October 15, 2025 • 18 mins
ANZ’s new CEO Nuno Matos is moving fast to remake Australia’s fourth-largest bank. In just five months, he’s announced thousands of job cuts, paused a share buyback, and pledged to refocus on core lending and business banking — part of an aggressive push to simplify operations and rebuild investor and regulator trust.
Bloomberg finance editor Adam Haigh joins host Rebecca Jones to unpack what Matos’s overhaul means for ANZ’s strategy, shareholders, and staff. They discuss his plan to lift returns, repair relationships with regulators, and steer the bank through an increasingly competitive market.
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Speaker 1 (00:01):
Aan ZED has swung the ax, decilating as workforce in
an attempt to cut costs, and ZED is set to
pay a record fine after admitting to ripping off customers
and according to our financial regulator, the Federal government too.
We want to unlock the potential of this organization. We
want to win the preference of our customers, of our shareholders.
Speaker 2 (00:25):
Hello, I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast.
He's only been in the job for five months, but
new a and ZED CEO Nuno Mattos is wasting no
time in shaking things up. This week, Matos set out
his vision for rebooting Australia's fourth biggest bank. To help
me unpack what Matthos's plan means for Ayan Zed and
(00:48):
the broader Australian banking sector, I'm delighted to welcome back
Bloomberg Finance editor Adam Haig to the podcast. Adam, how
are you going? Yeah?
Speaker 3 (00:57):
Really good? Thanks great to be back now.
Speaker 2 (01:00):
And best of all, what is this Nuno Gidden term
I'm seeing bandied about everywhere.
Speaker 3 (01:06):
Yeah, so this is a kind of a slightly tongue
in cheek phrase that has got a bit of momentum,
and really it speaks to the onslaught that's really been
change at this bank since Mattos started in the job
in May. He hasn't hung around. He's really come at
it all guns blazing and is really impacting not just
(01:28):
kind of organizational change, but also trying to impact the culture.
He's trying to win back the hearts of regulators, He's
trying to win back shareholders who have been very dissatisfied
with underperformance for many years. So he's really come about
this this early few months of his time at the
Helm of aan Z with real impact.
Speaker 2 (01:47):
You mentioned sholders. Matos addressed those shareholders this week and
one of his big strategic changes was to pause Ayanzi's
share buy back. Instead, he's looking at plowing that cash
into new hires and system over hauls. Adam, what is
behind that decision.
Speaker 3 (02:05):
Well, really, pausing a buyback allows you to do something
else with that money for now, and that's really what
he's doing. He's telling investors, listen, I'm diverting away that
money and we're going to spend it on other things.
And really what we've heard from the basis of his
strategy day earlier in the week. Is that a lot
of that's going to be around cost cutting, It's going
(02:27):
to be around simplifying this bank, just getting ririd of
so much duplication that's been happening, especially in the retail
consumer part of the bank, and also investing in things
like technology and other areas of the bank, including some
new staff. And this is really what the halt of
(02:49):
the buyback's about. So we're not buying back any more shares,
but we're going to use the money over here instead
to redeploy some capital into some better areas of the
bank where he can see some real improvements.
Speaker 2 (03:00):
And he's really starting with people, right, I mean, he
wants to hire mortgage lenders and lift those business banking
staff numbers. But he's also making quite significant chops as well.
There's like some three and a half thousand roles that
are going some of those are in back office and tech,
and perhaps that's that duplication that you speak of. Is
(03:21):
this change from a people perspective a meaningful pivot for
aims it?
Speaker 3 (03:26):
I think it's. I think it's really quite huge. And
last month we got the announcement around the three thousand,
five hundred roles that would be cut, but also the
one thousand consultants that would no longer be used. And
if you think of that in the context of how
many people work for this bank across not just Australia
and New Zealand, but also in other parts of Asia.
