Australia and New Zealand Banking Group Ltd. - Annual Report 2011

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Overview and strategy

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ANZ has established a strong business foundation

A clear company wide focus on our super regional strategy:

• Organised our business around three key geographies and our customers	p. 4-18
• Maintaining strong businesses in our home markets:
• Australia	p. 28-48
• New Zealand	p. 76-85
• Investing for strong organic growth in Asia	p. 49-60
• A redefined and clear focus in our global institutional business	p. 61-75
• A strong capital and funding position	p. 19-27
Additional information:
• 2011 Financial Result	p. 101-113
• Risk Management	p. 86-100

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ANZ is structured by Geography & Segment

Asia Pacific, Europe & America (APEA) Retail (including Wealth Commercial Institutional partnerships) Australia Retail Wealth Commercial Institutional New Zealand Retail Wealth Commercial Institutional

Institutional is a global business

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Coherent strategy – driving competitive advantage

Geographic opportunity

Footprint - exposure to Asia‟s more rapid growth
Growing financial services requirements
Regional connectivity
Strong domestic markets and businesses

Cross-border customer focus

Regional customer insights
Resources, agribusiness, infrastructure
Trade and investment flows
Migration/people flows, education

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Leading
Super
Regional
Bank
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Building Super Regional capabilities

Bench strength/international talent
Innovative product capability
„Throw and catch‟ capability and culture
Enabling technology and operations hubs
Global core brand, regional reach
Governance and risk management

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Delivering Super Regional performance momentum

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OUTPERFORM AND TRANSFORM

OUTPERFORM

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RESTORE

Institutional growth
Stronger risk and governance processes
Increased international banking experience
Balance sheet and capital management
Move from a presence to a real business in Asia
14% of Group Earnings
Beachhead in Greater China, SE Asia, India, Mekong
Maintain strong domestic franchises
Increased management bench strength
Create hub foundation
Improving balance sheet composition
Improved funding diversity

Realise full potential of Super Regional aspiration

Capturing value:

To Asia
OUTPERFORM
Within Asia
From Asia

2009-2010

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2007-2009

2011-2017

Super Regional - driving long term growth and differentiated returns

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Denotes two way merchandise trade flow [3 ]
Forecast GDP growth [1 ] (% p.a, 2011-14) FDI inward flow [2] (USDb, 2009)
(2009)
KR
EU 2
4.0% US
1.6% JP
12 2.7%
UK 1.6%
2.3%
TW Asia-US
3
CN 78 5.1% Trade: US$0.8trn
8.7%
HK
48
Asia-Europe IN 5.0%
Trade: US$1.0trn 35
8.5%
VN
8
7.1%
TH
5 Pacific-Asia [4]
4.5%
Trade: US$6bn
PHI
2
4.6%
Intra-Asia MLY
1
Trade:$1.6trn 5.0%
PNG
0.4
5.0%
SG IND
17 5
4.6% 5.9% AUS
23
3.2% Aus/NZ-Pacific [5]
Trade: US$6bn
Aus/NZ-Asia
Trade: US$235bn
NZ
0.2
2.9%
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Source: 1. Global Insight; 2. Bloomberg; 3. WTO; 4. IMF; 5. ABS and Statistics NZ.

Super Regional connectivity provides a competitive advanta e g

Growth in trade flows and direct investment between Asia and Australia is tracking at 11% and 26% pa respectively

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Surplus savings
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There is approximately $75b in direct foreign investment into Australia from the Asian region

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Commodity
consumers
Commodity
producers
Migration &
Investment
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Natural resources account for ~$125b or ~65% of Australian and New Zealand exports to Asia

Linked through flows of trade, capital and population

Key focus is to bridge gaps across the region: Asia generates surplus liquidity, Australia and NZ generate hard and soft commodities

42% of our Corporate[*] clients depend on Asia for more than 25% of their business

Soft commodities account for ~$25b or ~12% of Australian and New Zealand exports to Asia

Represents ANZ‟s Australian based clients with annual turnover of $40-400m

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Sources: Australian Bureau of Statistics (international direct investment positions, 2006-09), Trade Map (exports and 8 imports, 2007-2010)

Realising the full potential of Super Regional

2017 APEA sourced revenue to drive

Aspiration 25% - 30% of Group profit

Expanded view of • The more mature our business, the greater our opportunities •
opportunity in Increasing our footprint, customers and access to trade, liquidity APEA and investment flows
Domestic • Regional connectivity will deliver additional revenue into
outperformance Australia, New Zealand, Asia and the Pacific
Centres of • Hubs provide a lower and more flexible cost base – access Excellence deeper pools of talent, provide better service with lower risk
Focussed • Technology roadmap focused on customer facing (e.g. internet
technology banking, goMoney) and cross-border systems (e.g. FX, Cash
investments Management)

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Realising the full potential of Super Regional

2017 APEA sourced revenue to drive

Aspiration 25% - 30% of Group profit

Continue to build depth in international management and banking experience

People

Well defined succession planning
Remuneration and incentives aligned to delivery of strategy and management of risk
Risk management as a core competency
- Increased expertise across the risk function
Risk – Comprehensive set of asset writing strategies –
Management Product and segment expertise – focus on sectors we know
Customer driven rather than product focused
Lower balance sheet intensity
Greater balance sheet diversity
Financial • Reduced reliance on interest income
Management • Funding flexibility

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Growth levers - organic, partnerships and M&A

Continued Focus on Organic Growth

Leveraging Super Regional connectivity Increasing productivity Focus on core customers

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Managing the value of ANZ‟s Partnerships

Selective M&A opportunities

Delivering access to attractive markets/ segments
Linking partnership customers to ANZ‟s international network
Actively managing the portfolio to optimise strategic positioning
Dislocation in global markets continuing to create opportunities
Consistent M&A disciplines – on strategy, delivers value, executable

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Emerging differentiation

Super Regional strategy giving us greater exposure to Asia‟s growth
Building blocks in place via both acquisition and investment in capability
Developing stronger customer propositions
Driving productivity gains from our hubs
Integrating the Super Regional strategy into all our businesses

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Balance Sheet Management

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Group loans and deposits

Group net loans and advances (including acceptances)

Group customer deposits

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Growth Rates
FY08 FY09 FY10 FY11
$b
12% 16% 14% 15%
450
400
350
300
250
200
150
100
50
0
Sep 07 Sep 08 Sep 09 Sep 10 Sep 11
Retail Commercial
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Growth Rates
FY08 FY09 FY10 FY11
$b
16% 0% 9% 7%
450
400
350
300
250
200
150
100
50
0
Sep 07 Sep 08 Sep 09 Sep 10 Sep 11
Institutional
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Customer deposits by geography

Australia (AUDb) Growth Rates FY08 FY09 FY10 FY11 10% 16% 9% 11%	New Zealand (NZDb) Growth Rates	APEA (USDb) Growth Rates
	FY08 FY09 FY10 FY11 5% 1% 0% 4%	FY08 FY09 FY10 FY11 49% 49% 68% 40%



Sep 07 Sep 08 Sep 09 Sep 10 Sep 11	Sep 07 Sep 08 Sep 09 Sep 10 Sep 11	Sep 07 Sep 08 Sep 09 Sep 10 Sep 11
Retail Commercial Institutional 1

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Includes Wealth

Customer deposit composition by segment

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Group deposits by segment Deposits composition
(AUDb) Sep 2011
297
257
Group 39% 18% 41% 2%
233
124
110
Australia 31% 21% 47% 1%
102
54
46
APEA 77% 23%
47
117
98
80 New Zealand 19% 29% 45% 7%
Sep 09 Sep 10 Sep 11
Wealth Retail Commercial Institutional
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Net loans and advances by geography

