Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2010)
99 slides from Anz's roadshow presentation, Nov 8, 2010
Slide 1: Investor Discussion Pack
For personal use only Investor Discussion Pack Graham Hodges Deputy Chief Executive Officer AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010
Slide 2: ANZ has established a strong business foundation
ANZ has established a strong g business foundation For personal use only A clear company wide focus on our super regional strategy: • Organised our business around three key geographies and our customers p. 3-16 • Maintaining M i t i i strong t businesses b i iin our h home markets: k t • Australia
Slide 3: Overview and strategy
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Overview and strategy
Slide 4: ANZ is structured by Geography & Segment
ANZ is structured by y Geography g p y & Segment g For personal use only Asia Pacific, Europe & America (APEA) Retail Commercial (including (i l di Wealth Institutional (emerging) partnerships) Australia Retail Wealth Commercial Institutional New Zealand Retail Wealth Commercial Institutional Instit
Slide 5: Super Regional strategy progressing well
Super p Regional g strategy gy p progressing g g well For personal use only TRANSFORM OUT PERFORM RESTORE • Institutional I tit ti lbbackk • Quality on par with Create global leaders in our to system markets a leading Super • Restore “jaws” – • Best of breed Regional bank increase revenue faster tha
Slide 6: Super Regional Strategy
Super p Regional g Strategy gy For personal use only Asian, Australian & New Zealand Australian 2 way trade weights interconnectedness increasing: g US & Europe1 • Following and supporting our customers 25.0 Index to the region, developing relationships 20.0 to work both ends of the trade flows. 15.
Slide 7: Regional and intra-regional trade and investment flows are substantive
Regional g and intra-regional g trade and investment flows are substantive For personal use only Denotes two way trade flow (2008) FDI inward flow (USDb, (USDb 2008) Asia1-Europe Asia1-USA Trade: US$1.1trn $ Trade: US$1.0trn $ CN TW 108 5 IND HK 42 63 Pacific-Asia1 VN 8 Trade: US$7b INDON Intra-Asia
Slide 8: Building a genuinely pan regional business - connectivity provides a competitive advantage
Building a genuinely pan regional business - connectivity provides a competitive advantage For personal use only Growth in trade and capital flows between Asia Linked through flows of and Australia are tracking 17% to 25% pa trade, capital and population Surplus savings Key focus is to bridge gaps a
Slide 9: Disciplined approach to M&A - RBS Asia acquisition
Strategy gy is supported pp by y a disciplined p approach pp to M&A – RBS Asia acquisition For personal use only • Acquired RBS¹ businesses in six Country Business Branches Customers Deposits countries, t i aligned li d with ith currentt strategy: t t Taiwan Retail 21 ~1.3m ~US $2.5b ¾ Retail, wealt
Slide 10: Disciplined approach to M&A - ING Australia and New Zealand Joint Ventures
Strategy gy is supported pp by y a disciplined p approach pp to M&A - ING Australia and New Zealand Joint Ventures For personal use only • Acquired ING Groep’s (ING) 51% interest in ING Australia and ING NZ (the JVs) for $1,760m1 Australia ¾ ~11x multiple of normalised 2008 earnings2 Acquired ING's
Slide 11: Disciplined approach to M&A - Landmark Loan and Deposit book
Strategy gy is supported pp by y a disciplined p approach pp to M&A - Landmark Loan and Deposit book For personal use only Overview of transaction Overview of Landmark • Acquisition of Landmark Financial Services • Leading Australian agribusiness (LFS) loan and deposit book from AWB’s rural company,
Slide 12: ANZ has continued to invest for growth notwithstanding tougher economic conditions
ANZ has continued to invest for g growth notwithstanding g recent tougher economic conditions For personal use only Revenue and Expenses Net Profit by region 17% % 4% 2% 4% 4% 2% 7% 7% 10% 14% 12% 12% 12% Pro Forma Basis1 23% 22% 22% 14% 14% 9% 10% 8% 6% 8% 7% 8% 66% 69% 64% 68% 72% FY06 FY07 FY08 F
Slide 13: Group loans and deposits
