve already had a meeting this morning [1 May] after this result, and our team is already putting together a process on doing a self-assessment on those same issues at ANZ to [identify] what we can learn from this and what we can change,” the CEO continued.
“My understanding is that APRA will require us to do that and that will have to go to our board and then onto [APRA].
“We need some time to digest it and go through it and see if any of those apply to ANZ.”
Further, the Mr Elliott claimed that ANZ has proactively sought to improve its processes.
“Obviously, we have to participate in the royal commission and we are doing so in an open and transparent way and there will be a report and recommendations. But that doesn’t mean that we should just sit on our hands and wait,” Mr Elliott added.
“When we see things where there has been legitimate questions raised, either about us, about our actions or what we see in others, we sit down and say what shall we modify and what shall we change.”
[Related: APRA censures CBA for range of failings]