Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — European Covered Bond Conference 2020
76 slides from Anz's conference presentation, 2020
Slide 1: European Covered Bond Conference 2020
EUROPEAN COVERED BOND CONFERENCE 2020 AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED ABN 11 005 357 522 Not for distribution into the United States
Slide 2: Contents
CONTENTS Q3 Trading Update 3 1H20 Results 18 ESG Update 27 Group Treasury 33 Risk Management 41 Housing Portfolio 49 Covered Bond Trust Update 59 Economics 63 Key Contacts 74 2 Not for distribution into the United States
Slide 3: Q3 Trading Update
EUROPEAN COVERED BOND CONFERENCE 2020 Q3 TRADING UPDATE AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 4: Overview
OVERVIEW FINANCIAL INFORMATION AS AT 30 JUNE 2020 (ALL COMPARISONS TO 1H20 QUARTERLY AVG UNLESS OTHERWISE STATED) 3Q20 Profit • Unaudited Statutory Profit $1.3b. For Continuing Operations, unaudited Cash Profit excluding Large / Notable Items $1.6b (including Large / Notable items $1.5b) • Operating
Slide 5: Capital & Dividend
CAPITAL & DIVIDEND APRA LEVEL 2 COMMON EQUITY TIER 1 RATIO (CET1) 1H20 DIVIDEND DECLARED Dividend per share (fully franked) (no discount on DRP) 25c % of 1H20 statutory profit 46% % of 1H20 statutory profit (adj. for Panin & AmBank impairments) 30% 4Q20 CET1 impact of 1H20 dividend 15bps Earnings 43
Slide 6: Credit Risk Weighted Assets Movement
CREDIT RISK WEIGHTED ASSETS MOVEMENT Key credit RWA trends 3Q20 FX • Reversal of 2Q20 FX impact, primarily driven by USD and NZD rate movements (no material capital impact) UNDERLYING CRWA MOVEMENT • Following strong growth in March, Institutional’s CRWA declined in the June quarter, driven by lower
Slide 7: Provision Charge & Coverage
PROVISION CHARGE & COVERAGE PROVISION CHARGE CP COVERAGE1 $m % • 3Q20 Provision charge $500m included: 1,558 1.25 o $264m Individual provision charge 1.17 o $236m Collective provision charge increasing CP total CP balance to $4.65b as at 30 June 2020 CP balance 461 $4.65b balance • CP charge outcome
Slide 8: Australia Home Loan Credit Quality
AUSTRALIA HOME LOAN CREDIT QUALITY AUS. HOME LOANS DELINQUENCIES2,3,4 • For eligible home loans1 receiving COVID-19 assistance, arrears are frozen % for the period of the loan deferral 2.4 • Customers who requested assistance but were ineligible for repayment 2.2 deferral based on these criteria wer
Slide 9: Customer Behaviour
CUSTOMER BEHAVIOUR • Increased deposit balances YTD in Retail, Commercial and Institutional ANZ DEPOSIT ACTIVITY • Within the Institutional and Corporate customer base, a number of Australia Retail & New Zealand Institutional customers have been proactive in managing costs and taking a Commercial Di
Slide 10: Customer Support – Australia (Home Loans)
CUSTOMER SUPPORT – AUSTRALIA (HOME LOANS) COVID-19 RELIEF - HOME LOAN PAYMENT DEFERRALS AT 31 JULY 2020 Home Loan relief at 31 July 2020: Loan repayment Total AUS. Home deferrals Loan Portfolio2 • ~130k COVID-19 enquiries have been received to date, with 90k of these going Total Active deferrals ont
Slide 11: Customer Support – Australia (Home Loans)
CUSTOMER SUPPORT – AUSTRALIA (HOME LOANS) COVID-19 RELIEF - HOME LOAN PAYMENT DEFERRALS AT 31 JULY 2020 ~130,000 COVID-19 ENQUIRIES RECEIVED DYNAMIC LOAN TO VALUE RATIO PORTFOLIO BY STATE % of total requests (Mar-20 to Jul-20) (% of accounts)1,2 (% of accounts) 986k accounts ~84k accounts 986k accou
Slide 12: Customer Support – Australia (Commercial)
