Anz Group Holdings Limited · ASX:ANZ
Anz — Non-Deal Roadshow (June 2009)
88 slides from Anz's roadshow presentation, Jun 1, 2009
Slide 1: Investor Discussion Pack
For personal use only Investor Discussion Pack June 2009 Mike Smith – Chief Executive Officer Graham Hodges – Deputy Chief Executive Officer Jill Craig – GGM Investor Relations
Slide 2: Important Notice
Important Notice For personal use only This presentation includes various forward looking statements regarding events and trends that are subject to risks and uncertainties that could cause the actual results and financial position of ANZ to differ materially from the information presented herein. W
Slide 3: ANZ overview
For personal use only ANZ overview
Slide 4: Snapshot
Snapshot For personal use only ● Proud banking heritage spanning 170 years ● A top 10 listed company on the ASX (market cap ˜A$36b), with ˜390,000 shareholders ● Largest listed company in New Zealand, largest Australian bank in Asia and a leading bank in the Pacific ● AA rated bank on S&P long term
Slide 5: Super Regional Strategy scorecard
Super Regional Strategy launched in November 2007 – progressing well against this scorecard For personal use only TRANSFORM OUT PERFORM RESTORE • Quality on par with global leaders in our markets Create a leading • Institutional back to Super Regional bank system • Best of breed customer experience
Slide 6: The strategy leverages opportunities throughout the region
The strategy leverages opportunities throughout the region For personal use only Asia Pacific: Institutional Client focus: Our Base: • Asian regional corporates, Banks and Investors • Strong domestic franchise and client • Local corporates in Strategic and Franchise markets base in Australia and New
Slide 7: Increased earnings diversification
And will drive increased earnings diversification For personal use only Where our profits will come from … Stronger Asia-Pacific** contribution will result in more balanced profit profile ANZ Australia 69% of all ANZ profit NZ Asia/Pacific 2007* 22% 7% ANZ Strategic Australia ~60% of all ANZ profit
Slide 8: Focused approach to Super Regional Strategy
Focused approach to Super Regional Strategy For personal use only Strategic Imperative Top 4 foreign bank • Greater China • India Franchise Significant Major bank (top 4) • Vietnam, Malaysia, Indonesia Network Enhancement Network clients, product and liquidity hubs • Singapore, Tokyo, Hong Kong Next
Slide 9: Balance Sheet Strength remains our priority
Balance Sheet Strength remains our priority For personal use only • Tier 1 Capital ratio increased to 9.1% on pro Tier 1 Capital ratio above target range forma basis* (11.0% on an FSA basis) 10.0% ~11.0% • Tier 1 Capital internal target range 7.5% to ~9.1% 7.7% 8.2% 8% 6.9% • Collective Provision co
Slide 10: Customer Deposits by Geography
Customer Deposits by Geography For personal use only Australia NZ (NZD) Asia Total Group 17% 16% $bn 11% 11% 226 147 132 205 125 195 3% 1% 59 59 53% 58 31% 30 19 23 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 Retail Commercial Institutional Other Corporate Centre 10
Slide 11: Gross Loans and Advances by geography
Gross Loans and Advances by geography For personal use only Australia NZ (NZD) Offshore Total Group 9% 4% $bn 3% 2% 243 236 340 348 222 322 7% 1% 99 100 93 18% 8% 19 21 23 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 Housing Cards Business Lease Finance & Hire Purchase Other 11
Slide 12: Australia division customer focus
Australia division – customer focus is driving underlying momentum in both the retail and commercial businesses Australia Division footprint: 819 Branches; 2,545 ATMs; 14,408 FTE staff For personal use only A leader in customer satisfaction Strong Commercial Customer satisfaction Retail MFI Customer
Slide 13: ANZNB has leading market positions
ANZNB has leading market positions Share of Lending Retail & Rural Banking For personal use only (Registered Banks) 1 Share of Lending1 45% 34% 40% 35% 30% 18% 18% 19% 25% 20% 11% 15% 10% 5% 0% ANZN Peer 1 Peer 2 Peer 3 Peer 4 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Mortgages share Rural share • Institut
