Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (2019)
125 slides from Anz's debt investor presentation, 2019
Slide 1: 2019 Full Year Results - Debt Investor Update
2019 FULL YEAR RESULTS — D E B T I N V E S TO R U P D AT E AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522
Slide 2: Contents
CONTENTS 2019 FULL YEAR RESULTS ANZ Tier 2 Sustainable Development Goals (SDG) Bond Presentation 3 CEO and CFO Results Presentations 33 CEO Presentation 34 CFO Presentation 41 Group & Divisional Financial Performance 54 Group including impact of large / notable items 55 Australia Retail & Commercial
Slide 3: ANZ Tier 2 Sustainable Development Goals (SDG) Bond
ANZ TIER 2 SUSTAINABLE DEVELOPMENT GOALS (SDG) BOND — I N V ESTOR P R ES EN TATI ON AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522
Slide 4: Disclaimer
DISCLAIMER This document has been prepared by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (the "Bank") for the information of intended recipients only (being persons who meet the requirements described in the following paragraphs). This document is intended to be general bac
Slide 5: Disclaimer (Cont.)
DISCLAIMER (CONT.) The Bank provides no guarantees, representations or warranties regarding the accuracy of this information. No third party liability is accepted by the Bank, its directors and employees in respect of errors and omissions other than under the duties and liabilities of the FSMA. • In
Slide 6: TLAC & Tier 2 Capital Update
TLAC & TIER 2 CAPITAL UPDATE — 6
Slide 7: ANZ's Internationally Comparable Regulatory Capital Position
ANZ’S INTERNATIONALLY COMPARABLE1 REGULATORY CAPITAL POSITION APRA Level 2 CET1 – 30 September 2019 11.4% Corporate undrawn EAD and Australian ADI unsecured corporate lending LGDs and undrawn CCFs exceed those applied in many jurisdictions 1.6% unsecured LGD adjustments APRA requires 100% deduction
Slide 8: CET1 and Leverage in a Global Context
CET1 AND LEVERAGE IN A GLOBAL CONTEXT CET1 RATIOS1 LEVERAGE RATIOS1,2 5% 10% 15% 20% 2% 4% 6% 8% ABN Amro OCBC Svenska Handelsbanken UOB SEB DBS Swedbank Morgan Stanley BBVA Danske Bank Erste Bank ANZ Raiffeisen Bank International (RBI) RBS Intesa Sanpaolo Rabobank Groupe BPCE ANZ Credit Agricole Gr
Slide 9: Australia's TLAC Regime
AUSTRALIA’S TLAC REGIME Regulatory Minimum APRA’S TLAC REQUIREMENTS Additional 3% Including Buffers 17% (~AUD12b) of Tier 2 Sedse2 – capital by 1 Jan 2024 • APRA has announced that it will require Australian D-SIB’s to 5%dsedwsdgf meet TLAC requirements by an increase in Total Capital of 14.0% T2 3%
Slide 10: Potential Loss Absorption
CET1 VOLUME IN EXCESS AT UNQUESTIONABLY STRONG, MANAGEMENT ACTIONS AND PROFITABILITY PROTECT TIER 2 INVESTORS BUFFERS AND PROTECTIONS FOR TIER 2 INVESTORS ANZ’S BALANCE SHEET AND EARNINGS BUFFERS Possible actions that may be considered to Future Earnings1 strengthen capital include: Potential loss a
Slide 11: ANZ's Tier 2 Capital Profile
ANZ’S TIER 2 CAPITAL PROFILE1 ANZ’S TIER 2 CAPITAL REQUIREMENT TO PROGRESSIVELY INCREASE POST TLAC ANNOUNCEMENT TIER 2 CAPITAL • Issued AUD1.75b in July 2019 Notional amount • Current portfolio includes 38% in AUD (32% domestic AUD) – strong capacity By Format By Currency remaining in AUD • Annual t
Slide 12: Australian Tier 2 in a TLAC/MREL Context
AUSTRALIAN TIER 2 IN A TLAC/MREL CONTEXT APRA’S CONSERVATIVE RISK WEIGHTS COMBINED WITH “UNQUESTIONABLY STRONG” CET1 REQUIREMENTS PROVIDE STRONG PROTECTIONS FOR TIER 2 INVESTORS. AN ILLUSTRATIVE LOSS OF 5% OF ASSETS IS PRESENTED BELOW % over Assets T2 AT1 CET1 MREL 2.1 0.6 0.7 0.8 0.8 0.5 0.5 Loss A
Slide 13: Proposed Transaction Overview
PROPOSED TRANSACTION OVERVIEW ANZ IS CONSIDERING AN INAUGURAL SDG TIER 2 TLAC ELIGIBLE BOND ISSUE • On January 1 2016, the SDGs came into effect. The 17 goals and 169 targets are aimed at solving the world’s most pressing sustainable development challenges – ending global poverty, protecting our pla
Slide 14: ANZ EMTN EUR Tier 2 Subordinated SDG Notes Key Terms
ANZ EMTN EUR TIER 2 SUBORDINATED SDG NOTES KEY TERMS Issuer Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (“ANZ”) Issuer Senior Ratings Aa3 (Stable) | AA- (Stable) | AA- (Negative) (Moody’s/S&P/Fitch) Expected Issue Rating2 Baa1 | BBB +| A+ (Moody’s/S&P/Fitch) Information Memo
Slide 15: Non-Viability Trigger Event Loss Absorption
A Non-Viability Trigger Event occurs when APRA has provided a written determination to ANZBGL that the conversion or write- Non-Viability Trigger off of certain securities of ANZBGL is necessary because without either such Conversion or Write-Off or a public sector injection Event of capital, ANZBGL
Slide 16: Sustainability at ANZ
SUSTAINABILITY AT ANZ — 16
Slide 17: ANZ and the SDGs
ANZ AND THE SDGs ANZ IS A SIGNATORY TO THE CEO STATEMENT OF SUPPORT ISSUED BY THE UN GLOBAL COMPACT NETWORK OF AUSTRALIA IN SEPTEMBER 2016 In November 2019, we announced our commitment to a new AUD50b 2025 Sustainability Target aligned to the SDGs On January 1 2016, the United Nations SDGs came into
