Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Debt Investor Presentation (September 2022)
101 slides from Anz's debt investor presentation, September 2022
Slide 1: Debt Investor Update September 2022
ANZ DEBT INVESTOR UPDATE SEPTEMBER 2022 Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia ABN 11 005 357 522
Slide 2: Contents
ANZ Debt Investor Update 3Q22 Trading Update 5 Acquisition of Suncorp Bank 13 2022 Half Year Results 17 2022 Half Year Results Financial Overview 24 Environment, Social & Governance (ESG) 34 CONTENTS Divisional Performance 44 Treasury 49 Risk Management 64 Housing Portfolio 78 Economics 87 Key Conta
Slide 3: Disclaimer & Important Notice
ANZ Debt 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 presentation (together, the "Presen
Slide 4: Disclaimer & Important Notice
ANZ Debt Investor Update DISCLAIMER & IMPORTANT NOTICE European Economic Area: This document is not directed at, and no Securities will be offered, sold or otherwise made available to, any retail investor in the European Economic Area (the "EEA"). For these purposes, a "retail investor" means a pers
Slide 5: Disclaimer & Important Notice
ANZ Debt 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, nor any of its affiliates, agents, employees or advisors intends or has
Slide 6: 3Q22 Trading Update
3Q22 TRADING UPDATE DEBT INVESTOR UPDATE
Slide 7: Overview
ANZ Debt Investor Update OVERVIEW1 Financial • Strong lending and margin momentum was evident across all our major businesses in the quarter, with revenue up 5% (up 6% FX adjusted)2. Deposits were flat performance excluding FX impacts • Adding operational capacity and processing resilience in our Au
Slide 8: Capital
ANZ Debt Investor Update CAPITAL APRA LEVEL 2 CET1 RATIO - CAPITAL MOVEMENT % 11.07% 10.41% 11.53 -0.14 0.27 11.08 -0.41 -0.17 Mar-22 IRRBB RWA Interim FY22 dividend Underlying CRWA Q3 capital generation Jun-22 (incl. assoc. DTA) (net of DRP) & other Level 1 Basel III APRA Level 2 CET1 Basel III APR
Slide 9: Group Net Interest Margin (NIM)
ANZ Debt Investor Update GROUP NET INTEREST MARGIN (NIM) bps 10 164 3 0 0 161 158 -3 0 Higher rate -7 benefits Reversal of margin Ongoing compression on low competition rate deposits 6bps 3bps 1H22 Earnings on Liquidity Asset pricing Asset & Wholesale 3Q22 underlying1 Markets Large / 3Q22 Capital an
Slide 10: NIM Considerations
ANZ Debt Investor Update NIM CONSIDERATIONS CONSIDERATIONS REMAIN CONSISTENT WITH DISCLOSURES AT 1H22 RESULTS POSITIVES NEGATIVES Higher earnings on capital and replicated deposit portfolio Competitive pressures from rising interest rates Near term Reversal of margin compression on low rate deposits
Slide 11: Provision Charge
ANZ Debt Investor Update PROVISION CHARGE TOTAL PROVISION CHARGE / (RELEASE) ($m) 1,558 461 500 564 1,097 131 209 193 264 116 433 258 140 236 14 53 165 164 48 78 -49 -49 23 -53 21 -92 9 0 14 -173 -122 -249 -505 -32 -44 -44 -150 -240 -341 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q
Slide 12: Collective Provision (CP) Balance
ANZ Debt Investor Update COLLECTIVE PROVISION (CP) BALANCE COLLECTIVE PROVISION BALANCE & COVERAGE ($m) CP BALANCE BY DIVISION ($b) Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Jun-22 Australia R&C2 1.83 1.80 2.32 2.85 2.33 2.23 1.89 1.89 1.39% 1.17% 1.25% 1.22% Institutional 1.13 1.17 1.59 1.51
Slide 13: Australia & New Zealand 90+ Days Past Due
ANZ Debt Investor Update AUSTRALIA & NEW ZEALAND 90+ DAYS PAST DUE (DPD) CONSUMER PORTFOLIO1,2,3 90+ DPD as a % of total portfolio balances 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Jun 17 17 18 18 19 19 20 20 21 21 22 22 Australia Home Loans Australia C
Slide 14: Acquisition of Suncorp Bank
ACQUISITION OF SUNCORP BANK DEBT INVESTOR UPDATE
Slide 15: Acquiring a Strong Customer Franchise in a High Growth State
ANZ Debt Investor Update ACQUIRING A STRONG CUSTOMER FRANCHISE IN A HIGH GROWTH STATE • ANZ is currently under-represented in Queensland a growth State of economic importance, the fastest growing domestic economy over the past two decades1 − 2020-212 and is expected to strengthen further to 3% in 20
Slide 16: Provides Increased Scale and Diversification
ANZ Debt Investor Update PROVIDES INCREASED SCALE AND DIVERSIFICATION HOUSING LENDING HOUSEHOLD DEPOSITS (A$bn) (A$bn) 517 350 430 259 307 289 188 261 170 157 Peer 1 Peer 2 Peer 3 Peer 1 Peer 2 Peer 3 BUSINESS LENDING1 BUSINESS DEPOSITS2 (A$bn) (A$bn) 203 230 181 191 140 174 138 126 156 145 Peer 3 P
Slide 17: Proposed Operating Model Is Robust, Focused on Long-Term Growth
