2015 CLSA CONFERENCE Hong Kong A U S T R A L I A A N D N E W Z E - PowerPoint PPT Presentation

2015 CLSA CONFERENCE Hong Kong A U S T R A L I A A N D N E W Z E A L A N D B A N K I N G G R O U P L I M I T E D Investor Discussion Pack September 2015

Index Group Overview 3 Financial Performance 10 Treasury 27 Strategy 38 Risk Management 59 Portfolio composition by EAD – Group, IIB, Asia, China 75 Home Loans 80 Economics 88 Data within this discussion pack is current as at ANZ’s 1H15 results, disclosed 5 May 2015, unless otherwise stated All figures within this investor discussion pack are presented on Cash basis in Australian Dollars unless otherwise noted. In arriving at Cash Profit, Statutory Profit has been adjusted to exclude non-core items, further information is set out on page 86 of the 2015 Half Year 2 Consolidated Financial Report. Common growth rate abbreviations used in this presentation include PCP: Prior comparable period growth rate (for instance 1H15 vs 1H14, 2H14 vs 2H13); HoH: Half on Half growth rate (for instance 1H15 vs 2H14, 2H14 vs 1H14)

2015 CLSA CONFERENCE Hong Kong Group Overview

SUPER REGIONAL STRATEGY STRONG PROFITABLE ENTERPRISE CORE ASIAN APPROACH MARKETS GROWTH STRONG LIQUIDITY AND CAPITAL MANAGEMENT DISCIPLINED AND EXPERIENCED MANAGEMENT CEO PRIORITIES FY14-16 Improving Diversifying Improving Improving customer revenue productivity returns experience 4

ANZ offers a distinctive geographic footprint and business mix that provides earnings diversification Corporate Profile – Latest Full Year position: 2014 • Founded in 1835, ANZ is a super regional bank that serves 10 million retail, commercial and institutional customers in 33 markets and employs 50,000 staff. • Headquartered in Melbourne, Australia, ANZ is one of the four largest Australian banks and ranked in the top 25 banks globally by market capitalisation. • Listed on the Australian Stock Exchange (ASX) with a secondary listing on the New Zealand Stock Exchange (NZX) Top 4 Corporate A Top 4 Bank The Largest Bank in Bank in Asia 1 in Australia 2 New Zealand APEA Australia New Zealand Staff (FTE) 20,512 Staff (FTE) 21,591 Staff (FTE) 8,225 Customers ~1.6m Customers ~6m Customers ~2.1m Cash NPAT $1.2B Cash NPAT $4.4B Cash NPAT $1.5B RoRWA 1.30% RoRWA 2.16% RoRWA 2.51% Customer Deposits $108B Customer Deposits $228B Customer Deposits $68B Customer Lending $79B Customer Lending $349B Customer Lending $94B 1. Greenwich Associates 2013 Asian Large Corporate Banking Study 2. Peter Lee Associates Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand 2014 5

Profit & Loss contribution by division Operating Income by Division 1 1H15 - Operating Income by Division 1 $m Australia New Zealand IIB Wealth Australia New Zealand IIB Wealth 12,000 8% 10,000 42% 8,000 37% 6,000 4,000 2,000 13% 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 -2,000 Net Profit after Tax by Division 1 1H15 - Net Profit after Tax by Division 1 $m Australia New Zealand IIB Wealth Australia New Zealand IIB Wealth 4,000 7% 3,500 3,000 2,500 46% 2,000 42% 1,500 1,000 500 0 16% 1H12 2H12 1H13 2H13 1H14 2H14 1H15 1. Excluding GTSO / Group Centre 6

Profit & Loss contribution by geography Operating Income by Geography 1H15 - Operating Income by Geography Australia New Zealand APEA APEA Network $m Australia New Zealand APEA APEA Network 12,000 Revenue 1 18% represents 10,000 income generated in 8,000 25% APEA plus 20% 6,000 income generated in 4,000 Australia & New Zealand as a 62% 2,000 result of referral from ANZ’s APEA 0 network. 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Net Profit after Tax by Geography 1H15 - Operating Income by income type $m Net Interest Income Other Operating Income Australia New Zealand APEA 100% 4,000 23% 26% 80% 3,000 55% 60% 2,000 40% 77% 74% 1,000 45% 20% 0 0% 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Australia New Zealand APEA 1. APEA Network Revenue represents income generated in Australia & New Zealand as a result of referral from ANZ’s APEA network. Note: APEA = Asia Pacific Europe & America 7

Balance sheet Institutional Balance sheet profile Group balance sheet composition Customer Lending 1 Customer Deposits 1 By total exposure (%) By tenor – 1H15 (%) Default 16% Tenor >1Yr 30% Sub Inv Grade Tenor <1Yr 18% Inv. Grade 19% 65% 52% 20% 22% 22% 29% Australia APEA New Zealand 63% 64% Group lending composition 2 $b 400 Mortgages 79% Other Retail 77% 75% 300 71% Corporate & Commercial Institutional 200 37% 36% 100 0 Mar 13 Mar 14 Mar 15 Asia Aus NZ Australia NZ APEA 1. Customer lending represents Net Loans and Advances including acceptances. 2. Net Loans and Advances. Excludes Wealth & other (1% of total lending) 8

