Shayne Elliott defends ANZ Bank profits at parliamentary inquiry

The CEO has told a parliamentary hearing ANZ’s “large” profit is only a fraction of its total assets.

“We have no issue with a banking tribunal,” Mr Elliott said. Picture: Kym Smith/AAP

ANZ chief executive Shayne Elliott has defended bank profits at a parliamentary hearing in which he again apologised for conduct by the bank that hurt its customers over the past decade.

“In truth we have not met all the standards we have set for ourselves and the community expects,” he said, noting issues in its wealth division, financial planning, the Landmark rural loan book it purchased from AWB and its loans to the collapsed Timbercorp.

Mr Elliott said public scrutiny was a “fair part of the process” given the importance of the banks to the local economy.

He did, however, defend the billions of dollars in profits regularly made by the big four, noting that while ANZ’s profit was “large” it is only a fraction of total assets and comparative returns have been weakening.

“Returns in Australian banking are trending lower,” he said.

“Traditional competition is intense and has seen the margins halve over last 20 years.”

The challenges in the sector that are crimping margins means shareholders have not reaped great benefits since the GFC.

“ANZ shareholders have received an average annual return of a little over 9 per cent in the past 10 years and saw losses in four of those years. So shareholders have not always won,” he said.

Mr Elliott was fronting up in Canberra following the grilling of Commonwealth Bank boss Ian Narev yesterday, with the heads of National Australia Bank and Westpac due to appear tomorrow.

It comes amid a populist Labor push for a royal commission into the banks, while the Turnbull Government is hoping the interrogations will lead to a new tribunal to properly assess customer complaints.

“We have no issue with a banking tribunal,” Mr Elliott said in response to the Liberal proposal.

The banks are under pressure amid a series of financial planning scandals, alleged rate rigging, perceptions of a male-dominated, greed-driven culture, decisions not to pass rate cuts on in full and excessive card fees.

“The rates we offer are our main competitive weapon,” Mr Elliott said on the decision not to pass on RBA rate cuts in full.

He added the RBA cash rate was only “one ingredient” in its costs and decisions needed to be competitive against rivals while offering a “fair return” for depositors and shareholders.

The comments echoed similar statements from Mr Narev yesterday in response to claims of gouging.

“There are some products which could probably be a little cheaper … some which could be a bit more expensive,” Mr Narev said.

“The combination of the shareholders’ needs, the customer needs, the competitive market, etc — these are all constant themes in the decisions we are making.”