Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — FY2013 Earnings Presentation
172 slides from Anz's earnings presentation, Oct 29, 2013
Slide 1: Results Presentation & Investor Discussion Pack
For personal use only Results Presentation & Investor Discussion Pack
Slide 2: Index
Index Full Year Result Overview For personal use only CEO Presentation 3 CFO Presentation 13 Additional Financial Information Adjustments between Statutory Profit and Cash Profit 32 Net Interest Margin 40 Balance Sheet 43 Treasury 46 Risk Management 57 Divisional Performance Australia Division 81 AU
Slide 3: Mike Smith, Chief Executive Officer
For personal use only Mike Smith Chief Executive Officer
Slide 4: Delivering for shareholders and customers
Delivering for shareholders and customers FY13 FY12 FY13 2013 Result For personal use only $M $M v FY12 Cash Profit 6,498 5,830 Up 11% Statutory Profit 6,272 5,661 Up 11% Cash Earnings per Share (cents) 238.5 218.5 Up 9% Dividend per share (cents) 164.0 145.0 Up 13% Cash Return on Equity 15.3% 15.1%
Slide 5: Super Regional Strategy
For personal use only SUPER REGIONAL STRATEGY STRONG PROFITABLE ENTERPRISE CORE ASIAN APPROACH MARKETS GROWTH STRONG LIQUIDITY AND CAPITAL MANAGEMENT DISCIPLINED AND EXPERIENCED MANAGEMENT 5
Slide 6: Super Regional Strategy: Strong Core Markets
SUPER REGIONAL STRATEGY STRONG Strengthen our position in core markets of For personal use only CORE MARKETS Australia and New Zealand to drive Group earnings and returns Above market growth in core customer segments Home Loans Retail Deposits Cards Commercial Lending & Deposits FX, Trade
Slide 7: Super Regional Strategy: Profitable Asian Growth
SUPER REGIONAL STRATEGY PROFITABLE Asian expansion focused on connecting For personal use only ASIAN GROWTH customers to faster growing regional capital, trade and wealth flows Achieving double-digit income growth in Asia in targeted segments Institutional Asia 19% Trade 10% Markets 25% Cash Mana
Slide 8: Super Regional Strategy: Enterprise Approach
SUPER REGIONAL STRATEGY ENTERPRISE Built on common infrastructure and enterprise For personal use only APPROACH focus for greater responsiveness, efficiency and control Building operational leverage and efficiency Business volume growth of up to 12% & Operations expenses down 10% Enterprise approach
Slide 9: Super Regional Strategy: Strong Liquidity and Capital Management
SUPER REGIONAL STRATEGY STRONG LIQUIDITY AND CAPITAL MANAGEMENT Maintaining a strong balance sheet and conservative funding approach For personal use only One of the world‟s strongest, best capitalised banks AA band credit rating APRA Common Equity Tier 1 ratio 47 bps to 8.5%, Internationally Harmo
Slide 10: Super Regional Strategy: Disciplined and Experienced Management
SUPER REGIONAL STRATEGY Experienced management team. DISCIPLINED AND EXPERIENCED MANAGEMENT Growing the business in a For personal use only low risk, sustainable manner A strong effective management team A diverse workforce appropriate for the strategy Disciplined approach to acquisitions Driving qu
Slide 11: CEO Priorities
Building a Building a For personal use only better bank better bank for customers for shareholders CEO Priorities Improving customer Diversifying Improving Improving experience revenue productivity returns Financial Outcomes Above peer growth CTI <43% ROE of 16%+ 11
Slide 12: ANZ a recognised leader in sustainability
ANZ A RECOGNISED LEADER IN SUSTAINABILITY Rated most sustainable bank globally in the 2013 Dow Jones Sustainability Index for the sixth time in seven years For personal use only DJSI assesses business management practices including corporate governance, risk management, customer relations, brand man
Slide 13: Shayne Elliott, Chief Financial Officer
For personal use only Shayne Elliott Chief Financial Officer
Slide 14: 2013 financial performance
2013 financial performance Cash Profit Movement FY13 v FY12 For personal use only $m 61 283 662 6,498 206 132 5,830 Up 5% Down 2% Down 3% Down 5% Up 9% Up 11% FY12 Net Interest Other Expenses Provisions Tax & OEI FY13 Cash Profit Income Operating Cash Profit Income FY13 1 Year 3 Year FY13 1 Year 3 Y
Slide 15: Impact of foreign exchange and one-off items
Impact of foreign exchange and one-off items FX For personal use only Actual Adjusted $m FY13 FY13 FY12 FY13 v FY12 v FY12 Headline Operating Income 17,848 18,378 3.0% Visa sale (291) Funding Value Adjustment (FVA) 61 Core Operating Income 17,557 18,439 5.0% 4.2% Headline Operating Expenses 8,519 8,
Slide 16: The Group Result in 2013
The Group Result in 2013 Growth 2013 v 2012 For personal use only Adjusted for FX & One-Off Items Growth Income Expenses Australia +6.9% +0.2% Wealth +4.0% -0.3% Institutional Asia +16.2% +14.5% Operating Income +4.2% Productivity Income Expenses Operating Expenses +0.3% New Zealand -0.3% -3.6% Inst
Slide 17: Productivity Commitments
Productivity Commitments Cost to Income Ratio For personal use only -200bps 46.1% 1.3% 44.8% 44.1% <43.0% 1 FY12 Productivity FY13 FY14 FY16 Uplift FY13 Target Target 1. Excludes impact of one-off items in FY12 – Gain on Visa sale ($291m), software impairment ($273m) and NZ Simplification ($148m) 17
Slide 18: 2013 Result by Division
2013 Result by Division FY13 v FY12 FY13 v FY12 For personal use only Australia New Zealand (NZD) Operating Income 7,867 +7% Operating Income 2,678 -1% Operating Expenses 2,951 -2% Operating Expenses 1,155 -15% Cost to Income Ratio 37.5% -330 bps Cost to Income Ratio 43.1% -750 bps Net Interest Marg
Slide 19: 2013 Result by Division
2013 Result by Division FY13 Cash Net Profit after Tax ($m) For personal use only +11% +15% 2,873 2,430 +37% +36% 881 469 Australia International & New Zealand Global Wealth Institutional Banking Excludes Group Centre that includes a $301m decrease in revenue mainly due to the gain on sale of Visa s
Slide 20: Super Regional Strategy
For personal use only SUPER REGIONAL STRATEGY STRONG PROFITABLE ENTERPRISE CORE ASIAN APPROACH MARKETS GROWTH STRONG LIQUIDITY AND CAPITAL MANAGEMENT DISCIPLINED AND EXPERIENCED MANAGEMENT 20
Slide 21: Strengthening Australia – Retail & Wealth
Strengthening Australia – Retail & Wealth Increase in economic For personal use only Retail Market Share1 9% capital allocated to Australia Retail 14.4% Branch sales staff now 13.7% 68% accredited to sell home 13.1% loans 12.4% Branch sales staff 30% accredited to sell Wealth products 2010 2011 2012
Slide 22: Strengthening New Zealand – Retail & Wealth
Strengthening New Zealand – Retail & Wealth Products removed as part For personal use only Retail Income per Branch 85 of simplification NZDm +34% 4.7 Increase in Kiwisaver 3.5 31% FUM, 81% of sales via branches Increase in branch 7% coverage since 20101 FY10 FY13 Reduction in branch Retail Income p
Slide 23: Strengthening Institutional and Commercial in Australia & New Zealand
Strengthening Institutional and Commercial in Australia & New Zealand Grow Commercial For personal use only Increase in economic Corporate & Commercial Banking Australia Combined Lending and Deposit Growth2 9% capital allocated to Australia 1.9x 16.3% Growth in Australia 30,000 customer numbers1 8.5
Slide 24: Profitable Growth in Asia
