Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (September 2022)
104 slides from Anz's debt investor presentation, September 2022
Slide 1: European Covered Bond Conference
EUROPEAN COVERED BOND CONFERENCE SEPTEMBER 2022 Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia ABN 11 005 357 522 Not for distribution into the United States
Slide 2: Contents
2022 Half Year Results 6 2022 Half Year Results Financial Overview 12 Acquisition of Suncorp Bank 20 Environment, Social & Governance (ESG) and Corporate Overview 24 Divisional Performance 34 Treasury 38 CONTENTS Risk Management 50 Australia Housing Portfolio 61 ANZ Cover Pool 73 New Zealand Housing
Slide 3: Disclaimer and Important Notice
European Covered Bond Conference 2022 DISCLAIMER AND IMPORTANT NOTICE Background information only The information set out in this document and any accompanying verbal presentation including any question and answer session and any documents or other materials distributed with the presentation (togeth
Slide 4: Disclaimer and Important Notice
European Covered Bond Conference 2022 DISCLAIMER AND IMPORTANT NOTICE European Economic Area: This document is not directed at, and no Securities will be offered, sold or otherwise made available to, any retail investor in the European Economic Area (the "EEA"). For these purposes, a "retail investo
Slide 5: Disclaimer and Important Notice
European Covered Bond Conference 2022 DISCLAIMER AND IMPORTANT NOTICE Document subject to change The information contained in this document is provided as at the date of this document and is subject to change without notice. Neither the Bank, nor any of its affiliates, agents, employees or advisors
Slide 6: 2022 Half Year Results
2022 HALF YEAR RESULTS DEBT INVESTOR UPDATE
Slide 7: Financial Performance Overview
European Covered Bond Conference 2022 FINANCIAL PERFORMANCE OVERVIEW 1H22 vs 2H21 vs 1H21 Statutory Profit ($m) 3,530 +10% +20% Cash Profit (continuing operations)1 ($m) 3,113 -3% +4% Return on Equity (%) 10.0 -18bps +33bps Earnings Per Share - Basic (cents) 110.8 -2% +5% Dividend Per Share 100% ful
Slide 8: Continued to Simplify the Bank, Resulting in Lower Run Costs
European Covered Bond Conference 2022 CONTINUED TO SIMPLIFY THE BANK, RESULTING IN LOWER RUN COSTS TOTAL EXPENSES ($b) 8.8 8.6 8.6 0.6 PRODUCTIVITY FOCUS 0.9 1.3 More digital customer sales Increased self service 4.5 4.6 Higher STP2 rates 8.2 0.8 0.9 7.7 7.3 Increased use of Cloud 3.7 3.7 Property r
Slide 9: Investment Directed to Future Growth Opportunities
European Covered Bond Conference 2022 INVESTMENT DIRECTED TO FUTURE GROWTH OPPORTUNITIES TOTAL INVESTMENT SPEND ($m) 1,043 5% INVESTMENT EXAMPLES • New retail platform ANZ Plus 46% 663 • Sustainable financing capabilities 12% • New Retail FX proposition 53% • Migration of apps to Cloud 49% • Single
Slide 10: Improved Australia Home Loan Performance
European Covered Bond Conference 2022 IMPROVED AUSTRALIA HOME LOAN PERFORMANCE HOME LOAN GROSS LOANS & ADVANCES1 ($b) MEDIAN TIME TO FIRST DECISION2 275 281 278 278 269 265 264 3 days 7 days Simple applications Complex applications AUTO CREDIT PROCESSING DECISIONED CAPACITY 77% +30% ANZ branch appli
Slide 11: Intention to Implement a Non-Operating Holding Company (NOHC)
European Covered Bond Conference 2022 INTENTION TO IMPLEMENT A NON-OPERATING HOLDING COMPANY (NOHC) • Intention to lodge a formal application with APRA, the Federal Treasurer & other applicable regulators to establish a NOHC • Should proposed restructure proceed a new listed parent holding company w
Slide 12: 2022 Half Year Results Financial Overview
2022 HALF YEAR RESULTS FINANCIAL OVERVIEW DEBT INVESTOR UPDATE
Slide 13: Financial Performance
European Covered Bond Conference 2022 FINANCIAL PERFORMANCE CASH PROFIT (HoH) 54 $m 3,208 3% 2,990 -204 212 93 3,113 1H22 vs 2H21 -118 -34 -98 CASH PROFIT (PCP) Flat BAU costs FX adj. & excluding 4% Cashrewards 2H21 1H22 -97 -43 1H22 vs 1H21 1H21 2H21 Large / Income Markets BAU Investment Provisions
Slide 14: Group Net Interest Margin (NIM)
European Covered Bond Conference 2022 GROUP NET INTEREST MARGIN (NIM) Primarily lower UNDERLYING NIM margin fixed rate bps 165 1 home loans -6bps Sep 21 month: 159 Higher volumes and -2 4 159 1 158 1H22 vs 2H21 -6 Mar 22 modest rate -2 month: benefits -3 158 NZ Home Loans (-3) Wholesale funding (+1)
Slide 15: NIM Considerations
European Covered Bond Conference 2022 NIM CONSIDERATIONS POSITIVES NEGATIVES Higher earnings on capital and replicated Competitive pressures Near term deposit portfolio from rising interest rates Flexibility in a rising rate environment Impact of higher swap rates on fixed rate mortgages (lag impact
Slide 16: Capital & Replicated Deposit Portfolio
