Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2013)
111 slides from Anz's roadshow presentation, November 2013
Slide 1: Investor Discussion Pack
NOVEMBER 2013 Investor Discussion Pack
Slide 2: Delivering for shareholders and customers
Delivering for shareholders and customers FY13 FY12 FY13 2013 Result $M $M v FY12 Cash Profit 6,498 5,830 Up 11% Statutory Profit 6,272 5,661 Up 11% Cash Earnings per Share (cents) 238.5 218.5 Up 9% Dividend per share (cents) 164.0 145.0 Up 13% Cash Return on Equity 15.3% 15.1% Up 20bps • Super regi
Slide 3: Super Regional Strategy
SUPER REGIONAL STRATEGY STRONG PROFITABLE ENTERPRISE CORE ASIAN APPROACH MARKETS GROWTH STRONG LIQUIDITY AND CAPITAL MANAGEMENT DISCIPLINED AND EXPERIENCED MANAGEMENT 3
Slide 4: We have built scale, capability and momentum in Asia
We have built scale, capability and momentum in Asia ANZ has built a substantial business in Asia A top 4 Corporate Bank in Asia USDm Asia Operating Income1 Greenwich Associates Large Corporate Survey Overall Relationship Quality 70% 38% CAGR 2,243 2,109 1,840 17% 60% Bank A 1,257 11% 17% 877 24% 62
Slide 5: A differentiated strategy that is delivering for shareholders and customers
A differentiated strategy that is delivering for shareholders and customers ANZ has built a substantial business in Asia Established network to support faster growing regional flows in trade, capital and wealth Markets / No. Staff Japan & Korea – 200 China – 800 Asia-Europe Asia-US Trade: US$1.0trn
Slide 6: Strengthening Australia – Retail & Wealth
Strengthening Australia – Retail & Wealth Increase in economic Retail Market Share1 9% capital allocated to Australia Retail 14.4% Branch sales staff now 13.7% 68% accredited to sell home 13.1% loans 12.4% Branch sales staff 30% accredited to sell Wealth products 2010 2011 2012 2013 Wealth Products
Slide 7: Strengthening New Zealand – Retail & Wealth
Strengthening New Zealand – Retail & Wealth Products removed as part Retail Income per Branch 85 of simplification NZDm +34% 4.7 Increase in Kiwisaver 3.5 31% FUM, 81% of sales via branches Increase in branch 7% coverage since 20101 FY10 FY13 Reduction in branch Retail Income per FTE 7% expenses NZD
Slide 8: Strengthening Institutional and Commercial in Australia & New Zealand
Strengthening Institutional and Commercial in Australia & New Zealand Grow Commercial Increase in economic Corporate & Commercial Banking Australia Combined Lending and Deposit Growth2 9% capital allocated to Australia 1.9x 16.3% Growth in Australia 30,000 customer numbers1 8.5% Growth in New Zealan
Slide 9: Profitable Growth in Asia
Profitable Growth in Asia Build Scale Asia Customer Growth FY13 v FY12 Institutional Asia 11% customer growth 19% 16% 12% ANZ Transactive customer 35% growth 6% 7% ANZ Transactive monthly 96% transaction volume growth Agriculture Financial Resources Institutions Global Diversifieds Commercial Drive
Slide 10: Trade a key driver of return
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-Sell1 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
Slide 11: Productivity
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 Transactio
Slide 12: Credit Quality
Credit Quality Institutional diversification Group Provision Charge 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% Tenor 3.06 0.32% 0.30% 0.27% 1.82 1.21 1.25 1.20 Investment Grade
Slide 13: Capital efficiency
Capital efficiency Return on Equity Movement FY13 v FY12 $4.5 Organic capital billion generated in FY13 0.60% 15.3% 15.1% 0.05% Return on Risk 7bps Weighted Assets increase1 0.25% 0.10% Proactive allocation of resources FY12 FX Impact FVA Impact Increase Reduced in RoA leverage FY13 Average Credit
Slide 14: CEO Priorities and FY14 Outlook
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
Slide 15: Income by Line of Business
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 Other 6% 5% (margin and Driven by FX volume growth) turnover Payments & Cash Management and Loans (higher volume) • Term Deposits 19% 18% 231 68 18,378 • Mer
Slide 16: Income by Division and Geography