Profitable Growth in Asia Build Scale Asia Customer Growth FY13 v FY12 For personal use only Institutional Asia 11% customer growth 19% 16% 12% ANZ Transactive customer 35% growth 6% 7% ANZ Transactive monthly 96% transaction volume growth Agriculture Financial Resources Institutions Global Diversif
Slide 25: Trade a key driver of return
Trade a key driver of return Natural cross sell product for What Customers Want For personal use only Cash and Markets $1 of Trade income = $1.08 of Cross-Sell1 On the ground presence $2.08 $0.51 $1.00 $0.57 Risk and liquidity appetite Cross-Sell Income Trade Markets Cash Combined Processing e
Slide 26: Productivity
Productivity Operations Volume Growth Transaction Quality, Manual Payments For personal use only FY13 v FY12 Defects Per Million 12% 865 670 8% 7% 495 5% 400 180 Australia New IIB Global 2H11 1H12 2H12 1H13 2H13 Zealand Wealth Operations Expense Growth Straight Through Processing Aust/NZ FY13 v FY12
Slide 27: Credit Quality
Credit Quality Institutional diversification Group Provision Charge For personal use only delivering improved credit quality $b Provision Charge Provision Charge as % Avg. Net Advances 0.85% % Institutional Exposure At Default 0.50% Exposures < 1 year 48% Tenor 3.06 0.32% 0.30% 0.27% 1.82 1.21 1.25
Slide 28: Capital efficiency
Capital efficiency Return on Equity Movement FY13 v FY12 $4.5 Organic capital For personal use only billion generated in FY13 0.60% 15.3% 15.1% 0.05% Return on Risk 7bps Weighted Assets increase1 0.25% 0.10% Proactive allocation of resources FY12 FX Impact FVA Impact Increase Reduced in RoA levera
Slide 29: CEO Priorities and FY14 Outlook
CEO Priorities Improving Diversifying Improving Improving For personal use only customer revenue productivity returns experience Strategic Focus Proactive capital allocation Further improve productivity in NZ Build share in Australia Use scale to lower unit cost Grow Institutional business
Slide 30: Additional Financial Information
For personal use only Additional Financial Information
Slide 31: Overview of Financial Performance
Overview of Financial Performance For personal use only FY13 FY12 FY13 $M $M v FY12 Cash Profit 6,498 5,830 +11% Operating Income 18,378 17,848 +3% Expenses 8,236 8,519 -3% Provisions 1,197 1,258 -5% Statutory NPAT 6,272 5,661 +11% EPS (cents) 239 219 +9% Dividend per Share (cents) 164 145 +13% All
Slide 32: Adjustments between Statutory Profit and Cash Profit
Adjustments between Statutory Profit and Cash Profit FY13 FY12 For personal use only $M $M Statutory NPAT 6,272 5,661 Adjustments between statutory profit and cash profit Treasury shares adjustment 84 96 Revaluation of policy liabilities 46 (41) Economic hedging (13) 229 Revenue and net investment h
Slide 33: Segment Performance
Segment Performance Profit Before Profit Before Cash Cash Cash For personal use only Provisions Provisions Profit Profit Profit FY13 FY13 $M FY13 v FY12 FY13 FY12 v FY12 Australia 4,916 +13% 2,873 2,598 +11% IIB 3,594 +7% 2,430 2,111 +15% New Zealand 1,256 +21% 881 642 +37% Global Wealth 566 +20% 46
Slide 34: Financial Performance Snapshot
Financial Performance Snapshot For personal use only Cash Profit EPS $m cents 6,498 5,830 239 5,467 219 4,822 211 191 FY10 FY11 FY12 FY13 FY10 FY11 FY12 FY13 Return on Equity Return on Risk Weighted Assets RoRWA (Basel 3 Basis) 15.6% 2.09% 2.03% 2.02% 15.3% 1.97% 15.1% 2.03% 14.9% FY10 FY11 FY12 FY1
Slide 35: Return on Equity
Return on Equity IIB Return on Equity (Regulatory Capital Basel 3)1 Basel 3 Capital Usage Mix For personal use only FY12 Basel 3 Proforma FY13 Basel 3 5% 5% Other 3% 3% Retail 11% IIB Division 12% Partnerships 18% 19% 14% Institutional 14% Global 10% 22% 23% Global Loans Markets 11% 20% Transaction
Slide 36: Drivers of income growth in FY13
Drivers of income growth in FY13 Operating Income by Division Australia For personal use only Movement FY13 v FY12 • Above system growth in mortgages and strong growth in C&CB $m • Disciplined margin management partly offset by deposit pricing pressure 7% 2% 5% 5% International & Institutional Banki
Slide 37: Income by Line of Business
Income by Line of Business Operating Income Movement For personal use only Operating Income Mix by Line of Business FY13 v FY12 $17.6b $18.4b $m Growth in Mortgages Other 6% 5% (margin and Driven by FX volume growth) turnover Payments & Cash Management and Loans (higher volume) • Term Deposits 19% 1
Slide 38: Income by Division and Geography
Income by Division and Geography For personal use only Operating Income Mix by Division (FY13) Operating Income Mix by Geography (FY13) FY13 Network Revenue1 from APEA represented 21.4% of Group Operating Income Transaction Banking Retail Asia Global Pacific Loans Asia Partnerships 8% 4% Other 9% 2%
Slide 39: Other Operating Income
Other Operating Income Net Interest Income For personal use only Operating Income Mix movement FY13 v FY12 $m Other Operating Income Net Interest Income 80 65 12,772 3 515 15% 16% 1 31% 12,110 44% Up 5% 2H12 Australia IIB New Global Other 1H13 92% Zealand Wealth 85% Other Operating Income 84% moveme
Slide 40: Net Interest Margin – Group ex markets
Net Interest Margin – Group ex markets For personal use only Net Interest Margin movement 2H13 v 1H13 bps 267 2 2 261 4 2 3 1 1H13 Impact of Funding costs Business & Deposits Assets (incl. Other 2H13 lower interest (ex impact of funding mix credit risk mix) rates lower rates) Net Interest Margin mov
Slide 41: Net Interest Margin – Movement summary
Net Interest Margin – Movement summary Net Interest Margin Movment Summary For personal use only 2H13 v 1H13 Group Divisions bps Australia New Zealand IIB 1H13 NIM excluding Markets 267 253 249 277 Funding costs (incl. impact of lower interest rates) -2 3 2 -8 Business & funding mix -2 -1 -1 -3 Depo
Slide 42: Operating Expenses
Operating Expenses Operating Expenses by Division Operating Expense growth For personal use only movement FY13 v FY12 $m 8,519 FY13 v FY12 2H13 v 1H13 5% 4% 51 1% 99 -2% -3% -3% Group Australia IIB 8,236 109 23 1 5% 3% Down Down Down Down Flat 2% 3% 10% 2% -2% Operating Expenses down 3% FY12 1 Austr
Slide 43: Balance sheet
Balance sheet For personal use only Customer Lending & Deposits by Geography Customer Lending1 movement FY13 v FY12 $b Customer Lending1 Customer Deposits $b 14 469 8% CAGR 12 500 469 15 450 428 428 13% CAGR 397 400 369 369 Up 10% 350 328 297 Sep 12 Australia New APEA Sep 13 300 Zealand 257 250 Cust
Slide 44: Balance Sheet composition by Geography
Balance Sheet composition by Geography For personal use only Customer Lending1 by Geography Customer Deposits by Geography Australia APEA Institutional Retail & Wealth APEA Commercial APEA & Institutional APEA Commercial Retail & Wealth 10% 2% & Institutional 22% 11% 4% Australia Commercial APEA 14%
Slide 45: Balance Sheet composition by Segment
Balance Sheet composition by Segment For personal use only Customer Lending1 by Segment Customer Deposits by Segment Australia Australia Commercial New Zealand Institutional New Zealand Commercial Commercial 14% APEA 15% 7% Commercial New Zealand 5% Retail & Wealth Australia 11% Commercial Instituti
Slide 46: Group Treasury
For personal use only Group Treasury
