“Competition will remain intense. Regulation continues to rise and we of course need to continue to work even faster fixing the failures of the past.
“Despite the tough conditions we are facing, your board believes we remain well placed to navigate these challenges given the strong progress we have made in transforming our business,” he said.
ANZ Bank’s profits from continuing operations were flat in 2019, but the bank cut the tax credit available to Australian shareholders by lowering the rate of franking on its dividend. Despite the soft year, Mr Gonski said the bank was acting to lift its performance, including by selling its life insurance arm to Zuroich, and its superannuation business to IOOF.
As the industry responds to the weak outlook by cutting costs, chief executive Shayne Elliott told shareholders the bank would remain focused on further simplifuying its operations. He said that since 2016, ANZ had divested 23 businesses, releasing about $7 billion in shareholder funds.
As Westpac reels from a money laundering crisis, with a further $500 million capital charge announced on Tuesday, Mr Elliott repeated ANZ was reviewing its systems but it did not believe it had any major problems with the fiancial intelligence agency, AUSTRAC.
“I can confirm to shareholders today that while this review remains ongoing, we have not identified any material issues. We are also not aware of any impending litigation from AUSTRAC,” Mr Elliott said.
ANZ last year received a first “strike” on executive pay, which refers to a shareholder vote of 25 per cent or more against its remuneration report. Mr Gonski said the board to this protest vote “very seriously,” and this year there had been much more variation in the pay packets of its top executives, including a cut to Mr Elliott’s bonus.
Mr Gonski’s speech also addressed the pressure from some shareholders over the bank’s membership of the lobby groups including Business Council of Australia, amid criticism it is at odds with the bank’s stated commitments on reducing carbon dioxide emissions.
Mr Gonski said ANZ would conduct a review of the issue in 2020, publishing the findings in next year’s annual report.
He also defended the bank’s use of KPMG as its auditor since 1969, saying the board had processes to ensure auditor independence that went beyond what was required under the law, and by the Unites States securities regulator.
More to come