Tag: ANZ

ANZ IH, Profit Up, NIM Down

ANZ’s IH17 result, announced today shows the benefit of the consolidation of the business, with more focus on growth in Australia and New Zealand.  Profit is up, despite a drop in Group Net Interest Margin, with support from loan and deposit growth, and lower provisions. All well and good so long as the local economy performs!

ANZ today announced a Statutory Profit after tax for the Half Year ended 31 March 2017 of $2.9 billion up 6% and a Cash Profit1 of $3.4 billion up 23% on the prior comparable period (PCP). Cash profit was up 23%.

Group net interest margin fell 7 basis points from 1H16 to 2%.

ANZ’s Common Equity Tier 1 Capital Ratio was 10.1% at 31 March 2017 up 52 basis points (bps) from 30 September 2016. (15.2% on an
Internationally Comparable basis). Return on Equity increased
210 bps to 11.8%.

The total provision charge of $720 million ($787 million individual provision charge and a $67 million collective provision release) equates to
a loss rate of 25 bps, a decline of 11 bps from the end of 2H16. Gross
impaired assets over the same period decreased 7% to $2.94 billion with
new impaired assets down 3%.

Strong organic capital generation performance saw Australian Prudential Regulation Authority (APRA) Common Equity Tier 1 capital ratio above 10% for the first time and Return on Equity increased materially for the
first time since 2010.

The Group has a strong funding and liquidity position with the Net Stable
Funding Ratio at 113% up 5% from 30 September 2016. The improvement
was largely attributable to strong Retail deposit growth in Australia.

The FY17 interim result reflects further benefits from a significant reshaping of the business driven by ANZ’s strategic focus to create a simpler, better capitalised and more balanced bank producing better outcomes for customers and shareholders.

The Interim Dividend of 80 cents per share fully franked, is the same as the Interim Dividend in FY16, reflecting a payout ratio of 69% (Pro Forma 65%).

Highlights include:

  • Over 50% of Group Capital is now allocated to the Retail and
    Commercial businesses in Australia and New Zealand up from 44%.
  • Capital reallocation is evidenced in a $7b net decrease in Credit
    Risk Weighted Assets (CRWA) from the end of FY16 on a constant
    currency basis. This includes a $2b increase in Retail and
    Commercial offsetting a reduction in Institutional CRWAs of $8b.
  • The Group CET1 ratio was 10.1% at 31 March; net organic capital
    generation of 119 bps in the half was primarily driven by earnings
    growth along with RWA reduction.
  • Announced the sale of the Retail/Wealth businesses in six Asian
    countries, UDC Finance in New Zealand and ANZ’s 20% holding in
    Shanghai Rural Commercial Bank. Disposal of non-core assets will
    deliver an additional 65 – 70 bps of capital by the end of FY17.
  • Strong customer deposit growth in Australia (up 7%) and New
    Zealand Retail and Commercial (up 8%).
  • Australia home lending up 5%, maintained #3 market share while
    improving the portfolio mix, #1 market share in New Zealand.
    Small business lending in Australia up 4%, New Zealand up 8%.
  • The Institutional Payments and Cash Management business
    increased revenue 3%.
  • ANZ has a clear leadership position in Australia and New Zealand
    Lead Institutional Bank Penetration and was a Top 4 Corporate Bank
    in Asia for the fifth successive year.
  • New balanced scorecard remuneration structure introduced for
    Australian front line Retail Banking staff, focussed largely on
    customer service outcomes.
  • Improving the customer experience – introduced card replacement
    for lost or stolen cards within 15 minutes via the digital wallet.
    60% of customers in Australia and 64% in New Zealand are now
    digitally active.
  • Australia Retail and Commercial customer numbers up 4%; 60% of
    Retail customers holding multiple products. Service improvements
    along with products like ApplePay have driven net customer growth.
    Launch of Home Loan Online Application in Australia driving easier
    loan approvals. Expanded support to Small Business customers in
    Australia; new banker tools accelerate origination and assessment.

The adoption of Agile at scale continues, with planning is already underway to broaden its roll out in early 2018.

ANZ Hikes Investor Loans (Again)

From news.com.au.

ONE of the nation’s largest banks ANZ has lifted interest rates on home loan deals.

The bank has followed in the footsteps of rivals the Commonwealth Bank and Westpac, moving interest rates on both owner occupier and investor loans.

Some of the moves also include decreases and are effective immediately.

