Grand plan of ANZ boss Nuno Matos crystallises as job cuts shock
They call him ‘Nunogeddon’: the new ANZ boss swinging the axe at Australia’s biggest banking employer.
If you work in banking, watch out. Thousands of jobs are being cut as bosses prepare for a leaner future and shred projects that aren’t working. Today, the man swinging the axe at Australian Banking’s biggest employer, ANZ, they call him Nunogeddon.
(Audio clip) Nuno Matos: Obviously, this is a very, very special moment to me. It really means a lot.
Claire Harvey: Nuno Matos is an adventurous 57-year-old ocean swimmer who’s just moved his family to Australia. And when he was announced as the incoming chief executive of ANZ bank in 2024, you could feel the energy radiating through his warm Portuguese accent.
(Audio clip) Nuno Matos: My grandfather was an Indian, and he actually, in his 30s, he moved to Africa, where he met my grandmother. She came from Portugal. I met my wife in Peru, she’s Peruvian, and we have two boys. One was born in Spain, the other was born in Brazil, and actually at home, we always speak three languages every single day. And, well, I can’t forget our two dogs, one from the U.S. And the other from Mexico. We are kind of United Nations at home.
Claire Harvey: He made his career, from his start straight out of uni at Portugal’s Central Bank, to a globe-trotting banking career. Sound like one long, fabulous dinner party.
(Audio clip) Nuno Matos: After living in nine markets from Asia to the Americas, Australia feels a perfect country to live, to be happy, and to develop new friends and new professional connections.
Claire Harvey: By the time his feet were under the desk vacated by former boss Shane Elliot, Matos was sounding a little more weary.
(Audio clip) Nuno Matos: We have to run faster and at the same time with more excellence. It’s not operating at its full potential.
Claire Harvey: Here’s what that meant.
(Audio clip) Ross Greenwood: The ANZ will cut 3,500 of its 43,000 staff, plus another 1,000 contractors.
(Audio clip) Chris Reason: The unions have gone ballistic, a staggering, catastrophic announcement for so many staff who work here within the ANZ Banking Organisation.
Claire Harvey: And suddenly he has a new nickname, Nunogeddon.
Eric Johnston is an associate editor with The Australian.
Eric Johnston: The mood has changed at ANZ. ANZ was known as a really warm and friendly and fuzzy bank. For example, they even had meditation training courses many years ago under a former chief executive, John McFarlane. They had a more international perspective, but they were a very warm and friend institution, and that sort of allowed a lot of flexibility for their workforce.
And what we’ve seen is a sudden shift. And now that shift means people are coming back to the office. Last week I sat down and went down to the Docklands headquarters and just worked out there for a few mornings. No one asked a question, no one knew who I was.
Claire Harvey: Had anyone invited you to come with your laptop?
Eric Johnston: No, no, but they do great coffee, fantastic coffee. And you just sort of park (up on) the corner there. And look, people were there. People were working. People were really well-dressed. And that’s one of the things, when the new chief executive came in, he had complained that Australians didn’t look like bankers because people were really casual, they were dressing down and so on.
So suddenly, I’m noticing a lot more ties, a lot more suits are on, people were back, people were in the office and they knew there was anticipation in the air that something big was gonna happen -- and it did.
Claire Harvey: Now on paper, this bank is doing quite well. It made over $6 billion cash profit, reported that this year. Nuno Matos is on a $2.5 million salary with a$ 2.5 billion bonus, which I guess he might be achieving if he cuts these costs. What’s going wrong at ANZ?
Eric Johnston: Well, just on the salary, so that will escalate to up to $10 million at its maximum potential if all the long term benchmarks are achieved. That’s the way it’s structured.
But it is a big number. $6 billion. Wow. Look at that. Pure profit. Certainly big number that becomes less impressive when we start thinking, OK, ANZ’s asset base is about $600 billion. It’s kind of reasonable, but banks generally can do a bit better.
So Commonwealth Bank is a really well-run bank. And it generally returns about 13 and a half to 14%. So you can see the gap there. Nuno Matos, he’s coming from HSBC, a big global bank, and he’s seeing the immediate problem: ANZ has got to lift its shareholder returns, and this is one way that he wants to go about doing it.
Claire Harvey: There’s a lot of talk about big changes to something called ANZ Plus. What is that and what would that mean?
Eric Johnston: What it is for the last six years under the former management ANZ has been building what it calls at the front end, a new app called ANZ Plus. It’s been promised for ages, talking five or six years in the planning.
So far they’ve spent $1.5 billion on building effectively an app that they’ve been promising is going to be rolled out. It’s just starting to be rolled out to some customers. They’re promising the world, your whole 10-minute mortgages, it’ll do your dishes, it’ll everything. But it’s yet to be delivered.
