Monday, 25 Oct 2021

Border restrictions leaves bank struggling to get enough IT, compliance workers

The shortage of workers in the fruit picking and packing industry is well known but it’s not the only sector struggling to get staff with the border restrictions.

ANZ, the country’s largest bank, would normally have around 200 vacancies at any one time but that has blown out to 300 as the bank struggles to find IT workers and those with experience in risk and compliance.

Antonia Watson, ANZ New Zealand chief executive, said in most cases the roles were new and the additional need was partly due to the large-scale compliance projects it has on the go as well as the need to fill more specialised roles as its business model evolved.

“In general, within the technology workforce across New Zealand the increase in demand, and changing nature of the roles we require, isn’t necessarily aligned with the supply in the market which is why we would normally look to other talent pools and solutions to fill these roles, Covid has obviously had an impact on our ability to do this.”

The bank employs 6691 full-time equivalent workers in New Zealand.

Watson said that didn’t mean it wanted the borders to open up quickly again.

“No. We need to do this in a safe measured way or we will lose all the gains that we have made.

“We have got a couple of people offshore that we have hired that are stuck and we would love to see them here. We also appreciate that it has to be done in a safe way that maintains consumer and business confidence.”

In the meantime Watson said it was coping as best it could.

“We can use offshore technology providers via Zoom and that kind of thing. It is not ideal but there are a lot of other positions we could be in right now that would be a lot worse.”

Strong economy

Speaking after its result on Wednesday Watson said the 18 per cent rise in its half-year profit to $930 million was a reflection of a faster than expected recovery in the economy.

She said just 1 per cent of those who went on a home loan deferral were still being looked after by its financial wellbeing team.

“I don’t think we knew what to expect a year ago. You wouldn’t have expected the housing market to go gangbusters the way it did.”

ANZ New Zealand did 42,000 new home loans in the six months to March 31, up from 38,000 in the six months to March 31, 2020.

The value of its loan book rose from $82 billion to $90b.

This week the Reserve Bank warned that the likelihood of a “significant correction” in the housing market has increased.

Watson shrugged that off saying it had been very careful with its lending and only had 2 per cent of its book at a high loan-to-value ratio of over 80 per cent.

“If you took out a loan a year ago at 90 per cent you are probably under 80 [per cent] by now. We have got the buffer there.

“If employment stays where it is we know our customers when they take out the loan have the ability to service an interest rate up near 6 per cent because we make sure they can. Our book is in good shape. We don’t have any concerns about where we are.”

Watson said its residential lending had gone from frantic to busy since the reintroduction of the loan-to-value ratio caps on March 1 and subsequent property investor changes announced on March 23.

“In January we were seeing 16 per cent of our new lending to first-home buyers and 36 per cent to residential investment lending. That is now 23 per cent each.

“We have really seen a rebalancing between first-home buyers and residential investment lending albeit it is still busy out there.”

She said 23 per cent of new loans going to first-home buyers was historically high looking back over the last 10 years.

“That is pretty pleasing if you want to see people into homes which we are.”

Low business confidence

What Watson would like to see more of is business lending.

While it was not seeing the level of business failures it had expected she said many businesses still did not have the confidence to borrow to invest in growth despite the low interest rates, with worries about labour shortages and the supply chain being top of mind.

“We have seen new business lending over the half getting up to $3b worth. But there has been a lot of offsets to that – companies have gone to the debt capital markets, companies that drew down their limits to put in a bank account while things were a bit uncertain last year have paid back those limits again.”

All up its commercial loan book has been flat at $39b.

Watson said while it was lovely the travel bubble had opened to Australia it appeared that was being used more for family unions than business trips at the moment.

“I think if we get more of the population vaccinated and we get to understand what opening ourselves up to the world might look like over time I think you might see more confidence then. Because with that low interest rate it would be great to see businesses with the confidence to borrow to invest and right now it is far more the confidence thing playing out than the interest rates I think.”

One concern opening up more travel does raise for the bank is that some of the deposits people have built up will flow out on holidays.

“It is certainly something we think very hard about. It is a risk. We saw the money flow in from the quantitative easing and the wage subsidy. Some of that has been spent, some of it is being used to fund home loans. I think there is more consumer confidence not to hoard away the cash in a way that was being done. I suspect that will become more of a pinch point over time as we will have to evaluate our funding sources.”

ANZ is the only major bank not to tap into the Reserve Bank’s funding for lending programme so far – it didn’t need to because of the sale of UDC Finance – but that could change or it may also need to tap up the international wholesale funding market.

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