Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Non-Deal Roadshow (May 2012)
86 slides from Anz's roadshow presentation, May 2012
Slide 1: Investor Discussion Pack
I Investor t Discussion Di i Pack P k Graham Hodges Deputy Chief Executive Officer AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012
Slide 2: Index
Index Overview and strategy 3 First Half 2012 Results 7 Balance Sheet 22 Treasury 26 Divisional Performance 37 Risk Management 62 Economic Updates 77 2
Slide 3: Overview and strategy
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Overview and strategy
Slide 4: ANZ is structured by Geography & Segment
ANZ is structured by Geography & Segment Geographic Segments Global Segments Retail Commercial Australia Banking Banking Australia Australia Commercial Global Wealth Retail Global New Zealand New Zealand & Agri & Private Institutional New Zealand Banking Retail Commercial International Banking Asia
Slide 5: ANZ continues to organically pursue our Super Regional Strategy
ANZ continues to organically pursue our Super Regional Strategy ANZ Footprint in Asia Rationale behind the Super Regional Strategy 1. Strategy aligned to Asian growth • Strong domestic franchises and established Japan (3) market position S. Korea • Focus of expansion in higher growth Asian China (6)
Slide 6: Our Super-Regional Strategy is built on three pillars
Our Super-Regional Strategy is built on three pillars Diversification Connectivity 1. Revenue 1. Trade & Capital Flows a Focus Markets a. • Trade +25% 9 • Indonesia +17% 9 • Cash Management +19% 9 • Singapore +5% x • FX +23% 9 • India +71% 9 • Capital Markets +12% 9 • Greater China +24% 9 • Greater
Slide 7: First Half 2012 Results
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 First Half 2012 Results
Slide 8: Overview of financial performance
Overview of financial performance 1H12 Growth Growth AUDm vs 2H11 vs 1H11 Underlying Profit 2,973 5% 6% Operating Income 8,704 4% 3% Expenses 4 020 4,020 3% 5% Provisions 565 3% -14% Statutory Net Profit After Tax 2,919 8% 10% EPS (cents) 112.2 3% 2% Dividend per Share (cents) 66 n/a 3% Net Interest
Slide 9: First Half 2012
First Half 2012 $m Performance 1H12 v 2H11 199 2,973 , 14 2,919 46 143 2,834 54 4% 3% 2 691 2,691 Up 5% % Up 8% 2H11 Non-Core 2H11 Profit Provisions Tax & OEI 1H12 Non-Core 1H12 Statutory Items Underlying Before Underlying Items Statutory Profit Profit Provisions profit Profit Performance 1H12 v 1H1
Slide 10: Australia Division
Australia Division Underlying profit growth (AUDm) 1H12 v 2H11 Australia Division -7% 7% Net Interest Margin Profit composition NPAT Contribution (AUDm) 2.70% 13% 2.60% Retail 2.50% 48% Commercial 2.40% 39% 2.30% Wealth 1H11 2H11 1H12 Net Loans & Advances1 Customer Deposits AUDb Retail & Wealth Comm
Slide 11: New Zealand Businesses
New Zealand Businesses Underlying profit growth (NZDm) 1H12 v 2H11 New Zealand Businesses 11% Cost to income ratio Profit before provisions (NZDm) New Zealand Businesses 810 52% 761 772 Pro Forma NZD 716 50% 667 48% 46% 44% 42% 1H10 2H10 1H11 2H11 1H12 1H10 2H10 1H11 2H11 1H12 Profit composition Net
Slide 12: Asia Pacific, Europe & America (APEA) Division
Asia Pacific, Europe & America (APEA) Division Underlying profit growth (USDm) 1H12 v 2H11 APEA Division 21% APEA revenue (pro forma USD) Customer deposits & lending 20% Net loans and advances Customer Deposits 18% 1,820 USDb (including acceptances) 1,596 1,656 80 74 1,306 1,380 , 63 60 55 18% CAGR
Slide 13: Institutional Division
Institutional Division Underlying profit growth (AUDm) FY11 v FY10 Institutional Division 24% Institutional revenue mix ($m) Cross border income AUDm By Product By Geography 3,000 2,612 2,769 2,612 2,769 2,430 2,430 2,000 Cross Domestic 1,000 Border Booked 19% 81% 0 1H10 1H11 1H12 1H10 1H11 1H12 Tra
