Anz Group Holdings Limited · ASX:ANZ
Anz — Debt Investor Presentation (September 2024)
59 slides from Anz's debt investor presentation, September 2024
Slide 1: ANZ ECBC Debt Investor Update
ANZ ECBC DEBT INVESTOR UPDATE SEPTEMBER 2024 ANZ Group Holdings Limited ABN 16 659 510 791 9/833 Collins Street Docklands Victoria 3008 Australia
Slide 2: Disclaimer & Important Notice
ANZ – European Covered Bond Conference Investor Update DISCLAIMER & IMPORTANT NOTICE Background information only The information set out in this document and any accompanying verbal presentation including any question and answer session and any documents or other materials distributed with the prese
Slide 3: Disclaimer & Important Notice
ANZ – European Covered Bond Conference Investor Update DISCLAIMER & IMPORTANT NOTICE United Kingdom ("UK"): The communication of this document is not being made by, and the content of this document has not been approved by an authorised person for the purposes of section 21 of the UK’s Financial Ser
Slide 4: Disclaimer & Important Notice
ANZ – European Covered Bond Conference Investor Update DISCLAIMER & IMPORTANT NOTICE Document subject to change The information contained in this document is provided as at the date of this document and is subject to change without notice. Neither the Bank, ANZGHL nor any of their affiliates, agents
Slide 5: ANZ Overview – 1H24
ANZ – European Covered Bond Conference Investor Update ANZ OVERVIEW – 1H24 ANZ - Four key divisions, share of 1H24 revenue ($10.3b) 1H24 / vs 2H23/Sep 23 As at Mar 24 Australia Retail - Provides a range of banking products and services Cash Profit $3,552m -1% 28% to Australian consumers Cash ROE1 10
Slide 6: Portfolio Diversification – 1H24
ANZ – European Covered Bond Conference Investor Update PORTFOLIO DIVERSIFICATION – 1H24 Revenue contribution – 4 major divisions, $b Revenue ROE1 2.4 incl. Commercial change 10.3 customer revenue booked (1H24 vs 1H21) (1H24) 10.0 in other divisions 8.8 1.8 1.7 Australia Commercial +32% ~25% 8.4 1.3
Slide 7: Suncorp Bank Provides Increased Scale and Diversification
ANZ – European Covered Bond Conference Investor Update SUNCORP BANK PROVIDES INCREASED SCALE AND DIVERSIFICATION HOUSING LENDING HOUSEHOLD DEPOSITS (A$bn) (A$bn) 559 389 475 305 354 320 53 300 207 202 35 172 300 172 Peer 1 Peer 2 Peer 3 Peer 1 Peer 2 Peer 3 Suncorp Bank Suncorp Bank BUSINESS LENDING
Slide 8: Group Net Interest Margin (NIM)
ANZ – European Covered Bond Conference Investor Update GROUP NET INTEREST MARGIN (NIM) Group NIM movements (prior to Markets activities impact), bps 165 3 163 0 0 -1 -4 Incl -3 Housing Increased rate (Aus / NZ) partially offset by reduced volume -2bps 2H23 Assets pricing Deposits pricing Assets and
Slide 9: Balance Sheet Composition
ANZ – European Covered Bond Conference Investor Update BALANCE SHEET COMPOSITION Exposure At Default1, EOP $b Risk Weighted Assets, EOP $b Net Loans & Advances, EOP $b Customer Deposits, EOP $b 1,193 455 707 715 649 647 641 1,152 1,163 1,151 2% 690 0% 620 1% 1% 436 433 433 672 0% 0% 8% 0% 1% 7% 6% 6