Group loans and deposits For personal use only Group Customer Deposits (AUDb) Group Net Loans and Advances (including acceptances) (AUDb) Loan to Deposit Ratio Sep 2010 – 140% Loan to Deposit Ratio Sep 2006 – 171% 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 Sep 06 Sep 07 Sep 08
Slide 14: Net loans and advances by geography
Net loans and advances1 by y geography g g p y For personal use only Australia New Zealand (NZD) APEA (USD) FY07 FY08 FY09 FY10 FY07 FY08 FY09 FY10 FY07 FY08 FY09 FY10 Growth 13% 15% (1%) 6% 13% 11% (1%) (1%) 31% 99% (14%) 45% A$b 350 300 250 200 150 100 50 0 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep
Slide 15: Customer deposits by geography
Customer deposits p by yggeography g p y For personal use only Australia New Zealand (NZD) APEA (USD) FY07 FY08 FY09 FY10 FY07 FY08 FY09 FY10 FY07 FY08 FY09 FY10 Growth 20% 12% 14% 7% 7% 5% 2% 0% 26% 69% 31% 72% A$b 200 180 160 140 120 100 80 60 40 20 - Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Se
Slide 16: Diversified lending portfolio, weighted to secured mortgage portfolio
Diversified lending portfolio, weighted to secured mortgage portfolio For personal use only Net Loans and Advances (including acceptances) by product line (A$b) 361 Cards & Other 1 20 (A$b) 172 Mortgages 13 1 Cards & Other 159 47 199 7 Mortgages 40 Australia NZ & APEA (A$b) 90 Institutional Commerci
Slide 17: Australia Division
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Australia Division
Slide 18: Australia Division – high value strategy has delivered
Australia Division – high g value strategy gy has delivered For personal use only Pro Forma Basis2 Australia Division Revenue & Expense growth1 Profit Before Provisions growth 14% 11% 2% 12% Pro Forma Basis2 FY10 2H10 (HoH) 10% Provisions 9% 8% -34% -32% 6% 5% FY10 2H10 (HoH) 4% Net Profit after tax
Slide 19: Super Regional strategy provides opportunities across our Australian business
ANZ’s Super p Regional g strategy gy p provides opportunities pp across our Australian business For personal use only Retail • By 2015 15% of the Australian population will be of In-country Business Migrant banking Asian origin platforms Development Managers • Student volume is driving much of the i
Slide 20: Retail building on a strong customer franchise
Retail building g on a strong g customer franchise,, revenues impacted by fee changes and higher cost of funds For personal use only Pro Forma Basis3 • iKnow platform providing frontline staff with Market share2 Revenue growth improved customer insights and support • Renewed focus on customer servic
Slide 21: Australia: Commercial
Australia: Commercial For personal use only Pro Forma Basis3 • Acquired Landmark Financial Services Revenue growth Growing market share1 ($2.2bn lending, $400m deposits) 9% • Invested in more small business (% of market share) 6% specialists. Esanda 13.8 14.1 Market share • Esanda transitioned to a
Slide 22: Australia: Wealth
Australia: Wealth For personal use only Pro Forma Basis1 Revenue growth • ANZ assumed full ownership of ING's Insurance in-force premiums superannuation, investment and 23% insurance businesses $m Up 14% • Combined with ANZ Private and 1,312 1,400 1,155 1,230 Investment & Insurance businesses to 1,2
Slide 23: The Asia Pacific Europe & America Division
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 The Asia Pacific Europe & America Division
Slide 24: Deep onshore presence and strong network model delivers connectivity
Deep onshore presence and strong network model delivers connectivity to clients For personal use only Franchise Franchise Markets N t Network k Core markets for Institutional, Commercial, Retail & Wealth Hubs • Greater China • Greater Mekong1 • India • Indonesia • Malaysia • Pacific Regional Busines
Slide 25: Since 2008, we have prioritised our build out
Since 2008,, we have p prioritised our build out,, enabling g us to become a credible competitor For personal use only 1H 2008 Today • Institutional network • Pan-regional Institutional/commercial business • Formed partnership with • Top 4 foreign bank in Indonesia AmBank South and • Largest foreign