CUSTOMER SUPPORT – AUSTRALIA (COMMERCIAL) COVID-19 RELIEF – COMMERCIAL BANKING1 AT 31 JULY 2020 ANZ Commercial Banking: EAD Assistance Provided at 31 July 2020 Accounts at 30 June 2020 • ~485k customers in Commercial Banking of which ~165k have lending across ~240k accounts • Small Business Banking
Slide 13: Customer Support – Australia (Commercial)
CUSTOMER SUPPORT – AUSTRALIA (COMMERCIAL) COVID-19 RELIEF – COMMERCIAL BANKING1 AT 31 JULY 2020 BUSINESS LOAN DEFERRALS PROVIDED2 BY SECURITY PROFILE (% OF EAD)3 BY STATE (% OF EAD)4 BY INDUSTRY (% OF EAD) $69b $9.5b $69b $9.5b $69b $9.5b 5% 6% 0% 9% 6% 7% 12% 27% 26% 20% 13% 15% 16% 17% 5% 9% 6% Ot
Slide 14: Customer Support – New Zealand
CUSTOMER SUPPORT – NEW ZEALAND COVID-19 RELIEF AT 31 JULY 2020 LOAN REPAYMENT Total NZ Home Loan DEFERRALS Portfolio1 • Financial support provided to ~39,000 personal, home and business loan (31-Jul 20)1 customers through repayment deferrals or adjustments covering lending of ~NZ$23b Total number of
Slide 15: Margin Considerations
MARGIN CONSIDERATIONS KEY MARGIN CONSIDERATIONS CAPITAL & REPLICATING DEPOSITS PORTFOLIO (AUSTRALIA) % • Low rate environment in all geographies 3.0 • Strong growth in at-call deposits 2.5 2.0 • Increase in liquid assets 1.5 • Shifting customer preferences 1.0 (e.g. home loan switching to fixed rate
Slide 16: Provisions
PROVISIONS TOTAL PROVISION CHARGE COLLECTIVE PROVISION BALANCE & COVERAGE $m $b 4.50 4.65 1,558 461 3.38 3.38 2.79 2.66 2.58 2.52 1.25% 1.17% 1,097 500 0.98% 0.94% 237 193 0.81% 0.79% 0.75% 0.75% 202 43 209 264 206 121 159 156 53 116 220 210 183 186 194 258 140 236 160 165 -49 -18 -4 -39 -24 -30 -49
Slide 17: Credit Quality
CREDIT QUALITY IMPAIRED ASSETS AND LOANS PAST DUE GROSS IMPAIRED ASSETS BY DIVISION1,3 IMPAIRED LOANS / FACILITIES BY PORTFOLIO3 $b $b 4 3.1 3.1 0.51% 0.51% 3 2.7 2.7 0.40% 2.2 2.3 2.1 0.34% 0.35% 0.39% 2 1 0 Mar-16 Mar-17 Mar-18 Mar-19 Sep-19 Mar-20 Jun-20 2.9 2.9 0.2 0.2 Corporate Qualified Revolv
Slide 18: 1H20 Results
EUROPEAN COVERED BOND CONFERENCE 2020 1H20 RESULTS AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 19: Financial Performance
FINANCIAL PERFORMANCE 1H20 1H20 v 2H19 Statutory Profit ($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 20: 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 21: 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 22: Financial Performance
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 23: 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 24: Credit Quality
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: ESG Update
EUROPEAN COVERED BOND CONFERENCE 2020 ESG UPDATE AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 28: ANZ Has an Integrated Approach to Sustainability
ANZ HAS AN INTEGRATED APPROACH TO SUSTAINABILITY PURPOSE ESG TARGETS TEAM ANZ’s purpose is to shape a world where people and We exceeded our 2015 commitment to fund and facilitate at ANZ Group Treasury has implemented Green and communities thrive least AUD15b in environmentally sustainable solutions
Slide 29: 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 30: 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 31: ESG Target Performance
ESG TARGET PERFORMANCE 1 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®
Slide 32: How We Measure and Communicate
HOW WE MEASURE AND COMMUNICATE TRACKING OF EXTERNAL ESG rating performance • Context: Reputation indicators are increasingly being used by investors and analysts to understand our approach to ESG issues and to measure our ESG performance against our peers. We are rated based on our ESG disclosures,
