Strengthening Institutional and Commercial in Australia & New Zealand Grow Commercial Increase in economic Corporate & Commercial Banking Australia Combined Lending and Deposit Growth 2 9% capital allocated to Australia 1.9x 16.3% 30,000 Growth in Australia customer numbers 1 8.5% Growth in New Zealand 13% Small Business customers System ANZ Drive productivity in Institutional Institutional Australia & New Zealand Reduction in Aust/NZ 5% Cost to Income Ratio operating expenses 38.0% 6% Reduction in FTE Aust/NZ 36.2% 36.3% 35.7% Ex-software Increase in income Impairment 36% referred to Asia FY11 FY12 FY13 1. Excludes Esanda; 2. Source: Lending - RBA Lending and Credit Aggregates and Deposits – APRA Monthly Banking Statistics, Non-Financial Corporations 23
Profitable Growth in Asia Build Scale Asia Customer Growth FY13 v FY12 Institutional Asia 11% 19% customer growth 16% 12% 35% ANZ Transactive customer 7% 6% growth 96% ANZ Transactive monthly Agriculture Financial Resources Global Commercial transaction volume growth Institutions Diversifieds Drive Capital Efficiency Asia Volume Growth FY13 v FY12 Increase in capital 66% 24% allocated to Asia Trade % Institutional Asia 32% 74% portfolio with tenor < 1 year 16% 270 bps 1 Decline in Asia cost to income PCM Deposits Trade Lending FX Turnover 1. Adjusted for FX and prior period one-off items, unadjusted down 710bps 24
Trade a key driver of return Natural cross sell product for What Customers Want Cash and Markets $1 of Trade income = $1.08 of Cross-Sell 1 On the ground presence $2.08 $0.51 $1.00 $0.57 Risk and liquidity appetite Cross-Sell Income Processing expertise Trade Markets Cash Combined Income Income With strong utilisation by new to bank What ANZ Likes Trade led customers Quality multinational customer % New Trade Customers utilising 62% base 47% Short duration 8% High quality, high probability cross-sell Markets Cash Global Loans 1. New to bank trade led customers using Markets and Payments & Cash Management Products 25
Productivity Operations Volume Growth Transaction Quality, Manual Payments FY13 v FY12 Defects Per Million 12% 865 670 8% 7% 495 5% 400 180 Australia New IIB Global 2H11 1H12 2H12 1H13 2H13 Zealand Wealth Operations Expense Growth Straight Through Processing Aust/NZ FY13 v FY12 % of Total Transactions New Global ~90-95% Australia Zealand IIB Wealth 83% 76% 68% -6% -7% FY11 FY12 FY13 Global Best -10% Practice -11% 26
Credit Quality Group Provision Charge Institutional diversification delivering improved credit quality $b Provision Charge Provision Charge as % Avg. Net Advances 0.85% % Institutional Exposure At Default 0.50% Exposures < 1 year 48% 0.32% 0.30% Tenor 0.27% 3.06 1.82 1.25 1.21 1.20 Investment Grade 78% Exposures FY09 FY10 FY11 FY12 FY13 (68% in 2010) Group Impaired Assets Asia Exposures 29% $b 6.6 74% <1 year tenor 5.6 5.6 5.2 4.3 Global Loans 39% (47% in 2010) Average Credit RWA 41% rate (54% in 2010) 1 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 1. Basel 2 basis 27
Capital efficiency Return on Equity Movement FY13 v FY12 $4.5 Organic capital billion generated in FY13 0.60% 15.3% 0.05% 15.1% Return on Risk 7bps Weighted Assets increase 1 0.25% 0.10% Proactive allocation of FY12 FX FVA Increase Reduced FY13 resources Impact Impact in RoA leverage Economic Profit Movement FY13 v FY12 Average Credit RWA 200bps rate (CRWA/EAD) 1 $m 2,701 93 284 46 510bps 3 year DPOR increase 2,370 Neutralised Dividend FY12 Cash Profit Economic Imputation FY13 Reinvestment Plan net of Cost Credit Cost Credits of Capital 1. Basel 2 basis 28
CEO Priorities Improving Diversifying Improving Improving customer revenue productivity returns experience Strategic Focus Proactive capital allocation Further improve productivity in NZ Build share in Australia Use scale to lower unit cost Grow Institutional businesses aligned Maintain risk appetite to trade and capital flows FY14 Outlook Revenue Expense Above Peer Improved Growth Growth Stable Risk EPS ROE ~4-5% ~2% 29
Additional Financial Information
Overview of Financial Performance FY13 FY12 FY13 $M $M v FY12 Cash Profit 6,498 5,830 +11% Operating Income 18,378 17,848 +3% Expenses 8,236 8,519 -3% Provisions 1,197 1,258 -5% Statutory NPAT 6,272 5,661 +11% EPS (cents) 239 219 +9% Dividend per Share (cents) 164 145 +13% All figures other than Statutory Net Profit after Tax and Dividend per Share are presented on Cash basis 31
Adjustments between Statutory Profit and Cash Profit FY13 FY12 $M $M Statutory NPAT 6,272 5,661 Adjustments between statutory profit and cash profit Treasury shares adjustment 84 96 Revaluation of policy liabilities 46 (41) Economic hedging (13) 229 Revenue and net investment hedges 159 (53) Structured credit intermediation trades (50) (62) Total Adjustments 226 169 Cash Profit 6,498 5,830 1. Refer to pages 81 to 89 of the ANZ Consolidated Financial Report Dividend Announcement and Appendix 4E for an analysis of the reconciliation of Statutory Profit to Cash Profit 32
Segment Performance Profit Before Profit Before Cash Cash Cash Provisions Provisions Profit Profit Profit FY13 FY13 $M FY13 v FY12 FY13 FY12 v FY12 Australia 4,916 +13% 2,873 2,598 +11% IIB 3,594 +7% 2,430 2,111 +15% New Zealand 1,256 +21% 881 642 +37% Global Wealth 566 +20% 469 346 +36% Group Centre (190) Large (155) 133 Large Total 10,142 +9% 6,498 5,830 +11% All figures are presented on Cash basis 33
Financial Performance Snapshot Cash Profit EPS $m cents 6,498 5,830 239 5,467 219 211 4,822 191 FY10 FY11 FY12 FY13 FY10 FY11 FY12 FY13 Return on Equity Return on Risk Weighted Assets RoRWA (Basel 3 Basis) 15.6% 2.09% 2.03% 2.02% 15.3% 1.97% 15.1% 2.03% 14.9% FY10 FY11 FY12 FY13 FY10 FY11 FY12 FY13 All figures are presented on Cash basis 34
Return on Equity IIB Return on Equity (Regulatory Capital Basel 3) 1 Basel 3 Capital Usage Mix FY12 Basel 3 Proforma FY13 Basel 3 Other 5% 5% 3% 3% Retail 11% IIB Division 12% Partnerships 18% 19% 14% Institutional 14% Global 22% 10% 23% Markets Global Loans 11% 20% Transaction Transaction Banking 15% 18% Banking 17% 16% Global Markets 17% 10% Global Partnerships 37% 34% 11% Loans 11% Retail Banking 7% FY12 FY13 1. Capital calculated in accordance with APRA Standards. Capital represents Converted Basel 3 Average RWA plus Average Capital Deductions (i.e. partnership investment) 35
