Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — FY2011 Earnings Presentation
123 slides from Anz's earnings presentation, Nov 3, 2011
Slide 1: Full Year Results 2011
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Results Presentation & Investor Discussion Pack
Slide 2: Mike Smith, Chief Executive Officer
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Mike Smith Chief Executive Officer
Slide 3: Overview of financial performance
Overview of financial performance For personal use only 2011 $m % Underlying Profit 5,652 +12% Operating Income 16,812 +7% Expenses 7,718 +11% Provisions 1,211 -33% Statutory Net Profit After Tax 5,355 +19% EPS (cents) 218.4 +10% Dividend per Share (cents) 140 +11% Net Interest Margin 2.46% -1bps Cu
Slide 4: Strengthened capital & funding position; well diversified funding base
Strengthened capital & funding position; Well diversified funding base For personal use only Strong Capital Position Diversified Funding Base Equity & Hybrid Debt Customer funding Common Equity Tier 1 Ratio Tier 1 Ratio Term Funding >1 year Term Funding < 1 year 10.9% Short Term Funding 10.6% 10.1%
Slide 5: Increased diversification by geography, product & capability
Increased diversification by geography, product & capability For personal use only Strong growth in APEA franchise Diversification of Segment, Product & markets Capability in Institutional FY11 Client Revenue Growth FY11 Institutional by Geography Client Revenue Growth Taiwan 127% Natural Resources
Slide 6: Overview of financial performance
Overview of financial performance For personal use only 2011 $m % Underlying Profit 5,652 +12% Operating Income 16,812 +7% Expenses 7,718 +11% Provisions 1,211 -33% Statutory Net Profit After Tax 5,355 +19% EPS (cents) 218.4 +10% Dividend per Share (cents) 140 +11% Net Interest Margin 2.46% -1bps Cu
Slide 7: Australia Division
Australia Division For personal use only Underlying profit growth (AUDm) FY11 v FY10 Australia Division 4% Strong performance in competitive market Good performance in Retail & Commercial FY11 growth v System Pro Forma NPAT 12.2% 22% HOH YOY ANZ System 7.9% 6% 6% 5% 6.9% 5.7% -15% -16% 1 Mortgages H
Slide 8: Asia Pacific, Europe & America (APEA) Division
Asia Pacific, Europe & America (APEA) Division For personal use only Underlying profit growth (USDm) FY11 v FY10 APEA Division 22% Growth in key products Net Profit after Tax FY11 Client Revenue Growth USDm 31% CAGR 739 Investments & Insurance 48% 617 543 Cash Management 59% 393 Trade Finance 51% 25
Slide 9: New Zealand Businesses
New Zealand Businesses For personal use only Underlying profit growth (NZDm) FY11 v FY10 New Zealand Businesses 55% Lowering Cost to Income Ratio Customer satisfaction at historic highs1 New Zealand Businesses ANZ NBNZ 50% Pro Forma NZD 90% 90% 89% 91% 85% 85% 49% 48% 47% 46% 45% 1H10 2H10 1H11 2H11
Slide 10: Institutional Division
Institutional Division For personal use only Underlying profit growth (AUDm) FY11 v FY10 Institutional Division 7% Strong Growth in Priority Segments & Products Institutional Division Net Profit after Tax FY11 Client Revenue Growth 35% CAGR Natural Resources 18% Agribusiness 14% 1,895 1,778 Infrastr
Slide 11: Reduced reliance on offshore wholesale funding; strong liquidity position
Reduced reliance on offshore wholesale funding; Strong liquidity position For personal use only Stable term funding profile Strong liquidity position A$B 30 Issuance Maturities Liquid assets exceed total Offshore 25 Wholesale Debt securities 20 19.9 8.1 19.4 15 10.2 10 3.3 71.4 66.7 62.2 60.2 5 34.7
Slide 12: Peter Marriott, Chief Financial Officer
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Peter Marriott Chief Financial Officer
Slide 13: 2011 Full Year Performance
2011 Full Year For personal use only $m Performance FY11 v FY10 609 5,652 283 5,355 524 5,025 265 4,501 297 3% 33% Up 12% Up 19% FY10 Non-Core FY10 Profit Provisions Tax & OEI FY11 Non-Core FY11 Statutory Items Underlying Before Underlying Items Statutory Profit Profit Provisions profit Profit Perfo
Slide 14: Impact of trading income and provision trends
Impact of trading income and provision trends 2H11 For personal use only $m Performance 2H11 v 1H11 2,818 31 2,834 248 109 76 296 Down 70% Up 3% Up 2% Down 17% Down 3% Up 1% 1H11 Trading Income Expenses Provisions Tax & OEI 2H11 Underlying Income ex-Trading Underlying Profit Profit Performance FY10
Slide 15: Trends September Quarter 2011
Trends September Quarter 2011 For personal use only Trading Income weaker than expected Lower provision charge $m Sales Trading & Balance Sheet 300 328 250 200 223 150 100 50 0 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 3Q11 4Q11 Higher recoveries & write-backs driven by Release of collective flood provision tak
Slide 16: Adjust for acquisitions & FX – The Pro Forma Numbers
Adjust for acquisitions & FX – The Pro Forma Numbers For personal use only Growth FY11 v FY10 – Underlying & Pro forma Profit before Revenue Expenses Net Profit after Tax Provisions 12.5% 12.7% Ex-Trading 10.7% Ex-Trading 7.6% 8.2% 6.5% 7.0% 5.2% 3.2% 2.9% Underlying Pro Forma Underlying Pro Forma U