European Covered Bond Conference 2022 CAPITAL & REPLICATED DEPOSIT PORTFOLIO SENSITIVITY OF NII ON CAPITAL AND REPLICATING PORTFOLIO BASED ON ANZ RESEARCH FORECAST1, 2, 3 MAR 2022 PORTFOLIO ($b) ILLUSTRATIVE IMPACT TO NET INTEREST INCOME RELATIVE TO 12 MONTHS ENDING MARCH 20221, 2, 3 142 PROSPECTIVE
Slide 17: Sustainability-Led Value Creation in Institutional
European Covered Bond Conference 2022 SUSTAINABILITY-LED VALUE CREATION IN INSTITUTIONAL A MAJOR REPONSIBILITY A MAJOR OPPORTUNITY ANZ DIFFERENTIATION 1st Corporate Emerging Investors Depth and breadth of Institutional customers seeking 1 Australian bank to join the Net- client relationships transit
Slide 18: Balance Sheet Composition
European Covered Bond Conference 2022 BALANCE SHEET COMPOSITION EXPOSURE AT DEFAULT1 RISK WEIGHTED ASSETS NET LOANS & ADVANCES CUSTOMER DEPOSITS EOP $b EOP $b EOP $b EOP $b 1,103 438 651 611 1,080 630 1% 594 1% 1,045 416 2% 614 8% 408 0% 562 1% 7% 2% 0% 6% 2% 1% 16% 16% 20% 16% 14% 17% 20% 13% 14% 1
Slide 19: Large / Notable Items
European Covered Bond Conference 2022 LARGE / NOTABLE ITEMS CUSTOMER REMEDIATION LARGE / NOTABLE ITEMS Continuing Operations Pre-Tax $m $m 1H21 2H21 1H22 485 Cash Profit (763) (97) (43) 119 Divestments incl. Gain / (Loss) on sale (184) 32 247 352 29 $853m provisions Customer remediation (108) (113)
Slide 20: Acquisition of Suncorp Bank
EUROPEAN COVERED BOND CONFERENCE ACQUISITION OF SUNCORP BANK DEBT INVESTOR UPDATE
Slide 21: Acquiring a Strong Customer Franchise in a High Growth State
European Covered Bond Conference 2022 ACQUIRING A STRONG CUSTOMER FRANCHISE IN A HIGH GROWTH STATE • ANZ is currently under-represented in Queensland a growth State of economic importance, the fastest growing domestic economy over the past two decades1 Targeting − 2020-212 and is expected to strengt
Slide 22: Provides Increased Scale and Diversification
European Covered Bond Conference 2022 PROVIDES INCREASED SCALE AND DIVERSIFICATION HOUSING LENDING HOUSEHOLD DEPOSITS (A$bn) (A$bn) 517 350 430 259 307 289 188 261 170 157 Peer 1 Peer 2 Peer 3 Peer 1 Peer 2 Peer 3 BUSINESS LENDING1 BUSINESS DEPOSITS2 (A$bn) (A$bn) 203 230 181 191 140 174 138 126 156
Slide 23: Proposed Operating Model Is Robust, Focused on Long-Term Growth & Continuity
European Covered Bond Conference 2022 PROPOSED OPERATING MODEL IS ROBUST, FOCUSED ON LONG-TERM GROWTH & CONTINUITY Pre-Completion Solidifying Growth Migration and Transformation Timeframe ~ 12 months ~ 3 years Beyond • Joint integration planning and • Transitional Service Agreement for a 2-3 year pe
Slide 24: Environment, Social & Governance (ESG) & Corporate Overview
EUROPEAN COVERED BOND CONFERENCE ENVIRONMENT, SOCIAL & GOVERNANCE (ESG) & CORPORATE OVERVIEW DEBT INVESTOR UPDATE
Slide 25: Our ESG Related Disclosures
European Covered Bond Conference 2022 OUR ESG RELATED DISCLOSURES ESG Supplement ESG Briefing Climate Change Disclosures Climate change Annual event ESG information commitment and to brief & progress climate related investors on against our ESG financial ESG matters targets disclosures https://www.a
Slide 26: ESG Governance Overview
European Covered Bond Conference 2022 ESG GOVERNANCE OVERVIEW BOARD OF DIRECTORS Paul O'Sullivan, Chairman AUDIT RISK ETHICS, ENVIRONMENT, DIGITAL BUSINESS HUMAN NOMINATION AND COMMITTEE COMMITTEE SOCIAL AND GOVERNANCE AND TECHNOLOGY RESOURCES BOARD OPERATIONS (EESG) COMMITTEE COMMITTEE COMMITTEE CO
Slide 27: Snapshot of Half Year ESG Target Performance
European Covered Bond Conference 2022 SNAPSHOT OF HALF YEAR ESG TARGET PERFORMANCE ESG target Progress Relevant SDGs ENVIRONMENTAL SUSTAINABILITY Fund and facilitate at least AU$50 billion by 2025 towards sustainable solutions for our customers, Since October 2019, we have funded and facilitated AU$
Slide 28: ESG Performance Trends
European Covered Bond Conference 2022 ESG PERFORMANCE TRENDS COMMUNITY INVESTMENT1 MONEYMINDED & SAVER PLUS SUSTAINABLE FINANCE $50b TARGET3 Total community investment ($m) Estimated # of people reached Funded and facilitated ($b) Annual contributions towards Annual contributions towards new 2025 $5
Slide 29: Our Approach to Climate Change
European Covered Bond Conference 2022 OUR APPROACH TO CLIMATE CHANGE COMMITTED TO PLAYING OUR PART & SUPPORTING OUR CUSTOMERS IN TRANSITION TO NET-ZERO EMISSIONS BY 2050 • The most important role we can play in enabling a transition to net- s, while also helping them tap into the significant opportu
Slide 30: Our Resources Portfolio
European Covered Bond Conference 2022 OUR RESOURCES PORTFOLIO RESOURCES PORTFOLIO (EAD1 $b) 20.0 1.7 THERMAL COAL MINING (EAD1 $b) 0.6 17.3 17.0 1.3 16.2 0.8 0.5 2.0 15.3 0.7 0.8 1.2 1.0 0.9 2.9 0.4 0.7 1.5 14.0 0.7 13.8 1.1 1.5 1.2 0.8 0.9 13.0 0.4 0.3 0.5 1.7 0.4 0.7 1.0 1.0 1.2 0.6 1.2 1.0 4.9 1.
