ANZ’s CEO is handing back millions as scrutiny grows.
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What’s happening to the ANZ Group Holdings Ltd (ASX: ANZ) share price might be the least interesting development for the business today. That’s despite Australia’s fourth-largest bank copping a 1.8% haircut in an ocean of red on the ASX.
ANZ’s annual general meeting is today, pushing forward in the face of security concerns. This year’s AGM seems shrouded in protests and mounting pressure following a myriad of allegations levelled at the blue-branded bank.
The dissatisfaction among shareholders bubbled up into a message that even outgoing CEO Shayne Elliott couldn’t ignore.
Ugly lingering problems for ANZ shares
Management at ANZ is facing the music today, and it appears there’s a playlist four songs long:
- Australian Government bond trading scandal
- Alleged withdrawal of fees from deceased customer accounts
- Financing weapons manufacturing
- Remuneration
ANZ has been in hot water for much of the year over its handling of a bond deal. However, the bank’s internal review has been unable to discover any wrongdoing. Yet, the concern created by the ordeal has led the Australian Prudential Regulation Authority (APRA) to slap ANZ with a $250 million provision.
Furthermore, newly emerged accusations of ANZ charging fees to deceased account holders have re-stoked the dormant coals left by the Royal Commission into the banking sector. The alleged actions have drawn the attention of Australia’s corporate watchdog, the Australian Securities and Investments Commission, which is contemplating pursuing the matter.
Elliott must have preempted the backlash. Announced today, ANZ’s CEO will voluntarily forfeit a bonus of $3.2 million in ANZ shares ‘in recognition of shareholders’ views and to limit the impact on the bank’.
Nevertheless, shareholders voted 40% against the bank’s remuneration report, bestowing ANZ with its first strike since the days of the Royal Commission. Keep in mind if a company gets two consecutive strikes, the board faces a shake-up.
Banking in the bush on notice
Branch closures in regional areas have proven to be a thorn in the Big Four’s side. The endangerment of bank branches in the bush was raised in today’s AGM, where chair Paul O’Sullivan gave an inconclusive answer, stating that regional branches needed to have “commercial viability”.
ANZ is exploring different ideas to balance profit and regional service. One option cited is the reduction in operating hours.
The bank signed a moratorium in June to sustain its current regional branches for the next three years.
ANZ shares are up 10% in 2024 despite the bank’s profits falling 12.6%.
Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