Slide 14: Institutional business repositioning
The Institutional business is repositioning itself as an integrated Trade, Cash and Financial Markets Flow business Clients Leveraging strong customer relationships For personal use only Two major client segments: • Regional and global companies (FI and corporate) No. 1 Relationship Bank status • Lo
Slide 15: The Balance Sheet
For personal use only The Balance Sheet – Capital, Funding, Liquidity, Provision coverage
Slide 16: ANZ has a strong capital position
ANZ has a strong capital position Mar 08 Sep 08 Mar 09 ANZ FSA ANZ Mar 09 ANZ FSA For personal use only Basel II OSFI pro- Basel II Basel II forma* Mar 09 Pro-forma* Core Tier 1 5.3% 5.9% 6.4% 8.0% 8.8% 7.2% 9.0% Tier 1 6.9% 7.7% 8.2% 10.0% 10.7% 9.1% 11.0% Total Capital 10.1% 11.1% 11.0% >13% >13%
Slide 17: Tier 1 and Core Tier 1 ratios higher under FSA
Tier 1 and Core Tier 1 ratio’s are higher under FSA regulation comparisons For personal use only Capital differences arise principally due to FSA: • Not requiring a deduction for accrued dividend and net of the associated DRP • Not requiring a Tier-1 deduction for certain capitalised expenses and de
Slide 18: Capital strengthened during first half 2009
Capital strengthened during the first half 2009 continues with $2.5bn placement & announced $0.35bn SPP in 2H09 Basel II Capital Position (Tier 1 ratio) For personal use only ~11.0 10.0 ~0.9 ~9.07 Capital raising boosts ratio but average shares 0.50 (0.25) up 8% HoH / 11% PCP 0.29 8.17 (0.07)(0.28)
Slide 19: Core Tier 1 position improvement
With the improvement in ANZ’s capital position flowing through to the core Tier 1 position For personal use only Basel II Capital Position (Core 1 ratio) ~0.9 ~7.25 0.50 (0.25) 0.29 6.35 (0.05)(0.24) 0.39 5.91 (0.24) 0.13 (0.16) 0.04 0.03 0.44% Sep-08 NPAT Div. Volume RWA & Other Market RWA Deferred
Slide 20: ANZ well placed from a funding perspective
ANZ well placed from a funding perspective For personal use only Funding composition strengthened Balanced term debt maturity ($bn) profile Short- 20 21% 22% 18% term wholesale 18 6% funding 16 9% 7% reducing* 15% 14 13% 14% 12 10 Customer 8 50% 50% 54% deposit volumes 6 increasing 4 2 7% 7% 7% 0 Ma
Slide 21: Strong term debt issuance 2009
Strong term debt issuance 2009 Term debt issuance in 2009^ • Have completed $19bn in wholesale term For personal use only funding financial YTD (1 Oct 08 to 5 May 09) representing 90% of FY09 term funding FY08 $24bn YTD $19bn target (Includes $3bn issued post 31 Mar ($bn) 09) 9 • Maintained access t
Slide 22: Liquidity position strengthened further
Liquidity position strengthened further Significant increase in liquid assets ($bn) Portfolio diversified by geography For personal use only >12 months total offshore wholesale funding Mar-09 maturities Internal RMBS (New Australia Zealand) 36% 6% 60.1 34.7 Internal 20.1 21.5 RMBS New (Australia) Ze
Slide 23: Hedging program Kiwi dollar earnings
Hedging program Kiwi dollar earnings For personal use only FY09 Hedges AUD/NZD hedges established where revenues are believed to be • 100% of the estimated FY09 NZD earnings have been effectively hedged at an average at adverse risk 1.40 AUD/NZD rate of 1.19 • During the first half of 2009 financial
Slide 24: ANZ well provisioned with Collective Provision
ANZ well provisioned with Collective Provision balance coverage 1.06% of CRWAs and CP + IP balance at 1.58% of CRWAs For personal use only Collective Provision balance / Individual Provision balance + Credit RWAs (%) Collective Provision balance / Credit RWAs (%) 1.58% 1.13% 1.39% 1.06% 0.94% 1.07%
Slide 25: Australia, NZ & Asia economic trends
For personal use only AUSTRALIA, NZ & ASIA – ECONOMIC TRENDS
Slide 26: Summary of forecasts: Australia and New Zealand
Summary of forecasts: Australia and New Zealand For personal use only Australia New Zealand 2008 2009 2010 2011 2008 2009 2010 2011 2.4 1.7 -2.8 0.8 4.8 GDP 3.0 -0.7 0.3 Inflation 4.2 2.0 2.5 2.6 5.1 1.1 2.3 2.5 Unemployment 4.2 6.3 8.2 8.3 4.3 7.0 7.9 7.2 Current A/C (% GDP) -5.4 -2.7 -3.5 -4.0 -8.