(03:48):
You know they have more than forty thousand people. So
clearly this is a material change in cutting some staff
in those areas, but the areas where they're adding to
really tell tells you something about what Mattos thinks the
bank's been getting wrong. So he wants to hire more,
you know, mortgage lenders and business bankers, you know, frontline
(04:10):
people who are going to get him revenue. And I
think that's really where he's coming from. He's he's saying,
you know, we've been lagging in home loans, We've been
way behind the eight ball, and we shouldn't think about
just competing with Commonwealth Bank, the biggest bank. We should
think that there's plenty space in that pie for us
to be behaving and acting a lot better that we've
(04:31):
than we've been doing, offering customers one solution instead of
over the last few years where they've had different brands
to deal with you know, so he's really focusing minds
and he's saying, let's generate more revenue and spend the
time thinking about generating that revenue where we can, and
I think home loans and in the retail bank is
(04:51):
clearly one element of that. But the second part of
that is in the business and private bank. That's where
he sees kind of the wealth generation in Australia and
wealth management also an area of growth that he thinks
A and Z can take a bigger slice of.
Speaker 2 (05:09):
I want to talk a little bit about an ZI
share price now. Mattos's plan is to lift returns at
the bank to twelve percent by twenty twenty eight, which
is really not that far away, and by thirteen percent
by twenty thirty. In simple terms, what exactly do those
targets mean for people who hold A and Z shares?
Speaker 3 (05:31):
Well, Really, what he's trying to do is give you
a runway, give you a path, and show you that
over time he will be increasing the return on equity
that you get as a shareholder. So you know, this
kind of ten percent, ten and a bit percent where
Air and Z has been. He says it's too low.
(05:51):
He says, listen, we can get that up to twelve
that's going to take a few years, but then you know,
after that we can get up to thirteen percent. So
really what he's telling you is, over time, you can
get more bang for your buck by owning A and
Z shares and listen, this is how I'm going to
do it. He's outlined some of these areas where he's
going to improve things. So I think what this speaks
(06:11):
to really is the fact that A and Z shares
have underperformed the broader banking space in Australia for a
long time now, and he's trying to refocus minds with
these targets. And analysts particularly like targets because they're forecast,
they're targets and you can hold people account to them
if they don't get there. Now, that is one kind
(06:32):
of problem on the one hand, because if you don't
get there, then they can say, well, listen, you promised
us this and you didn't get us there. But also
if you're able to beat that, or if you're able
to get there quicker, it allows the management at A
and Z to say, well, listen, you know we're doing
all right against these targets. We're getting you there and
may even be getting you there quicker than you thought.
(06:54):
So it gives people a reference point to say, how
well is A and Z doing relative to its own history,
and how well is A and Z doing relative to
other banks that exist in this market as well. So
I think it makes sense. It's a prudent approach from Matos,
and indeed this is quite common in many other banks
around the world. So he's using some of the playbook
(07:17):
that he's learnt over his many years working at banks
around the world.
Speaker 2 (07:22):
And that leads nicely to my next question. You know, Adam,
what are the factors that are going to decide whether
or not Mathos can actually deliver on those targets? And
you know, frankly, why have the people that have come
before him failed to achieve this kind of level of return.
Speaker 3 (07:41):
Well, in many ways, his predecessors have fallen short for
a number of different reasons, and one of those is
around spending money in the wrong areas. And a lot
of the money that was wasted in a product like
A and Z Plus, which is like a kind of
a retail product, the app that people see when they
when they jump onto their ANZ banking. You know, a
(08:04):
lot of money's just been wasted in those kind of areas.
So he's trying to reposition the money that's being invested
into only investing in things that are that are more
certain that they're going to work. So he's trying to
remove that legacy of kind of investment that hasn't worked
in the past. But I think maybe more importantly is
this idea of the problems that anne Z has had
(08:26):
in with the regulators, and that's been a constant trouble
for previous CEOs, and especially the former CEO, Shane Elliott.
