ANZ to boost focus on digital, as loan growth impresses

  • By Christine St Anne

The real focus for ANZ will be on its “pace of execution” as it plans to roll out a number of initiatives to help its customers bank online. 

ANZ CEO Shayne Elliott made these comments as the bank announced an unaudited cash profit of $1.8 billion for the first quarter of December. This was up 54 per cent on the average of the last two quarters of 2020. 

The profit increase was underpinned by a better economic outlook. 

Overall, the result was solid. Morningstar bank analyst Nathan Zaia said loan growth and margin impress. 

Operating expense were flat while revenue was up 4 per cent excluding the impact of its markets business. 

Mortgage lending increased 1.5 times above system 

“ANZ has been able to achieve good loan growth in a competitive market,” Zaia said. 

“We thought the problems around loan approval times and restrictive lending standards were fixable, and it is reassuring to see ANZ continue to claw back market share,” Zaia said.

APRA statistics reveal that ANZ’s home loan market share is now 14.6 per cent, having steadily increased since March last year, nadir of 14 per cent. 

“We lent really strongly – we saw really good lending growth through that period for those that needed it – businesses, homeowners,” Elliott said.

He said that the bank will continue to grow its residential lending.  Costs were kept under control “while still investing at record amounts for the future in terms of digital and automation and new products and features which we’re really excited about”. 

The “real focus” now for Elliott is to do more on the “pace of execution”. 

“What we saw in 2020 was this massive shift of customers towards digital choices. 

“More and more Australians and New Zealanders want to bank online and using their mobile phones and they want to do more things on there,” Elliott said.

“We have got a really exciting agenda of releases over the coming year and that’s… we want to get on with that and we want to be able to do that and I’m feeling that we have the capacity to do it.” 

Consistent with the move adopted by Westpac, ANZ also wound back its provisions by $150 million – 10 per cent of the $1.7 billion it set aside last year in collective provisions in response to the economic challenges including rising unemployment of the health pandemic. 

During the December quarter we found is that the outlook isn’t quite as bad,” Elliott said. 

Indeed, the bank reported fall in the number of its customers on loan deferrals. 

About 1 per cent of home loan customers in Australia and New Zealand are still receiving COVID support from the bank, In Australia, 84 per cent of deferred home loans have rolled off with 98 per cent returning to repayment. In New Zealand, 92 per cent of loan deferrals have rolled off with 86 per cent returning to repayments.

This meant that the bank could “just trim those [provisions] back a little,” Elliott said. 

“The outlook is a lot more positive today, compared to going into the fourth quarter 2020.

“We were able to provide support for those that needed in in terms of deferrals and other forms of assistance. And all the while, doing it in a really well run, safe manner.”