Slide 10: Net Loans and Advances
ANZ – European Covered Bond Conference Investor Update NET LOANS AND ADVANCES Australia Retail, $b Australia Commercial, $b New Zealand, NZDb Institutional, $b +3% +4% +1% -2% 322 64 210 312 62 129 128 131 133 207 208 206 301 6 60 60 0 290 6 1 21 19 20 18 6 2 1 24 6 25 26 25 22 2 41 45 21 2 1 1 41 4
Slide 11: Customer Deposits
ANZ – European Covered Bond Conference Investor Update CUSTOMER DEPOSITS Australia Retail, $b Australia Commercial, $b New Zealand, NZDb Institutional, $b +5% +2% +3% -6% 172 116 109 278 165 112 113 113 104 105 106 263 1 266 156 2 1 249 150 1 47 21 27 30 33 45 44 38 42 46 49 128 43 106 113 98 33 37
Slide 12: ANZ Capital Position – 3Q24
ANZ – European Covered Bond Conference Investor Update ANZ CAPITAL POSITION – 3Q24 Level 2 capital ratio (APRA vs internationally comparable)1, % 29.8 30.7 29.1 7.2 7.6 8.5 20.6 21.0 21.9 2.5 2.5 2.5 5.5 5.8 6.5 1.9 1.9 1.9 19.4 19.7 19.7 13.2 13.3 13.5 APRA Mar 23 Int. Comparable APRA Sep 23 Int. C
Slide 13: Term Wholesale Funding Portfolio – 1H24
ANZ – European Covered Bond Conference Investor Update TERM WHOLESALE FUNDING PORTFOLIO1 - 1H24 Issuance2, $b Maturities2,3, $b 404 32 32 24 25 26 22 22 21 17 16 15 16 13 9 8 1 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 2H24 FY25 FY26 FY27 FY28 FY29 FY30 FY31+ Senior Unsecured Covered Bonds Tier 2
Slide 14: Term Wholesale Funding Issuance – 1H24
ANZ – European Covered Bond Conference Investor Update TERM WHOLESALE FUNDING ISSUANCE1 – 1H24 ANZ has access to a diverse range of wholesale funding A growing domestic market drives larger AUD benchmark deals Average AUD senior unsecured benchmark deal size2, $b • 1H24 term funding issuance of $21b
Slide 15: Total Loss-Absorbing Capacity (TLAC) Profile
ANZ – European Covered Bond Conference Investor Update TOTAL LOSS-ABSORBING CAPACITY (TLAC) PROFILE1 ANZ is well placed to meet APRA’s final TLAC requirements Tier 2 capital, Notional amount % • Total regulatory capital ratio is 21.9% (~19.7% pro forma for Suncorp Bank acquisition and Share buyback)
Slide 16: Australian TLAC in a Global Context
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN TLAC IN A GLOBAL CONTEXT Australian banks’ Tier 2 relative value Australia Canada Scandinavia United Kingdom Netherlands France Singapore % RWA 165 155 150 150 150 150 140 140 135 135 135 135 130 130 130 130 130 130 125 125 125 120 10
Slide 17: Provision Charge – 3Q24
ANZ – European Covered Bond Conference Investor Update PROVISION CHARGE – 3Q24 Total provision charge / (release), $m 1,558 461 500 564 1,097 131 264 116 217 433 236 14 38 71 77 35 53 17 45 165 164 78 60 146 64 59 27 27 23 21 48 9 0 14 -22 17 13 -24 26 6 11 18 -49 -53 -92 -122 -101 -173 -249 -32 -44
Slide 18: Impaired Assets & 90+ Days Past Due – 3Q24
ANZ – European Covered Bond Conference Investor Update IMPAIRED ASSETS & 90+ DAYS PAST DUE – 3Q24 Gross impaired assets by division 1,3, $b Consumer portfolio4 0.40% 90+ days past due as a % of portfolio balances 3.0 0.31% 0.21% 0.21% 0.21% 0.19% 2.5 1.50 2.5 1.25 2.0 2.0 1.00 1.5 1.5 1.5 1.4 1.4 0.