Slide 17: Divisional overview
Divisional overview For personal use only Net Profit after Tax (Pro Forma) 2H11 v 1H11 2H11 HOH FY11 YOY Australia Division (AUD) 1,445 8% 2,777 2% APEA (USD) 353 (9%) 739 20% Institutional (AUD) 867 (15%) 1,895 9% NZ Businesses (NZD) 451 0% 904 55% Profit Before Provisions (Pro forma) 2H11 v 1H11 2
Slide 18: Net Interest Margin
Net Interest Margin For personal use only Movement 2H11 V 1H11 (bps) 3.8 247.2 1.0 2.5 244.2 4.5 3.4 2.4 280.9 Down 0.6 bps ex-markets 280.3 Down 3.0 bps 1H11 Funding Funding Costs Deposits Assets Other Markets 2H11 & Asset Mix Movement FY11 v FY10 (bps) Funding & FY10 Funding Costs Deposits Assets
Slide 19: Net Interest Margin
Net Interest Margin For personal use only Net Interest Margin 2H11 v 1H11 Net Interest Margin Institutional ANZ Group ex-markets Australia Division ex-Markets Australia Division NZ Businesses APEA ex-markets 3.50% 8.4% Institutional ex-markets 2.7% Down 2bps Down 17bps 3.30% 3.10% -0.8% -5.4% 2.90%
Slide 20: Operating Expenses
Operating Expenses For personal use only Operating Expense Growth Pro Forma HOH Group Operating Expense growth Australia New Zealand Group 5.5% Division Businesses 0.7% 4.1% 6% 5% New Zealand 4% 3% Businesses 2% 1% 1% 0% Institutional 1.9% 2.2% 2.4% -5% APEA ex- 0.1% Institutional APEA APEA 1.0% Ins
Slide 21: Continue to invest for future growth and productivity
Continue to invest for future growth and productivity For personal use only Operating Expense Growth Pro Forma FY11 v FY10 269 64 421 83 7,718 251 7,132 • Risk management systems • Payments & IT infrastructure • Back & middle office FTE • Frontline FTE in Institutional & APEA • Institutional cash ma
Slide 22: Credit quality is improving
Credit quality is improving For personal use only Total Provision Charge New Impaired Assets $m $m 1,800 4,000 1,621 3,600 1,600 1,435 3,500 3,126 1,400 3,035 3,000 1,200 1,098 2,437 2,500 2,319 1,000 2,000 1,842 722 800 660 551 1,500 600 1,000 400 200 500 0 0 1H09 2H09 1H10 2H10 1H11 2H11 -200 1H09
Slide 23: Collective Provision Charge & Management Overlay
Collective Provision Charge & Management Overlay For personal use only Economic Cycle & Concentration Collective Provision Charge (Management) Overlay Balance Lending Growth Risk Profile Additional natural Portfolio Mix $m disaster overlay Cycle & Concentration (Management Overlay) 600 $m 500 500 40
Slide 24: Outlook
Outlook For personal use only Global Markets Revenue Total Provision Charge $m $m 400 Sales Trading & Balance Sheet 1,621 1,435 1,098 200 722 659 551 0 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1H09 2H09 1H10 2H10 1H11 2H11 Net Interest Margin ex-Markets Foreign Currency Translation 2.78% 2.81% 2.80% 1.20 1.40
Slide 25: Investor Discussion Pack: Net Interest Margin
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Investor Discussion Pack Net Interest Margin
Slide 26: NIM movement summary
NIM movement summary For personal use only Basis points (bps) Group Regions Divisions Australia NZ Australia Division NZ Businesses Global Institutional YOY HOH YOY HOH YOY HOH YOY HOH YOY HOH YOY HOH Starting NIM 247.4 247.2 261.4 259.5 226.9 235.4 258.8 257.9 230.1 243.8 215.3 198.1 Funding & Asse
Slide 27: Net Interest Margin - Group
Net Interest Margin - Group For personal use only NIM movement FY11 v FY10 bps 16.3 2.8 1.1 247.4 245.7 3.4 8.5 Ex-markets up 6.8 bps 7.8 Down 1.7 bps FY10 Funding & Funding Costs Deposits Assets Other Markets FY11 Asset Mix Key drivers of movement Funding & Reduced reliance on wholesale funding as
Slide 28: Net Interest Margin - Group
Net Interest Margin - Group For personal use only NIM movement 2H11 v 1H11 bps 3.8 247.2 1.0 2.5 4.5 244.2 2.4 3.4 Ex-markets Down 0.6 bps Down 3.0 bps 1H11 Funding & Funding Costs Deposits Assets Other Markets 2H11 Asset Mix Key drivers of movement Funding & Asset Reduced reliance on wholesale fund
Slide 29: NIM - Australia Division
NIM - Australia Division For personal use only NIM movement FY11 v FY10 bps 258.8 10.8 0.1 257.0 3.6 0.8 8.3 Down 1.8 bps FY10 Funding & Funding Costs Deposits Assets Other FY11 Asset Mix NIM movement 2H11 v 1H11 bps 257.9 0.2 4.6 1.4 256.2 1.3 3.8 Down 1.7 bps 1H11 Funding & Funding Costs Deposits
Slide 30: NIM – New Zealand Businesses
NIM – New Zealand Businesses For personal use only NIM movement FY11 v FY10 bps 4.2 246.7 36.5 230.1 2.3 9.6 16.8 Up 16.6 bps FY10 Funding & Funding Costs Deposits Assets Other FY11 Asset Mix NIM movement 2H11 v 1H11 bps 1.4 249.6 13.9 2.0 243.8 7.7 3.8 Up 5.8 bps 1H11 Funding & Funding Costs Deposi
Slide 31: NIM – Institutional Division
NIM – Institutional Division For personal use only NIM movement FY11 v FY10 bps 215.3 12.7 4.1 7.6 7.6 0.8 191.6 Down 23.7 bps 16.3 FY10 Funding & Funding Costs Deposits Assets Other Markets FY11 Asset Mix bps NIM movement 2H11 v 1H11 198.1 1.4 8.0 5.1 185.7 2.4 7.9 0.6 Down 12.4 bps 1H11 Funding &
Slide 32: Investor Discussion Pack: Balance Sheet Management
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Investor Discussion Pack Balance Sheet Management
Slide 33: Group loans and deposits