Slide 47: Strong Balance Sheet profile
Strong Balance Sheet profile FY13 v FY12 Capital For personal use only 10.0% 10.8% 47bps APRA Basel 3 CET1 Internationally Harmonised 76bps CET1 8.0% 8.5% Customer Funded Balance 62% Sheet Sep 12 Sep 13 APRA CET1 Internationally Harmonised CET1 Term Wholesale Funding $24b issued, 29% to Domestic Sta
Slide 48: Capital levels remain well positioned
Capital levels remain well positioned Basel 3 CET1 Capital Overview For personal use only 10.8% • Capital generation and initiatives in FY13 10.0% Internationally have lifted capital levels by 47bps (APRA 9.5% Harmonised CET1) and 76bps (Internationally APRA Harmonised CET1) • The group is well plac
Slide 49: Capital levels have increased in FY13
Capital levels have increased in FY13 CET1 – APRA (Sep 2013 v Sep 2012) For personal use only 2.06 0.24 0.35 0.27 8.49 8.02 1.16 0.05 +47bps Sep-12 Cash RWA Non RWA Capital Dividends Other (5) Sep 13 NPAT (1) Usage (2) Business Initiatives (4) (net DRP) Usage (3) CET1 – APRA (Sep 2013 v Mar 2013) 1.
Slide 50: Liquidity position has benefitted from improved funding mix and asset profile
Liquidity position has benefitted from an improvement in both funding mix and asset profile Funding mix has stabilised Shortened asset tenor For personal use only 29% 19% 18% 16% 23% 24% 7% 14% 15% 14% 13% 22% 8% 5% 3% 1% 6% 8% 3% 3% 7% 12% 12% 14% 80% 61% 62% 74% 73% 50% 7% 8% 8% 4% 3% 3% Sep 08 Se
Slide 51: Lowest structural funding gap of major domestic peers
Lowest structural funding gap of major domestic peers, providing flexibility Peer Funding Comparison For personal use only ANZ Westpac NAB CBA Loan – Deposit Ratio (%) 127% 145% 145% 139% Loan – Deposit Gap ($b) 101 162 153 157 Australia Household Funding Gap ($b) 115 181 129 174 Loan – Deposit Gap
Slide 52: A sustainable term wholesale funding profile
A sustainable term wholesale funding profile Term Wholesale Funding Profile For personal use only Issuance Maturities $b 26 26 24 24 Annual indicative 21 issuance volume 18 16 16 13 12 11 FY19+ FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Senior Unsecured Covered Bonds Government Guaranteed Tie
Slide 53: …which is well diversified
…which is well diversified Term Wholesale Funding Portfolio Term Wholesale Funding Portfolio Cost For personal use only (by Type) 150bp 8% 9% 8% 9% 6% Tier 2 20% 13% 18% Government 100bp Guaranteed Actual portfolio cost Covered 72% 69% 68% 50bp Bonds Forecast portfolio cost based Senior on current m
Slide 54: Strong liquid asset position
Strong liquid asset position Liquidity Portfolio Basel 3 Liquidity Rules Update For personal use only $b 122 ● In August, APRA provided further details on 115 their approach to Basel 3 Liquidity implementation relating to High Quality Liquid Assets (“HQLA”) 39 91 38 ● Each ADI needs to hold their re
Slide 55: Impact of the lower $A
Impact of the lower $A Earnings Composition by Currency Funding impact For personal use only A lower $A has a favourable impact on ANZ‟s NZD USD funding activities: 19% CNY • Results in cash inflows under the cross Other currency swaps in place for the existing 19% IDR foreign currency wholesale fun
Slide 56: Capital and Replicating Portfolio
Capital and Replicating Portfolio Portfolio Earnings & Spread to Cash Replicating Portfolios For personal use only Australia • Portfolio earnings on capital are % fully allocated to ANZ businesses 6 and therefore impact business NIM‟s ANZ Portfolio 5 Earnings Rate • ~$45bn of capital and low interes
Slide 57: Risk Management
For personal use only Risk Management
Slide 58: Strong credit quality
Strong credit quality Credit Quality Trends Provision Charge For personal use only FY13 v FY12 $m Individual Provision Charge (LHS) Collective provision Charge (LHS) Collective Provision 100bps coverage1 3,500 Total Provision Charge as % Avg. net Advances 2,500 0.85% 1,500 0.50% 5% Total Provision c
Slide 59: Continued transformation of Institutional business delivering improved credit quality
Continued transformation of Institutional business delivering improved Group credit quality Expected Loss rates continue to decline… For personal use only Group Regulatory Expected Loss bps of 32bps • Regulatory Expected Loss is a one-year downturn loss measure EAD as prescribed by APRA and reported
Slide 60: Continued transformation of Institutional business delivering improved credit quality
Continued transformation of Institutional business delivering improved Group credit quality …driven by targeted credit quality improvement in Institutional For personal use only Contribution to Group Internal Expected Loss Institutional Commercial/SME Lending Credit Quality improvement reflects: Cre
Slide 61: Continued improvement in Credit RWA rate
Continued improvement in Credit RWA rate Group Exposure at Default Global Institutional Exposure at Default For personal use only and Credit Risk Weighted Assets and Credit Risk Weighted Assets Exposure at Default ($b) Exposure at Default ($b) Basel 2 Credit Risk Weighted Assets ($b) Basel 2 Credit
Slide 62: Institutional portfolio diversified by Product and Geography
Super Regional strategy has diversified the Institutional portfolio by Product and Geography Traditional Lending has reduced to ~40% of …driven by increased diversification into Asia For personal use only Institutional credit exposure… Institutional credit exposure composition Institutional credit e
Slide 63: Trade Finance and Asia Institutional growth improved credit quality
Trade Finance and Asia Institutional growth has improved average credit quality for Institutional • Trade Finance portfolios provide access to a large Trade Finance For personal use only and high quality multi-national customer base $b Investment Grade Sub-Investment Grade 60 • Strong growth in Trad
Slide 64: Strong Collective Provisioning Coverage
Strong Collective Provisioning Coverage Global Institutional Sub-Investment Grade1 Trend in Global Institutional composition For personal use only Exposures continue to decline • ANZ remains appropriately provided for with a Sub-Investment Grade (LHS) Collective Provision coverage ratio of 100bps In
Slide 65: Individual Provision Charge
Individual Provision Charge Individual Provision Charge by Segment Individual Provision Charge Composition For personal use only $m Institutional Commercial Consumer $m New Increased Writebacks & Recoveries 3,000 2,815 2,815 3,000 1,823 1,637 1,213 1,167 2,000 2,500 1,000 0 2,000 1,823 -1,000 FY09 F
Slide 66: Risk Weighted Assets
Risk Weighted Assets Total Risk Weighted Assets Total Risk Weighted Assets For personal use only movement Sep 2013 v Sep 2012 $b $b Market & Operational Risk Weighted Assets 5.3 0.9 338.7 14.1 Credit Risk Weighted Assets 18.7 0.4 339 300.1 324 51 Up 8% 300 50 Sep 12 Basel 2 Basel 3 Traded IRRBB Oper
Slide 67: Traded Market Risk & IRRBB Risk Weighted Assets
Traded Market Risk & IRRBB Risk Weighted Assets Strategic decisions driving Risk Weighted Market Risk Weighted Asset Trends For personal use only Asset and VaR outcomes $b IRRBB RWAs $m • FY13 increase in IRRBB VaR and RWA partly reflects modest increase in Capital and Replicating 20 Traded Market R
Slide 68: Credit Risk Weighted Assets