Australia (AUDb)	Australia (AUDb)	New Zealand (NZDb) Growth Rates	New Zealand (NZDb) Growth Rates	APEA (USDb) Growth Rates
Growth Rates
FY07 FY08 FY09 FY10 FY11 14% 0% 9% 6%		FY07 FY08 FY09 FY10 FY11 12% (1%) (1%) (3%)		FY07 FY08 FY09 FY10 FY11 large (2%) 57% 44%



Sep 07 Sep 08 Sep 09 Sep 10 Sep 11		Sep 07 Sep 08 Sep 09 Sep 10 Sep 11		Sep 07 Sep 08 Sep 09 Sep 10 Sep 11
Retail Commercial 1				Institutional
	Retail		Commercial

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Includes Wealth

Lending composition by segment

Group lending composition Lending composition by segment (AUDb) Sep 2011

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397
369
346
Group 23% 22% 54% 1%
215
202 Australia 19% 17% 63% 1%
185
APEA 82% 18%
87
85
86
New Zealand 7% 54% 37% 1%
91
71 79
Sep 09 Sep 10 Sep 11
Wealth Retail Commercial Institutional
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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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Treasury

ANZ well capitalised and positioned to transition to Basel III

Basel II Basel III – Common Equity Tier 1 Basel II ~14.9% 7% minimum Proposed Basel III ~14.0% including buffer APRA fully applicable from Basel harmonised 12.1% 12.1% Jan-16 III[#] 11.9% ~9.5% ~9.5% 10.9% 10.5% 10.1% ~7.4% ~8.7% Common Equity Tier 1 ~7.5% surplus ~7.0% over 7.0% Capital Buffer ~11.4% 2.5% 8.5% 8.5% 8.0% 4.5% minimum Minimum target 4.5% Sep-10 Mar-11 Sep-11 Common Equity Higher RWA Dividend 10%/15% RWA: IRRBB Sep-11 Basel III Sep-11 FSA Tier 1 Charges accrual threshold insur, & mortgage Full Int'nl Deduction (credit risk) * APRA Basel III assoc, DTA LGDs & other Alignment (Insur,banking, (inc. DTA on CP) assoc, ELvCP) & other items Common Equity Tier 1 Hybrids Tier-2

Excludes Basel 2.5 Market & Securitisation Risks and any Basel 3 liquidity changes
Still subject to discussion paper feedback

Solid organic capital generation continues to underpin the strong Common Equity Tier 1 position

Capital Position (Common Equity Tier 1 Ratio)

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~11.4%
2.13%
~9.5%
(0.83%) 8.52%
8.05% (0.43%)
(0.33%) (0.07%)
Portfolio growth & mix 51bp decrease +15.8b
Risk Migration 7bp increase -1.3b
Portfolio data review 2bp increase -0.5b
Non-credit RWA 1bp decrease +0.4b
Net organic up 54bp
Up 47bp
Sep-10 NPAT Dividend/DRP RWA movement Other Investments Sep-11 Sep-11 Basel III Sep-11 FSA
(1) (2) (3) (4) (5)
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(1) Underlying NPAT. (2) Includes prior period under-accrual of DRP. (3) Includes impact of movement in Expected Loss versus Eligible Provision shortfall. (4) Includes OnePath Insurance Business‟ retained earnings, Asian Banking Associates‟ retained earnings, Non-Core NPAT items, Capitalised Costs and Software, FX, Net Deferred Tax Assets, Pensions, MTM gains on own name included in profit (5) Ratios based on full Basel III international alignment.

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Tier 1 position strengthened significantly with recent CPS3 issuance and solid organic capital generation

Capital Position (Tier 1 Ratio)

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~14.0%
2.13%
~11.7%
0.51% 10.94%
10.10% (0.83%)
(0.57%)
(0.33%) (0.07%)
Portfolio growth & mix 65bp decrease +15.8b
Risk Migration 8bp increase -1.3b
Portfolio data review 2bp increase -0.5b
Non-credit RWA 2bp decrease +0.4b
Net organic up 40bp
Up 84bp
Sep-10 NPAT Dividend/DRP RWA Other Investments Hybrids Sep-11 Sep-11 Basel Sep-11 FSA
(1) (2) movement (4) III
(3) (5)
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Reconciliation of ANZ‟s capital position under Basel III

ANZ capital ratios under a Basel III fully harmonised approach :

	Common Equity Tier 1	Tier 1	Total Capital
APRA Sep-11 Basel II	8.5%	10.9%	12.1%
Plus: dividend not provided for (net of DRP)	0.5%	0.5%	0.5%
Less Investments in ADI and overseas equivalents	-0.4%	-0.4%	0.0%
Less Investments in ANZ insurance subs including OnePath	-0.4%	-0.4%	0.0%
Less Expected losses in excess of eligible provisions	-0.2%	-0.2%	0.0%
Other	-0.1%	-0.1%	-0.1%
Less 10% reduction of existing hybrids and sub debt securities	-	-0.2%	-0.4%
Estimated increase in RWA1	-0.4%	-0.5%	-0.6%
APRA Sep-11 Basel III discussion paper	7.5%	9.6%	11.5%
10% allowance for investments in insurance subs and ADIs	0.8%	0.7%	0.6%
up to 5% allowance for deferred tax asset	0.2%	0.2%	0.2%
other capital items	0.2%	0.2%	0.3%
Mortgage 20% LGD floor and other measures	0.6%	0.7%	0.7%
IRRBB RWA (APRA Pillar 1 approach)	0.2%	0.3%	0.4%
Sep-11 Basel III fully aligned	9.5%	11.7%	13.7%

Includes credit counterparty but excludes Basel 2.5 Market & Securitisation Risks and any Basel III Liquidity changes

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ANZ has a well diversified funding profile with an increasing weighting to customer funding

Strong Funding Composition

Maintained low levels of shortterm wholesale funding

Short Term Wholesale Customer Funding Funding Term Debt < 1 year Residual Shareholders equity & Hybrid Maturity debt Term Debt > 1 year Residual Maturity

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3%
1%
2%
12%
6%
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Gross Interbank, Other

APEA CDs

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Equity/ Offshore short-term CP Hybrids 8% Domestic CDs

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12% 12%
17%
22%
6% 6%
5%
12%
7% 16%
15%
14%
61%
58%
55%
50%
7% 8% 8% 9%
Sep 08 Sep 09 Sep 10 Sep 11
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Well diversified term wholesale funding portfolio

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3% Offshore PPs (Multi ccy
incl. HKD,SGD,RMB)
1%
3% Japan (¥)
18% 5% UK & Europe (€,£,CHF)
North America
(USD, CAD)
6%
Domestic (AUD, NZD)
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Offshore PPs (Multi ccy incl. HKD,SGD,RMB)

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Stable term debt issuance, portfolio costs increasing

Portfolio term funding costs expected to increase further due to current market volatility

Stable term funding profile

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A$B 3m BBSW
30 Forecast Portfolio funding
Issuance Maturities 180bp costs based on current
market levels
160bp
25
140bp
20 120bp
100bp Forecast Portfolio funding
15 costs based on market
levels as at 1H11
80bp
10 60bp
40bp
5
20bp
0 0bp
Senior Debt Government Guarantee Sub Debt
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16+ Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14
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FY11 includes $2.4bn of pre-funding from FY10 All numbers are at Group Level

Total liquid assets exceed TOTAL offshore wholesale debt portfolio

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Strong liquidity position ($b) ANZ Total
Offshore
Wholesale Debt
securities
19.9
8.1 19.4
10.2
3.3 71.4
66.7
60.2 62.2
34.7
20.1
Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 11
Prime Liquidity Portfolio Other Eligible & Highly Liquid Securities Long-term Short-term
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Composition of prime liquid asset portfolio ($71.4b)

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Class 1 Class 2 Class 3
$31.3b $9.4b $30.7
Government/Semi Govt./Govt. Bank or Corporate Internal RMBS
Guaranteed bank paper, NZ cash paper rated AA or
With RNBZ, supernational paper better
Priority of use
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Hedging has lessened the impact on earnings of the stronger $A