Group loans and deposits For personal use only Group customer deposits Group net loans and advances (including acceptances) Growth Rates Growth Rates FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11 $b $b 12% 16% 14% 15% 16% 0% 9% 7% 450 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 S
Slide 34: Customer deposits by geography
Customer deposits by geography For personal use only Australia (AUDb) New Zealand (NZDb) APEA (USDb) Growth Rates Growth Rates Growth Rates FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11 10% 16% 9% 11% 5% 1% 0% 4% 49% 49% 68% 40% 200 180 160 140 120 100 80 60 40 20 0 Sep Sep Sep Sep Sep
Slide 35: Customer deposit composition by segment
Customer deposit composition by segment For personal use only Group deposits by segment Deposits composition (AUDb) Sep 2011 297 257 Group 39% 18% 41% 2% 233 124 110 Australia 31% 21% 47% 1% 102 54 46 APEA 77% 23% 47 117 98 80 New Zealand 19% 29% 45% 7% Sep 09 Sep 10 Sep 11 Wealth Retail Commercial
Slide 36: Net loans and advances by geography
Net loans and advances by geography For personal use only Australia (AUDb) New Zealand (NZDb) APEA (USDb) Growth Rates Growth Rates Growth Rates FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 14% 0% 9% 6% 12% (1%) (1%) (3%) large (2%) 57% 44% 300 250 200 150 100 50 0 Sep
Slide 37: Lending composition by segment
Lending composition by segment For personal use only Group lending composition Lending composition by segment (AUDb) Sep 2011 397 369 346 Group 23% 22% 54% 1% 215 202 Australia 19% 17% 63% 1% 185 APEA 82% 18% 87 86 85 New Zealand 7% 54% 37% 1% 79 91 71 Sep 09 Sep 10 Sep 11 Wealth Retail Commercial I
Slide 38: Divisional Performance: Australia Division
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Divisional Performance Australia Division
Slide 39: Australia Division – Consistent customer focus and market positioning
Australia Division – Consistent customer focus and well- established market positioning driving solid results For personal use only 1. Delivered customer propositions targeted at key segments aligned to our Super Regional Pro forma Profit before credit & Strategy income tax • New banking services fo
Slide 40: Australia Division – Financial performance
Australia Division – Financial performance For personal use only Pro forma Pro forma NPAT movement – FY11 v FY10 Growth Rates Revenue $m 395 8 5% 2% 145 2,777 2,717 113 FY11 2H11 69 Expenses Up 2% FY10 Net Other Expenses Provisons Tax and FY11 4% 1% Interest Income OEI FY11 2H11 Pro forma NPAT movem
Slide 41: Australia Geography – Balance sheet and funding
Australia Geography – Balance sheet and funding For personal use only Balance sheet management strategy Significant improvement in loan to • A well managed balance sheet supports sustainable deposit ratio lending and revenue growth • We aim to: $b % Continually improve the composition of deposits
Slide 42: Australia Geography – loans and deposits
Australia Geography – loans and deposits For personal use only Net loans and advances • Lending up 6% YOY and 2% HOH (including acceptances) • Mortgages up 7% YOY and 3% HOH growing at $b 1.2x system1 YOY 269.2 285.0 300.0 246.4 247.1 • Commercial up 5% YOY and 4% HOH 250.0 Business Banking up 10%
Slide 43: Australia Division – Net Interest Margin
Australia Division – Net Interest Margin For personal use only Margin strategy Net Interest Margin • ANZ is focused on profitable growth in key segments using a service led approach 2.80% 2.59% 2.57% 2.60% 2.53% 2.41% Outcome 2.40% • YOY NIM down 2 bps 2.20% Improved asset margins and reduced reli
Slide 44: Retail – ANZ value proposition: easy and empowering
Retail – ANZ value proposition: “easy and empowering” For personal use only Superior customer service Priorities Capabilities • Position ANZ as the most “easy and empowering bank” for Strong brand customers • Strategic marketing campaigns – “We live in your world.” • Be the bank of choice for target
Slide 45: Retail – Strategy delivering results
Retail – Strategy delivering results For personal use only FY11 v 2H11 v Customer deposit composition Movement FY10 1H11 100% Income 6% 2% 16% 13% 11% Expenses 4% 2% 80% 30% 33% 39% Profit Before Provisions 7% 3% 60% Net loans & advances incl. acceptances 7% 3% 40% Customer deposits 13% 6% 57% 56% 2
Slide 46: Retail - Focused on profitable growth and market share
Retail - Focused on profitable growth and market share For personal use only With MFI Customer Satisfaction again … and Peer leading Customer Advocacy approaching 80%... (%) MFI Customers1 Net Promoter Score1,3 80 78 76 74 72 70 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 …
Slide 47: Retail – Mortgages
Retail – Mortgages For personal use only Dynamic Loan to Valuation Ratio Portfolio Statistics % Portfolio 60% Total Number of Mortgage Accounts 832k 50% Total Mortgage FUM $170b 40% 13% of Portfolio >80% LVR 30% % of Total Australia Region Lending 60% 20% % of Total Group Lending 43% 10% 0% Owner Oc
Slide 48: Retail – Becoming the bank of choice for Asia Region customers