Income by Division and Geography Operating Income Mix by Division (FY13) Operating Income Mix by Geography (FY13) FY13 Network Revenue1 from APEA represented 21.4% of Group Operating Income Transaction Banking Retail Asia Global Pacific Loans Asia Partnerships 8% 4% Other 9% 2% 1% New Zealand 6% Ret
Slide 17: Balance Sheet composition by Geography
Balance Sheet composition by Geography Customer Lending1 by Geography Customer Deposits by Geography Australia APEA Institutional Retail & Wealth APEA Commercial APEA & Institutional APEA Commercial Retail & Wealth 10% 2% & Institutional 22% 11% 4% Australia Commercial APEA Australia APEA 14% 13% Ne
Slide 18: Balance Sheet composition by Segment
Balance Sheet composition by Segment Customer Lending1 by Segment Customer Deposits by Segment Australia Australia Commercial New Zealand Institutional New Zealand Commercial Commercial 14% APEA 15% 7% Commercial New Zealand 5% Retail & Wealth Australia 11% Commercial 10% Institutional APEA Australi
Slide 19: Return on Equity
Return on Equity IIB Return on Equity (Regulatory Capital Basel 3)1 Basel 3 Capital Usage Mix FY12 Basel 3 Proforma FY13 Basel 3 5% 5% Other 3% 3% Retail 11% IIB Division 12% Partnerships 18% 19% 14% Institutional 14% Global 10% 22% 23% Global Loans Markets 11% 20% Transaction Banking Transaction 18
Slide 20: ANZ a recognised leader in sustainability
ANZ A RECOGNISED LEADER IN SUSTAINABILITY Rated most sustainable bank globally in the 2013 Dow Jones Sustainability Index for the sixth time in seven years DJSI assesses business management practices including corporate governance, risk management, customer relations, brand management, human resourc
Slide 21: Group Treasury
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Slide 22: Strong Balance Sheet profile
Strong Balance Sheet profile FY13 v FY12 Capital 10.0% 10.8% 47bps APRA Basel 3 CET1 Internationally Harmonised 76bps CET1 8.0% 8.5% Customer Funded Balance 62% Sheet Sep 12 Sep 13 APRA CET1 Internationally Harmonised CET1 Term Wholesale Funding $24b issued, 29% to Domestic Stable Funding Mix invest
Slide 23: Capital levels remain well positioned
Capital levels remain well positioned Basel 3 CET1 Capital Overview 10.8% • Capital generation and initiatives in FY13 10.0% Internationally have lifted capital levels by 47bps (APRA 9.5% Harmonised CET1) and 76bps (Internationally APRA Harmonised CET1) • The group is well placed in regards to capit
Slide 24: Capital levels have increased in FY13
Capital levels have increased in FY13 CET1 – APRA (Sep 2013 v Sep 2012) 2.06 0.24 0.35 0.27 8.49 8.02 1.16 0.05 +47bps Sep-12 Cash RWA Non RWA Capital Dividends Other (5) Sep 13 NPAT (1) Usage (2) Business Initiatives (4) (net DRP) Usage (3) CET1 – APRA (Sep 2013 v Mar 2013) 1.03 0.08 0.08 0.01 8.49
Slide 25: Liquidity position has benefitted from improved funding mix and asset profile
Liquidity position has benefitted from an improvement in both funding mix and asset profile Funding mix has stabilised Shortened asset tenor 29% 19% 18% 16% 23% 24% 7% 14% 15% 14% 13% 22% 8% 5% 3% 1% 6% 8% 3% 3% 7% 12% 12% 14% 80% 61% 62% 74% 73% 50% 7% 8% 8% 4% 3% 3% Sep 08 Sep 12 Sep 13 Sep 08 Sep
Slide 26: Lowest structural funding gap of major domestic peers
Lowest structural funding gap of major domestic peers, providing flexibility Peer Funding Comparison ANZ Westpac NAB CBA Loan – Deposit Ratio (%) 127% 145% 145% 139% Loan – Deposit Gap ($b) 101 162 153 157 Australia Household Funding Gap ($b) 115 181 129 174 Loan – Deposit Gap Benefits of a lower Fu
Slide 27: A sustainable term wholesale funding profile
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 transacti
Slide 28: …which is well diversified
…which is well diversified Term Wholesale Funding Portfolio Term Wholesale Funding Portfolio Cost (by Type) 150bp 8% 9% 8% 9% 6% Tier 2 20% 13% 18% Government 100bp Guaranteed Actual portfolio cost Covered 72% 69% 68% 50bp Bonds Forecast portfolio cost based Senior on current market levels Unsecured
Slide 29: Strong liquid asset position
Strong liquid asset position Liquidity Portfolio Basel 3 Liquidity Rules Update $b 122 ● In August, APRA provided further details on 115 their approach to Basel 3 Liquidity implementation relating to High Quality Liquid Assets (“HQLA”) 39 91 38 ● Each ADI needs to hold their relative component of th