ANZ Debt Investor Update PROPOSED OPERATING MODEL IS ROBUST, FOCUSED ON LONG-TERM GROWTH & CONTINUITY Pre-Completion Solidifying Growth Migration and Transformation Timeframe ~ 12 months ~ 3 years Beyond • Joint integration planning and • Transitional Service Agreement for a 2-3 year period • ANZ an
Slide 18: 2022 Half Year Results
2022 HALF YEAR RESULTS DEBT INVESTOR UPDATE
Slide 19: Financial Performance Overview
ANZ Debt Investor Update FINANCIAL PERFORMANCE OVERVIEW 1H22 vs 2H21 vs 1H21 Statutory Profit ($m) 3,530 +10% +20% Cash Profit (continuing operations)1 ($m) 3,113 -3% +4% Return on Equity (%) 10.0 -18bps +33bps Earnings Per Share - Basic (cents) 110.8 -2% +5% Dividend Per Share 100% fully franked 72
Slide 20: Continued to Simplify the Bank, Resulting in Lower Run Costs
ANZ Debt Investor Update CONTINUED TO SIMPLIFY THE BANK, RESULTING IN LOWER RUN COSTS TOTAL EXPENSES ($b) 8.8 8.6 8.6 0.6 PRODUCTIVITY FOCUS 0.9 1.3 More digital customer sales Increased self service 4.5 4.6 8.2 0.8 0.9 Higher STP2 rates 7.7 7.3 Increased use of Cloud 3.7 3.7 Property rationalisatio
Slide 21: Investment Directed to Future Growth Opportunities
ANZ Debt Investor Update INVESTMENT DIRECTED TO FUTURE GROWTH OPPORTUNITIES TOTAL INVESTMENT SPEND ($m) 1,043 5% INVESTMENT EXAMPLES • New retail platform ANZ Plus 46% 663 • Sustainable financing capabilities 12% • New Retail FX proposition 53% • Migration of apps to Cloud 49% 35% • Single customer
Slide 22: Improved Australia Home Loan Performance
ANZ Debt Investor Update IMPROVED AUSTRALIA HOME LOAN PERFORMANCE HOME LOAN GROSS LOANS & ADVANCES1 ($b) MEDIAN TIME TO FIRST DECISION2 275 281 278 278 269 265 264 3 days 7 days Simple applications Complex applications AUTO CREDIT PROCESSING DECISIONED CAPACITY 77% +30% ANZ branch applications3 Apr
Slide 23: Exiting Non-Core Activities
ANZ Debt Investor Update EXITING NON-CORE ACTIVITIES MAR 2016 MAR 2022 ~18% ~5% Non-core1 Institutional of capital in non-core activities of capital in non-core activities Retail & Commercial Agreed the sale of 29 businesses, and reshaped the Institutional business, releasing over $13b in capital 1.
Slide 24: Intention to Implement a Non-Operating Holding Company
ANZ Debt Investor Update INTENTION TO IMPLEMENT A NON-OPERATING HOLDING COMPANY (NOHC) • Intention to lodge a formal application with APRA, the Federal Treasurer & other applicable regulators to establish a NOHC • Should proposed restructure proceed a new listed parent holding company will be create
Slide 25: 2022 Half Year Results: Financial Overview
2022 HALF YEAR RESULTS FINANCIAL OVERVIEW DEBT INVESTOR UPDATE
Slide 26: Financial Performance
ANZ Debt Investor Update FINANCIAL PERFORMANCE CASH PROFIT (HoH) 54 $m 3,208 3% 2,990 -204 212 93 3,113 1H22 vs 2H21 -118 -34 -98 CASH PROFIT (PCP) Flat BAU costs FX adj. & excluding 4% Cashrewards 2H21 1H22 -97 -43 1H22 vs 1H21 1H21 2H21 Large / Income Markets BAU Investment Provisions Tax & NCI 1H
Slide 27: Group Net Interest Margin (NIM)
ANZ Debt Investor Update GROUP NET INTEREST MARGIN (NIM) Primarily lower UNDERLYING NIM margin fixed rate bps 165 1 home loans -6bps Sep 21 month: 159 Higher -2 4 159 1 158 1H22 vs 2H21 volumes and -6 -2 modest rate Mar 22 -3 month: benefits 158 NZ Home Loans (-3) Wholesale funding (+1) HEADLINE EXI
Slide 28: Capital & Replicated Deposit Portfolio
ANZ Debt Investor Update CAPITAL & REPLICATED DEPOSIT PORTFOLIO SENSITIVITY OF NII ON CAPITAL AND REPLICATING PORTFOLIO BASED ON ANZ RESEARCH FORECAST1, 2, 3 MAR 2022 PORTFOLIO ($b) ILLUSTRATIVE IMPACT TO NET INTEREST INCOME RELATIVE TO 12 MONTHS ENDING MARCH 20221, 2, 3 142 PROSPECTIVE BENEFIT 4 FR
Slide 29: Australia Housing
ANZ Debt Investor Update AUSTRALIA HOUSING HOME LOAN BALANCE AND FLOWS ($b) HOME LOAN APPLICATIONS & PROCESSING CAPACITY Indexed data1 7 8 150 27 -10 140 278.0 278.4 130 -32 120 110 100 90 80 Sep 21 New Refi. In Redraw Refi. Out Repay Mar 22 Sep 20 Mar 21 Sep 21 Mar 22 Sales & Interest / Other (ex r
Slide 30: Sustainability-Led Value Creation in Institutional
ANZ Debt Investor Update SUSTAINABILITY-LED VALUE CREATION IN INSTITUTIONAL A MAJOR REPONSIBILITY A MAJOR OPPORTUNITY ANZ DIFFERENTIATION 1st Corporate Emerging Investors Depth and breadth of Institutional customers seeking 1 Australian bank to join the Net- client relationships transitioning to com
Slide 31: Expenses
ANZ Debt Investor Update EXPENSES Cashrewards) TOTAL (FX ADJ) $m 97 4,555 67 14 4,423 22 4,445 10 17 2% 759 760 -95 Investment 857 1H22 vs 2H21 In line with expensed rate guidance at increased to 88% 1Q22 market (79% in 2H21) BAU (FX ADJ) update 3,664 3,685 3,698 0% 1H22 vs 2H21 2H21 FX 2H21 FX Adj.
