Anz Group Holdings Limited · ASX:ANZ
Anz — 1H20 Earnings Presentation
77 slides from Anz's earnings presentation, May 2020
Slide 1: Half Year Results 2020
2020 HALF YEAR RESULTS — HALF YEAR ENDED 31 MARCH 2020 RESULTS PRESENTATION & INVESTOR DISCUSSION PACK
Slide 2: Shayne Elliott, Chief Executive Officer
2020 HALF YEAR RESULTS — SHAYNE ELLIOTT CHIEF EXECUTIVE OFFICER
Slide 3: Balance Sheet Strength
BALANCE SHEET STRENGTH TIER 1 CAPITAL & COLLECTIVE PROVISION BALANCE CP COVERAGE4 1.17% $b 60.8 0.94% CP balance 4.5 CET1 RATIO (APRA LEVEL 2)1,2 10.8% Mar-08 Mar-20 Mgt. Buffer CET1 capital $12b 48.3 LIQUIDITY (MAR-20) CCB3 20.7 139% 5.3% 2.3 $16b 118% 100% Regulatory 14.3 CET1 Minimum min. AT1 cap
Slide 4: Financial Performance
FINANCIAL PERFORMANCE 1H20 1H20 v 2H19 Statutory Profit ($m) 1,545 -44% Cash Profit (Continuing operations)1 ($m) 1,413 -51% Return on Equity 4.7% -506bps Earnings Per Share (cents) 49.9 -50% Cash Profit (Continuing operations) ex. large / notable items ($m) 2,451 -26% Dividend Per Share (cents) Def
Slide 5: Simplified and Strengthened the Bank
SIMPLIFIED AND STRENGTHENED THE BANK AUSTRALIA HOME LOAN PORTFOLIO Gross Loans & Advances (GLA) $b • Asia Retail & Wealth (IEL 151bps)1 Sold • Esanda Dealer Finance (IEL 100bps)2 264 • NZ Life, Aus. Life, Aus. P&I 242 85 • Emerging Corporate Asia (IEL 41bps)1 Exited (32%) • ANZ Financial Planning 97
Slide 6: Our Approach
OUR APPROACH PROTECT ADAPT ENGAGE PREPARE … our people, … to the … even more … for the future customers & changing proactively with our shareholders environment stakeholders 5
Slide 7: Protect Our People, Our Customers & Shareholders
PROTECT OUR PEOPLE, OUR CUSTOMERS & SHAREHOLDERS REQUESTS FOR HOME LOAN DEFERRALS1 PROTECT PROTECT AUSTRALIA - Cumulative accounts (000’s) 120 90 14% of Aus. home loan 60 balances Support measures for customers 30 0 20/03/20 24/04/20 Introduced health & safety measures NEW ZEALAND - Cumulative accou
Slide 8: Adapting to the New Environment
ADAPTING TO THE NEW ENVIRONMENT DRAMATIC FALLS IN ATM & POS TRANSACTIONS ADAPT PROTECT Avg. daily transaction # Oct-19 index = 100 ATM transactions 120 POS transactions 100 80 Record volumes of home loan 60 re-finance applications 40 Collapse in ATM/Branch volume 20 0 Oct-19 Dec-19 Feb-20 Apr-202 95
Slide 9: Increasing Engagement and Preparing for the Future
INCREASING ENGAGEMENT AND PREPARING FOR THE FUTURE ENGAGE PROTECT PREPARE PROTECT A LOT WILL CHANGE FOR THE LONG TERM Keeping messages • Consumer • Lower interest simple behaviour rates Changing customer Providing appropriate behaviour • Technology • Higher debt guidance usage levels Being accessibl
Slide 10: Outlook
OUTLOOK OUR PRIORITIES PRUDENT APPROACH TO RISK & CAPITAL • Entered the crisis in a strong position FOCUS ON LIQUIDITY financially, operationally, culturally STAYING CLOSE TO CUSTOMERS • Difficult to predict depth of the economic impact & length of recovery DYNAMIC PRICING OF RISK OPERATIONAL AGILIT
Slide 11: Michelle Jablko, Chief Financial Officer
2020 HALF YEAR RESULTS — MICHELLE JABLKO CHIEF FINANCIAL OFFICER
Slide 12: Agenda