Slide 31: How We Measure and Communicate
European Covered Bond Conference 2022 HOW WE MEASURE AND COMMUNICATE EXTERNAL REPORT CARD REPUTATION INDICATORS 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 ar
Slide 32: Customer Engagement to Support Emissions Reductions
European Covered Bond Conference 2022 CUSTOMER ENGAGEMENT TO SUPPORT EMISSIONS REDUCTIONS 100 OF OUR LARGEST EMITTING BUSINESS CUSTOMERS • Engaging with 100 of our largest emitting business customers, supporting them to establish or strengthen transition plans • These customers produced >150 million
Slide 33: Helping Improve the Environmental Sustainability of Customers
European Covered Bond Conference 2022 HELPING IMPROVE THE ENVIRONMENTAL SUSTAINABILITY OF CUSTOMERS Target to fund and facilitate at least A$50 billion by 2025 towards helping our customers improve environmental sustainability, increase access to affordable housing and promote financial wellbeing 1H
Slide 34: Divisional Performance
EUROPEAN COVERED BOND CONFERENCE DIVISIONAL PERFORMANCE DEBT INVESTOR UPDATE
Slide 35: Australia Retail & Commercial Financial Performance
European Covered Bond Conference 2022 AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM NII/OOI Contribution ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) 4,553 4,607 4,319 1,857 1,918 1
Slide 36: New Zealand Division Financial Performance
European Covered Bond Conference 2022 NEW ZEALAND DIVISION FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 (NZDb) & NIM NII/OOI Contribution (NZDm) Expenses (NZDm) Total Provision Charge (NZDm) Cash Profit (NZDm) 131 135 139 1,819 1,854 734 71
Slide 37: Institutional Financial Performance
European Covered Bond Conference 2022 INSTITUTIONAL FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM Product Composition3 ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) 2,478 2,432 2,387 175 18 14 14 1,210 969 158 1,
Slide 38: Treasury
EUROPEAN COVERED BOND CONFERENCE TREASURY DEBT INVESTOR UPDATE
Slide 39: Regulatory Capital
European Covered Bond Conference 2022 REGULATORY CAPITAL CAPITAL UPDATE APRA LEVEL 2 COMMON EQUITY TIER 1 (CET1) RATIO (%) ● Level 2 CET1 ratio of 11.5% and 18.0% on an Internationally Comparable basis1, above 0.76 2. CET1 reduction in the half mainly driven by: 12.34 -0.33 o Higher underlying CRWA
Slide 40: Regulatory Capital
European Covered Bond Conference 2022 REGULATORY CAPITAL Key Capital Ratios (%) Mar 21 Sep 21 Mar 22 RISK WEIGHTED ASSETS ($b) Level 2 CET1 capital ratio 12.4 12.3 11.5 Total Credit RWA increase $6.3b 15.9 437.9 15.3 Level 2 CET1 HoH mvmt 110 bps -10 bps -81 bps 416.1 -3.4 412.0 -1.5 -0.4 Additional
Slide 41: Internationally Comparable Regulatory Capital Position
European Covered Bond Conference 2022 INTERNATIONALLY COMPARABLE1 REGULATORY CAPITAL POSITION LEVEL 2 CAPITAL RATIO (APRA VS INTERNATIONALLY COMPARABLE)2 (%) 25.7 26.3 24.9 5.2 5.4 4.6 18.3 2.4 18.4 2.5 16.6 2.3 4.0 4.1 3.4 1.9 2.0 1.7 18.1 18.3 18.0 12.4 12.3 11.5 APRA Mar 21 Int. Comparable APRA S
Slide 42: CET1 and Leverage in a Global Context
European Covered Bond Conference 2022 CET1 AND LEVERAGE IN A GLOBAL CONTEXT CET1 RATIOS1,2 LEVERAGE1,2,3 0% 5% 10% 15% 20% 25% 0% 1% 2% 3% 4% 5% 6% 7% 8% SEB OCBC Svenska Handelsbanken BBVA Swedbank Nordea UOB Natwest Rabobank Danske Bank Intesa Sanpaolo Credit Agricole Group DBS ANZ Rabobank Raiffe
Slide 43: Balance Sheet Structure
European Covered Bond Conference 2022 BALANCE SHEET STRUCTURE1 NSFR MOVEMENT (%) Pro forma NSFR is ~119% once RSF benefit associated with TFF and CLF2 is removed BALANCE SHEET COMPOSITION (Mar-22) 4.2 123.8 0.4 0.1 123.1 -4.6 Short Term Wholesale Debt & -0.5 -0.3 Other Funding9 Liquid and Other Asse
Slide 44: Liquidity Coverage Ratio (LCR) Summary
European Covered Bond Conference 2022 LIQUIDITY COVERAGE RATIO (LCR) SUMMARY1 MOVEMENT IN AVERAGE LCR SURPLUS2 ($b) LCR COMPOSITION (AVERAGE 1H22, $b) 2H21 1H22 241 Avg LCR 136% Avg LCR 132% Internal RMBS 14 Other ALA5 HQLA2 -2 60 58 -1 -11 -1 -1 183 Wholesale funding HQLA1 Customer deposits & other