Slide 27: Australia is experiencing a recession
Australia is experiencing a recession For personal use only Gross domestic product and Unemployment income 8 Real % change 8.0 % of the labour force from 6 7.0 4 6.0 2 Real GDP (output) 0 5.0 01 02 03 04 05 06 08 09 10 -2 4.0 Real gross domestic -4 income (GDI) 3.0 -6 01 02 03 04 05 06 07 08 09 10 N
Slide 28: Australia's recession less severe than the US
However there is no reason to believe that Australia’s recession will be as severe as that now under way in the United States Australian and US labour market and household spending For personal use only Employment Consumer confidence 4 % change from year earlier 125 Dec 2000 = 100 Australia Australi
Slide 29: Australian banks less affected by global financial crisis
Australian banks have been affected by the global financial crisis, but much less than their US or European peers Spreads between 3-month bank For personal use only wholesale funding cost and official cash rates* 400 bps • Strength of the Australian banking (5-day moving avge) system versus much of
Slide 30: Australian Federal Government policy response
The Australian Federal Government policy response has been both rapid and substantial… Stimulus Packages to date: For personal use only • Oct 2008 - $10.4bn • Feb 2009 - $42bn February 2009 package included: • $12.7bn one off payments for families/farmers • $14.7bn for school building • $6.6bn publi
Slide 31: One of the largest stimulus packages in the world
One of the largest stimulus packages in the world For personal use only 16 Fiscal stimulus (% of GDP) 14 *Chinese stimulus over 5 years 12 % of GDP 10 8 6 4 2 0 Aust. India China US Global Italy Germany Taiwan Korea NZ France Japan Spain UK 31
Slide 32: Australia well placed to use fiscal policy
Australia well placed to continue to use fiscal policy to support economic activity For personal use only Budget surplus/deficit, 2008 Government net debt, 2008 6 % of GDP % of GDP 100 4 80 Surplus 60 2 40 0 20 -2 0 -20 -4 Deficit -40 -6 -60 Australia Italy Spain Germany Japan Sweden US UK Korea Can
Slide 33: Rapid monetary policy easing
Rapid, pre-emptive monetary policy easing has supported the economy For personal use only • The RBA has cut the official 10 % pa cash rate by 4.25% since September 08 9 Mortgage interest rates • Larger-than-expected movements 8 in October, November and February underscore the RBA’s 7 capacity to res
Slide 34: Monetary policy pass-through to consumers
Monetary policy having a greater impact in Australia than elsewhere – rate cuts are getting through to consumers International monetary policy pass through For personal use only % 6 Change in official interest rate Change in most common 5 mortgage rate 4 3 2 1 0 Australia Canada NZ UK US 34
Slide 35: Summary: tough 2009, Australia relatively well placed
Summary: Very tough 2009 for global economy, Australia impacted but relatively well placed For personal use only ● Australia relatively well placed – Rapid & substantial policy response – capacity for more – Starting point ‘fundamentals’ solid – Strong finance sector ● Housing supported by a supply
Slide 36: The New Zealand banking system is sound
The New Zealand banking system is sound For personal use only New Zealand banks well capitalised Banking sector not highly leveraged compared to other countries 12 % of Risk Weighted Assets 800 Bank debt as % of GDP 700 10 Total capital ratio 600 8 500 Tier 1 capital ratio 400 6 300 200 4 100 2 Tier
Slide 37: New Zealand recession extended into 2009
The recession in the New Zealand economy has extended into 2009 and conditions remain difficult For personal use only New Zealand real economic growth New Zealand major trading partner growth 7 % 7 Annual avg % change 6 6 Annual % change 5 RBNZ March 5 forecasts 4 4 3 Quarterly % change 3 2 2 1 Earl
Slide 38: Automatic stabilisers kicking in
Five quarters into the domestic recession automatic stabilisers are kicking in For personal use only Further interest rate cuts expected Fiscal impulse % % of GDP 4 10 3 Expansionary 8 Official 2 cash rate 6 1 0 4 -1 Dec 08 2 -2 update Contractionar 0 -3 00 01 02 03 04 05 06 07 08 09 97 99 01 03 05