Slide 30: Impact of the lower $A
Impact of the lower $A Earnings Composition by Currency Funding impact A lower $A has a favourable impact on ANZ‟s NZD USD funding activities: 19% CNY • Results in cash inflows under the cross Other currency swaps in place for the existing 19% IDR foreign currency wholesale funding AUD INR 62% PGK M
Slide 31: Capital and Replicating Portfolio
Capital and Replicating Portfolio Portfolio Earnings & Spread to Cash Replicating Portfolios Australia • Portfolio earnings on capital are % fully allocated to ANZ businesses 6 and therefore impact business ANZ Portfolio NIM‟s 5 Earnings Rate • ~$45bn of capital and low interest 4 rate sensitive dep
Slide 32: Risk Management
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Slide 33: Strong credit quality
Strong credit quality Credit Quality Trends Provision Charge FY13 v FY12 $m Individual Provision Charge (LHS) Collective provision Charge (LHS) Collective Provision 100bps coverage1 3,500 Total Provision Charge as % Avg. net Advances 2,500 0.85% 1,500 0.50% 5% Total Provision charge 500 0.32% 0.30%
Slide 34: Continued transformation of Institutional business delivering improved credit quality
Continued transformation of Institutional business delivering improved Group credit quality Expected Loss rates continue to decline… Group Regulatory Expected Loss bps of 32bps • Regulatory Expected Loss is a one-year downturn loss measure EAD as prescribed by APRA and reported in the Results Announ
Slide 35: Continued transformation of Institutional business delivering improved credit quality
Continued transformation of Institutional business delivering improved Group credit quality …driven by targeted credit quality improvement in Institutional Contribution to Group Internal Expected Loss Institutional Commercial/SME Lending Credit Quality improvement reflects: Credit Cards/Personal Loa
Slide 36: Continued improvement in Credit RWA rate
Continued improvement in Credit RWA rate Group Exposure at Default Global Institutional Exposure at Default and Credit Risk Weighted Assets and Credit Risk Weighted Assets Exposure at Default ($b) Exposure at Default ($b) Basel 2 Credit Risk Weighted Assets ($b) Basel 2 Credit Risk Weighted Assets (
Slide 37: Super Regional strategy has diversified the Institutional portfolio
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 (b
Slide 38: Trade Finance and Asia Institutional growth has improved credit quality
Trade Finance and Asia Institutional growth has improved average credit quality for Institutional • Trade Finance portfolios provide access to a large Trade Finance and high quality multi-national customer base $b Investment Grade Sub-Investment Grade 60 • Strong growth in Trade Finance portfolio fo
Slide 39: Strong Collective Provisioning Coverage
Strong Collective Provisioning Coverage Global Institutional Sub-Investment Grade1 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) •
Slide 40: Individual Provision Charge
Individual Provision Charge Individual Provision Charge by Segment Individual Provision Charge Composition $m Institutional Commercial Consumer $m New Increased Writebacks & Recoveries 3,000 2,815 2,815 3,000 1,823 1,637 1,213 1,167 2,000 2,500 1,000 0 2,000 1,823 -1,000 FY09 FY10 FY11 FY12 FY13 1,6
Slide 41: Risk Weighted Assets
Risk Weighted Assets Total Risk Weighted Assets Total Risk Weighted Assets movement Sep 2013 v Sep 2012 $b $b Market & Operational Risk Weighted Assets 5.3 0.9 338.7 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 Cre
Slide 42: Traded Market Risk & IRRBB Risk Weighted Assets
Traded Market Risk & IRRBB Risk Weighted Assets Strategic decisions driving Risk Weighted Market Risk Weighted Asset Trends Asset and VaR outcomes $b IRRBB RWAs $m • FY13 increase in IRRBB VaR and RWA partly reflects modest increase in Capital and Replicating 20 Traded Market Risk RWAs 50 portfolio
Slide 43: Australia Credit Risk Weighted Assets
