ANZ Group Holdings Ltd ESG Forum Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jonathan Mott - Barrenjoey - Analyst : Thank you. First question to Shayne and it goes back to the topic of housing and something that you've talked about a lot over the last year in particular, which you said mortgages has become a product only for the rich. I think you described them as a luxury good. And if you look at it, you're saying that the average household income to mortgage borrowers has risen by close to 30% over the last two years, and it's going up towards the mid 60% out for to get into the housing market. Now if I step back and look at some of the comments you said, you started with the purpose of ANZ, shaping a world where people and communities thrive. If we're in a situation where it's very, very difficult for young people to break into the housing market. And then when I look at the newspaper articles that new policies that have come out where people are earning more than $400,000 income in 145 expensive postcodes now waive their mortgage insurance up to 95% LVR. So I'm trying to piece this together that what can you do to actually try and get especially younger people who aren't necessarily high-income earners into the housing market. I don't know if you are on full-spectrum responsible lending. So it's worth also noting with [John Montoch] came out yesterday and actually said, and I'll quote from stage of the IBA where he said, most of the framework is principle-based and there's significant room to banks to run the businesses the way they want. And that means by the ability to set their own business strategy, pricing and risk appetite. So what can you do really on housing to make these communities thrive and help young people get into the housing market?

Question: Jonathan Mott - Barrenjoey - Analyst : Is there anything that you can do on the pricing and risk appetite to help younger people get in the housing market and understand supply side. And that's the challenge that a lot of people have been talking about. As a bank, you can affect the demand side of credit a lot more easily than you can impact the supply side. You've obviously made some changes in policy and pricing at the very top end. What can you do at the mid-level for young people?

Question: Jonathan Mott - Barrenjoey - Analyst : That's a very detailed answer.

Question: Andrew Triggs - JPMorgan Securities Australia Ltd - Analyst : Thank you. Good morning, It's just a follow up actually on John's question. Look, I would agree with respect to the residential property development side of things. There was a 2016, the [medic] reviewed it up or undertook on the sector and it is acknowledged, well, had concerns around controls and weakening underwriting standards in the residential property development market. What that drove was well, at least I think it was one of the big drivers was a 15% loss in major banks share of bank originated from commercial property exposures. And I would have thought the two are pretty closely linked with the same things like the amount of pre-commitments required in order for a bank to extend credit to a property development greater than 100%, typically, a reduction in some in [LBOs] in that space, too. That's all good from a credit quality perspective, but it would appear to be accentuating issues on supply stitched in your comments.

Question: Andrew Triggs - JPMorgan Securities Australia Ltd - Analyst : If you think there's any potential for loosening from April on that side of things.

Question: Andrew Triggs - JPMorgan Securities Australia Ltd - Analyst : Thank you. And just on a different topic, the ASIC report on hardship in May this year. Just interested to what extent was there a benchmarking element that you could see how ANZ compared to peers? And also just a general question, do you see risk of any look-back remediation for past hardship treatment of customers?

Question: Andrew Triggs - JPMorgan Securities Australia Ltd - Analyst : Okay. Thank you. Is there any chance of a look-back treatment or remediation?

Question: Andrew Triggs - JPMorgan Securities Australia Ltd - Analyst : Thank you.

Question: Mayleah House - Ethical Partners Funds Management - Analyst : Thank you, Shayne, and thank you, Kevin. Firstly, just wanted to acknowledge the great work that ANZ had done and is doing on the vaccination strategy. Really pleasing to see that today. My question goes to the comment made around transition plans and the enhanced framework. I'm interested if you could provide a little bit more color around what specifically that it enhanced framework looks like and how you're assessing the credibility of transition plans and what steps you're taking if customers don't meet those expectations?

Question: Mayleah House - Ethical Partners Funds Management - Analyst : Can I just clarify, you mentioned targets here. Do you have any expectations or assessments of how those targets are aligned to a 1.5xb% pathway? And what's your position on offsets and customers you think offsets to meet those targets as opposed to prioritizing absolute emissions reductions in the first instance? Unidentified Company Representative Yeah, we look for TCFD aligned disclosures in the first instance. And with regards to offsets, we also, we say that it as a legitimate tool to be used. And you'll see that as the government's pointed out in the sidecar mechanisms as well. So we see that as a legitimate tool, but it should only be one tool in ensuring that they meet their targets so that we want to see real progress in their underlying moves to read decarbonizing their own businesses. But also, we understand that some industries that we're talking to here are very difficult to decarbonize and that, therefore offsets will be part of that solution. But not the only part of that solution.

Question: Matthew Wilson - Jefferies and Company - Analyst : Good afternoon or good morning, team. Thanks for the opportunity to ask a question. Just on deposits. Well, timelines are very important. Do you think they get a disproportionate level of intention from an ESG perspective? You know, certain banks are now making more money in absolute sense from paying below market or paying zero on a retail deposits. From an ESG perspective, do you think come banks can enable retail depositors to earn a rate closer to the market rate to earn bonus interest, given most of the time the conditions associated with owning that bonus interest are tricky? Or will it take the government to move on deposits to get a fair outcome from an ESG perspective on the deposit market?

Question: Matthew Wilson - Jefferies and Company - Analyst : Excellent. Thanks, Shayne.