Slide 14: Global Markets income recovered with continued growth in sales and normalisation of trading income
Global Markets income recovered with continued growth in sales and normalisation of trading income Global Markets HOH Income Growth Global Markets Income Mix by Product Total Income Sales Income 10% 11% 17% Other 45% 10% 8% 8% 15% 14% 16% 42% Capital Markets 3% 53% 43% Fixed Income 32% 39% 27% Forei
Slide 15: Net Interest Margin – First Half 2012
Net Interest Margin – First Half 2012 Movement 1H12 v 2H11 (bps) 244 2 244.2 0.7 1.7 238.3 2.1 0.7 4.5 1.0 279.5 Down 4.9 bps p ex-Markets 274.6 Down 5.9 bps 2H11 Funding Funding Costs Deposits Assets Other Markets 1H12 & Asset Mix Movement 1H12 v 1H11 (bps) Funding F di & 1H11 Funding Costs Deposit
Slide 16: Net Interest Margin – Divisional Trends
Net Interest Margin – Divisional Trends Net Interest Margin 1H12 v 2H11 Net Interest Margin Institutional ANZ Group ex-markets Australia Division ex-Markets Australia Division NZ Businesses 3.40% APEA ex-markets 9.9% Institutional ex-markets 3.5% Down 13 bps Down 10 bps 3.20% -3.3% -5.2% 3.00% Volum
Slide 17: Positive 'JAWS' in most divisions; action underway on costs
Positive ‘JAWS’ in most divisions; action underway on costs t in i Australia A t li Pro Forma Income & Expense Growth Pro Forma Income & Expense Growth HOH by Division 1H12 v 2H11 Income Growth Expense Growth 16% Income growth Expense growth 11% 5.5% ex-Trading & 6% Balance Sheet 3% 3% 3% Income 0%
Slide 18: There has been a ramp up in restructuring activity
There has been a ramp up in restructuring activity Underlying Restructuring Cost 1H12 Underlying Restructuring ($m) Cost Breakdown Other 74 8% 20% Institutional Australia APEA 8% 58% 15 6% 8 New Zealand Funded from GST refund 1H11 2H11 1H12 and d existing i ti provisions i i 18
Slide 19: A greater focus on simplification and productivity whilst continuing to invest for growth
A greater focus on simplification and productivity whilst continuing to invest for growth Operating Expense Growth Pro Forma 1H12 v 2H11 78 21 4,020 70 22 70 3,899 • Technology infrastructure upgrade • IT security investment • Institutional Transaction Banking and Markets • APEA Commercial build out
Slide 20: Provision Charge
Provision Charge Total Provision Charge Provision charge remains at low (IP charge by Division, total CP charge) levels $m Total Provision charge as % of Average Net Advances 1,200 1,098 1,000 0.86% 800 722 565 660 551 600 0.61% 0.50% 400 0.32% 200 0.28% 0 0.18% -200 1H10 2H10 1H11 2H11 1H12 Institu
Slide 21: Net impaired assets continue to reduce, increase in new impaired driven by two single names
Net impaired assets continue to reduce, increase in new impaired driven by two single names in Institutional Net Impaired Assets New Impaired Assets by Division by Division $m $m 6,000 3,500 3,126 4,969 3,000 5,000 4,685 , 4,504 2,436 3,884 2,500 2,319 2,335 4,000 3,629 2,000 1,824 3,000 1 500 1,500
Slide 22: Balance Sheet
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Balance Sheet
Slide 23: Balance Sheet – Customer Lending & Deposits
Balance Sheet – Customer Lending & Deposits Net Loans & Advances Customer Deposits (incl. Acceptances) $b $b Loan / Deposit p Ratio 450 450 180% 167% 400 400 160% 350 350 134% 140% 300 300 120% 250 250 100% 200 200 80% 150 150 60% 100 100 40% 50 50 20% 0 0 0% Sep 08 Sep 09 Sep 10 Sep 11 Mar 12 Sep 0
Slide 24: Balance Sheet - Composition by Geography
