2008 Shareholder Review
Chairman’s Report - Video Script
Thank you for joining me for ANZ’s 2008 Shareholder Review video.
My name is Charles Goode and I am the Chairman of ANZ.
This is the first time we have produced the review in a video format for the internet.
As more shareholders use anz.com for information, I hope you will find this a useful addition to the resources we provide to you about your company.
2008 was a challenging year for banking globally and for ANZ.
ANZ has managed to weather the situation reasonably well and we have maintained our dividend which is covered by profits.
Our underlying business performance was good, however the turmoil in global financial markets and the change in the economic cycle in Australia and New Zealand impacted our results.
Profit after tax was $3,319 million, down 21%. Cash profit was $3,029 million, down 23%.
We absorbed a significant increase in provisions for credit impairment. Provisions totalled $1.9 billion, up $1.4 billion from the very low levels we experienced in 2007.
During the year, a number of deficiencies in processes and controls in our Institutional Division were identified and remedial action is underway.
We kept shareholders informed as these issues emerged through trading updates during the year.
While the global economic outlook is uncertain, we have a clear strategy and the confidence to plan positively for the future.
Importantly, our businesses remain strong and our dividend was maintained for the year at 136 cents per share, fully franked.
The results, while not what we planned, were a solid achievement in a time when many other banks in the world have faced unprecedented difficulty.
Our underlying performance in 2008 across the Group reinforces that ANZ has a good foundation on which to build.
Personal and Asia Pacific delivered strong results. New Zealand’s results were achieved in a weak economic environment and in our global Institutional Division, there is a two-year turnaround program underway.
During the year, we have made a number of senior management appointments and we now have, in my opinion, the most experienced leadership team of bankers in Australia.
Christopher Page joined from HSBC and was appointed Chief Risk Officer.
Margaret Payn was appointed to lead Strategy & Marketing and focus on strategic productivity improvements across the Bank.
Numerous appointments were made in the Asia Pacific Division led by Alex Thursby.
We are addressing a backlog of expenditure in our technology and systems.
I’m pleased to report that ANZ is well capitalised and in a strong liquidity position, consistent with our AA credit rating.
Financial stability and strength is more important in banking than it has ever been.
During 2008 we took the opportunity with the Interim and Final Dividend to improve our capital position by offering a discount of 1.5% under our Dividend Reinvestment Plan and having it underwritten.
Looking ahead, the coordinated action by governments and regulators is providing stability to the global financial system.
However, economic growth will be much softer in 2009.
The underlying performance of our business and our strategic focus on Asia, however, provides the foundation for us to go forward in this uncertain environment and deliver acceptable returns for shareholders over the long term.
Thank you for listening to me.
I’d like to wish all our shareholders the season’s greetings and thank you for your support during the year.