Earnings Composition by Region EPS Impact & Average Translation Rates

% Group									Exchange
Underlying									Rate
Profit
80% 90% 100%									1.30 1.40
									1.20
70%
60%									1.10
40% 50%									0.90 1.00
20% 30%									0.80
10%									0.70
0%									0.60
	2H09		1H10	2H10	1H11			2H11
APEA (LHS)						New	Zealand		(LHS)
Australia (LHS)						AVG	AUD/USD (RHS)
AVG		AUD/NZD (RHS)

Inclusive of Hedging Unhedged

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0.7%
-0.9%
-1.2%
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-2.6% 2H11 HoH FY11 YoY

Hedge profits more than halved the negative impact of AUD strength on FY11 earnings.
FY12 hedges are in place to cover ~80% of USD (inclusive of other significant currency exposures), and ~40% of NZD exposures.
At current levels (AUD/USD 1.04, AUD/NZD 1.30) FY12 FX expected to adversely impact FY12 EPS by ~0.3% (inclusive of hedges)
Each 5% appreciation of the AUD would negatively impact FY12 EPS by an additional ~0.9%

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Australia Division

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Australia Division – Consistent customer focus and wellestablished market ositionin drivin solid results p g g

1. Delivered customer propositions targeted at key segments aligned to our Super Regional Strategy

New banking services for affluent customers
Improved process for NZ customers opening accounts in Australia
Customer referral agreements with Shanghai Rural Commercial Bank (SRCB) and AmBank
Introduced multi-lingual capabilities to more than 2,700 ATMs (9 languages)

2. Driving customer growth and improving productivity and efficiency

Leveraging Super Regional advantage and franchise strength across Retail, Commercial, Wealth and Institutional
Improving efficiency by centralising and standardising administration functions

3. Successful implementation of technology and innovation initiatives

Rolled out integrated mortgage origination platform
Expanded functionality of GoMoney for BPAY payments (~420k customers & ~26% of all online traffic)
Launched Multi-currency Travel Card in May 11 (~55k cards sold with a value of $220m)
Launched OneAnswer Frontier – a 'fee for service' (commission free) investment platform
Term Deposits now available on OneAnswer
EasyProtect and 50+Life insurance products sold directly via anz.com and branches

Pro forma Profit before credit & income tax

$m

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5,000
482 Wealth
4,000
1,680 Commercial
3,000
4,431 4,673
2,000 4,003
2,511 Retail
1,000
0
FY09 FY10 FY11 FY11 by
business
Lending & deposit growth
(YOY)
20% 18%
15% 13%
10%
7%
5%
5%
0%
Retail Retail Commercial Commercial
lending deposits lending deposits
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Australia Division – Financial performance

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Pro forma
Pro forma NPAT movement – FY11 v FY10
Growth Rates
Revenue $m
395
8
5%
2% 145
2,777
2,717 113
FY11 2H11
69
Up 2%
Expenses
FY10 Net Other Expenses Provisons Tax and FY11
4%
1% Interest Income OEI
FY11 2H11
Pro forma NPAT movement – 2H11 v 1H11
Profit Before $m
Provisions 117
1,445
5% 75
2% 53
1,332 12 14
FY11 2H11
Up 8%
Provisions
19%
1H11 Net Other Expenses Provisons Tax and 2H11
Interest Income OEI
-28%
FY11 2H11
30
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Australia Geography – Balance sheet and funding

Balance sheet management strategy

A well managed balance sheet supports sustainable lending and revenue growth
We aim to:
Continually improve the composition of deposits in line with Basel 3 expectations - type, tenor and segment to fund core assets
Reduce the funding gap and therefore reliance on short term wholesale debt
Continually improve capital efficiency

Outcome

Loan to deposit ratio has improved to 156% in FY11 from 186% in FY08
Improved quality of deposit base:
Strong proportion of deposits from Household segment (Household deposits as % total deposits up from ~39% in Sep 08 to ~41% in Sep 11)[1]
Household customer deposit growth above market rates (1.5x system for the year[1] )
Market share for traditional banking products improved from 12.5% in Sep 10 to 13.0% in Sep 11[2]
Net gain of 113k transaction account customers
Launch of Term Deposits on our Wealth platform provides additional customer contact and allows customers to better manage their funds
Source: APRA Banking Statistics
Roy Morgan Research

Significant improvement in loan to deposit ratio

100 150 200 250 300 $b	100 125 150 175 200 Sep 08 Sep 09 Sep 10 Sep 11 Net loans and advances incl. acceptances Customer deposits Loan to Deposit Ratio (RHS) %

Australia Geography – loans and deposits

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Net loans and advances • Lending up 6% YOY and 2% HOH
(including acceptances) • Mortgages up 7% YOY and 3% HOH growing at
$b
300.0 269.2 285.0 1.2x system [1 ] YOY
246.4 247.1
250.0 • Commercial up 5% YOY and 4% HOH
200.0  Business Banking up 10% YOY and 4% HOH
150.0  Small Business Banking up 12% YOY and 9%
HOH
100.0
50.0  Regional Commercial Banking flat YOY and up
4% HOH
0.0
Sep 08 Sep 09 Sep 10 Sep 11 • Institutional up 5% YOY and 1% HOH
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Small Business Banking up 12% YOY and 9% HOH
Regional Commercial Banking flat YOY and up 4% HOH

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Customer deposits
$b
250.0
183.2
200.0 164.8
153.5
132.7
150.0
100.0
50.0
0.0
Sep 08 Sep 09 Sep 10 Sep 11
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Deposits up 11% YOY and 9% HOH
Focus on core bank customers
Retail up 13% YOY and 6% HOH
Commercial up 18% YOY and 7% HOH
Business Banking up 17% YOY and 5% HOH
Small Business Banking up 22% YOY and 11% HOH
Regional Commercial Banking up 17% YOY and 4% HOH
Institutional up 5% YOY and 16% HOH

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Source: APRA Banking Statistics and RBA data

Australia Division – Net Interest Margin

Margin strategy

Net Interest Margin

ANZ is focused on profitable growth in key segments using a service led approach

Outcome

YOY NIM down 2 bps
Improved asset margins and reduced reliance on wholesale funding largely offset by increased deposit competition and negative asset mix impacts

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2.80%
2.57%
2.59%
2.53%
2.60%
2.41%
2.40%
2.20%
2.00%
FY08 FY09 FY10 FY11
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NIM movement 2H11 vs. 1H11

HOH NIM down 2 bps
Asset repricing benefit offset by increased funding costs and price competition for deposits
Costs of funds impact on variable rate book pronounced in 4Q

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bps
257.9 0.2
4.6
256.2
1.3
1.4
3.8
1H11 Funding & Funding Deposits Assets Other 2H11
Asset Mix Costs
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Retail – ANZ value proposition: “easy and empowering”

Superior customer service

Priorities

Capabilities

Position ANZ as the most “easy and empowering bank” for
Strong brand customers
Strategic marketing campaigns – “We live in your world.”
• Be the bank of choice for target customer segments:  Affluent 
- Affluent  Migrant
- Young money  Over-50s  ANZ Staff

Deeper relationships with Customers

Tailored offerings and better processes
More specialists (migrant teams, retirement bankers, etc.)
Ability to open Australian accounts in other countries (e.g. New Zealand and China)

Simple to do business with

Simplified products, processes and policies making banking easier for customers and staff
Channels aligned with customer trends
Reconfiguring branch network – more efficient customer friendly footprint, more technologically advanced (e.g. Smart ATMs, cash recyclers, video conf.), more sales and advice oriented (e.g. engagement desks, Client Advisors)

Multi-channel sales & service

Single front-end platform (iKnow) will deliver a seamless customer experience across all channels
Extending functionality of online and mobile platforms in line with customer expectations

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Retail – Strategy delivering results

Movement	FY11 v FY10	2H11 v 1H11
Income	6%	2%
Expenses	4%	2%
Profit Before Provisions	7%	3%
Net loans & advances incl. acceptances	7%	3%
Customer deposits	13%	6%

Using a combination of short & long-term strategies to drive growth

Focused on growing share of wallet in key customer segments through a distinctive value proposition of being the most easy and empowering bank
Competitive in the market on price without being the price leader

Outcome

Revenue growth of 6% YOY
Improving CTI – 43.8% in FY11 from 44.6% in FY10
Peer leading customer satisfaction and improving share of wallet
Strong growth in deposits - up 13% YOY and 6% HOH
Mortgages FUM up 7% YOY and 3% HOH

Customer deposit composition

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100%
16% 13% 11%
80%
30% 33%
39%
60%
40%
57% 56%
46%
20%
0%
Sep 09 Sep-10 Sep-11
Term deposits Savings Transaction
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Cost to income (CTI) ratio

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----- Start of picture text -----

46%
45%
44%
43%
42%
1H10 2H10 1H11 2H11
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Retail - Focused on profitable growth and market share

With MFI Customer Satisfaction again approaching 80%...

