Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — H1 2009 Earnings Presentation
100 slides from Anz's earnings presentation, Apr 29, 2009
Slide 1: 2009 Half Year Results
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half Year Results 29 April 2009
Slide 2: Agenda
For personal use only Mike Smith, CEO - overview Peter Marriott, CFO – financial overview Mike Smith, CEO - summary 2
Slide 3: Strong underlying result delivered 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 4: Balance Sheet Strength a priority
Balance Sheet Strength a priority For personal use only • Tier 1 Capital ratio increased to 8.2% Tier 1 Capital ratio comfortably (10.0% on an FSA basis) above target range 10.0% • Tier 1 Capital target range 7.5% to 8% 8.2% 7.7% • Collective Provision coverage over 1% of 6.9% Credit RWAs • Improved
Slide 5: Diverse set of businesses continuing to perform well
Diverse set of businesses continuing to perform well For personal use only • Underlying pre provision profit up 5% HOH AUSTRALIA • Strong income and deposit growth coupled with market share gains and increased customer satisfaction. • Mixed performance, tougher economic conditions NEW ZEALAND partic
Slide 6: Australia and New Zealand's trade and economic future more closely tied to Asia
Australia and New Zealand’s trade and economic future more closely tied to Asia For personal use only Global economic growth Australian two-way trade weights 60 Index 10 Annual % change Asia (ex-Japan) 8 50 Asia (ex-Japan) 6 40 US 4 Euro 2 30 Japan EU 0 20 -2 Japan 10 US -4 -6 0 01 02 03 04 05 06 07
Slide 7: Australian divisions strong focus on customers
Australian divisions strong focus on customers For personal use only Australia Division footprint: 819 Branches; 2,545 ATMs; 14,408 FTE staff A leader in customer satisfaction Growing share of retail customers Retail MFI Customer Satisfaction^ (traditional Banking customer share)* Peer 1: 37.7% in F
Slide 8: On track with scorecard for Super Regional Strategy
On track with scorecard for Super Regional Strategy outlined in late 2007 For personal use only TRANSFORM OUT PERFORM RESTORE • Quality on par with global Create leaders in our markets a leading Super Regional • Institutional back to system • Best of breed customer bank experience • Restore “jaws” –
Slide 9: Agenda
For personal use only Mike Smith, CEO - overview Peter Marriott, CFO – financial overview Mike Smith, CEO - summary 9
Slide 10: Solid underlying performance offset by non continuing business impacts
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 11: Reconciling underlying profit with statutory profit
Reconciling underlying profit with statutory profit For personal use only 1H09 Profit $m 1,417 Adjustments to Statutory Profit - Organisational transformation costs (17) - Economic hedging – fair value gains/losses 461 Adjustments - NZD and USD revenue hedge – mark-to-market 19 Cash Profit 954 Both
Slide 12: Pre-provision profit growth across businesses
Pre-provision profit growth across businesses For personal use only 1H09 v 2H08 (HoH) PBP ($m) NPAT ($m) Australia division 5% 1,735 (6%) 908 Asia Pacific Europe 75% 98% 401 628 & America^ New Zealand* 1% 646 (3%) 284 Institutional 43% 1,663 223% 668 1H09 v 1H08 (PCP) PBP ($m) NPAT ($m) Australia di
Slide 13: Strong growth in Net Interest income from NIM and balance sheet growth
Strong growth in Net Interest income from improvement in NIM and balance sheet growth For personal use only NIM improvement from mix shift and re-pricing Self funding lending growth… Net Interest Margin (bp) (Net Loans and Advances) ($bn) 7% 2% 333 350 357 23 5 (2) 26 1 222 74 (16) 15 217 191 69 (9)
Slide 14: Total income benefiting from very strong Global Markets performance
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) $m growth both strong* (Markets income $m) 18% 1,019 11% 7,040 559 613 6,315 1,019 5,980 66% 10% 613 559 5% 6% 1H08 2H08 1H09 Trading Sales
Slide 15: Excluding Markets, Other Income boosted by Asian Partnerships
Excluding Markets, Other Income boosted by Asian Partnerships but offset by wealth and a flat economy For personal use only Other income excluding markets ($m) Strong Asian partnership business offsetting impacts of 3% (1%) Wealth and a flat economy 1,592 1,673 1,646 ($m) 286 Other 281 271 281 286 1
Slide 16: 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, investing HoH PCP in Super Regional strategy across Asia $193m $289m Up 7.0% Up 10.9% 0.9% Australia and New Zealand costs well contained 2.1% 0.
