Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (May 2015)
52 slides from Anz's debt investor presentation, May 2015
Slide 1: ANZ Green Bonds Investor Presentation
ANZ Green Bonds Investor Presentation May 2015
Slide 2: Index
Index ANZ Green Bonds 3 ANZ Overview 10 1H15 Result Overview 18 Treasury 25 Credit Quality 34 AUSTRALIA DIVISION All figures within this investor discussion pack are presented on Cash basis in Australian Dollars unless otherwise noted. In arriving at Cash Profit, Statutory Profit has been adjusted t
Slide 3: Summary of Green Bond Proposal
ANZ Green Bonds Investor Presentation Summary of Green Bond Proposal
Slide 4: ANZ is proposing to issue its first Green Bond
ANZ is proposing to issue its first Green Bond As part of ANZ’s commitment to actively managing and reducing the environmental impact of its activities, ANZ is proposing to issue its first Green Bond Key points • The transaction will involve issuance of a senior unsecured debt instrument by ANZ deno
Slide 5: ANZ is proposing to issue its first Green Bond: Certification & Verification
ANZ is proposing to issue its first Green Bond Certification & Verification • ANZ Green Bonds have been certified by the Climate Bonds Initiative (CBI) – a Not-For-Profit organisation that aims to promote large-scale investments that will help to deliver a low-carbon economy • The CBI’s standards pr
Slide 6: ANZ's Green Asset Portfolio
ANZ is proposing to issue its first Green Bond ANZ’s Green Asset Portfolio Portfolio Composition1 Project Class Country By Asset Class Bald Hills Wind Farm Wind Australia Solar Collgar Wind Farm Wind Australia 2% Mumbida Wind Farm Wind Australia Taralga Wind Farm Wind Australia Wonthaggi Wind Farm W
Slide 7: Asset pool, disclosure and non-contamination
ANZ is proposing to issue its first Green Bond Asset Pool • Future assets will be added and verified for eligibility as new business is written and/or CBI criteria is released for other potential classes (expected for geothermal and transport assets) Disclosure • Information on ANZ’s Eligible Asset
Slide 8: EY Assurance Statement
EY Assurance Statement Climate Bond Certified —_ EY po ae Independent Reasonable Assurance Report to the Directors and Management of ANZ Scope We nave performed a roasonablo acturance ‘engagement in relation to ANZ'S 2078 Green Bond Jesuance in oder to prowde en opinion as to where the {ubjoct ator
Slide 9: Climate Bond Standards Certification
Climate Bond Standards Certification 9
Slide 10: ANZ Overview
ANZ Green Bonds Investor Presentation ANZ Overview
Slide 11: Super Regional Strategy, CEO Priorities FY14-16
SUPER REGIONAL STRATEGY PROFITABLE STRONG CORE ENTERPRISE ASIAN MARKETS APPROACH GROWTH STRONG LIQUIDITY AND CAPITAL MANAGEMENT DISCIPLINED AND EXPERIENCED MANAGEMENT CEO PRIORITIES FY14-16 Improving Diversifying Improving Improving customer revenue productivity returns experience 11
Slide 12: ANZ Operating Structure
ANZ Operating Structure Operating Divisions 1H15 Operating Income Mix by Division Australia New Zealand IIB Wealth Australia Division 8% • Retail Banking • Corporate & Commercial Banking 42% 37% New Zealand Division • Retail Banking • Commercial & Agri Banking 13% International & Institutional Banki
Slide 13: Income and profit contribution by division and geography
Income and profit contribution by division and geography Operating Income by Division Net Profit after Tax by Division $m $m 4,000 12,000 7% 3,500 6% 8% 10,000 8% 10% 8% 3,000 6% 8% 8% 36% 37% 8% 38% 8,000 2,500 38% 36% 38% 35% 37% 37% 36% 2,000 6,000 15% 14% 15% 13% 12% 14% 12% 13% 13% 13% 1,500 4,
Slide 14: Loans and deposits by division and geography – 1H15
Loans and deposits by division and geography – 1H15 Customer Lending1 by Division Customer Deposits by Division New Zealand IIB 17% IIB 46% New 28% Zealand 14% Australia Australia Global Wealth 37% Global 53% 1% Wealth 4% Customer Lending1 by Geography Customer Deposits by Geography APEA APEA 16% AP
