Shayne Elliott has pushed the ANZ to the top of the major bank league tables in his first year as CEO.
The total returns for ANZ shareholders for the year to December were 15.7%, well ahead of the other big four banks, the regional banks and the ASX200 accumulation index, as this chart from Morgan Stanley shows:
“ANZ is our preferred major bank,” write Morgan Stanley analysts in a note to clients.
“While it faces several revenue headwinds, it’s less vulnerable than peers to margin pressure in Australia and we remain confident that the cost-out story can mitigate risk to earnings.”
The ANZ has been selling down its retail assets in Asia since Elliott replaced Mike Smith in January 2015 and is putting greater emphasis on institutional customers.
Morgan Stanley, which has ANZ shares rated as overweight, says the new strategy should deliver ROE (return on equity) recovery and leave ANZ with a stronger capital outlook and dividend outlook than its peers.
The latest sale is the bank’s 20% stake in Shanghai Rural Commercial Bank for $1.838 billion, about three times what it paid for it.
The ANZ in October also announced its departure from retail banking and wealth management in Asia. Singapore’s DBS Bank bought ANZ’s retail and wealth business in Singapore, Hong Kong, China, Taiwan and Indonesia. The other centres where the ANZ has retail and wealth management businesses — Cambodia, Laos, Vietnam and the Philippines — are still under review.
The ANZ in November posted an 18% fall in 2016 full year cash profit to $5.9 billion, dragged down by the cost of reforms. The result included $1.077 billion of after tax charges, including restructuring and the cost of software.