Slide 26: APEA: Balance sheet momentum
APEA: Balance sheet momentum1 For personal use only APEA loans & deposits (USDb) 2010 loan and deposit growth by RBS2 Dep. Loans region 50 46.1 92% 2H10 5.0 2.8 37.4 85% 40 1H10 1.5 0.4 72% 30 26.8 56% 20.3 24.1 45% 20 17.7 15.5 16.7 10 8% 8% -5% 0 APEA Asia Pacific Europe & 1H09 2H09 1H10 2H10 Amer
Slide 27: Business strategy allows for efficient use of APEA's liquidity surplus
Business strategy gy allows for efficient use of APEA's liquidity surplus For personal use only • Focus on affluent and emerging affluent client segments Business Strategy • Building a substantive DCM and Cash Management capability and investor client base Thi focus This f allows ll us to: t • Fund
Slide 28: Becoming a top four Institutional bank in Asia Pacific
Becoming g a top p four Institutional bank in Asia Pacific For personal use only Customer Segments Value Proposition • Be a core wholesale bank to our clients Institutional • Leveraging our strengths: MNC / Regional Corporate – Regional network and connectivity – AA rating Commercial – Deep insights
Slide 29: We are delivering for Institutional and our clients across Asia and the Pacific
We are delivering g for Institutional and our clients across Asia and the Pacific For personal use only Regional Connectivity Examples • Mandated Lead Arrangers with BNP and European and US Multinational HSBC companies accessing Asia • USD411m ((2.7x launch size)-maiden ) Asian syndication bond • Ra
Slide 30: Retail & Wealth and Private Bank to deliver local and regional banking to the affluent
Our Retail & Wealth and Private Bank will deliver local and regional banking to the affluent in each market For personal use only • HNW, HNW Affluent & Emerging Affluent Customer segments • Owners, management and staff of our institutional and commercial clients Position and Value Proposition • Thre
Slide 31: Five key partnerships expand our organic agenda
Five key y partnerships p p expand p our organic g agenda g For personal use only 9 Double play in high growth, high return market P t Partnership hi MModel d l 9 Focus on our key segments (Commercial, Affluent & Emerging Affluent) • Significant influence 9 Scale (Number 5 by assets & deposits) in a
Slide 32: Organic growth a key driver of strategy
Organic growth a key driver of strategy For personal use only 2008 2009 2010 2011 2012+ Develop strategy and Continue organic Extend and deepen build business model growth with bolt-ons franchise • Build substantive Institutional • Organic growth anchored by • Deepen organic growth in business Insti
Slide 33: The New Zealand Division
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 The New Zealand Division
Slide 34: Our strategy is to fully leverage ANZ's leading market position
Our strategy is to fully leverage ANZ’s leading market position to deliver superior growth and returns For personal use only Leveraging leading market share Two strong banking brands with a positions1 p powerful market presence 39% 39% 33% 32% 27% Market share1 39% 39% 2 Retail Credit Com'cial Rural
Slide 35: New Zealand - Retail & Wealth
New Zealand - Retail & Wealth For personal use only Pro Forma Basis2 Retail Wealth R Revenue growth th • Asset growth flat flat, system growth • Wealth profitability favourably rates subdued impacted by ING NZ full ownership 4% • Income impacted by removal of • $1.5 billion KiwiSaver FUM with except
Slide 36: New Zealand - Commercial
New Zealand - Commercial For personal use only Pro Forma Basis1 Commercial Rural • Leveraged Shanghai Expo as an • Higher Rural incomes with Fonterra Revenue growth opportunity t it tto connectt customers t to t fo ecasting the third forecasting thi d highest dairy dai payout pa o t 10% Asia and dem
Slide 37: New Zealand - Institutional
New Zealand - Institutional For personal use only Pro Forma Basis2 • ANZ continues to dominate the Institutional NZ NZ institutional segment 2010 Financial Performance Revenue growth • Second half expense growth Trading revenue driven by investment in 368 down 161m 150 5 350 payments systems (23%) (