Slide 33: Group Treasury
EUROPEAN COVERED BOND CONFERENCE 2020 GROUP TREASURY AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 34: 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 35: 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 36: 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 37: 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 38: 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 39: ANZ's Tier 2 FY20 Requirement Is Complete, Prefunding FY21
ANZ’S TIER 2 FY20 REQUIREMENT IS COMPLETE, PREFUNDING FY211 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
Slide 40: 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 41: Risk Management
EUROPEAN COVERED BOND CONFERENCE 2020 RISK MANAGEMENT AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 42: 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 43: Risk Management: Individual Provisions & Loss Rates
RISK MANAGEMENT INDIVIDUAL PROVISIONS & LOSS RATES INDIVIDUAL PROVISION CHARGE LONG RUN LOSS RATE (INTERNAL EXPECTED LOSS) $m 1,047 % 892 787 554 626 826 380 398 430 343 922 93 Division Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 969 812 807 612 594 592 532 495 229 153 136 116 122
Slide 44: Risk Management: Collective Provision
RISK MANAGEMENT COLLECTIVE PROVISION COLLECTIVE PROVISION CHARGE PROVISION BALANCE/COVERAGE RATIO BY STAGES ($m) AASB9 AASB9 $m 1H19 2H19 1H20 30 Sep-19 31 Mar-20 CP charge 13 4 1,048 Coverage ratio by stage1 Coverage ratio by stage1 Volume/Mix -28 -51 0 Change in Risk -40 19 17 1 2 3 1 2 3 Economic
Slide 45: Risk Management: Total Portfolio Composition
RISK MANAGEMENT TOTAL PORTFOLIO COMPOSITION % of Portfolio in Non Portfolio Balance EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category % of Group EAD Performing in Non Performing Mar-19 Sep-19 Mar-20 Mar-19 Sep-19 Mar-20 Mar-20 TOTAL GROUP EAD (Mar-20) Consumer Lending 38.8% 37.6% 34.6% 0.2% 0.1% 0.2%
Slide 46: Risk Management: Institutional & Commercial Portfolio
RISK MANAGEMENT INSTITUTIONAL & COMMERCIAL PORTFOLIO Credit Related EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category GLA Commitments and Contingencies EAD (Mar-20) ($b) ($b) = $703b1 Finance, Investment & Insurance 73 48 Property Services 12 7 9.1% Manufacturing 31 46 Agriculture, Forestry, Fishing 3
Slide 47: 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 $b Finance (Banks and Central Banks) 24% Government Admin. 500 Services to Fin. & Ins. 34% 450 Property Services3 2% Basic
Slide 48: Risk Management: Segments of Interest
RISK MANAGEMENT SEGMENTS OF INTEREST Commercial Property Resources GLAs by Region ($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 49: Housing Portfolio
EUROPEAN COVERED BOND CONFERENCE 2020 HOUSING PORTFOLIO AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 50: 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 51: Australia Home Loans: Portfolio Growth
AUSTRALIA HOME LOANS PORTFOLIO GROWTH HOME LOAN FUM COMPOSITION1,2 LOAN BALANCE & LENDING FLOWS1 $b $b 271 269 15 264 27 9 8 7 269 0 264 43 31 22 -47 10 17 29 57 52 44 Mar-19 New Sales Net OFI Refi Redraw & Repay Mar-20 excl. Refi-In Interest / Other MARKET SHARE3 % 161 168 14.7% 14.3% 146 15.1% 13.
Slide 52: Australia Home Loans: Portfolio & Flow Composition
AUSTRALIA HOME LOANS PORTFOLIO1,2 & FLOW3 COMPOSITION BY PURPOSE BY ORIGINATION LVR4 Portfolio Flow Flow 3% 3% 2% 1% 19% 17% 17% 32% 31% 30% 30% 17% 15% 18% 65% 66% 68% 69% 64% 68% 65% Mar-18 Mar-19 Mar-20 1H20 1H18 1H19 1H20 Owner Occ Investor Equity <80% LVR 80% LVR >80% LVR BY LOCATION BY CHANNEL