Retail – Becoming the bank of choice for Asia Region customers For personal use only Customer Focus Capabilities Outcome1 • Chinese customers able to open Australia & China accounts with one application 600% increase • Improved process for NZ customers (15 min process) new accounts opened by NZ Simp
Slide 49: Retail – Delivering customer propositions targeted at key segments
Retail – Delivering customer propositions targeted at key segments aligned to our Super Regional Strategy For personal use only International Banking Moving to Australia website Services branches Concierge model (Online) (Branch) (Phone) • Launched April 2011 • Increased from 19 to 47 • Launched Aug
Slide 50: Retail – Strong momentum in Affluent program
Retail – Strong momentum in Affluent program driven by new capabilities and services For personal use only Principles driving performance - easy and empowering Customer Focus Capabilities Outcome (5 months)1 • Whole customer relationship taken into account in financial ~4,700 product assessment Cust
Slide 51: Commercial overview
Commercial overview For personal use only FY11 v 2H11 v Net loans & advances (incl. Movement FY10 1H11 acceptances) by business Income 6% 4% Regional Commercial Expenses 6% (2%) 28% Banking Profit Before Provisions 6% 7% Business Banking Net loans & advances incl. acceptances 5% 4% 30% Small Busines
Slide 52: Commercial – super regional advantage
Commercial – super regional advantage For personal use only Our super regional platform and ANZ Cross-border referrals core capabilities are driving cross-sell 29% and new-to-bank acquisition increase 500 Super regional platform • ANZ is the only bank able to connect Commercial customers across Asia
Slide 53: Commercial - Business banking
Commercial - Business banking For personal use only Building momentum, creating capacity FY11 lending book composition by to grow key segments Property • Growing the balance sheet through a focus on 33.8% Retail acquiring larger customers and improved share of wallet Manufacturing 10.3% Wholesale Tr
Slide 54: Commercial - Regional Commercial banking
Commercial - Regional Commercial banking For personal use only Capitalising on opportunities for growth FY11 lending book by key and supporting customers in need segments Agriculture Regional Commercial1 Retail • Leveraging bank-wide sector expertise in Resources and Infrastructure to identify and c
Slide 55: Commercial - Small Business banking (SBB)
Commercial - Small Business banking (SBB) For personal use only Leveraging ANZ distribution networks FY11 lending book composition by and enhancing customer experience sector • Acquiring new-to-Commercial customers by tapping 22.2% Retail into the distribution networks of OnePath, Esanda Constructio
Slide 56: Commercial - Esanda
Commercial - Esanda For personal use only Esanda is the market leader in Esanda lending composition by vehicle finance and a prime source assets (Sep 11) of new-to-bank customers Vehicles • Largest player in the dealer vehicle finance 14% market 86% • Market leading credit processing speeds (under E
Slide 57: Wealth (OnePath superannuation, Investments & Insurance and ANZ Private)
Wealth (OnePath superannuation, Investments & Insurance and ANZ Private) For personal use only Strategic focus In-force annual premium growth • Improving management bench strength appointed new management; $M Distribution & Advice - Paul Barrett 1,600 Superannuation & Investments - Craig Bracken
Slide 58: Wealth – Progress against strategic priorities
Wealth – Progress against strategic priorities For personal use only Priorities Progress Step change in • Life insurance launched on anz.com ($3.4m premiums) and 50+ product ANZ customer base through branches ($0.7m premiums) penetration • Launched Affluent “Wealth Health Check.” • Further increase
Slide 59: Divisional Performance: APEA Division
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Divisional Performance Asia Pacific, Europe & America (APEA) Division
Slide 60: APEA Division - building a leading super regional bank
Asia Pacific, Europe & America Division (APEA) - building a leading super regional bank For personal use only APEA achieved another year of significant growth in APEA Division Revenue FY 2011… (USD m) • Revenue increase of 22% 2,556 • NPAT growth of 20% 37% CAGR • Customer deposit growth up by 40% (
Slide 61: APEA Division financial performance strengthened
APEA Division financial performance strengthened, despite markets trading headwinds in the second half For personal use only Pro forma NPAT movement – FY11 v FY10 USDm 127 7 168 163 61 739 617 314 90 Up 20% FY10 Net Other Markets Markets Expenses Provisions Tax and FY11 Interest Income Sales Trading
Slide 62: Revenue growing in key strategic geographies, segments and products
Revenue is growing in key strategic geographies customer segments and products For personal use only Geographies Customer Segments Products Franchise Markets Institutional Institutional Strategic Priorities • Greater China, Indonesia, • Natural Resources • Financial • Cash • FX & Singapore, Greater
Slide 63: Connectivity is a key differentiator for ANZ