Slide 18: ANZ Has an Integrated Approach to Sustainability
ANZ HAS AN INTEGRATED APPROACH TO SUSTAINABILITY PURPOSE ESG TARGETS TEAM ANZ’s purpose is to shape a world where people and We exceeded our 2015 commitment to fund and facilitate at ANZ Group Treasury has implemented Green and communities thrive least AUD15bn in environmentally sustainable solution
Slide 19: FY19 ESG Target Performance
FY19 ESG TARGET PERFORMANCE SCORECARD SNAPSHOT We are committed to the United Nations Sustainable Development Goals (SDGs). Our ESG targets support 10 of Not achieved Achieved In progress the 17 SDGs. ESG target Progress Outcome Relevant SDGs FAIR AND RESPONSIBLE BANKING Implement new Dispute Resolu
Slide 20: ESG Performance Trends
ESG PERFORMANCE TRENDS COMMUNITY INVESTMENT1 MONEYMINDED & SAVER PLUS ENVIRONMENTAL FINANCING $15B TARGET Total community investment (AUDm) Estimated # of people reached Funded and facilitated (AUDb) 137 142 88,308 90,724 19.1 131 80,074 11.5 90 69,826 65,549 75 6.9 2.5 2015 2016 2017 2018 2019 2015
Slide 21: ANZ's ESG Rating Scorecard
ANZ’S ESG RATING SCORECARD TRACKING OF EXTERNAL ESG RATING PERFORMANCE Context: Our reputation indicators identify our key weakness, scrutinised in the Royal Commission, as our failure to always responsibly deliver products and services, e.g. fees for no service. Bank industry median, 46 86, Highest
Slide 22: SDG Bond Framework & Eligible Assets
FURTHER INFORMATION AND SDG BOND FRAMEWORK & ELIGIBLE ASSETS — 22
Slide 23: ANZ SDG Bond Programme Overview
ANZ SDG BOND PROGRAMME OVERVIEW ANZ SDG Bond Framework Governance Progress • Aligned to the UN SDGs and updated to align ANZ’s SDG Programme adheres to the four • Issued first SDG Bond in February 2018 to the 2018 ICMA Principles and Guidelines pillars: 1. Use of Proceeds – • Reported/reporting Use
Slide 24: ANZ Is a Lead Issuer in Sustainability Bonds
ANZ IS A LEAD ISSUER IN SUSTAINABILITY BONDS ANZ’S INAUGURAL SDG BOND WAS ISSUED IN FEBRUARY 2018 • The ANZ SDG Bond Framework was developed in line with the International Capital Market Association (“ICMA”) Green Bond Principles (“GBP”), Social Bond Principles (“SBP”) 2017, and related Sustainabili
Slide 25: ANZ's Inaugural SDG Bond Impact Report
ANZ’S INAUGURAL SDG BOND IMPACT REPORT WAS PUBLISHED IN JULY 2019 INAUGURAL REPORTED IMPACTS1 AS AT 31 MARCH 2019 SDGs Impact (at project/asset level)2 • Hospitals: ~4,180 beds in total • Aged Care: 149 homes and ~12,700 beds • Operation of existing 3,700 student beds across 9 sites • Construction o
Slide 26: Evolution of Eligible Asset Pool
EVOLUTION OF ELIGIBLE ASSET POOL FEBRUARY 2018 SEPTEMBER 2019 Pool Size: EUR925m Pool Size: EUR2,096m 0.5% 15.7% 7.9% 0.2% 31.3% 21.2% SDG 3 SDG 6 SDG 9 SDG 11 13.2% By SDGs SDG 4 SDG 7 SDG 10 55.2% 5.4% 11.3% 9.8% 20.0% 8.4% 0.5% 0.2% 32.8% 39.6% Allocated to Corporate Transactions By Loan Allocate
Slide 27: Eligible Assets
ELIGIBLE ASSETS1 Total by SDGs Total by SDGs SDGs GBP/SBP Category2 Asset / Type Location % (AUD) (EUR) Access to essential services; Socioeconomic advancement and Aged Care & Hospital / Corporate & Project Australia, VIC, QLD, NSW, SA 1,062m 656m 31.3% empowerment; Finance Affordable basic infrastr
Slide 28: Independent Review
INDEPENDENT REVIEW SUSTAINALYTICS OPINION AND ERNST & YOUNG ASSURANCE ANZ retains a second party opinion from ANZ has also obtained pre-issuance assurance from Sustainalytics1 to confirm the alignment of the ANZ Ernst & Young (“EY”)2 to confirm that the proposed SDG Bond Framework with the GBPs, SBP
Slide 29: Contacts & Appendices
FURTHER INFORMATION AND CONTACTS & APPENDICES — 29
Slide 30: Further Information
FURTHER INFORMATION Key contacts Adrian Went Scott Gifford Mary Makridis Group Treasurer Head of Debt Investor Relations Associate Director +61 3 8654 5532 +61 3 8655 5683 Investor Relations +61 412 027 151 +61 434 076 876 +61 3 8655 4318 Adrian.went@anz.com scott.gifford@anz.com Mary.Makridis@anz.c
Slide 31: Appendix 1: Eligible Asset Categories
APPENDIX 1: ELIGIBLE ASSET CATEGORIES Eligibility Criteria: Activities that provide access to essential health-care services, promote metal health and wellbeing and achieve universal health coverage Examples: Public hospitals, private hospitals that are non-for-profit or provide social benefit progr
Slide 32: Appendix 1: Continued
APPENDIX 1: CONTINUED Eligibility Criteria: Activities that upgrade infrastructure and retrofit industries and make them sustainable, with increased resource use efficiency and greater adoption of clean and environmentally sound technologies Examples: Construction, renovation or operation of sustain
Slide 33: 2019 Full Year Results - CEO
2019 FULL YEAR RESULTS — S H AY N E E L L I O T T CHIEF EXECUTIVE OFFICER 33
