The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 1.9% amid the bank’s AGM and overall market volatility.
The ASX 200 (ASX: XJO) is down by 1.8%, the Commonwealth Bank of Australia (ASX: CBA) share price is down 1.9%, the Westpac Banking Corp (ASX: WBC) share price is down 1.4% and the National Australia Bank Ltd (ASX: NAB) share price is down 1.4%.
In the US, the Federal Reserve cut interest rates again by 0.25% (25 basis points), but also indicated that it may only reduce the interest rate two more times in 2025. This disappointed investors that were hoping for me.
ANZ AGM update
The annual general meeting (AGM) allows a business to tell investors how it performed in the prior financial year, give any updates about performance in the new financial year and comment on other issues.
ANZ’s Chair Paul O’Sullivan acknowledged that the company had more to do when it comes to management of non-financial risk. He noted the recent news that APRA has required ANZ to hold more capital because of failures in its markets business.
ASIC is investigating potential misconduct by ANZ’s markets business during a 2023 bond issue for the Australian Government.
The ANZ board “is requiring further focus from the management team, particularly around strengthening risk culture and embedding non-financial risk processes across the bank”.
ANZ said the issues are serious and, while no specific allegations have been made, the ASX bank share continues to cooperate with the regulator “to get to the bottom of what happened”.
The bank also revealed there has been conduct and data issues identified within the same part of its markets business.
Bank response
ANZ outlined a number of things it’s going to do.
First, it’s assessing reports from independent experts in financial markets appointed to analyse trading activity and reporting directly to the board.
Second, it has engaged external legal advisors, independent of management, to ensure “rigorous and thorough outcomes” from the expert reviews.
Third, it has established a sub-committee of directors with relevant experience, chaired by Paul O’Sullivan, to evaluate and test technical issues relating to these matters.
Finally, it has commissioned Oliver Wyman, in consultation with APRA, to undertake a thorough independent review of culture and controls within the markets business.
Also, ANZ CEO Shayne Elliott has decided to forfeit this year’s long-term variable remuneration, meaning he’s giving up $3 million. Elliott is going to be replaced by the new CEO Nuno Matos next year, who was most recently the chief executive of wealth and personal banking at HSBC.
Final thoughts on the ANZ share price
Shareholders are seemingly not going to put up with bad behaviour from large businesses and it may have cost Elliott his role, and millions of dollars.
Despite its recent decline, I still wouldn’t call ANZ shares a buy with a difficult growth outlook compared to its valuation. There are plenty of other ASX dividend shares I’d rather buy.
