As you know, today will be my 18th, and last, result presentation as Chief Executive, and it's pleasing to be able to finish with such a strong result, with the foundations in place for a stronger future.
Three significant changes have occurred since we last reported.
First, we announced a new Chief Executive. Nuno Matos will join ANZ this Monday, bringing over 30 years of international banking experience.
Second, ANZ entered into an enforceable undertaking with APRA, for matters relating to non-financial risk management.
Over the past 9 years, we have de-risked the bank both strategically and financially, with credit risk now peer leading. We are committed to making non-financial risk an equal area of strength.
Third, we are experiencing a more disruptive era of geopolitics.
Sweeping US trade policy changes and global supply chain disruptions are driving volatility and unpredictability, and for now, we are operating in a less globalised world.
Trade flows are interrupted, customers forced to adjust strategies, and capital is more cautious. While we focus on risk settings in the short term, global economic and market activity is likely to realign rather than decline. We will continue to follow our customers and facilitate that realignment as they move capital, rethink their manufacturing base or change supply chain.
Closer to home, this realignment is impacting confidence, but I remain positive.
Clearly many families and businesses will face tougher times, but our data tells us that Australian and New Zealand households on average are remarkably robust, with some of the strongest balance sheets in the world, not only driven by strong house prices. That resilience has been called on several times in recent years and may be called on again.
Governments on both sides of the Tasman retain fiscal and policy flexibility, and there is still room for interest rates to decline. Unemployment remains low by historical standards and likely to remain so.
I am not suggesting things are easy, but there are many reasons to be confident.
Our repositioning of ANZ over the past 9.5 years has better prepared us for times like these. With our uniquely diversified business and strong balance sheet, we are well positioned to manage risk, support customers under stress, and grow as opportunities arise.
Turning to highlights from the half.
2023 and 2024 were our two strongest financial results ever, and today we're announcing our highest ever first-half revenues.
We again saw the benefits of our targeted and diverse portfolio, including:
- Record organic asset growth in our banking businesses,
- The best-ever revenues from debt capital markets business,
- A solid performance within Markets overall, in line with prior guidance and history,
- The New Zealand Retail and Small Business Division, delivering another consistent performance in a competitive market despite several interest rate reductions,
- Outstanding profit growth at Suncorp Bank, in stark contrast to its regional peers, and
- Strongest ever result from our North American and European geographies.
Costs were well managed - again, despite maintaining a strong investment pipeline, with productivity now a core strength of ANZ.
Credit costs remain benign and peer-leading, reflecting years of de-risking and cautious customer selection.
Earnings per share are the highest since first-half of 2023, when margins hit their cyclical peak, supporting a dividend of 83 cents per share, franked at 70%.
Overall, these results reflect continued momentum across all divisions, and the benefits of a consistent strategy combined with sensible, targeted investment.
Focusing on the long term, this was an important half with respect to our dual-platform strategy.
We've invested around $2.8 billion in platforms over the last five years and the investments in our two key platforms - ANZ Plus and Transactive Global, are delivering now.
In the first half, ANZ Plus hit new highs.
We gave the market an in-depth update on Plus a few weeks ago and since then, we welcomed our 1 millionth customer, crossing through $21bn in deposits.
Retail Customers using Plus have an average save and transact deposit balance across ANZ platforms of over $31,000, versus an average balance of less than $16,000 for Classic only users.
With the introduction of tiered savings products, we now generate a margin on Plus deposits well above 100 basis points.
More than half of ANZ Plus customers consider ANZ their main bank and almost 40% are actively engaging with financial well-being features, like setting savings goals or using CashRewards or RoundUps, meaning they are more actively using ANZ, staying longer and sharing more data with us.
They also report that they're having an exceptional experience, with our App and Play store ratings sitting at 4.8 and 4.7. And we're doing this at a 45% lower cost to acquire, and a 35% lower cost to serve.
We're also picking up pace. Over 3 years, we've increased our tech release cadence almost 5-fold, from an average of eight to now forty releases per day.
This means every 30 to 45 minutes, we are improving security, services and customer experience.
In parallel, we continued to scale our core platform for large corporate customers, Transactive Global - or TG.
TG is like Plus, but for wholesale customers, web-based and able to connect directly into our customers' technical stack, spanning three key products: Loans, Markets and Transaction Banking.