Slide 19: Expected Credit Loss – Economic Scenarios
ANZ – European Covered Bond Conference Investor Update EXPECTED CREDIT LOSS – ECONOMIC SCENARIOS: MODELLED OUTCOMES (COLLECTIVE PROVISION BALANCE SCENARIOS)¹ Mar 24, $m Economic scenarios Actual Base case 2 31 March 2024 CY2022A CY2023A CY2024F CY2025F Australia GDP change3 3.6% 2.0% 1.3% 2.0% 100%
Slide 20: Total Portfolio Composition
ANZ – European Covered Bond Conference Investor Update TOTAL PORTFOLIO COMPOSITION Gross Exposure at Default (EAD) distribution Category % of Group EAD 1 % of Impaired Assets Impaired to EAD1 Assets2 Mar 23 Sep 23 Mar 24 Mar 23 Sep 23 Mar 24 Mar 24 4.1% 1.0% Consumer Lending 38.3% 40.3% 41.4% 0.1% 0
Slide 21: ANZ Institutional Portfolio
ANZ – European Covered Bond Conference Investor Update ANZ INSTITUTIONAL PORTFOLIO Size & tenor by market of incorporation, EAD $b Mar 241 Industry composition, EAD Finance, Investment & Insurance 14% Government & Official Institutions 508 2% Commercial Property 3% Manufacturing 4% 42% A$508b¹ Whole
Slide 22: ANZ Asia Institutional Portfolio
ANZ – European Covered Bond Conference Investor Update ANZ ASIA INSTITUTIONAL PORTFOLIO Market of incorporation, EAD ANZ Asia industry composition, EAD 3% 7% Finance, Investment & Insurance 5% 2% 1%2% 18% Manufacturing 8% 4% 2% 2% Wholesale Trade China South Korea 5% Government & Official Institutio
Slide 23: Commercial Property – Segments of Interest
ANZ – European Covered Bond Conference Investor Update COMMERCIAL PROPERTY – SEGMENTS OF INTEREST $1.9b International Outstandings by region, GLA $b Asia ex. China $1.6b Outstandings by sector, % China $0.2b Americas $0.0b Other $0.1b 9% 7% 6% 7% 6% 6% 7.6% 7.5% 7.6% 2% 2% 2% 2% 2% 7.3% 7.3% 2% 7.0%
Slide 24: Australia & New Zealand Economic Forecasts – August 2024
ANZ – European Covered Bond Conference Investor Update AUSTRALIA & NEW ZEALAND ECONOMIC FORECASTS – AUGUST 2024 2019 2020 2021 2022 2023 2024F 2025F Australia – annual % growth GDP 1.9 -2.2 5.5 3.9 2.0 1.1 1.9 Australia - headline CPI (% y/y) 1.6 0.8 2.9 6.6 5.6 3.2 3.0 Australia - unemployment (% Q
Slide 25: ANZ Mortgage Portfolio
ANZ – European Covered Bond Conference Investor Update 2022 ANZ HALF YEAR RESULTS MORTGAGE PORTFOLIO HALF YEAR ENDED 31 MARCH 2022 25
Slide 26: Australia Home Loans – Portfolio Overview
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO OVERVIEW Portfolio1 Flow Portfolio1 1H22 1H23 1H24 1H23 1H24 1H22 1H23 1H24 Number of Home Loan accounts 984k 969k 950k 95k2 86k2 Average LVR at Origination9 70% 65% 66% Total FUM $278b $293b $314b $43b $43b Aver
Slide 27: Australia Home Loans – Portfolio Composition
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO COMPOSITION Home Loan balance composition1,2, $b Home Loan balance & lending flows 1,4, $b 314 304 3 24 293 3 45 12 283 25 314 278 278 3 25 3 293 5 4 4 24 -59 3 21 22 23 3 5 4 3 71 68 65 62 62 63 Mar-23 New Sales
Slide 28: Australia Home Loans – Portfolio Composition & Flow
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO COMPOSITION & FLOW By Purpose, % of total balances LVR profile5, % of total balances Portfolio1,2 Flow 3 Dynamic LVR – Portfolio1,6 Origination LVR - Flow 3 1% 11% 2% 1% 1% 0% 0% 0% 16% 20% 16% 19% 12% 30% 31% 31
Slide 29: Australia Home Loans – Portfolio Resilience