Slide 17: Higher provision charge impacted by large single names
Higher provision charge impacted by large single names and further Corporate stresses For personal use only Provision charge up on prior half with IP charge largely from migration from Collective Provision Institutional and middle market stresses 1,435 IP charge by type ($m) 1,531 Individual Provisi
Slide 18: 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 348 • Growth in Australia and Asia Pacific Concentr
Slide 19: Higher Impaired Loans represent current market pressures
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 portfolios loans concentrated by industry (Gross Impaired Loans* /
Slide 20: 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 0.6 900 0.4 1H09 750 Oct Jan Apr Jul Oct Jan Apr charge 2H09 /
Slide 21: Capital position strengthened during the half
Capital position strengthened during the half For personal use only Basel II Capital Position (Tier 1 ratio) 10.0 Capital raising boosts ratio but average shares 0.50 (0.25) up 8% HoH / 11% PCP 8.17 0.29 (0.07) (0.28) 0.39 7.71 (0.24) 0.17 (0.16) 0.06 0.05 Target range 7.5% to 8% 0.46% Sep-08 NPAT D
Slide 22: Agenda
For personal use only Mike Smith, CEO - overview Peter Marriott, CFO – financial overview Mike Smith, CEO - summary 22
Slide 23: Australia is now experiencing a recession
Australia is now experiencing a recession For personal use only Gross domestic product and income Unemployment 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
Slide 24: Global growth downturn led by the developed economies
Global growth downturn – led by the developed economies For personal use only GDP growth 7 Real % change from year earlier 10 Real % change from year earlier 6 Long term average 8 'Developing' 5 economies 6 4 3 4 2 2 1 0 0 -1 IMF has forecast the first fall in GDP for 60 years -2 -2 'Advanced' econo
Slide 25: Emerging Asian economies still have considerable upside potential
The development of emerging Asian economies still has considerable upside potential For personal use only Living standards vs forecast GDP growth $US1,000/per capita % annual change 50 12% 45 10.3% 10% 40 35 7.9% 8% 6.8% 30 25 5.5% 6% 4.8% 20 2.9% 3.1% 4% 15 2.8% 2.2% 10 2% 5 0 0% India Vietnam Chin
Slide 26: Australian banks less affected by the global financial crisis
Australian banks have been affected by the global financial crisis, but much less than their US or European peers For personal use only Spreads between 3-month bank wholesale funding cost and official cash rates* 400 bps • Strength of the Australian banking (5-day moving avge) 350 system versus much
Slide 27: Focus on customers, community engagement and sustainable shareholder returns
ANZ’s focus on customers, community engagement and sustainable shareholder returns is driving business momentum For personal use only Focus on Innovation –CANSTAR CANNEX innovation excellence award for the ANZ Online Investment Account. Customer Service – Best Retail Bank in Vietnam award, inaugural
Slide 28: Additional Information
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half Year Results Additional Information
Slide 29: Statutory profit reconciliation – 1H09
Statutory profit reconciliation – 1H09 For personal use only Eco Rev One Statutory Visa OTC Origin NZ tax hedging hedging Cash ANZ ING NZ CIT Other Underlying profit 1 2 3 4 5 6 Profit 7 8 9 10 profit Net Interest 4,822 0 1 0 4,821 0 0 0 (1) 4,822 income Other income 1,745 0 655 27 1,063 0 (138) (81
Slide 30: Statutory profit reconciliation – 2H08
Statutory profit reconciliation – 2H08 For personal use only Eco Rev One Statutory Visa Origin NZ tax hedging hedging Cash ANZ ING NZ CIT Underlying profit 1 OTC 2 3 4 5 6 Profit 7 8 9 Other 10 profit Net Interest 4,070 0 0 0 4,070 0 (4) 4,074 income Other income 1,951 0 252 (23) 1,722 (305) (214) 2