(%) MFI Customers[1]

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----- Start of picture text -----

80
78
76
74
72
70
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11
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… purchase intention for ANZ home loans is up YOY and HOH

(%) Home loans trial intention[2]

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----- Start of picture text -----

30
25
20
15
10
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11
Peer 1 Peer 2 Peer 3
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Source: Roy Morgan Research
Source: Australian Retail Brand Monitor

… and Peer leading Customer Advocacy

Net Promoter Score[1,3]

Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 … and share of wallet growth outperforms domestic peers

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----- Start of picture text -----

(%) Share of wallet – Traditional Banking [1]
65
60
55
50
45
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11
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"Net Promoter Score[sm] is a service mark of Bain & Company, Inc., Satmetrix Systems, Inc. and Mr. Frederick Reichheld"

Retail – Mortgages

Portfolio Statistics	Portfolio Statistics
Total Number of Mortgage Accounts	832k
Total Mortgage FUM	$170b
% of Total Australia Region Lending	60%
% of Total Group Lending	43%
Owner Occupied Loans - % of Portfolio	64%
Average Loan Size at Origination	$231k
Average LVR at Origination	63%
Average Dynamic LVR of Portfolio	48%
% of Portfolio Ahead on Repayments1	37%
First Home Owners - % of Portfolio	9%
First Home Owners - % of New Lending	8%

Dynamic Loan to Valuation Ratio

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% Portfolio
60%
50%
40% 13% of Portfolio
>80% LVR
30%
20%
10%
0%
0-60% 61-75% 76-80% 81%-90% 91%+
Sep-09 Sep 10 Sep 11
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Mortgage Portfolio by State
(Sep 2011)
28% NSW & ACT
16%
QLD
VIC
10%
19%
WA
OTHER
27%
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One month or more ahead of repayments. Excludes funds in offset accounts.

Retail – Becoming the bank of choice for Asia Region customers

Simple processes	• Chinese customers able to open Australia & China accounts with one application • Improved process for NZ customers (15 min process) • Visa Debit card available on arrival • Fee free international money transfers2 • Global Retail Referral Tool
Tailored products & network for customer needs	• International Banking Services (IBS) branches increased from 19 to 47 branches from Jan to Jul-11 • Online multilingual application forms • Significant mortgage and credit card policy enhancements to better suit customers moving to Australia and insurance proposition under development • New website “Moving to Australia” • Dedicated email and phone contacts • Advertising in targeted countries and segments • Banking in Australia Seminars • Representation at appropriate Expos
Understand of banking in Australia

Simple
processes

•
Chinese customers able to open Australia & China accounts
with one application
•
Improved process for NZ customers (15 min process)
•
Visa Debit card available on arrival
•
Fee free international money transfers2
•
Global Retail Referral Tool

Tailored
products &
network for
customer
needs

•
International Banking Services (IBS) branches increased
from 19 to 47 branches from Jan to Jul-11
•
Online multilingual application forms
•
Significant mortgage and credit card policy enhancements
to better suit customers moving to Australia and insurance
proposition under development
•
New website “Moving to Australia”
•
Dedicated email and phone contacts
•
Advertising in targeted countries and segments
•
Banking in Australia Seminars
•
Representation at appropriate Expos

Understand of
banking in
Australia

Results as at September 2011

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ANZ offers fee free international money transfers to customers with a 1+1 student and parent account in Australia and China

Retail – Delivering customer propositions targeted at key segments aligned to our Super Regional Strategy

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----- Start of picture text -----

International Banking
Moving to Australia website Services branches Concierge model
(Online) (Branch) (Phone)
• Launched April 2011 • Increased from 19 to 47 • Launched August 2011
branches
• Simplified multilingual content • Multilingual account opening
• 47 targeted branches supported service
 English
by over 400 Banking Specialists • High-touch point of contact for
 Chinese with language capability
customers
 Korean • Supported by bilingual marketing • FX and International Money
material and in-branch
• Multilingual Online forms Transfer Specialists
campaigns
• Online content including • Dedicated support resources to • Arrange Visa Debit Card pick up
LifeGuides, country guides, etc. on arrival
assist in sales coaching for
• Complements Concierge model segment • Based on successful model in
ANZ New Zealand
• Supports Global Retail Referrals
Tool
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Retail – Strong momentum in Affluent program driven new ilities and services by capab

==> picture [673 x 30] intentionally omitted <==

----- Start of picture text -----

Principles driving performance - easy and empowering
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Customer knowledge	• Whole customer relationship taken into account in financial product assessment • Front line system for customers designed to capture all customer interactions
Accessibility to Wealth advice	• Introduction of a 30 minute Wealth Health Check • New capability for Wealth advisers that takes into account time poor customers • Dedicated customer managers • Referral processes between Financial Advisers, Mobile Lenders, Home Investment Lending Managers and branches for specialist support • Email communication the #1 method of daily liaison with customers from their dedicated customer manager • First meeting with specialists face to face • Dedicated Practice Manager to guide customers through mortgage process
Customer engagement
Customer liaison

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Results from May 2011 to October 2011

Commercial overview

Movement	FY11 v FY10	2H11 v 1H11
Income	6%	4%
Expenses	6%	(2%)
Profit Before Provisions	6%	7%
Net loans & advances incl. acceptances	5%	4%
Customer deposits	18%	7%

Strategic focus

Drive customer growth through leveraging:
ANZ‟s Super Regional capabilities and footprint
ANZ‟s strengths in Markets, Trade Finance and Cash Management and Agriculture and Natural Resources sector expertise
Retail, OnePath and Esanda‟s distribution network
Improve efficiency and productivity through centralising and standardising administration functions and enhanced use of offshore hubs.

Outcome

Income up YOY and HOH, strong deposit growth and improving asset volumes
NIM up YOY reflecting strong transaction account growth.