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO RESILIENCE Fixed rate Home Loan expiry profile, $b ANZ flow borrowing capacity1, 1H24 23 9% 3% 20 18 Surplus Capacity Minimal Capacity 12 At Capacity 88% 7 5 30+ DPD at March 24 by fixed rate expiry month The cha
Slide 30: Australia Home Loans – Portfolio Resilience
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO RESILIENCE Home Loans repayment profile1,2 Home Loans on time and <1 month ahead profile2,3 % of accounts ahead of repayments % composition of accounts 40 35% 36% 37% 30 26% 18% 15% 20 9% 18% 20% 26% 39% 10 21% M
Slide 31: Australia Home Loans – Book Originated and Attributes
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – BOOK ORIGINATED AND ATTRIBUTES Home Loans portfolio, Mar 24 ANZ interest rate buffer & floor Total Portfolio ($b) Home loan applications are assessed at the greater of 314 the customer interest rate plus the interest rate
Slide 32: Australia Home Loans – Portfolio Performance
ANZ – European Covered Bond Conference Investor Update AUSTRALIA HOME LOANS – PORTFOLIO PERFORMANCE Home Loans 90+ DPD (by State)1,2 Home Loans delinquencies 1,2,3,4 % of Portfolio Segment Balances % of Portfolio Segment Balances 2.4 2.5 2.0 2.2 1.5 2.0 1.0 0.5 1.8 0.0 Sep Mar Sep Mar Sep Mar Sep Ma
Slide 33: Product Offerings
ANZ – European Covered Bond Conference Investor Update PRODUCT OFFERINGS Variable Fixed Fixed Product Standard Variable Simplicity Plus (1-5, 7 & 10 years) Certainty of fixed interest A fully featured variable rate A competitive variable rate loan Description repayments for fixed rate loan with basi
Slide 34: Australian Mortgage Market Structure Results in Very Low Losses
ANZ – European Covered Bond Conference Investor Update THE STRUCTURE OF THE AUSTRALIAN MORTGAGE MARKET HAS RESULTED IN VERY LOW LOSSES THROUGH VARIOUS CYCLES AUSTRALIAN MORTGAGE MARKET CHARACTERISTICS Full Recourse • All mortgage lending is full recourse • Most mortgage lending is in variable rate f
Slide 35: ANZ Cover Pool
ANZ – European Covered Bond Conference Investor Update 2022 ANZ COVER POOL YEAR RESULTS HALF YEAR ENDED 31 MARCH 2022 35
Slide 36: ANZ Covered Bonds
ANZ – European Covered Bond Conference Investor Update ANZ COVERED BONDS COVER POOL SUMMARY COMPOSITION AND QUALIFYING CRITERIA Weighted average LVR Portfolio summary at 22 August 2024 54 42 Covered Bond Pool + Cash $20.9bn Covered Bonds on issue $13.6bn 21 Average loan size $370,560 12 14 12 Weight
Slide 37: Covered Bonds – Collateral Change
ANZ – European Covered Bond Conference Investor Update COVERED BONDS – COLLATERAL CHANGE (SINCE JULY 2023) Portfolio Summary 24-Jul-2023 22-Sep-2023 22-Dec-2023 22-Mar-2024 24-Jun-2024 22-Aug-2024 Cover Pool (inc. cash) $20.9bn $20.6bn $20.6bn $20.6bn $20.6bn $20.9bn Covered Bonds on issue $15.4bn $
Slide 38: Covered Bonds on Issue as at August 2024
ANZ – European Covered Bond Conference Investor Update COVERED BONDS ON ISSUE AS AT 22 AUGUST 2024 Covered Bonds ANZ covered bonds – issuance tenor Bonds Outstanding ($A$) $13.6bn Cover Pool (A$) + Cash in GIC account $20.9bn 1% 10% 2 yr 3 yr Program Ratings1 Aaa/AAA 41% 12 yr Number of Issues O/s 1
Slide 39: Appendix – ANZ Covered Bond Programme
ANZ – European Covered Bond Conference Investor Update 2022 HALF 1YEAR APPENDIX RESULTS ANZ COVERED BOND PROGRAMME HALF YEAR ENDED 31 MARCH 2022 39