Slide 32: Investment
ANZ Debt Investor Update INVESTMENT TOTAL INVESTMENT SPEND ($m) 1,058 1,043 CAPITALISED SOFTWARE 21% 24% BALANCE ($m) 811 752 663 20% 2,893 23% 26% 25% 16% 15% 19% 20% 1,856 55% 46% 46% 53% 48% 1,323 12% 10% 9% 7% 5% 960 924 1H20 2H20 1H21 2H21 1H22 72% expensed 79% expensed 88% expensed Sep 15 Sep
Slide 33: Balance Sheet Composition
ANZ Debt Investor Update BALANCE SHEET COMPOSITION EXPOSURE AT DEFAULT1 RISK WEIGHTED ASSETS NET LOANS & ADVANCES CUSTOMER DEPOSITS EOP $b EOP $b EOP $b EOP $b 1,103 438 651 611 1,080 630 594 1,045 416 2% 614 1% 1% 8% 408 0% 562 1% 7% 2% 0% 6% 2% 1% 16% 16% 20% 16% 14% 17% 20% 20% 13% 14% 16% 17% 24
Slide 34: Large / Notable Items
ANZ Debt Investor Update LARGE / NOTABLE ITEMS CUSTOMER REMEDIATION LARGE / NOTABLE ITEMS Continuing Operations Pre-Tax $m $m 1H21 2H21 1H22 485 Cash Profit (763) (97) (43) 119 Divestments incl. Gain / (Loss) on sale (184) 32 247 352 29 $853m provisions Customer remediation (108) (113) (123) 86 on B
Slide 35: Environment, Social & Governance (ESG)
2022 HALF YEAR RESULTS ENVIRONMENT, SOCIAL & GOVERNANCE (ESG) DEBT INVESTOR UPDATE
Slide 36: Our ESG Related Disclosures
ANZ Debt Investor Update OUR ESG RELATED DISCLOSURES ESG Supplement ESG Briefing Climate Change Disclosures Climate change Annual event ESG information commitment and to brief & progress climate related investors on against our ESG financial ESG matters targets disclosures https://www.anz.com.au/abo
Slide 37: ESG Governance Overview
ANZ Debt Investor Update ESG GOVERNANCE OVERVIEW BOARD OF DIRECTORS Paul O'Sullivan, Chairman AUDIT RISK ETHICS, ENVIRONMENT, DIGITAL BUSINESS HUMAN NOMINATION AND COMMITTEE COMMITTEE SOCIAL AND GOVERNANCE AND TECHNOLOGY RESOURCES BOARD OPERATIONS (EESG) COMMITTEE COMMITTEE COMMITTEE COMMITTEE Chair
Slide 38: Snapshot of Half Year ESG Target Performance
ANZ Debt Investor Update SNAPSHOT OF HALF YEAR ESG TARGET PERFORMANCE ESG target Progress Relevant SDGs ENVIRONMENTAL SUSTAINABILITY Fund and facilitate at least AU$50 billion by 2025 towards sustainable solutions for our customers, Since October 2019, we have funded and facilitated AU$31.03 billion
Slide 39: ESG Performance Trends
ANZ Debt Investor Update ESG PERFORMANCE TRENDS COMMUNITY INVESTMENT1 MONEYMINDED & SAVER PLUS SUSTAINABLE FINANCE $50b TARGET3 Total community investment ($m) Estimated # of people reached Funded and facilitated ($b) Annual contributions towards Annual contributions towards new 2025 $50bn target 13
Slide 40: Our Approach to Climate Change
ANZ Debt Investor Update OUR APPROACH TO CLIMATE CHANGE COMMITTED TO PLAYING OUR PART & SUPPORTING OUR CUSTOMERS IN TRANSITION TO NET-ZERO EMISSIONS BY 2050 • The most important role we can play in enabling a transition to net- s, while also helping them tap into the significant opportunities as a r
Slide 41: Our Resources Portfolio
ANZ Debt Investor Update OUR RESOURCES PORTFOLIO RESOURCES PORTFOLIO (EAD1 $b) 20.0 1.7 THERMAL COAL MINING (EAD1 $b) 0.6 17.3 17.0 1.3 16.2 0.8 0.5 0.7 2.0 15.3 0.8 1.2 1.0 0.9 2.9 0.4 0.7 14.0 0.7 13.8 1.5 1.1 1.5 1.2 0.8 0.9 13.0 0.4 0.3 0.5 1.7 0.4 0.7 1.0 1.2 0.6 1.0 1.2 1.0 4.9 1.4 5.4 5.2 1.0
Slide 42: How We Measure and Communicate
ANZ Debt Investor Update HOW WE MEASURE AND COMMUNICATE EXTERNAL REPORT CARD REPUTATION INDICATORS CONTEXT • Reputation indicators are increasingly being used by investors and analysts to understand our approach to ESG issues and to measure our ESG performance against our peers. • We are rated based
Slide 43: Customer Engagement to Support Emissions Reductions
ANZ Debt Investor Update CUSTOMER ENGAGEMENT TO SUPPORT EMISSIONS REDUCTIONS 100 OF OUR LARGEST EMITTING BUSINESS CUSTOMERS • Engaging with 100 of our largest emitting business customers, supporting them to establish or strengthen transition plans • These customers produced >150 million tonnes of di
Slide 44: Helping Improve the Environmental Sustainability of Customers