Slide 31: Statutory profit reconciliation – 1H08
Statutory profit reconciliation – 1H08 For personal use only Eco Rev One Statutory Visa OTC Origin NZ tax hedging hedging Cash ANZ ING NZ CIT Other Underlying profit 1 2 3 4 5 6 Profit 7 8 9 10 profit Net Interest 3,780 0 0 0 0 3,780 0 (1) 3,781 income Other 2,358 353 0 96 (14) 1,923 (226) (50) 2,19
Slide 32: Structured Credit intermediation trades
Structured Credit intermediation trades For personal use only Credit Risk on Notional Principal Amount Mark to Market Counterparty rating No. Derivatives^ (USD m) (USD m) (USD m) AAA/Aa2, Aa3 3 5,796 848 AAA*/Baa1 1 3,100 883 BBB-/Ba1 1 86 18 476 BB/Ba3 1 397 58 CC/Ca 1 308 64 Defaulted monoline 1 1
Slide 33: Pre-provision profit growth across geographies
Pre-provision profit growth across geographies For personal use only 1H09 v 2H08 (HoH) PBP ($m) NPAT ($m) Australia 2% 2,635 1% 1,084 Asia Pacific Europe & America 87% 638 115% 414 New Zealand* 25% 990 24% 494 1H09 v 1H08 (PCP) PBP ($m) NPAT ($m) Australia 16% 2,635 (9%) 1,084 Asia Pacific Europe &
Slide 34: Customer Deposits by Geography
Customer Deposits by Geography For personal use only Australia NZ (NZD) Asia Total Group $bn 17% 16% 11% 11% 226 147 132 205 125 195 3% 1% 58 59 59 53% 31% 30 19 23 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 1H08 2H08 1H09 Retail Commercial Institutional Other Corporate Centre 34
Slide 35: 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% 236 243 222 340 348 322 7% 1% 93 99 100 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 35
Slide 36: NIM – Group & Institutional
NIM – Group & Institutional For personal use only Group Institutional 2H08 v 1H09 (HOH) 2H08 v 1H09 (HOH) 5 (2) (16) 26 1 222 7 184 41 6 (2) (2) (3) 10 15 217 168 202 (9) 127 16 5 2H08 Acc/ing Funding Asset Mix Deposit Lower Asset Other 1H09 2H08 Acc/ing Funding Asset Mix Deposit Lower Asset Other 1
Slide 37: NIM – Australia and New Zealand Divisions
NIM – Australia and New Zealand Divisions For personal use only Australia New Zealand 2H08 v 1H09 (HOH) 2H08 v 1H09 (HOH) 39 (1) 245 219 1 0 (29) 3 (1) (23) 237 33 (5) 210 (9) (9) 8 (9) 2H08 Funding Asset Mix Deposit Lower Asset Other 1H09 2H08 Funding Asset Mix Deposit Lower Asset Other 1H09 Mix W/
Slide 38: Balance sheet management
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half 29 April 2009 Year Results Balance sheet management
Slide 39: ANZ Capital Position has been strengthened
ANZ Capital Position has been strengthened throughout the year despite pro-cyclicality For personal use only Mar 08 Sep 08 Mar 09 ANZ FSA ANZ OSFI Basel II Basel II Core Tier 1 5.3% 5.9% 6.4% 8.0% 8.8% Tier 1 6.9% 7.7% 8.2% 10.0% 10.7% Total Capital 10.1% 11.1% 11.0% >13% >13% Capital position conti
Slide 40: Improvement in capital position flowed through to core Tier 1
Improvement in ANZ’s capital position has flowed through to the core Tier 1 position For personal use only Basel II Capital Position (Core 1 ratio) 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 Other Final 08
Slide 41: Pro-cyclicality
Pro-cyclicality For personal use only Positive economic cycle Economic downturn Capital Capital Profitability (retained earnings) Profitability (retained earnings) Revenue Revenue Individual Provisions Individual Provisions Collective Provisions Collective Provisions Deductions Deductions Basel EL >
Slide 42: Pro-cyclicality: RWA impacts
Pro-cyclicality: RWA impacts For personal use only Credit RWA movements* ($bn) Risk Profile changes RWAs increase significantly as Corporate and Bank loans move through Risk Grade and Security profiles Basel II Corporate and Bank RWAs 6.2 5.6 Credit Loss Given Default 2.2 257.8 Rating 4.2 Well secur
Slide 43: Pro-cyclicality: Capital impacts