The upside for ANZ though, it allows processes to be done much more quickly and efficiently, and they’ll be betting on with less people as well. That’s yet eventuate.
Nuno Matos has come in and looked at this and he’s thought of straightaway. Why is this app not being delivered? Why are we still building this thing? There’s a lot of mission creep in this app. So he wants to take control of that. He just wants to pair it back and just get it in people’s hands and get it delivered. And so by this time next year, the expectation is it will start to be the main app the ANZ customers use.
Claire Harvey: We know the banks watch each other very closely. They all put rates up within hours of one another or down, depending on which way things are going. We’ve already seen NAB announce some job cuts. Would you expect people in banking to be now nervous that all the banks are going to look at whether they can bring their workforces down?
Eric Johnston: I think what this does, it gives others cover to also do that. Look, Westpac has in recent years cut about 1,700 roles, but it didn’t come out with a big announcement. It just said, look, we want to target a lower cost base.
Commonwealth Bank, again, you’ll hear every now and then they might cut jobs, but not in a wholesale way. And they’re certainly under no pressure to slash and burn because again, they run quite well. But it does give some of the others a little bit of cover.
It also gives corporate Australia cover to think, you know, if I come out tomorrow and cut a thousand jobs, I’m not gonna look like the bad guy, that guy down the road at ANZ, he’s still looking pretty terrible. So that’s what the message is.
But really interestingly, what’s happened is that since the COVID pandemic, there hasn’t really been wholesale job cuts. So this was a real big wake up call, and all large corporates have actually been hoarding labour because they’re so scared of a tight labour market and when the economy does go into an upswing, they’ll have nobody to be able to fund that growth or deliver into that growth. So that’s what we’ve heard of this term called “jobs hoarding”. So this is a real change of that mindset.
Claire Harvey: At the top of this episode we heard what Nuno Matos sounded like when he got this job. He’d gone for a couple of other big jobs, reportedly he wanted the top job at HSBC, didn’t get that, his name was mooted to be the boss of Westpac, that didn’t happen, got this job at ANZ and then in his introduction interview spoke very warmly about moving to Australia with his dogs and his kids.
I feel like if he knew he was going to be coming in here and sacking a lot of people he would have been less effusive about the big opportunity for himself and his family. He might’ve been a little bit more sensitive about that. So therefore, has he looked under the hood and found some things that have shocked him?
Eric Johnston: I think he knew exactly what he was going to do when he signed up. And an interesting background, Portuguese banker worked at a Spanish bank for many years called Santander, then moved across to HSBC, another big global bank. And he was an executive on the rise at HSBC. And they put him in what was probably their biggest problem child business, which was Mexico.
So he ran Mexico for HSBC for many years. And that was after it had a number of regulatory skirmishes, particularly around money laundering. And you can imagine the complexity of that. Now he really got onto the radar of HSBC management there because, first of all, cutting costs, winning back the trust of regulators and while growing the business with customers. And look, that just ticked all the boxes for HSBC.
He was in the running to get the top job and just narrowly missed out. At the time, Bloomberg described him as something along the lines of the most eligible CEO in the world. So it was just a matter of someone reaching out, coming to it reigns it, he knew what needed to be done. He had a reputation for cutting costs. And this is his playbook exactly.
Claire Harvey: So what’s next?
Eric Johnston: What we don’t know is where the jobs are going to be cut exactly. We do suspect it’s going to Be in the retail bank. And we do suspect a bit about business banking. He’s going to front up to investors in the middle of next month, October, and this is where he’ll present his strategy. This is how we’re going to go forward. He’s expected to put a line in the ground saying, we want to achieve these kind of shareholder returns. We want to do achieve this, and in banking world it’s called a cost to income ratio and it is what it sounds like. It’s about your costs relative to the revenue you do. So we expect him to put out a number to try and target a lower cost to income ratio.
Australian banks have a terrible track record of cutting costs. They have a terribly track record really in these big change programmes. Sure, change happens, but then they’re very short term, like, banks get into their old ways. Regulation is a really big deal in the Australian banking market. That’s where a lot of the baked in costs are from as well. So he’s going to confront some of these challenges as well, so running the bank and running it well.
At the same time, his rival banks, CBA, National Australia Bank and Westpac, they are just going gangbusters on business banking. So they’re throwing everything at that while he’s taking things out of it, so that’s going to be an interesting battle to watch.
This is an edited transcript of our daily news podcast The Front, where our journalists speak candidly about their stories. Hear it now on Apple Podcasts, Spotify or in The Australian’s app.
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