Credit Risk Weighted Assets Credit Risk Weighted Assets Credit Risk Weighted Assets movement Sep 2013 v Sep 2012 Basel 2 Credit Risk Weighted Assets $b Collective Provision as a % of CRWA (Basel 2) 15.4 10.9 287.7 14.1 Collective Provision as a % of CRWA (Basel 3) 254.9 7.0 0.6 1.32% 1.35% 1.28% 1.0
Slide 44: Control List and Risk Grade Profiles
Control List and Risk Grade Profiles Group Sub-Investment Grade1 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 = 100 120 28% 28% 26% 100 80 23% 22% 60 13% 13% 12% 40 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 11% 11% Inves
Slide 45: Gross Impaired Assets
Gross Impaired Assets Gross Impaired Assets by Type Gross Impaired Assets by Size of Exposure $m Impaired Loans NPCCD1 Restructured $m > $100m $10-$99m < $10m 8,000 8,000 Avg. $0.8b 7,000 decline YOY 7,000 6,561 since Sep 10 6,561 6,000 5,595 5,581 6,000 5,595 5,581 5,196 5,196 5,000 5,000 4,264 4,2
Slide 46: Impaired Assets
Impaired Assets New Impaired Assets by Division Net Impaired Assets by Division Institutional Australia New Zealand Other Institutional Australia New Zealand Other $m $m 7,000 6,575 5,000 4,685 4,069 6,000 5,446 3,884 4,000 3,423 5,000 4,265 4,203 2,797 4,000 3,287 3,000 3,000 2,000 2,000 1,000 1,00
Slide 47: Total Credit Exposure (EAD) by Geography
Total Credit Exposure (EAD) by Geography Exposure at Default by Exposure by Geography Line of Business2 Total Exposure at Default (Sep 13) - $725b1 Australia Australia New Zealand APEA Retail $450.6b $123.6b $150.8b 28% Commercial 55% 17% Institutional New Zealand UK & Europe New Zealand 3% 17% Reta
Slide 48: Total Credit Exposure (EAD) by Industry
Total Credit Exposure (EAD) by Industry Exposure at Default (EAD) % in Non as a % of group total Category EAD Performing ANZ Group Mar 13 Sep 13 Mar 13 Sep 13 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%
Slide 49: Resources
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 Includes Resources Exposure by Geography (EAD) Iron Ore 7% 37% 22% $b Au
Slide 50: Agriculture
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% 10 21
Slide 51: Commercial Property credit exposure
Commercial Property credit exposure Commercial Property Exposure Commercial Property Exposure by Sector Gross Loans and Advances by Region APEA (LHS) New Zealand (LHS) 29% Offices Australia (LHS) % of Group GLA's (RHS) $b Retail 35 8.5% Residential 30.9 30.7 28% 29.3 24% Industrial 28.2 27.8 30 Tour
Slide 52: Australia Division Credit Quality
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% Corporate & 24% 0.80% Commercial Consumer Cards 0.60% 7% 0.40% Personal Loans 1% 67% 0.20% Other 1% 0.00% VIC NSW QLD WA Portfoli
Slide 53: Australia Division - Home Loan Portfolio
Australia Division - Home Loan Portfolio Total Number of Home Loan Accounts 887k Dynamic Loan to Value Ratio % 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% Portfolio1 10% Average Loa
Slide 54: New Zealand Division – Home Loan Portfolio
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% 61-70% 11% % of Total Group Lending 11% 45% 71-80% 18% Owner Occupied Loans - % of Portfolio 77% 81-90% Averag
Slide 55: New Zealand – Credit Quality
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 1,463 400 190 202 200 66 1,307 0 -200 FY09 FY10 FY11 FY12 FY13 990 New Zealand Division 90+ days de
Slide 56: Australia Division
$1,795.02 ‘Other Accounts Current Balance ANZ First 8564 620 000% 3502 Online investment Account 123456 09876542210 Home Loan 123486 01234486780 ‘Access Advantage Cheque Account ~$605.14 99,343.68 $233,905.86 13 29 OCTOBER 2013
Slide 57: Transforming the business to position ANZ for growth
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
Slide 58: Banking on Australia is delivering strong outcomes
Banking on Australia is delivering strong outcomes FY13 Performance: NPAT up 11% to $2.87bn Retail Corporate & Commercial Banking Strongest overall growth of #1 major banks across Home Loans, 7% Lending Growth Deposits and Cards in FY131 Quarters of Above System Home Quarters of Above System 14 Loan
Slide 59: Achieving above system growth
Achieving above system growth Retail Strongest overall growth of major banks across Home Loans, Deposits and Cards in FY13 Home Loans1 Deposits1 Consumer Cards1 1.3x 1.2x 16.3x 8.8% 6.4% 7.6% 4.9% 1.7% 0.1% System ANZ System ANZ System ANZ Corporate & Commercial Banking Delivering above system growt