Connectivity is a key differentiator for ANZ, driving revenue growth across the network For personal use only Intra Asia connectivity becoming APEA Cross-Border Income1 increasingly important (AUD m) 864 801 • ANZ‟s Asian business intra region cross-border revenues expanded –up 40% YOY 153 Intra-APE
Slide 64: Growth has driven diversification across APEA
Growth has driven diversification across APEA as Asia Retail and Northeast Asia have expanded For personal use only APEA segments percentage of Group revenue FY07 vs FY11 15% 2% 4% 8% Partnerships & Other 1% 2% Asia Retail 1% Pacific Retail 2% 7% 4% Institutional & Commercial FY07 FY11 APEA geograph
Slide 65: Tight cost disciplines and improving efficiency
Tight cost disciplines and improving efficiency are helping to fund front-line investment For personal use only Improving efficiency APEA FTE • Focused on reducing enablement/back-office costs (including contract employees) while continuing to invest in revenue-generating capabilities Enablement Ce
Slide 66: Increased net funding while improving credit quality
Increased net funding while improving the credit quality of loan portfolio and growing the balance sheet For personal use only • Significant Volume growth • Credit Quality Improving • Self Funding • 75% Net Loans & Advances <1 year duration Customer Deposits Net Loans & Advances APEA Institutional R
Slide 67: Brand awareness has significantly improved
Brand awareness has significantly improved across all of our customer segments For personal use only Brand awareness1 across Hong Kong, Singapore and Taiwan Average Percentage, 2010-2011 2 2010 3 2011 75 69 62 53 34 29 Affluent Emerging Institutional Corporates 1. Includes both Prompted and Spontane
Slide 68: Integration of acquired RBS businesses completed
Integration of acquired RBS businesses into ANZ was completed in October 2011 For personal use only Completed complex integration Building a larger and more capable in 6 Asian markets bank on the integrated business Effective management of a complex Enhanced frontline integration • New frontline pri
Slide 69: APEA Institutional: Executing to a clearly articulated strategy
APEA Institutional: Executing to a clearly articulated strategy For personal use only Revenues up 29% YoY as customer franchise Customer numbers continue to grow strengthens Institutional Asia Client Numbers1 Targeting sectors aligned to global strengths and with 1,400 significant regional growth pr
Slide 70: APEA Retail: Growth in wealth driving business expansion
APEA Retail: Growth in wealth driving business expansion in Asia For personal use only Customer growth despite portfolio Substantial repositioning of Mass to repositioning Affluent / Emerging Affluent Customer Numbers („000s) +51% • Revenue up 18% amidst repositioning and volatile market 2,500 2,450
Slide 71: Divisional Performance: Institutional Division
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Divisional Performance Institutional Division
Slide 72: Institutional – executing to a clearly articulated strategy
Institutional – executing to a clearly articulated strategy For personal use only • Targeting sectors with existing strength and Institutional Division significant regional growth prospects Underlying Net profit after Tax ($m) • Natural Resources • Agriculture • Infrastructure 35% CAGR 1,895 1,778 •
Slide 73: Institutional – Financial Performance
Institutional – Financial Performance For personal use only Pro forma NPAT movement – FY11 v FY10 $m 186 47 484 1,895 1,733 120 82 309 284 Up 9% FY10 Net Other Markets Markets Sales Expenses Provisons Tax and FY11 Interest Income Trading OEI Ex-Global Markets Global Markets Pro forma NPAT movement –
Slide 74: Identified priority sectors where we have existing strengths
Identified priority sectors where we have existing strengths to build upon For personal use only Priority Sectors Priority Products Natural Resources Cash Management • In target sub-segments – minerals & mining, oil & • A leading provider of cash management and gas, primary processing, primary servi
Slide 75: Benefits emerging through growth in priority sectors and products
Benefits emerging through growth in priority sectors and products For personal use only Institutional Division Growth has been achieved through: Client revenue growth FY11 vs FY10 • A global specialised relationship model offering industry expertise and a broader product proposition has seen priorit
Slide 76: More diverse, self funded loan growth
More diverse, self funded loan growth For personal use only Institutional Lending and Deposits Institutional Trade Lines $b Funded & Unfunded 50 39 Net Loans & Advances Customer Deposits 40 (incl. acceptances) 30 30 22 $13b Growth YOY $20b Growth YOY $b 117.4 20 120 10 97.7 91.2 0 100 Sep 09 Sep 10
Slide 77: Investment in the strategy
Investment in the strategy For personal use only Majority of FY11 cost growth relates to investment in de risking and supporting immediate and longer term growth initiatives 2,001 $m 36 • Back / middle office FTE 130 • Risk management systems • Payments infrastructure • Productivity initiatives • Pr
Slide 78: Productivity focus evident in near term cost growth