Balance Sheet - Composition by Geography Net Loans & Advances Customer Deposits (incl. Acceptances) Australia APEA APEA Commercial Institutional APEA Retail & Wealth & Institutional Retail & Wealth 14% 2% APEA Commercial 5% 18% & Institutional Australia 8% Commercial Australia 12% Institutional 18%
Slide 25: Balance Sheet - Composition by Segment
Balance Sheet - Composition by Segment Net Loans & Advances Customer Deposits (incl. Acceptances) New Zealand Australia Australia Commercial Institutional Commercial New Zealand Commercial 18% 12% 10% 5% New Zealand Retail & Wealth 7% Commercial 14% Australia Australia 13% Institutional APEA 22% Com
Slide 26: Treasury
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Treasury
Slide 27: Strengthened capital position; well diversified funding base
Strengthened capital position; well diversified funding base Strong Capital Position Diversified Funding Base Common Equity Tier 1 Ratio Tier 1 Ratio E i &H Equity Hybrid b id Debt D b C Customer F Funding di Term Funding >1 year Term Funding <1 year 11.3% 10.9% Short Term Funding 10.1% 12% 12% 14%
Slide 28: Continued strengthening of capital levels places ANZ in a strong position for upcoming Basel III implementation
Continued strengthening of capital levels places ANZ in a strong position for upcoming Basel III implementation Current capital levels are strong Well placed to meet Basel III CET1 target (Mar-12) under APRA’s draft capital standards Common Equity Tier 1 Ratio (CET1) Basel III (APRA) Basel III Tier
Slide 29: Solid organic capital generation underpins strong CET1 position
Solid organic capital generation underpins strong CET1 position Capital Position (Common Equity Tier 1 Ratio) 1.06% 8.92% 8.49% 8.52% (0.37%) (0.27%) (0.02%) Portfolio Growth/Mix (26bp) +8.2b Risk Migration 5bp -2.2b Portfolio Review 5bp -1.5b Non-credit RWA (11bp) +3.5b Net organic up 40bps Mar-11
Slide 30: Tier 1 position strengthened through organic capital generation
Tier 1 position strengthened through organic capital generation Capital Position (Tier 1 Ratio) 1.06% 11 27% 11.27% 10.94% (0.37%) 10.51% (0.34%) (0.02%) Portfolio Growth/Mix (33bp ) +8.2b Risk Migration 7bp -2.2b Po tfolio Review Portfolio Re ie 6bp -1.5b 1 5b Non-credit RWA (14bp) +3.5b Net organi
Slide 31: Reconciliation of ANZ's capital position under Basel III
Reconciliation of ANZ’s capital position under Basel III ANZ capital ratios : Basel II to Basel III CET1 Tier-1 Total Capital APRA Mar-12 Basel II 8.9% 11.3% 12.6% Dividend not provided for (net of DRP) 0.4% 0.4% 0.4% Investments in ADI and overseas equivalents q -0.4% -0.4% 0.0% Investments in ANZ
Slide 32: ANZ has a well diversified funding profile with an increasing weighting to customer funding
ANZ has a well diversified funding profile with an increasing weighting to customer funding Strong Funding Composition Offshore short-term Commercial Paper makes up just 3% of total Short Term Wholesale Customer Funding Group funding Funding Term Debt < 1 year Residual Shareholders equity & Hybrid G
Slide 33: FY12 debt issuance is well ahead of plan; portfolio costs continue to increase
FY12 debt issuance is well ahead of plan; portfolio costs continue to increase ~80% FY12 term wholesale debt issuance Portfolio term funding costs will completed continue to increase A$B 3 BBSW 3m 30 Issuance Maturities 180bp 25 160bp Indicative annual issuance volumes 140bp p 20 Forecast Portfolio
Slide 34: ANZ's term funding portfolio is increasingly diversified with a declining reliance on offshore funding
ANZ’s term funding portfolio is increasingly diversified with a declining reliance on offshore funding Term Debt Issuance Term Debt Outstandings Weighted avg. Weighted avg. teno : 4 yrs tenor s teno : 5 yrs tenor s 10% 12% 13% 13% 14% 33% 18% 25% 20% 34% 29% 68% 23% 36% 32% 31% 35% 28% 44% 32% 33% 3
