Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Non-Deal Roadshow (September 2013)
62 slides from Anz's roadshow presentation, September 2013
Slide 1: Investor Discussion Pack
Investor Discussion Pack Shayne Elliott Chief Financial Officer AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED September 2013
Slide 2: Delivering ANZ's strategy
Delivering ANZ‟s strategy Super Regional Strategy To become the best connected and most respected bank across the region Capture faster Diversify revenue Strengthen our Drive operational growing regional streams by product, position in Australia efficiency and flows in trade, capital geography and &
Slide 3: Focused on differentiated growth, productivity and shareholder returns
Focused on differentiated growth, productivity and shareholder returns Diversified, low risk growth outcomes and 1. Growth opportunities Step change in productivity and cost 2. Productivity management 3. Shareholder Driving improved ROE and shareholder returns Returns 3
Slide 4: Our differentiated strategy is delivering for shareholders and customers
Our differentiated strategy is delivering for shareholders and customers ANZ has built a substantial business in Asia Established network to support faster growing regional flows in trade, capital and wealth Markets / No. Staff Japan & Korea – 200 China – 800 Asia-Europe Asia-US Trade: US$1.0trn Tra
Slide 5: We have built scale, capability and momentum in Asia
We have built scale, capability and momentum in Asia ANZ has built a substantial business in Asia A top 4 Corporate Bank in Asia USDm Asia Operating Income Greenwich Associates Large Corporate Survey Overall Relationship Quality 70% 2,109 +46% CAGR 1,840 +11% PCP 17% 60% Bank A 1,257 1,135 11% 17% 8
Slide 6: Diversified, low risk growth outcomes and opportunities
Diversified, low risk growth outcomes and opportunities Australia New Zealand 12 month growth vs system1 12 month growth vs system2 1.3x 1.6x 1.2x 1.4x Mortgages Household Deposits Mortgages Deposits International & Institutional Banking Global Wealth Operating Income Mix 1H13 Funds Under Management
Slide 7: Step change in productivity and cost management
Step change in productivity and cost management Cost to Income Ratio Operating Expense Growth Group 1H13 v 2H12 1H13 v 1H12 Australia Division International & Institutional Banking Division Group Australia IIB New Zealand Division 55% -1% -2% -2% -3% 50% -8% -10% New Zealand Global Wealth 45% -2% 40
Slide 8: Shareholders are benefitting from ANZ's momentum driving increased returns
Shareholders are benefitting from ANZ‟s momentum driving increased returns Return on Equity Diverse Funding Mix 16.1% 29% 19% 19% 20% 15.2% 15.5% 15.5% 14.7% 13% 14% 15% 22% 6% 5% 5% 7% 16% 12% 11% 14% 1H11 2H11 1H12 2H12 1H13 57% 61% 61% 50% Ordinary Share Dividends Paid $m 3,919 3,665 8% 8% 8% 7%
Slide 9: Half Year Results: Balance Sheet & Treasury
13 HALF YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 30 April 2013 Balance Sheet & Treasury
Slide 10: Balance Sheet composition by Geography
Balance Sheet composition by Geography Customer Lending1 by Geography Customer Deposits by Geography Australia APEA Institutional Retail & Wealth APEA APEA Commercial Retail & Wealth & Institutional APEA Commercial 11% 1% & Institutional 23% 10% 4% Australia Commercial 14% APEA Australia APEA 11% Ne
Slide 11: Balance Sheet composition by Segment