Net loans & advances (incl. acceptances) by business

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Regional Commercial
28%
Banking
Business Banking
30%
Small Business
34% Banking
Esanda
8%
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Net loans and advances incl. acceptances & deposits

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----- Start of picture text -----

$b %
47.8
50 45.7 140
43.0
39.7
40
33.7
32.1
130
30
20
120
10
0 110
Sep-09 Sep-10 Sep-11
Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
Loan to deposit ratio (RHS)
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Commercial – super regional advantage

Our super regional platform and ANZ core capabilities are driving cross-sell and new-to-bank acquisition

Super regional platform

ANZ is the only bank able to connect Commercial customers across Asia, New Zealand and Australia via a network that spans:
1,200+ branches
~270 business centres
~3,000 Commercial frontline staff
The value of this connectivity is evidenced by a 29% growth in cross-border referrals HOH

ANZ strengths

Cross-border referrals

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----- Start of picture text -----

29%
increase
500
250
0
1H11 2H11
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Cross-Border Cash Capability: ANZ Transactive

To further enhance our super regional offering we‟re leveraging ANZ‟s market leading capabilities in:
Trade finance:#1 in market share and #1 in customer experience[1]
Markets: „Best FX House in Australia‟[2]
Cash Management: ANZ Transactive cross-border cash capability
Web-based Cash Management platform with cross-regional capabilities
Enables complete regional visibility over accounts, control over all accounts and financial information
Provides comprehensive range of payment solutions to track local and overseas payments
Institutional customer share and Institutional customer experience; source East & Partners 2. AsiaRisk 2010

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Commercial - Business banking

Building momentum, creating capacity to grow

Growing the balance sheet through a focus on acquiring larger customers and improved share of wallet
Leveraging super regional connectivity and offering new services to customers (e.g. trade finance in RMB)
Introduced “ANZ OneSwitch” to make it easier for customers to switch their banking to ANZ via a simplified application and fulfilment process
Enhanced frontline skills and capabilities via sales leadership and coaching initiatives
Improved frontline productivity and capacity through continued centralisation of admin-related tasks

Outcome

Lending up 10% YOY, with a 35% increase YOY in average new-to-bank deal size
Strong growth in deposits (17% increase YOY)

FY11 lending book composition by key segments

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----- Start of picture text -----

Property
Retail
33.8%
Manufacturing
10.3%
Wholesale Trade
3.1%
Business Services
5.1%
Construction
15.1%
7.3%
Accommodation
7.4% Heath & Community Services
9.2%
8.7%
Other
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Net loans and advances incl. acceptances & deposits

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----- Start of picture text -----

$b %
18 125
16.2
16
14.5 14.7 120
13.8
14
12.1
11.8 115
12
10 110
Sep-09 Sep-10 Sep-11
Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
Loan to deposit ratio (RHS)
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Commercial - Regional Commercial banking

Capitalising on opportunities for growth and supporting customers in need

Regional Commercial[1]

Leveraging bank-wide sector expertise in Resources and Infrastructure to identify and capture Commercial opportunities within major projects, e.g. contractors and suppliers.

Agribusiness[2]

Leveraging bank-wide Agribusiness expertise to capture farmgate business
Increased products per customer in the acquired Landmark customer portfolio by 60%
Supported customers impacted by natural disasters through the „Seeds of Renewal‟ program, providing assistance to 40 separate community programs

Outcome

Despite unprecedented climatic conditions and other macro-level impacts, RCB 2H11 PBP grew 6%
Tight cost management led to positive revenue growth exceeding cost growth YOY
Lending flat YOY but up 4% in 2H11
Strong deposit growth HOH (4%) and YOY (17%)
Non metro Small Business and Business Banking customers

FY11 lending book by key segments

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----- Start of picture text -----

Agriculture
Retail
13.8% 55.1% Property Services
3.5% Construction
5.2%
Hospitality
5.5%
Manufacturing
8.0%
8.8% Other
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----- Start of picture text -----

Net loans and advances incl.
acceptances & deposits
FY10 benefited from
$b Landmark acquisition and %
internal resegmentation
20 160
150
15 13.5 13.6
10.8 140
10.5
9.2
10 130
6.8
120
5
110
0 100
Sep-09 Sep-10 Sep-11
Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
Loan to deposit ratio (RHS)
----- End of picture text -----

Farmgate customers

Commercial - Small Business banking (SBB)

Leveraging ANZ distribution networks and enhancing customer experience

Acquiring new-to-Commercial customers by tapping into the distribution networks of OnePath, Esanda and Retail‟s affluent segment
Enhanced our innovation offering via the launch of “Business Insights”, the relaunch of SB Hub and partnering with Xero (online accounting solution)
Improved productivity through the roll out of SBB Assist: elimination of admin tasks from frontline staff – 10,000 frontline hours saved

Outcome

~16k net new customers in FY11[1] , with improved customer satisfaction
Product cross sell up 15% in FY11 (e.g. asset finance, commercial cards, wealth, etc.)
Deposits up 22% YOY
Lending up 12% YOY
PBP up 10% HOH and 15% YOY

FY11 lending book composition by sector

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----- Start of picture text -----

22.2%
12.5%
21.3%
10.0%
4.9%
6.1% 9.3%
6.7%6.9%
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Retail

Construction Business Services Manufacturing Property Services Wholesale Trade Hospitality Transport & Storage Other

Net loans and advances incl. acceptances & deposits

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----- Start of picture text -----

$b %
20 30
14.9
15 12.1
11.2
10 25
5 3.3 3.3 3.7
0 20
Sep-09 Sep-10 Sep-11
Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
Loan to deposit ratio (RHS)
----- End of picture text -----

Metro customers only. As at August 2011

Commercial - Esanda

Esanda is the market leader in vehicle finance and a prime source of new-to-bank customers

Largest player in the dealer vehicle finance market
Market leading credit processing speeds (under 15 minutes to process new applications)
Rich source of new-to-bank consumer and Commercial customers:
~110k contracts settled per year
~75% of customers have no existing relationship with ANZ
~80% of auto finance customers are consumers and small business clients
Provider of equipment finance products offered through ANZ
Leverages Esanda‟s skills and technology platform
Fully integrated into ANZ‟s Commercial and Corporate distribution networks.

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----- Start of picture text -----

Esanda lending composition by
assets (Sep 11)
Vehicles
14%
86%
Equipment
finance
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Esanda lines of business

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----- Start of picture text -----

Dealer
(Auto
Finance)
----- End of picture text -----

Auto finance and insurance products offering to dealerships and consumers
National presence and capability across metro and regional
Relationships with over 200 dealer groups and over 700 car dealerships
~300,000 active finance contracts
Over 9k deals written per month[1]
ANZ asset finance offering to commercial and corporate banking clients

ANZ Asset Finance

Offering include hire purchase, chattel mortgage, finance lease facilities, etc.

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Average Consumer & Commercial contracts per month over FY11 through the Dealer channel

Wealth (OnePath superannuation, Investments & Insurance and ANZ Private)

Strategic focus

Improving management bench strength appointed new management;
Distribution & Advice - Paul Barrett
Superannuation & Investments - Craig Brackenrig
CRO - Edith Pfister
CFO - John Frechtling
Well advanced search for new MD Wealth
Develop products to suit simple super environment
Improve penetration of bank customers through branches and anz.com
Complete roll out of new client service model to ANZ Private
Actively adapt to regulatory change agenda
Deliver service & functionality enhancements to front end systems

Business Performance

NPAT down 16% YOY and 15% HOH driven by revenue impacts from volatile market conditions
Negative investor sentiment given poor equity markets impacted OnePath FUM and E*Trade, FUM down 8% YOY and 10% HOH
Annual in-force premiums up 12% YOY and 6% HOH
Growth in retail insurance income was offset by higher general insurance claims due to catastrophic weather events
Expense growth (+3% YOY) due to higher levels of investment in strategic projects coupled with some restatements and one-offs
Lapse rates below industry average during 2011.