AGENDA 1. Key pillars in protecting our balance sheet 2. Major components within capital 3. Outlook on capital going forward 11
Slide 13: Liquidity & Funding
LIQUIDITY & FUNDING CUSTOMER DEPOSITS LIQUIDITY COVERAGE RATIO NET STABLE FUNDING RATIO EOP $b Average EOP 567 143% 137% 139% 512 ~120% 493 116% 118% 259 205 217 100% 100% Regulatory Regulatory Minimum Minimum 288 295 308 Mar-19 Sep-19 Mar-20 1H19 2H19 1H20 Sep-19 Mar-20 Mar-20 (Pro-forma)1 Institut
Slide 14: Capital
CAPITAL APRA LEVEL 2 COMMON EQUITY TIER 1 RATIO (CET1) Earnings Credit Portfolio % (ex. Credit) impacts growth 0.87 -0.28 -0.08 -0.07 11.4 -0.44 -0.05 10.8 -0.53 -0.02 Pro-Forma CET1 of ~10.9% with conversion of NZD500m Capital Note Sep-19 PBP CIC Net DTA on CIC Risk Migration Underlying RWA Capital
Slide 15: Financial Performance: Cash Profit
FINANCIAL PERFORMANCE CASH PROFIT CONTINUING OPERATIONS $m 2,906 127 -44 -33 -639 370 1,413 Profit before provisions +1% -1,274 +2% -2% +1% +319% -27% -51% 2H19 Large / Notable Net interest income Other operating Expenses Provisions Tax & NCI 1H20 items after tax income 14
Slide 16: Financial Performance: Divisional and Large/Notable Items
FINANCIAL PERFORMANCE CONTINUING OPERATIONS DIVISIONAL PERFORMANCE LARGE / NOTABLE ITEMS EX. LARGE / NOTABLE ITEMS Income Expenses PBP Provisions Cash Profit 2H19 1H20 Change (AFTER TAX $m) (1H20 V 2H19) Customer remediation -405 -91 +314 Aus. Retail & Commercial -2% 0% -3% +167% -24% Restructuring
Slide 17: Net Interest Margin
NET INTEREST MARGIN CONTINUING OPERATIONS GROUP NET INTEREST MARGIN (NIM) bps 1 172 0 1 169 -4 4 168 0 -5 Includes 3bps headwind from rate cuts in mid to late 2019, net of repricing -4bps -3bps 2H19 Asset & Wholesale Treasury Deposits Assets 1H20 Markets Large / 1H20 Funding Mix Funding Cost underly
Slide 18: Margin Considerations
MARGIN CONSIDERATIONS LOW RATE ENVIRONMENT BILLS / OIS SPREAD Net impact of previously announced AUD, NZD & USD rate cuts Sensitivity of 10bp change in Bills/OIS NIM impact 30 Sep-19 1 bps 2H20 impact (net of repricing) ~6bps 31 Mar-20 0.5 bps Change in sensitivity due to $b bps stronger deposit gro
Slide 19: Australia Retail & Commercial
AUSTRALIA RETAIL & COMMERCIAL CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS INCOME CONTRIBUTION HOME LOAN APPLICATION1 TREND $m 3 month rolling average (Index Mar-19 = 100) 4,807 4,768 4,683 200 150 1,590 1,524 1,469 100 50 0 Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- 1
Slide 20: Institutional
INSTITUTIONAL CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS INSTITUTIONAL INCOME COMPOSITION1 MARKETS INCOME COMPOSITION $m $m 1,164 940 238 24 2,791 826 2,657 256 48 190 388 2,541 235 126 459 463 513 940 1,164 -10 826 1H19 2H19 1H20 Franchise Sales Balance Sheet Franchise Trading Derivative
Slide 21: Expenses
EXPENSES CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS 1H20 EXPENSE DRIVERS $m 69 29 4,351 63 4,355 4,322 -114 -14 flat +1% 2H19 FX 2H19 Inflation Business As Depreciation & Investment 1H20 FX adjusted Usual (BAU) Amortisation (D&A) NOTE: 1H20 expenses are up $78m, inclusive of accounting ch