Drivers of income growth in FY13 Operating Income by Division Australia Movement FY13 v FY12 • Above system growth in mortgages and strong growth in C&CB $m • Disciplined margin management partly offset by deposit pricing pressure 7% 2% 5% 5% International & Institutional Banking 10 • Volume growth in APEA deposits 18,378 70 113 and lending offset by margin 137 pressure from competition, mix 511 shift to lower risk trade products and lower rate environment 17,848 • OOI higher driven by Trade and Markets and Asia Partnerships 17,557 New Zealand 291 • Margins impacted by competition, Operating Income up 5% ex Visa Gain mix impacts with customers preferring lower margin fixed rate Operating Income up 3% products and higher funding costs, partially offset by improved deposit margins • OOI driven by the sale of EFTPOS and improved wealth management and insurance revenues Global Wealth • Growth in Funds Management, FY12 Gain on FY12 Australia IIB New Global Group FY13 Insurance and Private Wealth income Visa sale Normalised Zealand Wealth Centre driven by gains in the investment 2H12 market, improved insurance related claims, stable lapse experience, higher inforce premiums and solid growth in volumes 36
Income by Line of Business Operating Income Movement Operating Income Mix by Line of Business FY13 v FY12 $17.6b $18.4b $m Growth in Mortgages 5% 6% Other (margin and Driven by FX turnover volume growth) Payments & Cash Management and Loans (higher volume) 18% 19% • Term Deposits 231 68 18,378 • Merchant Acquiring 655 133 • Clearing & International Payments 16% 15% • Cash Management & Savings Accounts Lower margin in 17,557 Cash Management Risk Management & Term Deposits • Rates & Credit • FX & Commodities • Equity Derivatives • Life Insurance • Investments & • General Insurance Superannuation • Wealth Distribution and Advice 61% 60% Financing & Capital Management • Mortgages • Cards * FY12 Normalised Financing & Capital Risk Management Payments & Cash Other FY13 • Personal Loans • Business Loans Management Management • Trade & Supply • Specialised Chain Finance FY12 FY13 * Normalised * FY12 operating income adjusted to exclude the gain on Visa share sale ($291m) 37
Income by Division and Geography Operating Income Mix by Division (FY13) Operating Income Mix by Geography (FY13) FY13 Network Revenue 1 from APEA represented 21.4% of Group Operating Income Transaction Retail Asia Banking Pacific Global Asia Partnerships Loans 8% 4% Other 2% 9% 1% New Zealand APEA Retail 6% IIB 17% New Global New Zealand 36% 6% Markets 12% Zealand Commercial 12% Funds 3% New Zealand Management Global Wealth Australia 8% 3% Insurance 16% 1% 67% Private Wealth Australia 1% Other 44% 17% Australia Corporate & Commercial 27% Australia Retail 1. Network revenue represents income booked in a jurisdiction different from where a client relationship is managed 38
Other Operating Income Net Interest Income Operating Income Mix movement FY13 v FY12 $m Other Operating Income Net Interest Income 65 12,772 80 3 515 15% 16% 1 31% 12,110 44% Up 5% 2H12 Australia IIB New Global Other 1H13 Zealand Wealth 92% Other Operating Income 85% 84% movement FY13 v FY12 69% $m 56% 5,738 67 33 5,606 138 75 5,447 8% 291 4 ANZ Australia IIB New Global Normalised OOI up 3 % Group Zealand Wealth FY12 Gain on Normalised Australia IIB Zealand Wealth Centre FY13 Group Global Sale Visa New 2H12 3% 7% 2% 5% 5% Operating Income Growth FY13 v FY12 39
Net Interest Margin – Group ex markets Net Interest Margin movement 2H13 v 1H13 bps 267 2 2 261 2 4 3 1 1H13 Impact of Funding costs Business & Deposits Assets (incl. Other 2H13 lower interest (ex impact of funding mix credit risk mix) rates lower rates) Net Interest Margin movement FY13 v FY12 bps 271 3 4 263 - 1 10 4 FY12 Impact of Funding costs Business & Deposits Assets (incl. Other FY13 lower interest (ex impact of funding mix credit risk mix) rates lower rates) 40
Net Interest Margin – Movement summary Net Interest Margin Movment Summary 2H13 v 1H13 Group Divisions bps Australia New Zealand IIB 1H13 NIM excluding Markets 267 253 249 277 Funding costs (incl. impact of lower interest rates) -2 3 2 -8 Business & funding mix -2 -1 -1 -3 Deposits 2 1 11 - Assets (incl. credit risk mix) -3 - -9 -5 Other -1 -4 -3 - Total Movement -6 -1 0 -16 2H13 NIM excluding Markets 261 252 249 261 Net Interest Margin Movment Summary FY13 v FY12 Divisions Group bps Australia New Zealand IIB FY12 NIM excluding Markets 271 248 263 310 Funding costs (incl. impact of lower interest rates) -7 1 -7 -25 Business & funding mix -1 -1 4 -3 Deposits -4 -9 9 -2 Assets (incl. credit risk mix) 4 17 -18 -10 Other - -3 -2 -1 Total Movement -8 5 -14 -41 FY13 NIM excluding Markets 263 253 249 269 41
Operating Expenses Operating Expenses by Division Operating Expense growth movement FY13 v FY12 $m 8,519 FY13 v FY12 2H13 v 1H13 5% 4% 51 1% 99 -2% -3% -3% Group Australia IIB 8,236 109 23 1 5% 3% Down Down Down Down Flat 2% 3% 10% 2% -2% Operating Expenses down 3% FY12 1 Australia IIB New Global Group FY13 -10% Zealand Wealth Centre New Zealand Global Wealth 1. Includes $274m software impairment and $148 New Zealand Simplification programme restructuring expenses 42
Balance sheet Customer Lending & Deposits by Geography Customer Lending 1 movement FY13 v FY12 $b $b 14 469 Customer Lending 1 Customer Deposits 12 8% CAGR 500 469 15 428 428 450 13% CAGR 397 400 369 369 Up 10% 328 350 Sep 12 Australia New APEA Sep 13 297 Zealand 300 257 250 Customer Deposits movement FY13 v FY12 200 $b 150 18 369 10 100 13 50 328 - Up 12% - Sep Sep Sep Sep Sep Sep Sep Sep 10 11 12 13 10 11 12 13 2H12 Australia New APEA 1H13 Australia New Zealand APEA Zealand 1. Customer lending represents Net Loans & Advances including acceptances 43