The moves come ahead of the Reserve Bank of Australia board meeting on Tuesday where it’s expected they will keep the cash rate on hold at 1.5 per cent.

Owner occupiers and investors signing up to interest-only fixed rate deals will be the worst hit with some hikes as high as 0.4 per cent.

On 2, 4, and 5 year fixed owner occupier interest-only loans the rates will rise by 0.4 per cent on the bank’s Breakfree products (this is one of the bank’s most popular products).

On one of the most popular fixed loans terms, three-year owner occupier interest-only loans will rise by 0.3 per cent to 4.49 per cent increasing repayments on a $300,000 30-year loan by $75 per month to $1123.

For investors on a three-year fixed-rate interest-only Breakfree deal the rate will rise 0.3 per cent 4.69 per cent, pushing up repayments by $75 per month to $1173.

For both owner occupiers and investors on principal and interest fixed rate deals rates on nearly all these products will fall.
Borrowers have been hit by fixed rates increases in recent weeks.

Borrowers have been hit by fixed rates increases in recent weeks.Source:Supplied

The three-year fixed rate owner occupier principal and interest deal will fall by 0.2 per cent to 3.99 per cent saving customers $34 per month and making repayments $1431.

On a three-year fixed rate investor principal and interest deal the rate will fall by 0.1 per cent to 4.44 per cent.

An ANZ spokesman said the “reflect our need to closely manage our regulatory obligations, portfolio risk and the competitive environment.”

Mozo spokeswoman Kirsty Lamont said the increases by ANZ are a result of the financial regulator, the Australian Prudential and Regulation Authority limiting their interest-only lending.

Mozo spokeswoman Kirsty Lamont said there’s increasing pressure on financial institutions to limit interest-only lending.Source:News Corp Australia

“It’s now more important than ever for interest only borrowers to do their homework on where to find the best rates in this current climate of tighter regulation,’’ she said.

“With the Federal Reserve jacking up rates in the US and inflation just scraping within the Reserve Bank target, we expect a cash rate increase in the next 12 months which means these fixed rates are unlikely to be around for a long time.”

ANZ Exits Retail Banking In Vietnam

ANZ today announced it had entered into an agreement to sell its retail business in Vietnam to Shinhan Bank Vietnam.

Shinhan Bank Vietnam is part of the Shinhan Financial Group, a South Korean company listed on the Korean and New York stock exchanges.

ANZ Group Executive, International Farhan Faruqui said: “The sale of our retail business is in line with our strategy to simplify the bank and improve capital efficiency. It allows us to focus resources on our largest business in Asia – Institutional Banking – where we are a top four corporate bank supporting regional trade and capital flows.

“We have a long history in Vietnam and we will be maintaining our presence through our Institutional Bank in Vietnam which will continue to support our corporate clients in the Greater Mekong Region.

“The agreement with Shinhan Bank Vietnam includes all eight branches located in Hanoi and Ho Chi Minh City, and ongoing roles for all retail staff. This will help ensure a smooth transition for our customers, while presenting a great opportunity for our people to join a retail bank with significant growth plans,” Mr Faruqui said.

The retail business being sold serves 125,000 customers in Vietnam, and includes AUD$320 million in lending assets and AUD$800 million in deposits. The premium to book value for the sale of the retail business in Vietnam is not material to the ANZ Group.

Subject to regulatory approval, ANZ expects the transfer of the Vietnam retail business to Shinhan Bank Vietnam will be complete by the end of 2017.

ANZ’s Institutional Bank has a presence in 15 different markets in Asia and was ranked as a top four corporate bank in the region by Greenwich Associates in 2016.

The sale of ANZ’s retail business in Vietnam follows the announcement in October 2016 of the sale of ANZ’s retail and wealth business in five Asian countries to DBS.

March Job Ads Anemic

ANZ says Job advertisements rose 0.3% m/m in March in seasonally adjusted terms, partially reversing the 0.8% fall in the previous month. Annual growth in job ads edged up to 7.0% from 6.9% in February.

Trend growth in job ads eased somewhat to 0.4% m/m in March after averaging 0.6% m/m growth over the last eight months. The annual trend rate firmed up in March and now stands at 6.8% y/y. Annual growth in Q1 2017 averaged 6.5% compared to 5.3% the previous quarter.