Slide 22: Credit Quality: Provision Charge and Impaired Assets
CREDIT QUALITY PROVISION CHARGE CONTINUING OPERATIONS & IMPAIRED ASSETS TOTAL PROVISION CHARGE GROSS IMPAIRED ASSETS $m $b 1,674 2.60 2.6 2.38 LOSS RATE 1H19 2H19 1H20 2.4 2.2 2.14 2.13 IP / Avg. GLA1 0.12% 0.13% 0.20% 2.03 2.03 CIC / Avg. GLA 1 0.13% 0.13% 0.53% 2.0 1,048 1.8 1.6 1.4 1.2 1.0 0.8 40
Slide 23: Credit Quality: Collective Provision Balance
CREDIT QUALITY COLLECTIVE PROVISION BALANCE MOVEMENT BY DIVISION $m $m 1,031 0 4,501 4,501 50 -1 541 3,376 78 0 17 3,376 38 374 1,590 2,523 CP charge 1,048 1,169 2,320 1,795 Sep-18 Sep-19 FX Volume / Change Economic Model Other Mar-20 Sep-19 Mar-20 (pre (AASB 9) Mix in Risk Outlook / Meth. Balance (
Slide 24: Credit Quality: Economic Forecast and Provision Scenarios
CREDIT QUALITY BALANCE SHEET COLLECTIVE CREDIT PROVISION BASE CASE ECONOMIC FORECAST (AS AT 31 MARCH 2020 POST COMMENCEMENT OF COVID-19) BASE CASE ECONOMIC FORECAST1 Australia New Zealand Jun-20 Qtr. CY2020 CY2021 Jun-20 Qtr. CY2020 CY2021 GDP change2 -13.0% -4.7% 4.1% -17.0% -6.7% 4.2% Unemployment
Slide 25: Institutional & Commercial Portfolio
INSTITUTIONAL & COMMERCIAL PORTFOLIO1 TOTAL WHOLESALE EAD EXPOSURE TO SOME INDUSTRIES MORE IMMEDIATELY IMPACTED BY COVID-192 $703b $11b in Retail Trade $11b in Accommodation, Cafes & Restaurants 74% investment Grade Each <3% 3% 75% of EAD is in 4% 5% Institutional of which 20% 87% is investment grad
Slide 26: Consumer Portfolio
CONSUMER PORTFOLIO PORTFOLIO COMPOSITION CONSUMER PORTFOLIO1 (AUS & NZ) PRODUCT 90+ DAY DELINQUENCIES2 $b % 1.5 322 336 359 362 360 Australia Home Loans NZ Home Loans 1.2 5% 4% 4% 4% 3% 4% 4% 3% 3% 0.9 5% 9% 0.6 11% 14% 18% 5% 0.3 19% 7% 0.0 10% 19% Mar- Mar- Mar- Mar- Mar- Mar- 14% 17% 15 16 17 18
Slide 27: Customer Support: COVID-19 Relief and Assistance
CUSTOMER SUPPORT1 COVID-19 RELIEF AND ASSISTANCE (AS AT 24 APRIL 2020) AUSTRALIA AUSTRALIA HOME LOANS RELIEF ASSISTANCE REQUESTS (BY DLVR BAND) Home loans Requests for repayment deferral2 ~105,000 14% Lending value of assistance requested $36b 38% 0% - 60% 15% 61% - 80% Average dynamic LVR 66% 81% -
Slide 28: Capital and Dividend Considerations
CAPITAL AND DIVIDEND CONSIDERATIONS THREE KEY FACTORS THAT INFLUENCE OUR THINKING 1. COVID-19 impacts to earnings and risk weight migration 2. Use of capital buffers 3. Our responses – including capital allocation, balance sheet growth, productivity measures 27
Slide 29: CEO Key Messages
CEO KEY MESSAGES • Our long term strategy remains intact • In a strong position to manage the crisis • Remain committed to our $8b cost ambition • Short-term use of CET1 buffers are prudent and appropriate given what we know today 28
Slide 30: Group & Divisional Financial Performance
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK GROUP & DIVISIONAL FINANCIAL PERFORMANCE
Slide 31: Customer Remediation
CUSTOMER REMEDIATION CUSTOMER REMEDIATION CUMULATIVE CUSTOMER REMEDIATION CONTINUING OPERATIONS CONTINUING & DISCONTINUED OPERATIONS 485 1,832 PRE TAX $m PRE TAX $m 1,579 546 119 422 928 753 352 256 181 1,157 1,286 29 220 51 153 572 672 86 1H17 2H17 1H18 2H18 1H19 2H19 1H20 1,401 POST TAX $m 1,216 4
