Our Performance
ANZ’s statutory profit after tax for the year ended 30 September 2010 was $4.5 billion, up 53% reflecting a strong performance across the bank and lower provisions. The final dividend of 74 cents per share is 32% higher than 2009 and will bring the total dividend for the year to 126 cents per share fully franked, an annual increase of 24%.
Taking into account one-off items such as acquisition costs and subsequent fair value adjustments, and hedging timing differences our underlying profit for 2010 was $5 billion, up 33%.
Revenue growth of 15% was solid while costs increased by 17% reflecting the integration of acquisitions and continued investment in growth. Provisions reduced by 41% to $1.8 billion reflecting the improved economic environment in Australia and New Zealand.
ANZ remains strongly capitalised with Tier 1 capital as at 30 September 2010 at 10.1% and Core Tier 1 of 8.0%. The Group is well placed to meet new capital standards being developed by the Basel Committee on Banking Supervision and the Australian Prudential Regulation Authority.
Expansion and Growth
During 2010, we continued to advance our super regional strategy through organic growth and acquisitions.
In March 2010, we acquired the Landmark Financial Services loan and deposit books from AWB bringing with it around $300 million in deposits and around $2.4 billion in lending. It has taken our Regional Commercial business in Australia to the number two market share position in agri-business.
We also completed the acquisition of the remaining 51% of the ANZ-ING wealth management and life insurance joint ventures in Australia and New Zealand that we did not already own. It was pleasing to see that the business performed strongly during the year.
In Asia, we completed the acquisition of businesses from the Royal Bank of Scotland in six countries in Asia. A number of key strategic milestones were also reached, including the establishment of a locally incorporated subsidiary in China, obtaining a qualifying full bank licence in Singapore and in-principle approval for a foreign bank licence in India.
Customers and the Community
During 2010, ANZ continued to deliver good outcomes for our customers and the community. This is significant given the expectations that shareholders and society have of successful banks.
In Australia, we were ranked number one for retail customer satisfaction while in Institutional we were rated number one for ‘lead domestic bank relationships’ in Australia and in New Zealand and we were named Bank of the Year by the Institute of Finance Professionals. We were also assessed the leading bank globally by the Dow Jones Sustainability Index for the fourth consecutive year.
Together with our financial performance, the good outcomes we have achieved for our customers and the community reflects the significant efforts of our management and staff and I thank them for their contribution.
This year we have provided an integrated view of how ANZ is managing financial and non-financial issues. This reflects how we think about our business and our commitment to growing responsibly.
By combining the Annual Shareholder Review and our Corporate Responsibility Review we have simplified our reporting and provided a more complete and balanced picture of our performance and results.
Board Changes and Outlook
Board Changes
Charles Goode retired in March 2010 after 18 years of distinguished service on the ANZ Board including 15 as our Chairman. Charles successfully oversaw an extraordinary period of change at ANZ and made an outstanding contribution to business and the community, not only in Australia, but in the Asia Pacific region.
Outlook
In 2011, we expect Asia, excluding Japan, to grow at around 8% compared to less than 3% in the US and Europe. Australia is expected to continue to perform well and in New Zealand the recovery is gathering momentum for 2011.
Nevertheless, there is continuing uncertainty in the global economic environment, particularly in the US and Europe where the recovery remains fragile. At the same time, all banks are facing higher funding costs and there are regulatory uncertainties associated with new capital and liquidity requirements.
Our super regional strategy positions us well but with global economic growth likely to continue to be soft over the medium term the environment remains challenging to navigate.
2010 has marked the 175th anniversary of ANZ’s establishment and we continue to grow and to strengthen the bank. We have a clear direction and our results this year highlight the momentum we have established. I believe we will continue to deliver value and performance for our shareholders, our customers and the community in 2011 and beyond.
John Morschel
CHAIRMAN