Slide 45: Term Wholesale Funding Portfolio
European Covered Bond Conference 2022 TERM WHOLESALE FUNDING PORTFOLIO1 ISSUANCE ($b) MATURITIES ($b) 32 31 27 24 25 22 22 17 12 11 6 7 8 4 FY16 FY17 FY18 FY19 FY20 FY21 1H22 2H22 FY23 FY24 FY25 FY26 FY27 FY28+ Senior Unsecured Covered Bonds Tier 2 RMBS TFF NZ FLP / TLF PORTFOLIO PORTFOLIO BY CURREN
Slide 46: Tier 2 Capital Increase to Meet TLAC Requirement
European Covered Bond Conference 2022 1 TIER 2 CAPITAL (NOTIONAL AMOUNT) INCREASE TO MEET TLAC REQUIREMENT • ANZ BGL issued $11.4b since July 2019 across AUD, EUR, GBP, and USD 6% USD • Future T2 issuance needs expected to be approximately $5b per annum 8% 2% 28% AUD Domestic • APRA announced a fina
Slide 47: Capital & Replicating Deposits Portfolio
European Covered Bond Conference 2022 CAPITAL & REPLICATING DEPOSITS PORTFOLIO AUSTRALIA (%) PORTFOLIO EARNINGS RATE (AVERAGE %) Portfolio Earnings Rate is a combination 5 year AUD Swap 2.5 of term swap rates (hedged component) Rate increased Australia New Zealand & 3mth BBSW (unhedged) ~160bps over
Slide 48: Basel III CET1 Reforms and TLAC Finalisation
European Covered Bond Conference 2022 BASEL III CET1 REFORMS AND TLAC FINALISATION APRA CET1 REFORMS UPDATED MINIMUM CAPITAL REQUIREMENTS (%) • Revisions to capital framework finalised in November 2021 18.25% • Implementation on 1 January 2023 • The reforms will result in changes to the calculation
Slide 49: Capital & Liquidity Framework
European Covered Bond Conference 2022 CAPITAL & LIQUIDITY FRAMEWORK1 First Half CY2022 Second Half CY2022 CY2023 Implementation Date RBNZ Capital Framework Transition 2028 Leverage Ratio 2023 Standardised Approach to Credit Risk 2023 Internal Ratings-based Approach to Credit Risk 2023 Operational Ri
Slide 50: Risk Management
EUROPEAN COVERED BOND CONFERENCE RISK MANAGEMENT DEBT INVESTOR UPDATE
Slide 51: Long Run Provisions & Loss Rates
European Covered Bond Conference 2022 LONG RUN PROVISIONS & LOSS RATES TOTAL CREDIT IMPAIRMENT CHARGE ($m) 1,800 1,500 1,200 900 600 300 0 -300 -600 -900 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22 C
Slide 52: Individual Provision (IP) Charge
European Covered Bond Conference 2022 INDIVIDUAL PROVISION (IP) CHARGE IP CHARGE ($m) IP CHARGE BY DIVISION ($m) 626 626 1 430 398 343 395 380 398 272 430 343 380 3 395 807 187 31 592 28 15 5 7 0 6 612 594 500 69 35 40 49 532 34 87 35 62 375 266 247 187 116 122 158 175 375 350 355 3 93 93 80 103 54
Slide 53: Collective Provision (CP) Balance & Charge
European Covered Bond Conference 2022 COLLECTIVE PROVISION (CP) BALANCE & CHARGE CP CHARGE ($m) CP BALANCE BY CATEGORY ($m) 1.39% 1.25% 1.22% 1H19 2H19 1H20 2H20 1H21 2H21 1H22 1.17% 1.08% 0.98% 0.94% 5,008 CP charge 13 4 1,048 669 -678 -145 -371 4,501 696 11 4,285 4,195 Volume/Mix -28 -51 0 46 -199
Slide 54: Collective Provision (CP) Balance
European Covered Bond Conference 2022 COLLECTIVE PROVISION (CP) BALANCE CP BALANCE BY DIVISION ($b) PROVISION BALANCE BY STAGE ($b) Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21 Mar 22 31 Mar 21 31 Mar 22 Australia R&C 1.83 1.80 2.32 2.85 2.33 2.23 1.89 3.0 3.0 Institutional 1.13 1.17 1.59 1.51 1.36 1.3
Slide 55: Expected Credit Loss Economic Scenarios: Modelled Outcomes
European Covered Bond Conference 2022 EXPECTED CREDIT LOSS ECONOMIC SCENARIOS: MODELLED OUTCOMES (COLLECTIVE PROVISION BALANCE SCENARIOS)¹ MAR 22 ($m) Weightings to scenarios to determine CP balance ECONOMIC SCENARIOS BASE CASE 2 5% 40% 45% 10% 31 March 22 CY2019A CY2020A CY2021A CY2022F CY2023F 4,8
Slide 56: Impaired Assets
European Covered Bond Conference 2022 IMPAIRED ASSETS CONTROL LIST (INDEX SEP-16 =100) NEW IMPAIRED ASSETS BY DIVISION ($m) 150 2,000 1,570 1,500 100 1,121 963 890 1,000 611 639 50 500 0 0 Sep Sep Sep Sep Sep Sep Mar Mar 18 Mar 19 Mar 20 Mar 21 Sep 21 Mar 22 16 17 18 19 20 21 22 Control List by Limi