Last year it really kind of ended his legacy in
the final few months because you had some real issues
there which mainly focused on the institutional bank but also
impacted the retail bank as well. I think those are
(08:50):
quite key and repositioning the bank to be able to
get on the front foot now and put some of
those things behind him.
Speaker 2 (08:58):
You talked to investors in n as part of your
every day Adam. How is the street reading Mathos and
his new leadership bench. Is it signaling to you know,
the portfolding owne managers, the investment manager's credibility, or is
it raising questions about Mathos's local experience And also continuity
(09:21):
of service.
Speaker 3 (09:24):
Well, I think Beck, if you go back to Monday's
investor call, where Matos spent two hours addressing Q and
A from analysts, you get a sense of the tone
of what analysts were interested in asking him about. What
was that The bulk of the questions were all about costs.
It was how are you going to take out more
(09:46):
costs that will allow us to have a better performing
bank and therefore a better performing share price. And I
would say there is still a lot of skepticism around
whether he's done enough in that area. He's talked about
that the first year and the eight hundred million dollars
of cost savings that will will happen, but then given
(10:09):
kind of a little bit of leeway in terms of
future years as to what's going to happen there. So
I think there's a lot of skepticism still from a
cost perspective, there does seem to be, though, on the
other hand, a lot more optimism. Firstly, at the speed
at which he's moving. He's only been in the job
five months and he's already done a lot and a
lot of people are impressed with the speed of that.
(10:31):
And also, second to that, the fact that a lot
of the areas where he's identified that A and Z
is behind the pack. He's said, let's get up to
speed and start taking back market share there, and he's
laid that out very deliberately. So I think there is
some optimism within the analyst in investment community around there.
So I think on balance, and you can kind of
(10:54):
see this creeping through in the share price, is that
the share prices is outperforming local rivals at the moment,
and I think that does speak to people giving him
the benefit of the doubt that at the moment they
do think he can deliver something that will give them,
you know, something to want to continue to hold A
and Z shares in the future.
Speaker 2 (11:16):
When we come back, let's dig into the bank's regulatory
issues and whether or not Mathos will be able to
fix them. This is the Bloomberg Australia Podcast. Welcome back
to the Bloomberg Australia Podcast. You're here with me Rebecca Jones,
and I'm talking to Bloomberg Finance editor Adam Hague, who's
(11:37):
based in our Sydney newsroom. Today we're discussing the A
and ZED Strategy Day that happened on Monday. Adam ayan
z has had cause for reflection long before now, right
and you know, I'm of course talking about its rocky
relationship with Australian regulators. It was fine two hundred and
forty million Ossie dollars just last night for misconduct and
(12:01):
it is also facing an extra two hundred and fifty
million in a capital charge until its risk systems improve.
How significant are these regular tree headwinds for A and
z Adam? Are they keeping Metos up at night?
Speaker 3 (12:18):
I think to be honest, they have been one of
the key priorities that he has looked to address since
he started, and he's been quite public with how he's
been communicating with that. He's also been having a number
of behind closed door meetings with very senior regulators across
the banking regulator, the securities regulator, and the kind of
(12:39):
the network of regulators that oversee banks, which also of
course includes that the Central Bank. There is a Bank
of Australia as well. So he has from day one
been right on the forefront of trying to win them
back over Now, how far and how much he's achieved
so far, it's probably a little bit early to tell,
But what we can say is that the fine that
(13:02):
they agreed with the Australian Securities and Investment Commission last
month does draw a line in the sand under that
side of thing. So all the problems that that addressed
with the retail bank and the institutional bank and around
bond trading and data reporting, that largely kind of deals
(13:22):
with that. Now what still is ongoing is what you
spoke to is the additional capital charge that the banking
regulator still means they have to hold, and that is
an ongoing process, probably still multi year from here. Matos
did talk about it on Monday and said that would
be a number of years still to resolve. That's a
(13:43):
long running process. But what he's done is he's brought
in a new head of risk. He's reorganized compliance and
risk management positions across the entire group. So he's done
a material amount to try and address the yourganizational failures
at a risk and compliance level. And also one kind
(14:05):
of step below that is in their plans, their remediation
plans that they've handed to APRA. You know, they are
trying to say, you know, this is everything we're doing,
this is what we're changing. So I would say he
is somewhat over the hill. Now on that he is
on the on the downhill, he's got a bit of
(14:26):
momentum and that's working in his favor. But it's it's
not something that can change overnight. It's something that takes many,
many months and likely a few more years to resolve
as he tries to improve risk management.
