Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (November 2021)
89 slides from Anz's debt investor presentation, November 2021
Slide 1: 2021 Full Year Results Debt Investor Update
2021 FULL YEAR RESULTS FULL YEAR ENDED 30 SEPTEMBER 2021 DEBT INVESTOR UPDATE Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia ABN 11 005 357 522
Slide 2: Important Notice
IMPORTANT NOTICE Background information only This document has been prepared by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (the "Bank") for the information of intended recipients only (being persons who meet the requirements described in the following paragraphs). This docu
Slide 3: Important Notice
IMPORTANT NOTICE United States: This document is only for investors who are (x) outside the United States and are not U.S. Persons (as defined in Regulation S under the Securities Act of 1933 as amended (the “Securities Act”)) in compliance with Regulation S; or (y) “qualified institutional buyers”
Slide 4: Contents
CONTENTS 2021 FULL YEAR RESULTS CEO and CFO Results Presentations 4 CEO Presentation 4 CFO Presentation 10 Corporate Overview and Environment, Social & Governance (ESG) 18 Additional Information – Group Performance 29 Divisional Performance 35 Australia Retail & Commercial 36 New Zealand Division 38
Slide 5: Shayne Elliott, Chief Executive Officer
2021 FULL YEAR RESULTS SHAYNE ELLIOTT CHIEF EXECUTIVE OFFICER
Slide 6: Simpler, Better Balanced Foundation for Growth
SIMPLER, BETTER BALANCED FOUNDATION FOR GROWTH CAPITAL STRENGTH CAPITAL ALLOCATION RISK INTENSITY NET TANGIBLE ASSETS APRA Level 2 CET1 Ratio % % of total1 CRWA/EAD2 % NTA per share $ 12.3 100 38.7 21.09 11.4 37.3 36.6 19.59 10.6 75 17.66 9.6 33.4 16.86 50 25 0 Sep Sep Sep Sep Sep Sep Sep Sep Sep Se
Slide 7: Entering 2022 from a Position of Strength
ENTERING 2022 FROM A POSITION OF STRENGTH STRONGER CULTURE STRONGER CUSTOMERS STRONGER BALANCE SHEET 81% +$25b ~$6b INDUSTRY LEADING STAFF ENGAGEMENT NET INCREASE IN AUS & NZ RETAIL & CET1 CAPITAL ABOVE UNQUESTIONABLY (ENGAGEMENT SCORE JUL 21) COMMERCIAL DEPOSITS (SEP 21 VS SEP 20) STRONG 35.3% >530
Slide 8: Full Year 2021 Financial Snapshot
FULL YEAR 2021 FINANCIAL SNAPSHOT FY21 change 2 year change FY21 (FY21 vs FY20) (FY21 vs FY19)3 Statutory Profit ($m) 6,162 +72% +4% Cash Profit (continuing operations)1 ($m) 6,198 +65% -4% Return on Equity (%) 9.9 +376bps -95bps Earnings Per Share (cents) 218.3 +65% -4% Cash Profit (continuing oper
Slide 9: Growth Opportunities - Institutional
GROWTH OPPORTUNITIES - INSTITUTIONAL SUSTAINABILITY WHERE WE SUPPORT OUR CUSTOMERS SUSTAINABLE FINANCE FEE INCOME (INDEXED DATA) INDEX FY18 = 100 2,000 63% Supporting sustainability in Participated in 81 resource extraction, 1,800 sustainable basic materials & finance deals with new technologies a t
Slide 10: The Bank We're Building
THE BANK WE’RE BUILDING PURPOSE-LED TRANSFORMATION WILL DRIVE BETTER OUTCOMES FOR STAKEHOLDERS Better access to capital and Better customer propositions: talent, driving greater capacity ‘purposeful’, engaging, efficient to invest and ‘safe’ Better financial outcomes Better financial wellbeing and s
Slide 11: Farhan Faruqui, Chief Financial Officer
2021 FULL YEAR RESULTS FARHAN FARUQUI CHIEF FINANCIAL OFFICER
Slide 12: Overview
OVERVIEW CONTINUING OPERATIONS CASH PROFIT CASH EPS ROE $m cents % 10.9 6,470 6,198 228 9.9 218 3,758 6.2 133 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 11
Slide 13: Financial Performance
FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE CONTINUING OPERATIONS GROUP PROFIT DRIVERS $m 3,282 6,198 -839 193 555 335 3,758 -730 -356 Expenses: -21 FY20 FY21 FY20 FY21 1,501 946 2,672 1,942 65% FY20 Large / Notable Income Markets income BAU expenses2 Investment2 Provisions Tax & NCI FY21 items afte
Slide 14: Net Interest Margin
FINANCIAL PERFORMANCE NET INTEREST MARGIN CONTINUING OPERATIONS GROUP NET INTEREST MARGIN (NIM) bps 1 165 3 163 4 161 -1 -3 0 -2 Deposit / funding mix +1 Replicating portfolio volume +1 Home Loan SVR to Fixed -2 -2bps +2bps 1H21 Impact of rates Liquidity Asset pricing Asset & Wholesale 2H21 Markets
Slide 15: Expenses
FINANCIAL PERFORMANCE EXPENSES CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS EXPENSE DRIVERS $m BAU costs: -199 (-3%) 8,649 360 8,670 8,509 53 47 9 -140 933 929 -308 1,289 In line with guidance of +1% to +2% expense growth in FY21 (FX adjusted) 7,716 7,580 7,381 +2% flat FY20 FX FY20 FX adj.
