Sometimes it is the things people don't say that make the biggest impact. ANZ's new chief executive, Michael Smith, yesterday presided over a 90 minute analysts' briefing and an hour-long media conference to present the bank's 2007 financial results without once mentioning the soft metrics - measures such as staff engagement, customer satisfaction and corporate responsibility - that have become a collective obsession with his peers at the other big banks.Smith was more intent on talking about how he wanted the bank to have more "edge and urgency", how his focus was on "the jaws" (the difference between revenue growth and expense growth) and how he saw the need for some "re-engineering" to achieve a strategic shift in cost management. When asked if he was the sort of old-fashioned bank manager who wasn't into the touchy-feely stuff, he said he thought those metrics were essential but he conceded he was old fashioned enough to think they had to make a contribution to earnings.But the first place Smith will be looking for a greater contribution to earnings will be in the expense line. For the year to September operating expenses were up nine per cent, while operating income was up 12 per cent.Things deteriorated in the second half, when expenses were up eight per cent and operating income was up only three per cent. Poor expense management combined with a 36 per cent increase in the provision for credit impairment resulted in a one per cent fall in net profit in the second half.ANZ chief financial officer Peter Marriott conceded it was a disappointing result. The 8.1 per cent increase in cash earnings per share was at the bottom of the bank's target range.Net profit of $4.18 billion was 13.3 per cent up on 2006 but after adjusting for $195 million earned from the sale of Fleetpartners and the impact of hedge accounting cash earnings were $3.9 billion - 9.4 per cent up on the previous corresponding period.Marriott said the business was hit by a number of headwinds.  These included the impact of a very strong Australian dollar on overseas earnings, higher levels of provisioning and the dilutionary effect of a 1.3 per cent increase in the number of shares on issue (part of the E*Trade acquisition). Marriott said growth in the underlying business was a healthy 13 per cent. The highlights were the 16 per cent growth in the personal banking division and 34 per cent growth in the partnerships and private bank (which includes the ING Australia joint venture and all the Asian businesses). Not so impressive was the eight per cent increase in profit from the bank's New Zealand business and the six per cent increase in earnings from institutional business (which included a 13 per cent fall in profit from the New Zealand institutional business). Marriott said some headwinds will persist in 2008. One of them is the higher cost of funds.Earlier this month ANZ priced a $500 million subordinated debt issue in the domestic market; a