Slide 39: ANZ National: well funded with diversified mix
Consumer led rebalancing / ANZ National: well funded with diversified mix For personal use only Slowdown has led to rebalancing of Strong liquidity and well funded system growth in deposits and 20 Annual % change lending Short term wholesale Deposits 15% 15 Long term 10 securities 18% Lending Custom
Slide 40: New Zealand diversified export sector
New Zealand has a diversified export sector, weighted towards agriculture. For personal use only GDP composition Exports are diversified by product… Agriculture Fishing, Meat, 8.00% Personal 4.7% Forestry & Services Other Food, Mining 2.3% Other, 23.4% 11.9% 7.70% Government Manufacturing 14.1% Fore
Slide 41: A better starting position – low net debt
A better starting position – low net debt Gross public sector debt very low Fiscal position to deteriorate For personal use only compared to other countries but off a low base Treasury 60 % of GDP forecasts* 200 Gross public debt as % of GDP (2008) 180 50 160 Net Debt 140 40 120 30 100 80 20 60 40 1
Slide 42: Boost to household incomes
Tax cuts, lower mortgage rates and petrol prices are providing a boost to household incomes Mortgage Interest Rates Retail Petrol Prices For personal use only 220 NZ cents per litre 11 % Floating 200 10 180 9 2-year fixed 160 8 5-year fixed 140 7 6 120 5 100 4 80 00 01 02 03 04 05 06 07 08 03 04 05
Slide 43: Asian region expected to perform better
Asian region expected to perform better than much of the developed world For personal use only Emerging Asia - Baseline Medium-term Growth Scenario 2007 2008 2009 2010 2011 China 13.0 9.1 6.9 8.5 10.0 India 9.3 7.2 5.3 6.9 8.0 NIEs Hong Kong 6.4 2.0 -1.8 4.2 4.7 Korea 5.0 2.7 -2.9 4.0 5.0 Singapore
Slide 44: Global growth downturn led by developed economies
Global growth downturn has been led by the developed economies GDP growth For personal use only Real % change from year earlier Real % change from year earlier 7 10 6 Long term average 8 'Developing' 5 economies 4 6 3 4 2 2 1 0 0 -1 IMF has forecast the first fall in GDP for 60 years -2 -2 'Advanced
Slide 45: Asia region impact of the financial crisis
Asia Region impact of the Financial Crisis overview For personal use only • The impact on the region of the credit crisis and advanced economy recession has not been uniform. • Policymakers in Asia have been and are likely to continue to be aggressive. Interest rates have been cut sharply in many ec
Slide 46: Australia & NZ mortgage market data
For personal use only AUSTRALIA & NZ MORTGAGE MARKET DATA
Slide 47: Australian housing market fundamentals solid
Australian housing market fundamentals are solid, driven by strong underlying demand For personal use only Net permanent & long-term settler Persons per household arrivals 225 '000 (annual moving total) 2.8 '000 (annual moving total) 205 185 2.7 165 145 125 2.6 105 85 2.5 65 45 25 2.4 88 90 92 93 95
Slide 48: Pent-up housing demand at record levels
Solid demand coupled with inadequate supply is driving pent-up housing demand to record levels For personal use only Housing market balance: Australia 240 ‘000 200 Underlying demand 160 Completions 120 80 Shortage 40 0 -40 Surplus -80 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Sources: Austr
Slide 49: Household sector well placed to accumulate debt
The household sector was well placed to accumulate debt with two-thirds having little or no debt For personal use only Debt servicing ratio “the lending boom was 3.5 million households concentrated on existing homeowners who traded 70% of homes with up to bigger and better 3.0 less than a 4% houses
Slide 50: Interest burden and income after interest
Interest burden increased but ‘income after interest paid’ also increased in real terms For personal use only HH debt-servicing ratio HH income after interest paid 16 % 5 % change But “left-over” income Burden rising with per HH was solid 14 interest rates and 4 debt accumulation 3 12 2 10 1 8 0 6 -