Slide 16: Productivity
FINANCIAL PERFORMANCE PRODUCTIVITY FY21 RUN THE BANK PRODUCTIVITY FY21 INITIATIVES DELIVERED $308m EVOLVING CUSTOMER • Refinement of coverage models across all businesses ACQUISITION AND DISTRIBUTION ~$130m MODELS • Investment in digital channels, reduced physical presence OPTIMISED CUSTOMER SERVICI
Slide 17: Investment Spend
INVESTING FOR INVESTMENT SPEND THE FUTURE CONTINUING OPERATIONS INVESTMENT SPEND1 EXPENSED & CAPITALISED1 $m $m 1,058 1,810 811 21% 752 663 28% 21% 339 29% 79% 1,474 72% 79% 71% 223 349 1H20 2H20 1H21 2H21 1,171 191 Investment Expensed Investment Capitalised 171 341 245 164 CAPITALISED SOFTWARE 197
Slide 18: Investment Spend – Aligned to Strategic Priorities
INVESTING FOR INVESTMENT SPEND – ALIGNED TO STRATEGIC PRIORITIES THE FUTURE CONTINUING OPERATIONS FY21 INVESTMENT SPEND1 FY21 INVESTMENT SPEND BY CATEGORY (EXAMPLES) $m Estimated share Growth Productivity & Simplification 1,810 of investment spend in FY22 • ANZx • Migration to Cloud • Sustainability
Slide 19: Corporate Overview and ESG
2021 FULL YEAR RESULTS INVESTOR DISCUSSION PACK CORPORATE OVERVIEW AND ENVIRONMENT, SOCIAL & GOVERNANCE (ESG)
Slide 20: Our Purpose and Strategy
OUR PURPOSE AND STRATEGY OUR ESG APPROACH SUPPORTS THE EXECUTION OF OUR STRATEGY STRATEGY To improve the financial wellbeing & sustainability of our customers We will do this by providing excellent services, tools and insights that engage and retain customers and positively change their behaviour He
Slide 21: Sustainability Performance Trends
SUSTAINABILITY PERFORMANCE TRENDS FULL YEAR 2021 DISCLOSURE COMMUNITY INVESTMENT1 MONEYMINDED & SAVER PLUS3 SUSTAINABLE FINANCE $50b TARGET4 Total community investment ($m) Estimated # of people reached Funded and facilitated ($b) 12.9 142.2 139.5 139.7 90,724 9.1 2.3 131.0 136.9 88,308 80,074 0.1 1
Slide 22: Our FY21 ESG Targets: Financial Wellbeing
OUR FY21 ESG TARGETS FINANCIAL WELLBEING TARGET PERFORMANCE Since October 2020 we have supported around 151,600 customers to build a savings habit. This includes: Support 250,000 customers o more than 3,000 Saver Plus new participants actively saving using a Progress to build a savings habit, Save
Slide 23: Our FY21 ESG Targets: Environmental Sustainability
OUR FY21 ESG TARGETS ENVIRONMENTAL SUSTAINABILITY TARGET PERFORMANCE • Since October 2019, we have funded and facilitated AU$21.95 billion towards the Fund & facilitate at least $50 target, of which AU$12.18 billion is funded and AU$9.77 billion is facilitated billion by 2025 towards sustainable sol
Slide 24: Our FY21 ESG Targets: Housing
OUR FY21 ESG TARGETS HOUSING TARGET PERFORMANCE Fund & facilitate AU$10 billion of investment by 2030 Since October 2020, we have funded and facilitated AU$1.29 billion and to deliver more affordable, NZ$150 million of investment to deliver more affordable, accessible and accessible and sustainabl
Slide 25: Our FY21 ESG Targets: Fair and Responsible Banking