In-force annual premium growth

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----- Start of picture text -----

$M
1,600
1,500
1,400
1,300
1,200
1,100
Mar 10 Sep-10 Mar 11 Sep 11
----- End of picture text -----

Retail insurance lapse rates (Rolling 12 months)

==> picture [280 x 183] intentionally omitted <==

----- Start of picture text -----

13.5%
13.0%
12.5%
12.0%
11.5%
11.0%
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11
----- End of picture text -----

Wealth – Progress against strategic priorities

Priorities Step change in ANZ customer base penetration Capitalise on opportunities Leverage combined wealth business Productivity Enhance core capabilities for future growth	Priorities Step change in ANZ customer base penetration Capitalise on opportunities Leverage combined wealth business Productivity Enhance core capabilities for future growth	• Further increase MyAdvice (phone advice) volumes which doubled YOY • Capturing fee-for-service inflows on OneAnswer Frontier ($400m FUM1) • Maintain momentum in Retail life insurance, sales increased 29% YOY Progress • Life insurance launched on anz.com ($3.4m premiums) and 50+ product through branches ($0.7m premiums) • Launched Affluent “Wealth Health Check.” • Wealth business (previously INGA, ANZ Private and ANZ Investment and Insurance businesses) now integrated – next steps to improve penetration of broader customer base and drive further efficiency. • Automate key customer and adviser transactions to improve speed and accuracy – (60% of retail life insurance business coming through electronically) • Significant transformation of insurance claims management experience • Service and functionality enhancements to the OneAnswer investment platform (including online switches, improved super to pension transfer process and term deposits with ~$200m FUM since 1 Sept) • Managing within a constrained environment – prioritised investment spend and improving cost efficiency • Focus on centralising and standardising processes and back of house functions.
	Productivity

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As at 30 September 2011

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Asia Pacific, Europe & America (APEA) Division

==> picture [117 x 42] intentionally omitted <==

Asia Pacific, Europe & America Division (APEA) - buildin a leadin su er re ional bank g g p g

APEA achieved another year of significant growth in FY 2011…

Revenue increase of 22%
NPAT growth of 20%
Customer deposit growth up by 40% ($18b) and lending growth up by 44% ($12b)

…while continuing to execute our longer term organic growth strategy…

Balanced business - growth in selected geographies, segments and products
APEA Retail grew to 36% of APEA total revenue
APEA Institutional contributed 26% of Global Institutional revenue in FY11
Connectivity - across the network, and increasingly intra Asia – intra-Asia revenue up 40% in 2011
Investment discipline – finding investment dollars from cost savings
Balance sheet strength - improving the deposit base and credit quality – greater than 50% CAGR in loans and deposits over the last three years
Brand recognition – Institutional and Commercial recognition more than doubled from 2010

…and completing our acquisitions successfully

RBS Integration – all phases completed by FY11, resulting in USD130 million of savings over 4 years from 2010

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----- Start of picture text -----

APEA Division Revenue
(USD m)
2,556
37% CAGR
2,091
1,870
1,184
15%
716
8%
1
FY07 FY08 FY09 FY10 FY11
% APEA Contribution to Group Revenue
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----- Start of picture text -----

APEA Division Net profit after Tax
(USD m)
739
31% CAGR
617
543
393
253
1
FY07 FY08 FY09 FY10 FY11
Underlying Pro Forma
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Includes Europe and America results not included in originally reported figures

APEA Division financial performance strengthened, despite markets trading headwinds in the second half

Pro forma NPAT movement – FY11 v FY10

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----- Start of picture text -----

USDm
127 7
168
61
163
739
617
314 90
Up 20%
FY10 Net Other Markets Markets Expenses Provisions Tax and FY11
Interest Income Sales Trading OEI
Ex-Global Markets Global Markets
----- End of picture text -----

Pro forma NPAT movement – 2H11 v 1H11

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----- Start of picture text -----

USDm
23 11
41
386
42 353
59
64
27
Down 9%
1H11 Net Other Markets Markets Expenses Provisions Tax and 2H11
Interest Income Sales Trading OEI
Ex-Global Markets Global Markets
----- End of picture text -----

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Revenue is growing in key strategic geographies customer segments and products

	Geographies Customer Segments Products Franchise Markets • Greater China, Indonesia, Singapore, Greater Mekong and the Pacific Network Markets • Europe and America, Japan, Korea and India Institutional • Cash Management • Trade • FX & Commodities • Global Capital Markets Retail & Wealth • Investments • Deposits • Insurance Institutional • Natural Resources • Agriculture • Infrastructure • Financial Institutions • Commercial Retail & Wealth • Affluent • Emerging Affluent
Strategic Priorities
FY 2011 Revenue Growth1	127% 115% 82% 68% 48% 43% Taiwan India China Hong Kong Singapore Indonesia 48% 59% 51% 41% 77% Investments & Insurance Cash Management Trade Finance Markets Sales Global Capital Markets Sales 50% 34% 85% 33% 33% 35% Retail Asia Pacific Private Bank Asia Agriculture Natural Resources Infrastructure FIPS
Key Achievements	• Locally incorporated and established operations hub in China • Commenced operations in India and opened 1st branch in Mumbai • Offshore RMB services launched • Completed RBS integration across 6 geographies • Refocused Retail & Wealth business on Affluent and Emerging Affluent • Launched Commercial segment, building on RBS acquisition • Deepened industry specialisation in Natural Resources, Agriculture and Infrastructure • Cash platform on track for delivery in Singapore and Hong Kong • Expanded Markets and FI sales distribution, and substantially improved position in league tables for debt capital markets in Asia • Expanded wealth product menu and product specialists menu in Retail & Wealth

1: 2010 and 2011 underlying FX adjusted, excludes partnerships

Connectivity is a key differentiator for ANZ, driving revenue rowth across the network g

Intra Asia connectivity becoming increasingly important

APEA Cross-Border Income[1] (AUD m)

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----- Start of picture text -----

864
----- End of picture text -----

ANZ‟s Asian business intra region cross-border revenues expanded –up 40% YOY
Macro concerns in Europe and America curtailed cross-border income from these markets
Trade transaction volume increased 58% YOY and 25% HOH
RMB cross-border trade approval in Hong Kong with about 1,000 corporate customers having already booked offshore RMB transactions
Offshore customers represent 35% of the our Retail Banking customer base in Singapore and Hong Kong

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----- Start of picture text -----

801
----- End of picture text -----

==> picture [318 x 151] intentionally omitted <==

----- Start of picture text -----

40% 153
Intra-APEA 109
Australia/NZ
692 711
FY10 FY11
----- End of picture text -----

Expanding footprint in China, India, Dubai, London, and New York, while
Institutional continuing to develop key markets of Indonesia, Singapore, Hong Kong and Japan

Retail & Wealth

Framework implemented to capture Retail connectivity in the region has resulted in a 10 fold increase in cross-border referrals HoH
Partners leverage on ANZ‟s core capabilities in Australia and other markets for customer referrals and connectivity
Partnerships
- e.g. SRCB and AMMB customers moving to Australia can open ANZ Australia accounts prior to arriving in Australia

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1: 2010 and 2011 translated at constant FX rates

Growth has driven diversification across APEA as Asia Retail and Northeast Asia have ex anded p

APEA segments percentage of Group revenue FY07 vs FY11

==> picture [585 x 171] intentionally omitted <==

----- Start of picture text -----

15%
2%
4%
8%
Partnerships & Other 1% 2%
Asia Retail 1%
Pacific Retail 2%
7%
4%
Institutional & Commercial
FY07 FY11
----- End of picture text -----

APEA geographies percentage of Group revenue FY07 vs FY11

==> picture [568 x 161] intentionally omitted <==

----- Start of picture text -----

15%
2%
5%
8%
Europe & North America 2%
North East Asia 1%
6%
South East Asia 2%
Pacific
3% 2%
FY07 FY11
----- End of picture text -----

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Tight cost disciplines and improving efficiency are hel in to fund front-line investment p g

Improving efficiency

Focused on reducing enablement/back-office costs while continuing to invest in revenue-generating capabilities
Enablement Centralisation Program
Operational efficiency initiatives
Reduced ~230 FTE in Enablement
Reduced ~130 FTE in Retail & Wealth and Private Bank

Investing to grow revenue generating capabilities

Build-up of front-office and support staff, continued investment in systems, distribution and branding:
Increased ~160 staff for Commercial and Institutional businesses
Initiated Global Investment Program to build core banking, cash management, trading and sales capabilities
New Branches opened in India, China, Dubai and PNG

Additional cost synergies achieved in acquired RBS businesses

Restructure of the Retail Business
Alignment with Affluent Strategy away from Mass Market