Balance Sheet composition by Segment Customer Lending1 by Segment Customer Deposits by Segment Australia Commercial New Zealand Australia Commercial New Zealand Institutional 14% Commercial 15% 6% 2% New Zealand Retail & Wealth Australia 10% Commercial Institutional 11% Australia 13% APEA 20% Commer
Slide 12: Strongly capitalised under new Basel 3 rules
Strongly capitalised under new Basel 3 rules Capital levels are well positioned (CET1) Capital overview • ANZ remains at the upper end of global peer 10.0% 10.3% group under new B3 rules 9.5% 9.8% • Well placed in regards to capital targets and 2.5% Capital Conservation focused on driving capital ef
Slide 13: Organic capital generation and capital initiatives have improved capital levels
Organic capital generation and capital initiatives have improved capital levels Capital Position (APRA Basel 3 Common Equity Tier 1) 10.30 1.01 0.16 8.02 8.18 (0.31) 0.01 (0.18) (0.53) Portfolio growth 25bp Risk Migration (incl EL vs EP) flat Non credit RWA 6bp Up 16bps Sep-12 Cash RWA Non RWA Capit
Slide 14: Structural liquidity position strengthened
Structural liquidity position strengthened – driven by growth in customer funding and shortened asset tenor Deposit growth has stabilised Shortened asset tenor 29% 19% 19% 20% 16% 19% 23% 26% 7% 10% 13% 14% 15% 14% 14% 22% 8% 6% 1% 7% 5% 5% 2% 6% 8% 3% 7% 12% 11% 4% 16% 14% 80% 77% 61% 61% 74% 71% 5
Slide 15: Lowest structural funding gap provides funding flexibility
Lowest structural funding gap provides funding flexibility ANZ Westpac NAB CBA Loan – Deposit Ratio (%) 128% 148% 146% 141% Loan – Deposit Gap ($b) 97 167 156 157 Australia Household Funding Gap ($b) 112 184 126 170 Australian Household Funding Gap ANZ has achieved a substantially lower LDR $b ANZ L
Slide 16: A sustainable term wholesale funding profile
A sustainable term wholesale funding profile Issuance Maturities $b 26 26 24 24 Indicative annual issuance volume 18 17 16 15 13 12 11 7 7 FY08 FY09 FY10 FY11 FY12 FY14 FY15 FY16 FY17 FY18 FY19+ 1H13 2H13 Senior Unsecured Government Guaranteed Covered Bonds Subordinated Issuance since 1-Apr-13 Note:
Slide 17: Portfolio wholesale funding costs stabilising, deposit costs remain relatively high
Portfolio wholesale funding costs stabilising, deposit costs remain relatively high Retail deposit and wholesale funding Term Wholesale Funding Portfolio Costs margins (to 3mth BBSW) 200bp 150bp 150bp 100bp 50bp Actual portfolio cost 0bp Sep 2011 Mar 2012 Sep 2012 Mar 2013 Forecast portfolio cost ba
Slide 18: Strong liquid asset position
Strong liquid asset position Liquidity Portfolio Basel 3 Liquidity Rules 122 ● In January 2013, the Basel Committee 115 announced revised details on the Liquidity Coverage Ratio (“LCR”) including amendments 39 to the outflow assumptions 91 38 75 31 15 ● APRA is yet to finalise the LCR requirements 1
Slide 19: Hedging has partially offset the impact on earnings of sustained $A strength
Hedging has partially offset the impact on earnings of sustained $A strength 1H13 Earnings composition by Currency EPS impact from Hedging Non AUD & NZD 17% 0.60% Hedges in place for ~70% FY13 TWD earnings MYR PGK Other 0.10% IDR CNY USD AUD 65% -0.40% NZD 18% Hedges in place for ~70% FY13 earnings
Slide 20: Capital and Replicating Portfolio
Capital and Replicating Portfolio – Earnings impacted by lower interest rates, but portfolio management mitigates full impact Australia Capital and Replicating Portfolio Portfolio Earnings & Spread to Cash Contribution to Group NIM % bps (ex Markets) 6 Portfolio 45 HOH Impact: Earnings rate -4.3 bps
Slide 21: Half Year Results: Risk Management