Slide 15: Total Credit Exposure (EAD) by Geography
Total Credit Exposure (EAD) by Geography Exposure at Default1 by Geography Exposure at Default by Line of Business2 Total Exposure at Default (Mar 15) - $869b1 Australia New Zealand APEA 16% $515.8b $149.5b $204.1b 29% 31% 22% UK & Europe New Zealand 4% 94% 17% Americas 4% Pacific 1% Australia APEA
Slide 16: IIB – Asia
IIB – Asia IIB 1H15 profit by region Revenue growth in higher ROE businesses3 A$m, % growth PCP USD m 24% 143 148 126 18% (4)% 20% 167% (33)% 688 25% 149 177 178 25% 596 8% 59 64 9% 52 Higher 43% 257 330 334 48% ROE 95 80 1H13 1H14 1H15 Aus / NZ Asia EMEA Pacific Markets Cash Global Loans Trade Asse
Slide 17: Digital investment – delivering results
Digital investment – delivering results Australia ANZ Smart Choice Online rollover 1486 Sales numbers Transaction numbers via 1600 4,000 innovation via Digital1 (%) Digital2 (%) 1400 3,500 released 1200 3,000 14.4% 73.9% 1000 775 3,404 2,500 70.4% 800 2,000 9.5% 600 1,500 400 1,619 1,000 200 500 0 4
Slide 18: 1H15 Result Overview
ANZ Green Bonds Investor Presentation 1H15 Result Overview
Slide 19: 1H15 result overview
1H15 result overview Group 1H15 1H14 PCP AUDm AUDm % / bps Net interest income 7,138 6,764 6% Other operating income 3,047 2,904 5% Operating income 10,185 9,668 5% Expenses (4,593) (4,286) 7% PBP 5,592 5,382 4% Impairment charge (510) (528) (3%) Tax and non-controlling interests (1,406) (1,339) 5%
Slide 20: 1H15 result overview: Australia
1H15 result overview Australia 1H15 PCP Drivers & outcomes AUDm % / bps Net interest income 3,670 7% • Maintained margins in a competitive Other operating income 571 3% environment Operating income 4,241 6% • Invested in frontline, digital & NSW Expenses (1,556) 5% PBP 2,685 6% • Small business lend
Slide 21: 1H15 result overview: New Zealand
1H15 result overview New Zealand 1H15 PCP Drivers & outcomes NZDm % / bps Net interest income 1,241 6% • PBP up 6% in Retail & up 9% in Other operating income 196 1% Commercial Operating income 1,437 6% Expenses (576) 2% • Winning customers: #1 Mkt position & PBP 861 8% growing mortgage & cards shar
Slide 22: 1H15 result overview: International & Institutional Banking
1H15 result overview International & Institutional Banking 1H15 PCP Drivers & outcomes AUDm % / bps Net interest income 2,027 2% • 49% of markets income from APEA; Other operating income 1,759 8% driving IIB Asia growth of ~15% Operating income 3,786 5% Expenses (1,771) 9% • APEA represents over hal
Slide 23: 1H15 result overview: Global Wealth
1H15 result overview Global Wealth 1H15 PCP Drivers & outcomes AUDm % / bps Net interest income 88 10% Wealth customers2 Other operating income 97 (19%) m Net funds management & insurance income 665 10% 11% 2.1 Operating income 1.9 850 5% 1.6 Expenses (489) 1% PBP 361 12% Sep 13 Mar 14 Mar 15 Impai
Slide 24: Challenges and areas to improve
Challenges and areas to improve Challenges/Areas to Drivers & outcomes improve • Expenses • +4% (ex FX) front running investment • Targeting ~3% FY15 • Global liquidity squeezing loan margins, • Building deposits faster deferring benefit of Institutional cash build • Lifting cross-sell & key ‘corrid
Slide 25: Treasury
ANZ Green Bonds Investor Presentation Tr e a s u r y
Slide 26: Regulatory capital
Regulatory capital Capital Update Basel 3 Common Equity Tier 1 (CET1) • 1H15 organic capital generation1 of 59 bps modestly above 12.7% recent first half performance. APRA Common Equity Tier 1 12.2% 12.4% ratio 8.7%. Target range for CET1 ratio remains around 9% on an APRA basis. 8.8% 8.3% 8.7% • In
Slide 27: Internationally Comparable regulatory capital position
Internationally Comparable regulatory capital position Total CET1 Tier 1 Capital APRA 8.7% 10.6% 12.6% APRA requires 100% deduction from CET1 vs. 10% / 15% allowance for Basel framework which allows concessional 0.9% 0.9% 0.8% equity investments and DTA threshold prior to deduction APRA requires use