Productivity focus evident in near term cost growth For personal use only Institutional Operating Expenses Initiatives in train to maintain Growth Pro Forma HOH cost trajectory 9.7% 6.3% Process automation and enhancement 5.3% • Enhanced markets operations platforms and processes • Automation of dat
Slide 79: Improved credit quality
Improved credit quality For personal use only Institutional net impaired assets Institutional risk grade profile by size and as % NLA by exposure at default $m % NLA 4,000 6.00% 3,500 5.00% 3,000 60% 63% 68% AAA-BBB 4.00% 2,500 BBB- 2,000 3.00% BB+~BB- BB- 1,500 2.00% 17% >BB- 17% 1,000 16% 1.00% 12
Slide 80: Diversification of client base and revenues
Diversification of client base and revenues For personal use only Institutional client base Revenue mix1 No. of Clients 8,000 7,464 6,924 6,382 19% 22% 26% 6,000 20% 18% 21% 4,000 24% 18% 11% 2,000 36% 39% 41% 0 2009 2010 2011 2009 2010 2011 Global Loans Markets Trading Australia Asia Pacific Europe
Slide 81: Cash management business delivering connectivity
Cash management business delivering connectivity For personal use only Significant progress made in 2011 ANZ Transactive trans-tasman sites and usage • Connecting our customers‟ transaction banking needs Active $b across Australia and New Zealand is a key differentiator. Sites • Customers can perfor
Slide 82: Global Markets Performance
Global Markets Performance For personal use only Strategy to increase Global Markets revenue client flow revenues is delivering $m pro forma FX adjusted 2,500 • Revenue down 11% YOY and 31% HOH due to 2,011 difficult macro conditions in traded risk and balance 2,000 1,752 1,563 sheet management 1,50
Slide 83: Global Markets product offering
Global Markets product offering For personal use only Global Markets delivers innovative product solutions through specialist Global Markets revenue mix teams operating across the Asian region • Interest rate risk hedging for clients 6% 10% 10% • Pricing and risk management of credit Other Fixed Inc
Slide 84: Sales, trading and balance sheet revenue
Sales, trading and balance sheet revenue For personal use only Global markets business focussed on client driven risk management and trading activity Global Markets revenue Also management of ANZ‟s own liquidity and composition (pro forma) balance sheet risk management • Direct client flow business
Slide 85: Global Capital Markets - becoming a leading Asia Pacific specialist
Global Capital Markets - becoming a leading Asia Pacific capital markets specialist For personal use only Achieved a number of milestones in 2011 Corporate and frequent issuer bonds • A number of first in offshore RMB/CNH market league table rankings Joint Lead Manager for First offshore bond for
Slide 86: Divisional Performance: New Zealand Businesses
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Divisional Performance New Zealand Businesses
Slide 87: New Zealand Businesses - simplification & efficiency
New Zealand Businesses - simplification & efficiency For personal use only Simplifying the business • Have simplified the management structure Profit before provisions1 • Progressing with process and product simplification NZDm • Moving to one IT system 1,493 Improved customer and employee engagemen
Slide 88: New Zealand Businesses – financial performance
New Zealand Businesses – financial performance For personal use only Pro forma Pro forma NPAT movement – FY11 v FY10 Growth Rates (NZD) NZDm Revenue 299 904 149 24 5% 585 147 1% 6 FY11 2H11 Up 55% Expenses 0% FY10 Net Other Expenses Provisons Tax and FY11 Interest Income OEI -2% FY11 2H11 Pro forma
Slide 89: New Zealand Businesses - balance sheet management
New Zealand Businesses - balance sheet management For personal use only Net Interest Margin Retail 3.00% • Mortgages – have held share in the <80% LVR market and taken a more conservative 2.50% approach to growth in >80% LVR segment • Deposit strategy focussed on growing better 2.00% quality at call
Slide 90: Simplification program progressing well
Simplification program progressing well with good progress made in 2011 For personal use only • New regional management approach that simplifies decision making across all businesses New • Merged Commercial and Agri businesses to ensure an integrated focus Operating right across the agribusiness sec
Slide 91: Super Regional capabilities provide real differentiation
Super Regional capabilities provide real differentiation For personal use only Leveraging our Super Regional capabilities • Migrant Banking – on track to exceed 10,000 new customers through migrant banking channel this year • Wealth – migrant investor program targeting high net worth investors • Fir
Slide 92: Retail & Wealth - simplifying our business
Retail & Wealth - simplifying our business to make banking easier for customers and staff For personal use only Simplification initiatives undertaken across Customer satisfaction at business historic highs1 • Re-engineering processes to allow frontline staff to spend more time with customers 85% 90%
Slide 93: Commercial & Agri – unlocking value