“It is encouraging to see an improvement in job ads in March, albeit modest, especially given the disappointing jobs report in February. While somewhat at odds with recent employment data, the improvement in job ads is consistent with other forward indicators such as our Labour Market Conditions Index and solid business conditions. As such, we continue to expect a gradual improvement in labour market conditions through 2017.

The labour market remains a key variable for the inflation and spending outlook. In recent times, persistently low inflation and a high degree of spare capacity have weighed on labour incomes. If weak income growth persists it may have implications for consumer spending given the already high levels of household debt and the rapid decrease in the household savings rate over the past two years. More recently, we note that our measure of households’ confidence in their future finances has fallen to its long term average. This could have implications for consumer spending, especially if income growth continues to be weak.”

ANZ Lifts Security on Mobile Devices with Voice Biometrics

ANZ today announced it will be the first Australian bank to introduce voice biometrics to improve security on mobile devices to allow higher value transactions.

From the middle of this year, customers transferring more than $1000 through ANZ’s mobile apps will be able to use their voice to automatically authorise high value payments. Previously customers needed to use internet banking or visit a branch to complete transactions more than $1000.

Managing Director Customer Experience and Digital Channels, Peter Dalton said: “One of the key challenges today for banking as the world becomes more digital is making it easier for customers to do what they want to do in a safe and secure way.

“Voice biometrics is the next step in making banking more convenient for our customers while also strengthening security.

“A person’s voice has five to ten times as many security points than other methods such as fingerprints so we know this will improve security and be welcomed by our customers. The technology is now so advanced that it can tell the difference between identical twins or even a voice recording.
“We also know that people are becoming more comfortable with using their voice to do basic commands on their devices, so we see this is a natural extension of current technology and we are expecting this to be a popular enhancement of our mobile apps,” Mr Dalton said.

ANZ has been working closely with world-leading voiceprint and biometrics company Nuance to bring this new technology to Australian customers. A pilot will begin with ANZ staff and select customers in May using the Grow by ANZ mobile app. The service will then be rolled out to ANZ goMoney and other digital services progressively.

ANZ Tweaks Mortgage Rates

ANZ today announced an update on variable home loan and business loan interest rates.

Principal and interest owner-occupier home lending

  • Variable interest rates for the 80% of owner-occupier borrowers who repay principal and interest on their standard variable home loan remain unchanged at 5.25%pa.

Investor home lending

  • The variable interest rate paid by property investors will increase by 0.25%pa from 5.60%pa to 5.85%pa effective 31 March.

Interest-only home lending

ANZ will introduce new variable interest rates for customers choosing to pay interest-only on their home loans.

  • New lending. From 22 April, variable interest rates for new investor and owner-occupier home loan customers who choose to repay interest-only will increase.

– Investor variable rate home loans (interest only) will increase by a further 0.11%pa from 5.85%pa to 5.96%pa.

– Owner-occupier variable rate home loans (interest only) will increase by 0.20%pa from 5.25%pa to 5.45%pa.

  • Existing lending. From late July, increases applied to new lending will apply to existing investor and owner-occupier variable home loan customers who choose to repay interest-only. ANZ will be writing to existing interest-only variable home loan customers from May to provide them with advance notice of the change and the option of switching to repay principal and interest on their loan at a lower interest rate without incurring a fee.

Business lending

  • For business borrowers, business variable rate indices will increase by 0.08%pa.

ANZ Group Executive Australia Fred Ohlsson said: “We are pleased to be in a position to keep rates unchanged for the 80% of owner-occupier home borrowers who pay principal and interest on their loan.

“This is a clear signal that we are open for business for Australians either looking to buy a home or looking for a better deal.

“The changes we are making in home lending affect investors and borrowers who only repay interest on their loan. These changes reflect a need to closely manage our regulatory obligations, our portfolio risk and the competitive environment.

“We recognise the day-to-day challenges that home-owners face with their house-hold budgets. We believe this is a balanced decision that reflects the range of regulatory and risk factors, and the pressures on family budgets.

“This is why we are providing our customers with interest-only home loans additional notice and the option to switch to repaying principal and interest to take advantage of the lower rate,” Mr Ohlsson said.

ASIC accepts enforceable undertakings from Westpac and ANZ to address inadequacies within their wholesale FX businesses

ASIC says it has today accepted enforceable undertakings (EUs) from Westpac Banking Corporation (Westpac) and Australia and New Zealand Banking Group Limited (ANZ) in relation to the banks’ wholesale foreign exchange (FX) businesses.