Slide 28: ANZ's CET1 ratio compares favourably to global peers
ANZ’s CET1 ratio compares favourably to global peers adjusting for regional methodology differences Canada UK Singapore Europe +270bps +60bps +70bps +30bps 12.4% 12.5% 12.1% 11.5% 11.9% 11.6% 10.9% 11.4% 9.8% 8.7% UK Peer Average2 ANZ (Europe Singapore Peer (Internationally ANZ (UK basis) ANZ (APRA)
Slide 29: CET1 ratio, dividend timing and regulatory capital generation
Common Equity Tier 1 ratio, dividend timing and regulatory capital generation APRA Basel III CET1 Ratio Common Equity Tier 1 generation (bps) 9.0% First half average 1H15 1H12 – 8.5% 1H14 Cash profit 102 102 8.0% RWA growth (29) (22) 7.5% Capital deductions (18) (21) Net capital generation 55 59 7.0
Slide 30: Stable balance sheet composition – March 2015
Stable balance sheet composition – March 2015 $738bn $738bn Other ST Liabilities 4% Structural funding Short Liquids 17% position has ST Funding 8% Term remained stable with 29% Term Funding 30% growth in short-term ∆+3% <12M 4% ∆+3% funding invested in Other Short Term Assets Other Customer liquids
Slide 31: Term wholesale funding portfolio
Term wholesale funding portfolio Term Funding Profile Issuance1 $bn Maturities Annual 26 indicative 24 24 24 23 issuance 21 volume 16 16 11 12 10 10 7 FY10 FY11 FY12 FY13 FY14 1H15 2H15 FY16 FY17 FY18 FY19 FY20 FY21+ Senior Unsecured Covered Bonds Tier 2 Portfolio by Type Portfolio by Currency 1% 9%
Slide 32: Liquidity management successfully transitioned to LCR
Liquidity management successfully transitioned to LCR Date Sep 14 Mar 15 LCR 111% 119% LCR Surplus $15bn $28bn $b 173 17 150 145 17 135 49 24 19 49 3 3 116 121 104 81 Liquid Net Cash Liquid Net Cash Assets 1 Outflows 3 Assets 1, 2 Outflows 3 HQLA 1 Internal RMBS Customer deposits and other4 HQLA 2 O
Slide 33: Regulatory landscape
Regulatory landscape Status ANZ’s position • APRA draft standard Sep 2014 Leverage ratio 4.5-5.5% at 1H15 Leverage ratio depending on final calibration • No minimum currently specified, BCBS 3% • APRA draft Level 3 standards Aug 2014 No material impact expected based Level 3 capital on current draft
Slide 34: Credit Quality
ANZ Green Bonds Investor Presentation Credit Quality
Slide 35: Credit quality – Group overview
Credit quality – Group overview 1H15 2H14 1H14 Credit impairment charge % average GLA (Group) 0.19% 0.17% 0.21% Individual provisions % gross impaired assets (Group) 41.1% 40.7% 40.6% Collective provisions % credit RWA (Group) 0.86% 0.89% 0.93% Gross impaired assets % GLA (Group) 0.48% 0.55% 0.70% N
Slide 36: Impaired Assets
Impaired Assets Control list New impaired assets by division $m Index Sep 09 = 100 2,000 1,716 120 1,800 1,571 1,541 1,600 1,327 100 1,400 1,197 1,200 80 1,000 800 60 600 40 400 200 20 0 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 1H13 2H13 1H14 2H14 1H15 Control List by Limits Control List by No of G
Slide 37: Provision Charge
Provision Charge Provision charge Individual provision charge composition $m $m 700 599 598 510 1,500 528 461 1,250 572 602 500 595 542 1,000 455 300 0.27% 0.24% 0.24% 750 0.20% 0.17% 500 100 250 -100 0 1H13 2H13 1H14 2H14 1H15 -250 Individual Provision (IP) Charge -500 Collective Provision (CP) Cha
Slide 38: Collective Provision
Collective Provision CP Balance Growth CP coverage $b The collective provision balance increased by $157m in 340 the first half of FY15, to $2,914m, predominantly driven 305 309 275 288 by: • Foreign exchange, particularly the depreciation of the 1.01% 1.00% AUD against the USD and against the NZD,
Slide 39: Historical Loss
Historical Loss Group regulatory expected loss Historical observed loss rates bps bps % EAD 250 IP Loss Rate (LHS) 120 Corporate Gearing lagged 15 months (RHS) 100 200 80 150 60 75 69 61 62 100 54 40 50 20 0 0 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Sep 90 Sep 94 Sep 98 Sep 02 Sep 06 Sep 10 Sep 14 Corpor
