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  Reply # 2117573 31-Oct-2018 20:33
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I'm pretty anti it. I'd be unhappy even if it was an NZ company, I'm even more opposed when it's a foreign company.

 

 





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  Reply # 2117618 31-Oct-2018 22:06
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Well, @hio77 tempted me to post...

 

Disclosure - because I have to. I do work for ANZ as many of you know. This is my own personal word. It is not terribly related to the profit but more related to how ANZ as a company is to work for in order to change the somewhat incorrect view of some people on here who have (or will) post on here.

 

For starters, I'm not going to claim that ANZ is perfect considering on what has happened over in Australia this year but I just want to say that ANZ NZ is really its own entity run by New Zealanders and each one of the staff works hard here in NZ to give back to the community by means of volunteer days, staff payroll giving and fundraisers for many charities where even us - as staff give both our time and money personally as we're encouraged to (and want to).

 

ANZ, as a whole, is actually a fantastic place to work and as a company they do look after us. I, along with many others actually looks forward to going to work and those in customer service roles do a fantastic job of caring for the customer in most cases - yes, as a huge company you're always going to hear of the bad but there has been many things done internally such as getting rid of staff targets so those staff members can focus on the customers best interest along with other things such as (actually) lowering fees across accounts and not increasing others (like one bank I can think of) and removing ATM fees both in NZ and overseas.

 

In respect to the profit for the ANZ group this is due to the hard work that many people within ANZ (including myself) have done. And, because of this we do indeed get looked after. At the end of the day, they're a company, they're there to make money and this all builds a stronger bank in the process which is less likely to fall.

 

There is indeed stuff I can't discuss due to op-sec but we're not evil, or greedy bankers - in-fact I'm not even a banker (I work in the IT side) but do see many things going on internally and our whole company policy is based around the customer. Nothing I could tell you would shock you but some of the stories I have got are indeed interesting to many. The banking industry is incredibly complex with many things always going on that you wouldn't even think of - what you see on the outside is only a small portion of what goes on inside a bank - there is also AI working for us with an (amusing) name as one example (inside joke here). I'll let you use your imagination.

 

You can ask most ANZ staff members and they'll agree with this statement. Being a huge corporate and one of the biggest IT companies also there is always the media wanting to strike on the bad, but the good always gets overlooked. This goes for any large company including the other banks, telecommunications providers and all. Media is just so incredibly negative these days.

 

That is all from me. I likely won't comment further because I am not an official source of information and don't have all the facts or anything nor want to say anything that could affect my job (not that I am stupid enough to do so). I'll leave all that to our PR guys via official means of communication. I'm incredibly proud that the work we've done as a whole has reflected a profit such as this.





 
 
 
 


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  Reply # 2117619 31-Oct-2018 22:08
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Lias:

 

I'm pretty anti it. I'd be unhappy even if it was an NZ company, I'm even more opposed when it's a foreign company.

 

 

 

 

But a company that is listed on our NZX and you can buy shares in (if you can't beat them...)

 

Unlike some other "nz" firms that only trade on the ASX (Xero)


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  Reply # 2117625 31-Oct-2018 22:26
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michaelmurfy:

 

The banking industry is incredibly complex with many things always going on that you wouldn't even think of - what you see on the outside is only a small portion of what goes on inside a bank - there is also AI working for us with an (amusing) name as one example (inside joke here). I'll let you use your imagination.

 

 

Behind the "AI" is just plain "I". My BIL's son (I think he's my step nephew) is a PhD statistician/mathematician, working for an Aus bank (not your one - heave a sigh of relief). His current project is analysis and setting optimum future branch staffing levels throughout their Australasian operation.  Over a beer, I questioned why bother with the maths, when the obvious answer was zero. (I left school at 12 to join the circus - so claim no expertise).  After a pause he agreed, then pondered his own future.  So we had another beer.


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  Reply # 2117629 31-Oct-2018 22:39
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michaelmurfy:

 

At the end of the day, they're a company, they're there to make money and this all builds a stronger bank in the process which is less likely to fall.

 

You can ask most ANZ staff members and they'll agree with this statement.

 

 

FWIW I'm an ANZ customer and I'm friends with a manager there who would absolutely agree with you that it's a great place to work. I don't have any objection to ANZ as such, I just object to _any_ company, let alone a foreign one (and ANZ NZ might be stand aloneish, but it's still a subsidiary of a foreign company) making that much money, and I believe that our government needs to take more radical action to make it impossible for any company to make a profit like that. Companies should only be able to make reasonable profits, unchecked capitalism simply needs to be legislated out of existence, and at a certain point both individuals and companies should be paying 100% tax on the dollar to stop them earning obscene amounts. 





