Speaking exclusively to Your Money’s Ticky Fullerton, ANZ chief executive Shayne Elliott said that given the pressure both banks and the property market are under, it is time for lenders to tread carefully.
“There’s been a confluence of all sorts of issues happening in terms of what we’ve seen with house prices, the tightening of borrowing capacity of people, rates rising a little bit,” Elliott explained.
“It’s right to be cautious. I do not think that this is the time to really push the boundaries in terms of lending to homeowners,” he said.
Elliott made the comments after ANZ announced that its full year cash profit had fallen 5 per cent to $6.487 billion.
The result was impacted by the perfect storm currently facing banks, including increased scrutiny stemming from the financial services royal commission.
Those headwinds had meant that right now was the toughest time in living memory that the banks had faced, Elliott said.
“The world is going to be tougher, customers are demanding more and things are changing at a faster pace,” he said. “The way you win in that world is to be really adaptive, to be nimble, fast, innovative.”
It’s that approach that has motivated ANZ to slash costs for two and a half years running as it undergoes a cost-cutting campaign to offset regulatory risk and lending restrictions.
Given increased competition and a changing regulatory environment, Elliot said the way banks ‘win’ is “not to get bigger but to get better.”
“If we do a few things and we do them well, [with] simpler products, less fees, less charges, less complicated things … it’s easier to do them well,” he said.
As the royal commission closely documented, the failure of oversight and the needless complexity of some financial products have been partly responsible for worse customer outcomes.
Elliott insisted that by having many smaller working groups within the bank as part of its ‘agile’ approach, it would actually improve compliance, not detract from it.
“I believe that if we give people more accountability, we delegate more authority responsibility and decision making to those people, they’ll do the right thing.”
Listen to the full interview, aired on Trading Day on Wednesday, above.