OUR FY21 ESG TARGETS FAIR AND RESPONSIBLE BANKING TARGET PERFORMANCE Develop & commence Implementation of our Customer Vulnerability Framework continues, including implementation of a new implementing inclusive design principles in our product management framework, ensuring Customer Vulnerability
Slide 26: Our Approach to Climate Change
OUR APPROACH TO CLIMATE CHANGE COMMITTED TO PLAYING OUR PART & SUPPORTING OUR CUSTOMERS IN TRANSITION TO NET-ZERO EMISSIONS BY 2050 • The most important role we can play in enabling a transition to net-zero is to finance our customers’ efforts to reduce emissions, while also helping them tap into th
Slide 27: Our Resources Portfolio
OUR RESOURCES PORTFOLIO RESOURCES PORTFOLIO EXPOSURE AT DEFAULT (EAD) $b THERMAL COAL MINING EXPOSURE EXPOSURE AT DEFAULT (EAD) $b 20.0 2.0 1.7 1.5 0.6 17.3 17.0 1.3 16.2 0.8 0.5 1.0 15.3 0.7 0.8 1.2 1.0 2.9 0.7 0.9 0.4 14.0 14.2 0.5 1.1 0.7 1.5 1.2 0.5 0.8 0.9 0.6 13.0 0.3 0.4 0.0 1.7 1.0 1.2 1.2 0
Slide 28: How We Measure and Communicate
HOW WE MEASURE AND COMMUNICATE EXTERNAL REPORT CARD – REPUTATION INDICATORS Context: Reputation indicators are increasingly being used by investors and analysts to understand our approach to ESG issues and to measure our ESG performance against our peers. We are rated based on our ESG disclosures, a
Slide 29: Our ESG Related Disclosures
OUR ESG RELATED DISCLOSURES Climate Change Investor ESG Supplement ESG Briefing Human Rights Housing Financial Wellbeing Round Table ANZ-CoreLogic Housing Our financial Affordability Report, the wellbeing programs, ESG information & Annual event to Investor update on Our approach to pre-eminent guid
Slide 30: Additional Information - Group Performance
2021 FULL YEAR RESULTS DEBT INVESTOR UPDATE ADDITIONAL INFORMATION - GROUP PERFORMANCE
Slide 31: Financial Performance
FINANCIAL PERFORMANCE CONTINUING OPERATIONS FY21 CASH PROFIT DRIVERS LARGE / NOTABLE ITEMS $m FY201 FY21 $m Total (after tax) -1,501 -946 Divestments incl. Gain/(Loss) on sale 23 -238 3,282 Customer remediation -279 -221 6,198 Litigation settlements - -48 193 -839 555 Restructuring -115 -92 3,758 -7
Slide 32: Total Operating Income
TOTAL OPERATING INCOME TOTAL INCOME BY DIVISION NET INTEREST INCOME BY DIVISION OTHER OPERATING INCOME $b $b $b Continuing Continuing ex L/N Continuing Continuing ex L/N Continuing Continuing ex L/N 9.4 9.3 8.6 9.2 9.1 9.1 9.0 0.3 0.3 0.2 0.3 0.3 8.4 0.2 1.7 1.5 1.6 1.5 1.7 1.6 1.7 7.2 7.2 7.2 7.2 7
Slide 33: Balance Sheet Composition
BALANCE SHEET COMPOSITION CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS EXPOSURE AT DEFAULT1 RISK WEIGHTED ASSETS NET LOANS & ADVANCES CUSTOMER DEPOSITS $b (EOP) $b (EOP) $b (EOP) $b (EOP) 1,080 429 630 594 612 617 414 2% 416 1% 1% 1,010 7% 0% 0% 552 2% 2% 977 3% 1% 1% 15% 512 16% 19% 19% 20
Slide 34: Expense Management
EXPENSE MANAGEMENT TOTAL EXPENSES BY DIVISION TOTAL EXPENSES BY CATEGORY FULL TIME EQUIVALENT STAFF $b $b 000s Continuing Continuing ex L/N Continuing Continuing ex L/N Continuing (EOP) 4.8 4.8 39.7 4.6 4.6 4.6 4.6 37.8 37.8 1.1 4.5 4.5 37.5 0.7 1.1 1.1 1.1 0.6 4.5 0.9 4.5 0.6 0.7 4.4 4.3 0.8 4.4 4.