APEA FTE (including contract employees)

==> picture [47 x 11] intentionally omitted <==

----- Start of picture text -----

~12,100
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----- Start of picture text -----

~11,900
2010 Support Retail Markets Institutional 2011
ex-Markets
----- End of picture text -----

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----- Start of picture text -----

Asia Retail Cost to Income [1]
----- End of picture text -----

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----- Start of picture text -----

USDm Revenue
Expenses
1,000 Cost to Income Ratio
100%
89%
81%
500
0
FY09 FY10 FY11
----- End of picture text -----

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Asia Retail underlying (excluding Pacific Retail & Private Bank Asia)

Increased net funding while improving the credit quality of loan portfolio and growing the balance sheet

Significant Volume growth
Credit Quality Improving
Self Funding
75% Net Loans & Advances <1 year duration

APEA Institutional Risk Grade profile by Exposure at Default

==> picture [647 x 345] intentionally omitted <==

----- Start of picture text -----

Customer Deposits Net Loans & Advances
by Exposure at Default
USDb (incl. acceptances)
70
63
60
53% CAGR
AAA-BBB
50 45 63% 63% 67%
BBB-
51% CAGR
38
40
BB+~BB-
30 27 26 BB-
>BB-
15% 15%
20 17
15%
13%
14%
10 10%
6% 4% 5%
4% 4% 3%
0
Sep 09 Sep 10 Sep 11
Sep 09 Sep 10 Sep 11 Sep 09 Sep 10 Sep 11
Retail Institutional
56
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Brand awareness has significantly improved across all of our customer segments

Brand awareness[1 ] across Hong Kong, Singapore and Taiwan Average Percentage, 2010-2011

==> picture [573 x 307] intentionally omitted <==

----- Start of picture text -----

2
2010
3
2011
75
69
62
53
34
29
----- End of picture text -----

Affluent Emerging Corporates

Institutional

Includes both Prompted and Spontaneous awareness, arithmetic average across all three markets
Based on ANZ Brand Health Tracker study 2010, Hall & Partners
Based on ANZ Brand Campaign Tracking 2011, Hall & Partners

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Integration of acquired RBS businesses into ANZ was completed in October 2011

Completed complex integration in 6 Asian markets

Building a larger and more capable bank on the integrated business

Effective management of a complex

integration

6 markets
1.8 million customers
6,500 Staff

Enhanced frontline

New frontline pricing tools
Enhanced channels
New risk & sales governance
New call centres
54 Branches
4 different business segments: Retail & Wealth, Private Bank, Commercial & Institutional

New Platforms

New credit cards platforms
New core banking – Institutional/ Commercial
New general ledger

Realising real value from acquisition

~ USD$130m in Cost Saving projected over 4
years from FY10 to FY13
Renegotiated/reviewed 3,500 supplier contracts
Integrated new revenue platforms (across Retail, Wealth and Private Bank)
New payments platforms
New risk feeds
New regulatory reporting

Commercial presence & more scale to

business

Consolidated and built 3 new data centres
1,200 new systems interfaces built
6,200 standard desktops replaced / rebuilt
800 standard servers replaced / rebuilt

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APEA Institutional: Executing to a clearly articulated strategy

Revenues up 29% YoY as customer franchise strengthens

Customer numbers continue to grow

Institutional Asia Client Numbers[1]

Targeting sectors aligned to global strengths and with significant regional growth prospects

Natural Resources
Agribusiness
Infrastructure
Financial Institutions

Increasing geographic significance

APEA contributed 26% of Global Institutional revenue in FY11

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----- Start of picture text -----

1,400
+41% CAGR
1,050
750
550
350
FY07 FY08 FY09 FY10 FY11
----- End of picture text -----

Asia revenues grew 38% FY11
New Institutional branch builds in India and Middle East

Building diversified product revenue with reduced reliance on Trading

Significant growth in revenue in Trade Finance (51% YOY) and Cash Management (59% YOY)
Ongoing investment in Transaction Banking cash platform
Global Markets product expansion and platform development

Growing client base and deepening relationships

Asia customers grew 33% FY11
Maximising network flows with client revenues within APEA up 40%

Institutional Client revenue growing[2] (AUD m)

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----- Start of picture text -----

+47% CAGR
349
232
206
169 708
514
61 375
294
166
FY07 FY08 FY09 FY10 FY11
Other Client Revenue Market Sales
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Excludes Commercial

Excludes markets trading and amortisation impact of annuity business

APEA Retail: Growth in wealth driving business ex ansion in Asia p

Substantial repositioning of Mass to Affluent / Emerging Affluent

Revenue up 18% amidst repositioning and volatile market conditions
Growth in Wealth Management revenue contribution - up from 14% to 22%
Significant CTI improvement - 8% in Asia retail underlying, 2% overall pro forma
Channel expansion – mobile banking roll out in Fiji and Taiwan

Growing Signature Priority Banking (SPB) proposition

Presence in 10 markets (6 Asian markets and 4 markets in the Pacific) up from 6 in 2010
Monthly SPB customer acquisition growth of 29%
Average product holding per customer increased by 14%

Expanded product suite

Launched mortgage offering in Singapore, Taiwan and Indonesia
Expansion in Wealth Management product offering - 400 mutual funds, 25 bancassurance products, 450 Exchange Traded Fund‟s

Customer growth despite portfolio repositioning Customer Numbers („000s)

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----- Start of picture text -----

+51%
2,500
2,450
1,100
FY09 FY10 FY11
Building Revenue (USDm)
+34% 930
786
347
342
290
FY07 FY08 FY09 FY10 FY11
Pacific Asia Pro Forma Adjusted
Growing Funding Base
USDb 14
Loans & Deposits 12
8
7
6 5
4
3 4
2
FY07 FY08 FY09 FY10 FY11
Net Loans & Advances Customer Deposits
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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Institutional Division

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Institutional – executing to a clearly articulated strategy

Institutional Division Underlying Net profit after Tax ($m)

• Targeting sectors with existing strength and significant regional growth prospects

Natural Resources
Agriculture

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----- Start of picture text -----

35% CAGR 1,895
1,778
1,430
771
FY08 FY09 FY10 FY11
----- End of picture text -----

Infrastructure

• Increasing geographic diversification

APEA 26% of Institutional revenue FY11 (20% FY10)
Asia revenues grew 38% FY11

• Diversifying product range and reduced reliance on lending

Trade finance revenue up 29% YOY
FX revenues up 22% YOY
Cash management revenue up 13% YOY

• Grow client base and maintain strong relationships

Acquired 1,300 new relationships, growing client base 8% YOY
Asia Pacific client base grew 15% FY11
Ranked first in terms of overall institutional relationships and lead bank relationships across Australia and New Zealand (combined across both markets as measured by Peter Lee Associates)

• Improving risk profile of business

Net impaired assets down 27% YOY

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Institutional – Financial Performance

Pro forma NPAT movement – FY11 v FY10

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----- Start of picture text -----

$m
186 47 484 1,895
1,733 120
82
309
284
Up 9%
FY10 Net Other Markets Markets Sales Expenses Provisons Tax and FY11
Interest Income Trading OEI
Ex-Global Markets Global Markets
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Pro forma NPAT movement – 2H11 v 1H11

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----- Start of picture text -----

$m
1,024 22 41
65 867
14 48
296
51
Down 15%
1H11 Net Other Markets Markets Sales Expenses Provisons Tax and 2H11
Interest Income Trading OEI
Ex-Global Markets Global Markets
----- End of picture text -----

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Identified priority sectors where we have existing strengths to build upon

Priority Sectors

Priority Products

Natural Resources

In target sub-segments – minerals & mining, oil & gas, primary processing, primary services and commodity trading.
Focused on capturing Australia/NZ – Asia/Pacific trade supply and demand chain flows.
Lead bank to sector in Australia and growing Asia/Pacific franchise offering opportunity to assist both producers and consumers

Agriculture

Clear emphasis on customers with flows into and within the Asia Pacific region.
Focused on providing markets, working capital and supply chain solutions.
A particular focus on cotton, coffee, cocoa, grains and oilseeds, sugar, dairy and protein.

