ANZ Group has decided to halt its remaining A$800m ($517.6m) share buyback programme, choosing to allocate these funds towards a comprehensive revamp of its business strategy.
The move comes as the bank aims to maintain its dividend while implementing cost-saving measures and seeking to improve market competitiveness.
ANZ has revealed plans to achieve A$800m in cost savings before tax during the current financial year.
These savings are expected to arise from a combination of job reductions already announced, internal team restructuring, and the exit from non-core businesses, including the online shopping platform Cashrewards.
The bank has revised its expectations, now forecasting to double the annual cost savings from the acquisition of Suncorp Bank to A$500m, reported Reuters.
Its CEO Nuno Matos said in an investor briefing: “The opportunities to rationalise the company in the first year are so obvious.
“With a clear strategy, strong leadership and this simple execution, we are well placed to deliver meaningful value for our shareholders.”
ANZ is setting its sights on a 12% return on tangible equity by 2028, an improvement from the 10.3% achieved in the last year, with aspirations to reach 13% by 2030.
Part of the bank’s strategy to regain market share includes a proposal to boost its mortgage and business banking staff by as much as 50% in each division.
The bank is also planning to lessen its dependence on mortgage brokers and intends to directly issue more loans to enhance its home lending revenue.
The bank said that its Business & Private Bank division is expected to see a near 50% increase in its banking team, with the support of a new Commercial Bankers Academy and tools and systems to raise banker productivity.
ANZ is also planning to enhance its services to the middle-market segment with Transactive Global and to introduce the ANZ Plus front-end to small business customers.
ANZ sees growth potential in its Private Bank, which currently serves 17,500 customers. The bank plans to expand its relationship manager teams and capitalise on its initiatives within the mass affluent segment of the Australia Retail.
Investment will continue in the bank’s Transaction Banking and Markets platforms, with a focus on enhancing its position in payments, market flow products, and cash management, in New Zealand and Australia, and extending these capabilities internationally.
Last month, ANZ announced a reduction of 3,500 jobs, incurring a cost of A$560m. The bank also incurred an A$240m penalty for regulatory breaches in its government bond and retail banking operations.
Reuters reported that in May 2024, ANZ had initiated a new A$2bn share buyback but had only completed A$1.2bn in share repurchases before the latest announcement to discontinue the buyback.