Slide 35: Customer Remediation
CUSTOMER REMEDIATION CUSTOMER REMEDIATION CUMULATIVE CUSTOMER REMEDIATION CONTINUING OPERATIONS CONTINUING & DISCONTINUED OPERATIONS PRE TAX $m POST TAX $m 485 Balance Sheet1 119 $886m provisions on Balance Sheet at Sep-21 ($1,003m at Mar-21) 1,814 352 1,700 29 1,591 432 86 431 1,401 430 254 1,216 4
Slide 36: Divisional Performance
2021 FULL YEAR RESULTS DEBT INVESTOR UPDATE DIVISIONAL PERFORMANCE
Slide 37: Australia Retail & Commercial
AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM NII/OOI2 Contribution ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) FY20 FY21 FY2
Slide 38: Australia Retail & Commercial - Retail
AUSTRALIA RETAIL & COMMERCIAL - RETAIL LOANS & DEPOSITS LENDING COMPOSITION DEPOSIT COMPOSITION -1% +5% $b $b 288 284 135 141 282 134 279 7 121 123 23 274 272 7 6 117 19 21 10 14 15 16 9 8 27 28 33 36 39 27 269 265 275 281 278 24 20 16 31 29 26 49 53 57 58 63 264 45 Mar-19 Sep-19 Mar-20 Sep-20 Mar-2
Slide 39: New Zealand Division
NEW ZEALAND DIVISION FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 (NZDb) & NIM NII/OOI2 Contribution (NZDm) Expenses (NZDm) Total Provision Charge (NZDm) Cash Profit (NZDm) 131 135 125
Slide 40: New Zealand Division: Balance Sheet
NEW ZEALAND DIVISION BALANCE SHEET HOUSING1 BUSINESS2 AGRI ANZ PERFORMANCE (NZDb) ANZ PERFORMANCE (NZDb) ANZ PERFORMANCE (NZDb) 95.4 98.8 100 87.6 89.5 30 30 80 25 25 20.7 20 17.9 17.6 18.1 60 20 17.2 16.9 16.5 16.1 15 15 40 10 10 20 5 5 0 0 Mar-20 Sep-20 Mar-21 Sep-21 Mar-20 Sep-20 Mar-21 Sep-21 0
Slide 41: Institutional Digital Platforms
INSTITUTIONAL DIGITAL PLATFORMS PROVIDES SCALABLE OPERATING LEVERAGE, CAPITAL LIGHT PAYMENTS1 RECEIVABLES DATA1 NPP AGENCY PAYMENTS1 PLATFORM CASH MGT ACCOUNTS1 Indexed data2 Indexed data Indexed data2 Indexed data +24% +10% +112% +141% +24% +5% 130 137 988 124 530 105 +367% 100 100 +120% 467 220 10
Slide 42: Institutional
INSTITUTIONAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM Product Composition2 ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) 199 3,057 641 2,790 13 1,278 2
Slide 43: Institutional: Markets Income Composition
INSTITUTIONAL MARKETS INCOME COMPOSITION: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS MARKETS INCOME COMPOSITION MARKETS AVG VALUE AT RISK (99% VAR) $m $m 1,508 100 40 88 131 Non-traded VaR 82 80 increased in FY20 with COVID-related volatility 67 30 and then higher HQLA, 60 before flatteni
Slide 44: Treasury
2021 FULL YEAR RESULTS DEBT INVESTOR UPDATE TREASURY
Slide 45: Regulatory Capital
REGULATORY CAPITAL CAPITAL UPDATE APRA LEVEL 2 COMMON EQUITY TIER 1 RATIO (CET1) ● Level 2 CET1 ratio of 12.3% and 18.3% on an Internationally Comparable % basis1, which is well in excess of ‘Unquestionably Strong’ benchmark2 o Total credit impacts of +14bps primarily from benefits of negative CRWA
Slide 46: Regulatory Capital: APRA Level CET1 Ratio
REGULATORY CAPITAL APRA LEVEL 1 CET1 RATIO % Level 2: Level 2: 12.44 12.34 APRA Level 2 vs Level 1 CET1 Ratios bps Level 2 HoH mvmt (10) 0.07 Level 1 HoH mvmt (22) 0.84 0.01 0.02 -0.10 Level 2 vs Level 1 mvmt 12 -0.08 12.23 Total impact of +10bps -0.52 Level 1 CET1 ratio decline is larger relative
Slide 47: Internationally Comparable Regulatory Capital Position
INTERNATIONALLY COMPARABLE1 REGULATORY CAPITAL POSITION APRA Level 2 CET1 Ratio – 30 September 2021 12.3% Corporate Level 2 CET1 Ratio undrawn EAD Australian ADI unsecured corporate lending LGDs and undrawn and unsecured CCFs exceed those applied in many jurisdictions 1.8% % LGD adjustments Equity A
Slide 48: CET1 and Leverage in a Global Context