Balance Sheet composition by Geography Customer Lending 1 by Geography Customer Deposits by Geography APEA Australia APEA Commercial Retail & Wealth Institutional APEA & Institutional Retail & Wealth APEA Commercial 2% 10% & Institutional 22% 11% 4% Australia Commercial APEA APEA 14% Australia 13% New Zealand Institutional 26% 15% 11% Retail & New Zealand 9% Retail & Wealth Wealth New New Australia Zealand Zealand 2% Other Retail 19% NZ 17% 5% Australia NZ Australia 7% Commercial Commercial 68% 57% Australia 3% 1% 12% Commercial New Zealand New Zealand Institutional Institutional 42% 30% Australia Australia Retail Mortgages Retail & Wealth 1. Customer lending represents Net Loans & Advances including acceptances 44
Balance Sheet composition by Segment Customer Lending 1 by Segment Customer Deposits by Segment Australia Australia Institutional Commercial New Zealand New Zealand Commercial Commercial 15% 14% APEA 7% Commercial 5% New Zealand Retail & Wealth Australia Commercial 11% Institutional 10% APEA Australia 21% Institutional 12% 22% Commercial Institutional APEA 17% Retail & Wealth 40% 2% Commercial Institutional 21% APEA 10% Institutional New Zealand 9% Retail & Wealth Retail & Wealth Retail & Wealth 3% New Zealand 1% 58% New Zealand Institutional 43% Institutional 4% APEA Retail & Wealth 45% 30% Australia Australia Retail & Wealth Retail & Wealth 1. Customer lending represents Net Loans & Advances including acceptances 45
Group Treasury
Strong Balance Sheet profile FY13 v FY12 Capital 10.8% 47bps 10.0% APRA Basel 3 CET1 Internationally Harmonised 76bps 8.5% CET1 8.0% Customer Funded Balance 62% Sep 12 Sep 13 Sheet APRA CET1 Internationally Harmonised CET1 Term Wholesale Funding $24b issued, 29% to Domestic Stable Funding Mix investors 14% 15% Lowest funding gap of 5% 3% 12% 12% Australian major banks 62% 61% $7b Total Liquidity Portfolio 8% 8% Sep 12 Sep 13 FX earnings hedges in place ~60% SHE & Hybrid Debt Customer Funding for FY14 Term Debt >1yr Term Debt <1yr ST Wholesale Funding 47 All growth rates reflect FY13 v FY12
Capital levels remain well positioned Basel 3 CET1 Capital Overview • Capital generation and initiatives in FY13 10.8% 10.0% Internationally have lifted capital levels by 47bps (APRA 9.5% Harmonised CET1) and 76bps (Internationally Harmonised CET1) APRA • The group is well placed in regards to capital 2.5% targets and remains focused on driving Capital Conservation 8.5% further efficiencies 8.0% 7.5% Buffer • Dividend Payout to remain towards upper end of 65% - 70% range (Cash Earnings) in 4.5% the near term, 69.3% in FY13 CET1 Minimum • DRP/BOP will again be neutralised via on-market buyback Sep 11 Sep 12 Sep 13 Capital position reconciliation under Basel 3 CET1 Tier 1 Total Capital Sep 13 APRA 8.5% 10.4% 12.2% 10% allowance for investments in insurance subs and ADIs 0.8% 0.8% 0.7% Mortgage 20% LGD floor and other measures 0.5% 0.6% 0.7% IRRBB RWA (APRA Pillar 1 approach) 0.5% 0.6% 0.7% Up to 5% allowance for deferred tax asset 0.3% 0.2% 0.2% Other capital items 0.2% 0.2% 0.2% Sep 13 Internationally Harmonised 10.8% 12.8% 14.7% 48
Capital levels have increased in FY13 CET1 – APRA (Sep 2013 v Sep 2012) 2.06 0.24 0.35 0.27 8.49 8.02 1.16 0.05 +47bps Sep-12 Cash RWA Non RWA Capital Dividends Other (5) Sep 13 NPAT (1) Usage (2) Business Initiatives (4) (net DRP) Usage (3) CET1 – APRA (Sep 2013 v Mar 2013) 1.03 0.08 8.49 0.01 0.08 0.11 8.18 0.62 +31bps Mar 13 Cash RWA Non RWA Capital Dividends Other (5) Sep 13 NPAT (1) Usage (2) Business Initiatives (4) Usage (3) 1. Cash earnings net of pref shares. 2. Includes impact of expected loss versus eligible provision shortfall 3. Includes capital retention of deconsolidated entities, capitalised software and other intangibles. 4. Includes refinance of ANZ Wealth (1H13) and ANZ LMI (2H13). 5. Includes net FX, Non-Cash NPAT items, net deferred tax assets. 49
Liquidity position has benefitted from an improvement in both funding mix and asset profile Funding mix has stabilised Shortened asset tenor 29% 19% 18% 16% 23% 24% 7% 13% 14% 14% 15% 8% 22% 1% 5% 3% 6% 8% 3% 3% 12% 12% 7% 14% 80% 74% 73% 62% 61% 50% 8% 8% 7% 4% 3% 3% Sep 08 Sep 12 Sep 13 Sep 08 Sep 12 Sep 13 Other Fixed Assets Lending SHE & Hybrid Debt Customer Funding Trade Loans Other ST Assets Term Debt >1yr Term Debt <1yr ST Wholesale Funding Liquid Assets 50
Lowest structural funding gap of major domestic peers, providing flexibility Peer Funding Comparison ANZ Westpac NAB CBA Loan – Deposit Ratio (%) 127% 145% 145% 139% Loan – Deposit Gap ($b) 101 162 153 157 Australia Household Funding Gap ($b) 115 181 129 174 Loan – Deposit Gap Benefits of a lower Funding Gap $b ● Improved capability to manage periods of market volatility 200 175 ● Lessens reliance on offshore wholesale markets – a key focus of Rating Agencies 150 49b 52b 125 ● Enables ANZ to be a regular, but not too frequent, issuer in offshore benchmark 100 markets 75 Mar 12 Sep 12 Mar 13 Sep 13 ● Provides greater flexibility for ANZ to manage changes in system credit growth ANZ Westpac NAB CBA Source: APRA (Aug 13) and latest bank published financial statements 51
A sustainable term wholesale funding profile Term Wholesale Funding Profile Issuance Maturities $b 26 26 24 24 Annual indicative 21 issuance volume 18 16 16 13 12 11 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+ Senior Unsecured Covered Bonds Government Guaranteed Tier 2 Includes transactions with a call date or maturity date greater than 12 months at time of issue. Excludes Hybrids. 52
…which is well diversified Term Wholesale Funding Portfolio Term Wholesale Funding Portfolio Cost (by Type) 150bp 8% 9% 8% 6% Tier 2 9% 20% 18% 13% 100bp Government Guaranteed Actual portfolio cost Covered 72% 69% 68% 50bp Bonds Forecast portfolio cost based Senior on current market levels Unsecured 0bp Sep 11 Sep 12 Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Term Wholesale Funding Portfolio FY13 Term Debt Issuance (by Currency) (by Investor Location) Domestic 1% 3% (AUD, NZD) Domestic 11% 18% North America 29% North America 33% (USD, CAD) 19% Europe Europe (EUR, GBP, CHF) 21% Asia (JPY, HKD, SGD, Asia CNY) 29% Other Other 36% 53
Strong liquid asset position Liquidity Portfolio Basel 3 Liquidity Rules Update $b ● In August, APRA provided further details on 122 their approach to Basel 3 Liquidity 115 implementation relating to High Quality Liquid Assets (“HQLA”) 39 91 38 ● Each ADI needs to hold their relative component of the available HQLA in the system 31 16 15 ● The RBA have indicated that the current 13 aggregate holdings of HQLA at an industry level is appropriate 67 62 ● Final mix of HQLA and Committed Liquidity 47 Facility (CLF) for individual banks is still to be determined by APRA Sep 11 Sep 12 Sep 13 Internal RMBS Private Sector Securities & Precious Metals Cash, Government & Semi-Government Securities 54
