Receive the latest mybusiness newssign up
Major bank admits it has grown too big
LIVE
Royal commission delves into SME lending practices – Live Coverage:

Major bank admits it has grown too big

Contrary to the “too big to fail” mantra, the head of one of Australia’s major banks has suggested that being too big is not a good thing, and announced plans to reduce the size of the business.

Fresh after the announcement that it would sell its life insurance business for a hefty $2.85 billion, ANZ chief Shayne Elliott said the sale formed part of a new strategy to “do a few things and do them very well”.

My Business’ sister publication Mortgage Business reports that Mr Elliott said the divestment was part of a simplification strategy as the big four bank aims to become “the best bank we can be for our customers”.

“In a fast-changing world, particularly with new technology and new disruptive competitors, we want to win by doing the very, very best thing for our customers and being totally focused on them,” he said.

“So, we said we should do a few things and do them really well. The best way to do that is partnering with the world’s best.”

According to Mr Elliott, ANZ did not achieve a “winning proposition” with some its peripheral businesses, and removing these will allow it to focus on its core operations.

“We want to be talking to customers, but we don’t want to be manufacturing product,” he said.

SPONSORED CONTENT

 

“We’ll be a slightly smaller company as a result, so we’ll have less capital out there and we’ll have slightly less earnings. But in terms of returns, the returns on that capital really don’t change the whole lot.

“So, it’s a kind of net-square from that perspective. But we believe that being slightly smaller but more focused ultimately is in the interests of our shareholders and our customers.”

Mr Elliott’s admission mirrors that – albeit on a much larger scale – to the experience of Sydney garden centre group Flower Power.

Earlier in the year, Flower Power’s CEO John Sammut told My Business in an exclusive interview how the rapid growth of the company actually became a detriment, with smaller stores “cannibalising” larger ones.

“We did find that once we did close the smaller sites down, they [had been] actually cannibalising some of our larger stores,” he said.

“The business went back to our larger stores where we were getting more average sales from those customers. They had more to offer and it just worked so much better for us.”

 

Major bank admits it has grown too big
mybusiness logo
promoted content