CET1 AND LEVERAGE IN A GLOBAL CONTEXT CET1 RATIOS1,2 LEVERAGE RATIOS1,2,3 0% 5% 10% 15% 20% 25% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% SEB OCBC Svenska Handelsbanken Swedbank BBVA ABN Amro UOB CET1 Nordea Rabobank Leverage ● Regulators globally have Danske Bank Intesa Sanpaolo ANZ compares well on provided s
Slide 49: Balance Sheet Structure
BALANCE SHEET STRUCTURE1 Pro forma NSFR is ~119% once NSFR MOVEMENT RSF benefit associated with TFF BALANCE SHEET COMPOSITION Sep-21 and CLF 10 is removed Sep-21 % 5.5 0.6 123.8 -2.2 0.8 1.0 123.8 -1.9 Short Term Wholesale Debt & -3.8 Other Funding2 Liquid and Other Assets 23% 35% Sep-20 Retail/ Loa
Slide 50: Liquidity Coverage Ratio (LCR) Summary
LIQUIDITY COVERAGE RATIO (LCR) SUMMARY1 MOVEMENT IN AVERAGE LCR SURPLUS3 LCR COMPOSITION (AVERAGE) $b FY21 $b 226 FY20 FY21 Internal RMBS Avg LCR 139% Avg LCR 137% Other ALA2 34 HQLA2 -3 61 60 -5 -2 -1 165 Wholesale funding -22 HQLA1 Customer deposits & other3 FY20 CLF4 Liquid Retail/SME Corp/FI/ Wh
Slide 51: Term Wholesale Funding Portfolio
TERM WHOLESALE FUNDING PORTFOLIO1 ISSUANCE MATURITIES $b 32 30 27 25 24 22 22 21 19 17 11 8 8 3 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28+ Senior Unsecured Covered Bonds Tier 2 RMBS TFF NZ FLP / TLF PORTFOLIO PORTFOLIO BY CURRENCY • ANZ’s term funding requirements depend
Slide 52: ANZ's Tier 2 Capital Profile
ANZ’S TIER 2 CAPITAL PROFILE1 ANZ’S TIER 2 CAPITAL REQUIREMENT TO PROGRESSIVELY TIER 2 CAPITAL INCREASE TO MEET TLAC REQUIREMENT Notional amount • ANZ BGL issued $11.4b since July-2019 across AUD, EUR, GBP, and USD By Format By Currency • FY22 T2 issuance expected to be ~$4b 2% • Remaining required
Slide 53: Impacts of Rate Movements
IMPACTS OF RATE MOVEMENTS CAPITAL & REPLICATING DEPOSITS PORTFOLIO PORTFOLIO EARNINGS RATE (HISTORICAL) (AUSTRALIA) FY19 Ave: 2.08% % 1H19 Ave: 2.21% 2H19 Ave: 1.95% 2.2 FY20 Ave: 1.40% 2.1 2.0 1H20 Ave: 1.64% 2H20 Ave: 1.20% 1.9 FY21 Ave: 0.88% 1.8 1.7 Portfolio Earnings Rate is a 1H21 Ave: 0.92% 2
Slide 54: Capital Framework
CAPITAL FRAMEWORK CURRENT REGULATORY PROPOSALS AND RECENT REVISED IMPLEMENTATION DATES1 First half CY2021 Second half CY2021 CY2022 Implementation Date RBNZ Capital Framework Transition 2028 Leverage Ratio Consultation Finalise 2023 Standardised Approach to Credit Risk Consultation Finalise 2023 Int
Slide 55: Risk Management
2021 FULL YEAR RESULTS DEBT INVESTOR UPDATE RISK MANAGEMENT
Slide 56: Long Run Provisions & Loss Rates
RISK MANAGEMENT LONG RUN PROVISIONS & LOSS RATES TOTAL CREDIT IMPAIRMENT CHARGE $m 1,800 1,500 1,200 900 600 300 0 -300 -600 -900 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 Consumer IP Commercial IP Inst
Slide 57: Individual Provision Charge
RISK MANAGEMENT INDIVIDUAL PROVISION CHARGE INDIVIDUAL PROVISION CHARGE INDIVIDUAL PROVISION CHARGE BY DIVISION $m $m 1,047 1,047 82 892 787 892 554 81 626 787 826 435 86 430 343 398 395 626 922 380 339 554 1 969 210 812 187 79 807 61 398 612 594 592 500 69 55 430 272 43 61 343 380 3 395 532 31 495
Slide 58: Collective Provision (CP) Balance & Charge
RISK MANAGEMENT COLLECTIVE PROVISION (CP) BALANCE & CHARGE CP CHARGE CP BALANCE BY CATEGORY $m 1.39% 1.25% 1.22% $m 1H19 2H19 1H20 2H20 1H21 2H21 1.17% CP charge 13 4 1,048 669 -678 -145 0.98% 0.94% Volume/Mix -28 -51 0 46 -199 -83 5,008 Change in Risk -40 19 17 44 -112 -41 4,501 696 11 4,285 Econom
Slide 59: Collective Provision (CP) Balance
RISK MANAGEMENT COLLECTIVE PROVISION (CP) BALANCE CP BALANCE BY DIVISION CP BALANCE BY PORTFOLIO $b Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 $b Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Corporate 1.59 1.62 2.22 2.30 2.13 2.09 Australia R&C 1.83 1.80 2.32 2.85 2.33 2.23 Specialised 0.18 0.19 0.29 0.