Slide 51: Household debt service ratio reduced
Dramatic interest rate cuts has seen the household debt service ratio reduce… For personal use only Household debt service ratio 16 % of disposable income 15 14 13 12 11 20 year average 10 9 8 7 6 5 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Source: RBA, ABS, ANZ 51
Slide 52: Household saving ratio set to recover
Household saving ratio looks set to recover dramatically in 2009 For personal use only Household saving ratio 18 % 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Sources: ABS, Economics@ANZ 52
Slide 53: Household cash flow buoyed by stimulus
… household cash flow buoyed by fiscal stimulus and falling petrol prices For personal use only HH disposable income Petrol price annual % change cents per litre 20 160 18 150 16 140 14 130 12 120 10 110 8 100 6 90 4 10 year 2 80 average 0 70 02 03 04 05 06 07 08 09 02 03 04 05 06 07 08 09 Source: A
Slide 54: Recent gains driven by owner occupiers
Recent gains driven by owner occupiers including first home buyers but boosted by first home owners scheme. For personal use only Housing finance commitments (excl. refin.) 12 $m per month (trend) 11 Owner occupied 10 9 8 7 Investor 6 5 4 3 2 1 0 00 01 02 03 04 05 06 07 08 Sources: Australian Bureau
Slide 55: Rental market tightening and rents rising
The supply imbalance has prompted the rental market to tighten and rents to rise sharply For personal use only National rental vacancy rate House rents %; 4 qtr ma ABS 5.0 8 Sydney average 10.0 rents 4.5 Residex 6.6 "Advertised 4.0 Melbourne 11.8 " rents 3.5 12.2 Perth 12.5 3.0 2.5 5.4 Adelaide 12.3
Slide 56: Affordability favouring home purchase
With the moves in affordability favouring home purchase over rental House purchase affordability ANZ rent or buy indicator For personal use only 45 % of disposable income 1.6 ratio 40 'rent' 1.5 35 20 year average 30 1.4 25 1.3 20 1.2 86 88 90 92 94 96 98 00 02 04 06 08 10 12 1.1 Rental affordabilit
Slide 57: House prices softened but not expected to fall
House prices have softened but are not expected to fall appreciably House prices For personal use only 550 $000 500 Sydney (-7.3%*) 450 Perth 400 (-10.1%*) 350 Bris. (-6.3%*) Adel.(-1.9%*) 300 250 Melb. (-6.7%*) 200 Hobart (0.6%*) 150 100 50 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Sour
Slide 58: House price falls confined to upper end
House price falls have been largely confined to the upper For personal use only end of the market Source: RP Data-Rismark 58
Slide 59: Australia and US property markets differ
Australia and US residential property market fundamentals have very little in common Nominal GDP growth Population growth For personal use only 12 Ann % change Ann % change Australia 10 Australia 1.6 8 1.2 US 6 0.8 4 US 0.4 2 0 0.0 99 00 01 02 03 04 05 06 07 08 99 00 01 02 03 04 05 06 07 08 Rental v
Slide 60: New Zealand property markets declined further
In New Zealand property markets further declined through 2008 and into early 2009 Median NZ House prices For personal use only (3-mth-ave) 500 $'000 450 Auckland (-5.3%*) 400 350 NZ (-6.6%*) 300 Canturbury 250 (-7.5%*) Wellington 200 (-5.6%*) Otago (-7.9%*) 150 100 50 92 94 96 98 00 02 04 06 08 * Pe
Slide 61: NZ home loan market dominated by fixed rates
Home loan market in NZ is dominated by fixed rate mortgages. Interest rate reductions have started to benefit consumers. For personal use only 48% of ANZ National’s fixed rate book will reprice in next 12 months (80% of the book are on fixed rate mortgages) Bps 250 NZD bn 70 200 60 150 Forecast 100
Slide 62: Mortgage rates reduced substantially
Mortgage rates have reduced substantially, providing cashflow relief to households For personal use only 12 % 11 10 Floating rates 9 8 7 5-year fixed 6 2-year fixed 5 4 97 98 99 00 01 02 03 04 05 06 07 08 09 62
Slide 63: Credit quality
For personal use only CREDIT QUALITY
Slide 64: Portfolio rebalanced towards consumer segment