Slide 38: The Institutional Business
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 The Institutional Business
Slide 39: Global Institutional business focus redefined
Global Institutional business focus redefined For personal use only Foundations laid Revenue Contribution by Product • Strengthened the Institutional Leadership Team, additional team members with international experience • Starting to execute the technology and Target Mix 2010 operations roadmap • I
Slide 40: Increased focus on core customers and geographies
Increased c eased focus ocus o on co core e custo customers e saand d geog geographies ap es For personal use only Over 3,500 active Institutional and Corporate A single global team services customer customers supported by over 5 5,000 000 staff needs across the network • Corporate banking customers
Slide 41: Regional networks, superior insights & service underpin the competitive advantage
Regional networks, superior insights & service underpin the competitive advantage For personal use only Competing C ti globally l b ll requires i Regionally Networked Model superior insights and service • A lead regional bank servicing clients with pan regional needs • A strong regional branch • Bui
Slide 42: Global Institutional – a focus on growing core customer relationships
Global Institutional – a focus on g growing g core customer relationships supporting income performance For personal use only Customer Growth Customer Income1 Cross Border Income >1,100 , new relationship p managed g Customer Income ex Markets ex-Markets Super Regional strategy increasingly AUDb cus
Slide 43: Global Markets
Global Markets For personal use only Global Markets Income Product Contribution Sales & Trading Mix (AUDm)1 % Total Income 2,500 100% 2,062 2,000 1,816 80% 49% 1,500 60% 1,225 43% 1,000 857 36% 40% 29% 51% 57% 500 20% 71% 64% 0 0% 2007 2008 2009 2010 2007 2008 2009 2010 Sales Trading Fixed Income FX
Slide 44: Global Institutional P&L drivers
Global Institutional P&L drivers For personal use only Underlying Performance1 Business Segment Performance1 YOY Movement (FY10 vs FY09) AUDm YOY Movement (FY10 vs FY09) AUDm 459 43 1,758 102 642 1,761 (206) 1,360 (124) 89 1,360 large 14% (22%) large FY09 Lending Txn Markets Other 2 FY10 (206) NPAT
Slide 45: Investing across the business in systems and people
Investing g across the business in systems y and p people p For personal use only Expense Growth1 Asia Pacific, Europe & America • Continued investment in growing the Asia franchise YOY HOH and driving customer acquisition • Investment in support infrastructure to underpin revenue growth 31% 13% A t
Slide 46: Predicated on disciplined execution
Predicated on disciplined p execution For personal use only Implementation priorities Significant growth opportunities Estimated addressable Cash Management Sustained customer growth Revenue pools • Deepening relationships with existing 3500 active clients ($b) • Targeting a significant number of ne
Slide 47: Priority segments – Natural resources & Agriculture
Priority segments – Natural resources & Agriculture For personal use only Natural resources Agriculture • Well positioned to develop a super regional • Growing soft commodity demand from Asia natural resources business linking Australian producers with Asian processors • Well positioned for Australi
Slide 48: Priority segments – Infrastructure
Priority y segments g – Infrastructure For personal use only • Goal to become a leading commercial Addressable revenue in APAC Infrastructure Bank in the Asia Pacific I f Infrastructure market k set to grow to Region $5.5bn Debt Markets • Maintain dominant position in Australia and NZ and invest sel
Slide 49: Priority products – Cash Management & Trade
Priority products – Cash Management & Trade For personal use only Cash Management Trade • Vision to be a lead provider of pan-regional cash • Support trade flows between our core management solutions via a single transactional operating geographies interface • Build on strong market position in Aust
Slide 50: Priority products – Regional Rates and FX; Commodities and Debt Capital Markets