Slide 60: Portfolio Composition and Coverage Ratios
RISK MANAGEMENT PORTFOLIO COMPOSITION AND COVERAGE RATIOS PORTFOLIO COMPOSITION Sovereign Bank Corporate Resi. Mortgage Retail (ex Mortgages) Other Gross loans and advances Credit RWA Exposure at Default1 Exposure at Default1 Expected credit loss (ex Sovereign & Bank) (Collective Provision balance)
Slide 61: Expected Credit Loss
EXPECTED CREDIT LOSS ECONOMIC SCENARIOS – MODELLED OUTCOMES (COLLECTIVE PROVISION BALANCE SCENARIOS)1 SEPTEMBER 2021 $m Weightings to scenarios to determine CP balance ECONOMIC SCENARIOS BASE CASE2 5.2% 41.3% 47.7% 5.8% 5,358 30 September 2021 CY2020A CY2021 CY2022 AUSTRALIA 4,337 4,195 GDP change3
Slide 62: Impaired Assets
RISK MANAGEMENT IMPAIRED ASSETS CONTROL LIST NEW IMPAIRED ASSETS BY DIVISION Index Sep-16 = 100 $m 150 2,000 1,784 1,844 1,787 1,570 1,500 1,425 100 1,145 1,117 1,219 1,121 963 890 1,000 611 50 500 0 0 Sep- Sep- Sep- Sep- Sep- Sep- 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 16 17 18
Slide 63: Risk Weighted Asset and Exposure at Default – Divisional View
RISK MANAGEMENT RISK WEIGHTED ASSET AND EXPOSURE AT DEFAULT – DIVISIONAL VIEW TOTAL RISK WEIGHTED ASSETS CREDIT RWA DRIVERS $b $b 449 429 360.0 0.9 417 48 416 408 396 48 47 15 -6.6 3.2 48 47 342.5 38 22 -10.7 -4.3 12 13 19 25 178 156 157 Sep-20 FX Volume Risk Model / CVA (incl. Sep-21 144 142 144 /
Slide 64: Risk Weighted Assets & Exposure at Default
RISK WEIGHTED ASSETS & EXPOSURE AT DEFAULT EAD COMPOSITION1 EAD COMPOSITION EAD & CRWA MOVEMENT Increased exposure to the RBA via higher ESA (exchange $b $b (Sep-21 movement vs Mar-21) FX adjusted settlement account) balance 1,080 21.9 1,075 1% 1,045 1% 5% 1,010 1% 4% 968 977 1% 4% 4% 5% 5% 2.3 3.5
Slide 65: Total Portfolio Composition
RISK MANAGEMENT TOTAL PORTFOLIO COMPOSITION EXPOSURE AT DEFAULT (EAD) DISTRIBUTION % of Impaired Assets to Impaired Assets Category % of Group EAD EAD Balance3 Sep-202 Mar-21 Sep-21 Sep-202 Mar-21 Sep-21 Sep-21 TOTAL GROUP EAD (Sep-21) Consumer Lending 41.3% 41.1% 40.1% 0.2% 0.1% 0.1% $447m = $1,080
Slide 66: Segments of Interest
RISK MANAGEMENT SEGMENTS OF INTEREST COMMERCIAL PROPERTY OUTSTANDINGS BY REGION COMMERCIAL PROPERTY OUTSTANDINGS BY SECTOR $b % 7.0% 7.6% 7.3% 7.4% 6.9% 6.9% 6% 6% 9% 8% 7% 7% 46.5 47.1 46.8 3% 4% 2% 2% 2% 2% 45.2 42.4 42.9 2.4 2.1 2.2 18% 18% 2.1 21% 21% 20% 18% 2.8 2.8 11.4 10.9 10.4 10.9 10.7 10.
