Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (May 2020)
80 slides from Anz's debt investor presentation, May 2020
Slide 1: 2020 Half Year Results Debt Investor Update
2020 HALF YEAR RESULTS — HALF YEAR ENDED 31 MARCH 2020 DEBT INVESTOR UPDATE AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522 NOT FOR RELEASE IN UNITED STATES
Slide 2: Disclaimer
DISCLAIMER Background information only This document has been prepared by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (the "Bank") for the information of intended recipients only (being persons who meet the requirements described in the following paragraphs). This document a
Slide 3: Disclaimer (cont.)
DISCLAIMER (CONT.) The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession it and any document or other information referred to in it comes should inform themselves about and observe any such restrictions. Any failure to comply with these
Slide 4: Contents
CONTENTS 2020 HALF YEAR RESULTS CEO and CFO Results Presentations 4 CEO Presentation 5 CFO Presentation 12 Group & Divisional Financial Performance 23 Group including customer remediation 24 Australia Retail & Commercial 27 Institutional 29 New Zealand Division 31 Treasury 33 Risk Management 43 Comm
Slide 5: Half Year Results – CEO Shayne Elliott
2020 HALF YEAR RESULTS — SHAYNE ELLIOTT CHIEF EXECUTIVE OFFICER NOT FOR RELEASE IN UNITED STATES
Slide 6: 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 $16b 118% 100% Regulatory 14.3 CET1 Minimum min. AT1 cap
Slide 7: Financial Performance
FINANCIAL PERFORMANCE 1H20 1H20 v 2H19 Statutory Profit ($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 8: 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 9: 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 8 NOT FOR RELEASE IN UNITED STATES
Slide 10: 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 11: 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 12: 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 13: Half Year Results – CFO Michelle Jablko
2020 HALF YEAR RESULTS — MICHELLE JABLKO CHIEF FINANCIAL OFFICER NOT FOR RELEASE IN UNITED STATES
Slide 14: 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 15: Financial Performance – Cash Profit Continuing Operations
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 NOT FOR RELEASE IN UNITED
Slide 16: Financial Performance – Divisional Performance and Large/Notable Items
FINANCIAL PERFORMANCE CONTINUING OPERATIONS DIVISIONAL PERFORMANCE LARGE / NOTABLE ITEMS EX. LARGE / NOTABLE ITEMS Income Expenses PBP Provisions Cash Profit3 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: 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 20: 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 21: 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 22: Credit Quality – Base Case Economic Forecast
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 23: 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 24: Group & Divisional Financial Performance
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK GROUP & DIVISIONAL FINANCIAL PERFORMANCE NOT FOR RELEASE IN UNITED STATES
Slide 25: 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 26: 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 27: 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 28: Australia Retail & Commercial – Cash Profit Drivers
AUSTRALIA RETAIL & COMMERCIAL CASH PROFIT1 DRIVERS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS $m Net Interest Income (NII) 44 1,795 70 -42 -78 -79 -2 186 1,367 -527 0% -11% 0% Large -24% -24% 2H19 Retail Retail Commercial Commercial Other Expenses Provisions Tax 1H20 volume margin volume
Slide 29: Australia Retail & Commercial – Financial Performance
AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM NII/OOI2 contribution ($m) Expenses ($m) Total Provisions ($m) Cash Profit4 ($m) 4,807 4,768 4,683
Slide 30: Institutional – Cash Profit Drivers
INSTITUTIONAL CASH PROFIT1 DRIVERS: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS $m Total income 337 12 7 848 -3 -72 -24 127 622 -610 +10% -1% Large -33% -27% 2H19 Trade PCM L&SF Markets Other Expenses Provisions Tax 1H20 1. In accordance AASB 8 Operating Segments, the divisions performance