Slide 40: Australian Covered Bond Legislation
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN COVERED BOND LEGISLATION • Covered bond issuance permitted pursuant to the Banking Act 1959 since October 2011. • Authorised deposit taking institutions (ADIs) to be covered bond issuer, with dual recourse to issuer (first) and the co
Slide 41: ANZ Residential Covered Bond Program
ANZ – European Covered Bond Conference Investor Update ANZ RESIDENTIAL COVERED BOND PROGRAM Issuer • Australia and New Zealand Banking Group Limited (ANZBGL and ANZ) Issuer Rating 1 • AA-/A1+, Aa3/P-1 (Moody’s), A+/F1 (Fitch) Program Size • US$30,000,000,000 Covered Bond Rating 1 • Aaa (Moody’s) / A
Slide 42: Parties to the Program
ANZ – European Covered Bond Conference Investor Update PARTIES TO THE PROGRAM • ANZBGL Additional roles include: Residual Income Unitholder & Residual Capital Unitholder Calculation Manager Currency & interest rate swap provider Issuer and Seller Interest Rate Swap provider Contingent Covered Bond S
Slide 43: Program Structure
ANZ – European Covered Bond Conference Investor Update PROGRAM STRUCTURE ANZBGL ANZBGL ANZBGL Ccy and Interest Rate Swap Provider Interest Rate Swap Provider Covered Bond Swap Provider Housing Loans and Related Security Demand Loan and Intercompany Loan Perpetual Corporate Trust Limited ANZBGL as tr
Slide 44: Program Structural Enhancements
ANZ – European Covered Bond Conference Investor Update PROGRAM STRUCTURAL ENHANCEMENTS • Prior to a Notice to Pay, the Asset Coverage Test is performed on the relevant Determination Date to ensure sufficient assets to support the value of outstanding covered bonds. Over-collateralization • After a N
Slide 45: Program Structural Enhancements
ANZ – European Covered Bond Conference Investor Update PROGRAM STRUCTURAL ENHANCEMENTS For Hard Bullet Covered Bonds maturing within the next 12 months, Pre-Maturity Ledger must Moody’s: below P-1 be funded by the A$ equivalent of the Required Redemption Amount. Pre Maturity Test Fitch: below F1+ /
Slide 46: Cover Pool, the Demand & Intercompany Loans
ANZ – European Covered Bond Conference Investor Update COVER POOL, THE DEMAND & INTERCOMPANY LOANS Excess OC Senior Above Demand Minimum • The Asset Coverage Test is an ongoing test to ensure the adjusted aggregate receivable Loan Contractual amount (AARA) is equal to or greater than A$ equivalent o
Slide 47: Asset Coverage Test
ANZ – European Covered Bond Conference Investor Update ASSET COVERAGE TEST • Tested monthly on every determination date prior to the service of a Notice to Pay • The Asset Coverage Test is intended to test that the value of housing loans, cash, and other eligible assets is greater than the A$ equiva
Slide 48: Amortisation Test
ANZ – European Covered Bond Conference Investor Update AMORTISATION TEST • Tested monthly on every determination date after the service of a Notice to Pay. • The Amortisation Test is intended to test that the value of the Covered Bond Guarantor’s assets are at least equal to the A$ equivalent of out
Slide 49: Issuer Event of Default and Covered Bond Guarantee
ANZ – European Covered Bond Conference Investor Update ISSUER EVENT OF DEFAULT AND COVERED BOND GUARANTEE Include: • Default in principal or interest for 14 days Issuer Event of Default • Issuer fails to perform obligations for 30 days (other than Asset Coverage Test) • Winding up, insolvency and ba