Slide 32: Investments in Associates
INVESTMENTS IN ASSOCIATES Half Year $m SHARE OF ASSOCIATES’ PROFIT 131 131 135 $m 800 625 1H19 2H19 1H20 600 517 541 465 433 436 482 395 400 300 262 183 200 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Bank of Tianjin (BOT) Shanghai Rural Commercial Bank (SRCB) Other3 P.T. Bank Pan Indon
Slide 33: Investment Spend
INVESTMENT SPEND CONTINUING OPERATIONS TOTAL INVESTMENT SPEND BY DIVISION1 Capex and Opex $m 1,403 113 1,234 1,218 1,179 85 1,153 61 204 66 75 127 150 137 129 160 169 252 164 833 175 825 197 78 94 204 204 164 187 128 155 164 578 144 35 93 135 78 176 177 77 119 75 66 77 97 116 564 473 491 68 430 410
Slide 34: Risk Adjusted Performance
RISK ADJUSTED PERFORMANCE CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS1 GROUP2,3 AUS. RETAIL & COMMERCIAL INSTITUTIONAL2,3 NEW ZEALAND NET INTEREST INCOME / AVERAGE CREDIT RISK WEIGHTED ASSETS % 4.55 4.43 5.86 5.81 5.88 2.33 2.24 5.36 5.31 4.24 2.07 4.76 1H19 2H19 1H20 1H19 2H19 1H20 1H19 2
Slide 35: Australia Retail & Commercial: Cash Profit Drivers
AUSTRALIA RETAIL & COMMERCIAL CASH PROFIT DRIVERS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS $m Net Interest Income (NII) 44 1,795 70 -42 -78 -79 -2 186 1,367 -527 0% -11% 0% Large -24% -24% 2H19 Retail Retail Commercial Commercial Other Expenses Provisions Tax 1H20 volume margin volume
Slide 36: Australia Retail & Commercial: Financial Performance
AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM NII/OOI2 contribution ($m) Expenses ($m) Total Provisions ($m) Cash Profit ($m) 4,807 4,768 4,683 1
Slide 37: Institutional: Cash Profit Drivers
INSTITUTIONAL CASH PROFIT DRIVERS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS $m Total income 337 12 7 848 -3 -72 -24 127 622 -610 +10% -1% Large -33% -27% 2H19 Trade PCM L&SF Markets Other Expenses Provisions Tax 1H20 1. Trade: Trade & Supply Chain; PCM: Payments & Cash Management; L&SF:
Slide 38: Institutional: Financial Performance
INSTITUTIONAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM Customer / Non-customer ($m) Expenses ($m) Total Provisions ($m) Cash Profit ($m) 199 2,657 2,791 641 1,004 2,541 1
Slide 39: Institutional: Risk Weighted Assets & Returns
INSTITUTIONAL RISK WEIGHTED ASSETS & RISK ADJUSTED RETURNS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS CREDIT RWA (EOP) CREDIT RWA (AVG)1 CREDIT RWA INTENSITY (EOP) $b $b $b 3 178 159 10 3 142 147 156 6 34.5% 34.0% 35 41 33.1% 33.0% 32.8% 33 18 18 19 156 178 89 91 96 139 138 143 2 4 4 Sep
Slide 40: New Zealand Division: Cash Profit Drivers
NEW ZEALAND DIVISION CASH PROFIT DRIVERS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS NZDm Net Interest Income (NII) 25 5 744 2 11 -30 -35 -16 45 624 -127 +1% -12% +2% Large -16% -16% 2H19 Retail Retail Commercial Commercial Other Net Other Expenses Provisions Tax 1H20 volume margin volume
Slide 41: New Zealand Division: Financial Performance
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 Provisions (NZDm) Cash Profit (NZDm) 124 126 129 1,756