It is the only true Trans-Tasman platform of peers, and we have a clear lead in Australian direct integrations with a 16 point advantage over our nearest competitor, and total direct integrations up 11.3% this half versus same period last year. Overall, TG customers grew almost 10% pcp, driving a 5% increase in payment volumes, while holding cost per transaction flat.
As you know, we are the largest bank provider of Payments Platforms to other financial institutions in our home markets - banks, brokers, and funds. These Platforms performed very strongly with NPP Agency volumes up 20% versus a year ago and client monies accounts up 17%. Industry leading innovations like PayTo, ANZ's Digital Key and our API Developer portal will underpin future growth.
The combination of long-term underlying volume growth and a Return on Regulatory Capital for Cash Management alone of over 80%, mean TG has been key to Institutional's transformation over the past decade.
In addition to scaling dual platforms, our other priority has been Suncorp Bank, which reported an outstanding performance relative to regional peers.
Suncorp Bank today is better than the bank we agreed to buy 3 years ago. The team is engaged, the business growing and integration plans well advanced.
A bank owned bank has advantages, and Farhan will speak more to the specifics around synergies shortly.
Looking ahead, ANZ's priorities are clear:
- Resolve non-financial risk issues and ensure changes are embedded.
- Grow our dual platforms, underpinning long term competitive advantage.
- Run Suncorp Bank well, deliver synergies and prepare for migration, and
- Manage a smooth CEO transition.
The team is incredibly focused on delivering all four.
This year ANZ turned 197.
I have had the privilege to be its custodian for 9.5years, almost 5% of its history.
At one level, the task was simple - to leave it in better shape than I found it.
Ultimately that will be for others to judge, and while there will always be more to do, I am confident ANZ today is a simpler, stronger and better bank.
Some on this call have participated in all 18 of my results announcements - yes that means you Richard, Jonathon and Brian. But for many, it may be hard to recall what ANZ was like in 2016 - before the Royal Commission, before the Bank Levy, even before ApplePay.
2016 was the year of the Brexit referendum and the year Trump became President for the first time. John Key was Prime Minister in New Zealand and Malcolm Turnbull in Australia. The big global business story was the collapse of Theranos.
For ANZ this was still the era of the Super-Regional Strategy, but times were changing fast, and it was clear we needed to adapt. Frankly we were doing too many things in too many places with too many people, to truly do anything as well as we needed.
Since then, we focused our strategy, strengthened the balance sheet, tightened customer selection, drove significant productivity, improved capital efficiency and made a material shift in our culture.
I don't regret any of those decisions, only wishing that we had gone faster.
Since launching that new strategy at the first half result in 2016, we have increased our Market Cap by around $20 billion, returned around $48 billion to shareholders, while retaining sufficient capital to build a better bank, investing ahead of our peers. We didn't milk the franchise, but laid foundations for long-term success while delivering decent returns in the short term.
We helped over one million people on lower incomes build financial skills, knowledge and confidence with our financial literacy program Money-Minded and contributed to helping more than 62,000 people build lifelong savings habits while saving more than $31 million to go towards financial education in our award-winning program Saver-Plus.
From a start up in Van Dieman's land 197 years ago, we have grown and thrived in a volatile, changing world.
Like those before me, future custodians will need to navigate an uncertain environment - a more volatile geopolitical landscape, greater competition, fast evolving regulation, higher community standards and shifting customer expectations.
They will succeed by retaining a sense of purpose and agility - a growth mindset and a dynamic approach to capital and resource allocation.
As I hand over to a new CEO, I am confident we have the right people, in the right places, providing the right services to the right customers, to do just that.
The direction is clear, our foundations are strong, it is now time to double down on execution and pace while keeping a firm eye on the long term.
I thank you all for your support, guidance and even the critiques over the years.
While not always appreciated at the time, that robust challenge has driven a better outcome.
I am eternally grateful to my colleagues around the world. The notes, emails, calls and overall support has been invaluable.
I may have the most visible role in the bank, but it is the people of ANZ who bring passion and commitment to our customers and the community every day - shaping a world where people and communities thrive. Thank you all.
For Nuno - I wish you the very best for the future as you lead ANZ into our third century.