ANZ portfolio has rebalanced towards the consumer segment over time, this segment has had consistently lower loss rates For personal use only IP Charge as a % of Total Advance 1993 2009 2.0% 1.8% Aust. Mortgages Commercial / Other 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 1993 1995 1997 1999 2001
Slide 65: Days past due: stress in corporate and NZ consumer
90 Day Past due: increased stress on the Australian Corporate and NZ Consumer Portfolios For personal use only 90 Days Past Due well up, majority Australian Consumer Portfolio on the secured book (90+ day arrears as % of portfolio) 1.6% % of GLA Security profile 1.2% 0.5% Not secured 0.8% 0.4% 0.0%
Slide 66: Australian mortgage portfolio well diversified
Australian Mortgage portfolio well diversified with good underwriting standards Key Facts For personal use only Aus. Mortgage profile by state & product • Well diversified mortgage portfolio by state and distribution channel NSW • ˜65% of mortgage accounts are for primary residences ACT 27% • Averag
Slide 67: New Zealand mortgage portfolio stress
New Zealand mortgage portfolio stress driven by the impact of fixed mortgage rates New Zealand Mortgages^ 60+ Day For personal use only New Zealand Mortgages Delinquencies (% of GLA) 1.00% 60% LVR at origination Sep-07 0.80% LVR at origination Sep-08 40% LVR at origination Dec-08 0.60% 0.40% 20% 0.2
Slide 68: Australian corporate sector in strong financial position
The Australian corporate sector entered this part of the cycle in a strong financial position For personal use only Interest cover ratio ‘Profit share’ of national income 8 Ratio of gross operating surplus of 30 Gross operating surplus of Record high corporate trading enterprises to corporate tradin
Slide 69: Commercial Property portfolio
Commercial Property portfolio • Commercial property exposure of $29bn, Australian Property For personal use only an increase of 3% from Sep 08 almost Portfolio by Sector entirely from existing facility draw-downs • Portfolio remains at 8% of total Gross Tourism and Lending Assets Industrial Leisure
Slide 70: 1990s commercial property downturn oversupply
1990s commercial property downturn characterised by significant oversupply vs other downturns with the exception of WA & QLD For personal use only Supply Pipeline as a % of Total Stock Australian CBD Office Market Source: Jones Lang LaSalle 70
Slide 71: Collections teams increased, scorecards tightened
Collections teams increased and scorecards further tightened to manage through current cycle Group - GLAs For personal use only Institutional Banking & Financial Institutions BASEL I BASEL II Risk Grade Migration Summary by Customer Groups (FY08) $308bn $339bn $358bn 11.2% AAA to upgrade BBB 54.4% 5
Slide 72: New Zealand provisioning levels increased
New Zealand: Provisioning levels have increased, particularly in the Commercial businesses For personal use only •Provisions have risen from historic •Contribution to Collective Provision low levels Charge (New Zealand Geography) NZD m 112 NZD m FY05 FY06 FY07 FY08 1H09 32 77 $158 $18 $74 $300 $291
Slide 73: Increased arrears across all segments
Increased arrears and impaired assets is spread across all segments For personal use only 90 days past due largely secured Non-performing loans (NZD m) NZD 547m 0.8% SME 600 0.6% Rural 400 0.4% 92% Secured 200 Business Lending 0.2% 0 0.0% Personal Housing 1H05 1H06 1H07 1H08 1H09 8% Unsecured Non-Pe
Slide 74: NZ commercial credit quality holding up
New Zealand commercial credit quality holding up well; Rural well secured For personal use only Overall Commercial credit quality Rural has a well secured portfolio holding up in a difficult environment LVR SI • 95% of portfolio has a <50% Average Customer CCR A security indicator (based on extended
Slide 75: 2009 Interim Results Summary
For personal use only 2009 INTERIM RESULTS SUMMARY (RELEASED 29 APRIL 2009)
Slide 76: Strong underlying result in challenging conditions
Strong underlying result delivered in challenging conditions For personal use only 1H09 v. 2H08 1H09 v. 1H08 (HoH) (PCP) Net Profit after Tax $1,417m up 4% down 28% Underlying Profit^ $1,908m up 20% up 4% Revenue^ $7,040m up 11% up 18% Expenses^ $2,944m up 7% up 11% Provisions^ $1,435m up 5% up 98%
