The Australia and New Zealand Banking Group (ASX: ANZ) share price is trading lower on the day of its annual general meeting.
At the time of writing the banking giant’s shares are down almost 0.5% to $24.95.
What is happening at the ANZ AGM?
At the event in Brisbane, the bank reminded investors of how it performed in FY 2019 and provided it with its expectations for the near future.
In FY 2019 ANZ delivered a statutory profit of $6 billion and a cash profit of $6.5 billion. This was a decline of 7% and flat, respectively, on the prior corresponding period. But thanks to its capital management initiatives, cash earnings per share grew 2% to 228 cents.
The bank also spoke about its dividend. Last month ANZ surprised the market by declaring a 70% franked final dividend of 80 cents per share.
Chairman David Gonski said: “Your board recognises how important the dividend, its franking and its predictability is to many shareholders. The decision to reduce franking to a new base for now was difficult but appropriate given the changing mix of our business.”
“As you would know, our ability to pay you franking credits relates only to the tax we pay Australia. We receive no franking benefit for Australian shareholders where we pay tax in other jurisdictions and the international nature of our business sees us making profits in Australia, New Zealand and elsewhere,” he explained.
ANZ’s CEO, Shayne Elliott, provided an update on its remediation.
He advised that the bank estimates that over 3.4 million retail and commercial bank accounts need fixing. Of the bank accounts that have been fixed, the average refund has been around $60.
Mr Elliott said: “No one is proud of the fact we need to remediate mistakes of the past but we are learning from our failures and strengthening the bank as a result. We’re teaching our people about what went wrong and how it affected our customers to ensure we don’t make these mistakes again.”
He also advised that the bank has reformed how it pays people to reduce incentive payments and better align it with its customers’ interests.
The bank’s chairman appears a touch cautious on the future.
Mr Gonski said: “While the Board is pleased with the progress we have made, we do expect challenging trading conditions for all banks to continue well into the foreseeable future. Competition will remain intense. Regulation continues to rise and we of course need to continue to work even faster fixing the failures of the past.”
However, the chairman is optimistic the company will be able to overcome this.
“Despite the tough conditions we are facing, your Board believes we remain well placed to navigate these challenges given the strong progress we have made in transforming our business. We have the right strategy and a strong balance sheet. Perhaps most importantly, we believe we have the right people in place to maximise our opportunities in this complex environment,” he added.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.