Financial Data and Key Metrics Changes - Statutory profit increased by 16% year-on-year, while cash profit rose by 5% year-on-year and 9% in the second half [6][60] - Common equity Tier 1 ratio stood at 12.3%, with return on equity up 47 basis points to 10.4% [6][102] - Underlying profit before provisions increased by 20% in the second half, marking the highest half-on-half increase in over a decade [6][62] Business Line Data and Key Metrics Changes - Australian home loans saw restored momentum, with approval times aligning with peers and a focus on risk-adjusted margins [9][65] - Commercial division revenue grew by 20% in the second half, the highest among all divisions, with cash profit up 15% [25][67] - Institutional business experienced a 10% revenue growth, driven by strong corporate finance results and increased transaction volumes [66][78] Market Data and Key Metrics Changes - ANZ maintained industry-leading positions in New Zealand across key segments, with a diversified and well-managed business [30] - Total Australian household debt, net of liquid assets, is around zero, the lowest in 15 years, indicating strong underlying health [39] - Average loan size for small business customers increased by about a third, reflecting the need for working capital [41] Company Strategy and Development Direction - The company is focused on restoring momentum in home loans, launching ANZ Plus, and disciplined growth in institutional and commercial sectors [9][54] - ANZ Plus is positioned as a new bank with a focus on improving customer financial well-being, with deposits growing rapidly [12][17] - The acquisition of Suncorp Bank is aimed at enhancing presence in Queensland, with integration planning already underway [49][50] Management's Comments on Operating Environment and Future Outlook - The management acknowledged significant uncertainty in the economic environment, including inflation and geopolitical tensions, but noted that customers are entering this period in strong shape [35][38] - Despite economic risks, the company is well-prepared for challenges ahead, with a focus on maintaining strong customer engagement and productivity [55][56] - The management emphasized the importance of data analysis for proactive intervention in customer support during periods of stress [44][45] Other Important Information - The company completed the formal separation of its wealth business, enhancing its risk profile [33][34] - Investment spend increased to almost $2.2 billion, with a focus on growth and simplification initiatives [84][86] - The collective provision balance increased by approximately $100 million half-on-half, reflecting prudent risk management [92][94] Q&A Session Summary Question: Thoughts on NIM leverage going forward - Management indicated that benefits from rate hikes will be reasonably well proportioned between Australian and international exposures, with a larger shift expected in Australian dollar rates [110][112] Question: Drivers of expected expense growth in FY '23 - Management highlighted inflationary pressures on salary and vendor costs, alongside the impact of exiting the wealth business and ongoing investments in technology [113][119] Question: Changes in term deposit rates - Management explained that the increase in term deposit rates was a dynamic response to market conditions and funding needs, with a diversified deposit base allowing for flexibility [125][128]
ANZ Bank(ANZGY) - 2022 Q4 - Earnings Call Transcript