Slide 57: Total Portfolio Composition
European Covered Bond Conference 2022 TOTAL PORTFOLIO COMPOSITION EXPOSURE AT DEFAULT (EAD) DISTRIBUTION % of Impaired Assets Impaired Assets Category % of Group EAD 1 to EAD 1 Balance 2 Mar 21 Sep 21 Mar 22 Mar 21 Sep 21 Mar 22 Mar 22 4.0% 1.4% Consumer Lending 41.1% 40.1% 39.3% 0.1% 0.1% 0.1% $378
Slide 58: Commercial Property Segments of Interest
European Covered Bond Conference 2022 COMMERCIAL PROPERTY SEGMENTS OF INTEREST OUTSTANDINGS BY REGION (GLA $b) OUTSTANDINGS BY SECTOR (%) 7.3% 7.4% 7.3% 6.9% 7.0% 6.3% 5% 6% 9% 7% 7% 6% 3% 3% 2% 2% 2% 2% 46.8 47.7 46.5 18% 18% 19% 45.2 2.1 22% 21% 20% 2.4 2.2 42.4 2.1 2.8 11.0 37.6 11.4 10.9 10.4 28
Slide 59: ANZ Institutional Portfolio
European Covered Bond Conference 2022 ANZ INSTITUTIONAL PORTFOLIO SIZE & TENOR BY MARKET OF INCORPORATION ($b) INDUSTRY COMPOSITION EAD Mar 221 Finance 15% 472 Government Administration & Defence 32% Property & Business Services 450 3% 3% Services To Finance & Insurance 400 5% A$472b¹ Manufacturing
Slide 60: ANZ Asian Institutional Portfolio (Market of Incorporation)
European Covered Bond Conference 2022 ANZ ASIAN INSTITUTIONAL PORTFOLIO (MARKET OF INCORPORATION) MARKET OF INCORPORATION ANZ ASIA INDUSTRY COMPOSITION Finance 23% 8% Manufacturing 11% 3% 3% Wholesale Trade China South Korea 3% 2% Services to Finance & Insurance Japan India A$117b¹ 6% 6% Property &
Slide 61: Australia Housing Portfolio
EUROPEAN COVERED BOND CONFERENCE AUSTRALIA HOUSING PORTFOLIO DEBT INVESTOR UPDATE
Slide 62: Australia Home Loans Portfolio Overview
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS PORTFOLIO OVERVIEW Unless otherwise stated metrics are based on balances Portfolio1 Flow2 Portfolio1 1H20 1H21 1H22 1H21 1H22 1H20 1H21 1H22 Number of Home Loan accounts 971k 1,019k 984k 92k3 82k3 Average LVR at Origination9,10,11 68% 71% 70
Slide 63: Australia Home Loans Portfolio Composition
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS PORTFOLIO COMPOSITION HOME LOAN FLOWS (GROSS LOANS & ADVANCES1 $b) LOAN BALANCE & LENDING FLOWS1 ($b) 13 11 52 14 12 9 9 6 7 7 7 0 281 -4 8 4 278 7 8 1 7 3 2 8 7 -65 8 2 7 2 13 6 2 8 8 7 8 1 28 28 26 26 26 24 24 23 25 21 19 16 17 Mar 21 New
Slide 64: Australia Home Loans Portfolio Composition & Flow
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS PORTFOLIO COMPOSITION & FLOW BY PURPOSE (% OF TOTAL BALANCES) BY ORIGINATION LVR4,6 (% OF TOTAL BALANCES) Portfolio 1,2 Flow3,4 Flow3,4 2% 2% 2% 0% 30% 30% 30% 35% 19% 22% 19% 20% 21% 21% 68% 68% 68% 65% 61% 57% 60% Mar 20 Mar 21 Mar 22 1H22
Slide 65: Australia Home Loans Repayment Profile
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS REPAYMENT PROFILE HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE2 68% of accounts ahead of repayments % composition of accounts (Mar 22 vs Mar 21) 33% 30% New Accounts: 21 28 Less than 6 months old Structural: Lo
Slide 66: Australia Home Loans Dynamic Loan to Value Ratio (DLVR)
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS DYNAMIC LOAN TO VALUE RATIO (DLVR) DLVR BASED ON PORTFOLIO BALANCES 1,2,3,4 (%) DLVR BASED ON TOTAL PORTFOLIO ACCOUNTS 1,2,3,4,5 (%) 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 0-60% 61-75% 76-80% 81-90% 91-95%
Slide 67: Australia Home Loans Portfolio Performance
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS PORTFOLIO PERFORMANCE HOME LOANS 90+ DPD (BY STATE)1,2 HOME LOAN DELINQUENCIES1,2,3,4 % of Portfolio Segment Balances % of Portfolio Segment Balances 3 2.5 2 1 0 2.0 Mar Sep Mar Sep Mar Sep Mar Sep Mar 18 18 19 19 20 20 21 21 22 30+ DPD % 90
Slide 68: Product Offerings
European Covered Bond Conference 2022 PRODUCT OFFERINGS Variable Fixed Line of Credit Fixed Fixed Product Standard Variable Simplicity Plus Equity Manager (1-5 years) (7 & 10 years) Flexible line of credit Certainty of fixed interest Certainty of fixed interest A fully featured variable rate A compe
