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Our Strategy

We have embarked on a strategy to become a simpler, better balanced and more service oriented organisation, helping our customers and our people respond to a challenging world.

Becoming a simpler bank enables us to invest our resources to build better systems and processes, to fix things that are broken and to develop products, services and programs that improve the financial wellbeing of our customers and the community.

We are repositioning the bank for the longer term – focused on fewer things and doing them really well:

  • creating the best bank in Australia and New Zealand for home owners and small businesses
  • building the best bank in the world for clients driven by trade and capital flows between Australia, New Zealand and Asia
  • establishing a common, digital-ready infrastructure and using data to better assist our customers to succeed in a digital world.

While the environment in which we operate is changing at a rapid pace, the four priorities that underpin our strategy continue to drive our transformation.

We have made significant progress over the past two and a half years, but recognise that we still have much to do.

Variable remuneration is designed to focus our CEO and Disclosed Executives on key measures supporting our business strategy, and encourage the delivery of value for shareholders. Group, Division and individual performance is considered to determine their variable remuneration recommendations. In respect of Group performance, an assessment against a range of annual and longer-term strategic indicators is undertaken across the categories of Risk, Financial and Discipline, Customer, and People and Reputation. Together these inform the overall Group assessment.

Focusing on areas where we can win

Actions we are taking Our progress: Full year 2015 to full year 20181
Making buying and owning a home in Australia and New Zealand easy
  • established dedicated Home Owners and Home Lending teams, to make buying and owning a home easy
  • introduced First Home Buyer coaches: mortgage and home lending experts who assist customers through the first home buying journey from start to finish, without any cost or obligation
  • improved communication with home loan customers transitioning from interest only to principal and interest loans, helping them prepare for increased payment amounts
  • acquired technology start-up REALas, assisting prospective home buyers find out accurate sale price predictions for properties on the market
  • provided an additional $52 billion in home lending in Australia and New Zealand
  • maintained market share of owner occupier customers in Australia at 16%2
  • maintained number 1 housing market share position in New Zealand with 31%3 share
Making starting, running and growing a small business in Australia and New Zealand easy
  • continued to invest in a dedicated Business Banking proposition
  • introduced innovative solutions for customers including ANZ Be Business Ready (Honcho), ANZ Be Trade Ready, Employment Hero and SmartPayroll
  • launched BladePay™: smaller, smarter, faster payment technology
  • provided $95 billion business lending in Australia and New Zealand (in 2018)
  • grew business deposits in Australia and New Zealand by $16 billion
Being the best bank in the world for customers driven by the movement of goods and capital in our region
  • ranked number one Institutional Lead Bank in Australia and New Zealand4
  • maintained equal 4th corporate bank in Asia and improved to #1 for Overall Quality5
  • lead bank for trade services6
  • increased Payments and Cash Management revenue in Institutional by 9%

Links to 2018 Group performance assessment7:

Continued to improve customer experience this year, with a highlight being Institutional performance in key customer satisfaction/relationship strength surveys. A disappointing Net Promoter Score (NPS)8 in Australia was balanced by a record NPS in New Zealand Retail.

Creating a simpler, better balanced bank

Actions we are taking Our progress: Full year 2015 to full year 20181
Exit low return and non-core businesses
  • sold or exited 21 non-core businesses, including announced divestments:
  • Esanda asset finance business
  • Wealth Australia – Life Insurance, Wealth Australia – One Path Pensions and Investments/Aligned Dealer Groups
  • One Path Life New Zealand and New Zealand One Path Life medical insurance book
  • six Asia Retail and Wealth businesses across Singapore, China, Hong Kong, Taiwan, Indonesia and Vietnam
  • Papua New Guinea Retail, Commercial and SME business
  • Metrobank Card Corporation and Shanghai Rural Commercial Bank partnerships in Philippines and China respectively and ANZ Royal joint venture in Cambodia
  • agreement with CMC Markets to provide the ANZ Share Investing trading platform
Reduce reliance on low-return aspects of Institutional banking
  • focused on strategic Institutional customers across Australia, New Zealand and the Asia Pacific region
  • reduced the Institutional customer base by ~6,000, exiting off-strategy, low-return customers
  • reduced Institutional Total Risk Weighted Assets by $44 billion
  • reduced capital allocated to Institutional, from ~48%9 of total Group capital to ~38%9
Reduce operating costs and risks by removing product and management complexity
  • total cost base reduced from $9.4 billion to $9.2 billion
  • reshaped the workforce, including introduction of agile working practices (our New Ways of Working) to the Australia and Technology Divisions to increase speed-to-market for key customer initiatives
  • reduced full time equivalent (FTE) employees by 25%
  • decommissioned redundant technology applications
  • simplified products, including decommissioning ~140 products in Australia Division
Further strengthen the balance sheet by rebalancing our portfolio
  • increased Common Equity Tier 1 capital from 9.6% to 11.4%
  • reallocated capital to Retail and Commercial in Australia and New Zealand, from ~45%9 to ~60%9 of total Group capital
  • freed up over ~$12 billion in capital through announced divestments and reduction in Institutional risk weighted assets

Links to 2018 Group performance assessment7:

While cost outcomes were below target (resulting from the large/notable items), we maintained a strong balance sheet, and divestments during the year reduced the complexity of the Group. Total shareholder returns were positive relative to peers and return on equity was on target. Organic capital generation remained strong. Capital, funding and liquidity continued to be well above regulatory minimums.