Credit Risk Weighted Assets Credit Risk Weighted Assets Credit Risk Weighted Assets For personal use only movement Sep 2013 v Sep 2012 Basel 2 Credit Risk Weighted Assets $b Collective Provision as a % of CRWA (Basel 2) 15.4 10.9 287.7 14.1 Collective Provision as a % of CRWA (Basel 3) 254.9 7.0 0.6
Slide 69: Control List and Risk Grade Profiles
Control List and Risk Grade Profiles Group Sub-Investment Grade1 Exposures Control List For personal use only as % Exposure at Default Control List by limits Control List by No of Groups <BB- BB- BB+ to BB Index Sep 09 = 100 120 28% 28% 26% 100 80 23% 22% 60 13% 13% 12% 40 Sep 09 Sep 10 Sep 11 Sep 1
Slide 70: Gross Impaired Assets
Gross Impaired Assets Gross Impaired Assets by Type Gross Impaired Assets by Size of Exposure For personal use only $m Impaired Loans NPCCD1 Restructured $m > $100m $10-$99m < $10m 8,000 8,000 Avg. $0.8b 7,000 decline YOY 7,000 6,561 since Sep 10 6,561 6,000 5,595 5,581 6,000 5,595 5,581 5,196 5,196
Slide 71: Impaired Assets
Impaired Assets New Impaired Assets by Division Net Impaired Assets by Division For personal use only Institutional Australia New Zealand Other Institutional Australia New Zealand Other $m $m 7,000 6,575 5,000 4,685 4,069 6,000 5,446 3,884 4,000 3,423 5,000 4,265 4,203 2,797 4,000 3,287 3,000 3,000
Slide 72: Total Credit Exposure (EAD) by Geography
Total Credit Exposure (EAD) by Geography Exposure at Default by Exposure by Geography For personal use only Line of Business2 Total Exposure at Default (Sep 13) - $725b1 Australia Australia New Zealand APEA Retail $450.6b $123.6b $150.8b 28% Commercial 55% 17% Institutional New Zealand UK & Europe N
Slide 73: Total Credit Exposure (EAD) by Industry
Total Credit Exposure (EAD) by Industry Exposure at Default (EAD) % in Non Category EAD For personal use only as a % of group total Performing ANZ Group Mar 13 Sep 13 Mar 13 Sep 13 Total EAD (Sep 13) Consumer Lending 40.4% 40.8% 0.2% 0.2% $725b Finance, Investment & 16.8% 15.9% 0.2% 0.1% Insurance P
Slide 74: Resources
Resources Resources Exposure by Sector (% EAD) Resources Exposure by Geography (EAD) For personal use only Resources Australia 22% Total EAD (Sep 13) As a % of Group EAD $13.7b 1.9% Asia 6% New Zealand 52% 20% 6% 19% Europe, America, Pacific & Other Includes Resources Exposure by Geography (EAD) Iro
Slide 75: Agriculture
Agriculture New Zealand Agri Credit Exposure (EAD) Agriculture Exposure by Sector (% EAD) For personal use only and Average Probability of Default NZD Total Credit Exposure (LHS) Agriculture NZDb Average PD (Non-Defaulted Customers) (RHS) Total EAD (Sep 13) As a % of Group EAD 25 2.50% $30.9b 4.3% 2
Slide 76: Commercial Property credit exposure
Commercial Property credit exposure Commercial Property Exposure Commercial Property Exposure by Sector For personal use only Gross Loans and Advances by Region APEA (LHS) New Zealand (LHS) 29% Offices Australia (LHS) % of Group GLA's (RHS) $b Retail 35 8.5% Residential 30.9 30.7 28% 29.3 24% Indust
Slide 77: Australia Division Credit Quality
Australia Division Credit Quality Australia Home Loans 90+ day Australia Division Credit Exposure (EAD) For personal use only delinquencies by state Sep 10 Sep 11 Sep 12 Sep13 Home Loans 1.00% Corporate & 24% 0.80% Commercial Consumer Cards 0.60% 7% 0.40% Personal Loans 1% 67% 0.20% Other 1% 0.00% V
Slide 78: Australia Division - Home Loan Portfolio
Australia Division - Home Loan Portfolio Total Number of Home Loan Accounts 887k Dynamic Loan to Value Ratio For personal use only % of Portfolio Total Home Loan FUM $195b 60% % of Total Australia Geography 50% 60% Lending 40% % of Total Group Lending 41% 30% Owner Occupied Loans - % of 20% 62% Port
Slide 79: New Zealand Division – Home Loan Portfolio
New Zealand Division – Home Loan Portfolio Total Number of Home Loan Accounts 478k Dynamic Loan to Valuation Ratio For personal use only Total Home Loan FUM (NZD) $59b % of Total New Zealand Lending 56% 0-60% 9% 61-70% 11% % of Total Group Lending 11% 45% 71-80% Owner Occupied Loans - % of Portfolio
Slide 80: New Zealand – Credit Quality
New Zealand – Credit Quality New Zealand Geography New Zealand Geography For personal use only Net Impaired Assets Total Provision Charge NZDm NZDm IP Charge CP Charge Net Impaired Assets NIA as % GLA 1,000 883 800 600 456 1,463 400 190 202 200 66 1,307 0 -200 FY09 FY10 FY11 FY12 FY13 990 New Zealan
Slide 81: Australia Division
For personal use only Australia Division
Slide 82: A strong domestic franchise is critical to Super Regional strategy
A strong domestic franchise is critical to the success of ANZ‟s Super Regional strategy For personal use only The Banking on Australia program is our path to: • Delivering consistent above system growth focused in our target segments, • Maintaining strong margins, cost discipline and asset quality,
Slide 83: Transforming the business to position ANZ for growth
We are transforming the business to position ANZ for growth in a changing environment Building our lead in mobile & digital For personal use only • Expanding customer reach and deepening loyalty • New mobile & digital foundations • Rapid evolution of our market leading applications Transforming our
Slide 84: Banking on Australia is delivering strong outcomes
Banking on Australia is delivering strong outcomes FY13 Performance: NPAT up 11% to $2.87bn For personal use only Retail Corporate & Commercial Banking Strongest overall growth of #1 major banks across Home Loans, 7% Lending Growth Deposits and Cards in FY131 Quarters of Above System Home Quarters o
Slide 85: Delivering strong financial results
Delivering strong financial results Income Expenses PBP NPAT Cost to For personal use only ($m) ($m) ($m) ($m) Income % FY13 7,867 2,951 4,916 2,873 37.5% Australia Division v FY12 % +7% -2% +13% +11% -330bps FY13 4,846 1,974 2,872 1,732 40.7% Retail v FY12 % +9% -2% +17% +20% -434bps FY13 3,015 972
Slide 86: Achieving above system growth
Achieving above system growth Retail For personal use only Strongest overall growth of major banks across Home Loans, Deposits and Cards in FY13 Home Loans1 Deposits1 Consumer Cards1 1.3x 1.2x 16.3x 8.8% 6.4% 7.6% 4.9% 1.7% 0.1% System ANZ System ANZ System ANZ Corporate & Commercial Banking Deliver
Slide 87: Increasing market share while maintaining margins
And increasing market share while maintaining margins Corporate & Commercial Banking Net Interest Margin For personal use only Combined Lending and Deposit Growth2 2.60% 2.58% Growth August 2013 v August 2011 2.53% 2.52% 2.50% 1.9x 2.45% 16.3% 8.5% 1H11 2H11 1H12 2H12 1H13 2H13 System ANZ Retail Mar
Slide 88: Improving sales efficiency and productivity
Improving sales efficiency and productivity Australia Division Cost to Income Ratio Australia Operations Efficiency For personal use only Growth FY13 v FY12 5.0% 41.8% 39.9% -10.3% Operations Expenses Operations Volume 37.9% Uplift in branch sales per FTE 37.2% 7% in 2013 Increase in Home loans 15%
Slide 89: Retail Credit Quality
Retail Credit Quality For personal use only Improvement in Home Loan Australia Retail 90+ days past due1 3bps 90+ days past due in 20131 1.5% Credit Cards Home Loans Reduction in Credit Card 1.0% provisions in FY13, 30+ and 13% 90+ day delinquencies at 0.5% lowest level in 3 years Maintained prudent