ANZ Debt Investor Update HELPING IMPROVE THE ENVIRONMENTAL SUSTAINABILITY OF CUSTOMERS Target to fund and facilitate at least A$50 billion by 2025 towards helping our customers improve environmental sustainability, increase access to affordable housing and promote financial wellbeing 1H22 progress1
Slide 45: Divisional Performance
2022 HALF YEAR RESULTS DIVISIONAL PERFORMANCE DEBT INVESTOR UPDATE
Slide 46: Australia Retail & Commercial Financial Performance
ANZ Debt Investor Update AUSTRALIA RETAIL & COMMERCIAL FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM NII/OOI Contribution ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) 4,553 4,607 4,319 1,857 1,918 1,974 2,155 34
Slide 47: New Zealand Division Financial Performance
ANZ Debt Investor Update NEW ZEALAND DIVISION FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 (NZDb) & NIM NII/OOI Contribution (NZDm) Expenses (NZDm) Total Provision Charge (NZDm) Cash Profit (NZDm) 131 135 139 1,731 1,819 1,854 734 711 819 7
Slide 48: Institutional Financial Performance
ANZ Debt Investor Update INSTITUTIONAL FINANCIAL PERFORMANCE Balance Sheet Income Expenses / FTE Credit Quality / RWAs Profit and Returns NLAs1 ($b) & NIM Product Composition3 ($m) Expenses ($m) Total Provision Charge ($m) Cash Profit ($m) 2,478 2,432 2,387 175 18 14 14 1,210 969 147 158 1,171 1,149
Slide 49: Institutional Markets Income Composition
ANZ Debt Investor Update INSTITUTIONAL MARKETS INCOME COMPOSITION MARKETS INCOME COMPOSITION ($m) MARKETS AVG VALUE AT RISK (99% VAR $m) 1,508 100 40 88 82 131 Non-traded VaR increased in FY20 with 75 80 COVID-related volatility and then 67 30 higher HQLA, and since has continued to flatten to 1H22
Slide 50: Treasury
2022 HALF YEAR RESULTS TREASURY DEBT INVESTOR UPDATE
Slide 51: Regulatory Capital
ANZ Debt Investor Update REGULATORY CAPITAL CAPITAL UPDATE APRA LEVEL 2 COMMON EQUITY TIER 1 (CET1) RATIO (%) ● Level 2 CET1 ratio of 11.5% and 18.0% on an Internationally Comparable basis1 0.76 2. CET1 reduction in the half mainly driven by: 12.34 -0.33 o Higher underlying CRWA from core lending gr
Slide 52: Regulatory Capital
ANZ Debt Investor Update REGULATORY CAPITAL Key Capital Ratios (%) Mar 21 Sep 21 Mar 22 RISK WEIGHTED ASSETS ($b) Level 2 CET1 capital ratio 12.4 12.3 11.5 Total Credit RWA increase $6.3b 15.9 437.9 15.3 Level 2 CET1 HoH mvmt 110 bps -10 bps -81 bps 416.1 412.0 -3.4 -1.5 -0.4 Additional Tier 1 capit
Slide 53: Internationally Comparable Regulatory Capital Position
ANZ Debt Investor Update INTERNATIONALLY COMPARABLE1 REGULATORY CAPITAL POSITION LEVEL 2 CAPITAL RATIO (APRA VS INTERNATIONALLY COMPARABLE)2 (%) 25.7 26.3 24.9 5.2 5.4 4.6 18.3 2.4 18.4 2.5 2.3 16.6 4.0 4.1 3.4 1.9 2.0 1.7 18.1 18.3 18.0 12.4 12.3 11.5 APRA Int. Comparable APRA Int. Comparable APRA
Slide 54: CET1 and Leverage in a Global Context
ANZ Debt Investor Update CET1 AND LEVERAGE IN A GLOBAL CONTEXT CET1 RATIOS1,2 LEVERAGE1,2,3 0% 5% 10% 15% 20% 25% 0% 1% 2% 3% 4% 5% 6% 7% 8% SEB OCBC Svenska Handelsbanken BBVA Swedbank Nordea UOB Natwest Rabobank Danske Bank Intesa Sanpaolo Credit Agricole Group DBS ANZ Rabobank Raiffeisen Bank Int
Slide 55: Balance Sheet Structure
ANZ Debt Investor Update BALANCE SHEET STRUCTURE1 Pro forma NSFR is ~119% once RSF benefit NSFR MOVEMENT (%) associated with TFF and CLF2 is removed BALANCE SHEET COMPOSITION (Mar-22) 4.2 123.8 0.4 0.1 123.1 Short Term Wholesale Debt & -4.6 -0.5 -0.3 Other Funding9 Liquid and Other Assets 25% 35% Co
Slide 56: Liquidity Coverage Ratio (LCR) Summary
ANZ Debt Investor Update LIQUIDITY COVERAGE RATIO (LCR) SUMMARY1 MOVEMENT IN AVERAGE LCR SURPLUS2 ($b) LCR COMPOSITION (AVERAGE 1H22, $b) 2H21 1H22 241 Avg LCR 136% Avg LCR 132% Internal RMBS Other ALA5 14 HQLA2 -2 60 58 -1 -11 -1 -1 183 Wholesale funding HQLA1 Customer deposits & other4 2H21 CLF3 L
Slide 57: Term Wholesale Funding Portfolio
ANZ Debt Investor Update TERM WHOLESALE FUNDING PORTFOLIO1 ISSUANCE ($b) MATURITIES ($b) 32 31 25 27 22 22 24 17 12 11 6 7 8 4 FY16 FY17 FY18 FY19 FY20 FY21 1H22 2H22 FY23 FY24 FY25 FY26 FY27 FY28+ Senior Unsecured Covered Bonds Tier 2 RMBS TFF NZ FLP / TLF PORTFOLIO PORTFOLIO BY CURRENCY • conditio