Driving a Purpose and Values Led Transformation

Actions we are taking Our progress: Full year 2015 to full year 201810
Create a stronger sense of core purpose and ethics
  • renaming both the Board Environmental, Social and Governance Committee and Responsible Business Committee to include Ethics, providing management with a further vehicle to raise ethical and conduct issues
  • developed an ethical decision-making framework which captures how we apply our purpose, values and principles to inform complex decisions
  • changed the way we pay our employees, placing a greater focus on customer outcomes (see Improving Customer Outcomes on page 9)
  • built momentum across our key focus areas of financial wellbeing, environmental sustainability and housing:
    • surveyed 9,500 people in ANZ Adult Financial Wellbeing Survey in Australia and New Zealand and launched an insights report, the findings of which will inform future development of products and services
    • delivered Vulnerable Customer training to 6,100 frontline employees in Australia
    • arranged 18 green bonds ($1.867 billion) on behalf of customers, including debuts in New Zealand and Asia
    • introduced interest free loans to help New Zealanders insulate their homes, with nearly 560 loans approved
Invest in leaders who can help sense and navigate the rapidly changing environment
  • launched our New Ways of Leading, which describe the behaviours our leaders most need to demonstrate in order to transform ANZ
  • increased women in leadership roles by 0.9% to 32%, driven by our focus on adaptive leaders who uphold our ICARE values and our New Ways of Leading

Links to 2018 Group performance assessment11:

While there were a number of highlights during the year, such as an increase in the number of women in leadership, this was offset by employee engagement scores falling below target. Our standing in the community was impacted by significant community concern as a result of our failures highlighted by the Royal Commission.

Building a Superior Everyday Experience for Customers and Our People to Compete in the Digital Age

Actions we have taken Our progress: Full year 2015 to full year 201810
Build more convenient, engaging banking solutions to simplify the lives of customers and our own people
  • invested in ANZ’s new Digital Banking division to support growth in priority areas
  • upgraded key digital channels resulting in improved customer experience, including through:
    • a new mobile app
    • full mobile wallet (only major bank in Australia to offer this)
    • introduction of secure biometric security for ANZ app, New Zealand Contact Centre and Institutional channels
  • continued to simplify technology architecture, decommissioning 264 applications during 2018, a 35% increase on 2017
  • rolled out New Payments Platform (NPP) to small and medium businesses and Institutional clients
  • won 12 of 13 NPP mandates from local and foreign banks
  • prepared for Open Banking through a strategic partnership with Australia’s leading data company, Data Republic, allowing sharing and analysis of data with trusted third parties in a secure environment
  • introduced a digital assistant, ‘Jamie’, using Artificial Intelligence (AI) on, to assist customers with the top-40 most asked banking questions

Links to 2018 Group performance assessment11:

There was strong digital engagement with customers across the Group. The ANZ app remains the top-rated banking app in the Apple store, with almost 150,000 reviews.

  1. Financial comparisons are on a Cash Profit basis. 2018 excludes discontinued operations.
  2. Source: APRA monthly banking statistics 31 August 2018.
  3. Source: RBNZ, share of all banks as of August 2018.
  4. Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand. In New Zealand ranked against the Top 4 competitors.
  5. Greenwich Associates 2017 Asian Large Corporate Banking Study (issued in March 2018): ANZ ranked equal No. 4 in 2016 and 2017.
  6. Peter Lee Associates Large Corporate and Institutional Transactional Banking surveys, Australia 2004–2018 and New Zealand 2005–2018.
  1. See 2018 Annual Report for full Remuneration Report.
  2. NPS is a customer loyalty metric used globally to evaluate a company’s brand, products or services. Net Promoter® and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld.
  3. Based on Regulatory Capital. 2015: Institutional shown under 2015 IIB Structure, including Global Institutional and Asia Retail & Pacific. 2018 adjusted for announced divestments of OnePath, P&I, NZ OnePath, Cambodia subsidiary and ANZ PNG.
  4. Financial comparisons are on a Cash Profit basis. 2018 excludes discontinued operations.
  5. See 2018 Annual Report for full Remuneration Report.
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