13 HALF YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 30 April 2013 Investor Discussion Pack Risk Management
Slide 22: Credit quality in line with expectations
Credit quality in line with expectations Credit Quality trends Provision Charge $m Individual Provision Charge (LHS) • The 1H13 Provision charge of $599m Collective provision Charge (LHS) Total Provision Charge as % Avg. net Advances represents a 13% reduction HOH 2,000 1.60% 1,750 1.40% 1,500 1.20%
Slide 23: Collective Provisioning Coverage reflects Global Institutional Portfolio credit quality improvement
Collective Provisioning Coverage reflects Global Institutional Portfolio credit quality improvement Global Institutional Sub Investment Grade1 Trend in Global Institutional composition Exposures continue to decline $b Global Institutional Credit Exposure CRWA 160 40% Rate2 400 60% Institutional (% o
Slide 24: Individual Provision Charge
Individual Provision Charge Individual Provision Charge by Segment Individual Provision Charge Composition $m $m 1,062 915 1,200 1,500 761 618 722 595 595 1,062 1,000 500 1,000 915 0 -500 800 761 1H10 2H10 1H11 2H11 1H12 2H12 1H13 722 New Increased Writebacks & Recoveries 618 595 595 600 Individual
Slide 25: Continued improvement in Credit RWA rate
Continued improvement in Credit RWA rate Group Exposure at Default Global Institutional Exposure at Default and Credit Risk Weighted Assets and Credit Risk Weighted Assets Exposure at Default ($b) Exposure at Default ($b) Basel II Credit Risk Weighted Assets ($b) Basel II Credit Risk Weighted Assets
Slide 26: Risk Weighted Assets
Risk Weighted Assets Total Risk Weighted Assets Total Risk Weighted Assets movement 1H13 v 2H12 $b Market & Operational Risk Weighted Assets 14.1 2.4 322.6 $b 6.0 300.1 0.0 Credit Risk Weighted Assets 323 309 Up 7% 300 48 285 2H12 Basel II Basel III Markets & Operational 1H13 280 48 Credit Risk Cred
Slide 27: Credit Risk Weighted Assets
Credit Risk Weighted Assets Credit Risk Weighted Assets Credit Risk Weighted Assets ($b) movement 1H13 v 2H12 ($b) Basel II Credit Risk Weighted Assets 9.0 0.1 275.0 254.9 14.1 Collective Provision as a % of CRWA (Basel II) 2.1 Collective Provision as a % of CRWA (Basel III) 0.8 1.38% 1.36% 1.32% 1.
Slide 28: Control List and Risk Grade Profiles
Control List and Risk Grade Profiles Group Sub-Investment Grade1 Exposures Control List as % Exposure at Default Index Sep 08 = 100 300 28% 28% 250 26% 26% 200 150 24% 100 6% 23% 50 6% 22% 6% 0 6% 13% 13% Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 5% 5% 12% 12% 12% 11% Con
Slide 29: Gross Impaired Assets
Gross Impaired Assets Gross Impaired Assets by Type Gross Impaired Assets by Size of Exposure $m Impaired Loans NPCCD Restructured $m > $100m $10-$99m < $10m 8,000 8,000 Avg. $375m 7,000 6,561 6,561 decline HOH 7,000 6,561 6,561 6,221 since 2H10 6,221 6,000 5,581 6,000 5,581 5,343 5,343 5,196 5,196
Slide 30: Impaired Assets
Impaired Assets New Impaired Assets by Division Net Impaired Assets by Division $m $m 3,500 3,126 6,000 4,968 4,686 3,000 5,000 4,503 2,319 2,437 2,356 3,884 2,500 3,630 3,423 1,831 1,847 4,000 3,142 2,000 1,571 3,000 1,500 1,000 2,000 500 1,000 0 0 1H10 2H10 1H11 2H11 1H12 2H12 1H13 Mar 10 Sep 10 M
Slide 31: Total lending exposures by Geography
Total lending exposures by Geography Exposure at Default by Exposure by Geography Line of Business Australia Total Exposure at Default (Mar 13) - $693.2b1 Australia New Zealand APEA Retail 28% $437.1 $111.5 $144.6 55% Commercial 17% Institutional New Zealand UK & Europe New Zealand 3% Retail 16% 24%