Impact of the lower $A Earnings Composition by Currency Funding impact A lower $A has a favourable impact on ANZ‟s funding activities: NZD USD 19% • Results in cash inflows under the cross CNY currency swaps in place for the existing Other IDR foreign currency wholesale funding 19% AUD INR • Future foreign currency wholesale funding 62% PGK MYR requirements are lower to meet the same $A TWD funding task Other FY13 Earnings Per Share (EPS) impact FY14 foreign currency hedging • The key objective of hedging is to manage short 1.9% term EPS volatility arising from foreign currency earnings • Hedging currently in place to meet FY14 foreign 0.9% currency earnings: ~50% of USD earnings and 0.7% ~65% of NZD earnings 0.5% • At 30 September hedging levels, expected EPS impact on FY14 earnings (inclusive of hedges) is positive ~1% of earnings 2H13 v 1H13 FY13 v FY12 • Sensitivity to a 5% appreciation of the AUD would Inclusive of Hedging Unhedged negatively impact FY14 EPS by ~0.7% of earnings 55
Capital and Replicating Portfolio Replicating Portfolios Portfolio Earnings & Spread to Cash Australia • Portfolio earnings on capital are fully allocated to ANZ businesses % and therefore impact business 6 NIM‟s ANZ Portfolio 5 Earnings Rate • ~$45bn of capital and low interest rate sensitive deposits are 4 notionally invested along the yield 3 curve – typical investment tenor is Average RBA between 3 and 5 years Cash Rate 2 • 1H11 2H11 1H12 2H12 1H13 2H13 This strategy has resulted in a consistently higher yield and NIM outcome relative to being invested New Zealand at the cash rate % • 6 In FY13, portfolio earnings benefit ANZ Portfolio relative to the average cash rate 5 Earnings Rate was ~$370m in Australia and 4 ~$125m in New Zealand 3 • The low interest rate environment 2 Average RBNZ is reducing the absolute NIM 1 Cash Rate benefit. This impact is lessening 0 as term rates bottom 1H11 2H12 1H12 2H12 1H13 2H13 56
Risk Management
Strong credit quality Credit Quality Trends Provision Charge FY13 v FY12 Individual Provision Charge (LHS) $m Collective provision Charge (LHS) Collective Provision 100 bps Total Provision Charge as % Avg. net Advances coverage 1 3,500 2,500 0.85% 1,500 5% 0.50% Total Provision charge 500 0.32% 0.27% 0.30% -500 FY09 FY10 FY11 FY12 FY13 18% Gross Impaired Assets Impaired Assets $m Avg. $0.8b decline YOY 7,000 since Sep 10 6,000 22% New Impaired Assets 5,000 4,000 3,000 2,000 1,000 200bps Average Credit RWA 0 rate (CRWA/EAD) 2 Sep Sep Sep Sep Sep FY09 FY10 FY11 FY12 FY13 09 10 11 12 13 Gross Impaired Assets New Impaired Assets 1. Collective Provision coverage on an APRA Basel 3 basis. This ratio is the collective provision balance as a proportion of Credit Risk Weighted Assets 2. Credit RWA measured on a Basel 2 basis 58
Continued transformation of Institutional business delivering improved Group credit quality Expected Loss rates continue to decline… Group Regulatory Expected Loss • bps of Regulatory Expected Loss is a one-year downturn loss measure 32bps EAD as prescribed by APRA and reported in the Results Announcement • Includes conservative overlays that are not reflective of an „expected‟ outcome such as: 89 • 83 includes Balance Sheet Individual Provisions (which have 69 67 already been expensed to Profit and Loss) 57 • assumes stressed asset valuations • places a minimum 20% LGD (Loss Given Default) on all Australian Mortgages Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Group Internal Expected Loss • The Group‟s Internal Expected Loss is intended to reflect an bps of average one-year loss outcome through an economic cycle 11bps GLA‟s measured using regulatory inputs (except for collateral values) • In most years the actual loss rate will be below the Internal Expected Loss rate • The 11bps improvement in Internal Expected Loss rate since 48 46 42 38 37 FY09 is predominantly credit quality driven • As Internal Expected Loss assumes a one-year portfolio it does not capture the benefit of a shortening average tenor, for Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 example Trade Finance 59
Continued transformation of Institutional business delivering improved Group credit quality …driven by targeted credit quality improvement in Institutional Contribution to Group Internal Expected Loss Institutional Commercial/SME Lending Credit Quality improvement reflects: Credit Cards/Personal Loans Mortgages • Progression in credit cycle, as stress moved 48 through the Institutional book and the 2 37 portfolio re-rated 16 • Actively improving the credit quality mix of 1 8 3 15 our customer base 14 12 -11bps of GLA Business Mix improvement reflects: 16 9 • Institutional credit exposure growth Sep 09 Credit Business Sep 13 exceeding SME/Commercial growth Quality Mix Significant reduction in Institutional average Probability of Default (PD) bps of • Global Institutional Expected Loss rate has Institutional IEL Rate (LHS) GLA‟s reduced by more than 37bps since FY09 Institutional Average PD (RHS) 100 3.00% 80 • Loss rate improvement driven by average 2.00% counterparty credit quality improvement 60 40 79 67 1.00% • Counterparty credit quality improvement can 59 44 20 42 be seen via the ongoing reduction in Institutional average PD 0 0.00% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 60
Continued improvement in Credit RWA rate Group Exposure at Default Global Institutional Exposure at Default and Credit Risk Weighted Assets and Credit Risk Weighted Assets Exposure at Default ($b) Exposure at Default ($b) Basel 2 Credit Risk Weighted Assets ($b) Basel 2 Credit Risk Weighted Assets ($b) CRWA / EAD (%) - Basel 2 CRWA / EAD (%) - Basel 2 CRWA / EAD (%) - Basel 3 CRWA / EAD (%) - Basel 3 741 59% 658 54% 615 550 47% 511 43% 46% 45% 41% 42% 39% 40% 39% 37% Basel 3 288 CRWAs 298 274 265 255 249 239 234 230 206 187 Basel 3 136 CRWAs 124 115 112 110 110 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 61