Speaker 2 (14:41):
Did he get many questions on Monday's Analysts call about
these regulatory headwinds?
Speaker 3 (14:46):
Very few, and a very small amount of the call
was actually spent on this, which I was slightly surprised about.
But I think it tells you that, you know, there
are other things. There are bigger issues that this bank
has that people are that investors are interested in, and
risk management is just just one small.
Speaker 2 (15:04):
Part of that.
Speaker 1 (15:05):
Yeah.
Speaker 2 (15:05):
It's a really interesting contrast, isn't it, Because certainly A
and Z's regulatory woes have been dominating the domestic business
cycle avenues here in Australia. You see you see it
on the evening news and read about it in the newspapers.
Yet the analyst community is less interested, more interested in
conning the beans.
Speaker 3 (15:26):
Indeed.
Speaker 2 (15:27):
All said, though, investors do seem to like what they're
seeing right because an Z shares are up at last
check about twenty nine percent this year, and that's more
than triple the broader ASX two hundred, Adam, is this
rally sustainable?
Speaker 1 (15:44):
Well?
Speaker 3 (15:44):
Time will tell I certainly don't have a crystal ballback
to tell you that, but I think what Matos would say.
You know, he's outlined enough of a plan and he's
given people enough of a detail for them to make
the assessment that if they believe him, and if they
have in what he's doing, then indeed the share price
can continue to appreciate fairly meaningfully in the coming months
(16:07):
and years. Now, how it does relative to other banks
and relative to the broader Australian stock market is kind
of you know, that's that's the key question, really, like
is there enough there in this plan and will he
be able to execute it and to keep this rally going?
As I said earlier, you know, early signs are investors
are prepared to give him the benefit of the doubt,
(16:29):
and I think that's why you're seeing this outperformance currently
and certainly over the first five months of his tenure,
but into next year. And you know, with many of
the other banks also making lots of changes and improving
how they're doing business. It's an incredibly competitive landscape still
so very difficult to tell whether A and Zed, you know,
(16:49):
for example, in home loans, will they really be able
to get back that market share that they've they've let
go over recent years and will they be come back
be able to come back as a real fighting force
in Australia banking.
Speaker 1 (17:01):
Adam.
Speaker 2 (17:02):
Finally, if you were going to create a slogan for Matos,
given what we know about his desire to pump in
business bankers into branches all over Australia, what do you
reckon it would be old school banking for a new era.
Speaker 3 (17:17):
Back to basics. I'd say, you know, something as simple
and as bland as that. He doesn't want fireworks. He
doesn't want anything, you know, too exciting. He's saying, let's
just get back to doing good old school banking that
we that we know we're good at, and let's invest
in those areas. So let's get our mortgage book built up. Let's,
(17:38):
you know, focus on the areas that we know we're
good at and that we haven't performed well in. That's
where we can do can do better. He doesn't want
to build a bank that's suddenly going in to do
all sorts of esoteric areas. He wants a very simple
bar leaner and more simpler bank that can just do
the basics really well. And I think that's really the
(17:59):
strategy that laid out.
Speaker 2 (18:01):
And we'll be following along from here in the bureau.
Adam Haig, thank you for joining me.
Speaker 3 (18:06):
Thanks a lot.
Speaker 2 (18:08):
If you found today's conversation insightful, be sure to follow
the Bloomberg Australia Podcast wherever you listen, and check for
more reading on Australia's banking industry, including the latest reporting
from Adam Hague on Bloomberg dot com. This episode was
recorded on the traditional lands of the Warwundery and Gadigall People.