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  Reply # 2117634 1-Nov-2018 01:27
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Lias:

michaelmurfy:


At the end of the day, they're a company, they're there to make money and this all builds a stronger bank in the process which is less likely to fall.


You can ask most ANZ staff members and they'll agree with this statement.



FWIW I'm an ANZ customer and I'm friends with a manager there who would absolutely agree with you that it's a great place to work. I don't have any objection to ANZ as such, I just object to _any_ company, let alone a foreign one (and ANZ NZ might be stand aloneish, but it's still a subsidiary of a foreign company) making that much money, and I believe that our government needs to take more radical action to make it impossible for any company to make a profit like that. Companies should only be able to make reasonable profits, unchecked capitalism simply needs to be legislated out of existence, and at a certain point both individuals and companies should be paying 100% tax on the dollar to stop them earning obscene amounts. 



Taxing them 100% won’t stop them earning the $2b that you object to - just redirects the profit from the shareholders to the government. The evil that you perceive won’t be directly eliminated that way.

If you want them to earn less, you’ll have to control their margins (or other aspects of their operations) by legislation or regulation.

Better still - nationalise ‘em - and see how that plays out for a strong and competitive market.

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  Reply # 2117647 1-Nov-2018 06:52
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michaelmurfy:

Disclosure - because I have to. I do work for ANZ as many of you know. This is my own personal word. It is not terribly related to the profit but more related to how ANZ as a company is to work for in order to change the somewhat incorrect view of some people on here who have (or will) post on here.


For starters, I'm not going to claim that ANZ is perfect considering on what has happened over in Australia this year but I just want to say that ANZ NZ is really its own entity run by New Zealanders and each one of the staff works hard here in NZ to give back to the community by means of volunteer days, staff payroll giving and fundraisers for many charities where even us - as staff give both our time and money personally as we're encouraged to (and want to).


ANZ, as a whole, is actually a fantastic place to work and as a company they do look after us. I, along with many others actually looks forward to going to work and those in customer service roles do a fantastic job of caring for the customer in most cases - yes, as a huge company you're always going to hear of the bad but there has been many things done internally such as getting rid of staff targets so those staff members can focus on the customers best interest along with other things such as (actually) lowering fees across accounts and not increasing others (like one bank I can think of) and removing ATM fees both in NZ and overseas.


In respect to the profit for the ANZ group this is due to the hard work that many people within ANZ (including myself) have done. And, because of this we do indeed get looked after. At the end of the day, they're a company, they're there to make money and this all builds a stronger bank in the process which is less likely to fall.


There is indeed stuff I can't discuss due to op-sec but we're not evil, or greedy bankers - in-fact I'm not even a banker (I work in the IT side) but do see many things going on internally and our whole company policy is based around the customer. Nothing I could tell you would shock you but some of the stories I have got are indeed interesting to many. The banking industry is incredibly complex with many things always going on that you wouldn't even think of - what you see on the outside is only a small portion of what goes on inside a bank - there is also AI working for us with an (amusing) name as one example (inside joke here). I'll let you use your imagination.


You can ask most ANZ staff members and they'll agree with this statement. Being a huge corporate and one of the biggest IT companies also there is always the media wanting to strike on the bad, but the good always gets overlooked. This goes for any large company including the other banks, telecommunications providers and all. Media is just so incredibly negative these days.


That is all from me. I likely won't comment further because I am not an official source of information and don't have all the facts or anything nor want to say anything that could affect my job (not that I am stupid enough to do so). I'll leave all that to our PR guys via official means of communication. I'm incredibly proud that the work we've done as a whole has reflected a profit such as this.



In my opinion, (and it may be wrong as i have no idea where banks make most of their money!)

it's likely because we are borrowing more than ever. Every other investor is "investing" in property. Presumably business loans are up too. I have a feeling it's the corporate customers that generate the most profit. And presumably with that comes the associated product sales like insurance etc.

I don't think they'd make more money if their products weren't competitively priced. So it's hard to pin it down to price gouging.

Unlike Apple ... (Disclaimer we own Apple products, it's a statement not a criticism per se)

I think one shouldn't get upset at business making profit, wherever they're based. But whether they have competition, and mouse importantly whether they pay tax in the country that they make those profits.




Swype on iOS is detrimental to accurate typing. Apologies in advance.


