ANZ: losing the personal touch was a mistake

By PAM GRAHAM

We were wrong. Customers still want face-to-face service. So says ANZ Bank's new New Zealand chief, Greg Camm, who plans to open a "couple of dozen" new branches.

The frank observation was one of many by ANZ's management at a shareholder presentation in Auckland yesterday.

The Melbourne-based bank said it was passing power back to New Zealand, shifting the balance between pleasing shareholders and customers towards customers and acknowledging that not everyone wants to use the internet.

In Australia, ANZ has been marketing itself as more open and caring than competitors but in New Zealand it lags in customer satisfaction surveys at a time when competition for retail customers from new and established players is heating up.

Chairman Sir Charles Goode, chief executive John McFarlane, chief financial officer Peter Marriott and Camm disclosed so much information at yesterday's meeting that it is difficult to know where to begin.

For the markets there was a forecast of an 8 per cent rise in 2003 profit even after a A$27 million ($29 million) charge for credit card loyalty points, offset by a A$16 million gain from an Asian business. The bank made A$2.2 billion last year and said in December its goal of 10 per cent profit growth might be a stretch. It made A$330 million in New Zealand last year.

For shareholders the news was that the percentage of profits paid as dividends will rise but harmonisation of tax laws announced by Finance Minister Michael Cullen and Australian Treasurer Peter Costello would not provide credits to 10,000 New Zealand shareholders.

For the bank's retail customers the news was that an "energised" ANZ wants their business and a bigger market share.

"The simple reality is that our branch network is too lean for the number of customers we have. We have over one million customers, the second largest of any bank, with the smallest number of branches," Camm said about the NZ business.

"Some of us, me included, thought that everyone would be banking by phone and internet by the turn of the century. We were wrong."

The decision to open branches "is a response to market conditions. It is well known that our customer satisfaction is low in the consumer segment and we have lost market share in some of those segments".

Budgets had not been set yet for the plan but Camm said he had more power than predecessor Murray Horn to carry it out. New Zealand staff now report to him rather than through divisions to head office in a reorganisation that recognised that centralisation to Australia had swung too far.

McFarlane said the change was driven by a need for the bank in New Zealand to satisfy New Zealand customers. "It is a big shift."

Still, the preoccupation of New Zealand shareholders at the two-hour meeting was the lack of tax credits on their dividends.

New Zealand director Jeff Todd told shareholders they should address to the two Governments their anger about double taxing Australian companies' dividends to New Zealand shareholders.