Slide 35: Liquid assets of $99b exceed total offshore wholesale debt of $85b
Liquid assets of $99b exceed total offshore wholesale d bt off $85b debt Strong liquidity position ($b) ANZ Total Offshore Wholesale Debt securities 19.9 27.2 8.1 22.5 10.2 3.3 66.7 71.4 71.3 60.2 62.7 34.7 Sep 08 Sep 09 Sep 10 Sep 11 Mar 12 Mar 12 Prime Liquidity Portfolio Other Eligible & Highly L
Slide 36: Strong domestic funding markets and covered bonds reduce need for offshore senior unsecured issuance
Strong domestic funding markets and the introduction of covered bonds significantly reduces ANZ’s need to issue senior unsecured benchmarks in offshore markets • ANZ's lower and more stable wholesale funding requirement relative to peers is a distinct advantage • Domestic AUD/NZD funding markets wil
Slide 37: Divisional Performance
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Divisional Performance
Slide 38: Australia Division – Consistent customer focus and well-established market positioning
Australia Division – Consistent customer focus and well- established market positioning 1. Driving customer growth and improving Underlying PBP productivity and efficiency • Delivering on the transformation agenda for the distribution $m network, reducing network costs and aligning capability and ca
Slide 39: Australia Division – loans and deposits
Australia Division – loans and deposits Net loans and advances (including acceptances) • Lending up 4% HOH and 7% PCP $b 241.5 224.9 231.2 • Mortgages up 5% HOH and 8% PCP 250 0 250.0 • Commercial up 3% HOH and 7% PCP 200.0 150.0 ¾ Small Business Banking up 6% HOH and 13% PCP 100.0 g up ¾ Business B
Slide 40: Australia Division – Deposits
Australia Division – Deposits Customer deposit composition Retail deposit composition 100% 13% 13% 13% 100% 80% 10% 10% 9% 9% 9% 10% 60% 26% 29% 30% Decreased 13% 13% 12% 40% reliance on 80% term 51% 49% 48% 20% deposits 0% 30% 33% Mar 11 Sep 11 Mar 12 60% 36% Commercial deposit composition 40% 100%
Slide 41: Retail – Strengthening the franchise
Retail – Strengthening the franchise 1H12 v 1H12 v ANZ Market Share1 Movement 2H11 1H11 Traditional banking market share Income -4% -1% 20 25 Expenses 2% 4% 20 15 Profit Before Provisions -8% -6% Net loans & advances incl. acceptances 5% 8% 10 Customer deposits 5% 11% Sep 09 Mar 10 Sep 10 Mar 11 Sep
Slide 42: Retail - Mortgage pricing
Retail - Mortgage pricing Criteria used to assess Interest Change in cost of funds over the RBA Cash Rates Rate since the Global Financial Crisis ANZ’s average costt for ANZ’ f term t wholesale h l l funding f di between b t 1 October O t b 2011 to t 31 March 2012 increased by 15 bps from 116 basis
Slide 43: Commercial overview
Commercial overview 1H12 v 1H12 v Movement 2H11 1H11 Net loans & advances (incl. Income 1% 4% acceptances) by business Business Banking Expenses 4% 3% 33% Profit Before Provisions -1% 5% Regional Commercial Net loans & advances incl. acceptances 3% 7% Banking 30% Customer deposits 3% 10% Small Busin
Slide 44: APEA an increasing contributor to group revenue through continued execution of Super Regional strategy
APEA an increasing contributor to group revenue through continued execution of Super Regional strategy APEA Revenue APEA contributed 20%1 of Group revenue in 1H12… Pro Forma (USDm) 20% • NPAT growth of 21% HoH (11% PCP) 1,820 • Jaws were +5% with income up 11% and expenses increasing 1,656 18% 1 596
Slide 45: Revenue growth is driven by focus on our priority geographies, customer segments and products