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  Reply # 2117663 1-Nov-2018 08:24
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Fred99:

 

MikeB4:
Fred99:

 

MikeB4: @Fredd99 As at the 2017 financial return the ANZ Group assets were at A$897,326,000,000.

 

See above - that's not net assets (less liabilities) which is a fraction of that.

 

If you "own" a million dollar house but owe $900k, you shouldn't claim you've got a $1m asset.

 



My posts have never said net assets.

 

To be fair, I never realised that banks used a headline figure for "assets" in that stupid way. 

 

Media uses that headline figure for "assets" in that stupid way every time they report on changing property prices.  House price inflation, that everyone is infatuated with, is just the asset.

 

Rampant property price increases that have increased wealth are, what, 7% pa over the last ten years.  Thats ROA.  Compare that to the banks.  ROA c2%.  

 

Lets say that households are indebted based on investment property LVR's.  Thats 60% geared.  Return on net assets would be 17.5%.  Banks are 10-13%.  Homeowners would appear to be making obscene returns on an ROE basis.   If they were geared based on putting down 20% deposit and borrowing the rest then that homeowner is earning an ROE of 35% based on that ROA of 7%.  Are the banks really making obscene returns?  Lets keep things in context. 


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  Reply # 2117664 1-Nov-2018 08:27
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Lias:

 

michaelmurfy:

 

At the end of the day, they're a company, they're there to make money and this all builds a stronger bank in the process which is less likely to fall.

 

You can ask most ANZ staff members and they'll agree with this statement.

 

 

FWIW I'm an ANZ customer and I'm friends with a manager there who would absolutely agree with you that it's a great place to work. I don't have any objection to ANZ as such, I just object to _any_ company, let alone a foreign one (and ANZ NZ might be stand aloneish, but it's still a subsidiary of a foreign company) making that much money, and I believe that our government needs to take more radical action to make it impossible for any company to make a profit like that. Companies should only be able to make reasonable profits, unchecked capitalism simply needs to be legislated out of existence, and at a certain point both individuals and companies should be paying 100% tax on the dollar to stop them earning obscene amounts. 

 

 

Whats a reasonable level of profit?  What return is acceptable?  Cost of equity?  Cost of Capital?  Risk free rate?  Risk free rate plus a margin?

 

What is a reasonable level of return for you to earn on your assets?  On your net assets?  As a homeowner.  As an investor.  Or as a business owner?  


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  Reply # 2117682 1-Nov-2018 09:21
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Banks are easy targets and figures like "2 billion" stir up emotive comments from people that believe banks, along with supermarkets, power companies, petrol companies and SKY, are somehow shafting people and their services should supplied dirt cheap.

Banks provide a service that people pay for. I have relationships with BNZ, ANZ, ASB and Rabobank and their profits dont concern me at all. We have a competitive banking sector and people have choice

However, Choosing a bank because they dont make much money would seem an odd choice to me.

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  Reply # 2117760 1-Nov-2018 11:13
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ockel:

 

Whats a reasonable level of profit?  What return is acceptable?  Cost of equity?  Cost of Capital?  Risk free rate?  Risk free rate plus a margin?

 

What is a reasonable level of return for you to earn on your assets?  On your net assets?  As a homeowner.  As an investor.  Or as a business owner?  

 

 

I think single digit ROI is the acceptable range, maybe 8-10% for 100% NZ owned firms, dropping down to maybe 3-4% for 100% foreign owned. We also need to find a way of making companies like Google, Microsoft, Apple,  BK, McDonald's etc pay more tax on the sales they make in NZ. E.g. Google makes hundreds of millions of dollars in revenue from NZ, but most of it is done in such a way that they claim the profit in a tax haven and pay the (low) tax there, while on paper making virtually no revenue in NZ and posting a loss. 

 

 





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  Reply # 2117762 1-Nov-2018 11:17
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MileHighKiwi: 
However, Choosing a bank because they dont make much money would seem an odd choice to me.

 

See, I go out of my way to favour organisations that are NOT in it to make profits. E.g. Started doing some of my banking with The Co-Cooperative Bank(customer owned), medical insurance via Southern Cross (Not for profit) etc.

 

 

 

 





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  Reply # 2117765 1-Nov-2018 11:24
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michaelmurfy:

 

Well, @hio77 tempted me to post...

 

There is indeed stuff I can't discuss due to op-sec but we're not evil, or greedy bankers - in-fact I'm not even a banker (I work in the IT side) but do see many things going on internally and our whole company policy is based around the customer.

 

 

I am not sure even why you felt a need to post. I used to work for ANZ in IT.... even you admit, it is not even banking, you are just IT , a cost center.   