Slide 77: Underlying performance offset by non continuing business
Solid underlying performance offset by non continuing business impacts For personal use only 1H09 v 2H08 Underlying profit 20% (HoH) 748 (23) 193 71 142 (1%) 1,908 491 233 1,589 7% 5% 1,417 1,356 24% 18% 11% 2H08 Non Core 2H08 NII Other Operating Provisions Income 1H09 Non Core 1H09 reported underly
Slide 78: Reconciling underlying profit with statutory profit
Reconciling underlying profit with statutory profit For personal use only 1H09 Profit $m 1,417 Adjustments to Statutory Profit - Organisational transformation costs (17) - Economic hedging – fair value gains/losses 461 Adjustments - NZD and USD revenue hedge – mark-to-market 19 Cash Profit 954 Both
Slide 79: Pre-provision profit growth across businesses
Pre-provision profit growth across businesses For personal use only 1H09 v 2H08 (HoH) PBP ($m) NPAT ($m) Australia division 5% 1,735 (6%) 908 Asia Pacific Europe 98% 401 & America^ 75% 628 New Zealand* 1% 646 (3%) 284 Institutional 43% 1,663 223% 668 1H09 v 1H08 (PCP) PBP ($m) NPAT ($m) Australia di
Slide 80: Strong growth in Net Interest income
Strong growth in Net Interest income from improvement in NIM and balance sheet growth For personal use only NIM improvement from mix shift and re- Self funding lending growth… pricing (Net Loans and Advances) Net Interest Margin (bp) ($bn) 7% 2% 5 (2) 26 1 222 350 357 (16) 333 23 15 217 74 191 (9) 6
Slide 81: Total income benefiting from Global Markets
Total income benefiting from very strong Global Markets performance For personal use only Markets drove 56% of total income growth Sales and trading income ($m) growth both strong* $m (Markets income $m) 18% 1,019 11% 7,040 559 613 6,315 5,980 66% 1,019 10% 613 559 1H08 2H08 1H09 5% 6% Trading Sales
Slide 82: Other Income excluding Markets
Excluding Markets, Other Income boosted by Asian Partnerships but offset by wealth and a flat economy For personal use only Other income excluding markets ($m) Strong Asian partnership business offsetting impacts 3% of Wealth and a flat economy (1%) ($m) 1,673 1,646 1,592 286 Other 281 271 281 286 2
Slide 83: Core expense growth well contained
Core expense growth well contained, investment directed towards growth markets For personal use only Expense growth Underlying cost growth well contained, HoH PCP investing in Super Regional strategy across Asia $193m $289m Up 7.0% Up 10.9% 0.9% Australia and New Zealand costs well contained 2.1% 0.
Slide 84: Higher provision charge
Higher provision charge impacted by large single names and further Corporate stresses For personal use only Provision charge up on prior half with IP charge largely from migration from Collective Provision Institutional and middle market stresses 1,435 IP charge by type ($m) 1,531 Individual Provisi
Slide 85: Collective Provision charge moving through the cycle
Collective Provision charge moving through the cycle For personal use only Collective provision charge reflects progression of the economic downturn Risk Profile ($m) • Primarily in Institutional and New Zealand. Net of downgrades 470 Volume Growth • Growth in Australia and Asia Pacific 348 Concentr
Slide 86: Higher Impaired Loans
Higher Impaired Loans represent current market pressures and actively working with customers in difficulty For personal use only Increase in impaired loans predominantly Institutional Non Performing from Institutional / Middle market loans concentrated by industry portfolios ($m) (Gross Impaired Loa
Slide 87: Credit Intermediation Trades charge remains volatile
Credit Intermediation Trades charge remains volatile For personal use only Credit charge on Credit Intermediation Trades Majority of FX impacts from (Post tax charge) AUD/USD movements AUD/USD Cumulative 1.0 31/3 charge (AUDm) 0.8 1,050 0.6 0.4 900 Oct Jan Apr Jul Oct Jan Apr 1H09 07 08 08 08 08 09
Slide 88: Further information and contact
For personal use only The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or p