Revenue growth is driven by focus on our priority geographies customer segments and products geographies, Geographies Customer Segments Products Franchise Markets Institutional Institutional & Commercial Strategic Priorities • Greater China • Indonesia • Natural Resources • Financial • Cash • Foreig
Slide 46: We utilise strong expense discipline in order to fund deployment of revenue generating headcount
We utilise strong expense discipline in order to fund d l deployment t off revenue generating ti headcount h d t A focus on reducing back-office costs while continuing to invest in revenue-generating capabilities… APEA FTE (including contract employees) ~12,100 Movement Sep 2010 to Mar 2012 ~11,900
Slide 47: In addition, we are continuing to optimise our footprint in order to fund growth investments
In addition, we are continuing to optimise our footprint i order in d to t fund f d growthth investments i t t Continuing to rationalise sub-scale …in order to fund additional growth businesses… investment • Sold Wing, our Cambodia mobile Additional investment 1H121 payments platform, to focus on ou
Slide 48: Connectivity is a key differentiator for ANZ, driving cross-border revenue growth across the network
Connectivity is a key differentiator for ANZ, driving cross border revenue growth across the network cross-border Intra APEA connectivity becoming APEA Cross-Border Income increasingly important (USDm) • ANZ’ ANZ’s APEA business b i intra i region i cross-border b d 22% CAGR revenues have achieved C
Slide 49: APEA continues to grow its deposit base, with strong credit quality in the loan book
APEA continues to grow its deposit base, with strong credit dit quality lit in i the th loan l book b k • Significant volume growth APEA Institutional Risk Grade profile • Retail Asia deposits up 20% HOH by Exposure at Default • 31% of APEA lending book represents funded trade lines. These have an a
Slide 50: APEA Institutional revenue up 26% on continued client acquisition
APEA Institutional revenue up 26% on continued client acquisition i iti and d deepening d i wallet ll t share h Revenue up 26% on prior comparative period APEA Institutional Client Revenue • Growth across all products and sectors, in particular Pro Forma2 Trade, Cash Management and Foreign Exchange
Slide 51: APEA Retail – Continued focus on growing affluent and emerging affluent
APEA Retail – Continued focus on growing affluent and emerging affluent while repositioning the portfolio Delivering growth amidst portfolio reshaping Underlying growth in core customers • Revenue up 4% HoH through period of portfolio repositioning • Fee income represents 38% of total revenue • Inve
Slide 52: Institutional is growing NPAT by diversifying into non-lending revenue streams
Institutional is growing NPAT by diversifying into non- lending revenue streams Diversifying revenue streams to reduce reliance Institutional Revenue Mix ($m) on lending • Trade & Supply Chain revenue up 22%1 HOH By Product By Geography $m • Cash management revenue up 9% 3,000 2,769 2,769 • Markets
Slide 53: Institutional target customer segments and products that drive revenue growth
Institutional target customer segments and products that drive revenue growth Geographies Customer Segments Products APEA growth driving geographic Continued strong performance in Reducing reliance on balance sheet diversification Financial Institutions and Natural lending revenues and trading Resou
Slide 54: Priority Customer Segments – capture trade flows to/from Asia while maintaining domestic position
Priority Customer Segments – capture trade flows to/from Asia while maintaining domestic position Natural Resources Infrastructure Agriculture • Our focus is on capturing • Dominant infrastructure specialist in • A primary focus on Agri customers Australia/NZ - Asia/Pacific trade Australia and New Z