Slide 60: Improving sales efficiency and productivity
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 37.2% 7% in 2013 Increase in Home loans 15% approved at first appl
Slide 61: Retail Credit Quality
Retail Credit Quality Improvement in Home Loan Australia Retail 90+ days past due1 3bps 90+ days past due in 20131 1.5% Credit Cards Home Loans Reduction in Credit Card provisions in FY13, 30+ and 1.0% 13% 90+ day delinquencies at lowest level in 3 years 0.5% Maintained prudent risk 0.0% Sep 10 Se
Slide 62: Corporate & Commercial Banking Credit Quality
Corporate & Commercial Banking Credit Quality Individual Provision Charge Movement Net Impaired Assets FY13 v FY12 $m $m 23 387 1,000 937 949 1.80% 895 Net impaired assets as a % 54 21 803 1.50% of net lending assets 275 14 800 1.61% 1.55% 1.42% 1.20% +16% 600 1.23% 0.90% 400 0.60% +41% 200 0.30% FY
Slide 63: Banking on Australia
Significant progress made on mobile and digital agenda Banking on Australia 63
Slide 64: ANZ goMoney is our market leading mobile banking app
ANZ goMoneyTM is our market leading mobile banking app 2010 First payments app in the Australian market Available for iPhone and Android Active goMoney 1.0m users2 goMoney logins >25m per month Transactions >$56b processed ANZ‟s award-winning app1 provides a secure and convenient way to bank, 24/7 C
Slide 65: Transforming our branches to focus on complex needs
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 18% Uplift in sales via Video Conference in 2H13 New look sales focused 74 branches 201 Smart ATMs instal
Slide 66: Interactive frontline sales tools that improve banker productivity
Interactive frontline sales tools that improve banker productivity and deliver ANZ‟s super regional capabilities to our customers 100% C&CB frontline bankers with iPads 8 Frontline Applications Developed 1 A-Z Review Digital A-Z reviews Customer needs assessment >5,000 completed in last 3 2 Collabor
Slide 67: ANZ FastPay is our award winning mobile merchant app
ANZ FastPayTM 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 banking1 Available for iPhone and iPad 7,000+ FastPay users • Mobile merchant app for faster Monthly grow
Slide 68: Retail Transformation is improving Home Loan capability
Retail Transformation is improving Home Loan capability 1.1 A to Z customer needs Home Loan Sales Mix by Channel million reviews completed in 2013 Branch sales staff now 55% 51% 49% 47% Broker 68% accredited to sell home loans Proprietary 49% 51% 53% 45% Increase in branch 16% Home Loan sales in 201
Slide 69: Increasing cross sell of retail, wealth and small business solutions
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 Choic
Slide 70: Corporate & Commercial Banking transformation enhancing banker productivity
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 rem
Slide 71: Delivering leading insight and support to corporate & commercial customers
Delivering leading insight and support to help corporate & commercial customers improve their business Leading Insights Capabilities #1 No.1 Most Trusted Adviser1 Business Insights Lent to new small businesses $750 Real-time peer in the first 6 months under million benchmarking tool for our $1 billi
Slide 72: Leveraging our super regional advantage
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 s
Slide 73: International and Institutional Banking Division
International and Institutional Banking Division
Slide 74: Disciplined execution of our strategy is driving improved performance
Disciplined execution of our strategy is driving improved performance 32% % Institutional customers dealing with IIB in multiple countries Strong growth in priority segments – Natural Resources +6%, Volume1 Customer growth Global Diversified +9%, Financial Institutions +17%, Asia Commercial +30%, As
Slide 75: Strong customer relationships
Strong customer relationships 2013 2012 Source Performance Indicator Rank Rank Australia Peter Lee Associates1 Overall Market Penetration Tied for 1st 2 Relationship Strength Index 2 2 New Zealand Peter Lee Associates2 Overall Market Penetration 1 1 Relationship Strength Index 1 1 Asia Pacific Green