Slide 50: Appendix – Economics
ANZ – European Covered Bond Conference Investor Update 2022 HALF 2 APPENDIX YEAR RESULTS ECONOMICS HALF YEAR ENDED 31 MARCH 2022 50
Slide 51: Economic Forecasts – Global Comparison
ANZ – European Covered Bond Conference Investor Update ECONOMIC FORECASTS – GLOBAL COMPARISON 2022 2023 2024F 2025F GDP (% y/y) Australia 3.9 2.0 1.3 2.3 New Zealand 2.4 0.7 0.5 1.5 United States 1.9 2.5 2.3 1.5 Euro area 3.4 0.9 0.5 1.7 CPI (% y/y) Australia 6.6 5.6 3.0 2.7 New Zealand 7.2 5.7 3.1
Slide 52: Australian Economy – Economic Growth
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN ECONOMY – ECONOMIC GROWTH RBA GDP growth forecast* 1 Nominal Australian retail sales2 and Consumer Confidence3 Year ended 30 % change 140 20 130 TBU 120 10 110 Total Retail, m/m (LHS) 0 100 Total Retail, y/y (LHS) Consumer Confidence
Slide 53: Australian Economy – Income and Savings
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN ECONOMY – INCOME AND SAVINGS Household disposable income growth1 Household Savings Indicators2 Real, year-ended with contributions Statement ofTBU Mon Statement policy- of Mon Aug 22 Policy May 23 TBU * Share of disposable income. Lat
Slide 54: Australian Economy – Inflation
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN ECONOMY – INFLATION CPI inflation1 Rent inflation1 Year-ended, with contributions TBU * Includes market services and administered items; excludes utilities, rents and holiday travel & accommodation. ** Includes groceries, alcohol & to
Slide 55: Commodities
ANZ – European Covered Bond Conference Investor Update COMMODITIES RBA index of commodity prices1 Resource exports1 SDR, 2022/23 average = 100, log scale Log scale, quarterly TBU Chart Pack TBU Bulk commodity prices1 Terms of trade*, 1 Free on board basis 2021/22 average = 100, log scale TBU TBU 55
Slide 56: Monetary and Fiscal Policy
ANZ – European Covered Bond Conference Investor Update MONETARY AND FISCAL POLICY Australian government budget balance1 Policy rate change this cycle % of nominal GDP TBU Budget balance Government debt 56 1. Sources: 1. RBA Chart Pack, May 2024
Slide 57: Australian Housing Dynamics
ANZ – European Covered Bond Conference Investor Update AUSTRALIAN HOUSING DYNAMICS Housing price forecasts by capital city1 House price growth2 % y/y, calendar year % 6 Month Change Year on Year Change 5 Year Cumulative Change Apr-24 Total Houses Units Total Houses Units Total Houses Units Adelaide
Slide 58: New Zealand Housing Dynamics
ANZ – European Covered Bond Conference Investor Update NEW ZEALAND HOUSING DYNAMICS NZ Residential Mortgage Rate Monthly House Price Index 9 4500 8 4000 7 6 TBU 3500 5 3000 Index % 4 2500 3 2000 2 1500 1 0 1000 11 12 13 14 15 16 17 18 19 20 21 22 23 24 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Varia
Slide 59: Further Information
ANZ – European Covered Bond Conference Investor Update FURTHER INFORMATION Key Contacts Adrian Went David Goode John Needham Group Treasurer Head of Debt Investor Relations Head of Capital and Secured Funding +61 3 8654 5532 +61 2 8037 0670 +61 412 027 151 +61 410 495 399 +61 411 149 158 Adrian.Went
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