Slide 31: Institutional – Financial Performance
INSTITUTIONAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Balance sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM Customer / Non-customer ($m) Expenses ($m) Total Provisions ($m) Cash Profit4 ($m) 199 2,657 2,791 641 1,004 2,541
Slide 32: New Zealand Division – Cash Profit Drivers
NEW ZEALAND DIVISION CASH PROFIT1 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 volum
Slide 33: 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 Profit4 (NZDm) 124 126 129 1,756
Slide 34: Treasury
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK TREASURY NOT FOR RELEASE IN UNITED STATES
Slide 35: 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 36: 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 37: 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 38: 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 39: Liquidity Coverage Ratio 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 40: 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 41: 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 $5.7b since July 2019 across AUD, EUR, and USD By Format By Currency • Current portfolio includes 29% in AUD (23% domestic AUD) –
Slide 42: Impacts of Rate Movements
IMPACTS OF RATE MOVEMENTS BILLS/OIS SPREAD CAPITAL & REPLICATING CAPITAL2 & REPLICATING DEPOSITS PORTFOLIO DEPOSITS PORTFOLIO (AUSTRALIA) bps % 70 3.0 AUST NZ APEA 60 2.5 50 Volume ($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 43: 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 44: Risk Management
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK RISK MANAGEMENT NOT FOR RELEASE IN UNITED STATES
Slide 45: 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 46: Individual Provisions & Loss Rates
RISK MANAGEMENT INDIVIDUAL PROVISIONS & LOSS RATES INDIVIDUAL PROVISION CHARGE LONG RUN LOSS RATE (INTERNAL EXPECTED LOSS) $m 1,047 % 892 787 554 626 826 380 398 430 343 922 93 Division Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 969 812 807 612 594 592 532 495 229 153 136 116 122
Slide 47: Collective Provision
RISK MANAGEMENT COLLECTIVE PROVISION COLLECTIVE PROVISION CHARGE PROVISION BALANCE/COVERAGE RATIO BY STAGES ($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 48: 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 49: Risk Weighted Asset Movement
RISK MANAGEMENT RISK WEIGHTED ASSET MOVEMENT TOTAL RISK WEIGHTED ASSETS CREDIT RWA DRIVERS $b $b 2.0 0.1 2.6 1.9 386.0 5.6 6.9 449 9.1 9 358.1 417 -0.3 396 391 396 8 Divisional lending 14.3 71 12 11 10 66 58 57 60 Sep-19 FX Aus R&C Instit. Markets NZ Other Risk Model / Mar-20 (ex. div. Method. Marke
Slide 50: Total Portfolio Composition
RISK MANAGEMENT TOTAL PORTFOLIO COMPOSITION % of Portfolio in Non Portfolio Balance EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category % of Group EAD Performing in Non Performing Mar-19 Sep-19 Mar-20 Mar-19 Sep-19 Mar-20 Mar-20 TOTAL GROUP EAD (Mar-20) Consumer Lending 38.8% 37.6% 34.6% 0.2% 0.1% 0.2%
Slide 51: Institutional & Commercial Portfolio
RISK MANAGEMENT INSTITUTIONAL & COMMERCIAL PORTFOLIO Credit Related EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category GLA Commitments and Contingencies EAD (Mar-20) ($b) ($b) = $703b1 Finance, Investment & Insurance 73 48 Property Services 12 7 9.1% Manufacturing 31 46 Agriculture, Forestry, Fishing 3
Slide 52: 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 $b Finance (Banks and Central Banks) 24% Government Admin. 500 Services to Fin. & Ins. 34% 450 Property Services3 2% Basic
Slide 53: Segments of Interest
RISK MANAGEMENT SEGMENTS OF INTEREST Commercial Property Resources GLAs by Region ($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 54: 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) NOT FOR RELEASE IN UNITED STATES
Slide 55: 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 56: 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 57: 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 58: Australia Home Loans – 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 59: 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 60: Australia Home Loans – Application Trends