Priority products – Regional Rates and FX; Commodities and Debt Capital Markets For personal use only Commodities Regional Rates and FX • Commodity y revenue split: p • Largest L t domestic d ti markets k t business b i ¾ Hedging exposures of commodity producers and consumers ~ 60% of revenue • FX r
Slide 51: Treasury
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Treasury
Slide 52: ANZ's strong capital ratios are fully reflected when measured consistently
ANZ’s strong g capital p ratios are fully y reflected when measured consistently across various jurisdictions For personal use only Sep 09 Mar 10 Sep 10 FSA Sep 10 Core Tier 1(1) 9.0% 8.5% 8.0% 11.3% Tier 1 10.6% 10.7% 10.1% 13.5% Total Capital 13.7% 13.0% 11.9% 15.2% Capital Update: Capital Agenda:
Slide 53: Core Tier-1 level remains strong and well positioned
Core Tier-1 level remains strong g and well p positioned For personal use only Capital Position (Core Tier-1 Ratio) 11.25 1.99 0.80 8 96 8.96 0.39 0.46 8.05 Portfolio growth & mix 19bp decrease 1.25 Risk migration 3bp increase Portfolio data review 4bp increase ING 79bp decrease Non credit RWA 27bp
Slide 54: Tier-1 position reduced during FY10 due to recent acquisitions
Tier-1 p position reduced during g FY10 due to recent acquisitions partially offset by Hybrid issuance For personal use only Capital Position (Tier-1 Ratio) 13.54 13 54 1.99 0.63 0.80 10.56 0 48 0.48 0.49 10.10 1.31 Portfolio growth & mix 23bp decrease Risk Ri k migration i ti 4bp 4b increase i Port
Slide 55: Reconciliation of ANZ's capital position to FSA
Reconciliation of ANZ’s capital position to FSA Basel 2 guidelines For personal use only APRA regulations are more conservative than current FSA regulations, in that APRA requires: • A 20% Loss Given Default floor for mortgages (FSA: 10% floor) • Interest Rate Risk in the Banking Book (IRRBB) includ
Slide 56: Basel & APRA Regulatory reform - Capital
Basel 3 & APRA Regulatory g y reform - Capital p For personal use only Basel Committee Announcements What remains outstanding under B3 ? To date, the Basel Committee has announced: • Methodology for determining countercyclical buffer • New N capital i l targets and d buffers b ff • Final requirement
Slide 57: Improved funding profile achieved, stable term debt issuance
Improved p funding gpprofile achieved,, stable term debt issuance For personal use only Stable term funding profile Key Funding Metrics • 82% of all funded assets financed by equity, deposits & Senior Debt Government Guaranteed LT debt (was 78% as at Sep ‘09 & 71% Sep ‘08) Subordinated Debt • $26.4b
Slide 58: ANZ's term debt issuance consistent and well diversified
ANZ’s term debt issuance consistent and well diversified For personal use only Marginal term funding costs have APEA funding benefit reduces stabilised but average costs continue term debt issuance by ~10% to increase as portfolio reprices APEA surplus +bps deposits p margin Domestic D ti AUD/NZD 14
Slide 59: Strong Liquidity Position leading into proposed B3 changes
Strong g Liquidity q y Position leading g into p proposed p B3 changes For personal use only Basel III Liquidity Developments Maintaining post GFC liquidity • Reduction in required core funding of position ($b) mortgages from f 100% 00% to 65% 6 % • Improved treatment of ‘Retail’ and ‘SME’ deposits
Slide 60: AUD strength presents a headwind for future earnings
AUD strength g p presents a headwind for future earnings g For personal use only • ~1.25% negative impact, including current hedging positions, on FY11 EPS growth expected if the AUD maintains current levels • NZD remains the most significant single currency revenue exposure • USD and Asian local cu
Slide 61: 2010 Results
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 2010 Results
Slide 62: Overview of financial performance
Overview of financial performance p For personal use only 2010 2H10 Consolidated Group ppperformance A$m G Growth th G Growth th Underlying performance Revenue 15,782 +10% + 9% Expense 6,971 +15% +15% Profit before provisions 8,811 +6% +4% Provisions 1 820 1,820 -40% -34% Net Profit After Tax 5,025