Slide 58: Tier 2 Capital Increase to Meet TLAC Requirement
ANZ Debt Investor Update 1 TIER 2 CAPITAL (NOTIONAL AMOUNT) INCREASE TO MEET TLAC REQUIREMENT • ANZ BGL issued $11.4b since July 2019 across AUD, EUR, GBP, and USD 6% 8% 2% USD • Future T2 issuance needs expected to be approximately $5b per annum 28% AUD Domestic • APRA announced a finalised Tier 2
Slide 59: Australian TLAC in a Global Context
ANZ Debt Investor Update AUSTRALIAN TLAC IN A GLOBAL CONTEXT ND AT1 CAPITAL Australia Canada Scandinavia Netherlands France Singapore % RWA 35 30 25 ANZ Tier 2 20 15 10 5 0 CBA ANZ Westpac NAB BMO TD Bank RBC CIBC SHB SEB Danske Nordea ABN Rabobank ING Credit Societe BNP OCBC DBS UOB AMRO Agricole G
Slide 60: Australian TLAC in a Global Context
ANZ Debt Investor Update AUSTRALIAN TLAC IN A GLOBAL CONTEXT AUSTRALIAN TLAC IS WELL PROTECTED FROM A THEORETICAL LOSS OF 5% OF TOTAL ASSETS % Total Australia Canada Scandinavia Netherlands France Singapore Assets 11 10 9 8 7 6 5% Loss of Total Assets 5 4 3 2 1 0 Westpac NAB ANZ CBA BMO RBC CIBC TD
Slide 61: Australian TLAC in a Global Context
ANZ Debt Investor Update AUSTRALIAN TLAC IN A GLOBAL CONTEXT AUSTRALIAN TLAC OFFERS INVESTORS HIGHER RETURNS THAN GLOBAL PEERS INTERNATIONALLY COMPARABLE RWA RATIOS1 10NC5Y SPREADS2 10Y SPREADS2 ANZ Tier 2 A$438 18.0 2.3 4.6 25% 270 280 ANZ Australia CBA A$498 18.6 2.9 5.6 27% NAB A$432 17.9 2.1 6.0
Slide 62: Capital & Replicating Deposits Portfolio
ANZ Debt Investor Update CAPITAL & REPLICATING DEPOSITS PORTFOLIO AUSTRALIA (%) PORTFOLIO EARNINGS RATE (AVERAGE %) Portfolio Earnings Rate is a combination 5 year AUD Swap 2.5 of term swap rates (hedged component) Rate increased Australia New Zealand & 3mth BBSW (unhedged) ~160bps over 1H22 2.0 1H1
Slide 63: Basel III CET1 Reforms and TLAC Finalisation
ANZ Debt Investor Update BASEL III CET1 REFORMS AND TLAC FINALISATION APRA CET1 REFORMS UPDATED MINIMUM CAPITAL REQUIREMENTS (%) • Revisions to capital framework finalised in November 2021 18.25% • Implementation on 1 January 2023 • The reforms will result in changes to the calculation and presentat
Slide 64: Capital & Liquidity Framework
ANZ Debt Investor Update CAPITAL & LIQUIDITY FRAMEWORK1 First Half CY2022 Second Half CY2022 CY2023 Implementation Date RBNZ Capital Framework Transition 2028 Leverage Ratio 2023 Standardised Approach to Credit Risk 2023 Internal Ratings-based Approach to Credit Risk 2023 Operational Risk 2023 Funda
Slide 65: Risk Management
2022 HALF YEAR RESULTS RISK MANAGEMENT DEBT INVESTOR UPDATE
Slide 66: Long Run Provisions & Loss Rates
ANZ Debt Investor Update LONG RUN PROVISIONS & LOSS RATES TOTAL CREDIT IMPAIRMENT CHARGE ($m) 1,800 1,500 1,200 900 600 300 0 -300 -600 -900 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22 Consumer IP Co
Slide 67: Individual Provision (IP) Charge
ANZ Debt Investor Update INDIVIDUAL PROVISION (IP) CHARGE IP CHARGE ($m) IP CHARGE BY DIVISION ($m) 626 626 1 430 343 398 395 380 398 272 430 343 380 3 395 807 187 31 592 28 15 5 7 0 6 612 594 500 69 35 40 49 532 87 34 35 62 375 266 247 187 116 122 158 175 375 350 355 3 93 93 80 103 54 337 318 55 27
Slide 68: Collective Provision (CP) Balance & Charge
ANZ Debt Investor Update COLLECTIVE PROVISION (CP) BALANCE & CHARGE CP CHARGE ($m) CP BALANCE BY CATEGORY ($m) 1.39% 1.25% 1.22% 1H19 2H19 1H20 2H20 1H21 2H21 1H22 1.17% 1.08% 0.98% 0.94% 5,008 CP charge 13 4 1,048 669 -678 -145 -371 4,501 696 11 4,285 4,195 Volume/Mix -28 -51 0 46 -199 -83 -98 746
Slide 69: Collective Provision (CP) Balance
ANZ Debt Investor Update COLLECTIVE PROVISION (CP) BALANCE CP BALANCE BY DIVISION ($b) PROVISION BALANCE BY STAGE ($b) Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21 Mar 22 31 Mar 21 31 Mar 22 Australia R&C 1.83 1.80 2.32 2.85 2.33 2.23 1.89 3.0 3.0 Institutional 1.13 1.17 1.59 1.51 1.36 1.35 1.28 2.5 2.