Slide 34: Financial Snapshot
FINANCIAL SNAPSHOT FY19 FY19 v FY18 Statutory Profit ($m) 5,953 -7% Cash Profit (continuing operations)1 ($m) 6,470 0% Return on Equity 10.9% -10bps Earnings Per Share (cents) 228 +2% Dividend Per Share (cents) 160 flat Franking (FY19 avg) 85% -15% CET1 Ratio (APRA) 11.4% stable Total Capital (CET1)
Slide 35: 6 Point Plan
6 POINT PLAN FOCUSING RESOURCES TO DELIVER FOR CUSTOMERS, SHAREHOLDERS & THE COMMUNITY 1 Running the business well 2 Maintaining discipline within Institutional 3 Resolving our challenges in NZ 4 Investing to prepare Australia for growth 5 Driving further simplification 6 Building the team’s resilie
Slide 36: Run the Business Well
RUN THE BUSINESS WELL AUSTRALIA RETAIL AND COMMERCIAL Changed our management structure & team LAUNCHED A MAJOR HOUSING MARKETING CAMPAIGN Continuing to invest in process redesign Refining credit policies within a prudent risk appetite Delegating more decisions to front line Monitoring key
Slide 37: Run the Business Well - Customer Remediation
RUN THE BUSINESS WELL CUSTOMER REMEDIATION CUMULATIVE CUSTOMER REMEDIATION CHARGE Pre tax $m 1,579 928 753 220 153 51 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Continuing operations Discontinued (Wealth businesses) >1,000 people progressing remediation activities 37
Slide 38: Run the Business Well - New Zealand
RUN THE BUSINESS WELL NEW ZEALAND BS11 (Outsourcing Policy) RBNZ Capital Review Paper 4 Expected to be finalised in Dec 2019 Requires all large banks in New Zealand to have compliant outsourcing arrangements Relates to the amount of regulatory capital by 2022 required of locally incorporated banks I
Slide 39: Investing for Growth
INVESTING FOR GROWTH GROUP INVESTMENT SPEND1 PREPARING FOR CHANGE $m LAST DECADE NEXT DECADE? 1,403 Universal services Specialisation Mass share Targeted share 1,234 1,218 1,153 1,179 One price for all Risk based pricing 564 Transactions Discussions 430 Value from branches Value from data 410 473 49
Slide 40: Capitalised Software Balance
CAPITALISED SOFTWARE BALANCE1 $b 3 2 1 0 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16 Sep-18 Sep-19 ANZ Peer 3 Peer 2 Peer 1 1. Source: Capitalised software balances sourced from publicly available company financials; 2019 numbers are based on the most recently disclosure financial statements 40
Slide 41: 2019 Full Year Results - CFO
2019 FULL YEAR RESULTS — M I C H E L L E J A B L KO CHIEF FINANCIAL OFFICER 41
Slide 42: Overview
OVERVIEW CASH PROFIT1,2 CASH EPS1,2 ROE1,2 CET1 RATIO (LEVEL 2) $m cents % % 6,809 6,487 6,470 233 11.7 11.4 11.4 223 228 11.0 10.9 10.6 FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19 Sep-17 Sep-18 Sep-19 1. Cash Profit from continuing operations 2. FY17 has not been restated for AASB15 impacts 42
Slide 43: Regulatory Developments
REGULATORY DEVELOPMENTS IN CONSULTATION STAGE APRA LEVEL 1 & LEVEL 2 FY19 NET ORGANIC CAPITAL SEP-19 CET1 RATIOS APRA - Investments in subsidiaries (APS111) GENERATION bps RBNZ - Capital proposals APRA - Ongoing APRA regulatory reviews1 RECENTLY FINALISED (IMPLEMENTING) 165 11.4% 11.4% ~136 AP
Slide 44: Financial Performance
FINANCIAL PERFORMANCE CASH PROFIT CONTINUING OPERATIONS CASH PROFIT DRIVERS $m 79 6,487 1 131 6,470 -94 -134 -21% 0% 0% 20% -5% FY18 Large / Notable Revenue Expenses Provisions Tax & NCI FY19 items after tax1 CASH PROFIT DIVISIONAL PERFORMANCE $m 79 Australia Retail & 6,487 151 6,470 FY19 v FY18 Ins
Slide 45: Australia Retail & Commercial
AUSTRALIA RETAIL & COMMERCIAL INCOME EXCLUDING LARGE / NOTABLE ITEMS AND HOUSING PORTFOLIO INCOME COMPOSITION HOUSING PORTFOLIO1,2 $m $b 10,165 264 272 265 9,575 9 8 7 26 37 49 3,238 14 3,114 22 33 54 49 39 4,807 4,768 1,590 1,524 6,927 6,461 164 156 134 3,217 3,244 FY18 FY19 1H19 2H19 Sep-17 Sep-18
Slide 46: Australia Retail & Commercial - Housing Momentum
AUSTRALIA RETAIL & COMMERCIAL - HOUSING MOMENTUM IMPROVING MOMENTUM HOME LOAN APPLICATION TREND 3 month rolling average (Index Sep 2017 = 100) Clarity and consistency on policy and risk settings “Offer So Good” campaign – July 2 to August 31 110 Approval turnaround times 100 90 Industry condit
Slide 47: Institutional
INSTITUTIONAL INCOME CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS INSTITUTIONAL INCOME COMPOSITION1 MARKETS INCOME COMPOSITION $m $m +5% -1% 5,198 1,780 1,766 4,970 42 63 38 48 446 1,766 566 1,780 -4% -12% 2,657 940 2,541 470 23 361 19 826 448 271 256 48 940 826 1,296 190 1,173 236 234 235
Slide 48: Net Interest Margin
NET INTEREST MARGIN CONTINUING OPERATIONS GROUP NET INTEREST MARGIN (NIM) bps 180 -2 1 175 -2 2 -1 172 -4 -2 -6bps impact of lower rates -5bps -8bps 1H19 Asset & Treasury Deposits Wholesale Assets 2H19 Markets Large / 2H19 Funding Mix Funding Cost Underlying1 Balance Sheet Notable Items Activities2
Slide 49: Margin Environment
