ANZ) braces for the Nuno Matos effect as new CEO prepares his big reveal
“We operate in a rapidly evolving and highly competitive banking environment. As we continue our strategic review, we are eliminating duplication and complexity, discontinuing work that does not support our priorities, and sharpening our focus on improving our non-financial risk management practices across the bank.”
Analysts from Macquarie Equities point out that ANZ’s retail banking business is an obvious target for a major overhaul.
Improving the performance of ANZ’s retail operation is expected to be a key focus of the new boss.Credit: Will Willitts
“The biggest opportunity for ANZ to improve returns is likely to be in retail banking, where it has underperformed its peers,” they said.
Comparing ANZ’s staffing levels to its closest peer Westpac, analysts “suggest ANZ could potentially reduce retail FTEs (full-time equivalents) by around 30 per cent (roughly 3800),” he added.
Meanwhile, Morningstar banking analyst Nathan Zaia warned ANZ must deliver services while keeping its costs under control.
“Lowering costs is one thing, but ensuring it has a competitive level of service across its core products is even more critical to long-term success,” Zaia said last month. he said.
Matos will also use the update to clarify the future of ANZ Plus, ANZ’s multibillion-dollar digital platform. The bank has touted it as the future of the retail banking model but now lacks the key personnel it needs to deliver it, including former CEO candidate Carnegie.
Analysts such as Zaia have raised the possibility of ANZ rethinking its investments into a platform that is struggling to deliver. It could be bundled with ANZ’s legacy platforms to save money in the short term, but possibly at the expense of digital competitiveness in the long term.
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“We think this update increases the likelihood that the move to ANZ Plus, a new banking platform, will be pushed back. Despite billions of dollars being spent on the project, it still lacks functionality and if the strategy needs to change, it will probably be in the interests of shareholders,” Zaia said.
He added that ANZ Plus changes made to the front end will likely be retained, but changes to back-end systems aimed at achieving material cost savings are less likely.
Macquarie says this increases the risk of “underinvestment in the broader franchise at a time when peers (particularly CBA) are in full swing”.
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