Commercial & Agri – unlocking value by bringing segments closer together For personal use only Managing for a lower growth environment Lending Composition • Disciplined management of risk, balance sheet and expenses By Segment Enhanced customer focus • Unrivalled coverage, with customers having acce
Slide 94: Business Banking – compelling growth proposition in Small Business
Business Banking – ANZ has a compelling growth proposition in Small Business For personal use only Strong performance in FY11 Small Business a significant part • Maintained #1 market share position of the NZ economy • Customer satisfaction improved from 87% to 88%1 90% of NZ businesses employ • Lend
Slide 95: New Zealand Businesses - credit quality
New Zealand Businesses - credit quality For personal use only Total impaired assets Total provision charge NZDm NZDm 531 600 2.47% 400 351 2.25% 247 165 98 119 2,215 2.06% 200 1.92% 2,020 0 1,809 -200 1,718 1H09 2H09 1H10 2H10 1H11 2H11 IP Charge CP Charge 1.25% 90+ Days arrears 1.20% Mortgages 0.70
Slide 96: Investor Discussion Pack: Treasury
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED Investor Discussion Pack Treasury
Slide 97: ANZ well capitalised and positioned to transition to Basel III
ANZ well capitalised and positioned to transition to Basel III For personal use only Basel II Basel III – Common Equity Tier 1 Basel II ~14.9% 7% minimum Proposed Basel III ~14.0% including buffer APRA fully applicable from Basel harmonised 12.1% 12.1% Jan-16 III# 11.9% ~9.5% ~9.5% 10.5% 10.9% 10.1%
Slide 98: Solid organic capital generation underpins Common Equity Tier 1
Solid organic capital generation continues to underpin the strong Common Equity Tier 1 position For personal use only Capital Position (Common Equity Tier 1 Ratio) ~11.4% 2.13% ~9.5% (0.83%) 8.52% 8.05% (0.43%) (0.33%) (0.07%) Portfolio growth & mix 51bp decrease +15.8b Risk Migration 7bp increase -
Slide 99: Tier 1 position strengthened significantly
Tier 1 position strengthened significantly with recent CPS3 issuance and solid organic capital generation For personal use only Capital Position (Tier 1 Ratio) ~14.0% 2.13% ~11.7% 0.51% 10.94% 10.10% (0.83%) (0.57%) (0.33%) (0.07%) Portfolio growth & mix 65bp decrease +15.8b Risk Migration 8bp incre
Slide 100: Reconciliation of ANZ's capital position under Basel III
Reconciliation of ANZ‟s capital position under Basel III For personal use only ANZ capital ratios under a Basel III fully harmonised approach : Common Tier 1 Total Capital Equity Tier 1 APRA Sep-11 Basel II 8.5% 10.9% 12.1% Plus: dividend not provided for (net of DRP) 0.5% 0.5% 0.5% Less Investments
Slide 101: Well diversified funding profile with increasing customer funding
ANZ has a well diversified funding profile with an increasing weighting to customer funding For personal use only Strong Funding Composition Maintained low levels of short- term wholesale funding Short Term Wholesale Customer Funding Funding Gross Interbank, Other 3% Term Debt < 1 year Residual Shar
Slide 102: Stable term debt issuance, portfolio costs increasing
Stable term debt issuance, portfolio costs increasing For personal use only Stable term funding profile Portfolio term funding costs expected to increase further due to current market volatility A$B 3m BBSW Forecast Portfolio funding 30 Issuance Maturities 180bp costs based on current market levels
Slide 103: Total liquid assets exceed total offshore wholesale debt
Total liquid assets exceed TOTAL offshore wholesale debt portfolio For personal use only Strong liquidity position ($b) ANZ Total Offshore Wholesale Debt securities 19.9 8.1 19.4 10.2 3.3 66.7 71.4 60.2 62.2 34.7 20.1 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 11 Prime Liquidity Portfolio Other Eligible
Slide 104: Hedging has lessened the impact on earnings of the stronger $A
Hedging has lessened the impact on earnings of the stronger $A For personal use only Earnings Composition by Region EPS Impact & Average Translation Rates % Group Exchange Inclusive of Hedging Unhedged Underlying Rate Profit 0.7% 100% 1.40 90% 1.30 80% 1.20 -0.9% 70% -1.2% 60% 1.10 -2.6% 50% 1.00 2H
Slide 105: Investor Discussion Pack: Risk Management
For personal use only 11 FULL YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 November 2011 Investor Discussion Pack Risk Management
Slide 106: Provision Charge and Impaired Assets
Provision Charge and Impaired Assets For personal use only Total Provision Charge New Impaired Assets (IP charge by Division, total CP charge) by Division $m $m 1,800 4,000 1,621 3,600 1,600 1,435 3,500 3,126 1,400 3,035 3,000 1,200 1,098 2,436 2,500 2,319 1,000 2,000 1,824 722 800 660 551 1,500 600
Slide 107: Individual Provision Charge
Individual Provision Charge For personal use only Individual Provision Charge Individual Provision Charge by Segment composition $m $m 2,000 2,000 1,531 1,283 1,062 1,500 762 594 609 1,800 1,000 1,531 500 1,600 0 -500 1,400 1,283 -1,000 1H09 2H09 1H10 2H10 1H11 2H11 1,200 1,062 New Increased Writeba
Slide 108: Collective Provision Charge