MARGIN ENVIRONMENT LOW RATE ENVIRONMENT SWITCHING FROM INTEREST ONLY TO PRINCIPAL & INTEREST Sep-19 $b Sensitivity to a 25bps drop in AUD, NZD and USD interest rates 23 24 20 Deposits & earnings on capital ~3 bps 10 8 16 6 11 $b 7 6 13 16 14 ~110 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Early conversions
Slide 50: Expenses
EXPENSES CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS FY19 EXPENSE DRIVERS $m 136 8,563 170 8,562 -259 -48 Includes Personnel & Includes Property Regulatory & productivity Compliance (net of $160m $125m inflation) -1.6% 0% FY18 FX BAU D&A Investment FY19 50
Slide 51: Investment Spend
INVESTMENT SPEND CONTINUING OPERATIONS TOTAL INVESTMENT SPEND BY DIVISION1 Capex and Opex $m 1,403 113 1,234 1,218 1,179 85 1,153 61 204 66 75 127 150 137 129 160 169 252 164 175 197 204 164 204 187 164 135 144 176 177 564 473 491 430 410 FY15 FY16 FY17 FY18 FY19 Australia Retail & Commercial Proper
Slide 52: Customer Remediation
CUSTOMER REMEDIATION TOTAL REMEDIATION - POST TAX IMPACT $m 559 Financial impact 154 377 $826m ($682m post tax) charge in FY19 127 405 $1,579m ($1,216m post tax) charges since 1H17 123 72 250 40 45 53 70 $1,139m provisions on balance sheet at 30 Sep 2019 1H17 2H17 1H18 2H18 1H19 2H19 Discontin
Slide 53: Dividend
DIVIDEND GEOGRAPHIC EARNINGS AUSTRALIA GEOGRAPHY EARNINGS & DPOR1 GEOGRAPHIC EARNINGS1 % of total Group Statutory Profit 82% 76% 11% 10% 11% 16% 16% 73% 72% 69% 25% 26% 64% 64% 22% 28% 62% 29% 61% 55% 62% 64% 64% 61% 55% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 DPOR Australia Geography earn
Slide 54: Group & Divisional Performance
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K GROUP & DIVISIONAL PERFORMANCE
Slide 55: Financial Performance - Statutory to Cash Profit
FINANCIAL PERFORMANCE – STATUTORY TO CASH PROFIT STATUTORY PROFIT CASH PROFIT REPORTED CASH PROFIT CONTINUING OPERATIONS $m $m $m -7% 0% 6,406 6,938 +6% 6,809 6,400 5,953 6,487 6,470 5,709 6,161 5,889 5,889 5,805 FY161 FY171 FY18 FY19 FY161 FY171 FY18 FY19 FY161,2 FY171 FY18 FY19 STATUTORY TO CASH A
Slide 56: Large / Notable Items
LARGE / NOTABLE (L/N) ITEMS1 1H17 2H17 1H18 2H18 1H19 2H19 Cash Profit Continuing Operations ($m) 3,355 3,454 3,493 2,994 3,564 2,906 Gain / (Loss) on sale from divestments -284 14 138 53 187 18 Divested business results 274 187 70 56 25 7 Customer remediation -40 -72 -45 -250 -70 -405 Restructuring
Slide 57: Balance Sheet Composition
BALANCE SHEET COMPOSITION BY SEGMENT NET LOANS & ADVANCES CUSTOMER DEPOSITS $b $b 606 615 512 580 4 1 487 4 468 7 2 150 165 132 217 206 189 96 97 97 14 14 13 95 98 102 331 341 339 182 184 189 -1 Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 Housing (Aus & NZ) Commercial (Aus & NZ) Other Retail (Aus & NZ
Slide 58: Expense Management
EXPENSE MANAGEMENT CONTINUING OPERATIONS TOTAL EXPENSES FULL TIME EQUIVALENT STAFF CONTINUING OPERATIONS EX LARGE / NOTABLE ITEMS CONTINUING OPERATIONS $b $b #‘000s #‘000s -4% 9.4 0% 9.0 9.1 8.5 8.6 8.6 50.2 37.9 37.6 1.7 3% 3% 1.5 1.9 46.6 1.4 1.5 44.9 1.5 0.1 0.2 0.1 39.9 39.1 28% 29% 1.6 1.9 1.5
Slide 59: Australia Retail & Commercial
AUSTRALIA RETAIL & COMMERCIAL BALANCE SHEET NET LOANS & ADVANCES1 CUSTOMER DEPOSITS $b Commercial Customer preferences favouring saving Subdued system growth & increased competition $b products in low rate environment and offset by specialist segment growth transactional digital payments offering Re
Slide 60: Australia Retail & Commercial
AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Productivity initiatives including Slower credit demand, tighter Lower collective provision charge workforce and branch optimisation home loan origination risk reflects reduced FUM. have offset
Slide 61: Institutional
INSTITUTIONAL FY19 FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Continued momentum and Productivity focus maintained, Credit charges remained below Targeted profitable growth and customer revenue growth absolute cost reduction long run trend improved returns Income ($
Slide 62: New Zealand Division
NEW ZEALAND DIVISION FINANCIAL PERFORMANCE: CONTINUING OPERATIONS EXCLUDING LARGE / NOTABLE ITEMS Margin compression, compliance Solid home lending growth within Increased regulatory compliance Provisions returning to more costs and provisions impacting a competitive environment requirements normali
Slide 63: Treasury
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K TREASURY
Slide 64: Regulatory Capital
REGULATORY CAPITAL CAPITAL UPDATE APRA LEVEL 2 COMMON EQUITY TIER 1 (CET1) APRA Level 2 CET1 ratio of 11.4% (16.4% on an Internationally Comparable basis 1), % which is in excess of APRA’s ‘unquestionably strong’ benchmark2. Net Organic Capital APRA Level 1 CET1 ratio of 11.4%. Level 1 consolida
Slide 65: Regulatory Capital Generation