Slide 63: Solid pre provision earnings, lower provisions and acquisition benefits delivering 33% NPAT growth
Solid p pre p provision earnings, g , lower p provisions and acquisition benefits delivering 33% NPAT growth For personal use only 2010 Full Year Includes 480m of acquisition i iti iimpacts t Underlying EPS Up 18% 1,191 459 AUD m 148 151 5,025 524 4,501 518 829 3,772 down 40% -4% and +4% offsetting
Slide 64: Pro Forma data adjusts for acquisitions and FX
Pro Forma data adjusts j for acquisitions q and FX,, showing g good revenue growth and continuing momentum For personal use only Revenue Expense Profit before Net profit growth growth provisions after tax 2010 Full Year 33% 35% 15% 10% 8% 7% 6% 7% Underlying Pro Forma Underlying Pro Forma Underlying
Slide 65: Growth largely in Net Interest, Partnerships & Wealth
Growth largely g y in Net Interest,, Partnerships p & Wealth income partly offset by lower markets income and fees For personal use only Pro Forma revenue growth Markets income Lower relative L l ti to t exceptional ti l 2009, positive longer term trend Net interest1 11% A$m CAGR 29% 1200 6% 1000 80
Slide 66: NIM improved year on year with repricing for business risk
NIM improved p year on year y y with repricing p g for business risk, slowing in 2H10 and continued funding pressure For personal use only 2010 Full Year NIM Basis points 43 4.3 (12 3) (12.3) 36.6 14.4 247.4 231.3 (10.8) (16 1) (16.1) Group p ex Markets +28.4 bps p Group +16.1 bps 2009 Funding F di
Slide 67: Expense trend reflective of substantial investment
Expense p trend reflective of substantial investment and a focus on delivering sustainable revenue outcomes For personal use only Revenue / Expense “Jaws” Expense growth Avg Revenue growth 11% 15% 15% Avg Expense growth 9% Acquisitions & FX 17% Group 13% Ex 7% Markets1 New Zealand 10% 12% 11% Ex Aus
Slide 68: Improved provision & new impaired asset trends
Improved p p provision & new impaired p asset trends predominantly in the Institutional business For personal use only Total Provision Charge New & Increased Impaired (IP charge by Division and total CP charge) Assets by Division 1,800 A$m 4,000 A$m 1,600 3,500 3,126 1,400 3,000 1,200 1,098 2,500 2,
Slide 69: Divisional performance
Divisional performance p For personal use only 2010 Divisional Profit Before Provisions (Pro Forma basis) 2010 2H10 growth AUD m Australia 4,003 457 4,460 11% 2% Institutional 3,291 (118) 3,173 (4%)1 (1%) NZD m NZ Businesses 1,317 26 1,343 2% 8% USD m 902 13 915 1% ((3%)) APEA 2010 Divisional Net Pr
Slide 70: Summary
Summary y For personal use only Group margin ex Markets1 Investing in the franchise Cost growth 2.56% 2 71% 2.71% 2 79% 2.79% 2.31% 2.38% 0.3% % (HoH) 7% 6% 0.2% 5% 4% 4% 0.1% 0.0% 2H08 1H09 2H09 1H10 2H10 2H08 1H09 2H09 1H10 2H10 NIM movement HOH (RHS) Net Loans and Advances2 growth Total provision
Slide 71: Risk Management
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Risk Management
Slide 72: Individual Provision Charge
Individual Provision Charge For personal use only Individual Provision (IP) Charge by IP Charge Movement Composition Segment g A$m A$m A$ 1,600 1,600 1,531 1,200 800 400 1,283 0 1,200 -400 1,062 2H08 1H09 2H09 1H10 2H10 894 New Increased Writebacks & Recoveries 800 762 IP Charge by Region A$m 1,600
Slide 73: Collective Provision Charge
Collective Provision Charge g For personal use only Collective Provision Charge by Division FY10 Total Risk Impacts Cycle & (A$m) Charge Lending & migration Concentration Mix Group Total (4) 62 (68) 29 (26) 58 12 Australia Division 10 (11) ((49)) 11 60 1 New Zealand Businesses 48 (24) 29 16 Institut
Slide 74: Credit Risk Weighted Assets
Credit Risk Weighted g Assets For personal use only Total Credit Risk Weighted Assets Credit RWA Movement FY10 vs FY09 A$b A$b 257.8 250.8 5.8 (1.3) ((6.2)) 6.9 (1.5) 233.5 233.5 229.8 229.8 220.4 Acquisitions Impact: RBS $4.6b Landmark $2.3b Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Sep 09 Acq. Growth Dat
Slide 75: Impaired Asset balance has reduced ex-acquisitions