Slide 67: Exposure to Industries Impacted by COVID-19 Downgrades
RISK MANAGEMENT EXPOSURE TO SOME INDUSTRIES MORE IMPACTED BY DOWNGRADES DURING THE COVID-19 PANDEMIC1,2 TOTAL GROUP EAD RETAIL TRADE ACCOMMODATION, CAFES & RESTAURANTS $b $b All exposures on an EAD basis in $b 10.2 9.0 12.7 12.7 12.5 12.8 8.1 8.2 4% 5% 5% 6% $1,080b (Sep-21) 50% 17% 16% 15% 14% 53%
Slide 68: ANZ Institutional Portfolio
RISK MANAGEMENT ANZ INSTITUTIONAL PORTFOLIO INSTITUTIONAL PORTFOLIO SIZE & TENOR BY MARKET ANZ INSTITUTIONAL INDUSTRY COMPOSITION OF INCORPORATION (EAD SEP-211) EAD (Sep-21): A$456b1 $b 450 Finance 15% Government Administration & Defence 3% 29% 400 Property & Business Services 3% Services To Finance
Slide 69: ANZ Asian Institutional Portfolio
RISK MANAGEMENT ANZ ASIAN INSTITUTIONAL PORTFOLIO (MARKET OF INCORPORATION) MARKET OF INCORPORATION ANZ ASIA INDUSTRY COMPOSITION EAD (Sep-21): A$102b1 EAD (Sep-21): A$102b1 21% 7% Finance 12% Manufacturing 3% China South Korea 3% Wholesale Trade Japan India 4% 2% 7% Services To Finance & Insurance
Slide 70: Housing Portfolio
2021 FULL YEAR RESULTS DEBT INVESTOR UPDATE HOUSING PORTFOLIO
Slide 71: Australia Home Loans: Portfolio Overview
AUSTRALIA HOME LOANS PORTFOLIO OVERVIEW (UNLESS OTHERWISE STATED METRICS ARE BASED ON BALANCES) Portfolio1 Flow2 Portfolio1 FY19 FY20 FY21 FY20 FY21 FY19 FY20 FY21 Number of Home Loan 983k 1,008k 1,002k 170k3 179k3 Average LVR at Origination9,10,11 67% 69% 71% accounts Total FUM $265b $275b $278b $6
Slide 72: Australia Home Loans: Portfolio Growth
AUSTRALIA HOME LOANS PORTFOLIO GROWTH HOME LOAN FUM COMPOSITION1,2,3,4 LOAN BALANCE & LENDING FLOWS1 $b $b 281 278 14 275 5 48 4 269 265 6 5 264 8 7 22 21 278 7 21 275 6 5 -63 31 26 22 8 10 17 14 62 62 60 57 52 54 Sep-20 New Sales Net OFI Refi Redraw & Repay / Other Sep-21 excl. Refi-In Interest MAR
Slide 73: Australia Home Loans: Portfolio Composition
AUSTRALIA HOME LOANS PORTFOLIO1,2 & FLOW3,4 COMPOSITION (% of TOTAL BALANCES) BY PURPOSE BY ORIGINATION LVR4,5,6 Portfolio Flow Flow 3% 2% 2% 1% 18% 17% 22% 30% 30% 30% 31% 17% 20% 21% 67% 68% 68% 68% 65% 63% 57% Sep-19 Sep-20 Sep-21 FY21 FY19 FY20 FY21 Owner Occupied Investor Equity Manager7 <80% L
Slide 74: Australia Home Loans: Portfolio Dynamics
AUSTRALIA HOME LOANS PORTFOLIO DYNAMICS HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE2 70% of accounts ahead of repayments % composition of accounts (Sep-21) 32% 0 0 28% 14 13 26 Active COVID-19 deferrals3 26 30 New Accounts: Less than 6 months old 36 Structural: Loans
Slide 75: Australia Home Loans: Portfolio Performance
AUSTRALIA HOME LOANS PORTFOLIO PERFORMANCE HOME LOANS 90+ DPD BY STATE1,2 HOME LOAN DELINQUENCIES1,2,3,4 % of Portfolio Segment Balances % of Portfolio Segment Balances 2.5 2.5 2.0 1.5 1.0 2.0 0.5 0.0 Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- 18 18 19 19 20 20 21 21 1.5 30+ DPD % 90+ Owner Occupied 90
Slide 76: Lenders Mortgage Insurance
LENDERS MORTGAGE INSURANCE SEPTEMBER FULL YEAR 2021 RESULTS LMI & REINSURANCE STRUCTURE Gross Written Premium ($m) $124.0m Australian Home Loan portfolio LMI and Reinsurance Structure at 30 Sep 21 (% New Business FUM Oct 20 to Sep 21) Net Claims Paid ($m) $19.0m 2021 Reinsurance Arrangement Loss Rat
Slide 77: New Zealand Home Loans: Portfolio Overview
NEW ZEALAND HOME LOANS PORTFOLIO OVERVIEW Portfolio Flow Portfolio FY19 FY20 FY21 FY20 FY21 FY19 FY20 FY21 Number of Home Loan Accounts 527k 529k 535k 68k 82k Average LVR at Origination1 56% 58% 57% Total FUM NZD85b NZD90b NZD99b NZD20b NZD29b Average Dynamic LVR1 42% 40% 35% Average Loan Size NZD16
Slide 78: New Zealand Home Loans: Lending & Arrears Trends