As a result of ASIC’s investigation, ASIC is concerned that between 1 January 2008 and 30 June 2013, both banks failed to ensure that their systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by ASIC.

ASIC Commissioner Cathie Armour said, ‘The foreign exchange market is a systemically important market that depends on all participants acting with integrity and fairness. ASIC is committed to ensuring that major financial institutions have the systems in place to ensure that financial services are provided fairly, honestly and efficiently.’

Westpac

ASIC identified the following conduct by employees of Westpac in its spot FX business between 1 January 2008 and 30 June 2013:

  • on several occasions, Westpac employees disclosed confidential details of pending client orders to external traders in the spot FX market, including on a few occasions identification of the client by use of code names;
  • on at least one occasion, a Westpac employee acted together with an external party to share confidential information and enter and cancel offers on a trading platform other than in the ordinary course of hedging or market making;
  • on several occasions, Westpac employees inappropriately received and/or disclosed confidential information about Westpac’s or another institution’s orders in the course of fix order management and execution;
  • on one occasion, a Westpac employee altered a proprietary position prior to the fix upon receipt of confidential and potentially material information in relation to other institutional fix orders; and
  • on at least one occasion, a Westpac employee inappropriately disclosed confidential Westpac fix order information to an external party to inform their joint personal account trading strategy.

ASIC is concerned that Westpac did not ensure that its systems, controls and supervision were adequate to prevent, detect and respond to such conduct, which had the potential to undermine confidence in the proper functioning and integrity of the market.

Under the EU, Westpac will develop a program of changes to its existing systems, controls, monitoring and supervision of employees within its spot FX business to prevent, detect and respond in relation to:

  • disclosure of confidential information to external market participants;
  • inappropriate order management and trading, including fix orders and the entry or cancellation of offers on an electronic trading platform other than in the ordinary course of hedging or market making activities; and
  • inappropriate personal trading.

The program and its implementation will be assessed by an independent consultant appointed by ASIC. The program will incorporate changes already made by Westpac as part of an existing review of its spot FX business.

Upon implementation of that program, for a period of three years, Westpac will provide to ASIC an annual attestation from a senior executive that the systems and controls in its spot FX business are appropriate and adequate to effectively prevent, detect and respond to specified matters. The program will also be subject to annual internal reviews and assessment by the independent consultant for a period of three years.

Westpac will also make a community benefit payment of $3 million to support the financial capability of vulnerable people including women experiencing family violence, the elderly and youth at risk.

ANZ

ASIC identified the following conduct by employees of ANZ in its spot FX business between 1 January 2008 and 30 June 2013:

  • on a number of occasions, ANZ employees disclosed specific confidential details of pending customer orders to external third parties including the identification of the customer through the use of code names;
  • on at least one occasion, a former ANZ spot FX trader exchanged with an external market participant confidential and potentially material information about other institutions’ customer flow or proprietary positions, including information concerning likely directional flow at the WM/R London 4pm fix, which was potentially inconsistent with a proper approach to market making or hedging. Following the receipt of such information, the ANZ trader acquired a proprietary position in a currency prior to the WM/R London 4pm fix; and
  • on a number of occasions, ANZ employees who were responsible for managing particular client orders traded in a manner which was potentially inconsistent with a proper approach to market making or hedging.

ASIC is concerned that ANZ did not ensure that its systems, controls and supervision were adequate to prevent, detect and respond to such conduct, which had the potential to undermine confidence in the proper functioning and integrity of the market.

Under the EU, ANZ will develop a program of changes to its existing systems, controls, training, guidance and framework for monitoring and supervision of employees in its spot FX and non-deliverable forwards businesses to prevent, detect and respond to:

  • disclosures of confidential customer and potentially material information; and
  • inappropriate order management and trading while in possession of confidential and potentially material information.

The program and its implementation will be assessed by an independent consultant appointed by ASIC. The program will incorporate changes already made by ANZ as part of ongoing reviews of its businesses.

Upon implementation of that program, for a period of three years, ANZ will provide to ASIC an annual attestation from its senior executives that the systems and controls in its spot FX and non-deliverable forwards businesses are appropriate and adequate to effectively manage conduct risks relating to specified matters. The program will also be subject to annual internal reviews and assessments by the independent consultant for a period of three years.

ANZ will also make a community benefit payment of $3 million to Financial Literacy Australia.