Slide 42: Treasury
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK TREASURY
Slide 43: Regulatory Capital
REGULATORY CAPITAL CAPITAL UPDATE APRA LEVEL 2 COMMON EQUITY TIER 1 RATIO (CET1) APRA Level 2 CET1 ratio of 10.8% (15.5% on an Internationally Comparable % basis1), which is in excess of APRA’s ‘Unquestionably Strong’ benchmark2 APRA Level 1 CET1 ratio of 10.6%. Level 1 consolidation primarily c
Slide 44: Regulatory Capital: APRA Level CET1 Ratio
REGULATORY CAPITAL APRA LEVEL 1 CET1 RATIO % Level 2: 11.36 Level 2: 10.76 APRA LEVEL 2 VS LEVEL 1 CET1 RATIOS bps 0.69 Level 2 HoH mvmt -60 Level 1 HoH mvmt -71 -0.26 -0.08 Level 2 vs Level 1 Mvmt 11 -0.06 Explained by 11.35 Cash Profit1 16 11.19 -0.37 -0.01 Total impact of -40bps RWA movement -8 O
Slide 45: Internationally Comparable Regulatory Capital Position
INTERNATIONALLY COMPARABLE1 REGULATORY CAPITAL POSITION APRA Level 2 CET1 Ratio– 31 March 2020 10.8% Level 2 CET1 Ratio Corporate undrawn EAD Australian ADI unsecured corporate lending LGDs and undrawn and unsecured CCFs exceed those applied in many jurisdictions 1.6% % LGD adjustments Equity APRA r
Slide 46: Balance Sheet Structure
BALANCE SHEET STRUCTURE1 • Assuming no term wholesale debt issuance (domestic or offshore) for the next 18 months ANZ’s Net Stable Funding Ratio is projected to remain well above regulatory minimums at greater than 110% BALANCE SHEET COMPOSITION NSFR COMPOSITION Mar-20 Mar-20 $b 552 Wholesale 469 Fu
Slide 47: Liquidity Coverage Ratio (LCR) Summary
LIQUIDITY COVERAGE RATIO (LCR) SUMMARY1 • ANZ’s USCP outstanding’s as at 31 March 2020 was USD13.5b • $12b Term Funding Facility included in LCR from 31 March 2020 (no impact on reported 1H20 average). 1H20 LCR impacted by system wide reduction in RBA • Assuming all USCP is not replaced, LCR would r
Slide 48: Term Wholesale Funding Portfolio
TERM WHOLESALE FUNDING PORTFOLIO1 • ANZ’s term funding requirements depend on market conditions, balance sheet needs and exchange rates, amongst other factors • RBA Term Funding Facility (TFF) Initial Allocation of ~$12b • ANZ estimates minimal senior debt term funding requirement for 2H20 ISSUANCE
Slide 49: ANZ's Tier 2 FY20 Requirement Is Complete
ANZ’S TIER 2 FY20 REQUIREMENT IS COMPLETE1 ANZ’S TIER 2 CAPITAL REQUIREMENT TO PROGRESSIVELY TIER 2 CAPITAL INCREASE TO MEET TLAC REQUIREMENT Notional amount • Issued AUD $5.7b since July 2019 across AUD, EUR, and USD By Format By Currency • Current portfolio includes 29% in AUD (23% domestic AUD) –
Slide 50: Impacts of Rate Movements
IMPACTS OF RATE MOVEMENTS BILLS/OIS SPREAD CAPITAL & REPLICATING CAPITAL2 & REPLICATING DEPOSITS PORTFOLIO DEPOSITS PORTFOLIO (AUSTRALIA) bps % 70 3.0 AUST NZ APEA 60 2.5 50 Volume ($A)3 ~67b ~27b ~11b 40 2.0 Target Duration Rolling 3 to 5 years Various 30 1.5 Proportion Hedged3 ~65% ~80% Various 20
Slide 51: Capital Framework
CAPITAL FRAMEWORK CURRENT REGULATORY PROPOSALS AND RECENT REVISED IMPLEMENTATION DATES1 Original Revised 2019 1H20 2H20 Implementation Implementation Date Date RBNZ capital framework Finalise 2027 20282 Leverage ratio Finalise 2022 2023 Standardised approach to credit Consultation Finalise 2022 2023
