ANZ has unveiled a seven-point, four-year action plan
and aims to achieve at least 10 percent annual profit growth in its
Australian retail banking division. and also to raise its mortgage
and deposits market shares. Overall, the target is to become the
second-largest retail player in Australia, says Douglas

ANZ, Australia’s third-largest banking group by assets, is
aiming to increase profits in its retail banking division more
quickly than its local rivals, and has targeted an earnings CAGR of
at least 10 percent until 2010.

“We would describe that as an aspirational target,” Brian Hartzer,
group managing director of ANZ’s personal division, told analysts
at an investor briefing on 19 September.

While ANZ has been the most enthusiastic of Australia’s Big Four
banks in expanding overseas – such as investing in its priority
markets of China, India, Indonesia, Malaysia, Vietnam, Philippines
and Thailand – the bank remains committed to establishing itself as
the second-largest retail bank in Australia, behind Commonwealth
Bank of Australia.

ANZ is aiming to increase its mortgage market share in its domestic
market by 1 percent as well as achieving a 14 percent market share
of deposits.

The analyst presentation included the release of a seven-point
action plan that commits the bank to making itself more accessible
to customers, together with plans to simplify its retail banking
products and fees. The seven points are:

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• more ATM locations than major rivals;

• seven-days-per-week full service banking available in every
capital city and selected regional areas;

• 50 new Local Link agencies in rural towns;

• a dedicated specialist small business banker available in every

• offering a personal banking service, initially across
metropolitan Australia;

• 24/7 internet support; and

• an online internet banking guarantee.

The release of ANZ’s new retail strategy, designed to promote its
‘Australia’s most convenient bank’ tagline, follows announcements
in recent weeks by a number of its rivals of similarly ambitious
retail expansion plans. St George, Australia’s fifth-largest bank,
announced plans to expand into Western Australia. In July,
BankWest, which is owned by the UK’s HBOS and is the country’s
sixth-largest bank, said it would open more than 160 new branches
across key Australian markets in an effort to break the dominance
of the Big Four. And in August, Commonwealth Bank of Australia
unveiled the first of its new branches designed under its Branch
Experience Program.

“There is no question that competition is getting tougher. There is
still much more to do for our customers and it’s time to raise the
bar and extend our point of difference,” added Hartzer, who was
nominated as one of RBI’s Retail Bankers of the Year in

Beating analyst forecasts

ANZ’s first-half profits for 2007 of A$2.1 billion ($1.74 billion)
beat analyst forecasts. The personal banking division profit rose
21.6 percent on revenue growth of 14.4 percent.

In areas such as credit cards, ANZ has led the domestic market with
innovations, including personalised cards, prepaid foreign currency
travel cards, Visa debit cards targeted at the young adult market,
gift cards and a three-party card scheme. An extensive cards
marketing campaign over the last year, which highlighted the
service and security factors in ANZ’s card offerings, has paid off
for the bank, which now reports a 20 percent consumer cards market

A focus on improving its customer satisfaction levels has also
proved to be successful. ANZ now claims to have the highest level
among the Big Four Australian banks in personal banking and cards


Although the current global credit crunch is costing ANZ around
A$20 million in revenue each month, Hartzer told analysts that the
bank had a strong retail deposit franchise and suggested that ANZ
would cut rates on some of its products as soon as conditions in
the credit markets improve. “We are now Australia’s most convenient
bank and we are committing to build on this over the next three
years by making the investments needed to extend our point of
difference with a focus on the things customers tell us matter to
them: convenience, simplicity and responsibility,” Hartzer


Long-runninig competition

ANZ’s long-running competition with Westpac –
traditionally ANZ’s closest rival in terms of retail banking market
share – received a boost in September with the award by the Dow
Jones Sustainability Index (DJSI) of the accolade as the world’s
most sustainable bank (see RBI 578), following five
successive years when the award was given to Westpac.

ANZ has already rolled out a marketing campaign that centres around
being a global sector leader in the DJSI, and also knocks Westpac.
Adverts feature the message “Guess who’s now the world’s most
responsible bank”, perhaps the most direct use to date of a bank’s
socially responsible credentials in its marketing efforts.