Pro-cyclicality: Capital impacts For personal use only Regulatory capital standards require banks to be adequately Regulatory expected loss v. Eligible capitalised against both expected losses (EL) and unexpected losses (UL) provisions (EP) ($m) Under the IRB Approach to Basel II, these components a
Slide 44: Pro-cyclicality: Regulatory expected loss v. eligible provisions
Pro-cyclicality: Regulatory expected loss v. eligible provisions For personal use only Regulatory EL is made up of two components (I) estimated EL on non-defaulted exposures, calculated as Probability of Default (PD) * Loss Given Default (LGD) * Exposure at default (EAD); and (II) Best Estimate of E
Slide 45: Pro-cyclicality: Regulatory expected loss v. eligible provisions
Pro-cyclicality: Regulatory expected loss v. eligible provisions For personal use only Parts of CP & EL moving differently Slotted exposures: Regulatory EL movement Slotting through Risk Grade profiles The estimated Regulatory EL on Basel II "Slotted" loans have a very non-granular progression with
Slide 46: Strong term debt issuance in 1H09
Strong term debt issuance in 1H09 leaves ANZ well placed from a funding perspective For personal use only Funding composition improved Accelerated Term debt issuance in 2009^ Short-term 21% 18% FY08 $24bn YTD $18bn 22% wholesale 10 9% 7% 6% funding ($bn) 13% 14% 15% 8 reducing 6 50% 50% 54% Customer
Slide 47: Liquidity position strengthened
Liquidity position strengthened For personal use only Significant increase in liquid assets ($bn) Portfolio diversified by geography Mar-09 >12 months total offshore wholesale funding Internal maturities RMBS (New Zealand) 6% Australia 36% Internal 60.1 RMBS New Zealand (Australia) 12% 34.7 20.1 21.
Slide 48: Hedging the Kiwi dollar
Hedging the Kiwi dollar For personal use only AUD/NZD hedges established where FY09 Hedges revenues are believed to be at adverse risk • 100% of the estimated FY09 NZD earnings have been effectively hedged at an average 1.40 AUD/NZD rate of 1.19 1.35 • During the first half of 2009 financial year, F
Slide 49: Additional Information – Credit Quality
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half 29 April 2009 Year Results Additional Information – Credit Quality
Slide 50: Collective Provision balance coverage above 1% of Credit RWAs
Remaining well provisioned with Collective Provision balance coverage above 1% of Credit RWAs For personal use only Collective Provision balance Collective Provision balance / Credit RWAs^ ($m) (%) 4,083 1.13% IP balance 1.06% CP balance 3,496 1,341 0.94% 675 0.79% 2,656 0.72% 2,262 316 2,266 285 27
Slide 51: Breakdown of 1H09 collective provision charge
Breakdown of 1H09 collective provision charge For personal use only Lending Cycle and Mix / Business Unit (AUDm) Growth Risk Impact Total concentrations Other* Impact Group 67 141 -306 2 -96 Institutional 13 22 -318 18 -265 Australia (excl CF 27 40 0 -13 54 and BB) Business Banking -1 12 0 0 11 Cons
Slide 52: Portfolio rebalanced towards the consumer segment
Portfolio rebalanced towards the consumer segment, 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 2003 2005 2007 2009* IP/NLA Aust. Mort
Slide 53: Increase in Individual Provision charge
Increase in Individual Provision charge predominantly on the Corporate portfolio in Australia, and NZ Consumer portfolio For personal use only Total IP – Consumer and Commercial split Commercial IP – by division $m 1,531 $m 1,186 894 608 378 243 264 56 180 62 1H07 2H07 1H08 2H08 1H09 1H07 2H07 1H08
Slide 54: Days Past Due: increased stress
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 on Australian Consumer Portfolio 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% 0.4%
Slide 55: Impaired Loans impacted by large single name exposures