Collective Provision Charge For personal use only Collective Provision Charge by Source $m $m CP Charge by Division 2H11 80 (96) 331 36 (40) 65 (58) (74) (42) 29 29 60 40 20 0 -20 -40 -60 -80 -100 -120 1H09 2H09 1H10 2H10 1H11 2H11 Australia New Institutional APEA Zealand & Other Lending Growth Econ
Slide 109: Collective Provision Charge
Collective Provision Charge For personal use only Collective Provision Charge by Source Lending Portfolio Cycle & FY11 Risk Impact Growth Mix Concentration Total Australia Division 20 42 (6) (14) 42 Institutional (29) 65 (14) 12 34 New Zealand (35) (6) (1) (47) (89) APEA & Group Centre (47) 29 1 37
Slide 110: Credit Risk Weighted Assets
Credit Risk Weighted Assets For personal use only Credit Risk Weighted Assets Total Credit Risk Weighted Assets Movement FY11 v FY10 $b $b 257.8 248.8 1.3 15.8 248.8 233.5 233.2 229.8 0.5 1.3 220.4 233.5 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Sep 10 Growth Data FX Risk Sep 11 Review Impact 110
Slide 111: Impaired Assets
Impaired Assets For personal use only Gross Impaired Assets Gross Impaired Assets by Type by Size of Exposure $m $m 8,000 Impaired Loans NPCCD Restructured 6,561 6,561 6,221 6,000 5,595 5,581 8,000 4,158 4,000 7,000 6,561 6,561 2,000 6,221 0 6,000 5,595 5,581 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 1
Slide 112: Watch & Control Lists and Risk Grade Profiles
Watch & Control Lists and Risk Grade Profiles For personal use only Group Risk Grade profile by Watch & Control List Exposure at Default Index Watch List by Limits Mar 2009 Watch List by No. Groups 6% 6% 6% 6% 6% = 100 Control List by Limits 9% 9% 9% 8% 8% Control List by No. Groups 180 13% 13% 12%
Slide 113: Commercial Industry Exposures
Commercial Industry Exposures For personal use only Finance & Insurance Property Services Manufacturing 80 16% 80 14% 80 14% 14% 12% 12% 60 12% 60 10% 60 10% 10% 8% 8% 40 8% 40 40 6% 6% 6% 20 4% 20 4% 20 4% 2% 2% 2% 0 0% 0 0% 0 0% Sep 10 Mar 11 Sep 11 Sep 10 Mar 11 Sep 11 Sep 10 Mar 11 Sep 11 Agri,
Slide 114: Australia 90+ Day Delinquencies
Australia 90+ Day Delinquencies For personal use only Australia Retail 90+ day delinquencies 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Total Mortgage Portfolio NSW & ACT Mortgages QLD Mortgages VIC Mortgages WA Mortgages Total Credit Cards Australia Division Mortgages ha
Slide 115: Australia Mortgages
Australia Mortgages For personal use only Dynamic Loan to Valuation Ratio Portfolio Statistics % Portfolio 60% Total Number of Mortgage Accounts 832k 50% Total Mortgage FUM $170b 40% 13% of Portfolio >80% LVR 30% % of Total Australia Region Lending 60% 20% % of Total Group Lending 43% 10% 0% Owner O
Slide 116: Australia Commercial
Australia Commercial For personal use only Australia Commercial 90+ day delinquencies 3.00% Business Banking Regional Commercial Banking 2.50% Esanda Small Business Banking 2.00% 1.50% 1.00% 0.50% 0.00% Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Regional Commercial Banking Australia Commercial Lending Mix 9
Slide 117: New Zealand businesses
New Zealand businesses For personal use only Total Impaired Assets Total Provision Charge NZDm NZDm 531 600 2.47% 400 351 2.25% 247 165 98 119 2,215 2.06% 200 1.92% 2,020 0 1,809 -200 1,718 1H09 2H09 1H10 2H10 1H11 2H11 IP Charge CP Charge 1.25% 90+ Days Arrears 1.20% Mortgages 0.70% 1,132 Commercia
Slide 118: Credit Intermediation Trades
Credit Intermediation Trades For personal use only Life to Date Position as at 30 Notional Notional September 2011 purchased Credit Risk Credit Risk Principal Mark to protection on on Amount on No. Market principal Derivatives Derivatives corresponding (USDm) amount (USDm) (AUDm) Sold Protection Cou
Slide 119: Credit Intermediation Trade Portfolio
Credit Intermediation Trade Portfolio For personal use only • Cumulative Credit Risk on Derivative expense for the Credit Intermediation Trades Credit Intermediation Trade portfolio as at 30/9/2011 was $511m (up $50m from 31/3/2011) AUDb USDb • Recent volatility and uncertainty in European and Ameri
Slide 120: Economic Updates
For personal use only 11 HALF YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 3 May 2011 Investor Discussion Pack Economic Updates
Slide 121: Economic updates
Economic updates For personal use only Australia New Zealand 2009 2010 2011 2012 2009 2010 2011 2012 GDP 0.9 2.7 1.6 3.5 -2.7 1.4 1.7 2.7 Inflation 1.3 2.8 3.5 2.7 1.7 1.5 4.61 2.5 Unemployment 5.7 5.2 5.2 5.4 6.5 6.4 6.4 5.5 Cash rate 3.00 4.50 4.75 4.25 2.50 3.00 2.50 3.25 AUD/USD 0.88 0.97 0.97 1
Slide 122: Growth Forecasts – Asia
Growth Forecasts – Asia For personal use only Emerging Asia GDP Growth Forecasts 2007 2008 2009 2010 2011 2012 2013 China 13.1 9.6 9.1 10.1 9.3 9.5 9.3 India 9.5 7.4 7.0 8.8 7.8 8.3 8.4 NIEs Hong Kong 6.4 2.4 -2.7 7.0 4.8 4.3 3.9 Korea 5.1 1.5 0.2 6.2 3.9 4.1 4.4 Singapore 8.6 2.3 -0.8 14.5 5.0 5.1
Slide 123: For personal use only
For personal use only The material in this presentation is general background information about the Bank‟s activities current at the 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 p
Australia and New Zealand Banking Group — FY2011 Earnings Presentation on 6ix