***********

ASIC encourages market participants to adhere to high standards of market practice, including those set out in the Global Code of Conduct for the Foreign Exchange Market, published by the Bank of International Settlements (BIS Global FX Code). The BIS Global FX Code provides a global set of practice guidelines to promote the integrity and effective functioning of the wholesale FX market. Phase 1 of the Code was published in May 2016, and Phase 2 is due for publication in May 2017.

ASIC is grateful for the assistance of our international regulatory counterparts in progressing our investigation, including the UK Financial Conduct Authority, the NZ Financial Markets Authority and the Monetary Authority of Singapore.

Background

Prior to accepting these EUs from ANZ and Westpac, ASIC’s FX investigation has seen ASIC accept enforceable undertakings from each of the National Australia Bank Limited and the Commonwealth Bank of Australia (refer: 16-455MR). The institutions also made voluntary contributions of $2.5 million each to fund independent financial literacy projects in Australia.

The wholesale spot FX market is an important financial market for Australia. It facilitates the exchange of one currency for another and thus allows market participants to buy and sell foreign currencies. As part of its spot FX business, Westpac and ANZ entered into different types of spot FX agreements with its clients, including Australian clients.

Spot FX refers to FX contracts involving the exchange of two currencies at a price (exchange rate) agreed on a date (the trade date), and which are usually settled two business days from the trade date.

Non-deliverable forwards refer to FX forward contracts which, at maturity, are settled by calculating the difference between the agreed forward rate and a settlement rate (which is usually determined by reference to a benchmark published exchange rate). A FX forward contract is an agreement between two counterparties to exchange currencies at a future date at a rate agreed upon in advance.

Tracker mortgages ‘commercially unattractive’: ANZ chief

From The Advisor

ANZ CEO Shayne Elliott has explained how the group “looked hard” at launching tracker mortgages before it realised they would not be popular among borrowers.

In his opening statement to the House of Representatives economics standing committee in Canberra yesterday, Mr Elliott explained that the bank had taken action on a number of issues since it last met with the committee, including lowering credit card rates and potentially introducing rate ‘tracker’ mortgages.

“We looked hard at launching tracker mortgages, but our research showed that only 10 per cent of variable rate customers today would think about switching to a tracker. In part, that reflects price; we cannot fund that bank with tracker deposits, and this risk needs to be priced for,” he said.

“Launching trackers would therefore be commercially unattractive in our view and make us even more complex. That said, we will continue to assess demand.”

The committee tabled its first report of the major banks in November, where it labelled the big four an “oligopoly” and highlighted the “surprising” lack of regulation that has allowed the majors to harness significant pricing power in the residential mortgage market.

The report noted that the majors increased their oligopolistic powers after the GFC when they purchased a number of their smaller competitors.

The committee recommends that the ACCC, or the proposed Australian Council for Competition Policy, establish a small team to make recommendations to the treasurer every six months to improve competition in the banking sector.

Mr Elliott said ANZ is happy with this recommendation. However, in his opening statement he did stress that Australia’s banking industry is already “highly competitive”.

“We believe the market is already highly competitive and serving customers well. For example, small banks are growing their share of the market faster than large banks,” he said.

“Banking is a low margin business because of competition, and that is good for customers. For example, competitive discounts on mortgages mean we make only 67 cents for every $100 that we lend.”

ANZ To Cut Some Credit Card Rates

ANZ has today announced it will reduce purchase interest rates on two credit cards by up to 2.00%pa, which is the lowest these rates have been for customers since 2003.

Effective Thursday 23 February, ANZ will reduce the purchase rate on its Low Rate Platinum card by 2.00%pa to 11.49%pa, and its Low Rate Classic card by 1.00%pa to 12.49%pa.

More than 500,000 existing ANZ Low Rate accounts will benefit from the new rates with the majority of those customers who pay interest every month to save about $150 a year.

Announcing the changes, Group Executive Australia Fred Ohlsson said: “Our customers with Low Rate accounts are typically middle income Australians who predominantly use their credit card for everyday household purchases, such as groceries.

“We’ve listened to customer feedback about credit card rates and decided our Low Rate customers would benefit most from a rate reduction as they are more likely to have ongoing debt from month to month. These changes mean they will have the best rate available from any of the major banks or any of the regional banks owned by the majors,” Mr Ohlsson said.

