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By Antony Currie

MELBOURNE, Oct 13 (Reuters Breakingviews) - Nuno Matos has just given a masterclass on how to excoriate a predecessor without mentioning them by name. On Monday, five months after becoming CEO of ANZ ANZ.AX, the former HSBC executive unveiled his vision for the $70 billion Australian lender and stated simply that "the opportunities to rationalise the company in the first year are so obvious". Sure, it's no secret that the bank under Shayne Elliott had lagged its rivals. But Matos's thinly veiled criticism means he really is putting his mouth where his shareholders' money is.

The Portuguese banker has pledged to boost the Australian bank's return on tangible equity by almost a third to 13% by 2030. That would be a marked improvement, though still shy of what market leader Commonwealth Bank CBA.AX cranked out in its most recent financial year.

Cost cuts - or improved productivity, as Matos likes to call it - are expected to do much of the heavy lifting. He reckons he can reduce ANZ's core annual expenses by A$800 million ($520 million) this year, or around 7% of the total, per estimates collated by LSEG. He has already made a start, laying off 3,500 employees last month. He also intends to consolidate overlapping and competing technology platforms, calling a key one - ANZ Plus, a digital retail banking platform - inefficient and lacking some capabilities.

Had Elliott removed that bloat himself, it would have added almost a percentage point to last year's 10.3% tangible equity return, Breakingviews calculates. That's not all: Matos reckons he can also almost double to A$500 million the cost savings from integrating Suncorp Bank, which ANZ bought last year.

Hitting those expense targets is one thing. But he also has to grow ANZ's revenue. He intends to increase front office ranks in mortgages and commercial banking by some 50%. The stock rose more than 2% on the new strategy and is up by almost a quarter since Matos took charge in May.

Throwing down the gauntlet to rivals is all very well. But Australia's banking sector is highly competitive: the Big Four already control some 80% of the key deposit-taking and home loan markets and the cohort is battling fiercely to dominate in the commercial banking arena.

Matos is, at least, well aware of the challenges: he began his strategy presentation by making clear he understands how commoditised and short on "value-added services" the Australian banking industry is. Using his knowledge, experience and ambition to turn around a laggard is no easy feat.

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CONTEXT NEWS

ANZ CEO Nuno Matos has set a 2030 return on tangible equity target of 13%, up from 10.3% in 2024. He made the announcement as he outlined his strategy for the bank on October 13, five months since taking over as CEO. His goals include accelerating the integration of Suncorp Bank, which the lender bought last year, speeding up the rollout of digital banking product ANZ Plus, increasing bankers in the mortgage and commercial banking division, and giving middle market corporate clients access to institutional banking tools.

He expects to cut costs by A$800 million ($520 million) in financial year 2026 and to almost double expense savings to A$500 million by 2028 from integrating Suncorp.

ANZ shares were up almost 3% in early afternoon trading.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on CURRIE/antony.currie@thomsonreuters.com))