Slide 76: Diversification by customer
Diversification by customer Institutional: International connectivity, insights, strong balance sheet and consistency of relationship to deliver flow and value added solutions Customer Value Asia Pacific Commercial: Seamless connectivity to customers targeting those with Proposition cross border nee
Slide 77: Diversification by geography and product
Diversification by geography and product Accessing fast growing Asia: Income by Geography Geography 18% CAGR in Asia IIB Income by Geography (FY10-FY13) income over last three years1 FY13 Diversifying income to create Asia Aust & NZ CAGR CAGR -1% Product greater resilience against 34% +18% 24% chang
Slide 78: Cross border income is 35% of Institutional customer revenue
Cross border income is 35% of Institutional customer revenue - 3x faster growth than domestic Domestic Institutional Cross Border1 Institutional FY13 cross sell of $0.5 billion Institutional products into $1.6 billion FY13 cross border income Commercial Australia & NZ Cross border income growth 5% 1
Slide 79: Productivity gains enabling focused investment spend
Productivity gains enabling focused investment spend Strong productivity outcomes JAWs Flat Delivered flat JAWs YOY HoH Cost Growth (Constant FX)1 4.8% Costs Driving efficiency by 3.4% up 1% HOH leveraging Global Hubs 2.5% $88m In Technology and front line 0.7% 0.8% Incremental spend in FY13 coverag
Slide 80: Institutional - A higher quality balance sheet
Institutional - A higher quality balance sheet Institutional Risk Grade Profile Net Impaired Assets by Exposure at Default $m 4% 22% 2,062 32% 3% 2.9% 3% 1,329 2% 78% 2% 68% 1.3% 1% 1% 0% Sep-10 Sep-13 Sep-10 Sep-13 Investment Grade 1 Sub-Investment Grade 1 Net Impaired Assets Net Impaired Assets %
Slide 81: Re-shaping the Australia and New Zealand Institutional businesses
Re-shaping the Australia and New Zealand Institutional businesses Shifting business mix with a greater focus Maintaining cost discipline with costs down on flow and value added products 5% YOY1 Volume growth $m 13% Australia / NZ Costs HOH (FY13 v FY12) 647 643 6% 634 630 625 624 598 -6% -7% Global
Slide 82: A top Corporate Bank in Asia with a growing customer base
A top 4 Corporate Bank in Asia with a growing customer base Growing our customer base and volume in A top 4 Corporate Bank in Asia key products Growth In Asia Customer Numbers By Segment Greenwich Associates Large Corporate Survey (FY13 v FY12) Overall Relationship Quality 70% 19% 16% 60% Bank A 12%
Slide 83: Asian business growing in line with strategy
Asian business growing in line with strategy FY13 Performance: NPAT up 45% to USD0.6 billion1 Growing flow and value added products Gaining momentum across the region Asia Operating Income2 Income growth by largest geographies (USDm) FY13 Flow & value added FY10 FY13 Partnerships business Indonesia
Slide 84: Asia Institutional balance sheet – Shorter tenor
Asia Institutional balance sheet – Shorter tenor Institutional Asia Risk Grade Profile Net Impaired Assets by Exposure at Default $m 139 1% 26% 25% 0.9% 1% 1% 50 0% 74% 75% 0.1% 0% 0% Sep-10 Sep-13 Sep-10 Sep-13 1 Investment Grade Sub-Investment Grade Net Impaired Assets Net Impaired Assets % GLA Te
Slide 85: Asia Pacific Commercial and Retail
Asia Pacific Commercial and Retail Growing with positive JAWS Ongoing customer acquisition in Asia (FY13 v FY12) Active Customer Growth Retail Commercial (FY13 v FY12) 19% JAWs +6% JAWs +12% 16% 29% 17% 4% -2% Retail Commercial Income Cost Income Cost Affluent Commercial Asia: Institutional product
Slide 86: Growing faster in higher return products
Growing faster in higher return products Growing higher return flow and value added Growing volume products Revenue Growth by Product IIB Volume Growth (FY10-FY13) (FY12–FY13) Grow 9% 35% 7% Maintain 1% 27% 24% Global Transaction Markets Loans Banking Sales FY13 Return on Equity (Regulatory Capital
Slide 87: Transaction Banking