Slide 55: Transaction Banking – delivering superior client connectivity central to Super Regional strategy
Transaction Banking – delivering superior client connectivity central to Super Regional strategy Payments & Cash Management Payments & Cash Management Average Deposit Volumes 80 $m Continuing to deliver enhanced connectivity to clients • Transactive full functionality now embedded in Australia, New
Slide 56: Global Markets - continued focus on diversification and growing client driven revenue
Global Markets - continued focus on diversification and growing client driven revenue Since 2010, we have been executing on our Global Markets Revenue strategy to diversify our business increasing our 800 $m pro forma FX adjusted product offering and global footprint Sales Trading & Balance Sheet 60
Slide 57: Global Markets customer sales income at record highs
Global Markets customer sales income at record highs Trading & Balance Sheet Income Sales Income (FX Adjusted) (FX Adjusted) $m $ Quarterly Sales Income $m $ Quarterly Trading & Balance Sheet Income 400 Quarterly Average 2008 400 Quarterly Average 2008 Quarterly Average 2009 Quarterly Average 2009 Q
Slide 58: Global Capital Markets – continue to build distribution capabilities and strengthen market position
Global Capital Markets – continue to build distribution capabilities and strengthen market position Extended leading position in Corporate and frequent issuer bonds domestic bond markets league table rankings • No. 1 bond issuer in Australia with 21.7% market Category g y 2011 Q1 2012 Q share and le
Slide 59: Recognised as a leading Institutional bank in the Asia Pacific region
Recognised as a leading Institutional bank in the Asia Pacific region AWARDS FOR IFR ASIA AWARDS FX POLL PFI AWARDS EXCELLENCE BEST TRADE BANK IN BEST DOMESTIC PROVIDER ASIA PACIFIC INFRASTRUCTURE AUSTRALIA, NEW ZEALAND LOAN HOUSE OF THE YEAR OF FX SERVICES IN AUSTRALIA DEAL OF THE YEAR AND VIETNAM
Slide 60: New Zealand Businesses - Simplification & Efficiency
New Zealand Businesses - Simplification & Efficiency Simplifying the business Profit before Provisions • Continuing to simplify the management structure NZDm • Progressing with process and product simplification • Moving to one IT system 810 761 772 716 Improving customer and staff engagement – 667
Slide 61: New Zealand Businesses - Balance sheet management
New Zealand Businesses - Balance sheet management Funding Net Interest Margin • Funding gap has reduced by $1.9b YTD, largely 3.00% driven by an increase in customer deposits – at call ll and d savings i accounts t up 14% 2 50% 2.50% 2.00% Retail • Mortgages – market growth subdued at +0.9% 1.50% YT
Slide 62: Risk Management
Investor Discussion Pack AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Risk Management
Slide 63: Provision Charge and Impaired Assets
Provision Charge and Impaired Assets Total Provision Charge New Impaired Assets (IP charge by Division, total CP charge) by Division $m $m 1,200 3,500 1,098 3,126 1,000 3,000 2,436 722 2,500 2,319 2,335 800 565 660 551 2,000 1,824 600 1 500 1,500 400 1,000 Driven 200 by two 500 large single 0 names
Slide 64: Individual Provision Charge lifted by "transfers"
Individual Provision Charge lifted by “transfers" Individual Provision Charge ($m) IP net of CP & CVA "transfers" related to “Transfers” to Individual Provision ($m) legacy exposures and natural disasters arising in prior periods Institutional 121 "Transfers" to IP 717 Management overlay 53 Other Si