Slide 69: Channel Accreditation
European Covered Bond Conference 2022 CHANNEL ACCREDITATION STRINGENT ON-BOARDING AND MONITORING PROCESSES ENSURE HIGH-QUALITY NON PROPRIETARY CHANNELS Accreditation Monitoring • Selection involves several stages: business planning, interviews with Franchise Acquisition Manager and Regional Manager,
Slide 70: Australia Home Loans Underwriting Practices and Policy Changes
European Covered Bond Conference 2022 AUSTRALIA HOME LOANS • End-to-end home lending responsibility managed within ANZ UNDERWRITING PRACTICES AND POLICY CHANGES1 • Effective hardship & collections processes • Full recourse lending Multiple checks during origination process • ANZ assessment process a
Slide 71: Home Loans Collections Operating Model
European Covered Bond Conference 2022 HOME LOANS COLLECTIONS OPERATING MODEL oa seek a resolution to customer arrears, preserve home ownership where sustainable, and assist customers where possible to mitigate and/or avoid the detrimental implications that may occur from adverse credit behaviour • n
Slide 72: Australian Mortgage Market Structure Results in Very Low Losses
European Covered Bond Conference 2022 THE STRUCTURE OF THE AUSTRALIAN MORTGAGE MARKET HAS RESULTED IN VERY LOW LOSSES THROUGH VARIOUS CYCLES AUSTRALIAN MORTGAGE MARKET CHARACTERISTICS Full Recourse • All mortgage lending is full recourse • Most mortgage lending is in variable rate format (typically
Slide 73: ANZ Cover Pool
EUROPEAN COVERED BOND CONFERENCE ANZ COVER POOL DEBT INVESTOR UPDATE
Slide 74: ANZ Covered Bonds
European Covered Bond Conference 2022 ANZ COVERED BONDS COVER POOL SUMMARY COMPOSITION AND QUALIFYING CRITERIA WEIGHTED AVERAGE LVR PORTFOLIO SUMMARY AT 22 AUGUST 2022 62 41 Covered Bond Pool + Cash $17.9bn Covered Bonds on issue $9.8bn 21 Average loan size $328,105 12 14 10 11 11 10 Weighted Ave Cu
Slide 75: Covered Bonds Collateral Change (Since March 2019)
European Covered Bond Conference 2022 COVERED BONDS COLLATERAL CHANGE (SINCE MARCH 2019) Portfolio Summary 22-Mar-2019 22-Sep-2019 22-Mar-2020 22-Sep-2020 22-Mar-2021 22-Jul-2021 22-Mar-2022 22-Aug-2022 Cover Pool (inc. cash) $19.9bn $19.4bn $17.9bn $17.9bn $17.9bn $17.9bn $17.9bn $17.9bn Covered Bo
Slide 76: Covered Bonds on Issue as at 22 August 2022
European Covered Bond Conference 2022 COVERED BONDS ON ISSUE AS AT 22 AUGUST 2022 Covered Bonds ANZ COVERED BONDS ISSUANCE TENOR Bonds Outstanding ($A$) $9.8bn 3 yr Cover Pool (A$) $17.9bn 14% 4 yr 2% 27% Program Ratings Aaa/AAA 7 yr 10 yr Number of Issues O/s 11 12 yr Number of Currencies 2 27% 15+
Slide 77: New Zealand Housing Portfolio
EUROPEAN COVERED BOND CONFERENCE NEW ZEALAND HOUSING PORTFOLIO DEBT INVESTOR UPDATE
Slide 78: New Zealand Home Loans Portfolio Overview
European Covered Bond Conference 2022 NEW ZEALAND HOME LOANS PORTFOLIO OVERVIEW Portfolio Flow Portfolio 1H20 1H21 1H22 1H21 1H22 1H20 1H21 1H22 Number of Home Loan Accounts 531k 533k 540k 42k 31k Average LVR at Origination 57% 58% 56% Total FUM NZD88b NZD95b NZD103b NZD15b NZD14b Average Dynamic LV
Slide 79: New Zealand Home Lending & Arrears Trends
European Covered Bond Conference 2022 NEW ZEALAND LOANS HOME LENDING & ARREARS TRENDS HOME LOAN LVR PROFILE1 HOUSING FLOWS HOUSING PORTFOLIO 2% 1% 1% 2% 14% 11% 11% 3% 2% 7% 43% 45% 55% 7% 12% 86% 89% 89% 15% 12% 57% 55% 45% 19% 1H20 1H21 1H22 Mar 20 Mar 21 Mar 22 Proprietary Broker Fixed Variable H
Slide 80: Economics
EUROPEAN COVERED BOND CONFERENCE ECONOMICS DEBT INVESTOR UPDATE
Slide 81: Australian Economy Forecast Table
European Covered Bond Conference 2022 AUSTRALIAN ECONOMY FORECAST TABLE 2018 2019 2020 2021 2022F1 2023F1 Australia annual % growth GDP 2.8 1.9 -2.2 4.7 4.0 2.4 Headline CPI (% y/y) 1.9 1.6 0.8 2.9 6.4 3.8 Employment (% y/y) 2.3 2.2 -1.0 2.2 5.1 1.6 Unemployment (% Q4 avg) 5.0 5.2 6.8 4.7 3.0 3.3 Wa