It was produced by Paul Allen and edited by Chris
(18:28):
Burke and Ainsley Chandler. I'm Rebecca Jones and I'll see
you next week.
Aan ZED has swung the ax, decilating as workforce in
an attempt to cut costs, and ZED is set to
pay a record fine after admitting to ripping off customers
and according to our financial regulator, the Federal government too.
We want to unlock the potential of this organization. We
want to win the preference of our customers, of our shareholders.
Speaker 2 (00:25):
Hello, I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast.
He's only been in the job for five months, but
new a and ZED CEO Nuno Mattos is wasting no
time in shaking things up. This week, Matos set out
his vision for rebooting Australia's fourth biggest bank. To help
me unpack what Matthos's plan means for Ayan Zed and
(00:48):
the broader Australian banking sector, I'm delighted to welcome back
Bloomberg Finance editor Adam Haig to the podcast. Adam, how
are you going? Yeah?
Speaker 3 (00:57):
Really good? Thanks great to be back now.
Speaker 2 (01:00):
And best of all, what is this Nuno Gidden term
I'm seeing bandied about everywhere.
Speaker 3 (01:06):
Yeah, so this is a kind of a slightly tongue
in cheek phrase that has got a bit of momentum,
and really it speaks to the onslaught that's really been
change at this bank since Mattos started in the job
in May. He hasn't hung around. He's really come at
it all guns blazing and is really impacting not just
(01:28):
kind of organizational change, but also trying to impact the culture.
He's trying to win back the hearts of regulators, He's
trying to win back shareholders who have been very dissatisfied
with underperformance for many years. So he's really come about
this this early few months of his time at the
Helm of aan Z with real impact.
Speaker 2 (01:47):
You mentioned sholders. Matos addressed those shareholders this week and
one of his big strategic changes was to pause Ayanzi's
share buy back. Instead, he's looking at plowing that cash
into new hires and system over hauls. Adam, what is
behind that decision.
Speaker 3 (02:05):
Well, really, pausing a buyback allows you to do something
else with that money for now, and that's really what
he's doing. He's telling investors, listen, I'm diverting away that
money and we're going to spend it on other things.
And really what we've heard from the basis of his
strategy day earlier in the week. Is that a lot
of that's going to be around cost cutting, It's going
(02:27):
to be around simplifying this bank, just getting ririd of
so much duplication that's been happening, especially in the retail
consumer part of the bank, and also investing in things
like technology and other areas of the bank, including some
new staff. And this is really what the halt of
(02:49):
the buyback's about. So we're not buying back any more shares,
but we're going to use the money over here instead
to redeploy some capital into some better areas of the
bank where he can see some real improvements.
Speaker 2 (03:00):
And he's really starting with people, right, I mean, he
wants to hire mortgage lenders and lift those business banking
staff numbers. But he's also making quite significant chops as well.
There's like some three and a half thousand roles that
are going some of those are in back office and tech,
and perhaps that's that duplication that you speak of. Is
(03:21):
this change from a people perspective a meaningful pivot for
aims it?
Speaker 3 (03:26):
I think it's. I think it's really quite huge. And
last month we got the announcement around the three thousand,
five hundred roles that would be cut, but also the
one thousand consultants that would no longer be used. And
if you think of that in the context of how
many people work for this bank across not just Australia
and New Zealand, but also in other parts of Asia.
