[SYDNEY] Australia & New Zealand Banking Group has axed its traditional US$1,000 share bonus for staff this year, citing the need to cut expenses. In an intranet post seen by Bloomberg News, management told employees that 2016 had been a "challenging year" and that in an "environment of lower growth and lower returns, ANZ needs to reduce costs."

Higher funding costs, narrower margins and rising bad-debt charges are putting pressure on profit at Australia's largest lenders, with ANZ earlier this month reporting its lowest full-year earnings since 2011.

Since taking over in January, chief executive officer Shayne Elliott has been winding back the bank's lower-returning operations in Asia and focusing on the domestic market.

"It's been a difficult operating environment for ANZ and our shareholders have already felt the impact of this through a reduction in the dividend," Stephen Ries, a spokesman for the Melbourne-based lender, said in an e-mail confirming the decision. He stressed that the share offers were never guaranteed and came on top of other annual bonuses and pay rises for most staff.

The move comes after Mr Elliott was earlier this month granted 27,764 in deferred shares, a company filing on Nov 28 showed.

That formed part of his annual compensation and the bonus was previously disclosed in the company's annual report, a fact reiterated by Ries when queried about the matter.

ANZ, Australia's third-biggest bank, is exploring the sale of a number of assets, including its domestic wealth business and minority stakes in Shanghai Rural Commercial Bank, Bank of Tianjin, PT Bank Pan Indonesia and Malaysia's AMMB Holdings Bhd.

Investors appear supportive of the new strategy, with ANZ shares having risen 10 per cent in the past six months. Half of the 16 analyst recommendations in a Bloomberg survey were to buy the stock, with only one sell.

BLOOMBERG