ANZ extends top executive pay freeze

A year ago the Australia and New Zealand Banking Group (ANZ), Australia’s third largest bank, decided to freeze the salaries of 900 of its top earners. Last week, chief executive Mike Smith announced that the measure was being extended to 2013.

This happens as the company reports an increase of its income across all of its business divisions except wealth management, as well as a 5.5 percent rise in its underlying profit over the past three quarters, reflecting the group’s increased market share in deposits, mortgages and commercial lending.

The decision was announced ahead of delicate negotiations with company staff and unions. During the past nine months ANZ has cut more than 1,400 jobs.

The company is also aiming to neutralize criticism of record combined annual profits at Australia’s four big banks, ANZ, Commonwealth Bank of Australia, Westpac and National Australia Bank, reports the Financial Times.

‘We recognise that as senior executives we have to demonstrate that constraining costs is everyone’s business,’ said Smith, who also stressed that the bank’s financial recovery was on track, according to Australian.

‘We have made good progress in the strategy we have outlined and it is consistent with the outlook that we have delivered.’

The group is highly exposed to Asian markets with operations in mainland China, Singapore, Indonesia and Vietnam, and anticipates that its ‘super-regional strategy’ will result in 20 percent of its business coming from that area in the next few years.

Although the economy in Asia is slowing down because of the economic turmoil in Europe and the recent cooling measures for property initiated by the Chinese government, Smith stressed that ‘developing Asia is still growing at seven percent a year’ and the banking group was ‘in the right place at the time with the right strategy’.