Transaction Banking Trade & Supply Chain Income Net Lending Assets Franchise expansion into Asia Asia has driven volumes $m $b Expansion and income growth 27% 8% 24.1 75% of Assets with Financial 664 614 Customer Institutions, Resources and 19.0 Segments Global Diversified. 60% of 487 15.2 90% of 40
Slide 88: Trade a key driver of returns
Trade a key driver of returns Natural cross sell product for What Customers Want Cash and Markets For every $1 of Trade income we generate additional Cross Sell of $1.081 On the ground presence $2.08 $0.51 $1.00 $0.57 Risk and liquidity appetite Cross-Sell Income Processing expertise Trade Mar
Slide 89: Global Markets
Global Markets Global Markets income growth by product, Increased & Diversified Earnings client and geography (FY13 v FY12) Markets income growth - FX income up Products Client Segment 11% 14% YOY 14% 11% 15% 12% 6% Trading income on the back of client 28% flows and improved execution capabilities F
Slide 90: Global Markets showing consistent growth
Global Markets showing consistent growth while building out capabilities in core franchise products Global Markets Income Global Markets Income by Type $m 4% CAGR $m Sales Trading Balance Sheet Avg. 1H:2H 2,110 Income split ≈ 2,500 1,856 1,908 53%:47% 1,694 2,000 998 1,500 2H 879 704 904 1,112 998 1
Slide 91: Diversification of income and more stable risk adjusted margins
Diversification of income and more stable risk adjusted margins Income Net Interest Margin AUDb NIM is more stable on a risk adjusted basis reflecting an improved portfolio risk profile 6% CAGR 4.50% 3.3 3.3 3.3 IIB ex Markets NIM down 67bps 3.1 3.2 4.00% 2.9 Risk Adjusted NIM down 17bps 2.9 2.6 3.5
Slide 92: New Zealand Division
‘Access Advantage Cheque Account 01234501234567890 $1,795.02 > harem ANZ First -$605.14 ) 1564 628K X00 3592 Online Investment Account $9,343.68 > 123456 09876543210 Home Loan 123456 01234456780 56253, 908-28 > 13 ue "New Zealand Division —
Slide 93: Strategy to simplify and focus business to create scale
Our strategy has been to significantly simplify and focus our business to create scale Create Scale Leverage Scale Scale advantage 2010 - 2013 2013-2016 2017+ 2010 2012 2013 2017+ Systems 2 1 1 1 Brands 2 1 1 1 Brand Consideration1 27% 32% 39% Market leading Staff engagement 64% 74% 76% Best practic
Slide 94: Creating scale to build a stronger bank
Creating scale to build a stronger bank Increased Cross Sell Cost to Income Loan to Deposit Ratio Growth NZ Division NZ Geography FY13 v FY12 NZ Simplification Programme 199% 49.1% 48.4% 62% ANZ@work1 187% 43.1% 42.5% 177% 175% 22% Trade Finance FY10 FY13 FY10 FY13 Sep 10 Sep 11 Sep 12 Sep13 33% Kiw
Slide 95: New operating model enabling productivity and efficiency
New operating model is enabling productivity and efficiency improvements Revenue per FTE Revenue per Branch Optimising branch network NZDk NZDm +10% +17% 7% Branch coverage up 7% over 3 years 10.3 361.9 7% Branch costs down 7% YOY (-6% HOH) 8.8 Leveraging scale 328.5 Revenue per FTE up 10% YOY (+8%
Slide 96: Transforming our lending book
Transforming our lending book by focusing on growing mortgage share and balancing risk in the Agri portfolio… System lending growth driven ANZ out-performing system in key home by mortgages loans segment System lending growth1 Indexed Sep 11 = 100 115 Growth in home loans – ANZ v System1 Business Mo
Slide 97: Continued improvement in credit quality
… and this is driving continued improvement in credit quality Net impaired assets (NIA) Total provision charge NZDm NZDm 400 349 1.50% 300 165 119 1.34% 200 98 101 90 100 36 10 0 1.11% -100 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 0.99% IP Charge CP Charge 0.63% 90+ days arrears 1,295 1,158 979 1.20%
Slide 98: Single brand focus has increased consideration and profile
Single brand focus has resulted in increased consideration and higher profile Increased Brand Consideration… … driven by best in market advertising campaigns Brand Consideration1 ANZ‟s advertising stands out in the market and is delivering high advertising awareness. Combining our marketing spend fr
Slide 99: Retail – Driving sales through investment in capability