Slide 70: Portfolio Composition and Coverage Ratios
ANZ Debt Investor Update PORTFOLIO COMPOSITION AND COVERAGE RATIOS PORTFOLIO COMPOSITION Gross Loans and Advances Credit RWA Exposure at Default1 Exposure at Default1 Expected Credit Loss (ex Sovereign & Bank) (Collective Provision balance) $1,102.6b $3.8b 1% 1% 23% $655.0b $813.1b 2% 3% 3% 55% 33%
Slide 71: Expected Credit Loss Economic Scenarios: Modelled Outcomes
ANZ Debt Investor Update EXPECTED CREDIT LOSS ECONOMIC SCENARIOS: MODELLED OUTCOMES (COLLECTIVE PROVISION BALANCE SCENARIOS)¹ MAR 22 ($m) Weightings to scenarios to determine CP balance ECONOMIC SCENARIOS BASE CASE 2 5% 40% 45% 10% 31 March 22 CY2019A CY2020A CY2021A CY2022F CY2023F 4,859 AUSTRALIA
Slide 72: Impaired Assets
ANZ Debt Investor Update IMPAIRED ASSETS CONTROL LIST (INDEX SEP-16 =100) NEW IMPAIRED ASSETS BY DIVISION ($m) 150 2,000 1,570 1,500 100 1,121 963 890 1,000 611 639 50 500 0 0 Sep Sep Sep Sep Sep Sep Mar Mar 18 Mar 19 Mar 20 Mar 21 Sep 21 Mar 22 16 17 18 19 20 21 22 Control List by Limits Control Li
Slide 73: Risk Weighted Asset (RWA)
ANZ Debt Investor Update RISK WEIGHTED ASSET (RWA) TOTAL RWAS ($b) CREDIT RWA DRIVERS ($b) 449 14.7 438 48 408 416 396 396 48 348.8 15 48 -3.4 37 38 47 -0.8 -0.1 41 16 13 19 25 342.5 178 141 144 142 144 153 -4.1 8 8 8 7 7 7 52 53 62 57 59 59 143 141 138 136 133 130 Mar 18 Mar 19 Mar 20 Mar 21 Sep 21
Slide 74: Risk Weighted Assets & Exposure at Default Composition
ANZ Debt Investor Update RISK WEIGHTED ASSETS & EXPOSURE AT DEFAULT COMPOSITION1 EAD COMPOSITION ($b) EAD & CRWA MOVEMENT ($b) Mar 22 vs Sep 21 FX adjusted 28.9 1,080 1,103 1,075 1,045 1% 1% 13.8 1% 4% 5% 1% 4% 4% 7.7 968 4% 4% 4.4 930 5% 4% 0.1 2.0 0.1 1% 1% 6% 7% 4% -0.2 -1.3 -0.5 4% 27% 28% 30% 2
Slide 75: Total Portfolio Composition
ANZ Debt Investor Update TOTAL PORTFOLIO COMPOSITION EXPOSURE AT DEFAULT (EAD) DISTRIBUTION % of Impaired Assets Impaired Assets Category % of Group EAD 1 to EAD 1 Balance 2 Mar 21 Sep 21 Mar 22 Mar 21 Sep 21 Mar 22 Mar 22 4.0% 1.4% Consumer Lending 41.1% 40.1% 39.3% 0.1% 0.1% 0.1% $378m 1.8% 1.2% 0
Slide 76: Commercial Property Segments of Interest
ANZ Debt Investor Update COMMERCIAL PROPERTY SEGMENTS OF INTEREST OUTSTANDINGS BY REGION (GLA $b) OUTSTANDINGS BY SECTOR (%) 7.3% 7.4% 7.3% 6.9% 7.0% 6.3% 5% 6% 9% 7% 7% 6% 3% 3% 2% 2% 2% 47.7 2% 46.5 46.8 19% 45.2 2.1 22% 21% 18% 18% 2.4 2.2 20% 42.4 2.1 2.8 11.0 37.6 11.4 10.9 10.4 28% 29% 29% 3.0
Slide 77: ANZ Institutional Portfolio
ANZ Debt Investor Update ANZ INSTITUTIONAL PORTFOLIO SIZE & TENOR BY MARKET OF INCORPORATION ($b) INDUSTRY COMPOSITION EAD Mar 221 Finance 15% 472 Government Administration & Defence 32% Property & Business Services 450 3% 3% Services To Finance & Insurance 400 5% A$472b¹ Manufacturing (Mar 22) Whol
Slide 78: ANZ Asian Institutional Portfolio
ANZ Debt Investor Update ANZ ASIAN INSTITUTIONAL PORTFOLIO (MARKET OF INCORPORATION) MARKET OF INCORPORATION ANZ ASIA INDUSTRY COMPOSITION 23% Finance 8% Manufacturing 11% 3% 3% Wholesale Trade China South Korea 3% 2% Services to Finance & Insurance 6% Japan India A$117b¹ 6% Property & Business Serv
Slide 79: Housing Portfolio
2022 HALF YEAR RESULTS HOUSING PORTFOLIO DEBT INVESTOR UPDATE
Slide 80: Australia Home Loans Portfolio Overview
ANZ Debt Investor Update AUSTRALIA HOME LOANS PORTFOLIO OVERVIEW Unless otherwise stated metrics are based on balances Portfolio1 Flow2 Portfolio1 1H20 1H21 1H22 1H21 1H22 1H20 1H21 1H22 Number of Home Loan accounts 971k 1,019k 984k 92k3 82k3 Average LVR at Origination9,10,11 68% 71% 70% Total FUM $