REGULATORY CAPITAL GENERATION COMMON EQUITY TIER 1 GENERATION 2H averages Full Year average 2H19 FY19 (bps) 2H12-2H18 FY12-FY18 Cash NPAT1 95 83 189 172 Organic Capital Generation RWA movement 1 (10) (13) (7) Capital Deductions2 (6) 2 (18) - Net organic capital generation of Net capital generation
Slide 66: Balance Sheet Structure
BALANCE SHEET STRUCTURE1 BALANCE SHEET COMPOSITION NSFR COMPOSITION Sep 2019 $515b Wholesale $443b Funding & Other3 Liquids Non Financial and Other Assets4 Corporates Other Short Term Wholesale Debt & Loans5 Liquid and Other Assets Other Funding2 Retail/SME 29% 25% Residential Mortgages6,7 Capital <
Slide 67: Liquidity Coverage Ratio (LCR) Summary
LIQUIDITY COVERAGE RATIO (LCR) SUMMARY1 LCR COMPOSITION (AVERAGE) MOVEMENT IN AVERAGE LCR SURPLUS ($b) FY19 FY18 v FY19 $188b Internal RMBS Other ALA2 FY18 FY19 LCR 138% LCR 140% HQLA2 2 6 54 53 $134b 1 Wholesale funding -4 HQLA1 0 -4 Customer deposits & other3 Liquid Assets Net Cash Outflow FY18 CL
Slide 68: Term Wholesale Funding Portfolio
TERM WHOLESALE FUNDING PORTFOLIO1 • ANZ’s term funding requirements depend on market conditions, balance sheet needs and exchange rates, amongst other factors • ANZ estimates an FY20 funding requirement broadly consistent with previous years at ~$25b ISSUANCE MATURITIES $14.5b in AUD $b and NZD 32 2
Slide 69: Impacts of Rate Movements
IMPACTS OF RATE MOVEMENTS BILLS/OIS SPREAD CAPITAL & REPLICATING CAPITAL2 & REPLICATING DEPOSITS PORTFOLIO DEPOSITS PORTFOLIO (AUSTRALIA) bps % 65 3.0 60 AUST NZ APEA 55 2.5 50 Volume ($A) ~60bn ~20bn ~10bn 45 40 2.0 Target Duration Rolling 3 to 5 years Various 35 30 1.5 Proportion Hedged ~70% ~75%
Slide 70: Capital Framework
CAPITAL FRAMEWORK CURRENT REGULATORY PROPOSALS AND RECENT FINALISATION1 1H19 2H19 2020 2021 2022 2023 2024 RBNZ capital framework Consultation Finalise2 Transition Implementation Counterparty Credit Risk3 Implementation Leverage ratio Consultation Finalise Implementation Advanced approach to credit
Slide 71: Risk Management
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K RISK MANAGEMENT
Slide 72: Key Risk Metrics
KEY RISK METRICS CREDIT IMPAIRMENT CHARGE INDIVIDUAL PROVISION (IP) CHARGE COLLECTIVE PROVISION (CP) BALANCE & COVERAGE Sep-19 CP/CRWA impacted -3bps by increase in CRWA’s $m $m $m 787 from regulatory & methodology changes (incl. SA-CCR) 554 720 430 343 398 3,378 3,376 380 2,785 2,662 479 2,579 2,52
Slide 73: Risk Management - Provisions
RISK MANAGEMENT PROVISIONS CREDIT IMPAIRMENT CHARGE ANZ HISTORICAL LOSS RATES $m bps 1,500 250 1,200 1,038 918 200 900 720 479 150 600 408 280 393 402 300 100 0 50 -300 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 90 93 96 99 02 05 08 11 14 17 18 19 Consu
Slide 74: Collective Provision
COLLECTIVE PROVISION COLLECTIVE PROVISION BALANCE COLLECTIVE PROVISION CHARGE1 $m AASB9 813 90 27 23 3,376 $m 1H19 2H19 FY19 CP charge 13 4 17 -79 -21 2,523 Volume/Mix -28 -51 -79 Change in Risk -40 19 -21 CP charge 17 Economic outlook 73 17 90 sensitivity Other 8 19 27 Sep-18 Transition Volume / Ch
Slide 75: Impaired Assets
RISK MANAGEMENT IMPAIRED ASSETS CONTROL LIST GROSS IMPAIRED ASSETS BY DIVISION Index Sep 09 = 100 $m 150 3,173 2,883 2,940 3,000 100 2,384 2,034 2,139 2,128 2,029 2,000 50 1,000 0.51% 0.55% 0.51% 0.41% 0.34% 0.33% 0.33% 0.33% 0 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 0 Mar-16 Sep-16 Mar-17 Sep-1
Slide 76: Risk Weighted Assets
RISK MANAGEMENT RISK WEIGHTED ASSETS TOTAL RISK WEIGHTED ASSETS 2H19 increase includes op. risk modelled increase CRWA MOVEMENT Increase driven by SA-CCR implementation, a regulatory overlay for Australia Home Loans as well as of +$3b combined with an overlay +$6.25b and implementation of APRA Risk
Slide 77: Portfolio Composition
RISK MANAGEMENT PORTFOLIO COMPOSITION % of Portfolio in Non Portfolio Balance EXPOSURE AT DEFAULT (EAD) DISTRIBUTION Category % of Group EAD Performing in Non Performing Sep-18 Mar-19 Sep-19 Sep-18 Mar-19 Sep-19 Sep-19 TOTAL GROUP EAD (Sep-19) Consumer Lending 39.7% 38.8% 37.6% 0.2% 0.2% 0.1% $549m
Slide 78: Commercial Property Portfolio
RISK MANAGEMENT COMMERCIAL PROPERTY PORTFOLIO COMMERCIAL PROPERTY OUTSTANDINGS BY REGION COMMERCIAL PROPERTY OUSTANDINGS BY SECTOR $b % % 42.9 100 42.4 12 80 40.2 2.8 2.8 38.4 37.9 37.7 37.6 11 60 37.5 2.9 3.9 3.6 2.7 2.4 3.0 10 40 10.7 10.5 9.8 20 9 8.8 9.5 9.5 9.7 9.7 8 Mar-17 Sep-17 Mar-18 Sep-18
Slide 79: Residential Development
RESIDENTIAL DEVELOPMENT OVERVIEW PROFILE (SEP-19) Total Residential Limits: $10.6b 31% • Average qualifying pre-sales for Inner City Apartment 20% Development loans and corresponding LVRs were 101% and 52%, respectively as at Sep 19 (as compared to presales of Apartment Development 101% and LVR of 4
Slide 80: Group Agriculture Portfolio
RISK MANAGEMENT GROUP AGRICULTURE PORTFOLIO AGRICULTURE EXPOSURE BY SECTOR (% EAD) GROUP AGRICULTURE EAD SPLITS1 6.6% Total EAD (Sep-19) As a % of Group EAD 3.3% A$35.2b 3.6% 6.1% 3.0% 43.5% 44.9% 15.9% 14.9% 10.4% 98.9% 98.9% 74.2% 76.0% 56.2% 54.9% 12.8% 35.0% 0.3% 0.2% 1.1% 1.1% Sep-18 Sep-19 Sep
