ANZ post $7.4 billion cash profit for 2023

Brokers take market share from direct channel

ANZ post $7.4 billion cash profit for 2023


By Ryan Johnson

ANZ has announced a $7.4 billion cash profit in its 2023 full year results, up 14% compared to last year.

ANZ CEO Shayne Elliott (pictured above) said it was a strong annual result, with record revenue and cash profit following several years of transformation.

“We continued to strengthen our balance sheet and closed the year with provisions for potential credit losses higher than prior to the pandemic, and with more capital than ever before,” Elliott said.

Elliott said this was critical as the bank entered a period of continued high interest rates, rising costs and geopolitical tensions.

“While our first half was stronger, the second half delivered an outstanding revenue and profit result, demonstrating the benefits of our diversified franchise.”

Brokers take market share from ANZ direct channel

Overall, ANZ’s channels grew evenly over the year. ANZ commercial channel was its highest performing delivering 26% return on equity and 11% revenue growth for the year. Lending also grew to a record high of $62 billion.

The major bank’s institutional (13%) and New Zealand (16%) channels also delivered a return on equity.

Despite facing challenges from rising interest rates and inflation, the major bank's home loan portfolio continued to expand, increasing from $283 billion to $304 billion over the year.

Brokers played a significant role in this growth, originating 56% of these loans, while the bank's direct channel's share decreased slightly from 46% to 44%.

Given the environment of the past year, ANZ’s retail channel performed well with its sales volume up 19%.

The bank’s time to first decision, which refers to simple deals via broker and mobile lender channels, has consistently been within three days and its first touch approval rate was up 58%.

Brokers had also responded to these increases in its service, with ANZ’s broker NPS score rising 14%.

“In Australia retail, our ongoing investment in home loan processing supported consistent turnaround times which, coupled with ongoing digitisation for deposit account opening, resulted in high-quality growth in our retail balance sheet,” said Elliott. 

“This month we have released our new ANZ Plus digital home loan refinance product to eligible customers, designed to make home lending faster and simpler for Australian homeowners.”

ANZ customers faced ‘profound changes’

As interest rates and inflation have been a big talking point all year, ANZ would be remiss to exclude mentioning financial hardship in its full year results.

Elliott acknowledged that the RBA’s rapid rate rises and inflation came as a shock to many that had “real impacts on our customers”.

“Whether you're a homeowner or a business owner, whatever you do in the community, that really changes your life and it's pretty profound,” Elliott said.

“It's changing a lot of business models, it's changing people's view about housing and what they can afford and how they have to make really difficult decisions to balance the budget.”

However, Elliott said ANZ’s customers had come through the challenging period from “a great starting point”.

“We have a million homeowners here in Australia, or people who have a home loan with us, only 2,000 of them are in hardship,” said Elliott.

“Now it's dreadful for the 2,000 and we'll do everything we can to help them through. But in the scheme of things, it's relatively modest. And so that again speaks to the strength of the economy the fact that people have been able to work through.”

As borrowers grapple with another rate rise, Elliott said there was plenty of opportunity for banks to help.

“One of the great things when you're a strong bank like ANZ, you're able to lean in and help those who need it, whether that's restructuring loans that they have or giving them assistance to work through what will undoubtedly be a difficult time,” Elliott said.

 “So, there is opportunity, for banks like us to step forward and assist those through the challenge.”

ANZ-Suncorp Bank update

ANZ also responded to its so far failed acquisition of Suncorp Bank.

In July 2022, ANZ announced plans to acquire Suncorp Bank to add scale to its retail and commercial businesses.

“The process continues,” said Elliott. “We’re going in front of the Australian Competition Tribunal in a few weeks’ time and that's essentially like going to an appeal court and we'll go and make our case again, and they've given us an indication that they'll come back with a decision in late February.”

“But we're really optimistic about that. We strongly believe our case is a good one, that this really is in the best interests of consumers.”

If ANZ’s application is successful, completion would then remain subject to approval from the Federal Treasurer and the passage of legislative amendments by the Queensland Parliament.

“We continue preparations to integrate Suncorp Bank into ANZ Group, subject to these conditions being met.”

What do you think of ANZ’s full year results? Comment below.

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