Impaired p Asset balance has reduced ex-acquisitions q For personal use only Gross Impaired Assets Gross Impaired Assets By y type yp By y size of exposure p Impaired Loans ex-acquisitions A$m > $100m $10-$99m < $10m NPCCD 8,000 Restructured A$m Acquisitions 6,000 8,000 4,000 7,000 2,000 6,000 0 Sep
Slide 76: Watch & Control Lists and Risk Grade Profiles
Watch & Control Lists and Risk Grade Profiles For personal use only Watch & Control List by limits Group Risk Grade profile by (Mar 2009 Watch List index =100) Exposure at Default Index -150 -100 -50 0 50 100 150 5.7% 6.3% 6.4% 6.4% Mar 09 8.9% 8.8% 9.4% 8.9% Jun 09 Sep 09 13.0% 12.6% 13.0% 12.5% De
Slide 77: Commercial Industry Exposures
Commercial Industry y Exposures p For personal use only A$b Finance & Insurance A$b Property Services1 75 15% 75 15% 50 10% 50 10% 25 5% 25 5% 0 0% 0 0% Sep-09 Mar-10 Sep-10 Sep-09 Mar-10 Sep-10 Agriculture, Forestry & Fishing Manufacturing 75 15% 75 15% 50 10% 50 10% 25 5% 25 5% 0 0% 0 0% Sep-09 Ma
Slide 78: Commercial Industry Exposures
Commercial Industry y Exposures p For personal use only A$b Retail Trade A$b Transport & Storage 75 15% 75 15% 50 10% 50 10% 25 5% 25 5% 0 0% 0 0% Sep-09 S 09 Mar-10 M 10 Sep-10 S 10 Sep-09 S 09 Mar-10 M 10 Sep-10 S 10 Electricity, Gas & Water Supply Mining 75 15% 75 15% 50 10% 50 10% 25 5% 25 5% 0
Slide 79: 90+ days past due Australia
90+ days y past p due Australia For personal use only Australia Mortgages Australia Cards 90+ day delinquencies 90+ day delinquencies 1.50% 1.50% Total Portfolio NSW & ACT 1.00% QLD VIC WA 0.50% 1.20% 0.00% Sep-07 Sep 07 Sep-08 Sep 08 Sep-09 Sep 09 Sep-10 Sep 10 0.90% Australia Commercial 90+ day de
Slide 80: Australia Mortgages
Australia Mortgages g g For personal use only Portfolio Statistics Dynamic Loan to Valuation Ratio % Portfolio Sep 2009 Sep 2010 • All lending is on a full recourse basis 50% Sep 2010 - 84% 12% 4% 40% • Approvals require demonstrated serviceability i bilit 30% 20% • ~830,000 loans on book 10% • 65%
Slide 81: New Zealand – Risk Performance
New Zealand – Risk Performance For personal use only Total Impaired Assets and as % Gross Total Provision Charge Lending Assets Individual Provision Collective Provision 1,000 (NZ$m) 889 2.13% 800 1.89% 600 461 1.24% 400 300 0.64% 200 74 0.34% 0 2007 2008 2009 2010 (NZ$m) 90+ Days Arrears 2,079 1 83
Slide 82: Credit Intermediation Trades
Credit Intermediation Trades For personal use only Position as at 30 Sep Notional Life to Date Notional 2010 purchased Credit Risk Credit Risk Principal Mark k to protection on on Amount on No. Market principal Derivatives Derivatives corresponding (US$m) amount (US$m) (A$m) Sold Protection Counterp
Slide 83: Credit Intermediation Trade Portfolio
Credit Intermediation Trade Portfolio For personal use only • Cumulative Credit Risk on Derivative expense for the Credit Intermediation Trades Credit Intermediation Trade portfolio as at 30/9/2010 was $515m (down $5m from 31/3/2010) A$b US$b • The relative stability in credit markets and the reduce
Slide 84: Commercial Property Credit Exposure
Commercial Property p y Credit Exposure p For personal use only Commercial Property Exposure Commercial Property Exposure GLA by Region (AUDb) by Sector 7.5% of Group GLA’s Australia Offices Retail 29.6 28.2 28 2 Residential 27.2 0.8 26.7 27.7 0.8 26.1 1.1 Industrial 0.7 0.7 6.1 1.0 6.1 5.8 Tourism
Slide 85: Economics
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Economics
Slide 86: Record population growth coupled with undersupply
Record population growth coupled with undersupply For personal use only Population growth vs. dwelling completions 225000 450,000 Annual population 400,000 , gain (lhs) 200000 350,000 175000 300,000 250,000 150000 200,000 125000 150,000 Annual dwelling completions (rhs) 100,000 100000 76 78 8 80 82
Slide 87: Housing shortage has reached unprecedented levels
Housing shortage has reached unprecedented levels For personal use only Housing market balance ‘000 400 360 320 280 240 Underlying demand 200 160 120 Completions 80 Cumulative Shortage 40 0 -40 -80 Surplus 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 Sources: ABS, ANZ Economics and Markets Research
