(Bloomberg) -- ANZ Group Holdings Ltd. has assembled a “fortress” balance sheet to protect the bank in the event of the market deteriorating, Chief Executive Officer Shayne Elliott said Tuesday. 

ANZ, which Tuesday opted to hand out A$2 billion ($1.3 billion) to investors via a buyback, has made a concerted effort to build up its capital base, Elliott told Bloomberg Television in an interview following its half-year results.

“What we have built is a fortress balance sheet,” he said. “Even after the buyback, even after we pay for the A$4.9 billion ($3.2 billion) to buy Suncorp Bank we will still have extraordinary strong levels of capital above our regulatory minimum. Should things deteriorate, we are well provided for.”

More customers are struggling, Elliott said, although the number is still low on a relative historical base at 0.3% of all customers. 

“Clearly there is some stress on the economy. I mean that’s to be expected given the interest rate rises and cost of living pressures. The market is subdued, particularly here in Australia and New Zealand,” he said.

Australia’s largest lenders have had a tricky time preparing themselves and investors for what comes next from central banks. The Reserve Bank of Australia is widely expected to hold interest rates at a 12-year high of 4.35% later Tuesday and while lenders typically enjoy a tailwind from rising interest rates, the cycle has been less profitable than many had expected due to fierce competition in the mortgage market. 

Elliott said he had been saying for some time that interest rates will stay higher for longer.

“The market in June was getting overly excited about the potential for rate cuts,” he said. “Now there’s general consensus that any rate cuts will be later and potentially into next year.”

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