Slide 90: Corporate & Commercial Banking Credit Quality
Corporate & Commercial Banking Credit Quality Individual Provision Charge Movement Net Impaired Assets For personal use only FY13 v FY12 $m $m 23 387 1,000 937 949 1.80% 895 Net impaired assets as a % 54 21 803 1.50% of net lending assets 275 14 800 1.61% 1.55% 1.42% 1.20% +16% 600 1.23% 0.90% 400 0
Slide 91: Significant progress made on mobile and digital agenda
Significant progress made on mobile and digital agenda For personal use only Banking on Australia 91
Slide 92: ANZ goMoney is our market leading mobile banking app
ANZ goMoneyTM is our market leading mobile banking app For personal use only 2010 First payments app in the Australian market Available for iPhone and Android Active goMoney 1.0m users2 goMoney logins >25m per month Transactions >$56b processed ANZ‟s award-winning app1 provides a secure and convenie
Slide 93: Transforming our branches to focus on more complex needs
Transforming our branches to focus on more complex needs, generate increased cross-sell and productivity For personal use only 7% Uplift in branch sales in FY13 Drop in branch traffic due to 5% increased self service 18% Uplift in sales via Video Conference in 2H13 New look sales focused 74 branches
Slide 94: Interactive frontline sales tools that improve banker productivity
Interactive frontline sales tools that improve banker productivity and deliver ANZ‟s super regional capabilities to our customers For personal use only 100% C&CB frontline bankers with iPads 8 Frontline Applications Developed 1 A-Z Review Digital A-Z reviews Customer needs assessment >5,000 complete
Slide 95: ANZ FastPay mobile merchant app
ANZ FastPayTM is our award winning mobile merchant app, enabling our small business customers to be paid „on the go‟ For personal use only Winner, FIIA Award for Innovation and the Trailblazer award for innovation in banking1 Available for iPhone and iPad 7,000+ FastPay users • Mobile merchant app f
Slide 96: Retail Transformation is improving Home Loan capability
Retail Transformation is improving Home Loan capability 1.1 A to Z customer needs Home Loan Sales Mix by Channel For personal use only million reviews completed in 2013 Branch sales staff now 55% 51% 49% 47% Broker 68% accredited to sell home loans Proprietary 45% 49% 51% 53% Increase in branch 16%
Slide 97: Increasing cross sell of retail, wealth and small business solutions
And increasing cross sell of retail, wealth and small business solutions to our customers Revenue from Retail Products Sold to Branch staff trained to sell For personal use only Commercial Customers 1,600 Small Business transaction $m accounts +19% 740 Branch staff accredited to 1,300 sell Wealth pr
Slide 98: Corporate & Commercial Banking transformation enhancing banker productivity
Corporate & Commercial Banking transformation is enhancing banker productivity Revenue per FTE Costs per FTE For personal use only Growth in cross sell revenue 8% to $1.3 billion +2% -2% 1,137 20% Growth in leads to frontline 1,111 376 367 Establishment of cross border on-boarding team FY12 FY13 F
Slide 99: Delivering leading insight and support to corporate & commercial customers
Delivering leading insight and support to help corporate & commercial customers improve their business Leading Insights Capabilities For personal use only #1 No.1 Most Trusted Adviser1 Business Insights Lent to new small businesses $750 Real-time peer in the first 6 months under million benchmarking
Slide 100: Leveraging super regional advantage for customers
And leveraging our super regional advantage to bring the whole of ANZ to our customers Super Regional iPad App to facilitate For personal use only Relationship Frontline staff cross-border customer conversations 100% with Super Regional training Growth in cross-border 45% referrals from Australia Re
Slide 101: A strong domestic franchise is critical to Super Regional strategy
A strong domestic franchise is critical to the success of ANZ‟s Super Regional strategy. For personal use only • Strongest overall growth of major banks across Home Loans, Deposits and Cards in FY13 Outperforming • Strong above system lending growth in Corporate & Commercial the market Banking • Ret
Slide 102: Australia Division 2013 Performance
Australia Division 2013 Performance Net Profit after Tax Financial Highlights – FY13 For personal use only Movement FY13 v FY12 $m $m, 12 months FY13 v FY12 51 Operating Income 7,867 7% 130 381 0 2,873 Operating Expenses (2,951) (2%) 178 2,598 109 Profit before Provisions 4,916 13% Provisions (820)
Slide 103: Australia Division 2013 Performance
Australia Division 2013 Performance Australia Division Balance Sheet For personal use only Sep v Mar v Sep Customer Deposits Customer Lending $b 2013 2013 2012 Offset Balances Asset Finance Customer Deposits 152.4 5% 8% 6% Retail Deposits 107.0 5% 10% 10% Business Transaction 9% Term Lending 18% C&C
Slide 104: International and Institutional Banking Division
For personal use only International and Institutional Banking Division
Slide 105: Building a leading regional bank driven by Trade and Capital Flows
Building a leading regional bank focused on customer relationships and driven by Trade and Capital Flows For personal use only • Leveraging our strengths in Australia and New Zealand while increasing our contribution from Asia • Intermediating Trade and Capital Flows in the Asia Pacific region • Div
Slide 106: IIB Division summary
International & Institutional Banking Division summary For personal use only Institutional Banking – Australia & New Zealand Asia Global products summary Financials 106
Slide 107: Strong business outcomes driven by enhanced focus on target customers
Strong business outcomes driven by enhanced focus on target customers and disciplined management For personal use only • Increased Operating Income 2%, NPAT 15% and ROE 82 bps to 12.21,2 • Enhanced focus on target segments: Financial Institutions, Natural Resources, Global Diversified, Agriculture,
Slide 108: Disciplined execution of our strategy is driving improved performance
Disciplined execution of our strategy is driving improved performance 32% % Institutional customers dealing with IIB in multiple countries For personal use only Strong growth in priority segments – Natural Resources +6%, Volume1 Customer growth Global Diversified +9%, Financial Institutions +17%, As
Slide 109: Financial outcomes - FY13
Financial outcomes - FY13 Income Expenses PBP NPAT Cost to ($m) ($m) ($m) ($m) Income % For personal use only FY13 6,564 2,970 3,594 2,430 45.2% IIB Division v FY12 % +2% -3% +7% +15% -260bps FY13 5,302 2,126 3,176 2,101 40.1% Global Institutional v FY12 % +1% flat +2% +10% -50bps FY13 1,523 667 856
Slide 110: Strong customer relationships
Strong customer relationships 2013 2012 Source Performance Indicator For personal use only Rank Rank Australia Peter Lee Associates1 Overall Market Penetration Tied for 1st 2 Relationship Strength Index 2 2 New Zealand Peter Lee Associates2 Overall Market Penetration 1 1 Relationship Strength Index
Slide 111: Diversification by customer