Super Regional strategy has diversified the Institutional portfolio by Product and Geography Traditional Lending has reduced to ~40% of …driven by increased diversification into Asia Institutional credit exposure… Institutional credit exposure composition Institutional credit exposure composition (by Product) 1 (by Geography) 1 $b $b 350 350 298 298 300 300 265 265 17% 240 250 250 240 16% 41% 14% 41% 29% 190 200 200 190 40% 26% 23% 12% 38% 150 150 19% 19% 9% 10% 10% 17% 16% 11% 15% 100 100 45% 49% 53% 39% 41% 58% 44% 50 50 47% 0 0 Sep 10 Sep 11 Sep 12 Sep 13 Sep 10 Sep 11 Sep 12 Sep 13 Global Loans Transaction Banking Markets 2 Australia New Zealand Asia Other (includes Trade) 1. Credit exposure represents Regulatory Exposure At Default (EAD) 2. Europe, America, Pacific and Other 62
Trade Finance and Asia Institutional growth has improved average credit quality for Institutional Trade Finance • Trade Finance portfolios provide access to a large and high quality multi-national customer base $b Investment Grade Sub-Investment Grade 60 • Strong growth in Trade Finance portfolio focussed on shorter duration exposures to investment grade counterparties 40 • Asia Global Loans focussed on shorter duration to Investment Grade customers 20 69% • Asia Global Loans has a higher proportion of 67% 67% 64% investment grade credit exposure than Australia 0 Global Loans Sep 10 Sep 11 Sep 12 Sep 13 Asia Global Loans Australia Global Loans $b $b Investment Grade Sub-Investment Grade Investment Grade Sub-Investment Grade 80 80 60 60 40 40 20 20 56% 57% 55% 50% 67% 67% 69% 59% 0 0 Sep 10 Sep 11 Sep 12 Sep 13 Sep 10 Sep 11 Sep 12 Sep 13 63
Strong Collective Provisioning Coverage Global Institutional Sub-Investment Grade 1 Trend in Global Institutional composition Exposures continue to decline • ANZ remains appropriately provided for with a Sub-Investment Grade (LHS) Collective Provision coverage ratio of 100bps Investment Grade (LHS) • Reductions in Collective Provision overlay have $m CRWA Rate 2 Institutional Basel 2 CRWA Rate occurred in line with portfolio improvement 400 80% • This improvement can be seen by the reduction in 300 60% Institutional Sub-Investment Grade Exposure 200 40% Institutional (% of Sub-Investment Grade 140 40% 78% 73% 73% 100 20% 68% 66% 130 35% 0 0% CP / Credit RWA (bps) 120 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 credit exposure) 30% 110 Collective Provision Charge (CP) by Source 100 25% $b 90 136 20% 80 15% 70 43 60 10% 29 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 30 34 Group CP/CRWA Ratio (Basel 3) Group CP/CRWA Ratio (Basel 2) Lending Risk Impact Portfolio Economic Total FY13 Institutional Sub-Investment Grade Exposure (RHS) Growth Cycle CP charge 1. Sub-Investment grade defined as exposures with a rating below BBB- 2. CRWA Rate defined as Credit Risk Weighted Assets as a percentage of Exposure at Default (EAD) 64
Individual Provision Charge Individual Provision Charge by Segment Individual Provision Charge Composition New Increased Writebacks & Recoveries $m Institutional Commercial Consumer $m 2,815 3,000 3,000 2,815 1,823 1,637 1,213 1,167 2,000 2,500 1,000 0 2,000 -1,000 1,823 FY09 FY10 FY11 FY12 FY13 1,637 Individual Provision Charge by Region 1,500 1,213 1,167 Australia New Zealand APEA $m 2,815 3,000 1,000 2,500 1,823 2,000 1,637 1,500 1,213 500 1,167 1,000 500 0 0 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13 65
Risk Weighted Assets Total Risk Weighted Assets Total Risk Weighted Assets movement Sep 2013 v Sep 2012 $b $b 338.7 Market & Operational Risk Weighted Assets 0.9 5.3 14.1 Credit Risk Weighted Assets 18.7 0.4 339 300.1 324 51 Up 8% 300 50 Sep 12 Basel 2 Basel 3 Traded IRRBB Operational Sep 13 280 Credit Credit RWA Market RWA Risk 45 RWA Impacts RWA RWA 264 31 Total Risk Weighted Assets 252 31 movement by Division Sep 2013 v Sep 2012 22 $b 5.1 0.9 338.7 21.5 288 274 11.1 255 249 300.1 234 230 Up 8% Sep 12 Australia IIB New GWPB Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 13 Zealand Basel 2 Basel 3 66
Traded Market Risk & IRRBB Risk Weighted Assets Strategic decisions driving Risk Weighted Market Risk Weighted Asset Trends Asset and VaR outcomes $b $m IRRBB RWAs • FY13 increase in IRRBB VaR and RWA partly 20 Traded Market Risk RWAs 50 reflects modest increase in Capital and Replicating Traded Market Risk 1-day VaR (RHS) portfolio duration and additional liquid assets 40 15 • Increased diversification over time in the Traded 30 Market portfolio has reduced Traded Market Risk 10 20 1-day 99% VaR whilst Traded Market Risk RWAs were impacted by Jan 2012 Basel 2.5 introduction 5 10 0 0 Sep 10 Sep 11 Sep 12 Sep 13 Generating improved Markets Income ($) / VaR 1 Risk-adjusted Income outcomes $ Global Markets Sales & Trading (Traded) • Sales & Trading business has continued to grow 250 Balance Sheet (Non-Traded) its income stream in parallel with reducing the 198 Traded Market Risk 1-day 99% VaR 200 170 150 • The improved 1-day 99% VaR trend reflects the 91 diversification benefit achieved via Asian growth 100 and via growth and diversity in our Foreign 42 Exchange business 50 17 14 12 17 0 FY10 FY11 FY12 FY13 1. Average 1-day 99% VaR 67
Credit Risk Weighted Assets Credit Risk Weighted Assets Credit Risk Weighted Assets movement Sep 2013 v Sep 2012 $b Basel 2 Credit Risk Weighted Assets Collective Provision as a % of CRWA (Basel 2) 10.9 287.7 15.4 14.1 Collective Provision as a % of CRWA (Basel 3) 7.0 254.9 0.6 1.32% 1.35% 1.28% 1.06% 1.08% Sep 12 Basel III Risk Growth Portfolio FX Impact Sep 13 Impact Data 1.00% Review Basel 3 288 CRWAs 274 Credit Risk Weighted Assets 255 movement by Division Sep 2013 v Sep 2012 249 234 230 $b Basel 2 Impacts Basel 3 Impacts 12.5 0.1 1.3 287.7 5.2 9.1 5.1 273.6 0.2 254.9 0.7 Australia IIB NZ Basel 2 Australia IIB NZ Basel 3 Sep 12 Other Sep 13 Other Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 68