Slide 40: Portfolio composition
Portfolio composition Exposure at default (EAD) % of Portfolio % of Group Portfolio Balance as a % of Group total Category EAD in Non in Non Performing Performing ANZ Group Mar 14 Mar 15 Mar 14 Mar 15 Mar 15 Total Group EAD (Mar 15) Consumer Lending 40.3% 38.2% 0.2% 0.2% $608m Finance, Investment &
Slide 41: Australia Division
Australia Division Australia Home Loans 90+ day delinquencies Australia Division credit exposure (EAD) by state1 1% 0% Mar 12 Mar 13 Mar 14 Mar 15 Home Loans 1.0% 6% 0.8% Corporate and Commercial 0.6% Consumer Cards 24% 0.4% Personal Loans 69% 0.2% Other 0.0% VIC NSW QLD WA Portfolio & ACT Australia
Slide 42: Australia Home Loans portfolio
Australia Home Loans portfolio Portfolio statistics1 Dynamic loan to value ratio5 % of Portfolio Statistics 1H15 FY14 1H14 50% Sep 12 45% Mar 13 Total Number of Home Loan 934k 919k 903k 40% Sep 13 Accounts 35% Mar 14 Total Home Loans FUM $218b $209b $202b Sep 14 30% Mar 15 25% % of Total Australia G
Slide 43: New Zealand mortgages portfolio
New Zealand mortgages portfolio Portfolio statistics Dynamic loan to value ratio % of Portfolio Statistics 1H15 FY14 1H14 60% Mar 14 Total Number of Mortgage 494k 488k 484k 50% Accounts Sep 14 Total Mortgage FUM (NZD) $64b $62b $61b 40% Mar 15 % of Total New Zealand 59% 58% 59% Lending 30% LVR >90%
Slide 44: New Zealand
New Zealand NZ Geography net impaired assets NZ Geography total provision charge NZDm NZDm 200 105 Net Impaired Assets NIA as % GLA (RHS) 85 1,685 103 150 99 100 44 22 30 50 (39) 31 0 1,307 -50 1,169 -100 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 991 IP Charge CP Charge 1.74% 883 NZ Division 90+
Slide 45: Resources Portfolio
Resources Portfolio Resources exposure credit quality by Resources exposure by sector (% EAD) geography (EAD) Total EAD (Mar 15) As a % of Group EAD EA & Other AUS ($b) NZ ($b) ASIA ($b) ($b) $19.5b 2.2% 9.8 0.9 4.3 4.5 9% 24% 22% 42% Oil & Gas 49% 39% 91% 76% 78% 23% 51% Metal Ore Mining 23% AUS NZ
Slide 46: Agri portfolio
Agri portfolio Agriculture exposure by sector (% EAD) New Zealand Agri credit quality Total EAD (Mar 15) As a % of Group EAD NZ$ b $34.0b 3.9% 21 Dairy 19 14% 18 17 18 18 2.11% Beef 10% 1.55% Sheep & Other Livestock 1.23% 1 40% 0.96% 0.94% 0.81% Grain/Wheat 16% Horticulture/Fruit/Other Crops Sep 10
Slide 47: Commercial property portfolio
Commercial property portfolio Commercial Property outstandings by region1 Commercial Property outstandings by sector1 $b 8.0% 26% Offices 35.5 34.4 33.9 Retail 32.0 4.6 7.5% 30.6 4.5 Residential 4.1 30% 4.1 22% Industrial 4.0 7.8 7.0% Tourism 6.1 6.9 6.9 5.4 4% Other 3% 15% 6.5% Property peer compar
Slide 48: Risk Weighted Assets
Risk Weighted Assets Total RWA Group EAD & CRWAs $b CRWA $b 891 387 growth 813 741 779 $b 692 362 30.8 361 47 1.7 Other 39.8% 38.9% 39.2% 38.0% 38.1% 56 53 16.1 Lending growth Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Exposure at Default CRWA / EAD 15.4 FX 340 CRWA movement - Mar 15 v Sep 14 -2.4 Risk $b 3
Slide 49: Key Treasury Contacts
Key Treasury Contacts Australia and New Zealand Banking Group Limited Level 9, 833 Collins Street Docklands VIC 3008 Australia Group Treasurer Head of Group Funding Rick Moscati Luke Davidson Phone : +61 (3) 8654 5404 Phone: +61 (3) 8654 5140 Mobile: + 61 (0) 412 809 814 Mobile: +61 (0) 413 019 349
Slide 50: Important notices
Important notices The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restri
Slide 51: Important notices
Important notices This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will",
Slide 52: Important notices
Important notices The certification of the ANZ Green Bond as Climate Bond by the Climate Bond Initiative is based solely on the Climate Bond Standard and does not, and is not intended to, make any representation or give any assurance with respect to any other matter relating to the ANZ Green Bond or
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