As a result, profit fell 12% to NZ$715 million, although New Zealand geographic performance was stronger because of a good performance in New Zealand Institutional.
Revenue growth was 4%. The key relationship businesses in Rural, Corporate and Commercial performed solidly. The Retail businesses however were impacted by higher credit provisions which increased significantly from the low levels experienced in 2007. Higher funding costs, including a squeeze in deposit margins, also impacted performance.
In this tougher environment, the Division focused on key investment initiatives, innovation and efficiency. Investments included expanding business opportunities in the fast growing Auckland market and in attractive customer segments such as private banking, migrants and Asian banking. It has also invested in upgrading key infrastructure (data and call centres, telecommunications, telling platforms) to position it for future growth. During the year the Bank introduced innovative deposit and credit card products and New Zealand’s first contactless payments card.
Costs rose 4%. A number of transformation initiatives commenced to drive efficiency. Tangible benefits have been delivered via Lean Six Sigma projects, benchmarking initiatives and procurement savings. A program to leverage ANZ’s technology and operations centre in Bangalore to gain greater scale and efficiency in back office operations also commenced.
During the year, strong staff engagement scores were maintained at 64%. Despite the impact of the weak New Zealand economy, ANZ has maintained the strong franchise position that was created following the acquisition of The National Bank of New Zealand in 2003 and is well positioned to participate in a recovery in the economy.