Slide 52: Risk Management
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK RISK MANAGEMENT
Slide 53: Risk Management: Long Run Provisions & Loss Rates
RISK MANAGEMENT LONG RUN PROVISIONS & LOSS RATES TOTAL CREDIT IMPAIRMENT CHARGE $m Consumer IP Institutional IP Commercial IP CP Charge / (Release) 1,800 1,674 1,500 1,200 900 600 300 0 -300 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18
Slide 54: Risk Management: Individual Provisions & Loss Rates
RISK MANAGEMENT INDIVIDUAL PROVISIONS & LOSS RATES INDIVIDUAL PROVISION CHARGE LONG RUN LOSS RATE (INTERNAL EXPECTED LOSS) $m 1,047 % 892 787 554 626 826 380 398 430 343 922 93 Division Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 969 812 807 612 594 592 532 495 229 153 136 116 122
Slide 55: Risk Management: Collective Provision
RISK MANAGEMENT COLLECTIVE PROVISION COLLECTIVE PROVISION CHARGE PROVISION BALANCE/COVERAGE RATIO BY STAGES ($m) AASB9 AASB9 $m 1H19 2H19 1H20 30 Sep-19 31 Mar-20 CP charge 13 4 1,048 Coverage ratio by stage1 Coverage ratio by stage1 Volume/Mix -28 -51 0 Change in Risk -40 19 17 1 2 3 1 2 3 Economic
Slide 56: Risk Management: Impaired Assets
RISK MANAGEMENT IMPAIRED ASSETS CONTROL LIST NEW IMPAIRED ASSETS BY DIVISION Index Sep 09 = 100 $m 150 2,000 1,784 1,844 1,787 1,570 1,500 1,425 100 1,145 1,117 963 890 1,000 50 500 0 0 Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Mar- 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 09 10 11
Slide 57: Risk Management: Risk Weighted Asset Movement
RISK MANAGEMENT RISK WEIGHTED ASSET MOVEMENT TOTAL RISK WEIGHTED ASSETS CREDIT RWA DRIVERS $b $b 2.0 0.1 2.6 1.9 386.0 5.6 6.9 449 9.1 9 358.1 417 -0.3 396 391 396 8 Divisional lending 14.3 71 12 11 10 66 58 57 60 Sep-19 FX Aus R&C Instit. Markets NZ Other Risk Model / Mar-20 (ex. div. Method. Marke
Slide 58: Risk Management: Total Portfolio Composition
RISK MANAGEMENT TOTAL PORTFOLIO COMPOSITION % of Portfolio in Non Portfolio Balance EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category % of Group EAD Performing in Non Performing Mar-19 Sep-19 Mar-20 Mar-19 Sep-19 Mar-20 Mar-20 TOTAL GROUP EAD (Mar-20) Consumer Lending 38.8% 37.6% 34.6% 0.2% 0.1% 0.2%
Slide 59: Risk Management: Institutional & Commercial Portfolio
RISK MANAGEMENT INSTITUTIONAL & COMMERCIAL PORTFOLIO Credit Related EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category GLA Commitments and Contingencies EAD (Mar-20) ($b) ($b) = $703b1 Finance, Investment & Insurance 73 48 Property Services 12 7 9.1% Manufacturing 31 46 Agriculture, Forestry, Fishing 3
Slide 60: Risk Management: ANZ Institutional Portfolio
RISK MANAGEMENT ANZ INSTITUTIONAL PORTFOLIO INSTITUTIONAL PORTFOLIO SIZE & TENOR BY COUNTRY ANZ INSTITUTIONAL INDUSTRY COMPOSITION OF INCORPORATION1 (EAD2) EAD (Mar-20): A$529b2 $b Finance (Banks and Central Banks) 24% Government Admin. 500 Services to Fin. & Ins. 34% 450 Property Services3 2% Basic
Slide 61: Risk Management: Segments of Interest