NEW ZEALAND HOME LOANS HOME LENDING & ARREARS TRENDS ANZ HOME LOAN LVR PROFILE1 HOUSING FLOWS HOUSING PORTFOLIO 1% 15% 13% 10% 2% 2% 1% 4% 3% 40% 42% 46% 6% 13% 85% 87% 90% 15% 12% 60% 58% 54% 19% FY19 FY20 FY21 Sep-19 Sep-20 Sep-21 19% Proprietary Broker Fixed Variable HOUSING PORTFOLIO BY REGION2
Slide 79: Summary of Macro Prudential Changes
NEW ZEALAND HOME LOANS SUMMARY OF MACRO PRUDENTIAL CHANGES1 HOUSE PRICE CHANGES BY LOCATION3 Restrictions on loan-to-value ratios (LVRs) are limits on banks to reduce the amount of low deposit mortgage Annual % change (3-mth average) lending. Below are the changes to the LVR restrictions during the
Slide 80: Economics
2021 HALF YEAR RESULTS DEBT INVESTOR UPDATE ECONOMICS
Slide 81: Economics: Australia Forecast Table
ECONOMICS AUSTRALIA FORECAST TABLE 2018 2019 2020 2021F1 2022F1 Australia – annual % growth GDP 2.8 1.8 -0.9 1.4 4.8 Headline CPI (% y/y) 1.9 1.6 0.9 2.1 2.0 Employment (% y/y) 2.3 2.2 -1.0 1.9 3.4 Unemployment (% y/y) 5.0 5.2 6.8 5.2 4.3 RBA cash rate (% year end) 1.50 0.75 0.10 0.10 0.10 3yr bond
Slide 82: Australian Economy - GDP
AUSTRALIAN ECONOMY- GDP GDP GROWTH1 GLOBAL GDP GROWTH COMPARISON*,2 Relative to GDP in December quarter 2019 CONSUMER PRICE INFLATION1 AUSTRALIAN GOVERNMENT BUDGET BALANCE1 % of nominal GDP 81 Sources: 1. RBA Chart Pack, Oct 2021 2. RBA Statement on Monetary Policy, Aug 2021
Slide 83: Australian Economy - Income and Savings
AUSTRALIAN ECONOMY- INCOME AND SAVINGS HOUSEHOLD DISPOSABLE INCOME GROWTH1 WAGE PRICE INDEX GROWTH BY INDUSTRY1 Nominal, quarterly with contributions Year-ended, March 2021 HOUSEHOLD INCOME AND CONSUMPTION*,2 HOUSEHOLD SAVING RATIO3 Share of household disposable income 82 Sources: 1. RBA Statement o
Slide 84: Australian Labour Market
AUSTRALIAN LABOUR MARKET UNEMPLOYMENT AND UNDEREMPLOYMENT1 JOB VACANCIES AND ADVERTISEMENTS1 (% of labour force) WAGE FREEZES2 EMPLOYMENT AND HOURS WORKED1,3 Share of firms reporting wages data in liaison 2008 average=100 83 Sources: 1. RBA Chart Pack, Oct 2021 2. RBA Statement on Monetary Policy, A
Slide 85: Commodity Prices
COMMODITY PRICES RBA INDEX OF COMMODITY PRICES1 RESOURCE EXPORTS*,1 SDR, 2019/20 Average = 100, log scale Log scale, quarterly BULK COMMODITY PRICES1 TERMS OF TRADE*,1 Free on board basis 2018/19 average = 100, log scale 84 Sources: 1. RBA Chart Pack, Oct 2021
Slide 86: Australian Housing Dynamics: Low Rates Drive Recent Growth
AUSTRALIAN HOUSING DYNAMICS: LOW RATES DRIVE RECENT GROWTH HOUSING PRICE FORECASTS BY STATE1 HOUSE PRICE GROWTH2 6 Month Change Year on Year Change 5 Year Cumulative Change September All All All Houses Units Houses Units Houses Units 2021 dwellings dwellings dwellings Sydney 14.3 16.3 9.6 23.6 28.9
Slide 87: Australian Housing Dynamics
AUSTRALIAN HOUSING DYNAMICS PRIVATE RESIDENTIAL BUILDING APPROVALS1 SHARE OF NEW HOUSING LENDING2 Monthly % Of new monthly housing First Home Owners’ Boost NSW & Victoria reduce stamp duty HOUSING LOAN COMMITMENTS1 MORTGAGE CREDIT3 (excluding refinancing) Six-month-ended annualised growth, seasonall
Slide 88: Australian Housing: Household Debt and Income
AUSTRALIAN HOUSING HOUSEHOLD DEBT AND INCOME HOUSEHOLD DEBT AND DEPOSITS1 HOUSING DEBT TO HOUSEHOLD INCOME2 % of annual household disposable income FLOWS INTO OFFSET & REDRAW ACCOUNTS*,3 CHANGE IN HOUSING LOAN PREPAYMENTS*,2 Share of disposable income; quarterly Over the year to August 2021 Sources:
Slide 89: Key Contacts
KEY CONTACTS Key Contacts Adrian Went Scott Gifford Mostyn Kau Group Treasurer Head of Debt Investor Relations Head of Group Funding +61 3 8654 5532 +61 3 8655 5683 +61 8655 3860 +61 412 027 151 +61 434 076 876 +61 478 406 607 Adrian.Went@anz.com Scott.Gifford@anz.com Mostyn.Kau@anz.com John Needham
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