(03:48):
You know they have more than forty thousand people. So
clearly this is a material change in cutting some staff
in those areas, but the areas where they're adding to
really tell tells you something about what Mattos thinks the
bank's been getting wrong. So he wants to hire more,
you know, mortgage lenders and business bankers, you know, frontline
(04:10):
people who are going to get him revenue. And I
think that's really where he's coming from. He's he's saying,
you know, we've been lagging in home loans, We've been
way behind the eight ball, and we shouldn't think about
just competing with Commonwealth Bank, the biggest bank. We should
think that there's plenty space in that pie for us
to be behaving and acting a lot better that we've
(04:31):
than we've been doing, offering customers one solution instead of
over the last few years where they've had different brands
to deal with you know, so he's really focusing minds
and he's saying, let's generate more revenue and spend the
time thinking about generating that revenue where we can, and
I think home loans and in the retail bank is
(04:51):
clearly one element of that. But the second part of
that is in the business and private bank. That's where
he sees kind of the wealth generation in Australia and
wealth management also an area of growth that he thinks
A and Z can take a bigger slice of.
Speaker 2 (05:09):
I want to talk a little bit about an ZI
share price now. Mattos's plan is to lift returns at
the bank to twelve percent by twenty twenty eight, which
is really not that far away, and by thirteen percent
by twenty thirty. In simple terms, what exactly do those
targets mean for people who hold A and Z shares?
Speaker 3 (05:31):
Well, Really, what he's trying to do is give you
a runway, give you a path, and show you that
over time he will be increasing the return on equity
that you get as a shareholder. So you know, this
kind of ten percent, ten and a bit percent where
Air and Z has been. He says it's too low.
(05:51):
He says, listen, we can get that up to twelve
that's going to take a few years, but then you know,
after that we can get up to thirteen percent. So
really what he's telling you is, over time, you can
get more bang for your buck by owning A and
Z shares and listen, this is how I'm going to
do it. He's outlined some of these areas where he's
going to improve things. So I think what this speaks
(06:11):
to really is the fact that A and Z shares
have underperformed the broader banking space in Australia for a
long time now, and he's trying to refocus minds with
these targets. And analysts particularly like targets because they're forecast,
they're targets and you can hold people account to them
if they don't get there. Now, that is one kind
(06:32):
of problem on the one hand, because if you don't
get there, then they can say, well, listen, you promised
us this and you didn't get us there. But also
if you're able to beat that, or if you're able
to get there quicker, it allows the management at A
and Z to say, well, listen, you know we're doing
all right against these targets. We're getting you there and
may even be getting you there quicker than you thought.
(06:54):
So it gives people a reference point to say, how
well is A and Z doing relative to its own history,
and how well is A and Z doing relative to
other banks that exist in this market as well. So
I think it makes sense. It's a prudent approach from Matos,
and indeed this is quite common in many other banks
around the world. So he's using some of the playbook
(07:17):
that he's learnt over his many years working at banks
around the world.
Speaker 2 (07:22):
And that leads nicely to my next question. You know, Adam,
what are the factors that are going to decide whether
or not Mathos can actually deliver on those targets? And
you know, frankly, why have the people that have come
before him failed to achieve this kind of level of return.
Speaker 3 (07:41):
Well, in many ways, his predecessors have fallen short for
a number of different reasons, and one of those is
around spending money in the wrong areas. And a lot
of the money that was wasted in a product like
A and Z Plus, which is like a kind of
a retail product, the app that people see when they
when they jump onto their ANZ banking. You know, a
(08:04):
lot of money's just been wasted in those kind of areas.
So he's trying to reposition the money that's being invested
into only investing in things that are that are more
certain that they're going to work. So he's trying to
remove that legacy of kind of investment that hasn't worked
in the past. But I think maybe more importantly is
this idea of the problems that anne Z has had
(08:26):
in with the regulators, and that's been a constant trouble
for previous CEOs, and especially the former CEO, Shane Elliott.
Last year it really kind of ended his legacy in
the final few months because you had some real issues
there which mainly focused on the institutional bank but also
impacted the retail bank as well. I think those are
(08:50):
quite key and repositioning the bank to be able to
get on the front foot now and put some of
those things behind him.