Slide 82: Australian Economy - GDP
European Covered Bond Conference 2022 AUSTRALIAN ECONOMY - GDP GDP GROWTH1 GLOBAL GDP GROWTH COMPARISON2 RELATIVE TO GDP IN DECEMBER QUARTER 2019 CAPITAL EXPENDITURE INTENTIONS2 AUSTRALIAN GOVERNMENT BUDGET BALANCE1 NOMINAL % OF NOMINAL GDP 82 Sources: 1. RBA Chart Pack, September 2022 2. RBA Statem
Slide 83: Australian Economy - Income and Savings
European Covered Bond Conference 2022 AUSTRALIAN ECONOMY- INCOME AND SAVINGS CHANGE IN HOUSEHOLD INCOME1 WAGE PRICE INDEX GROWTH BY INDUSTRY2 SINCE DECEMBER QUARTER 2019 YEAR-ENDED, DECEMBER 2021 HOUSEHOLD INCOME AND CONSUMPTION3 HOUSEHOLD SAVING RATIO4 SHARE OF HOUSEHOLD DISPOSABLE INCOME 83 Source
Slide 84: Australian Economy - Inflation
European Covered Bond Conference 2022 AUSTRALIAN ECONOMY - INFLATION CONSUMER PRICE INFLATION1 QUARTERLY CPI INFLATION2 SEASONALLY ADJUSTED, WITH CONTRIBUTIONS DISTRIBUTION OF WAGES GROWTH*, 2 REAL WAGES GROWTH3 AS A SHARE OF FIRMS REPORTING WAGE DATA IN LIAISON MARCH 2022, YEAR-ENDED 84 Sources: 1.
Slide 85: Australian Labour Market
European Covered Bond Conference 2022 AUSTRALIAN LABOUR MARKET UNEMPLOYMENT AND UNDEREMPLOYMENT1 JOB VACANCIES AND ADVERTISEMENTS1 % OF LABOUR FORCE SHORT-TERM VISITOR ARRIVALS AND RESIDENT RETURNS2 EMPLOYMENT AND HOURS WORKED*, 1 MONTHLY 2008 AVERAGE=100 Inflation 85 Sources: 1. RBA Chart Pack, Sep
Slide 86: Commodities
European Covered Bond Conference 2022 COMMODITIES RBA INDEX OF COMMODITY PRICES1 RESOURCE EXPORTS1 SDR, 2020/21 AVERAGE = 100, LOG SCALE LOG SCALE, QUARTERLY BULK COMMODITY PRICES1 TERMS OF TRADE*, 1 FREE ON BOARD BASIS 2019/20 AVERAGE = 100, LOG SCALE 86 Sources: 1. RBA Chart Pack, September 2022
Slide 87: Australian Housing Dynamics
European Covered Bond Conference 2022 AUSTRALIAN HOUSING DYNAMICS HOUSING PRICE FORECASTS BY CAPITAL CITY1 HOUSE PRICE GROWTH2 6 Month Change Year on Year Change 5 Year Cumulative Change Aug 2022 All All All Houses Units Houses Units Houses Units dwellings dwellings dwellings Sydney -7.3 -8.0 -5.4 -
Slide 88: Australian Housing Dynamics
European Covered Bond Conference 2022 AUSTRALIAN HOUSING DYNAMICS PRIVATE RESIDENTIAL BUILDING APPROVALS1 NEW HOUSING LENDING2 MONTHLY % MONTHLY HOUSING FINANCE, EX RE-FINANCING First Home Owners’ Boost NSW & Victoria reduce stamp duty HOUSING LOAN COMMITMENTS3 MORTGAGE CREDIT GROWTH4 EXCLUDING REFI
Slide 89: Australian Housing Dynamics
European Covered Bond Conference 2022 AUSTRALIAN HOUSING DYNAMICS CONTRIBUTION TO TOTAL CREDIT GROWTH1 OUTSTANDING LVR DISTRIBUTION2 SIX-MONTH-ENDED ANNUALISED SHARE OF BALANCES Inflation HOUSEHOLD BALANCE SHEET2 2 SHARE OF DISPOSABLE INCOME SHARE OF TOTAL NEW LENDING 89 Sources: 1. RBA Statement on
Slide 90: Australian Housing - Household Debt and Income
European Covered Bond Conference 2022 AUSTRALIAN HOUSING - HOUSEHOLD DEBT AND INCOME HOUSEHOLD DEBT AND DEPOSITS1 FLOWS INTO HOUSING LOAN AND OFFSET ACCOUNTS2 % OF ANNUAL HOUSEHOLD DISPOSABLE INCOME SHARE OF DISPOSABLE INCOME; QUARTERLY MORTAGE EXCESS PAYMENT BUFFERS3 REPAYMENT INCREASES FOR VARIABL
Slide 91: Australian Housing Rental Markets
European Covered Bond Conference 2022 AUSTRALIAN HOUSING RENTAL MARKETS RENTAL VACANCY RATES1 RENT INFLATION1 SEASONALLY ADJUSTED, QUARTERLY YEAR-ENDED, WITH CITY WEIGHTS INDICATED HOUSEHOLD DYNAMICS2 NET OVERSEAS ARRIVALS3 91 Sources: 1. RBA Statement of Monetary Policy, August 2022 2. RBA Speech:
Slide 92: Appendix: ANZ Residential Covered Bond Program Overview
EUROPEAN COVERED BOND CONFERENCE APPENDIX: ANZ RESIDENTIAL COVERED BOND PROGRAM OVERVIEW DEBT INVESTOR UPDATE
Slide 93: Australian Covered Bond Legislation
European Covered Bond Conference 2022 AUSTRALIAN COVERED BOND LEGISLATION • Covered bond issuance permitted pursuant to the Banking Act 1959 since October 2011. • Authorised deposit taking institutions (ADIs) to be covered bond issuer, with dual recourse to issuer (first) and the cover pool (next).
