ANZ chief Shayne Elliott: Banks can’t save everyone

ANZ’s chief has warned that the banking industry’s resources are finite and it can’t ‘save everybody’ from the COVID-19 fallout.

ANZ chief executive Shayne Elliott Picture: AAP

ANZ Bank chief executive Shayne Elliott has said the coronavirus pandemic is an opportunity for the banks to restore their reputations, but warned that the industry’s resources were ­finite and it could not “save everybody”.

In an interview on ABC Radio in Melbourne, Mr Elliott agreed that the banks would make “life-or-death decisions literally every hour of the day” for businesses, with the same principle applying to households.

“But we can’t oversimplify this and say the banks can save everyone,” he said. “We don’t have endless resources either.

“We have highly leveraged balance sheets because of the nature of what we do, and we have depositors to look after, too.

“So we have masses of cap­acity, but it’s not limitless.”

The banks have played a key role in hardship and assistance packages rolled out by the government in recent weeks.

The value of the stimulus so far is $189bn — equivalent to about 10 per cent of the nation’s gross domestic product.

ANZ said its support package, announced last Friday, had the potential to inject $6bn into the economy.

Like its major-bank rivals, the package added to industry initiatives, with a 25-basis-point reduction in variable small business interest rates and a 15-basis-point cut in variable mortgage rates.

Home loan and SME customers can ask for a deferral on loan repayments for up to six months.

“We have been working with both the federal government and our regulators to keep money flowing through the economy and we’ll do all we can to keep businesses afloat and Australians employed, as well as reducing the financial pressure on households,” Mr Elliott said at the time.

“Our decision to reduce variable home loan and small business rates is the right thing to do for our existing customers, particularly the significant number of our home loan customers who are self-employed and managing the effects of the COVID-19 crisis on their own businesses.”

As the big four banks get swamped by inquiries about a range of packages, the potential for a post-royal commission turnaround in the industry’s shattered reputation has not been lost on its participants.

At the same, one banker has said that the big four were ­“shovelling billions out the door” to try to keep the economy ­functioning.

“We have a real opportunity to stand up and play our role in what is going to be a very, very difficult time,” Mr Elliott said on radio.

Asked by a caller about the prospect of relief from punishing credit card interest rates, he said the industry’s focus so far had been on homeowners and small businesses.

The bank had $300bn in home loans, compared to only $7bn in credit card debt and personal loans.

Mr Elliott said he was “looking at all the alternatives in the coming days”, although he advised people against using their credit cards to pay for daily necessities such as groceries.

“We don’t want to encourage people to take on more debt and make things worse,” he said.