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09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP - PowerPoint PPT Presentation

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09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 29 OCTOBER 2009 RESULTS PRESENTATIONS & INVESTOR PACK 09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED MIKE SMITH CHIEF EXECUTIVE OFFICER

  1. 09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 29 OCTOBER 2009 RESULTS PRESENTATIONS & INVESTOR PACK

  2. 09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED MIKE SMITH CHIEF EXECUTIVE OFFICER

  3. ANZ, well positioned and delivering on our strategic commitments ● Strong operating result despite Global Tier-1 Capital Position (%) Financial Crisis ● Business has reached a turning point momentum maintained throughout o remediation program two strategic acquisitions - integration on o 1 track 1 Prime Liquidity Portfolio ($bn) ● Highest retail customer satisfaction level of the major banks in Australia ● Capital position places us amongst strongest banks in the world 1. Includes the RBS asset and ING Joint Venture acquisitions 2

  4. Overview of the 2009 result Full Year 2009 Growth ($m) 2009 vs 2008 Underlying Profit 1 3,772 10% Revenue 1 14,367 17% Expenses 1 (6,068) 12% Provisions 1 (3,056) 46% Statutory Net Profit After Tax 2,943 (11%) EPS 1 168.3 (4%) Full Year Franked Dividend 102 cents (25%) (interim 46cps, final 56cps) Customer Deposits 233,141 14% Net Loans and Advances incl. Acceptances 345,769 (1%) 1. All figures other than NPAT and full year dividend are underlying. 3

  5. Geographic performance - Highlights Underlying Profit by geography 2 ($m) Australia 2,560 Australia ● Strong contributions from both Retail and Up 13% Institutional Asia Pacific, Europe & America 699 1 ● Partnerships and the Institutional APEA Up 81% business the major contributors New Zealand 513 ● Challenging domestic economic New Zealand Down 32% conditions impacted results Institutional division 2 ● Institutional revenue up 37% driven by 1,401 Institutional Up 82% both customer flows and trading revenue division 1. Asia Pacific, Europe & America. 2. Institutional is a global line of business and is also included within Australia, New Zealand and APEA regions. 4

  6. Progress report on “Our journey to becoming a Super Regional bank” TRANSFORM OUT PERFORM RESTORE • Quality on par with • Institutional back global leaders in our Create to system  markets a leading Super • Restore “jaws” – • Best of breed customer Regional bank increase revenue  experience faster than costs • In-fill mergers and Global • Drive Asia profit  acquisitions in Asia quality, regional  • Capture existing (core geographies)  opportunities focus • Unlock the value of our • Strategic cost  franchise  management 1 to 2 years 2 to 5 years 5+ years 5

  7. 09 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED PETER MARRIOTT CHIEF FINANCIAL OFFICER

  8. Solid underlying business performance, timing of costs and higher provisions impacting second half Group Underlying Profit FY09 vs FY08 ($m) 1,955 117 (662) (966) (98) 3,772 (829) 107 3,426 3,319 2,943 17% 12% 46% 7% Underlying profit up 10% Sep 2008 Non Core Sep 2008 NII Other Operating Provisions Income Sep 2009 Non Core Sep 2009 Reported Underlying Income Expenses Tax, OEI Underlying Reported Group Underlying Profit 2H09 vs 1H09 ($m) Mar 09 Non Mar 09 NII Other Operating Provisions Income Sep 09 Non core Sep 09 reported Core underlying income expenses tax & underlying reported minorities 1,417 491 1,908 3% 5% 6% 13% (5%) 1,864 (338) 1,526 7

  9. Statutory profit reconciliation YOY 2H09 1H09 FY09 FY08 Growth Profit ($m) 1,526 1,417 2,943 3,319 (11%) Adjustments to Statutory Profit - Top up of NZ conduits tax provision (196) - (196) - - Economic Hedging – fair value gains/losses (709) 461 (248) 243 - Other 2 2 4 47 Cash Profit 2,429 954 3,383 3,029 12% Other Non Core Items Both impacted - One ANZ restructure (4) (79) (83) - by credit spreads - ING New Zealand settlement (24) (97) (121) - - Credit Intermediation Trades 595 (664) (69) (371) - Non Continuing businesses / Other (2) (114) (116) (26) Underlying Profit 1,864 1,908 3,772 3,426 10% 8

  10. Geographic businesses delivering solid performance in Australia and significant growth in Asia Pacific, NZ impacted by difficult conditions 2009 Pre Provisions Profit ($m) 2009 Net Profit After Tax ($m) 5,728 2,560 Australia Australia up 18% Up 13% 699 1,115 2008 profit 1 1 APEA APEA up 70% up 81% 2009 increase 2009 decrease 513 1,456 3 2 New Zealand New Zealand down 34% up 5% 2H09 Performance 2H09 Pre 2H09 NPAT (vs 1H09) Provision profit Australia 17% 36% APEA 25% 31% New Zealand 23% 75% 1. Asia Pacific, Europe & America. 2. New Zealand 2009 PBP NZD 1,783m; 2H09 vs 1H09 PBP down 20%. 3. New Zealand 2009 NPAT NZD 628m; 2H09 vs 1H09 NPAT down 73% 9