Slide 53: Australia Home Loans: Portfolio Dynamics
AUSTRALIA HOME LOANS PORTFOLIO DYNAMICS HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE1,2 76% of accounts ahead of repayments % composition of accounts (Mar-20) 28% Investment:3 Interest payments may receive 37 36 negative gearing/tax benefits 20% 20% 20 17 New Accounts:
Slide 54: Australia Home Loans: Dynamic Loan to Value Ratio
AUSTRALIA HOME LOANS DYNAMIC LOAN TO VALUE RATIO BASED ON TOTAL PORTFOLIO ACCOUNTS 1,2,3,4 % of total Portfolio Accounts >90% 60 Net of offset balances 50 • 8.0% of portfolio 40 • 61% ahead of repayments 30 • 52% with LMI 20 NEGATIVE EQUITY 10 Net of offset balances 0 • 3.2% of portfolio 0-60% 61-75
Slide 55: Stress Testing the Australian Mortgage Portfolio
AUSTRALIAN HOME LOANS STRESS TESTING THE AUSTRALIAN MORTGAGE PORTFOLIO • ANZ conducts regular stress tests of its loan portfolios to meet risk management Assumptions Base1 Year 1 Year 2 Year 3 objectives and satisfy regulatory requirements. Unemployment 5.1% 5.5% 9.8% 10.5% rate • Stress tests are h
Slide 56: Lenders Mortgage Insurance
LENDERS MORTGAGE INSURANCE SEPTEMBER FULL YEAR 2019 RESULTS LMI & REINSURANCE STRUCTURE Australian Home Loan portfolio LMI and Reinsurance Structure at 30 Sep 19 (% New Business FUM Oct-18 to Sep-19) Gross Written Premium ($m) $80.7m LVR<80% Not LMI Insured Net Claims Paid ($m) $31.4m 86% Loss Rate
Slide 57: 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 58: 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 59: ANZ Covered Bond Trust Update
EUROPEAN COVERED BOND CONFERENCE 2020 ANZ COVERED BOND TRUST UPDATE AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 60: ANZ Covered Bonds
ANZ COVERED BONDS COVER POOL SUMMARY COMPOSITION AND QUALIFYING CRITERIA WEIGHTED AVERAGE LVR PORTFOLIO SUMMARY AT 24 AUGUST 2020 51 Covered Bond Pool $17.1bn 40 Covered Bonds on issue $10.1bn Average loan size $310,109 18 Weighted Ave Current LVR 60.86% 10 12 13 14 13 Weighted Ave Indexed LVR 56.63
Slide 61: Covered Bonds – Collateral Change
COVERED BONDS – COLLATERAL CHANGE (SINCE SEPTEMBER 2018) Portfolio Summary 22-Sep-2017 22-Dec-2017 22-Mar-2018 22-Sep-2018 22-Mar-2019 22-Sep-2019 22-Mar-2020 22-Aug-2020 Cover Pool $19.5bn $19.5bn $19.5bn $19.5bn $19.9bn $19.4bn $17.9bn $17.1bn Covered Bonds on issue $13.9bn $13.9bn $13.9bn $12.4bn
Slide 62: Covered Bonds on Issue as at August 2020
COVERED BONDS ON ISSUE AS AT 24 AUGUST 2020 ANZ COVERED BONDS – ISSUANCE TENOR Covered Bonds 9% 3 yr 13% Bonds Outstanding ($A$) $10.1bn 4 yr 2% 4% 7 yr Cover Pool (A$) $17.9bn 20% 10 yr Program Ratings Aaa/AAA 12 yr Number of Issues O/s 13 16 yr 41% Number of Currencies 4 11% 20 yr WA Term at Issue
Slide 63: Economics
EUROPEAN COVERED BOND CONFERENCE 2020 ECONOMICS AUSTRALIA AND NEW Z EALAND BANKING GROUP LIMITED Not for distribution into the United States
Slide 64: Australia Forecast Table
ECONOMICS AUSTRALIA FORECAST TABLE 2017 2018 2019 2020F 2021F Australia – annual % growth GDP 2.4 2.8 1.8 -3.2 1.7 Headline CPI (% y/y) 1.9 1.9 1.6 0.6 1.0 Core CPI (%y/y) 1.8 1.9 1.6 1.2 0.9 Employment (%y/y) 3.3 2.3 2.3 -2.7 0.5 Unemployment (ann. avg) 5.5 5.0 5.2 7.2 8.3 RBA cash rate (% year end
Slide 65: Australian Economy
AUSTRALIAN ECONOMY GDP GROWTH1 GLOBAL GDP GROWTH COMPARISON1 CONSUMER PRICE INFLATION2 AUSTRALIAN GOVERNMENT BUDGET BALANCE2 Per cent of nominal GDP 65 Sources: 1. ANZ Research “Australian Economic Insight”, September 2020 2. RBA Chart Pack September 2020 Not for distribution into the United States
Slide 66: Australian Economy and Population