Slide 65: Collective Provision release principally due to exposures being crystallised
Collective Provision release principally due to exposures being crystallised Collective Provision Charge Modelled Collective Provision Composition ($m) Charge Drivers 1H12 ($m) 1H11 2H11 1H12 100 Institutional Growth 74 50 Australia Growth 0 Other Growth -4 Institutional I tit ti l -50 Risk profile
Slide 66: Credit Risk Weighted Assets
Credit Risk Weighted Assets Total Credit Risk Weighted Assets Credit Risk Weighted Assets (AUDb) Movement 1H12 v 2H11 (AUDb) 8.2 248.8 250.2 250.2 248.8 1.5 3.1 2.2 233 5 233.5 233 2 233.2 220.4 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 11 Growth Data FX Risk Mar 12 Review Impact 66
Slide 67: Impaired Assets
Impaired Assets Gross Impaired Assets Gross Impaired Assets by Type by Size of Exposure $m $ $m 8 000 8,000 Impaired Loans NPCCD Restructured 6,561 6,561 6,221 5,581 5,343 6,000 8,000 4,000 7,000 6,561 6,561 2,000 6,221 0 6,000 5,581 5,343 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 5,000 > $100m $10-$99m <
Slide 68: Watch & Control Lists and Risk Grade Profiles
Watch & Control Lists and Risk Grade Profiles Group Risk Grade profile by Watch & Control List Exposure at Default Index Watch List by Limits Mar 2009 Watch List by No. Groups = 100 Control List by Limits Control List by No. Groups 180 160 59% 58% 60% 61% 61% 140 120 100 13% 14% 14% 80 13% 15% 60 13
Slide 69: Total lending exposures – by Geography
Total lending exposures – by Geography Exposure at default (EAD) Other North 31% East Asia 19% Other South East Asia 18% Hong Kong 32% Singapore Australia 11% Asia 65% 17% New Institutional Zealand Trade 26% Other Institutional 64% 10% 1% Retail 3% 3% Pacific UK & Europe Americas 69
Slide 70: Total lending exposures – by Sector
Total lending exposures – by Sector Exposure at default (EAD) % in Non Category EAD as a % of g group p total Performing Sep-11 Mar-12 Sep-11 Mar-12 Consumer Lending 45.2% 45.7% 0.4% 0.3% 14% Finance, Investment & 14.4% 14.4% 0.3% 0.2% Insurance 7% Property Services 6.9% 7.0% 2.5% 2.1% 6% Agricultur
Slide 71: Australia 90+ Day Delinquencies
Australia 90+ Day Delinquencies Australia Retail Owner Occupied vs. Investment Loans 90+ day delinquencies 90+ DPD (%) T t l Mortgage Total M t Portfolio P tf li NSW & ACT Mortgages M t 1.0% QLD Mortgages VIC Mortgages Owner 0.8% Occupied WA Mortgages Total Credit Cards Loans 1.25% 0.6% 0 4% 0.4% In
Slide 72: Australia – Mortgages
Australia – Mortgages Dynamic Loan to Valuation Ratio Portfolio Statistics % Portfolio 60% Total Number of Mortgage Accounts 851k 50% Total Mortgage FUM $178b 40% Portfolio >90% LVR: • Sep 08 = 7% 30% • Mar 12 = 4% % of Total Australia Region Lending 60% 20% % of Total Group Lending 43% 10% 0% Owner
Slide 73: Although house prices have fallen in most capital cities, partially retracing earlier gains
Although house prices have fallen in most capital cities, iti partially ti ll retracing t i earlier li gains i Median Australian house prices International housing prices 230 Index: Dec 2004 = 100 210 Darwin. (-6.0%)* 190 Perth. (-7.5%)* 170 Melb. (-6.9%)* Adel 150 (-6.6%)* Bris. 130 (-9.0%)* 110 Sy
Slide 74: Market fundamentals remain sound with population growth set to pick up
Market fundamentals remain sound with population growth set to pick up Population growth vs. dwelling completions 500 ‘000 ‘000 225 Annual population gain (lhs) 450 200 400 350 175 300 150 250 200 Annual dwelling completions (rhs) 125 150 100 100 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
Slide 75: Importantly, mortgage debt is concentrated in higher income households
