“We are operating in a rapidly evolving and highly competitive banking environment. As we continue our strategic review, we are eliminating duplication and complexity, stopping work that doesn’t support our priorities and sharpening our focus on improving our non-financial risk management practices across the bank.”
Analysts from Macquarie Equities point to ANZ’s retail banking business as an obvious target for a big overhaul.
Lifting the performance of ANZ’s retail operation is expected to be a core focus for the new boss.Credit: Will Willitts
“The greatest opportunity for ANZ to lift returns is likely in the retail bank, where it has underperformed peers,” they said.
Comparing ANZ’s staffing levels to its closest peer, Westpac, “suggests ANZ could potentially reduce retail FTEs (full-time equivalents) by around 30 per cent (roughly 3800),” the analysts added.
Meanwhile, Morningstar’s banking analyst Nathan Zaia has warned that ANZ needs to deliver on service while keeping a lid on its costs.
“Ripping costs out is one thing, but ensuring it has a competitive service level across its key products is even more critical to long-term success,” Zaia said last month.
Matos will also use the update to clarify the future of ANZ’s multi-billion dollar digital platform ANZ Plus. The bank touted it as the future of its retail banking model, but is now minus the key staff who were meant to deliver it, including former CEO contender Carnegie.
Analysts like Zaia have raised the possibility that ANZ will rethink its investment in a platform that has struggled to deliver. It could be cobbled together with ANZ’s legacy platforms to save money in the short term, but possibly at the expense of its digital competitiveness in the longer term.
Loading
“We think this update increases the likelihood that the migration to a new banking platform, ANZ Plus, will be pulled. Despite billions of dollars sunk into the project, it still lacks functionality, and if the strategy needs to pivot, it is likely in the best interest of shareholders,” Zaia said.
He added that the ANZ Plus changes to the front end are likely to be retained, but changes to the back-end systems, which were intended to deliver material cost savings, are less likely.
Macquarie says that raises the risk of “under-investment into the broader franchise at a time when peers (especially CBA) are charging full steam ahead”.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
