One of the more influential business books is Tom Peter’s 1999 classic “The Circle of Innovation: You Can’t Shrink Your Way to Greatness”. Shrinking is what the ANZ has been doing over the last few years as it abandoned its Asian foray, started to exit wealth management, and culled its institutional bank. It’s now largely an Australasian retail and commercial bank, which in addition provides transaction, markets, payments and trade services to institutional clients.
Last Thursday, the ANZ delivered its full year results for FY17. The headline number, a cash profit of $6.94bn, largely met consensus expectations. However, this came from a very material reduction in bad debt provisions, and the lack of revenue growth, together with questions about the sustainability of the profit, left the market a little underwhelmed.
So, can ANZ “shrink to greatness”?