Control List and Risk Grade Profiles Group Sub-Investment Grade 1 Exposures Control List as % Exposure at Default Control List by limits Control List by No of Groups <BB- BB- BB+ to BB Index Sep 09 = 100 28% 28% 120 26% 100 80 23% 22% 60 13% 13% 12% 40 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 11% 11% Investment Grade Risk Profile 9% 9% 8% 7% 7% 78% 77% 74% 72% 72% 6% 6% 6% 5% 4% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 1. Sub-investment grade defined as exposures with a rating below BBB- 69
Gross Impaired Assets Gross Impaired Assets by Type Gross Impaired Assets by Size of Exposure Impaired Loans NPCCD 1 Restructured > $100m $10-$99m < $10m $m $m 8,000 8,000 Avg. $0.8b decline YOY 7,000 7,000 6,561 6,561 since Sep 10 6,000 6,000 5,581 5,595 5,595 5,581 5,196 5,196 5,000 5,000 4,264 4,264 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 0 0 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 1. NPCCD - Non-Performing Commitments, Contingents & Derivatives 70
Impaired Assets New Impaired Assets by Division Net Impaired Assets by Division Institutional Australia New Zealand Other Institutional Australia New Zealand Other $m $m 6,575 4,685 7,000 5,000 4,069 5,446 3,884 6,000 4,000 3,423 5,000 4,265 4,203 2,797 3,000 4,000 3,287 3,000 2,000 2,000 1,000 1,000 0 0 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 FY09 FY10 FY11 FY12 FY13 Impaired Assets Concentration Impaired Assets Concentration by number of Customers 1 by value of Impaired Assets 1 $10-50m $51-100m $101-200m >$200m $10-50m $51-100m $101-200m >$200m 3% 3% 3% 4% 1% 4% 12% 9% 4% 11% 19% 24% 20% 27% 26% 11% 31% 55% 19% 5% 16% 18% 11% 31% 18% 88% 82% 29% 77% 72% 16% 58% 56% 16% 42% 37% 29% 13% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 1. Only >$10m customers 71
Total Credit Exposure (EAD) by Geography Exposure at Default by Exposure by Geography Line of Business 2 Australia Total Exposure at Default (Sep 13) - $725b 1 Australia New Zealand APEA Retail $450.6b $123.6b $150.8b 28% Commercial 55% 17% Institutional New Zealand UK & Europe New Zealand 3% 17% Retail 22% Americas 3% Commercial 48% Pacific 1% 30% Australia Institutional 4% 62% Singapore APEA 21% 3% APEA Hong Kong 5% 1% 4% Other North Retail East Asia 3% Other South Commercial East Asia Institutional 94% 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 72
Total Credit Exposure (EAD) by Industry Exposure at Default (EAD) % in Non Category EAD as a % of group total Performing Mar 13 Sep 13 Mar 13 Sep 13 ANZ Group Total EAD (Sep 13) Consumer Lending 40.4% 40.8% 0.2% 0.2% $725b Finance, Investment & 16.8% 15.9% 0.2% 0.1% Insurance Property Services 7.1% 7.1% 1.6% 1.1% 16% 7% Manufacturing 6.1% 6.0% 1.0% 0.7% Agriculture, Forestry, 6% 4.2% 4.3% 4.1% 4.1% Fishing 4% Government & Official 3.9% 4.0% 0.0% 0.0% Institutions 4% Wholesale trade 4.0% 3.9% 0.6% 0.8% 4% Retail Trade 2.9% 2.9% 0.8% 0.9% 3% Transport & Storage 2.2% 2.2% 2.0% 1.6% 2% 41% Business Services 1.9% 2.0% 0.7% 0.5% 2% 2% Resources (Mining) 1.8% 1.9% 0.2% 1.2% 2% 2% 5% Electricity, Gas & Water 1.7% 1.7% 0.1% 0.1% Supply Construction 1.6% 1.7% 1.2% 1.1% Other 5.4% 5.7% 0.1% 0.9% 73
Resources Resources Exposure by Sector (% EAD) Resources Exposure by Geography (EAD) Resources Australia 22% Total EAD (Sep 13) As a % of Group EAD $13.7b 1.9% Asia 6% New Zealand 52% 20% 6% 19% Europe, America, Pacific & Other Resources Exposure by Geography (EAD) Includes Iron Ore 7% 37% $b 22% Australia Non-Australia 16 14 12 16% 10 8 6 Oil & Gas Coal 4 Metal Ore Mining Services 2 0 Other Sep 10 Sep 11 Sep 12 Sep 13 74
Agriculture New Zealand Agri Credit Exposure (EAD) Agriculture Exposure by Sector (% EAD) and Average Probability of Default NZD Total Credit Exposure (LHS) Agriculture NZDb Average PD (Non-Defaulted Customers) (RHS) Total EAD (Sep 13) As a % of Group EAD 25 2.50% $30.9b 4.3% 20 2.00% 15 1.50% 21 10 1.00% 19 14% 18 17 5 0.50% 0 0.00% 10% Sep 10 Sep 11 Sep 12 Sep 13 Agriculture Security Levels 38% 14% 10% 7% 9% 5% 7% 10% 10% 16% 3% 25% 8% 4% 4% 78% 5% 68% 54% 1 Dairy Beef Sheep & Other Livestock Grain Group Australia New Zealand Wheat Horticulture/Fruit Fully Secured 80-100% Secured Other Crops Forestry & Fishing Agriculture Services 60-80% Secured <60% Secured 1. 93% of Dairy exposure is in New Zealand Agri 75
Commercial Property credit exposure Commercial Property Exposure Commercial Property Exposure by Sector Gross Loans and Advances by Region APEA (LHS) New Zealand (LHS) Offices 29% Australia (LHS) % of Group GLA's (RHS) Retail $b Residential 35 8.5% 28% 30.9 30.7 29.3 24% Industrial 28.2 27.8 30 Tourism 8.0% 3.5 26.1 4.1 0.8 3.0 14% 1.1 3% Other 1.0 2% 25 5.3 6.1 5.9 5.0 5.9 7.5% Exposure to REIT‟s, Listed Property 5.2 Companies and/or their subsidiaries 20 7.0% 6.6% 15 Exposure to 6.5% 22.1 21.3 21.3 REITs, listed 20.8 20.7 10 19.9 Other property Commercial 32% companies 68% 6.0% Property and/or their 5 subsidiaries 0 5.5% Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 Jun 13 76
Australia Division Credit Quality Australia Home Loans 90+ day Australia Division Credit Exposure (EAD) delinquencies by state Sep 10 Sep 11 Sep 12 Sep13 Home Loans 1.00% 0.80% Corporate & 24% Commercial 0.60% Consumer Cards 7% 0.40% Personal Loans 1% 67% 0.20% 1% Other 0.00% VIC NSW QLD WA Portfolio & ACT Australia Division 90+ day delinquencies Australia Home Loan Portfolio by state Home Loans Credit Cards 2.0% Corporate & VIC 26% Commercial Banking 1.5% NSW & ACT 1.35% 29% 1.0% 1.03% QLD 18% WA 0.5% 0.44% 10% Other 17% 0.0% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Changes to treatment of hardship cases within Home Loan 90+ DPD impacted underlying trends during FY13. Sep 2013 90+ DPD 0.40% excluding change and 0.44% including. 77
Australia Division - Home Loan Portfolio Dynamic Loan to Value Ratio Total Number of Home Loan Accounts 887k % of Portfolio Total Home Loan FUM $195b 60% % of Total Australia Geography 50% 60% Lending 40% % of Total Group Lending 41% 30% Owner Occupied Loans - % of 20% 62% Portfolio 1 10% Average Loan Size at Origination $329k (2H13 average) 2 0% 0-60% 61-75% 76-80% 81-90% 91-95% 95%+ Average LVR at Origination 70% Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 (2H13 average) Average Dynamic LVR of Portfolio 50% Individual Provision as % Gross Loans 1H12 2H12 1H13 2H13 % of Portfolio Ahead on Repayments 3 57% First Home Owners - % of New ANZ Group Total 0.36% 0.43% 0.27% 0.24% 7% Lending Australia 0.03% 0.02% 0.02% 0.02% % of Portfolio Paying Interest Only 4 32% Home Loans 1. Excludes funds in Equity Manager Accounts. 2. Average loan size of home loans written in 2H13 excluding offset accounts 3. % of customers paying Principal and Interest that are one month or more ahead of repayments 4. Excludes revolving credit facilities 78