Impaired Loans significantly impacted by large single name exposures on the Australian Institutional Protfolio For personal use only Commercial Non Performing Loans by Impaired Loans - impacted by large single $m Geography# $m names >$100m $50-99m 3,220 (7 customers) 2,265 891 $20-49m 504 526 $10-19
Slide 56: Group and Institutional Portfolio
Group and Institutional Portfolio For personal use only Group – Gross Lending Assets (GLA) Institutional* – GLAs $bn $339 $358 $365 $85 $92 $92 51% 47% 42% AAA to BBB 22% 22% BBB- 21% AAA 52.4% 16% 18% 54.4% 53.3% BB+ to BB 16% to BB- 9% 11% 11% BBB >BB- 3% 4% 8% Mar-08 Sep-08 Mar-09 Institutional R
Slide 57: Increase in watch & control lists
Increase in watch & control lists reflecting increased credit vigilance and impacts of a weakening environment For personal use only Watch and Control list* Diverse industry split on watch list (indexed data) (Watch list by industry - Number of groups %) Sep-07 Nov-07 Property Services Jan-08 Wholes
Slide 58: Commercial Industry exposures – Group
Commercial Industry exposures – Group For personal use only Commercial Property Agriculture, Forestry & Finance & Insurance 35bn 12.0% 35bn 12.0% 35bn 12.0% 30bn 30bn Fishing 30bn 10.0% 10.0% 10.0% 25bn 25bn 25bn 8.0% 8.0% 8.0% 20bn 20bn 20bn 6.0% 6.0% 6.0% 15bn 15bn 15bn 4.0% 4.0% 4.0% 10bn 10bn 10
Slide 59: Commercial Industry exposures – Group
Commercial Industry exposures – Group For personal use only Mining Accommodation, Cafes & Electricity, Gas & Water 35bn 12.0% 35bn 12.0% 35bn 12.0% Restaurants Supply 30bn 10.0% 30bn 10.0% 30bn 10.0% 25bn 25bn 25bn 8.0% 8.0% 8.0% 20bn 20bn 20bn 6.0% 6.0% 6.0% 15bn 15bn 15bn 4.0% 4.0% 4.0% 10bn 10bn
Slide 60: Commercial Property exposure
Commercial Property exposure For personal use only • Commercial property exposure of $29bn, an Australian Property Portfolio by Sector increase of 3% from Sep 08 almost entirely from existing facility draw-downs Industrial Tourism and • Portfolio remains at 8% of total Gross Lending Leisure Assets •
Slide 61: Australia secured consumer portfolio
Australia secured consumer portfolio For personal use only Mortgages^ 60+ Day Delinquencies by State Mortgages Australia (Retail) 1.2% (% of GLA) 60% LVR at origination Mar-08 LVR at origination Mar-09 40% Current LVR Mar-08 Current LVR Mar-09 20% 0.8% 0% 0-60% 61-75% 76-80% 81%- 91%+ 90% 0.4% Numbe
Slide 62: Australia unsecured portfolio
Australia unsecured portfolio For personal use only Bankruptcy numbers by state^ 4000 Consumer Cards 60+ day arrears to 3000 outstandings 2000 3.0% 1000 2.5% 0 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 2.0% NSW/ACT VIC/TAS QLD SA/NT WA 1.5% Consumer Cards 30+ Month on books 1.0% 120 (Indexed as of F
Slide 63: New Zealand: Provisioning levels increasing
New Zealand: Provisioning levels increasing as the recession deepens, particularly in the Commercial businesses For personal use only Provisions have grown from low levels Contribution to Collective Provision Charge (New Zealand Geography) 112 NZD m FY05 FY06 FY07 FY08 1H09 NZD m 350 $158 $18 $74 $3
Slide 64: New Zealand: Increase in arrears and impaired assets
New Zealand: Increase in arrears and impaired assets is now being experienced 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 0.2% Business Lending 0 0.0% Personal Housing 1H05 1H06 1H07
Slide 65: New Zealand Retail: household cashflow relief expected
New Zealand Retail: more household cashflow relief expected, although stress now driven by unemployment or reduced incomes For personal use only Interest rate reductions now benefiting No over supply of housing in the domestic Bps consumers since early 2009 NZDbn 000s market 12 Demand 250 NZ Mortgag
Slide 66: Commercial credit quality holding up well; Rural well secured