Slide 81: Australia Home Loans Portfolio Composition
ANZ Debt Investor Update AUSTRALIA HOME LOANS PORTFOLIO COMPOSITION HOME LOAN FLOWS (GROSS LOANS & ADVANCES1 $b) LOAN BALANCE & LENDING FLOWS1 ($b) 13 11 52 14 12 9 6 9 7 7 7 0 281 -4 278 8 4 7 8 1 7 3 2 8 7 -65 8 2 7 2 13 6 2 8 8 7 8 1 28 28 26 26 26 24 24 23 25 21 19 16 17 Mar 21 New Sales Net OFI
Slide 82: Australia Home Loans Portfolio Composition & Flow
ANZ Debt Investor Update AUSTRALIA HOME LOANS PORTFOLIO COMPOSITION & FLOW BY PURPOSE (% OF TOTAL BALANCES) BY ORIGINATION LVR4,6 (% OF TOTAL BALANCES) Portfolio1,2 Flow3,4 Flow3,4 2% 2% 2% 0% 30% 30% 30% 35% 19% 22% 19% 20% 21% 21% 68% 68% 68% 65% 61% 57% 60% Mar 20 Mar 21 Mar 22 1H22 1H20 1H21 1H2
Slide 83: Australia Home Loans Repayment Profile
ANZ Debt Investor Update AUSTRALIA HOME LOANS REPAYMENT PROFILE HOME LOANS REPAYMENT PROFILE1,2 HOME LOANS ON TIME & <1 MONTH AHEAD PROFILE2 68% of accounts ahead of repayments % composition of accounts (Mar 22 vs Mar 21) 33% 30% New Accounts: 21 28 Less than 6 months old Structural: Loans that rest
Slide 84: Australia Home Loans Dynamic Loan to Value Ratio (DLVR)
ANZ Debt Investor Update AUSTRALIA HOME LOANS DYNAMIC LOAN TO VALUE RATIO (DLVR) DLVR BASED ON PORTFOLIO BALANCES 1,2,3,4 (%) DLVR BASED ON TOTAL PORTFOLIO ACCOUNTS 1,2,3,4,5 (%) 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 0-60% 61-75% 76-80% 81-90% 91-95% 96-100% 100%+
Slide 85: Australia Home Loans Portfolio Performance
ANZ Debt Investor Update AUSTRALIA HOME LOANS PORTFOLIO PERFORMANCE HOME LOANS 90+ DPD (BY STATE)1,2 HOME LOAN DELINQUENCIES1,2,3,4 % of Portfolio Segment Balances % of Portfolio Segment Balances 3 2.5 2 1 0 2.0 Mar Sep Mar Sep Mar Sep Mar Sep Mar 18 18 19 19 20 20 21 21 22 30+ DPD % 90+ Owner Occup
Slide 86: New Zealand Home Loans Portfolio Overview
ANZ Debt Investor Update NEW ZEALAND HOME LOANS PORTFOLIO OVERVIEW Portfolio Flow Portfolio 1H20 1H21 1H22 1H21 1H22 1H20 1H21 1H22 Number of Home Loan Accounts 531k 533k 540k 42k 31k Average LVR at Origination 57% 58% 56% Total FUM NZD88b NZD95b NZD103b NZD15b NZD14b Average Dynamic LVR 40% 37% 35%
Slide 87: New Zealand Loans Home Lending & Arrears Trends
ANZ Debt Investor Update NEW ZEALAND LOANS HOME LENDING & ARREARS TRENDS HOME LOAN LVR PROFILE1 HOUSING FLOWS HOUSING PORTFOLIO 2% 1% 1% 2% 14% 11% 11% 3% 2% 7% 43% 45% 55% 7% 12% 86% 89% 89% 15% 12% 57% 55% 45% 19% 1H20 1H21 1H22 Mar 20 Mar 21 Mar 22 Proprietary Broker Fixed Variable HOUSING PORTFO
Slide 88: Economics
2022 HALF YEAR RESULTS ECONOMICS DEBT INVESTOR UPDATE
Slide 89: Australian Economy Forecast Table
ANZ Debt Investor Update AUSTRALIAN ECONOMY FORECAST TABLE 2018 2019 2020 2021 2022F1 2023F1 Australia annual % growth GDP 2.8 1.9 -2.2 4.7 4.0 2.4 Headline CPI (% y/y) 1.9 1.6 0.8 2.9 6.4 3.8 Employment (% y/y) 2.3 2.2 -1.0 2.2 5.1 1.6 Unemployment (% Q4 avg) 5.0 5.2 6.8 4.7 3.0 3.3 Wage Price Inde
Slide 90: Australian Economy - GDP
ANZ Debt Investor Update AUSTRALIAN ECONOMY - GDP GDP GROWTH1 GLOBAL GDP GROWTH COMPARISON2 RELATIVE TO GDP IN DECEMBER QUARTER 2019 CAPITAL EXPENDITURE INTENTIONS2 AUSTRALIAN GOVERNMENT BUDGET BALANCE1 NOMINAL % OF NOMINAL GDP 89 Sources: 1. RBA Chart Pack, September 2022 2. RBA Statement on Moneta
Slide 91: Australian Economy - Income and Savings