RISK MANAGEMENT SEGMENTS OF INTEREST Commercial Property Resources GLAs by Region ($b) Exposure at Default (EAD) ($b) 17.3 16.1 15.3 0.8 46.5 20.0 1.2 14.0 42.9 14 0.7 0.7 18.9 42.4 2.4 1.7 0.4 0.8 40.2 0.6 0.7 1.0 0.8 0.6 37.6 2.8 2.8 12 1.1 0.3 2.9 11.4 1.3 0.9 1.0 3.0 10.5 2.9 1.0 1.6 10.7 10 1.5
Slide 62: Australia Commercial Portfolio, Australia & NZ Housing Portfolio
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK AUSTRALIA COMMERCIAL PORTFOLIO, AUSTRALIA & NZ HOUSING PORTFOLIO (INCLUDING RELIEF & ASSISTANCE MEASURES)
Slide 63: Australia Commercial Banking: Portfolio Overview
AUSTRALIA COMMERCIAL BANKING1 PORTFOLIO OVERVIEW NET LOANS & ADVANCES CUSTOMER DEPOSITS CREDIT RWA $b $b $b 53.9 54.2 54.2 60.4 61.5 64.4 44.1 43.6 44.1 89% 88% 84% 1H19 2H19 1H20 1H19 2H19 1H20 1H19 2H19 1H20 Loan to Deposit Ratio NLA Savings Term Deposit Transact NET LOANS & ADVANCES BY STATE TOTA
Slide 64: Australia Commercial Banking: Portfolio Dynamics
AUSTRALIA COMMERCIAL BANKING1 PORTFOLIO DYNAMICS PROVISION CHARGE Customer Turnover <$150m $m 253 Total lending2 <$40m 15 149 166 162 Diversified businesses, Corporate Agribusiness, Premium Health, Specialist -11 Property and Emerging Corporate (larger diversified businesses) 1H19 2H19 1H20 Collecti
Slide 65: Australia Commercial Banking: COVID-19 Relief and Assistance
AUSTRALIA COMMERCIAL BANKING1 COVID-19 RELIEF AND ASSISTANCE DETAILS OF RELIEF MEASURES CUSTOMER RELIEF PROVIDED • Initial relief and support offering available • ~42,000 total requests for assistance (based on product numbers) to ANZ’s Commercial Banking customers • ~15% of Commercial lending custo
Slide 66: Australia Home Loans: Interest Rate Changes and COVID-19 Relief
AUSTRALIA HOME LOANS RECENT INTEREST RATE CHANGES; COVID-19 RELIEF AND ASSISTANCE INTEREST RATE CHANGES Variable interest rates Fixed Interest rates • Decreased Standard Variable Interest rates in Australia by • New lower fixed rate home loans for Owner Occupied and Investor 0.40% p.a. in March 2020
Slide 67: Australia Home Loans: Portfolio Overview
AUSTRALIA HOME LOANS PORTFOLIO OVERVIEW Portfolio1 Flow2 Portfolio1 1H18 1H19 1H20 1H19 1H20 1H18 1H19 1H20 Number of Home Loan Average LVR at Origination7,8,9 68% 67% 68% 1,018k 1,000k 971k 64k3 64k3 accounts1 Average Dynamic LVR (excl. offset)8,9,10 55% 56% 56% Total FUM1 $271b $269b $264b $21b $2
Slide 68: Australia Home Loans: Application Trends & Equifax Score
AUSTRALIA HOME LOANS APPLICATION TRENDS & MORTGAGE ENQUIRIES – EQUIFAX COMPREHENSIVE SCORE1 HOME LOAN APPLICATION2 TREND MORTGAGE ENQUIRIES – EQUIFAX COMPREHENSIVE SCORE1,3 3 month rolling average (Index Mar-19 = 100) Average score (Mar-18 to Mar-20) 200 Average EFX Apply Positive Score 960 150 940
Slide 69: Australia Home Loans: Portfolio Growth
AUSTRALIA HOME LOANS PORTFOLIO GROWTH HOME LOAN FUM COMPOSITION1,2 LOAN BALANCE & LENDING FLOWS1 $b $b 271 269 15 264 27 9 8 7 269 0 264 43 31 22 -47 10 17 29 57 52 44 Mar-19 New Sales Net OFI Refi Redraw & Repay Mar-20 excl. Refi-In Interest / Other MARKET SHARE3 % 161 168 14.7% 14.3% 146 15.1% 13.
