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ANZ declared that it will shake up its group structure on Tuesday morning, with the digital business, including ANZx, to be integrated with the retail bank.
As part of the changes, Mark Hand, ANZ group executive, Australia retail and commercial will assist chief executive Shayne Elliott in establishing the commercial business as a new separate division before he will depart later in the year.
Mr Hand has been with the group for around 34 years, having sat on the executive committee since 2018.
In his place, Malie Carnegie, ANZ group executive, digital and Australia transformation will step up as the new group executive, Australian retail.
The changes have come after ANZ has fought to reverse the fall of its home loan book. The group’s last financial results showed the mortgage book fell by $3 billion over the six months to September, to a total of $278 billion.
More recent APRA data had also revealed the bank’s owner-occupier loan book dipped by $200 million in December, to $173.5 billion, while its big four rivals managed to climb.
During the company’s annual meeting in December, chair Paul O’Sullivan explained the group had lost market share as a result of its lagging loan assessment times.
But in a new interview on ANZ’s blog, bluenotes, Mr Elliott has denied that the departure of retail boss Mr Hand is linked to the bank’s problems with loans.
“Were those well-publicised issues around the home mortgage processing a factor in Mark’s decision to leave now?” bluenotes managing editor Andrew Cornell asked Mr Elliott.
“No, the decision about the future of the bank was really always planned. It was all about the timing,” the CEO responded.
“When do we bring our digital propositions back in line with our traditional ANZ retail proposition? And the real factor is that we've got our first proposition in market under the ANZ Plus brand and that's really the driving reason for why now.”
Mr Hand was “very much of the mind” that the right thing to do was to divide the retail and commercial businesses, Mr Elliott said, and to rebuild the personal banking proposition.
“And so he agreed with the decision and in coming to that, obviously we have lots of conversations about the future. The future shape of the business and the future for himself. And he decided that the best thing for him was to move on,” Mr Elliott said.
“So I've asked him to stay for four months, helping me think through this commercial bank strategy. Mark's got a deep experience in that space and his input and advice will be enormously valuable.”
Previously, the commercial bank was considered a larger part of ANZ before the boom in retail banking and mortgages.
Mr Elliott commented that now is the time to move his, the board’s and management’s attention to the segment, after focusing more on building the retail business for the last 10 to 15 years.
He also reported that applications for new credit from small businesses were up 30 per cent year on year.
“Frankly we haven’t… I haven’t given it enough attention over the last five years. We've been busy on other things but it's a really valuable part of who and what ANZ is,” Mr Elliott said.
He later added: “We are subscale in retail, we are one of the smaller major banks so we wanted to boost it and that's why we're doing ANZ Plus etc.
“So it's time, it's time to go back and refocus on commercial and start to think about how do you build something that's really differentiated in the marketplace and build a sustainable, high-quality business for the long-term.”
The group is about to launch its new digital banking service offering, ANZ Plus, which Mr Elliott has claimed will “lay the foundations for the future ANZ and what ANZ will be about for the next 10 years and beyond”.
According to the CEO, ANZ had started to think about the future of banking in Australia and New Zealand around four to five years ago, before it started to identify what customers would want and what bar would be set by its competitors.
The digital division had been established and worked on quietly in the background, while the bank set about the massive task of remediation amid the royal commission.
“We realised that the infrastructure and the way we were running the business really wasn't a contemporary way of doing that, and we weren't going to get to where we needed to be,” the CEO said.
“So we took it on ourselves to fundamentally undertake quite a significant rebuild.”
Last week, Mr Hand spoke to broking trade journalists on the ANZ’s work to reduce its lagging turnarounds and to reverse the fall in its loan portfolio, with more staff being hired to the assessment team, as well as a new general manager for retail broker.
ANZ had also simplified its home loan range, recently scrapping its Breakfree package, which allowed customers to bundle their home loan with other products such as a credit card or offset account.
Mr Hand had criticised aggressively low pricing across the home loan industry, but despite competitive pressures, he noted that the bank should still aim for growth.
[Related: ANZ exec expects pain when cash rate climbs]