Importantly, mortgage debt is concentrated in higher income households Indebted Households • Household debt up but also total Share of household debt byy income assets held by y households quintiles, 2006 • Debt largely used to acquire assets 25% • Financial assets (i.e. ex housing) now equivalent t
Slide 76: Australia Commercial
Australia Commercial Australia Commercial 90+ day delinquencies 3.0% Business Banking Regional Commercial Banking Esanda 2 5% 2.5% Small B Business siness Banking Total Comme Commercial cial 2.0% 1.5% 1.0% 0.5% 0.0% Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Regional Commercial Banking Australia Commercial
Slide 77: Economics
I Investor t Discussion Di i Pack P k AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED May 2012 Economics
Slide 78: Australia remains in a very strong fiscal position
Australia remains in a very strong fiscal position Fiscal & Debt position 160 Greece 140 Japan 120 100 Italy Singapore Belgium Portugal US Net Debt % GDP, 2012f 80 Ireland France UK India 60 Spain Germany Taiwan 40 Canada Hong Kong China 20 Indonesia Australia NZ Denmark 0 -20 -40 Korea -8 -6 -4 -2
Slide 79: Most debt is in the private sector
Most debt is in the private sector 300 % GDP 280 P i t Private 260 Public 240 220 200 180 160 140 120 100 80 60 40 20 0 -20 -40 Australia US UK Canada Germany Netherlands Sweden Sources: ABS, RBA, Cecchetti, Datastream, ANZ Research 79
Slide 80: The Terms of Trade has driven the economy and resulted in strong income growth
The Terms of Trade has driven the economy and resulted in strong income growth Terms of trade since 1960 Income growth is continuing 120 140 Australia US 110 130 New Zealand 120 100 000's (A $, US$, NZ$ New f/c 110 90 100 ndex 80 Forecastss In 90 70 80 60 70 60 50 50 40 60 70 80 90 00 10 00 01 02 03
Slide 81: The household balance sheet is consolidating
The household balance sheet is consolidating Household Savings rate back to Debt levels remain elevated but more sustainable levels servicing is expected to decline 81
Slide 82: GDP growth likely to move back to trend levels, driven largely by investment growth
GDP growth likely to move back to trend levels, driven l largely l bby investment i t t growth th GDP growth Business investment vs. consumption 62 22 7 Forecasts sts Forecas 6 60 20 5 58 18 yearly change % of GDP 4 % of GDP 56 16 3 54 14 %y 2 52 12 1 50 10 0 48 8 -1 90 93 96 99 02 05 08 11 -2 House
Slide 83: This investment spend is in the mining, energy and infrastructure sectors and is driving the 2 speed economy
This investment spend is in the mining, energy and infrastructure sectors and is driving the 2 speed economy $bn 140 Communication sub-total Water & sewerage Sub-total Forecast Manufacturing g Sub-total 120 Gas Pipeline sub-total Electricity Sub-total Mining Sub-total 100 Energy Sub-total Airports S
Slide 84: The Australian economy is grappling with the structural change associated with this 2 speed economy
The Australian economy is grappling with the structural change associated with this 2 speed economy Employment growth by industry, 12 months to Feb 2012 Hospitality T Transport t & postt Nett employment N l t change, h Retail Trade 12 months to February 2012: Wholesale Trade +22k Manufacturing Arts
Slide 85: ANZ retains a positive outlook for China
ANZ retains a positive outlook for China China - GDP Growth ANZ’s view on China: Key themes 20 • Growth slowed in Q1 2012 due to weakness in the 18 property p p y market and global g uncertainties 16 14 • However improved PMI data suggests growth 12 momentum has picked up and we expect the 10 econom
Slide 86: 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 (May 2012) on 6ix