ANZ warns economic struggles will continue into 2021 due to global pandemic | Ralph Lauren

Must Read


ANZ says Australia will still face economic challenges well into 2021, warning households and businesses may struggle as Federal Government stimulus packages continue to taper in the first half of the coming year.

Holding its annual general meeting on Wednesday, the major bank’s newly appointed chairman Paul O’Sullivan said Australia’s ability to stamp out the virus locally was optimistic. But ongoing hurdles would persist into the new year.

“We know there are many individuals who have had an incredibly demanding year despite the considerable support from the governments in Australia and New Zealand,” Mr O’Sullivan said.

“We are also acutely aware that much of this assistance will need to unwind in the early part of next year — understandably. This may present further economic challenges that need to be very carefully navigated.”

ANZ chief executive Shayne Elliott in his opening statement reaffirmed the bank’s simplification strategy to de-risk the company and return to core banking services.

“Our work to simplify and strengthen the bank has materially lowered our exposure to potential credit and operational risks,” Mr Elliott said.

The simplification and risk minimisation overhaul has caused ANZ to exit its Asian banking business, sell its Esanda motor dealer finance business and prioritise owner-occupier home loans over investor home loans.

Mr Elliott also noted 92 per cent of COVID-19 home loan deferrals had resumed repayments, while 3000 business loan customers remained on suspended payments.

For its 2020 financial year, ANZ posted a cash profit of $3.7 billion, a fall of 42 per cent on the previous year.

Mr O’Sullivan said further consideration on dividend payments to shareholders in 2021 would be based on the operating environment at the time.

The Australian Prudential Regulation Authority set guidelines earlier in the year that limited banks to only distribute half of profits via dividends while the pandemic persists. On Tuesday, the regulator scrapped the COVID-19 guidelines.

Shareholders asked the board how customers would be impacted by the proposed repeal of responsible lending laws governed by the Australian Securities and Investments Commission.

Mr O’Sullivan said close to 90 per cent of responsible lending laws were covered by APRA’s governance of the banking industry.

“I want to reassure everyone that we have many different codes of practice that guide our lending responsibilities and we do not see this in any way of encouraging us to be irresponsible in a way that we operate,” he said.

ANZ has set aside $5b in reserves to cope with the impact of the pandemic.

Mr Elliott said the bank remained one of the most well-capitalised banks in the world.

“We will continue to reshape our portfolio to produce a more balanced, lower risk business that generates decent, more predictable returns,” Mr Elliott said.

“We have a substantially simpler business that is less focused on dealing with problems and more focused on winning and keeping customers.”



Source link

Leave A Reply

Please enter your comment!
Please enter your name here

Latest News

2021 AFLW Draft report card: How Fremantle and West Coast fared with their selections | Ralph Lauren

Both WA clubs boasted strong hands at the 2021 AFLW National Draft. But did they make the most...

More Articles Like This