Diversification by customer Institutional: International connectivity, insights, strong balance sheet and For personal use only consistency of relationship to deliver flow and value added solutions Customer Value Asia Pacific Commercial: Seamless connectivity to customers targeting those with Propos
Slide 112: Diversification by geography and product
Diversification by geography and product Accessing fast growing Asia: Income by Geography For personal use only Geography 18% CAGR in Asia IIB Income by Geography (FY10-FY13) income over last three years1 FY13 Diversifying income to create Asia Aust & NZ CAGR CAGR -1% Product greater resilience agai
Slide 113: Cross border income is 35% of Institutional customer revenue
Cross border income is 35% of Institutional customer revenue - 3x faster growth than domestic For personal use only Domestic Institutional Cross Border1 Institutional FY13 cross sell of $0.5 billion Institutional products into $1.6 billion FY13 cross border income Commercial Australia & NZ Cross bor
Slide 114: Productivity gains enabling focused investment spend
Productivity gains enabling focused investment spend Strong productivity outcomes For personal use only JAWs Flat Delivered flat JAWs YOY HoH Cost Growth (Constant FX)1 4.8% Costs Driving efficiency by 3.4% up 1% HOH leveraging Global Hubs 2.5% $88m In Technology and front line 0.7% 0.8% Incremental
Slide 115: Institutional - A higher quality balance sheet
Institutional - A higher quality balance sheet Institutional Risk Grade Profile Net Impaired Assets For personal use only by Exposure at Default $m 4% 22% 2,062 32% 3% 2.9% 3% 1,329 2% 78% 2% 68% 1.3% 1% 1% 0% Sep-10 Sep-13 Sep-10 Sep-13 Investment Grade Sub-Investment Grade 1 Net Impaired Assets Ne
Slide 116: IIB Division summary
International & Institutional Banking Division summary For personal use only Institutional Banking – Australia & New Zealand Asia Global products summary Financials 116
Slide 117: Reshaping the Australia & New Zealand Institutional businesses
Reshaping the Australia & New Zealand Institutional businesses For personal use only • Improving customer relationships in target growth segments: Financial Institutions, Natural Resources, Agriculture, Global Diversified • Maximising cross sell of flow and value added products within our customer b
Slide 118: A market leading Australian and New Zealand Institutional business
A market leading Australian and New Zealand Institutional business FY13 Performance: NPAT up 12% to $1.46 billion For personal use only Market Position1,2 Market Penetration (equal) Trusted Adviser Relationship Capability Australia Lead Trade Bank #1 Loan Syndications (MLA and Bookrunner)3 USPP and
Slide 119: Re-shaping the Australia and New Zealand Institutional businesses
Re-shaping the Australia and New Zealand Institutional businesses Shifting business mix with a greater focus Maintaining cost discipline with costs down For personal use only on flow and value added products 5% YOY1 Volume growth $m 13% Australia / NZ Costs HOH (FY13 v FY12) 647 643 6% 634 630 625 6
Slide 120: IIB Division summary
International & Institutional Banking Division summary For personal use only Institutional Banking – Australia & New Zealand Asia Global products summary Financials 120
Slide 121: Growing in Asia
Growing in Asia For personal use only We continue to build our Asia business by: • Intermediating the fast growing Trade and Capital Flows in the region • Focusing on our target segments of Financial Institutions, Natural Resources, Global Diversified, Agriculture, Asia Commercial, Asia Retail Afflu
Slide 122: A top Corporate Bank in Asia with a growing customer base
A top 4 Corporate Bank in Asia with a growing customer base Growing our customer base and volume in A top 4 Corporate Bank in Asia For personal use only key products Growth In Asia Customer Numbers By Segment Greenwich Associates Large Corporate Survey (FY13 v FY12) Overall Relationship Quality 70%
Slide 123: Asian business growing in line with strategy
Asian business growing in line with strategy FY13 Performance: NPAT up 45% to USD0.6 billion1 For personal use only Growing flow and value added products Gaining momentum across the region Asia Operating Income2 Income growth by largest geographies (USDm) FY13 Flow & value added FY10 FY13 Partnershi
Slide 124: Asia Institutional balance sheet – Shorter tenor
Asia Institutional balance sheet – Shorter tenor Institutional Asia Risk Grade Profile Net Impaired Assets For personal use only by Exposure at Default $m 139 1% 26% 25% 0.9% 1% 1% 50 0% 74% 75% 0.1% 0% 0% Sep-10 Sep-13 Sep-10 Sep-13 1 Investment Grade Sub-Investment Grade Net Impaired Assets Net Im
Slide 125: Asia Pacific Commercial and Retail
Asia Pacific Commercial and Retail Growing with positive JAWS Ongoing customer acquisition in Asia (FY13 v FY12) For personal use only Active Customer Growth Retail Commercial (FY13 v FY12) 19% JAWs +6% JAWs +12% 16% 29% 17% 4% -2% Retail Commercial Income Cost Income Cost Affluent Commercial Asia:
Slide 126: IIB Division summary
International & Institutional Banking Division summary For personal use only Institutional Banking – Australia & New Zealand Asia Global products summary Financials 126
Slide 127: Growing faster in higher return products
Growing faster in higher return products Growing higher return flow and value added Growing volume For personal use only products Revenue Growth by Product IIB Volume Growth (FY10-FY13) (FY12–FY13) Grow 9% 35% 7% Maintain 1% 27% 24% Global Transaction Markets Loans Banking Sales FY13 Return on Equit
Slide 128: Transaction Banking
Transaction Banking Trade & Supply Chain Income Net Lending Assets For personal use only Franchise expansion into Asia Asia has driven volumes $m $b Expansion and income growth 27% 8% 24.1 75% of Assets with Financial 664 614 Customer Institutions, Resources and 19.0 Segments Global Diversified. 60%
Slide 129: Trade a key driver of returns
Trade a key driver of returns Natural cross sell product for For personal use only What Customers Want Cash and Markets For every $1 of Trade income we generate additional Cross Sell of $1.081 On the ground presence $2.08 $0.51 $1.00 $0.57 Risk and liquidity appetite Cross-Sell Income Processi
Slide 130: Global Markets
Global Markets Global Markets income growth by product, Increased & Diversified Earnings client and geography For personal use only (FY13 v FY12) Markets income growth - FX income up Products Client Segment 11% 14% YOY 14% 11% 15% 12% 6% Trading income on the back of client 28% flows and improved ex
Slide 131: Global Markets showing consistent growth
Global Markets showing consistent growth while building out capabilities in core franchise products For personal use only Global Markets Income Global Markets Income by Type $m 4% CAGR $m Sales Trading Balance Sheet Avg. 1H:2H 2,110 Income split ≈ 2,500 1,856 1,908 53%:47% 1,694 2,000 998 1,500 2H 8
Slide 132: Maintaining a lead position with our customers
Maintaining a lead position with our customers Capital Markets League Tables For personal use only Loan Syndications Volume No. 3Q13 Category USDb % mkt Issue Rank Australia (MLA) 9.2 18 81 1 Australia (Bookrunner) 6.1 27 21 1 Asia-Pacific ex-Japan (MLA) 17.3 6 186 3 Asia Pacific ex-Japan (Bookrunne