 

The problem people have is with banking policies. Not IT, which is fine just like most of the banks. 

 

 

 

 


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  Reply # 2117771 1-Nov-2018 11:46
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Lias:

 

ockel:

 

Whats a reasonable level of profit?  What return is acceptable?  Cost of equity?  Cost of Capital?  Risk free rate?  Risk free rate plus a margin?

 

What is a reasonable level of return for you to earn on your assets?  On your net assets?  As a homeowner.  As an investor.  Or as a business owner?  

 

 

I think single digit ROI is the acceptable range, maybe 8-10% for 100% NZ owned firms, dropping down to maybe 3-4% for 100% foreign owned. We also need to find a way of making companies like Google, Microsoft, Apple,  BK, McDonald's etc pay more tax on the sales they make in NZ. E.g. Google makes hundreds of millions of dollars in revenue from NZ, but most of it is done in such a way that they claim the profit in a tax haven and pay the (low) tax there, while on paper making virtually no revenue in NZ and posting a loss. 

 

 

ANZ earned an ROE of 9.8% last year.  Seems like you're happy with their result on the basis that 8-10% is acceptable.  Many regulated businesses in NZ have their ROIC measured against WACC that its calculated by the ComCom.  In some cases thats below your 8-10% measure.  Highly dependent on the capital structure but the ROE is usually much higher than that.  Do you think the ComCom has it wrong?  And why?

 

 

 

So what level of return did you earn on your investments in the last 12 months? 

 

Do you own a home?  How much did the asset value change?  Does it have any borrowing associated with it?  If so, what was the ROI you earned on that home?  Was that too high?  Will you be donating the balance of that return to the Govt such that your ROI was 8-10%?

 

How did your Kiwisaver provider perform?  When you take into account the Govt contribution what level of ROI did you earn?  Was that too high?  Will you be donating the balance of that return to the Govt such that your ROI was 8-10%?

 

Do you run your own business?  What sort of return did you earn?  If you reduce the ROI to single digits will you still operate your business?  If you're not self employed, what sort of return did your employer earn?   If the ROI was single digit do you think that your employer would continue in business, or continue to employ you?

 

Why do you think a single digit ROI is acceptable?  Different assets and different businesses have different risks and different levels of risk demand different levels of return.  Suggesting a single digit ROI is naive, uneducated and insulting to those business that have an intention to grow and to employ.  Insufficient return = no expansion = poor economic outcomes.  

 

 

 

[As to making multinationals that use cross-border tax agreements to reduce their tax footprint in NZ - thats a whole different kettle of fish and something that is trying to be grappled with by Governments around the world.  Its completely offtopic wrt ANZ and its earnings.]


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  Reply # 2117784 1-Nov-2018 12:08
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Lias:

 

Companies should only be able to make reasonable profits, unchecked capitalism simply needs to be legislated out of existence, and at a certain point both individuals and companies should be paying 100% tax on the dollar to stop them earning obscene amounts. 

 

 

Lias:

 

I think single digit ROI is the acceptable range, maybe 8-10% for 100% NZ owned firms, dropping down to maybe 3-4% for 100% foreign owned. We also need to find a way of making companies like Google, Microsoft, Apple,  BK, McDonald's etc pay more tax on the sales they make in NZ. E.g. Google makes hundreds of millions of dollars in revenue from NZ, but most of it is done in such a way that they claim the profit in a tax haven and pay the (low) tax there, while on paper making virtually no revenue in NZ and posting a loss. 

 

 

They key question is are they a monopoly, in fact that's really the only question. If they are then it's a question for the Commerce Commission as to whether they are abusing their monopoly position, and the Commission has powers if they are. If they aren't then their profit isn't a matter for the Government.

 

The ANZ isn't a monopoly, and operates in a fairly competitive market. If they are running their business well then they are entitled to any profit they can make, and also have to shoulder losses when they happen as well. 

 

Your policy essentially amounts to deciding that a business can only earn a profit if you feel it meets your own subjective definition of "fair" and if you like the shareholder, otherwise it should be confiscated. Basic considerations like whether annual profits are procyclical, the degree of market competitiveness, a company's risk profile, risk-adjusted costs of capital, and our reciprocal obligations under the CER Treaty seem to escape you entirely.

 

If you think that the ANZ, or any other company, is gouging you then take your business elsewhere. If you dislike the shareholders of the ANZ, or any other company, then take your business elsewhere. What you are espousing here is irrational, and unimplementable.


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