Slide 32: Total lending exposures by industry sector
Total lending exposures by industry sector Exposure at Default (EAD) % in Non as a % of group total Category EAD Performing ANZ Group Sep 12 Mar 13 Sep 12 Mar 13 Total EAD (Mar 13) Consumer Lending 41.0% 40.4% 0.3% 0.2% $693.2b Finance, Investment & 14.9% 16.8% 0.5% 0.2% Insurance Property Services
Slide 33: Global Agriculture
Global Agriculture Agriculture Exposure by Sector (EAD) Agriculture Exposure by Geography Agriculture Total EAD (Mar 13) As a % of Group EAD Australia $29.2b 4.2% 14% 57%1 42% APEA 10% New Zealand 1% 37% 14% Agriculture Security Levels 3% 6% 5% 9% 7% 4% 10% 11% 8% 17% 4% 6% 4% 25% 70% 80% Dairy Beef
Slide 34: Manufacturing
Manufacturing Risk Rating Profile (% EAD) Exposure Mix by Geography (EAD) Manufacturing 14% 25% Total EAD (Mar 13) As a % of Group EAD 37% $41.9b 6.1% 86% 75% 63% 14% 11% 10% 16% Group Australia APEA 1 Investment Grade Sub-Investment Grade 35% 41% 43% 49% Total Exposure by Geography (EAD) $b 50 40 5
Slide 35: Resources
Resources Resources Exposure by Sector (% EAD) Resources Exposure by Geography (EAD) Resources Australia Total EAD (Mar 13) As a % of Group EAD 20% $12.5b 1.8% Asia 5% 8% 56% New Zealand 18% 19% Europe, America, Pacific & Other Includes 35% Resources Exposure by Geography (EAD) Iron Ore 5% 23% $b 15
Slide 36: Commercial Property credit exposure
Commercial Property credit exposure Commercial Property Exposure Commercial Property Exposure by Sector Gross Loans and Advances by Region $b % GLA 35 8.0% 30% Offices 30.9 30.2 Retail 29.3 7.8% 30 28.2 27.8 26.1 3.5 Residential 0.8 3.0 3.8 26% 1.1 7.6% 25% Industrial 25 1.0 6.1 5.3 5.9 5.0 5.2 7.4%
Slide 37: Australia 90+ day delinquencies
Australia 90+ day delinquencies Australia Retail 90+ day delinquencies Total Mortgage Portfolio NSW & ACT Mortgages QLD Mortgages VIC Mortgages WA Mortgages Total Credit Cards 2.0% 1.5% 1.0% 0.5% 0.0% Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Australia Commercial 9
Slide 38: Australia Division - Mortgages
Australia Division - Mortgages Portfolio statistics Dynamic Loan to Valuation Ratio % Portfolio Total Number of Mortgage Accounts 860k 60% Portfolio >90% LVR Total Mortgage FUM $188b 50% = 4.5% (Mar 13) % of Total Australia Region Lending 60% 40% 30% % of Total Group Lending 43% 20% Owner Occupied L
Slide 39: New Zealand - Mortgages
New Zealand - Mortgages Portfolio statistics Dynamic Loan to Valuation Ratio Total Number of Mortgage Accounts 474k 0-60% 9% Total Mortgage FUM NZD 57b 61-70% 12% % of Total New Zealand Lending 56% 41% 71-80% % of Total Group Lending 10% 21% 81-90% Owner Occupied Loans - % of Portfolio 78% 17% 90%+
Slide 40: New Zealand Geography – credit quality
New Zealand Geography – credit quality Net impaired assets Total provision charge NZDm NZDm 1,685 400 325 300 1,463 131 105 200 85 98 96 43 1.74% 1,307 100 1,230 0 1,169 1.50% -100 1.38% 1H10 2H10 1H11 2H11 1H12 2H12 1H13 990 1.26% 1.23% 884 IP Charge CP Charge 1.02% 90+ days delinquencies (New Zeal
Slide 41: Half Year Results: Divisional Snapshots
13 HALF YEAR RESULTS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 30 April 2013 Investor Discussion Pack Divisional Snapshots
Slide 42: The Australian Franchise continues its trend of above system volume growth
AUSTRALIA DIVISION The Australian Franchise continues its trend of above system volume growth Household deposits growth1 Household lending growth1 Indexed Sep 2009 = 100 Indexed Sep 2009 = 100 150 ANZ Peer 1 Peer 2 Peer 3 148.7 150 ANZ Peer 1 Peer 2 Peer 3 143.6 142.4 140 140 130 130.7 130 132.5 120