Speaker 2 (08:58):
You talked to investors in n as part of your
every day Adam. How is the street reading Mathos and
his new leadership bench. Is it signaling to you know,
the portfolding owne managers, the investment manager's credibility, or is
it raising questions about Mathos's local experience And also continuity
(09:21):
of service.
Speaker 3 (09:24):
Well, I think Beck, if you go back to Monday's
investor call, where Matos spent two hours addressing Q and
A from analysts, you get a sense of the tone
of what analysts were interested in asking him about. What
was that The bulk of the questions were all about costs.
It was how are you going to take out more
(09:46):
costs that will allow us to have a better performing
bank and therefore a better performing share price. And I
would say there is still a lot of skepticism around
whether he's done enough in that area. He's talked about
that the first year and the eight hundred million dollars
of cost savings that will will happen, but then given
(10:09):
kind of a little bit of leeway in terms of
future years as to what's going to happen there. So
I think there's a lot of skepticism still from a
cost perspective, there does seem to be, though, on the
other hand, a lot more optimism. Firstly, at the speed
at which he's moving. He's only been in the job
five months and he's already done a lot and a
lot of people are impressed with the speed of that.
(10:31):
And also, second to that, the fact that a lot
of the areas where he's identified that A and Z
is behind the pack. He's said, let's get up to
speed and start taking back market share there, and he's
laid that out very deliberately. So I think there is
some optimism within the analyst in investment community around there.
So I think on balance, and you can kind of
(10:54):
see this creeping through in the share price, is that
the share prices is outperforming local rivals at the moment,
and I think that does speak to people giving him
the benefit of the doubt that at the moment they
do think he can deliver something that will give them,
you know, something to want to continue to hold A
and Z shares in the future.
Speaker 2 (11:16):
When we come back, let's dig into the bank's regulatory
issues and whether or not Mathos will be able to
fix them. This is the Bloomberg Australia Podcast. Welcome back
to the Bloomberg Australia Podcast. You're here with me Rebecca Jones,
and I'm talking to Bloomberg Finance editor Adam Hague, who's
(11:37):
based in our Sydney newsroom. Today we're discussing the A
and ZED Strategy Day that happened on Monday. Adam ayan
z has had cause for reflection long before now, right
and you know, I'm of course talking about its rocky
relationship with Australian regulators. It was fine two hundred and
forty million Ossie dollars just last night for misconduct and
(12:01):
it is also facing an extra two hundred and fifty
million in a capital charge until its risk systems improve.
How significant are these regular tree headwinds for A and
z Adam? Are they keeping Metos up at night?
Speaker 3 (12:18):
I think to be honest, they have been one of
the key priorities that he has looked to address since
he started, and he's been quite public with how he's
been communicating with that. He's also been having a number
of behind closed door meetings with very senior regulators across
the banking regulator, the securities regulator, and the kind of
(12:39):
the network of regulators that oversee banks, which also of
course includes that the Central Bank. There is a Bank
of Australia as well. So he has from day one
been right on the forefront of trying to win them
back over Now, how far and how much he's achieved
so far, it's probably a little bit early to tell,
But what we can say is that the fine that
(13:02):
they agreed with the Australian Securities and Investment Commission last
month does draw a line in the sand under that
side of thing. So all the problems that that addressed
with the retail bank and the institutional bank and around
bond trading and data reporting, that largely kind of deals
(13:22):
with that. Now what still is ongoing is what you
spoke to is the additional capital charge that the banking
regulator still means they have to hold, and that is
an ongoing process, probably still multi year from here. Matos
did talk about it on Monday and said that would
be a number of years still to resolve. That's a
(13:43):
long running process. But what he's done is he's brought
in a new head of risk. He's reorganized compliance and
risk management positions across the entire group. So he's done
a material amount to try and address the yourganizational failures
at a risk and compliance level. And also one kind
(14:05):
of step below that is in their plans, their remediation
plans that they've handed to APRA. You know, they are
trying to say, you know, this is everything we're doing,
this is what we're changing. So I would say he
is somewhat over the hill. Now on that he is
on the on the downhill, he's got a bit of
(14:26):
momentum and that's working in his favor. But it's it's
not something that can change overnight. It's something that takes many,
many months and likely a few more years to resolve
as he tries to improve risk management.