Slide 133: Build out of Global Markets capabilities in Asia
Build out of Global Markets capabilities in Asia showcases implementation of super regional strategy For personal use only FX Options - built out product capability (e.g. CNY/CNH) in conjunction with intensive F EUROMONEY AsiaRisk marketing to Asian Corporate & Commercial client segment in FX POLL C
Slide 134: IIB Division summary
International & Institutional Banking Division summary For personal use only Institutional Banking – Australia & New Zealand Asia Global products summary Financials 134
Slide 135: IIB Division 2013 Performance
IIB Division 2013 Performance Net Profit after Tax Financial Highlights – FY13 For personal use only Movement FY13 v FY12 $m FY13 v FY12 $m FY12 includes $162m Operating Income 6,564 2% of software 134 impairment 2,430 Operating Expenses (2,970) (3%) 99 51 Profit before Provisions 3,594 7% 137 Provi
Slide 136: IIB Division 2013 Performance
IIB Division 2013 Performance IIB Division Balance Sheet For personal use only Sep v Mar v Sep $b Customer Deposits Customer Lending 2013 2013 2012 Relationship & Customer Deposits 163.2 7% 14% Relationship & Infrastructure, 1% Infrastructure, 1% Retail 12.9 18% 24% Global Global Institutional 148.7
Slide 137: Diversification of income and more stable risk adjusted margins
Diversification of income and more stable risk adjusted margins Income Net Interest Margin For personal use only AUDb NIM is more stable on a risk adjusted basis reflecting an improved portfolio risk profile 6% CAGR 4.50% 3.3 3.3 3.3 IIB ex Markets NIM down 67bps 3.1 3.2 4.00% 2.9 Risk Adjusted NIM
Slide 138: New Zealand Division
For personal use only New Zealand Division
Slide 139: A strong domestic franchise in New Zealand is critical to Super Regional strategy
A strong domestic franchise in New Zealand is critical to the success of ANZ‟s Super Regional strategy For personal use only The New Zealand strategy is focused on: • Delivering a better banking experience for our customers by simplifying the business (products, processes and systems) • Delivering s
Slide 140: Significantly simplify and focus our business to create scale
Our strategy has been to significantly simplify and focus our business to create scale For personal use only Create Scale Leverage Scale Scale advantage 2010 - 2013 2013-2016 2017+ 2010 2012 2013 2017+ Systems 2 1 1 1 Brands 2 1 1 1 Brand Consideration1 27% 32% 39% Market leading Staff engagement 64
Slide 141: Creating scale to build a stronger bank
Creating scale to build a stronger bank Increased Cross Sell Cost to Income Loan to Deposit Ratio For personal use only Growth NZ Division NZ Geography FY13 v FY12 NZ Simplification Programme 199% 49.1% 48.4% 62% ANZ@work1 43.1% 187% 42.5% 177% 175% 22% Trade Finance FY10 FY13 FY10 FY13 Sep 10 Sep 1
Slide 142: New operating model enabling productivity and efficiency improvements
New operating model is enabling productivity and efficiency improvements Revenue per FTE Revenue per Branch Optimising branch network For personal use only NZDk NZDm +10% +17% 7% Branch coverage up 7% over 3 years 10.3 361.9 7% Branch costs down 7% YOY (-6% HOH) 8.8 Leveraging scale 328.5 Revenue pe
Slide 143: Transforming our lending book: mortgage share and Agri portfolio
Transforming our lending book by focusing on growing mortgage share and balancing risk in the Agri portfolio… System lending growth driven ANZ out-performing system in key home For personal use only by mortgages loans segment System lending growth1 Indexed Sep 11 = 100 115 Growth in home loans – ANZ
Slide 144: Continued improvement in credit quality
… and this is driving continued improvement in credit quality For personal use only Net impaired assets (NIA) Total provision charge NZDm NZDm 400 349 1.50% 300 165 119 1.34% 200 98 101 90 100 36 10 0 1.11% -100 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 0.99% IP Charge CP Charge 0.63% 90+ days arrears
Slide 145: Single brand focus increased consideration and profile
Single brand focus has resulted in increased consideration and higher profile Increased Brand Consideration… … driven by best in market advertising campaigns For personal use only Brand Consideration1 ANZ‟s advertising stands out in the market and is delivering high advertising awareness. Combining
Slide 146: Retail – Driving sales through sales capability, channels and branch coverage
Retail – Driving sales through investment in sales capability, channels and branch coverage Strong result Increased branch coverage2 For personal use only 4% Cash profit up 4% YOY & 15% HOH 82% 2% CTI down 2% YOY & 3% HOH 75% 12% Consideration1 scores Staff engagement up 13% to 76% 13% over 3 years
Slide 147: Retail - fewer, simpler products
Retail - fewer, simpler products ANZ has award-winning products, A simplified product suite For personal use only including more 5-star Credit Card Ratings1 than any other bank – which has driven market share gains # Retail & Business Banking Products Low rate Airpoints Platinum 160 Making it easier
Slide 148: Winning in key growth mortgage markets without increasing risk
Winning in key growth mortgage markets without increasing risk Share of new mortgage sales1 in Winning share in Auckland and Christchurch For personal use only #1 Auckland and Christchurch Share of new mortgage Share of new mortgage sales in Auckland1 sales in Christchurch1 67% Average LVR at origin
Slide 149: Commercial - Strong growth in Small Business Banking
Commercial - Strong growth in Small Business Banking Profit growth driven by lending volumes Lending and Deposit Growth and improved economic environment For personal use only Lending Growth % YOY 13 HOH profit growth (+17% YOY) 11% driven by small business lending HOH 6 3 3 2 1 1 -1 YOY increase in
Slide 150: Commercial – delivering insight to our customers
Commercial – delivering insight to our customers and connecting them to the region Connecting customers abroad Leading the Agribusiness market For personal use only Customer tours to India, Hong Kong and China Best Agri Bank Sponsor: Young Farmers Strategic Partner: National Fieldays UDC - 75 years
Slide 151: Customers increasingly using digital channels
Customers are increasingly using digital channels to do their banking Greater than 50% of ANZ NZ For personal use only >50% customers are using digital channels to do their banking 57% of customer transactions now 57% digital (up 5% YOY) #1 Banking ANZ goMoney is currently the most TM downloaded ban
Slide 152: ANZ FastPay to be launched
ANZ FastPayTM to be launched For personal use only • Award winning mobile merchant app currently operational in Australia and soon to be launched in New Zealand • Enables business customers to process credit and debit card payments securely using their iPhone or Android smartphone • Provides same da
Slide 153: Financial outcomes – FY13
Financial outcomes – FY13 Income Expenses PBP NPAT Cost to For personal use only (NZDm) (NZDm) (NZDm) (NZDm) Income % FY13 2,678 1,155 1,523 1,068 43.1% New Zealand Division v FY12 % -1% -15% +14% +29% -7.5% FY13 1,223 638 585 380 52.2% Retail v FY12 % 0% -3% +3% +4% -1.6% FY13 1,441 488 953 699 33.