Slide 94: ANZ Residential Covered Bond Program
European Covered Bond Conference 2022 ANZ RESIDENTIAL COVERED BOND PROGRAM Issuer • Australia and New Zealand Banking Group Limited (ANZBGL and ANZ) Issuer Rating • AA-/A1+, Aa3/P- Program Size • US$30,000,000,000 Covered Bond Rating • Aaa Covered Bond Guarantor • Perpetual Corporate Trust Limited i
Slide 95: Parties to the Program
European Covered Bond Conference 2022 PARTIES TO THE PROGRAM • ANZBGL Additional roles include: Residual Income Unitholder & Residual Capital Unitholder Calculation Manager Currency & interest rate swap provider Issuer and Seller Interest Rate Swap provider Contingent Covered Bond Swap provider Acco
Slide 96: Program Structure
European Covered Bond Conference 2022 PROGRAM STRUCTURE ANZBGL ANZBGL ANZBGL Ccy and Interest Rate Swap Provider Interest Rate Swap Provider Covered Bond Swap Provider Housing Loans and Related Security Demand Loan and Intercompany Loan Perpetual Corporate Trust Limited as ANZBGL trustee of the ANZ
Slide 97: Program Structural Enhancements
European Covered Bond Conference 2022 PROGRAM STRUCTURAL ENHANCEMENTS Prior to a Notice to Pay, the Asset Coverage Test is performed on the relevant Determination Date to ensure sufficient assets to support the value of outstanding covered bonds. Over-collateralization After a Notice to Pay, the Amo
Slide 98: Program Structural Enhancements
European Covered Bond Conference 2022 PROGRAM STRUCTURAL ENHANCEMENTS For Hard Bullet Covered Bonds maturing within the next 12 months, Pre-Maturity Ledger must be -1 funded by the A$ equivalent of the Required Redemption Amount. Pre Maturity Test Fitch: below F1+ / A+ Failure to remedy a breach of
Slide 99: Cover Pool, the Demand & Intercompany Loans
European Covered Bond Conference 2022 COVER POOL, THE DEMAND & INTERCOMPANY LOANS Excess OC Senior Above Demand Minimum • The Asset Coverage Test is an ongoing test to ensure the adjusted aggregate receivable Loan Contractual amount (AARA) is equal to or greater than A$ equivalent of Covered Bonds o
Slide 100: Asset Coverage Test
European Covered Bond Conference 2022 ASSET COVERAGE TEST • Tested monthly on every determination date prior to the service of a Notice to Pay • The Asset Coverage Test is intended to test that the value of housing loans, cash, and other eligible assets is greater than the A$ equivalent of outstandi
Slide 101: Amortisation Test
European Covered Bond Conference 2022 AMORTISATION TEST • Tested monthly on every determination date after the service of a Notice to Pay. • The Amortisation standing covered bonds. • A failure of the Amortisation Test will constitute a Covered Bond Guarantor Event of Default and prompt an accelerat
Slide 102: Issuer Event of Default and Covered Bond Guarantee
European Covered Bond Conference 2022 ISSUER EVENT OF DEFAULT AND COVERED BOND GUARANTEE Include: Default in principal or interest for 14 days Issuer Event of Default Issuer fails to perform obligations for 30 days (other than Asset Coverage Test) Winding up, insolvency and bankruptcy events An uncu
Slide 103: Key Contacts
EUROPEAN COVERED BOND CONFERENCE KEY CONTACTS DEBT INVESTOR UPDATE
Slide 104: Further Information
European Covered Bond Conference 2022 FURTHER INFORMATION Key Contacts Adrian Went Scott Gifford John Needham Group Treasurer Head of Debt Investor Relations Head of Capital and Secured Funding +61 3 8654 5532 +61 3 8655 5683 +61 2 8037 0670 +61 412 027 151 +61 434 076 876 +61 411 149 158 Adrian.Wen
Australia and New Zealand Banking Group — Debt Investor Presentation (September 2022) on 6ix