AUSTRALIAN ECONOMY AND POPULATION POPULATION GROWTH1 – AUSTRALIA AND G7 COVID-19 NEW CASES2 % yoy 2.5% 2.0% Australia 1.5% 1.0% G7 weighted average 0.5% 0.0% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 COVID-19 POLICY MEASURES2 HOUSEHOLD SAVING
Slide 67: Australian Labour Market
AUSTRALIAN LABOUR MARKET UNEMPLOYMENT AND UNDEREMPLOYMENT1 JOB VACANCIES AND ADVERTISEMENTS1 (Per cent of labour force) WAGE PRICE INDEX GROWTH1 EMPLOYMENT AND HOURS WORKED2 67 Sources: 1. RBA Chart Pack September 2020 2. RBA Speech: “The Economic Outlook”, August 2020 Not for distribution into the
Slide 68: Commodity Prices
COMMODITY PRICES1 RBA INDEX OF COMMODITY PRICES BASE METALS, RURAL, AND OIL PRICES SDR, 2016/17 Average = 100, log scale Weekly BULK COMMODITY PRICES TERMS OF TRADE* Free on board basis 2016/17 average = 100, log scale 68 Sources: 1. RBA Chart Pack September 2020 Not for distribution into the United
Slide 69: Australian Housing Dynamics: A Cooling Market
AUSTRALIAN HOUSING DYNAMICS: A COOLING MARKET HOUSING PRICE FORECASTS BY STATE1 HOUSE PRICE GROWTH2 12 6 Month Change Year on Year Change 5 Year Cumulative Change Housing prices, y/y % change (calendar year) 10 8 All All All Aug 2020 Houses Units Houses Units Houses Units dwellings dwellings dwellin
Slide 70: Rental Vacancy Rates Remain Low
RENTAL VACANCY RATES REMAIN LOW1 NUMBER OF NEW RENTAL LISTINGS CHANGE IN TOTAL AND NEW RENT LISTINGS BETWEEN 4 WEEKS ENDING MARCH 15TH AND JUNE 28TH COMBINED CAPITAL CITIES DWELLINGS PORTION OF INCOME REQUIRED TO SERVICE RENT GROSS RENTAL YIELDS CAPITAL CITY DWELLING MARKETS Sources: 1. CoreLogic Ho
Slide 71: Australian Housing Dynamics
AUSTRALIAN HOUSING DYNAMICS PRIVATE RESIDENTIAL BUILDING APPROVALS1 FIRST HOME BUYERS SHARE OF FINANCE2 Monthly 25 First Home Owners' Boost First Home 20 Owners' Grant % share of total housing finance 15 NSW & Victoria reduce stamp duty 10 5 0 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 First-home
Slide 72: Australian Housing: Household Debt and Income
AUSTRALIAN HOUSING HOUSEHOLD DEBT AND INCOME HOUSEHOLD DEBT AND DEPOSITS1 HOUSEHOLD DEBT-TO-INCOME RATIOS2 % of annual household disposable income HOUSEHOLD MORTGAGE BUFFERS3 HOUSEHOLD MORTGAGE DEBT INDICATORS2 Sources: 1. ABS, RBA. Housing Debt refers to ratio of housing debt to annualised househol
Slide 73: Low Levels of High LVR Lending - Isolated Negative Equity
AUSTRALIAN HOUSING LOW LEVELS OF HIGH LVR LENDING - ISOLATED NEGATIVE EQUITY1 ADIs’ HIGH LVR LOANS1 LOANS IN NEGATIVE EQUITY2 Share of new loan approvals Share of balances, June 2019 CURRENT DYNAMIC LVR DISTRIBUTION3 DISTRIBUTION OF HOUSEHOLD DEBT4 Share of balances, February 2020 By income quintile
Slide 74: Key Contacts
KEY CONTACTS Key contacts Adrian Went Scott Gifford Mostyn Kau Group Treasurer Head of Debt Investor Relations Head of Group Funding +61 3 8654 5532 +61 3 8655 5683 +61 8655 3860 +61 412 027 151 +61 434 076 876 +61 478 406 607 Adrian.went@anz.com scott.gifford@anz.com Mostyn.kau@anz.com John Needham
Slide 75: Important Notice
IMPORTANT NOTICE 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 docu
Slide 76: Important Notice
IMPORTANT NOTICE United States: This document is only for investors who are (x) outside the United States and are not U.S. Persons (as defined in Regulation S under the Securities Act of 1933 as amended (the “Securities Act”)) in compliance with Regulation S; or (y) “qualified institutional buyers”
Australia and New Zealand Banking Group — European Covered Bond Conference 2020 on 6ix