Slide 154: Financial outcomes – 2H13
Financial outcomes – 2H13 Income Expenses PBP NPAT Cost to For personal use only (NZDm) (NZDm) (NZDm) (NZDm) Income % 2H13 1,361 566 795 571 41.6% New Zealand Division v 1H13 % +3% -4% +9% +15% -3.1% 2H13 627 318 309 203 50.7% Retail v 1H13 % +5% -1% +12% +15% -3.0% 2H13 728 243 485 367 33.4% Commer
Slide 155: New Zealand Division 2013 Performance
New Zealand Division 2013 Performance Net Profit after Tax Financial Highlights – FY13 For personal use only Movement FY13 v FY12 NZDm FY13 v FY12 NZDm 145 Operating Income 2,678 -1% 1,068 211 Operating Expenses 1,155 -15% 94 Profit before Provisions 1,523 +14% 827 Provisions 46 -76% 21 Net Profit a
Slide 156: New Zealand Division 2013 Performance
New Zealand Division 2013 Performance New Zealand Division Balance Sheet For personal use only NZDb Sep 2013 Mar 2013 Sep 2012 v Mar 2013 v Sep 2012 Customer Lending 91.5 89.3 88.0 +2% +4% Retail 36.4 35.8 35.5 +2% +3% Small Business Banking 20.4 19.2 18.2 +6% +13% Commercial & Agri (C&A) 34.6 34.2
Slide 157: Net interest margin has stabilised in 2H13
Net interest margin has stabilised in 2H13 Shift in borrower preference back towards ● Net Interest Margin stabilised in 2H13 fixed rate mortgage products For personal use only ● Challenges from: ANZ % Fixed Rate Sales Mix mortgages in portfolio Intensified lending competition 100% 30% Variable
Slide 158: Global Wealth
For personal use only Global Wealth
Slide 159: ANZ Global Wealth delivering innovative financial solutions
ANZ Global Wealth is delivering innovative and differentiated financial solutions to customers across the region, enabling active engagement in growing and protecting their wealth For personal use only This will deliver value to the Group through: • Deeper and longer customer relationships with impr
Slide 160: Global Wealth's transformation strategy is delivering
Global Wealth‟s transformation strategy is delivering • 36% increase in cash profit For personal use only Financial • 470bps reduction in Cost to Income ratio Driving higher returns • Marginal return on capital increased 130bps. Performing above mid-teen hurdles • 11% increase in wealth solutions he
Slide 161: Wealth Management sector undergoing a once in a generation transition
Wealth Management sector is undergoing a „once in a generation‟ transition Changing Customer Impact on Wealth For personal use only Industry Shifts Behaviour Industry • Boomers are retiring Consolidation within Demographic Shifts Open Market channels • Future customers want to engage in new ways Dig
Slide 162: Global Wealth supports ANZ's Super Regional Strategy
Global Wealth supports ANZ‟s Super Regional Strategy Improved customer economics Important source of liquidity For personal use only Customer Attrition Revenue per customer FY12 FY13 $b $b -45% +65% 26 22 14 13 10 11 5 5 9 12 5 6 Without With Without With Deposits Loans Deposits Loans Wealth Wealth
Slide 163: Embed wealth solutions into all customer touch points
Embed wealth solutions into all customer touch points across the bank Increased Wealth Solutions to Direct Insurance sales For personal use only ANZ Customers (Includes Australia, New Zealand & Asia) Australia New Zealand1 $m NZDm +11% +13% +33% 250 283 52 39 FY12 FY13 FY12 FY13 FY12 FY13 ANZ Smart
Slide 164: Build a highly skilled, trained and productive adviser force
Build a highly skilled, trained and productive adviser force Increased capacity in ANZ Financial Stronger flows from aligned channels For personal use only Planning +20% Netflows Risk Inforce $m $m 413 +$282m +7% 345 56 47 357 298 298 16 FY12 FY13 FY12 FY13 FY12 FY13 Australia New Zealand Higher qua
Slide 165: Grow our presence in Wealth and Private Bank across the region
Grow our presence in Wealth and Private Bank across the region Comments Global Private Wealth Financials For personal use only $m Income Expenses Cash Profit • Launched investment solution for Australian +6% -5% +35% Significant Investor Visa program 203 50 134 • Launched China Mutual Funds through
Slide 166: Deliver higher returns in Life Insurance
Deliver higher returns in Life Insurance Retail Life Insurance Inforce Insurance Cash Profit For personal use only $m $m 9% +10% 1,067 967 147 128 203 221 920 839 FY12 FY13 FY12 FY13 Australia New Zealand Retail Life Lapse Rates Awards Australia New Zealand % % 20bps 70bps Direct Life Insurance Life
Slide 167: Position for growth in Funds Management
Position for growth in Funds Management Funds Under Management (FUM) Funds Management Cash Profit For personal use only $b $m 88% +13% 58.6 51.7 11.2 8.8 47.4 128 42.9 68 FY12 FY13 FY12 FY13 Australia New Zealand Efficiently delivering MySuper Awards • MySuper license approved by APRA • Our MySuper
Slide 168: Simplify the business and leverage global capabilities
Simplify the business and leverage global capabilities Comments Global Wealth Cost to Income Ratio For personal use only • Cost to Income Ratio improved by 470bps 470bps 67.2% • Improvement in Insurance Expense to Inforce premiums in Australia by 70 bps • Improved Funds Management Expense to Average
Slide 169: ANZ Global Wealth is investing for the future
ANZ Global Wealth is investing for the future Developing innovative solutions for the self directed customer For personal use only • Expanding ANZ Smart Choice Super to provide a MySuper compliant solution for Employers • Launching ANZ Self Managed Super - an integrated solution for self managed sup
Slide 170: Global Wealth Division 2013 Performance
Global Wealth Division 2013 Performance Financial Highlights – FY13 Cash Profit movement – FY13 v FY12 For personal use only $m FY13 v FY12 50 469 Operating Income 1,510 5% 65 23 - 20 Operating Expenses 944 (2%) 346 3 2 Profit before 566 20% Provisions Provisions (4) (0%) Up 36% Net Profit After Tax
Slide 171: Embedded Value - Life and Investments
Embedded Value - Life and Investments For personal use only Embedded Value1 • The embedded value $m has continued to grow 579 from the addition of 4,373 profitable new business. 4,091 297 • This growth has been partially offset due to 3,666 assumptions changes 707 driven by: • higher claims on the c
Slide 172: 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 — FY2013 Earnings Presentation on 6ix