In afternoon trade the Australia and New Zealand Banking Group (ASX: ANZ) share price has given back some of its morning gains but still sits higher by 0.6% at $23.83 on the day of its annual general meeting.
Here are a few takeaways from today's event:
It has been a confronting year for ANZ Bank.
Chairman, David Gonski AC, described 2018 as a "confronting year" for the bank. He also acknowledged that the Royal Commission highlighted conduct by ANZ which is of a "standard below what the community expects, and in some cases what the law requires." But Mr Gonski assured shareholders that the bank is taking action.
ANZ to be hit with first strike.
Hot on the heels of Westpac Banking Corp (ASX: WBC) last week and National Australia Bank Ltd (ASX: NAB) this morning, Mr Gonski advised that he expected ANZ Bank to be hit with a first strike against its remuneration report. At the time of his speech, 34% of shareholders had voted against the remuneration report. A first strike occurs if 25% of shareholders vote against it. In response to this he said: "The Board acknowledges the very real concerns of those who have voted against the report and I assure you we will continue to work hard in 2019 to ensure further alignment between compensation and shareholder interests."
Tough trading conditions aren't going away.
ANZ Bank's CEO Shayne Elliott warned that the market continues to face strong headwinds, particularly in Australian retail banking which is being impacted by falling house prices, increased competition, and higher compliance costs. While Mr Elliott doesn't see these trends changing any time soon and expects revenue growth to be tough, the bank is "focusing on growing share in the right markets, managing our costs tightly and strengthening our balance sheet."
ANZ Bank is well positioned to deal with RBNZ changes.
Late last week the Reserve Bank of New Zealand advised that it is looking into increasing its tier 1 minimum capital ratio from 8.5% to 16%. While Mr Elliott acknowledged that it is too early to know what will happen, he believes the bank's "simplification work and capital strength means we are in a good position to deal with any changes."