Retail – Driving sales through investment in sales capability, channels and branch coverage Strong result Increased branch coverage2 4% Cash profit up 4% YOY & 15% HOH 82% 2% CTI down 2% YOY & 3% HOH 75% 12% Consideration1 scores Staff engagement up 13% to 76% 13% over 3 years 2010 2013 Increased sa
Slide 100: Retail - fewer, simpler products
Retail - fewer, simpler products ANZ has award-winning products, A simplified product suite including more 5-star Credit Card Ratings1 than any other bank – which has driven market share gains # Retail & Business Banking Products Low rate Airpoints Platinum 160 Making it easier for our customers to
Slide 101: Winning in key growth mortgage markets
Winning in key growth mortgage markets without increasing risk Share of new mortgage sales1 in Winning share in Auckland and Christchurch #1 Auckland and Christchurch Share of new mortgage Share of new mortgage sales in Auckland1 sales in Christchurch1 67% Average LVR at origination4 Leading peer ba
Slide 102: Commercial - Strong growth in Small Business Banking
Commercial - Strong growth in Small Business Banking Profit growth driven by lending volumes Lending and Deposit Growth and improved economic environment Lending Growth % YOY 13 HOH profit growth (+17% YOY) 11% driven by small business lending HOH 6 3 3 2 1 1 -1 YOY increase in revenue cross sell 11
Slide 103: Commercial – delivering insight to our customers
Commercial – delivering insight to our customers and connecting them to the region Connecting customers abroad Leading the Agribusiness market Customer tours to India, Hong Kong and China Best Agri Bank Sponsor: Young Farmers Strategic Partner: National Fieldays UDC - 75 years of providing asset fin
Slide 104: Customers increasingly using digital channels
Customers are increasingly using digital channels to do their banking Greater than 50% of ANZ NZ >50% customers are using digital channels to do their banking 57% of customer transactions now 57% digital (up 5% YOY) #1 Banking ANZ goMoney is currently the most TM downloaded banking app in New App 1
Slide 105: ANZ FastPay to be launched
ANZ FastPayTM to be launched • Award winning mobile merchant app currently operational in Australia and soon to be launched in New Zealand • Enables business customers to process credit and debit card payments securely using their iPhone or Android smartphone • Provides same day access to takings in
Slide 106: Global Wealth
13 u2@® © F al99* 13:37 = Accounts ANZ Smart Choice Super 1234567890 $54,623.47 > ‘Access Account + 013.025 999999999 6).562.00 ores Lowe -$349,973.48 013 025 999999999 a a 7 29 OCTOBER 2013
Slide 107: Global Wealth supports ANZ's Super Regional Strategy
Global Wealth supports ANZ‟s Super Regional Strategy Improved customer economics Important source of liquidity Customer Attrition Revenue per customer FY12 FY13 $b $b -45% +65% 26 22 14 13 10 11 5 5 9 12 5 6 Without With Without With Deposits Loans Deposits Loans Wealth Wealth Wealth Wealth Wealth W
Slide 108: Embed wealth solutions into all customer touch points
Embed wealth solutions into all customer touch points across the bank Increased Wealth Solutions to Direct Insurance sales ANZ Customers (Includes Australia, New Zealand & Asia) Australia New Zealand1 $m NZDm +11% +13% +33% 250 283 52 39 FY12 FY13 FY12 FY13 FY12 FY13 ANZ Smart Choice Super Accounts
Slide 109: Deliver higher returns in Life Insurance
Deliver higher returns in Life Insurance Retail Life Insurance Inforce Insurance Cash Profit $m $m 9% +10% 1,067 967 147 128 203 221 920 839 FY12 FY13 FY12 FY13 Australia New Zealand Retail Life Lapse Rates Awards Australia New Zealand % % 20bps 70bps Direct Life Insurance Life Insurance Australia M
Slide 110: Position for growth in Funds Management
Position for growth in Funds Management Funds Under Management (FUM) Funds Management Cash Profit $b $m 88% +13% 58.6 51.7 11.2 8.8 47.4 128 42.9 68 FY12 FY13 FY12 FY13 Australia New Zealand Efficiently delivering MySuper Awards • MySuper license approved by APRA • Our MySuper compliant offering (AN
Slide 111: www.anz.com
The material in this presentation is general background information about the Bank‟s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and
Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2013) on 6ix