MELBOURNE: ANZ Group Holdings Ltd’s profit missed expectations as chief executive officer (CEO) Nuno Matos reiterated that action is needed to turn around the lender.
Cash profit dipped 14% to A$5.79bil (US$3.8bil) in the 12 months through Sept 30 from a year earlier, according to a statement.
That compared with the A$6.28bil average estimate of analysts surveyed by Bloomberg.
Current and former senior executives took hits to variable compensation due to past problems with risk management, ANZ’s annual report showed.
Former CEO Shayne Elliott forfeited A$13.49mil for 2024 and 2025, while institutional bank chief Mark Whelan sacrificed A$3.5mil. The impact on Matos’s remuneration was A$975,000.
Matos is revamping the Melbourne-based lender by reducing costs and focusing on making the firm simpler.
Since taking the helm six months ago he’s cut some 3,500 jobs, appointed a slew of new senior managers, and has handed investors return on equity targets in a bid to improve the bank’s performance.
“The results we have announced today demonstrate our franchise is strong, but action is needed,” Matos said in the statement.
“As we deliver our strategy, we will accelerate growth and outperform the market, while delivering more for our customers.”
Overall credit quality “remained sound,” the bank said, with a modest increase in individual provisions over the half. The lender will pay a final dividend of 83 Australian cents per share.
The results were impacted by the previously announced notable items that amounted to A$1.1bil, including the costs of settling a regulatory fine as well as expenses related to integrating Suncorp Bank.
ANZ’s retail division as well as its business and private banking unit have underperformed, Matos said, impacted in part by intense competition and falling interest rates that curbed margins.
In the meantime, the firm’s institutional and New Zealand businesses are market leading, he said.
Matos also said progress is being made improving non-financial risk management, one of his key priorities. A plan submitted to the banking regulator in September was approved.
“A significant amount of work is already underway to support the business and cultural transformation which will deliver a better-run bank for our customers,” he said.
Last month Matos laid out his strategy for the next five years.
He’s brought in Pedro Rodeia to run the Australia retail division and will hire mortgage sales staff to claw back market share in home loans.
The shares are now up about 29% this year, outperforming the wider financials index in Australia. — Bloomberg