Commercial credit quality holding up well; Rural well secured For personal use only Overall Commercial credit quality holding Rural has a well secured portfolio LVR SI up in a difficult environment • 95% of portfolio has a <50% A Average Customer CCR security indicator (based on extended Sep- Mar- J
Slide 67: Divisional performance
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half Year 29 April 2009 Results Divisional performance
Slide 68: Australia: Strong Customer Franchise
Australia: Strong Customer Franchise For personal use only Retail MFI Customer Satisfaction^ Commercial customer share* (share of main bank) 85 % 30 % 25 20 80 15 10 5 75 0 Mar-06 Mar-07 Mar-08 Mar-09 70 ANZ Peer 1 Peer 2 Peer 3 Peer 4 65 Commercial Customer satisfaction* (Customer Satisfaction with
Slide 69: Australia: Maintaining pre provision earnings momentum
Australia: Maintaining pre provision earnings momentum, provision levels reflecting the economic downturn For personal use only 1H09 v 2H08 Financial performance (6%) (HoH) 179 (69) 21 149 963 (5) 908 (8%) 2% 8% 50% (1%) PBP 5% 2H08 NII Other inc ome Operating Provisions Inc ome tax 1H09 expenses 1H
Slide 70: Australia: Segment Profit and Loss Review
Australia: Segment Profit and Loss Review For personal use only 1H09 Performance (HOH)^ Australia Division consists of Retail, Commercial and Wealth segments ($m) PBP NPAT R* 5% 1219 (1%) 693 • Good contribution from Retail and Commercial businesses, Wealth impacted by investment market conditions C
Slide 71: Australia: Balance Sheet review
Australia: Balance Sheet review - strong deposit growth has funded growth in assets For personal use only Net Loans and Advances inc Acceptances $bn 4% 5% 6% • Growth of net loans & advances in 1H09 174 184 191 166 was dominated by consumer mortgages 4 4 3 3 43 43 40 41 • Customer deposits had good
Slide 72: Australia: Retail performance
Australia: Retail performance – solid pre provision growth For personal use only Retail 1H09 v 2H08 (HOH) Retail covers Products and Distribution (1%) channels for Australia, and includes $m Mortgages, Credit Cards and Deposits 81 (11) 16 55 693 • $693m NPAT in 1H09, representing PCP 698 4 2% growth
Slide 73: Australia: Retail Balance Sheet
Australia: Retail Balance Sheet - self funding balance sheet growth, achieving market share gains For personal use only NLA inc Acceptances Retail mortgage market share* $bn 6% 6% 6% 12.7% 6% 146 11.9% 12.3% 137 11.7% 11.8% 122 129 115 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Mar-07 Sep-07 Mar-08 Sep-08 F
Slide 74: Australia: Retail continuing to grow customer relationships
Australia: Retail continuing to grow customer relationships, managing a well diversified portfolio For personal use only Share of Retail Customers Cards by Type (traditional Banking customer share)^ 3% 4% 4% 5% 5% 25 % 24% 25% 25% 26% 27% Peer 1: 37.7% in Feb 09 20 23% 23% 23% 23% 22% 15 10 49% 48%
Slide 75: Australia: Strong commercial revenue growth
Australia: Strong commercial revenue growth supporting investment, partially offsetting higher credit costs For personal use only Commercial 1H09 v 2H08 (HOH) Commercial comprises Business Banking, $m (1%) Small Business Banking, Regional Commercial & Agri and Esanda 99 (7) 8 86 • $320m NPAT in 1H09
Slide 76: Australia: Commercial Balance Sheet
Australia: Commercial Balance Sheet For personal use only NLA inc Acceptance Business Banking new lending source* $bn 5% flat Industry ANZ 3% 40 41 43 43 23.5% 21.8% 2 3 3 3 15 15 16 16 8 8 9 9 15 15 15 15 78.2% 76.5% 2H07 1H08 2H08 1H09 Esanda Rural & Agribusiness Business Banking Small Business Ba
Slide 77: Australia: Wealth earnings impacted
Australia: Wealth earnings impacted by current economic and investment conditions For personal use only Wealth 1H09 v 1H08 (PCP) INGA performance impacted by investment environment $m (67%) $m INGA NPAT by type (69%) 154 12 99 1 47 114 (89) 142 129 97 -30 -50 2% 1H08 2H08 1H09 Operating profit Capit