Slide 70: Australia Home Loans: Portfolio & Flow Composition
AUSTRALIA HOME LOANS PORTFOLIO1,2 & FLOW3 COMPOSITION BY PURPOSE BY ORIGINATION LVR4 Portfolio Flow Flow 3% 3% 2% 1% 19% 17% 17% 32% 31% 30% 30% 17% 15% 18% 65% 66% 68% 69% 64% 68% 65% Mar-18 Mar-19 Mar-20 1H20 1H18 1H19 1H20 Owner Occ Investor Equity <80% LVR 80% LVR >80% LVR BY LOCATION BY CHANNEL
Slide 71: Australia Home Loans: Portfolio Dynamics
AUSTRALIA HOME LOANS PORTFOLIO DYNAMICS HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE1,2 76% of accounts ahead of repayments % composition of accounts (Mar-20) 28% Investment:3 Interest payments may receive 37 36 negative gearing/tax benefits 20% 20% 20 17 New Accounts:
Slide 72: Australia Home Loans: Dynamic LVR
AUSTRALIA HOME LOANS PORTFOLIO DYNAMICS DYNAMIC LOAN TO VALUE RATIO BASED ON TOTAL PORTFOLIO ACCOUNTS 1,2,3,4 % of total Portfolio Accounts >90% 60 Net of offset balances 50 • 8.0% of portfolio 40 • 61% ahead of repayments 30 • 52% with LMI 20 NEGATIVE EQUITY 10 Net of offset balances 0 • 3.2% of po
Slide 73: Australia Consumer Portfolio: Portfolio Performance
AUSTRALIA CONSUMER PORTFOLIO PORTFOLIO PERFORMANCE PRODUCT 90+ DAY DELINQUENCIES1,2 HOME LOAN DELINQUENCIES1,2,3,4 % % 5.0 2.5 4.0 2.0 3.0 1.5 2.0 1.0 1.0 0.5 0.0 0.0 Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- 15 16 17 18 19 20 15 16 17 18 19 20 Home Loans Consumer Cards Personal Lo
Slide 74: New Zealand Home Loans: Portfolio Overview
NEW ZEALAND HOME LOANS PORTFOLIO OVERVIEW1 Portfolio Flow Portfolio 1H18 1H19 1H20 1H19 1H20 1H18 1H19 1H20 Number of Home Loan Accounts 523k 527k 531k 37k 38k Average LVR at Origination2 58% 57% 57% Total FUM NZD79b NZD83b NZD88b NZD9b NZD10b Average Dynamic LVR2 42% 42% 40% Average Loan Size2 NZD1
Slide 75: New Zealand Home Loans: Lending & Arrears Trends
NEW ZEALAND HOME LOANS HOME LENDING & ARREARS TRENDS1 NZ DIVISION 90+DAYS DELINQUENCIES HOUSING FLOWS HOUSING PORTFOLIO % 1.5 1.0 20% 16% 14% 38% 41% 43% 0.5 80% 84% 86% 62% 59% 57% 0.0 Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- 1H18 1H19 1H20 Mar-18 Mar-19 Mar-20 09 10 11 12 13 14
Slide 76: Additional Information
ADDITIONAL INFORMATION ANZ SHAREHOLDER WEBSITE: https://www.anz.com/shareholder/centre/ Royal Commission & Corporate Overview & AASB9 COVID-19 update Sustainability Update on implementation of Progress against our Environment, AASB9 overview and stages Hayne recommendations and Social & Governance (
Slide 77: Further Information
FURTHER INFORMATION Our Shareholder information anz.com/shareholder/centre/ Equity Investors Jill Campbell Cameron Davis Harsh Vardhan Group General Manager Executive Manager Manager Investor Relations Investor Relations Investor Relations +61 3 8654 7749 +61 3 8654 7716 +61 3 8655 0878 +61 412 047
Australia and New Zealand Banking Group Limited (ANZ) — 1H20 Earnings Presentation on 6ix