Total Credit Exposure (EAD) by Geography Exposure at Default 1 by Geography Exposure at Default by Line of Business 2 Total Exposure at Default (Mar 15) - $869b 1 Australia New Zealand APEA 16% $515.8b $149.5b $204.1b 29% 31% 22% New Zealand UK & Europe 4% 94% 17% Americas 4% Pacific 1% Australia APEA 59% 4% 24% 53% Singapore 49% 3% Hong Kong 6% Other North 6% 2% East Asia Australia New Zealand APEA Other South East Asia Retail Institutional Commercial 1. EAD excludes amounts for ‘Securitisation’ and ‘Other Assets’ Basel asset classes. 2. Institutional includes exposure to Bank and Sovereign counterparties and ANZ’s Liquidity portfolio. 9

2015 CLSA CONFERENCE Hong Kong Financial Performance

Summary of results 1H15 – 1H14 $m change Revenue 10,185 5.3% Expenses (4,593) 7.2% PBP 5,592 3.9% Provisions (510) (3.4%) Cash Profit 3,676 4.6% Stat. adjustments (170) Statutory Profit 3,506 3.4% Cash EPS (cents) 133.6 3.8% DPS (cents) 86 3.6% ROE 14.7% (80)bp CET1 (%) Internationally harmonised 12.4 - APRA basis 8.7 40bp 11

Impact of FX translation 1H15 Earnings Composition 1H15 FX FX Adj (by currency) Growth impact Growth 1H15 1H13 Revenue 5.3% 2.1% 3.2% $3,676m $3,179m 10% 11% Other 1 3% 5% CNY Expenses 7.2% 2.8% 4.4% 4% 6% USD 18% NZD 22% PBP 3.9% 1.7% 2.2% Provisions (3.4)% 1.6% (5.0)% 65% NPAT 4.6% 1.8% 2.8% 56% AUD ROE (80)bp (30)bp (50)bp 1. major currencies in “other” category includes TWD, MYR, PGK and IND – no one currency greater than 2% 12

Operating environment and key actions What we said at FY14 Actions – 1H15 Expanded coverage Additional Aus. Division front office staff: ~600 • NSW expansion • Improved Customer Experience Digital capacity & capability • “ GoMoney ”, “Grow”, “Smart Choice” & • “ Transactive ” enhancements “Tap and Pin” ATM: world first • Rolled out “ Transactive ” China and Philippines • Single digital access to Cash, Trade and Markets • in 4 Asian markets Enhanced Productivity & Capital Efficiency Hubs & Ops unit costs down ~10% average • Esanda Dealer Finance sale • 13

Composition of Group earnings Revenue drivers Net Interest Margin Expense drivers Divisional Cash Profit (1H15 – 1H14) Notes. TB: Transaction Banking, Retail: Retail Australia, Retail New Zealand, Retail Asia Pacific and Global Wealth, Comm: Corporate & commercial Banking Australia and Commercial NZ 14

Net interest margin Group Divisional Australia Division Group NIM First half trend NZ Division (NZD) 2.52% 2.53% 2.50% 2.49% 2.50% 2.50% 2.25% 2.15% 2.04% 1H13 1H14 1H15 1H13 1H14 1H15 1H13 1H14 1H15 Net Interest Income contribution IIB Division Global Loans NIM Trends 3% 2.54% 2.45% 2.35% 2.24% 1.65% 1.55% 1.99% 29% 2% 1.34% 1.46% 1.53% 1.22% 1.29% 1.18% 53% 1% 18% 0 1H13 1H14 1H15 1H13 2H13 1H14 2H14 1H15 Aus Division NZ Division Aus NIM Asia NIM Instituional 15

Lending composition and flows Australia Division NZ Division Net Loans and Advances balance Net Loans and Advances balance 1 NZ$b $b 12 10 11 68 66 63 16 16 16 17 16 15 218 202 188 63 60 56 Mar 13 Mar 14 Mar 15 Mar 13 Mar 14 Mar 15 Home Loans Business Lending Other Consumer Home Lending Business Lending Rural Lending Net Loans and Advances flows Net Loans and Advances flows 2 NZ$b $b 9.1 90 0.4 8.6 13.7 83 0.4 12.5 (9.9) 100 298 (9.5) 95 91 (7.7) 278 262 (7.3) (70) (67) New Fundings, Net Personal New Fundings, Net Personal Mar 15 Mar 13 Repay/ Refis / Mar 14 Repay/ Refis / Loans and Loans and Mar 13 New TopUp Exit Repay Mar 14 New TopUp Exit Repay Mar 15 Redraws & Redraws & Interest Interest Cards Cards Other Other 1. Excludes “other” Mar 13 $3.0b, Mar 14 $3.2b, Mar 15 $3.3b 2. Includes capitalised brokerage/mortgage origination fees, unearned income and customer liabilities for acceptances. 16

Cost to income Australia Division NZ Division (NZD) 45.2% 41.3% 38.1% 37.0% 40.1% 36.7% 1H13 1H14 1H15 1H13 1H14 1H15 IIB Global Wealth 1 62.4% 60.4% 57.5% 46.8% 44.9% 44.2% 1H13 1H14 1H15 1H13 1H14 1H15 1. Excluding the impact of the Trustees sale 17