Slide 78: APEA: Strong overall performance
Asia Pacific, Europe & America (APEA): Strong overall performance amidst deteriorating economic conditions For personal use only Highlights NPAT (1H09 v 1H08) $m NPAT 96% • >95% HOH & PCP NPAT growth in Asia Pacific, 273 183 Europe & America 72 219 41 401 • Increased contribution to overall Group pr
Slide 79: APEA: Continued strategic investments in Retail and Wealth
APEA: Continued strategic investments in Retail and Wealth funded by strong Institutional & Asia Partnerships performance For personal use only Business PBP 1H09 NPAT 1H09 Executing growth strategy Retail & Wealth Retail & (69%) • Investment focused on franchise 1% 70 10 Wealth expansion in key stra
Slide 80: APEA: Continued investments while maintaining positive jaws
APEA: Continued investments in strategic markets and regional support capability while maintaining positive “jaws” For personal use only Positive “jaws” while still investing Expense growth 453 • Positive “jaws” with PCP +16%, HOH +11% $m • FTE increases mainly in Vietnam & Indonesia with the expans
Slide 81: APEA: Delivering on deposit lead strategy
APEA: Delivering on deposit lead strategy For personal use only Net loans and advances by business Net loans and advances by region $bn $m 9% 6% 8% 9% 22.6 58% 22.8 62% 21.3 20.9 19.5 19.4 8.1 8.9 12.0 17.5 12.3 9.3 16.2 16.9 4.9 4.1 4.8 3.6 9.3 2.5 5.9 6.8 5.1 3.0 4.5 2.8 3.2 4.4 2.4 2.8 1.9 2.0 2H
Slide 82: APEA: Retail & Wealth businesses continue to invest
APEA: Retail & Wealth businesses continue to invest in key strategic markets to position for longer-term growth For personal use only Revenue ($m) Expenses ($m) Continued investments to build franchise 274 • Strong double-digit revenue growth 218 204 197 198 • Expense growth reflects required invest
Slide 83: APEA: Institutional doubling profit
APEA: Institutional doubling profit For personal use only Institutional NPAT More than doubled growth in profit $m 132% Growth PCP • Growth: Revenue up 107%; Expense up 70%; Creating Jaws of 37% 162 86 42 • Markets (sales & trading) being major revenue 177 56 272 engine with revenue growth > 200% 70
Slide 84: APEA: Healthy contributions from Asia Partnerships
APEA: Healthy contributions from Asia Partnerships even after negative accounting impact For personal use only NPAT contribution $m Healthy profit contribution continued • Continued growth in underlying results with higher 211 (60) contribution from equity accounted earnings 65 due to adjustments (A
Slide 85: New Zealand: Strong underlying first half result
New Zealand: Strong underlying first half result despite continued domestic recession and slowing world economy For personal use only Underlying Performance (HoH) • NZ Banking underlying profit NZ Banking Performance increased 20% over 2H08 with: 116 14 58 ¾ Global market (2%) 14 513 229 opportuniti
Slide 86: New Zealand: Retail and Commercial impacted by recession
New Zealand: Retail and Commercial businesses impacted by the domestic recession with Institutional taking opportunities from market volatility For personal use only NZ Banking PBP 19% Underlying Profit 20% NZ Businesses 331 PBP 1% Underlying Profit -3% 345 229 144 159 102 50 62 10 8 17 -1 (6%) (6%)
Slide 87: New Zealand: Five quarters into the domestic recession
New Zealand: Five quarters into the domestic recession with automatic stabilisers kicking in For personal use only Further interest rate cuts expected Fiscal impulse % of GDP % 4 10 3 Expansionary Official cash 8 2 rate 6 1 0 4 -1 Dec 08 2 update Our forecasts -2 C ontractionary 0 -3 00 01 02 03 04
Slide 88: New Zealand: System and ANZ National funding
New Zealand: System: 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 lending Short term 20 Annual % change wholesale 15% Deposits 15 Long term 10 securiti