ANZ’s Low Rate Classic card also offers the lowest annual fee of the major banks for similar cards at $58, and has a minimum credit limit of $1000 making it accessible to a wide range of customers.

The Low Rate Platinum card has an annual fee of $99 and a minimum credit limit of $6000. It also comes with a range of insurances, including overseas travel and medical, and up to nine additional card holders at no extra cost. Both cards feature up to 55 interest free days on purchases.

Key crossbench senator Nick Xenophon welcomed the announcement, but said the banks needed to do more to address the cost of credit cards.

“The gap between the official cash rate and credit card rates has never been higher and I think that we really need to look at some form of either greater market competition, or the banks need to really explain themselves in gouging consumers in this way,” he told ABC TV on Sunday.

ANZ Trading Update – NIM Under Pressure

ANZ released their trading update for 3 months to 31 December 2016. Whilst the information is selective, and unaudited, we see growth in home lending supporting retail banking, along with deposit growth, but group net interest margin “declined several basis points” (not specified) and capital ratios down a little.  Cost management was a highlight. Disposal of “non-core” assets will help the result.  The credit environment is marginally better than expected, they say.

The unaudited results show a statutory net profit of $1.6 billion up 8% compared to the quarterly average of the second half of FY16. Cash Profit was $2.0 billion up 31% (Adjusted Proforma up 20%) benefited from a good performance in Australia and New Zealand Retail and in Institutional along with a lower provision charge and the sale of 100 Queen Street.

Profit before Provisions was up 17% (Adjusted Proforma up 9%). Revenue was up 7% (Adjusted Proforma up 4%), expenses down 4% (Adjusted Proforma down 1%) driven by current and prior period productivity initiatives and tight cost management. Total risk weighted assets (RWAs) rose from $409 bn in Sept 16 to $412 bn in Dec 16.

However Group Net Interest Margin (NIM) declined several basis points (bps) reflecting lower earnings on capital and higher funding costs driven by improving liability mix from strong deposit growth.

In Australia, home lending volumes grew, whilst commercial lending volumes were more subdued. Deposit growth was strong.

Institutional banking benefited from favourable trading conditions on the back of movements in the USD and yield curve.

Gross Impaired Assets increased 1.8%.

The Total Provision charge was $283 million with the Individual Provision (IP) charge $325 million. A Collective Provision release of $42 million was assisted by portfolio composition improvement and exposures transferring to IP. There were no changes to management overlays.

APRA Common Equity Tier 1 (CET1) ratio was 9.5% at 31 December, compared with 9.7% in June 16. Excluding the payment of the 2016 Final Dividend (net of the Dividend Reinvestment Plan), CET1 increased 40 bps in the first quarter, primarily driven by organic capital generation of 48 bps which is substantially stronger than the Post Basel III 1Q average of 21 bps.

There was no capital benefit from asset disposals in the quarter.

Strong deposit growth and solid progress with the Group’s term wholesale funding plan has contributed to a further improvement in the Group’s liquidity and funding position. The Group’s average Liquidity Coverage Ratio (LCR) for the quarter was 137% (proforma 132% if adjusted for the $6.5 billion reduction in the Committed Liquidity Facility effective January 2017). ANZ’s Net Stable Funding Ratio (NSFR) is estimated to be in excess of 108%.

The Basel III leverage ratio is 5.1%.

Since the start of FY2017, ANZ has signed agreements to sell its 20% stake in Shanghai Rural Commercial Bank (SRCB), the UDC Finance business in New Zealand and ANZ’s Retail and Wealth businesses in five Asian countries. The transactions are expected to complete in the second half of FY2017 and 1H2018 subject to regulatory approvals. For the purposes of comparison, if the earnings from the businesses being sold were to be excluded from Cash Profit performance for 1Q17 it would show an increase of 33% (+31% including).

In FY2016 a number of actions were classified as Specified Items which formed part of the Group’s Cash Profit. This classification assisted investors and analysts to look through the impact of strategic initiatives to determine underlying business performance trends and included the disposal of Esanda, restructuring charges, a write down of the valuation for the investment in AmBank, and accounting methodology changes. In 2017 the classification of Specified Items will be limited to the impact of disposals.

These transactions outlined above will boost ANZ’s APRA CET1 position by ~$2.7 billion or ~70bps upon completion further improving ANZ’s capital flexibility.

Here is ANZ CEO Shayne Elliott speaking to BlueNotes on video after the announcement.