Capital Calls: ANZ deserves some shareholder respect

3 minute read

A woman uses an ANZ Banking corporation ATM in central Sydney, Australia February 20, 2018. REUTERS/Daniel Munoz - RC1767691DE0

MELBOURNE, May 5 (Reuters Breakingviews) - Concise insights on global finance.


CHEER UP. Shayne Elliott cannot catch a break. Australia and New Zealand Banking Group’s (ANZ.AX) chief executive presided over good first-half results and almost tripled the dividend, yet the stock fell 2% in morning trading. The $62 bln lender is valued at just 16% above book value, the lowest of Australia’s big-four banks. That’s wrong-headed.

Earnings for the six months to the end of March are better than the 9.7% annualised return on equity implies. Strip out one-offs like the 1MDB-sparked write-down on its stake in Malaysia’s AmBank and some loan reserve releases and the return bumps up to 11.3%, besting Westpac’s (WBC.AX) adjusted figure.

ANZ is also leaner, with 54 cents of every dollar of revenue spent on costs, compared to Westpac’s 56 cents – and should get that down to 48 cents next year. Westpac, which trades a third above book, wants to slash expenses by 21% read more , but that’s a tall order and will take time. Elliott deserves more recognition from investors for his efforts. (By Antony Currie)

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