Slide 43: Strong mortgage performance
AUSTRALIA DIVISION Strong mortgage performance • Strong volume growth Mortgages growth Increase in mortgage market share from 14.5% (Feb 12) to 14.7% (Feb 13)1 Mortgage FUM Number of accounts Above system mortgage growth for 13 $b „000 consecutive quarters1 188 884 Leveraging our network capab
Slide 44: Balancing proprietary and broker mortgage channels
AUSTRALIA DIVISION Balancing proprietary and broker mortgage channels Trend improving in ANZ Proprietary/Broker • Program of initiatives executed to strengthen sales mix… proprietary mortgage capability Leveraging our network capability and driving growth from alternative proprietary channels 45%
Slide 45: Corporate & Commercial Banking growing strongly
AUSTRALIA DIVISION Corporate & Commercial Banking growing strongly • 1H13 cash profit up 8% HOH driven by strong asset growth and tight cost control Cash Profit movement – 1H13 v 2H123 • Strong volume growth with net loans and $m 7 589 advances up 9% and deposits up 7% over the 7 33 3 12 months to M
Slide 46: Corporate & Commercial Banking remains well managed
AUSTRALIA DIVISION Corporate & Commercial Banking remains well managed • Strong growth in cross sell revenue led by sales Whole of customer focus delivering 11% of mortgages to C&CB customers up 36% and cross sell revenue growth Trade up 15% PCP Retail Institutional Wealth $m • Credit quality is wel
Slide 47: Corporate & Commercial Banking is winning business through customer growth
AUSTRALIA DIVISION Corporate & Commercial Banking is winning business through customer growth driven by a differentiated value proposition • Leveraging ANZ‟s super regional advantage and ANZ FastPay - Australia‟s first mobile „connectivity‟ brand awareness (cross border payment App for small busines
Slide 48: The Banking on Australia program
AUSTRALIA DIVISION The Banking on Australia program The „Banking on Australia‟ program responds to changing customer expectations and the competitive domestic banking landscape. It‟s about putting customers in control of their finances and making it easy for them to bank with us. Investing $1.5 bill
Slide 49: Digital - central to banking in the future
AUSTRALIA DIVISION Digital - central to banking in the future; we are the market leader in mobile banking platforms Building our online and digital banking capabilities • Digital channels will define the way we operate • Focusing on customer acquisition and servicing and deepening the customer relat
Slide 50: IIB growing in line with strategy while improving productivity
IIB DIVISION IIB growing in line with strategy while improving productivity • Income growth continues Operating Income growth 1H13 v 2H12 IIB income growth of 3%, with Asia organic franchise income up 8% 16% 16% Improved connectivity and growing volumes 6% have countered margin pressures 3% 1%
Slide 51: Increasing earnings diversity and focusing on higher return products and segments
IIB DIVISION Increasing earnings diversity and focusing on higher return products and segments Increasing contribution of flow and value Diversifying Income by Geography added product 1H13 1H13 Australia Asia Pacific, 23% Transaction Europe & Global Loans 26% Banking America 21% 46% 40% 30% 1H11 52%
Slide 52: Maintaining a leading position in Australia / New Zealand and gaining recognition in Asia
IIB DIVISION Maintaining a leading position in Australia / New Zealand and gaining recognition in Asia Leading in Priority products Winning Flow & Value Added Deals Foreign Exchange & Commodities Number 1 primary supplier of spot FX and forward FX in Leveraging ANZ‟s Australia (East & Partners 201