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 61: 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 62: 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 63: 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 64: 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 65: Australia Consumer Portfolio
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 66: 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 67: 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 68: Corporate Overview, Royal Commission Update & ESG
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK CORPORATE OVERVIEW, ROYAL COMMISSION UPDATE & ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) NOT FOR RELEASE IN UNITED STATES
Slide 69: Royal Commission
ROYAL COMMISSION OUR APPROACH, OUR RESPONSE WE ARE RESPONDING TO THE ‘SPIRIT AND THE LETTER’ OF THE ROYAL COMMISSION. Action taken • Reported to Government that we have made the changes that we can to respond to the four recommendations that Commissioner Hayne directed at banks. In relation to these
Slide 70: ESG – Governance Overview
ESG – GOVERNANCE OVERVIEW BOARD OF DIRECTORS Chaired by David Gonski, Chairman Audit Committee Risk Committee Ethics, Environment, Digital Business Human Resources Nomination and Social and Technology Committee Board Operations and Governance Committee Committee Committee Chair: Chair: Chair: Chair:
Slide 71: Board and Executive Committees Work Together
BOARD AND EXECUTIVE COMMITTEES WORK TOGETHER INDICATIVE RESPONSIBILITIES DEMONSTRATE HOW COMMITTEES MANAGE ESG Ethics, Environment, Social and Governance Ethics and Responsible Business Board committee Management committee Purpose: Establish ethical and ESG guidelines and Purpose: Operationalise Boa
Slide 72: ESG Target Performance
ESG TARGET PERFORMANCE SCORECARD SNAPSHOT We are committed to the United Nations Sustainable Development Goals (SDGs). Our ESG targets support 10 of Not achieved Achieved In progress the 17 SDGs. ESG target Progress Outcome Relevant SDGs FAIR AND RESPONSIBLE BANKING Ranked 1st relative to RepTrak® c
Slide 73: ANZ's ESG Rating Scorecard
ANZ’S ESG RATING SCORECARD TRACKING OF EXTERNAL ESG RATING PERFORMANCE Context: Our reputation indicators identify our key weakness, scrutinised in the Royal Commission, as our failure to always responsibly deliver products and services, e.g. fees for no service. Bank industry median, 46 86, Highest
Slide 74: Climate-Related Financial Disclosures
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK CLIMATE-RELATED FINANCIAL DISCLOSURES NOT FOR RELEASE IN UNITED STATES
Slide 75: Climate-Related Financial Disclosures (TCFD)
CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)1 Governance Strategy Risk Management Metrics & targets • Board Risk Committee oversees • Low carbon financial products and • Climate-related risks identified as • 47 engagements with large management of climate-related services potential credit risk emitt
Slide 76: Supporting Our Customers and Training Our Staff on Low Carbon Transition Plans
SUPPORTING OUR CUSTOMERS AND TRAINING OUR STAFF ON THE DEVELOPMENT OF LOW CARBON TRANSITION PLANS CUSTOMER MANAGEMENT AND STAFF TRAINING CUSTOMER EXAMPLE: BHP’S TRANSITION PLANNING BHP has an integrated strategy including: ANZ customer management informed by climate-related engagement • Targets to h
Slide 77: Economics
2020 HALF YEAR RESULTS — INVESTOR DISCUSSION PACK ECONOMICS NOT FOR RELEASE IN UNITED STATES
Slide 78: Economics – Australia Forecast Table
ECONOMICS AUSTRALIA FORECAST TABLE1 2017 2018 2019 2020F 2021F Australia – annual average % growth GDP 2.5 2.7 1.8 -4.7 4.1 Headline CPI (year end % y/y) 1.9 1.8 1.8 0.4 1.4 Trimmed mean CPI (year end % y/y) 1.7 1.8 1.6 1.2 1.4 Unemployment (ann. avg) 5.6 5.3 5.2 7.8 7.3 RBA cash rate (% year end) 1
Slide 79: 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 80: Further Information
FURTHER INFORMATION Key contacts Adrian Went Scott Gifford Mary Makridis Group Treasurer Head of Debt Investor Relations Associate Director +61 3 8654 5532 +61 3 8655 5683 Investor Relations +61 412 027 151 +61 434 076 876 +61 3 8655 4318 Adrian.went@anz.com scott.gifford@anz.com Mary.Makridis@anz.c
Australia and New Zealand Banking Group — Debt Investor Presentation (May 2020) on 6ix