Slide 81: Group Resources Portfolio
GROUP RESOURCES PORTFOLIO TOTAL ANZ PORTFOLIO RESOURCES PORTFOLIO THERMAL COAL EXPOSURE EAD $b EAD $b EAD $b 2.0 977 Resources: 944 17 1.8% of ANZs 1.5 903 15 20.0 Thermal 898 895 total portfolio 20 16 14 coal 1.0 1.7 mining: 0.6 17.3 <0.1% of 0.5 ANZs total 1.3 16.1 0.8 0.0 portfolio 15.3 0.7 Sep-1
Slide 82: ANZ Institutional Portfolio
RISK MANAGEMENT ANZ INSTITUTIONAL PORTFOLIO (COUNTRY OF INCORPORATION1) INSTITUTIONAL PORTFOLIO SIZE & TENOR (EAD2) ANZ INSTITUTIONAL INDUSTRY COMPOSITION $b EAD (Sep-19): A$447b2 Finance (Banks and Central Banks) Government Admin. 400 26% 30% Services to Fin. & Ins. Property Services3 350 Basic Mat
Slide 83: ANZ Asian Institutional Portfolio
RISK MANAGEMENT ANZ ASIAN INSTITUTIONAL PORTFOLIO (COUNTRY OF INCORPORATION1) COUNTRY OF INCORPORATION1 ANZ ASIA INDUSTRY COMPOSITION EAD (Sep-19): A$121b2 EAD (Sep-19): A$121b2 Finance (Banks & Central Banks) 5% 19% Basic Material Wholesaling 3% 3% Machinery & Equip Mnfg 5% 26% 2% Petroleum,Coal,Ch
Slide 84: Housing Portfolio
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K HOUSING PORTFOLIO
Slide 85: Australia Home Loans - Portfolio Overview
AUSTRALIA HOME LOANS PORTFOLIO OVERVIEW Portfolio1 Flow2 Portfolio1 FY17 FY18 FY19 FY18 FY19 FY17 FY18 FY19 Number of Home Loan Average LVR at Origination7,8,9 69% 67% 67% 1,009k 1,011k 983k 170k3 119k3 accounts1 Average Dynamic LVR (excl offset)8,9,10,11,12 55% 55% 57% Total FUM1 $264b $272b $265b
Slide 86: Australia Home Loans - Portfolio Growth
AUSTRALIA HOME LOANS PORTFOLIO GROWTH HOME LOAN COMPOSITION1,2 LOAN BALANCE & LENDING FLOWS1 $b $b 256 264 271 272 269 265 16 8 7 29 10 9 9 8 272 -2 31 26 265 43 37 54 49 -50 14 17 22 29 33 54 52 38 49 44 39 33 Sep-18 New Sales Net OFI Refi Redraw & Repay / Other Sep-19 exc Refi-In Interest ANZ MORT
Slide 87: Australia Home Loans - Portfolio and Flow Composition
AUSTRALIA HOME LOANS PORTFOLIO1,2 & FLOW3 COMPOSITION BY PURPOSE BY ORIGINATION LVR4 Portfolio Flow Flow 4% 3% 3% 1% 20% 18% 17% 30% 26% 33% 32% 19% 17% 16% 65% 67% 73% 65% 67% 63% 61% Sep-17 Sep-18 Sep-19 FY19 FY17 FY18 FY19 Owner Occ Investor Equity <80% LVR 80% LVR >80% LVR BY LOCATION BY CHANNEL
Slide 88: Australia Home Loans - Portfolio Dynamics
AUSTRALIA HOME LOANS PORTFOLIO DYNAMICS HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE1,2 76% of accounts ahead of repayments % composition of accounts (September 19) 27% Investment:5 Interest payments may receive 20% 21% 38 37 negative gearing/tax benefits 21 19 New Acc
Slide 89: Australia Home Loans - Portfolio Performance
AUSTRALIA HOME LOANS PORTFOLIO PERFORMANCE PRODUCT 90+ DAY DELINQUENCIES1,2,3 HOME LOAN DELINQUENCIES1,2,5 % % 5.0 2.5 4.0 2.0 3.0 1.5 2.0 1.0 1.0 0.5 0.0 0.0 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 12 13 14 15 16 17 18 19 12 13 14 15 16 17 18 19 Home Loans Personal Loans 30+
Slide 90: Australia Home Loans - Western Australia
AUSTRALIA HOME LOANS WESTERN AUSTRALIA • Exposure to WA has decreased since Mar-16 driven by the economic WA OUTSTANDING BALANCE environment and credit policy tightening (mining town lending) $b • Currently WA comprises 13% of portfolio FUM (and is decreasing), 40 however it comprises 27% of 90+ del
Slide 91: Australia Home Loans - New South Wales/ACT
AUSTRALIA HOME LOANS NEW SOUTH WALES/ACT Portfolio HOUSING PORTFOLIO1 HOUSING FLOW • NSW/ACT makes up 32% of portfolio FUM and 25% of 90+ days past due. $b $b • 76% in advance of repayments which is in line with the total portfolio. 272 264 271 269 265 • 18% of the portfolio is Interest Only & reduc
Slide 92: Australia Home Loans - Interest Only
AUSTRALIA HOME LOANS INTEREST ONLY INTEREST ONLY FLOW COMPOSITION • Serviceability assessment is based on ability to repay principal & interest repayments calculated over the residual term of loan % APRA’s 30% limit removed December 2018 • 86% of Interest Only customers have net income >$100k p.a. (
Slide 93: Underwriting Practices and Policy Changes
AUSTRALIA HOME LOANS UNDERWRITING PRACTICES AND POLICY CHANGES1 • End-to-end home lending responsibility managed within ANZ Multiple checks during origination process • Effective hardship & collections processes Pre – application2 Income & Expenses • Full recourse lending • ANZ assessment process ac
Slide 94: Underwriting Practices and Policy Changes - June 2015 to September 2019
AUSTRALIA HOME LOANS UNDERWRITING PRACTICES AND POLICY CHANGES1 - JUNE 2015 TO SEPTEMBER 2019 ANZ LVR Caps • LVR cap reduced to 70% in high risk mining towns in June 2015; reduced to 90% for investment loans (July 2015) • Restricted new housing lending (new security to ANZ) to max. 80% LVR for all a
Slide 95: Stress Testing the Australian Mortgage Portfolio
