(Bloomberg) --

Most Read from Bloomberg

• Citi Trader Made Error Behind Flash Crash in Europe Stocks
• Biggest Treasury Buyer Outside U.S. Quietly Selling Billions
• Alibaba Recovers After Report on ‘Ma’ Briefly Erased $26 Billion
• Ukraine Latest: Kremlin Says Putin and Macron Discussed Mariupol
• Russia Seeks to Annex Occupied Ukraine as Invasion Goals Shift

Australia & New Zealand Banking Group Ltd. is keeping cash on its balance sheet as it watches and waits for how customers react to rising interest rates, according to Chief Executive Officer Shayne Elliott.

“We are sitting on a little bit of an excess at the moment,” Elliott said in a Bloomberg TV interview Wednesday. “We spend a lot of time thinking about the best use of that capital to generate returns and right now we are looking at that pivot point in the economy and thinking it’s going to throw up a lot of opportunities. We want to be prepared for those opportunities, we want to give it a little bit more thought before we make a decision.”

Bloomberg Intelligence estimates ANZ Bank’s has surplus capital of A$3.4 billion ($2.4 billion). The lender reported first-half profit that topped analyst estimates one day after the Reserve Bank of Australia hiked its cash rate by 25 basis points, the first increase since 2010. 

Most Australian borrowers have never experienced inflation and “an extraordinary number” have never seen rates rise, he said, underlining the need to remain cautious while observing the actions of consumers.

“What’s keeping me awake are what the consumers do next,” Elliott said. “Are people going to want to save more? Or are they going to start spending more because unemployment is really low?”

Most Read from Bloomberg Businessweek

• China Cracked Down on Big Tech Companies. Now It Needs Them
• The Hot Housing Market Makes the Fed’s Inflation-Fighting Job Even Tougher
• Musk and Google Add to $2 Billion Boost for Carbon Removal
• War Is Making One of the Richest Countries Even Richer
• Nobody Knows Where the Red Line Is for Cyberwarfare

©2022 Bloomberg L.P.