New Zealand Division – Home Loan Portfolio Total Number of Home Loan Accounts 478k Dynamic Loan to Valuation Ratio Total Home Loan FUM (NZD) $59b % of Total New Zealand Lending 56% 0-60% 9% 11% 61-70% % of Total Group Lending 11% 45% 71-80% 18% Owner Occupied Loans - % of Portfolio 77% 81-90% Average Loan Size at Origination 17% $247k 90%+ (2H13 average) (NZD) Average LVR at Origination 67% (2H13 average) Home Loan Portfolio by Region Average Dynamic LVR of Portfolio 47% Auckland % of Portfolio Paying Interest Only 1 21% 12% 3% Wellington 39% Individual Provision as % Gross Loans Christchurch 28% Rest of North Island 1H12 2H12 1H13 2H13 Rest of South Island ANZ Group Total 0.36% 0.43% 0.27% 0.24% 12% 6% Other New Zealand 0.05% 0.03% 0.02% 0.02% Home Loans 1. Excludes revolving credit facilities 79
New Zealand – Credit Quality New Zealand Geography New Zealand Geography Net Impaired Assets Total Provision Charge NZDm NZDm IP Charge CP Charge Net Impaired Assets NIA as % GLA 1,000 883 800 600 456 190 400 202 1,463 66 200 1,307 0 -200 FY09 FY10 FY11 FY12 FY13 990 New Zealand Division 90+ days delinquencies 1.50% 1 1.38% Mortgages Commercial Rural 2.0% 743 662 1.6% 1.02% 0.76% 1.2% 0.66% 0.8% 0.4% 0.0% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 2007 2008 2009 2010 2011 2012 2013 1. Spikes in 2012 Commercial 90 day delinquencies are primarily due to internal classifications rather than any deterioration in underlying credit quality. 80
Australia Division
A strong domestic franchise is critical to the success of ANZ‟s Super Regional strategy The Banking on Australia program is our path to: • Delivering consistent above system growth focused in our target segments, • Maintaining strong margins, cost discipline and asset quality, • And leveraging ANZ‟s Super Regional advantage to bring the whole of ANZ to our customers To deliver peer leading financial outcomes 82
We are transforming the business to position ANZ for growth in a changing environment Building our lead in mobile & digital Expanding customer reach and deepening loyalty • New mobile & digital foundations • Rapid evolution of our market leading applications • Transforming our distribution channels Retail Corporate & Commercial Banking • Transforming branches and contact centres to focus on Using our super regional • more complex sales advantage to bring whole of ANZ • Multi-channel connectivity Providing market leading banker • • Migrating low value tools & centralised service transactions to self service Offering deep industry insight • Simplifying our products & process Accelerating through customer insights New information platforms • Digitising and automating • Single customer view • Paperless processing • enabled Simplifying product range • Insight driven offers • 83
Banking on Australia is delivering strong outcomes FY13 Performance: NPAT up 11% to $2.87bn Corporate & Commercial Banking Retail Strongest overall growth of #1 7% major banks across Home Loans, Lending Growth Deposits and Cards in FY13 1 Quarters of Above System Home Quarters of Above System 6 14 Loan growth 2 Lending growth 2 17% 30,000 Profit before Provisions growth Growth in Customer Numbers 4 >80% 7,000+ MFI Customer satisfaction 3 ANZ Fastpay Users Increase in sales via Digital Reduction in Cost to Income 19% 158 bps channels ratio Reduction in customer 11% 45,000+ Frontline training hours invested complaints 1. Source: APRA Monthly Banking Statistics, 12 months to August 2013. Excludes impact from sale of Origin Mortgage Management Services; 2. To June quarter 2013. Retail Source: APRA Monthly Banking Statistics, excludes impact from sale of Origin Mortgage Management Services; C&CB Source: RBA Lending and Credit Aggregates – Non Financial Corporations.; 3. Source: Roy Morgan Research, 6 months to August 2013; 4. Excludes Esanda. 84
Delivering strong financial results Income Expenses PBP NPAT Cost to ($m) ($m) ($m) ($m) Income % 7,867 2,951 4,916 2,873 37.5% FY13 Australia Division v FY12 +7% -2% +13% +11% -330bps % 4,846 1,974 2,872 1,732 40.7% FY13 Retail v FY12 +9% -2% +17% +20% -434bps % 3,015 972 2,043 1,141 32.2% FY13 Corporate & Commercial Banking v FY12 +4% -1% +6% -2% -158bps % 85
Achieving above system growth Retail Strongest overall growth of major banks across Home Loans, Deposits and Cards in FY13 Home Loans 1 Deposits 1 Consumer Cards 1 16.3x 1.3x 1.2x 8.8% 6.4% 7.6% 4.9% 1.7% 0.1% System ANZ System ANZ System ANZ Corporate & Commercial Banking Delivering above system growth and cross sell income to Institutional, Retail and Wealth Cross Sell Income 3 ($m) Lending 2 Deposits 2 3.1x 2.4x +8% +8% 1,298 6.6% 1,202 4.4% 1,108 1.8% 2.2% System ANZ FY11 FY12 FY13 System ANZ 1. Source: APRA Monthly Banking Statistics, Sep 2012 to Aug 2013. System adjusted for new ADI incorporations; 2. Source: Lending - RBA Lending and Credit Aggregates and Deposits – APRA Monthly Banking Statistics, Non-Financial Corporations, Sep 2012 to Aug 2013; 3. C&CB cross sell includes income booked in Retail, Wealth and International and Institutional Banking. 86
And increasing market share while maintaining margins Corporate & Commercial Banking Net Interest Margin Combined Lending and Deposit Growth 2 2.60% Growth August 2013 v August 2011 2.58% 2.53% 2.52% 2.50% 1.9x 2.45% 16.3% 8.5% 1H11 2H11 1H12 2H12 1H13 2H13 System ANZ Retail Market Share 1 Affluent Market Share 1 15.3% 12.4% 14.4% 12.4% August 2010 August 2013 August 2010 August 2013 1. Source: Roy Morgan Research: rolling 12 months, traditional banking consumer market (Deposits, Cards & Loans); Affluent defined as customers 87 with all financial services FUM between $400k and $1m (in all financial institutions) or income greater than $150k/year; 2. Source: Lending - RBA Lending and Credit Aggregates and Deposits – APRA Monthly Banking Statistics, Non-Financial Corporations.