AUSTRALIAN HOME LOANS STRESS TESTING THE AUSTRALIAN MORTGAGE PORTFOLIO • ANZ conducts regular stress tests of its loan portfolios to meet risk management Assumptions Base1 Year 1 Year 2 Year 3 objectives and satisfy regulatory requirements. Unemployment 5.1% 5.5% 9.8% 10.5% rate • Stress tests are h
Slide 96: Lenders Mortgage Insurance
LENDERS MORTGAGE INSURANCE SEPTEMBER FULL YEAR 2019 RESULTS LMI & REINSURANCE STRUCTURE Australian Home Loan portfolio LMI and Reinsurance Structure at 30 Sep 19 (% New Business FUM Oct-18 to Sep-19) Gross Written Premium ($m) $80.7m LVR<80% Not LMI Insured Net Claims Paid ($m) $31.4m 86% Loss Rate
Slide 97: New Zealand Home Loans - Portfolio Overview
NEW ZEALAND HOME LOANS PORTFOLIO OVERVIEW1 Portfolio Flow Portfolio FY17 FY18 FY19 FY19 FY17 FY18 FY19 Number of Home Loan Accounts 520k 526k 527k 118k Average LVR at Origination2 59% 58% 56% Total FUM NZD77b NZD81b NZD85b NZD19b Average Dynamic LVR2 43% 41% 42% Average Loan Size2 NZD148k NZD153k NZ
Slide 98: New Zealand Home Loans - Lending and Arrears Trends
NEW ZEALAND HOME LOANS HOME LENDING & ARREARS TRENDS1 NZ DIVISION 90+DAYS HOUSING FLOWS2 HOUSING PORTFOLIO DELINQUENCIES % 1.5 1.0 21% 18% 15% 34% 39% 40% 0.5 79% 82% 85% 66% 61% 60% 0.0 Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- Sep- FY17 FY18 FY19 Sep-17 Sep-18 Sep-19 08 09 10 11 12 13
Slide 99: Royal Commission Update & Regulatory Reforms
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K R OYA L C O M M I S S I O N U P D AT E & R E G U L ATO R Y R E F O R M S
Slide 100: Royal Commission - Our Approach, Our Response
ROYAL COMMISSION OUR APPROACH, OUR RESPONSE WE ARE RESPONDING TO THE ‘SPIRIT AND THE LETTER’ OF THE ROYAL COMMISSION. Initial response • Committed in February 2019 to sixteen actions that we can take now including: • removing overdrawn and dishonour fees on our Pensioner Advantage account • improvin
Slide 101: Strengthening Our Risk Culture
STRENGTHENING OUR RISK CULTURE • We have strengthened the way we deal with risk events SENIOR LEADER CONSEQUENCES IN 2019* through an enhanced Accountability and Consequence Framework, which is applicable to all of our people. Remuneration consequence 23 • In 2019 across the Group, 151 employees wer
Slide 102: Corporate Overview & ESG
2019 FULL YEAR RESULTS — I N V E S TO R D I S C U S S I O N PA C K C O R P O R AT E O V E R V I E W & E N V I R O N M E N T, S O C I A L A N D G O V E R N A N C E ( E S G )
Slide 103: ESG - Governance Overview
ESG – GOVERNANCE OVERVIEW BOARD OF DIRECTORS Chaired by David Gonski, Chairman Audit Committee Risk Committee Ethics, Environment, Digital Business Human Resources Nomination and Social and Technology Committee Board Operations and Governance Committee Committee Committee Chair: Chair: Chair: Chair:
Slide 104: Board and Executive Committees Work Together
BOARD AND EXECUTIVE COMMITTEES WORK TOGETHER INDICATIVE RESPONSIBILITIES DEMONSTRATE HOW COMMITTEES MANAGE ESG Ethics, Environment, Social and Governance Ethics and Responsible Business Board committee Management committee Purpose: Establish ethical and ESG guidelines and Purpose: Operationalise Boa
Slide 105: What We Care About Most - A Year in Review
‘WHAT WE CARE ABOUT MOST’ – A YEAR IN REVIEW More Australians and New Zealanders • Joint Lead Manager on $315m National Housing Finance and Investment Corporation bond, and have access to affordable, liveable, NZD$500m and NZD$600m bonds for Housing New Zealand to provide new and upgraded social hou
Slide 106: Creating Value for Our Stakeholders
CREATING VALUE FOR OUR STAKEHOLDERS CUSTOMERS COMMUNITY • 8.7m total retail, commercial • $142m contributed in and Institutional customers community investment3 EMPLOYEES SHAREHOLDERS • $291b in retail & commercial • 134,930 volunteering hours customer deposits in Australia • 39,060 people employed
Slide 107: Climate-Related Financial Disclosures
2019 FULL YEAR RESULTS — C L I M AT E - R E L AT E D F I N A N C I A L D I S C L O S U R E S
Slide 108: Climate-Related Financial Disclosures (TCFD)
CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)1 Governance Strategy Risk Management Metrics & targets • Board Risk Committee oversees • Low carbon financial products and • Climate-related risks identified as • 29 engagements with large management of climate-related services potential credit risk emitt
Slide 109: Supporting Our Customers and Training Our Staff
SUPPORTING OUR CUSTOMERS AND TRAINING OUR STAFF ON THE DEVELOPMENT OF LOW CARBON TRANSITION PLANS CUSTOMER MANAGEMENT AND STAFF TRAINING CUSTOMER EXAMPLE: BHP’S TRANSITION PLANNING BHP has an integrated strategy including: ANZ customer management informed by climate-related engagement • Targets to h
Slide 110: Economics
2019 FULL YEAR RESULTS — D E B T I N V E S TO R P R E S E N TAT I O N ECONOMICS
Slide 111: Economics - Australia Forecast Table