Slide 53: A focus on growth and scale in Asia to drive improved returns
IIB DIVISION A focus on growth and scale in Asia to drive improved returns Significant growth achieved since Volume growth has remained strong commencing super regional strategy Asia Volume growth (1H13 v 1H12) USDm Asia Operating Income 26% 28% 20% 17% 11% 2,109 1,840 International Retail Investmen
Slide 54: Improving income quality whilst continuing to drive volume growth
IIB DIVISION Improving income quality whilst continuing to drive volume growth Improving quality of earnings through Driving volumes growth to counter margin growth of Non-Interest Income pressures and mix changes in our business IIB Operating Income Net Interest Margin ex-Markets AUDb 4.00% IIB ex
Slide 55: Growth is focused toward higher return products
IIB DIVISION Growth is focused toward higher return products IIB Return on Equity (Regulatory Capital1) % Basel III Capital Usage Mix 2H12 Basel II 1H13 Basel II 1H13 Basel III 24 5% Other 21 19 3% Retail 17 14 15 14 10 11 18% 7 Partnerships 2 IIB Transaction Global Global Commercial Banking Markets
Slide 56: NZ Division is harnessing the benefits of scale
NEW ZEALAND DIVISION NZ Division is harnessing the benefits of scale to compete in a lower growth, highly competitive market As the largest bank in New Zealand … … we are harnessing the benefits of scale to drive greater value Gross Loans and Advances (NZDm)1 ● Simplify the business and reduce dupli
Slide 57: Maintained momentum through a period of significant change
NEW ZEALAND DIVISION Maintained momentum through a period of significant change Consideration up1 Frontline Engagement Increased Cross Sell 76% Growth 1H13 v 1H12 35% 27% • ANZ@work +63% 63% • Merchant services +12% • Trade +10% • Kiwisaver FUM +35% 2010 1H13 2010 1H13 • Insurance sales +34% Mortgag
Slide 58: Next phase focused on leveraging our scale
NEW ZEALAND DIVISION Next phase focused on leveraging our scale Harness Scale Leverage Scale Scale advantage 2010 - 2012 2013-2015 2016+ Leverage scale through a focus on service, efficiency and cross sell • Continue to drive productivity benefits Deploying a new modular branch design that from simp
Slide 59: 1H13 Strategic scorecard – Wealth Division
GLOBAL WEALTH DIVISION 1H13 Strategic scorecard – Wealth Division Scorecard Comments Grow relationships with existing ANZ • Net increase in Wealth solutions held by bank customers: customers of 9% PCP Wealth solutions sold to ANZ customers • ANZ Smart Choice Super exceeding 800 account Size of A
Slide 60: ANZ Smart Choice Super
GLOBAL WEALTH DIVISION ANZ Smart Choice Super ANZ Smart Choice Super – a low cost and innovative solution Visibility • See your super alongside other Over 17,000 accounts already accounts opened • Never lose your super again • 24/7 access 36% of these have rolled over Choice & Control their exis
Slide 61: Deepening relationships with existing ANZ Customers
GLOBAL WEALTH DIVISION Deepening relationships with existing ANZ Customers Wealth Solutions to Bank Customers1 Direct Investments Growth in wealth solutions held by ANZ customers Smart Choice Super KiwiSaver1 (PCP) ANZ Customers ANZ Customers („000) („000) 10% +278% 9% +16% 7% Australia New Zealand
Slide 62: www.anz.com
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 potential investors and
Australia and New Zealand Banking Group — Non-Deal Roadshow (September 2013) on 6ix