ANZ Debt Investor Update AUSTRALIAN ECONOMY- INCOME AND SAVINGS CHANGE IN HOUSEHOLD INCOME1 WAGE PRICE INDEX GROWTH BY INDUSTRY2 SINCE DECEMBER QUARTER 2019 YEAR-ENDED, DECEMBER 2021 HOUSEHOLD INCOME AND CONSUMPTION3 HOUSEHOLD SAVING RATIO4 SHARE OF HOUSEHOLD DISPOSABLE INCOME 90 Sources: 1. RBA Sta
Slide 92: Australian Economy - Inflation
ANZ Debt Investor Update AUSTRALIAN ECONOMY - INFLATION CONSUMER PRICE INFLATION1 QUARTERLY CPI INFLATION2 SEASONALLY ADJUSTED, WITH CONTRIBUTIONS DISTRIBUTION OF WAGES GROWTH*, 2 REAL WAGES GROWTH3 AS A SHARE OF FIRMS REPORTING WAGE DATA IN LIAISON MARCH 2022, YEAR-ENDED 91 Sources: 1. RBA Chart Pa
Slide 93: Australian Labour Market
ANZ Debt Investor Update AUSTRALIAN LABOUR MARKET UNEMPLOYMENT AND UNDEREMPLOYMENT1 JOB VACANCIES AND ADVERTISEMENTS1 % OF LABOUR FORCE SHORT-TERM VISITOR ARRIVALS AND RESIDENT RETURNS2 EMPLOYMENT AND HOURS WORKED*, 1 MONTHLY 2008 AVERAGE=100 Inflation 92 Sources: 1. RBA Chart Pack, September 2022 2
Slide 94: Commodities
ANZ Debt Investor Update COMMODITIES RBA INDEX OF COMMODITY PRICES1 RESOURCE EXPORTS1 SDR, 2020/21 AVERAGE = 100, LOG SCALE LOG SCALE, QUARTERLY BULK COMMODITY PRICES1 TERMS OF TRADE*, 1 FREE ON BOARD BASIS 2019/20 AVERAGE = 100, LOG SCALE 93 Sources: 1. RBA Chart Pack, September 2022
Slide 95: Australian Housing Dynamics
ANZ Debt Investor Update AUSTRALIAN HOUSING DYNAMICS HOUSING PRICE FORECASTS BY CAPITAL CITY1 HOUSE PRICE GROWTH2 6 Month Change Year on Year Change 5 Year Cumulative Change Aug 2022 All All All Houses Units Houses Units Houses Units dwellings dwellings dwellings Sydney -7.3 -8.0 -5.4 -2.5 -2.5 -2.5
Slide 96: Australian Housing Dynamics
ANZ Debt Investor Update AUSTRALIAN HOUSING DYNAMICS PRIVATE RESIDENTIAL BUILDING APPROVALS1 NEW HOUSING LENDING2 MONTHLY % MONTHLY HOUSING FINANCE, EX RE-FINANCING First Home Owners’ Boost NSW & Victoria reduce stamp duty HOUSING LOAN COMMITMENTS3 MORTGAGE CREDIT GROWTH4 EXCLUDING REFINANCING SIX-M
Slide 97: Australian Housing Dynamics
ANZ Debt Investor Update AUSTRALIAN HOUSING DYNAMICS CONTRIBUTION TO TOTAL CREDIT GROWTH1 OUTSTANDING LVR DISTRIBUTION2 SIX-MONTH-ENDED ANNUALISED SHARE OF BALANCES Inflation HOUSEHOLD BALANCE SHEET2 2 SHARE OF DISPOSABLE INCOME SHARE OF TOTAL NEW LENDING 96 Sources: 1. RBA Statement on Monetary Pol
Slide 98: Australian Housing - Household Debt and Income
ANZ Debt Investor Update AUSTRALIAN HOUSING - HOUSEHOLD DEBT AND INCOME HOUSEHOLD DEBT AND DEPOSITS1 FLOWS INTO HOUSING LOAN AND OFFSET ACCOUNTS2 % OF ANNUAL HOUSEHOLD DISPOSABLE INCOME SHARE OF DISPOSABLE INCOME; QUARTERLY MORTAGE EXCESS PAYMENT BUFFERS3 REPAYMENT INCREASES FOR VARIABLE RATE LOANS3
Slide 99: Australian Housing Rental Markets
ANZ Debt Investor Update AUSTRALIAN HOUSING RENTAL MARKETS RENTAL VACANCY RATES1 RENT INFLATION1 SEASONALLY ADJUSTED, QUARTERLY YEAR-ENDED, WITH CITY WEIGHTS INDICATED HOUSEHOLD DYNAMICS2 NET OVERSEAS ARRIVALS3 98 Sources: 1. RBA Statement of Monetary Policy, August 2022 2. RBA Speech: Housing in th
Slide 100: Key Contacts
KEY CONTACTS DEBT INVESTOR UPDATE
Slide 101: Key Contacts
ANZ Debt Investor Update KEY CONTACTS Key Contacts Adrian Went Scott Gifford John Needham Group Treasurer Head of Debt Investor Head of Capital and Secured Funding +61 3 8654 5532 Relations +61 2 8037 0670 +61 412 027 151 +61 3 8655 5683 +61 411 149 158 Adrian.Went@anz.com +61 434 076 876 John.Needh
Australia and New Zealand Banking Group — Debt Investor Presentation (September 2022) on 6ix