Improving sales efficiency and productivity Australia Division Cost to Income Ratio Australia Operations Efficiency Growth FY13 v FY12 5.0% 41.8% 39.9% -10.3% Operations Expenses Operations Volume 37.9% Uplift in branch sales per FTE 7% 37.2% in 2013 Increase in Home loans 15% approved at first application 2H13 178,000 Frontline hours freed up through Operations efficiency 1H12 2H12 1H13 2H13 88
Retail Credit Quality Australia Retail 90+ days past due 1 Improvement in Home Loan 3bps 90+ days past due in 2013 1 Credit Cards Home Loans 1.5% Reduction in Credit Card 1.0% provisions in FY13, 30+ and 13% 90+ day delinquencies at 0.5% lowest level in 3 years 0.0% Maintained prudent risk Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 settings Home Loan Loss Rates Home Loans 90+ days past by state Sep 10 Sep 11 Sep 12 Sep 13 IP Charge as % Portfolio 1.00% 0.03% 0.80% 0.02% 0.02% 0.02% 0.60% 0.01% 0.01% 0.40% 0.20% 2008 2009 2010 2011 2012 2013 19 36 21 28 43 45 0.00% VIC NSW QLD WA Portfolio Individual Provision Charge ($m) & ACT 1. Excludes changes to treatment of hardship cases that impacted underlying trend. Sep 2013 90+ DPD 0.40% excluding hardship change and 0.44% including. 89
Corporate & Commercial Banking Credit Quality Individual Provision Charge Movement Net Impaired Assets FY13 v FY12 $m $m 937 949 387 1,000 23 1.80% 895 Net impaired assets as a % 21 54 803 of net lending assets 1.50% 800 1.61% 275 14 1.55% 1.42% 1.20% 600 +16% 1.23% 0.90% 400 0.60% +41% 200 0.30% FY12 W/Back & Existing Esanda Other FY13 0 0.00% Recoveries Impaired New Impaired Mar 12 Sep 12 Mar 13 Sep 13 Individual Provision Charge Customer Credit Rating (CCR) as % Gross Loans & Advances Profiles by Exposure at Default % of Weighted Average CCR 0.62% 0.61% Portfolio 6.19 6.18 0.57% Weaker 7-10 12.5% 13.0% 4-6 78.9% 78.2% Stronger 0-3 8.6% 8.8% 2H12 1H13 2H13 Sep 2012 Sep 2013 90
Significant progress made on mobile and digital agenda Banking on Australia 91
ANZ goMoney TM is our market leading mobile banking app 2010 First payments app in the Australian market Available for iPhone and Android 1.0m Active goMoney users 2 goMoney logins >25m per month >$56b Transactions processed ANZ‟s award -winning app 1 provides a secure and convenient way to bank, 24/7 Customers with ANZ goMoney TM demonstrate greater loyalty 1. Winner of 2011 IDC Financial Insights Innovation Award, 2011 CANSTAR Innovation in Financial Services Award, 2011 Banking & Payments Asia 92 Trailblazer Award, 2011 Australian Banking & Finance Magazine Innovative Retail Banking Product of the Year Award; 2. Active users within past 120 days.
Transforming our branches to focus on more complex needs, generate increased cross-sell and productivity 7% Uplift in branch sales in FY13 Drop in branch traffic due to 5% increased self service Uplift in sales via Video 18% Conference in 2H13 New look sales focused 74 branches 201 Smart ATMs installed Transforming our distribution network by embracing new technology to meet the changing needs of customers 93
Interactive frontline sales tools that improve banker productivity and deliver ANZ‟s super regional capabilities to our customers 100% C&CB frontline 8 Frontline Applications Developed bankers with iPads A-Z Review 1 Digital A-Z reviews Customer needs assessment >5,000 completed in last 3 Collaboration 2 Video access to specialists months 1 5 Super Regional 3 ANZ regional capability resource Markets connected 33 2 6 Voice notes via Super Regional 4 Capture of customer notes App 3 7 On Boarding & Identification 5 Customer information capture Average turnaround ANZ Podcast 4 8 48 hrs 6 time saving with Banker Training each “Sign -on- Glass” ANZ Hub 7 application Customer & frontline information ANZ App catalogue 8 Source of banker apps Faster application turnaround Access to bank-wide digital customer information 94
ANZ FastPay TM is our award winning mobile merchant app, enabling our small business customers to be paid „on the go‟ Winner, FIIA Award for Innovation and the Trailblazer award for innovation in banking 1 Available for iPhone and iPad 7,000+ FastPay users Mobile merchant app for faster • 30% Monthly growth in card payments FastPay customers Allows businesses to accept card • sales on iPhone or iPad with Transactions >140k same-day settlement processed 95 1. Financial Insights Innovation Awards (FIIA) 2013; 2013 Banking & Payments Asia Trailblazer Awards
Retail Transformation is improving Home Loan capability Home Loan Sales Mix by Channel 1.1 A to Z customer needs million reviews completed in 2013 Branch sales staff now 47% 49% 51% 55% Broker 68% accredited to sell home loans Proprietary 53% 51% 49% 45% Increase in branch 16% Home Loan sales in 2013 1H12 2H12 1H13 2H13 Delivered Home Loan Total Home Loan Accounts continuous improvement program Thousands 887 $13 Home Loan growth achieved 869 billion in 2013 857 847 Percentage of online chats 19% generating mortgage referrals 1H12 2H12 1H13 2H13 96
And increasing cross sell of retail, wealth and small business solutions to our customers Revenue from Retail Products Sold to Branch staff trained to sell Commercial Customers 1,600 Small Business transaction $m accounts +19% 740 Branch staff accredited to 1,300 sell Wealth products 622 Smart Choice Super sales 23,000 sold through branch network FY12 FY13 since November 2012 launch Wealth Products Sold Through Retail Distribution Thousands Growth in Small Business +19% 16% deposit accounts 206 414,000 Business sales and wealth 173 referrals through branches FY12 FY13 97
Corporate & Commercial Banking transformation is enhancing banker productivity Revenue per FTE Costs per FTE Growth in cross sell revenue 8% to $1.3 billion +2% -2% 1,137 20% Growth in leads to frontline 1,111 376 367 Establishment of cross border on-boarding team FY12 FY13 FY12 FY13 Processes removed from 47 frontline staff Money Magazine Business CANSTAR Best Value Australia Different product applications Bank of the Year Agribusiness Award 12 to 1 consolidated to a single form 12 Products decommissioned FIIA Innovative in Mobile Trailblazer „Channel Excellence in Payments Award 2013 Mobile – Payments‟ Award 2013 98
Delivering leading insight and support to help corporate & commercial customers improve their business Leading Insights Capabilities #1 No.1 Most Trusted Adviser 1 Business Insights Lent to new small businesses $750 Real-time peer in the first 6 months under million benchmarking tool for our $1 billion pledge small and medium sized business clients Monthly customer visits to 6,000 the Small Business HUB, an Client Insights online customer portal Bespoke strategic industry and Small business customer customer insight for approval notification via SMS corporate clients Simplified application and ANZ Insight Series assessment for new small businesses A series of client reports covering long-term opportunities and Single point of contact for challenges across Asia Business Banking servicing Pacific 1. Peter Lee Associates 2013 Large Corporate and Institutional Relationship Banking survey Australia 99
And leveraging our super regional advantage to bring the whole of ANZ to our customers Super Regional iPad App to facilitate Relationship Frontline staff cross-border customer conversations 100% with Super Regional training Growth in cross-border 45% referrals from Australia Relationship Frontline staff 25% with hands-on experience in key Asian markets “Can Service My Business Needs Across Australia, NZ and Asia” 1 ANZ Peer 1 Peer 2 Peer 3 Growth in foreign exchange 30% 40 customers 36 32 Customers per week visit 28 2,500 anz.com Super-regional site 24 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 1. DBM‟s Business Financial Services Monitor. Rolling 3 month average, as at Sept -13. Defined as proportion of Commercial Banking customers with $1m to less than $40m turnover who associate bank with the statement „can service my business needs across Australia, NZ and Asia„ 100
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