  11. Global Markets and Asia Pacific key contributors to increase in total income Total Income ($m) Markets Income (including NII) ($m) 1,066 1,125 14,367 17% FY09 growth: 77% 7,327 12,295 7,040 46% of 581 660 1,125 FY09 6,315 442 1,066 414 5,980 growth 1,658 Excluding 1,645 markets FY09 up 1H07 2H07 1H08 2H08 1H09 2H09 10% Markets sales Markets trading Growth in Asia offsetting lower New Zealand income (Total income %) 4,544 4,329 2008 2009 68% 69% 14% 1H08 2H08 1H09 2H09 18% 10% 21% Net Interest (ex Markets) Other Income (ex Markets) Markets income Australia New Zealand APEA 10

  12. Asia Partnerships a key contributor to growth in other income Underlying other income ($m) Composition of “Other” 4,557 4,440 $m $m 2500 350 2,339 2,199 2,241 2,218 300 2000 Refer 250 Markets 1500 comments 200 150 1000 71% Flat increase 100 growth 2009 vs 500 2009 vs 2008 2008 50 0 0 1H08 2H08 1H09 2H09 1H08 2H08 1H09 2H09 -500 Asia Partnerships Fee income FX earnings INGA / NZ Trading securities Other Other FX Impact 11

  13. Margins moving back to pre crisis levels Net Interest Margin (NIM) Full Year 2009 (bp) (1.4) 229.5 4.5 5.0 44.8 NIM excluding (12.2) 3.5 12.3 213.2 “Accounting noise” (27.9) 200.9 280 Basis points 260 240 Asset & funding mix 220 Accounting noise 200 16bp 180 Funding costs 160 Equity Mix 140 Deposits Markets Assets 120 Other 100 2H06 2H07 2H08 2H09 Group NIM 2008 2008 Re-pricing 2009 adjusted impacts Group risk adjusted NIM 222.3 216.4 5.9 5.6 8.4 4.2 (3.7) 236.8 Second Half 2009 12

  14. Strong deposit growth and subdued lending position a result of environmental drivers, strategic and portfolio initiatives Customer deposit and lending growth Institutional Lending growth returning (2009 vs 2008) (%) to more normalised levels (NLA incl Acceptances $b) 14% Average Total $b Net Loans 29% Group 85.8 85.1 90 up 9% (1%) CAGR Thousands 80.6 80 16% 70.4 Australia 66.1 70 Division 7% 58.1 8% 60 CAGR NZ 1% 50 Division (1%) (NZD) 40 35% APEA 30 Division 1 (11%) 20 23% 10 Global Instit. (18%) 0 1H07 2H07 1H08 2H08 1H09 2H09 Net Loans and Advances Customer Deposits including acceptances 1. Includes Institutional APEA under Matrix reporting 13

  15. Expense growth directed to growth markets and to drive superior returns, costs contained in New Zealand and Australia division Contribution to 2009 cost growth 12.3% Revenue Cost “Jaws” growth growth FX Adjusted 3.8% Investment in network, support functions APEA 1 32% 30% 2% and staff to deliver growth agenda FX Adjusted Investment in “rebuild and refocus” 3.5% 29% 20% 9% Institutional 2 program, remuneration increases Australia Front line staff and systems, salary inflation 2.1% 9% 4% 5% Division 1.3% Infrastructure & transformation spending - - Group Centre +$71m 0.3% NZ Division FX Adjusted Costs well contained (4%) 2% (6%) 1.3% FX Impact 2H09 expense growth exceeded first half, impacted by timing of performance based payments 1. Asia Pacific, Europe & America, including Institutional. 2. Excluding Asia Pacific, Europe & America. 14

  16. Provision charge composition changing with the credit cycle - moved towards middle market, significant increase in New Zealand Total Provision Charge ($m) Individual Provision Charge ($m) 77% 119% 88% 5% 13% Wholesale > 100m Wholesale < 100m 1,531 1,621 Commercial 205 Consumer secured 1,435 154 1,283 1,364 Consumer unsecured 142 122 243 486 241 201 894 187 726 290 653 1,072 981 378 331 460 267 172 187 330 103 1H07 2H07 1H08 2H08 1H09 2H09 1H07 2H07 1H08 2H08 1H09 2H09 Australia New Zealand APEA 15

  17. Balance sheet well positioned for the current economic environment Collective Provision Balance / Collective Provision Charge returning Credit RWAs (%) towards a more normalised level ($m) 1.31% 818 1.13% 1.06% No net 0.94% release from Concentration / 0.73% Economic Cycle provisions across year 242 69 83 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 FY06 FY07 FY08 FY09 Total Provision Coverage Lending Growth Risk Profile Total Provision Balance / Credit RWAs Portfolio Mix Other Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 0.83% 1.07% 1.39% 1.58% 1.97% Economic Cycle Concentration 16

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