Speaker 2 (14:41):
Did he get many questions on Monday's Analysts call about
these regulatory headwinds?
Speaker 3 (14:46):
Very few, and a very small amount of the call
was actually spent on this, which I was slightly surprised about.
But I think it tells you that, you know, there
are other things. There are bigger issues that this bank
has that people are that investors are interested in, and
risk management is just just one small.
Speaker 2 (15:04):
Part of that.
Speaker 1 (15:05):
Yeah.
Speaker 2 (15:05):
It's a really interesting contrast, isn't it, Because certainly A
and Z's regulatory woes have been dominating the domestic business
cycle avenues here in Australia. You see you see it
on the evening news and read about it in the newspapers.
Yet the analyst community is less interested, more interested in
conning the beans.
Speaker 3 (15:26):
Indeed.
Speaker 2 (15:27):
All said, though, investors do seem to like what they're
seeing right because an Z shares are up at last
check about twenty nine percent this year, and that's more
than triple the broader ASX two hundred, Adam, is this
rally sustainable?
Speaker 1 (15:44):
Well?
Speaker 3 (15:44):
Time will tell I certainly don't have a crystal ballback
to tell you that, but I think what Matos would say.
You know, he's outlined enough of a plan and he's
given people enough of a detail for them to make
the assessment that if they believe him, and if they
have in what he's doing, then indeed the share price
can continue to appreciate fairly meaningfully in the coming months
(16:07):
and years. Now, how it does relative to other banks
and relative to the broader Australian stock market is kind
of you know, that's that's the key question, really, like
is there enough there in this plan and will he
be able to execute it and to keep this rally going?
As I said earlier, you know, early signs are investors
are prepared to give him the benefit of the doubt,
(16:29):
and I think that's why you're seeing this outperformance currently
and certainly over the first five months of his tenure,
but into next year. And you know, with many of
the other banks also making lots of changes and improving
how they're doing business. It's an incredibly competitive landscape still
so very difficult to tell whether A and Zed, you know,
(16:49):
for example, in home loans, will they really be able
to get back that market share that they've they've let
go over recent years and will they be come back
be able to come back as a real fighting force
in Australia banking.
Speaker 1 (17:01):
Adam.
Speaker 2 (17:02):
Finally, if you were going to create a slogan for Matos,
given what we know about his desire to pump in
business bankers into branches all over Australia, what do you
reckon it would be old school banking for a new era.
Speaker 3 (17:17):
Back to basics. I'd say, you know, something as simple
and as bland as that. He doesn't want fireworks. He
doesn't want anything, you know, too exciting. He's saying, let's
just get back to doing good old school banking that
we that we know we're good at, and let's invest
in those areas. So let's get our mortgage book built up. Let's,
(17:38):
you know, focus on the areas that we know we're
good at and that we haven't performed well in. That's
where we can do can do better. He doesn't want
to build a bank that's suddenly going in to do
all sorts of esoteric areas. He wants a very simple
bar leaner and more simpler bank that can just do
the basics really well. And I think that's really the
(17:59):
strategy that laid out.
Speaker 2 (18:01):
And we'll be following along from here in the bureau.
Adam Haig, thank you for joining me.
Speaker 3 (18:06):
Thanks a lot.
Speaker 2 (18:08):
If you found today's conversation insightful, be sure to follow
the Bloomberg Australia Podcast wherever you listen, and check for
more reading on Australia's banking industry, including the latest reporting
from Adam Hague on Bloomberg dot com. This episode was
recorded on the traditional lands of the Warwundery and Gadigall People.
It was produced by Paul Allen and edited by Chris
(18:28):
Burke and Ainsley Chandler. I'm Rebecca Jones and I'll see
you next week.
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