The major bank’s remediation costs dropped in the first half of 2021 in line with its positive performance, but the bill from its discontinued businesses continues to creep up.
In ANZ’s results presentation on Wednesday, the bank revealed it had spent $166 million on remediation in the first half of 2021, down from $254 million in the previous half.
However including its discontinued operations – the wealth businesses that were sold to IOOF in 2017 – ANZ had spent a total of $2.26 billion on remediation so far.
The bank flagged it had retained just over $1 billion in provisions on its balance sheet for forthcoming customer refunds, down from $1.1 billion in September last year.
ANZ noted it had reduced its headcount by around 13,000 full-time staff over five years as a result of divestments including the wealth businesses, in order to create “a more efficient and resilient bank”.
The big four bank saw its first-half profits increase dramatically on the back of the post-COVID recovery, with statutory net profit after tax for the first half of the 2021 year totalling $2.94 billion, up 45 per cent on the previous half as it released $491 million of credit provisions.
However the bank’s cash profit before credit impairments and tax was $3.94 billion, down 10 per cent on the previous half.
ANZ chief executive Shayne Elliott said work done at the bank in recent years to “simplify our operations, strengthen our balance sheet and de-risk the group” had helped ANZ deliver a strong result.
“Following the trends of the first quarter, all parts of our business performed well,” Mr Elliott said.
“Costs were down 2 per cent and we also increased investment in new digital capability that will provide ongoing productivity improvements and better customer outcomes.”
Mr Elliott added that ANZ was still “well-placed to continue to support the ongoing economic recovery and customers doing it tough” and had almost $4.3 billion in reserve if conditions deteriorated.
“Our disciplined approach to capital management also meant we could support customers through the COVID-19 pandemic without the need to dilute existing shareholders through equity raisings,” he said.
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