Slide 89: New Zealand: Global credit crisis impact on Retail revenue
New Zealand: Global credit crisis continues to impact most significantly on Retail revenue For personal use only Retail impacted by higher wholesale funding Due to the predominance of fixed rate costs and shift to negative deposit margins mortgages in the lending book the benefit of 2 % mortgage re-
Slide 90: New Zealand: Growth in Commercial driven by Rural
New Zealand: Growth in the Commercial businesses driven mainly by Rural with strong balance sheet growth For personal use only Medium term outlook for Rural sector Strengthening Commercial’s remains steady market leading position Horticulture Other • Medium term outlook remains 6% 3% • Proactive eng
Slide 91: New Zealand Institutional: strong performance
New Zealand Institutional: strong performance reflecting growth in customer revenue and exceptional Markets trading For personal use only Institutional result driven by strong Markets …with good mix from both customers and revenue… trading Rates Sales DCM 11% 3% $m 300 200 Rates Trading 100 47% FX S
Slide 92: Institutional: repositioning as integrated Trade, Cash and Financial Markets business
Institutional: repositioning as an integrated Trade, Cash and Financial Markets Flow business For personal use only Clients Leveraging strong customer relationships Two major client segments: No. 1 Relationship Bank status • Regional and global companies (FI and corporate) Relationship Market Penetr
Slide 93: Institutional: Strong underlying performance
Institutional: Strong underlying performance, offset by Non Continuing Businesses For personal use only 1H09 v 2H08 Underlying performance 223% (HoH) (135) 52 100 197 552 668 (778) 6% 16% (19) 246% 234 207 (18%) (27) 61% (110) 2H08 Non Core 2H08 NII Other Operating Provisions Inc ome 1H09 Non Core 1
Slide 94: Institutional: All core businesses performing well
Institutional: All core businesses performing well, provisions mostly impacting Specialised Lending For personal use only 1H09 (HOH) by Business Majority of Non continuing businesses PBP NPAT drag from Credit Intermediation Trades (After tax cost) 778 BSM* 325% 62 359% 44 114 GM* 95% 767 305% 458 23
Slide 95: Institutional: Growth strategy delivering results across the region
Institutional: Growth strategy delivering results across the region For personal use only 1H09 (HOH) by Region Net Lending Assets incl. acceptances PBP NPAT 6% (1%) 23% 81 87 86 Aus 18% 925 632% 205 66 NZ 81% 287 71% 191 AP E&A^ 109 450 306% 272 Sep-07 Mar-08 Sep-08 Mar-09 % Australia New Zealand AP
Slide 96: Institutional: significant increase in Markets income
Institutional: significant increase in Markets income benefiting from volatility across products and regions For personal use only Markets performance (Income) Sales and trading income growth was $m 83% strong* $m 1019 66% 1019 10% 558 613 449 613 558 45 282 244 474 240 253 32 85 71 63 -48 1H08 2H08
Slide 97: Additional Information
For personal use only AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2009 Half 29 April 2009 Year Results Additional Information
Slide 98: Corporate Responsibility
Corporate Responsibility A long term commitment to responsible business practice For personal use only Our Priorities 1. Responsible products, services and decisions We are delivering this through: ANZ is recognised as a domestic and • Support for customers facing hardship International leader in •
Slide 99: 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 GDP 3.0 -0.7 0.3 2.4 1.7 -2.8 0.8 4.8 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 100: For personal use only
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
Australia and New Zealand Banking Group — H1 2009 Earnings Presentation on 6ix