ANZ has reassured customers and stakeholders of the stability of the big banks as the economic impact of the COVID-19 virus continues to be felt both domestically and around the world.
ANZ chief executive Shayne Elliott reassured both customers and shareholders of the stability of the banks during this time, stating that – despite the prospect of a short-term recession looking likely – the banks are both “willing and able” to assist customers through this period of economic uncertainty.
This comes following the Reserve Bank of Australia’s (RBA) move to provide the banking sector with a significant liquidity boost earlier this week by purchasing bank assets through repurchase (repo) agreements totalling $8.8 billion – well above the daily average.
“...[W]e’re in a great position in terms of strength. And what I mean by that is that ANZ – and the banks as an industry – have never had more capital,” Mr Elliott said.
Mr Elliott emphasised that many of the banks, particularly the majors, have survived other periods of economic downturn, including the Asian financial crisis and the global financial crisis.
However, he stated that the banks’ current state of historically high capital puts the banks in a favourable and stable position.
“[The banks have] assets that we can liquefy and turn into cash and get into customers’ hands; [we’ve] never had more liquidity before and we’ve never had lower credit losses,” Mr Elliott said.
“What that means is that not only are we willing to assist, we are able to assist and we have the resources,” he said.
“And so that’s why I think you take some indications of the time periods required and the financial strength we have.
“This is, we’re in a great position to do the right thing and see our customers through this difficult period,” Mr Elliott said.
In relation to shareholders, Mr Elliott stated they should be prepared to ride out the current market upheaval, and that the bank “needs their support” to maintain its favourable position.
“I would say that most shareholders are here for the very long term and they understand the nature of our business is cyclical,” he said.
“We go through good periods and down periods. What we’ve got to do to protect long-term value for our shareholders is actually build a franchise, a sustainable franchise, that has customers.”
The bank’s chief executive noted that providing confidence to customers in a period of uncertainty can generate economic activity, meaning that shareholders’ interests are “absolutely aligned” with ANZ doing right by their customers.
When it comes to the day-to-day operations following the increasing government regulation of the COVID-19 outbreak, the bank stated that its priority was “protecting our people, our customers” and ensuring the provision of customer services.
Further, Mr Elliott stated that the bank will need to be prepared to adapt to longer-term changes to how customers will behave, some of which may continue even after the fear of the virus has dissipated, and by engaging with customers and stakeholders as regulations change.
The executive encouraged any ANZ customers who are struggling in light of COVID-19, including those who have lost their job or whose business may be struggling, to get in contact with the bank.
NAB ‘open for business’, headquarters close for cleaning
Similarly, the chief executive of National Australia Bank (NAB), Ross McEwan, has reiterated that the lender is still “open for business”, after the bank vacated its Melbourne headquarters following a member of staff being tested positive for COVID-19.
Mr McEwan said: “Rest assured, NAB is open for business. We continued lending throughout the GFC and we’ll continue to lend through this.”
Following the positive diagnosis, NAB announced an evacuation of the Bourke Street building and encouraged staff to “go home and continue to work from home” in order to have the building “pandemically cleansed”.
“We plan to have 700 Bourke Street ready for colleagues to return to work later this week,” Mr McEwan said earlier this week.
Those who are believed to have had close contact with the confirmed case will be contacted by health authorities and encouraged to self-isolate for two weeks.
“The safety and wellbeing of all our colleagues and customers is our priority. We understand you may be experiencing heightened stress during this event,” Mr McEwan said.
“We want you to know we are continuing to monitor the situation closely, keeping those who are affected in our thoughts, and are listening carefully to the questions and concerns we receive from you.
He concluded: “Lastly, I want to thank you all for everything that you are doing to support each other and our customers. We will get through this together.”
The ability of the banks to lend has been in sharp focus as the economic ramifications of the coronavirus continue to be felt. The RBA will meet later today for an emergency meeting in which it is expected to announce “further policy measures to support the Australian economy”.
Some analysts have suggested that the central bank may cut the cash rate pre-emptively to a new record low of 0.25 per cent.
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Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.