ECONOMICS AUSTRALIA FORECAST TABLE1 2016 2017 2018 2019F 2020F Australia – annual % growth GDP 2.8 2.4 2.8 1.9 2.8 Domestic final demand (% q/q) 1.8 3.0 2.8 1.0 1.7 Headline CPI (% y/y) 1.3 1.9 1.9 1.4 1.7 Core CPI (%y/y) 1.5 1.8 1.9 1.4 1.7 Employment (%y/y) 1.0 3.3 2.3 2.0 1.9 Wage Price Index (%y
Slide 112: Australian Economy
AUSTRALIAN ECONOMY GDP GROWTH1 CONSUMER PRICE INFLATION1 CREDIT GROWTH BY SECTOR1 AUSTRALIAN GOVERNMENT BUDGET BALANCE2 (year ended) Per cent of nominal GDP 112 Sources: 1. RBA Chart Pack Oct 2019
Slide 113: Australian Economy and Population
AUSTRALIAN ECONOMY AND POPULATION POPULATION GROWTH1 – AUSTRALIA AND G7 CONSUMER SPENDING GROWTH4 % yoy 2.5% 2.0% Australia 1.5% 1.0% G7 weighted average 0.5% 0.0% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 POPULATION GROWTH – MAJOR STATES3 STATE S
Slide 114: Australian Labour Market
AUSTRALIAN LABOUR MARKET UNEMPLOYMENT AND UNDEREMPLOYMENT1 JOB VACANCIES AND ADVERTISEMENTS1 (Per cent of labour force) WAGE PRICE INDEX GROWTH2 LABOUR COSTS AND INFLATION3 7 5.0 4.5 6 4.0 5 3.5 % change y/y % change y/y 4 3.0 3 2.5 2 2.0 1 1.5 0 1.0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 1
Slide 115: Commodity Prices
COMMODITY PRICES1 RBA INDEX OF COMMODITY PRICES BASE METALS, RURAL, AND OIL PRICES SDR, 2016/17 Average = 100, log scale Weekly BULK COMMODITY PRICES TERMS OF TRADE* Free on board basis 2016/17 average = 100, log scale 115 1. RBA Chart Pack Oct 2019
Slide 116: Australian Economy - State by State
AUSTRALIAN ECONOMY – STATE BY STATE STATE FINAL DEMAND (STATE GDP)1 CHANGE IN EMPLOYMENT BY STATE1 % yoy Past 3 years 6.0 4.0 2.0 0.0 -2.0 -4.0 NSW VIC TAS SA QLD WA -6.0 -8.0 -10.0 2014 2015 2016 2017 2018 2019 POPULATION GROWTH1 MAJOR INFRASTRUCTURE PROJECTS2 000’s % yoy 22 North-South - River Tor
Slide 117: Australian Economy - WA and QLD
AUSTRALIAN ECONOMY – WA AND QLD1 WA GDP HAS IMPROVED 6 MONTHS OF JOB GROWTH IN WA AND QLD 16 30 14 26 NT 12 22 Tas 10 18 8 ACT 14 y/y % change (trend) y/y % change (trend) 6 10 WA 4 6 2 SA 2 0 -2 Qld -2 -6 -4 WA improved NSW -6 -10 -8 -14 Vic -10 -18 -20 0 20 40 60 80 100 120 04 06 08 10 12 14 16 18
Slide 118: Australian Economy - Service Exports
AUSTRALIAN ECONOMY – SERVICE EXPORTS SERVICE EXPORTS AND AUD1 INTERNATIONAL TOURIST VISA’S GRANTED2 3.0 40 2.5 45 49% growth 2.0 50 6 1.5 55 5 AUDbn, 3-month sum 1.0 60 4 Index 0.5 65 0.0 70 3 -0.5 75 -1.0 80 2 -1.5 85 1 -2.0 90 95 97 99 01 03 05 07 09 11 13 15 17 19 - Net tourism & education relate
Slide 119: Australian Housing Dynamics: A Cooling Market
AUSTRALIAN HOUSING DYNAMICS: A COOLING MARKET HOUSING PRICE FORECASTS BY STATE3 HOUSE PRICE GROWTH1 16 5 yr Cumulative Sep 14-Sep yoy % 5 yr Cumulative 2013-2018 19 Total housing prices, y/y % change (calendar year) 12 All All All Sep 2019 Houses Units Houses Units Houses Units dwellings dwellings d
Slide 120: Rental Vacancy Rates Remain Low
RENTAL VACANCY RATES REMAIN LOW RENTAL VACANCY RATES1 VACANCY RATES BY STATE2,3 Seasonally adjusted* 8 7 6 Vacancy rates, % 5 4 3 2 1 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Australian capital cities Sydney Melbourne Brisbane Perth RENTS2,3 RENTS & VACANCY RATES2,3 15 4.5 0 4.0
Slide 121: Australian Housing Dynamics
AUSTRALIAN HOUSING DYNAMICS PRIVATE RESIDENTIAL BUILDING APPROVALS1 HIGH DENSITY APARTMENT COMPLETIONS2 Monthly 4+ Storey buildings, share of 2016 dwelling stock HOUSING LOAN APPROVALS1 HOUSING STARTS AND COMPLETIONS3 121 Sources: 1. RBA Chart Pack Oct 2019, ABS 2. RBA Financial Stability Review, Ap
Slide 122: Australian Housing - Household Debt and Income
AUSTRALIAN HOUSING HOUSEHOLD DEBT AND INCOME HOUSEHOLD DEBT AND DEPOSITS1 HOUSEHOLD DEBT-TO-INCOME RATIOS2 % of annual household disposable income HOUSING PRICE-TO-INCOME RATIO3 HOUSEHOLD MORTGAGE DEBT INDICATORS2 Sources: 1. ABS, RBA. Housing Debt refers to ratio of housing debt to annualised house
Slide 123: Australian Housing - Household Debt
AUSTRALIAN HOUSING HOUSEHOLD DEBT HOUSEHOLD DEBT1 HOUSEHOLD BALANCE SHEET2 Per cent of household disposable income Relative to disposable income Sources: 1. RBA Speech: "Property, Debt and Financial Stability", March 2019. 2. RBA. Financial Stability Review, October 2019 123
Slide 124: Australian Housing - Low Levels of High LVR Lending
AUSTRALIAN HOUSING LOW LEVELS OF HIGH LVR LENDING - ISOLATED NEGATIVE EQUITY1 ADIs’ HIGH LVR LOANS1 LOANS IN NEGATIVE EQUITY2 Share of new loan approvals Share of balances, February 2019 CURRENT DYNAMIC LVR DISTRIBUTION1 Share of balances, February 2019 Sources: 1. RBA. Financial Stability Review, A
Slide 125: Australian Mortgage Stability
AUSTRALIAN MORTGAGE STABILITY OFFSET BALANCES AND SMALL SHADOW BANKING SECTOR HOUSEHOLD MORTAGE BUFFERS1 NON-BANK HOUSING CREDIT AND RMBS ISSUANCE2 • Aggregate buffers of 16.5% of outstanding mortgage balance or 2.5 years scheduled payments (at current interest rates) • Of those with <1 month buffer
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