Slide 88: Recovery in dwelling prices has been broadly-based
Recovery in dwelling prices has been broadly-based broadly based For personal use only Australian dwelling prices P i Price iindex d value l 125 Top 20% 120 115 Middle 60% 110 Bottom 20% 105 100 95 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 88 Source: RP Data Rismark
Slide 89: Changing composition in those seeking finance approvals
Changing g g composition p in those seeking g finance approvals pp For personal use only Housing finance approvals (value) $b/mth First Home Buyers Upgraders (excl refinancing) 120 Investors (excl refinancing) 100 80 60 40 20 - 1992 1995 1998 2001 2004 2007 2010 Sources: ABS, RBA, ANZ Economics and
Slide 90: Distribution of debt rather than the aggregate debt is a key factor
Distribution of debt rather than the aggregate debt is a key factor… For personal use only Increased household debt has been And has been taken up by higher directed towards residential income households with the capacity property, not personal consumption to service Source: RBA paper “Aspects of Au
Slide 91: Complexion of household debt
Complexion p of household debt For personal use only • Household debt up but also total assets held by households • Debt largely used to acquire assets • Financial assets (i.e. ex housing) now equivalent to 2.75 years of income up from 1.75 years of income in the early 1990 1990’s s • Increased debt
Slide 92: Household incomes and consumption
Household incomes and consumption For personal use only Household disposable income & consumption % 10 Gross disposable income Consumption spending Savings Sa gs rate a e 8 Forecasts 6 4 2 0 -2 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: ANZ, RBA, ABS 92
Slide 93: Labour market is strong and supporting household confidence
Labour market is strong and supporting household confidence fid For personal use only Monthly employment and labour force growth, ‘000 people (trend) 40 Labourforce growth (trend) Employment growth (trend) 30 nth change per mon 20 10 '000 c 0 -10 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Sour
Slide 94: 1990's commercial property downturn characterised by significant oversupply
1990’s commercial property downturn characterised by significant i ifi t oversupply l vs other th d downturns t 1 For personal use only Supply Pipeline as a % of Total Stock Australian CBD Office Market 40% 35% 30% 25% 20% 15% 10% 5% 0% Sydney Melbourne Brisbane Perth Adelaide 1982 Recession 1991 Re
Slide 95: Australia has run a current account deficit for most of the past 150 years
Australia has run a current account deficit for most of the pastt 150 years For personal use only Current account deficit 10 % of GDP ● The current account deficit is the gap between national saving and national investment ● That Australia has run a deficit for such a long 5 period suggests the coun
Slide 96: Economics – Forecasts
For personal use only Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED November 2010 Economics – Forecasts
Slide 97: Economic updates
E Economic i updates d For personal use only Australia New Zealand 2009 2010 2011 2012 2009 2010 2011 2012 GDP 0.8 3.7 3.8 4.1 -1.7 1.9 3.9 2.6 Inflation 13 1.3 29 2.9 29 2.9 32 3.2 20 2.0 4.6 4 61 30 3.0 24 2.4 Unemployment 5.8 5.0 4.7 4.5 7.1 6.4 5.4 5.6 Current A/C (% GDP) -4.4 -2.9 -3.4 -4.9 -2.
Slide 98: Growth Forecasts – Asia
Growth Forecasts – Asia For personal use only Emerging Asia GDP Growth Forecasts 2007 2008 2009 2010 2011 2012 China 13.1 9.0 8.8 9.9 10.0 10.3 India 9.5 7.5 6.7 8.3 6.7 7.5 NIEs Hong Kong 6.4 2.4 -2.8 5.5 5.0 5.2 Korea 5.1 2.5 0.1 6.1 4.0 4.7 Singapore 8.6 1.9 -1.3 15.0 4.9 4.5 Taiwan 5.9 1.1 -2.0
Slide 99: For personal use only
For personal use only The material in this presentation is general background information about the Bank’s activities current at the d t off the date th presentation. t ti It is i information i f ti given i in i summary form f andd does d nott purportt to t be b complete. l t It is i not intended to
Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2010) on 6ix