Cash Management

A leading provider of cash management and working capital solutions in Australia and NZ via ANZ Transactive, the first trans-tasman internet banking platform
Continued build and roll-out of Asian Cash Management capability across 11 countries

Trade

Provides trade finance and supply chain solutions to our customers that manage risk and liquidity and support a deepening of customer relationships.
ANZ is the leading trade and supply chain bank in Australia and NZ, delivering superior sales and service underpinned by a global proposition with teams on the ground in 28 countries.

FX & Commodities

Infrastructure

Target customers and investors operating in power & utilities, roads, rail, airports, ports, water, waste and social infrastructure.
Primary focus is to support customers in the Asia Pacific region whilst remaining dominant in Australia and New Zealand.
Continue to position as infrastructure specialists.
Building on our strong Australian and New Zealand Corporate businesses to expand into Asian currencies and clients
Emphasis on building a high-frequency global flow and trading Corporate and Institutional business in four hubs, and on growing our business with Financial Institutions (which account for ~90% of all global FX volumes)

Benefits emerging through growth in priority sectors and products

Institutional Division Client revenue growth FY11 vs FY10

Institutional Division Natural Resources Agribusiness Infrastructure Trade FX & Commodities Cash Management		10% 18% 14% 25%




		29%
		28% 13%

Growth has been achieved through:

A global specialised relationship model offering industry expertise and a broader product proposition has seen priority sectors achieve superior growth
Natural Resources - Asia revenues up ~40% with significant increases in Markets and Trade products
Agribusiness - Asian revenues up ~80%, again with significant increases in Markets and Trade products
Infrastructure - predominantly growth in Australian revenue from large domestic infrastructure projects augmented by a lift in Asian revenue momentum.
Trade – 29% revenue growth reflects continued increase in client relationships. ANZ maintains a leading position in the Australian and New Zealand trade markets and growing presence in Asia which now represents over 50% of total trade revenue.
Over 85% of growth in our FX business occurred in APEA due to better penetration of our client base, product diversification and a focus on Financial Institutions clients
In Australia, our share of Australian FX turnover increased from 6.3% at the end of September to 11.8% in September (as measured by the RBA)
The only bank offering a trans-tasman cash management platform, with Singapore and Hong Kong to be added to system the by end of 2011

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More diverse, self funded loan growth

Institutional Lending and Deposits

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----- Start of picture text -----

Net Loans & Advances Customer Deposits
(incl. acceptances)
$13b Growth YOY $20b Growth YOY
$b
117.4
120
97.7
91.2
100
78.7 79.8
75.6
80
60
40
20
0
Sep 09 Sep 10 Sep 11 Sep 09 Sep 10 Sep 11
Australia APEA New Zealand
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----- Start of picture text -----

Institutional Trade Lines
$b Funded & Unfunded
50
39
40
30
30
22
20
10
0
Sep 09 Sep 10 Sep 11
Australia APEA New Zealand
----- End of picture text -----

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----- Start of picture text -----

Asia Funded Trade Lines
$b
11
12
10
7
8
6
3
4
2
0
Sep 09 Sep 10 Sep 11
----- End of picture text -----

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Investment in the strategy

Majority of FY11 cost growth relates to investment in de risking and supporting immediate and longer term growth initiatives

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----- Start of picture text -----

2,001
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----- Start of picture text -----

36
130
•
Cash management
platform
•
Markets FX engine
•
Pricing tools
----- End of picture text -----

$m • Back / middle office FTE
• Risk management systems
• Payments infrastructure

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----- Start of picture text -----

•
Productivity initiatives
• Process automation
69
49 • Cash management
1,717 platform
•
Markets FX engine
•
Pricing tools
•
Salary CPI
• Reduce Back / Middle Office FTE • Frontline FTE
• Customer systems Markets sales, Relationship Managers
•
Markets technology
----- End of picture text -----

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FY10 Run the Strengthen Business the Business

Investing for near-term results

Investing for FY11 longer-term results

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Productivity focus evident in near term cost growth

Institutional Operating Expenses Growth Pro Forma HOH

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----- Start of picture text -----

9.7%
6.3%
5.3%
-0.3%
1H10 2H10 1H11 2H11
----- End of picture text -----

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----- Start of picture text -----

Institutional Operating Expenses
$m Quarterly Trend
550
500
450
400
350
300
250
200
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
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Initiatives in train to maintain cost trajectory

Process automation and enhancement

Enhanced markets operations platforms and processes
Automation of data processing capabilities to reduce manual intervention

Increased utilisation of regional hubs

Operations streams are now managed as global functions throughout Australia, New Zealand and Asia

Streamlining regional and global enablement support

Creating opportunities to share regional/functional resources and infrastructure
Aligning business and support structures to future business requirements

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Improved credit quality

Institutional net impaired assets by size and as % NLA

Institutional risk grade profile by exposure at default

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----- Start of picture text -----

$m % NLA
4,000 6.00%
3,500
5.00%
3,000
60%
63%
68%
AAA-BBB
4.00%
2,500
BBB-
2,000 3.00% BB+~BB-
BB-
1,500
2.00% 17% >BB-
17%
1,000 16%
1.00% 12% 11%
500 10%
5% 4%
3%
5% 5% 3%
0 0.00%
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Sep 09 Sep 10 Sep 11
Institutional net impaired assets % NLA (RHS)
69
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Diversification of client base and revenues

Institutional client base

Revenue mix[1]

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----- Start of picture text -----

No. of
Clients
8,000 7,464
6,924
6,382
6,000
4,000
2,000
0
2009 2010 2011
----- End of picture text -----

Australia Asia Pacific Europe US NZ

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----- Start of picture text -----

19%
22% 26%
20%
18%
21%
24% 18% 11%
39% 41%
36%
2009 2010 2011
Global Loans Markets Trading
Markets Sales Transaction Banking
Other
----- End of picture text -----

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Underlying basis

Cash management business delivering connectivity

Significant progress made in 2011

Connecting our customers‟ transaction banking needs across Australia and New Zealand is a key differentiator.
Customers can perform a range of cash management activities through a single internet channel:
Record number of multi-country Cash Management mandates won in 2011
Strong growth in the number of payment transactions processed in Asia via internet channels
Over 7,800 clients have been on-boarded to ANZ Transactive to date:
3,923 clients on-boarded to ANZ Transactive Trans-Tasman solution in Australia and New Zealand
3,909 clients on-boarded to ANZ Transactive Asia
We will continue to add functional enrichments, with the planned rollout of the enhanced ANZ Transactive platform to 11 key Asian markets:
Singapore and Hong Kong enhancements to occur in November 2011
Remaining 9 key Asian markets will be brought online by 2013

ANZ Transactive trans-tasman sites and usage

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----- Start of picture text -----

Active $b
Sites
4,500 80
4,000 70
3,500
60
3,000
50
2,500
40
2,000
30
1,500
20
1,000
10
500
0 0
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11
New Implementation
Migrated from ANZ Online
Monthly Transaction Volume
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Global Markets Performance

Strategy to increase client flow revenues is delivering

Revenue down 11% YOY and 31% HOH due to difficult macro conditions in traded risk and balance sheet management
Trading and balance sheet related revenues were down 36% YOY and 70% HOH
A strong Markets sales performance across all geographies and products has partially offset lower trading revenues with sales revenues growing 13% YOY
APEA sourced revenue was up 25% YOY driven by expansion of capabilities throughout the region
The FX business continued to expand in the second half 2011 with a 7% uplift in FX sales revenue HOH
The Commodities business doubled 2010 revenues with strong trading and sales performance
Australian results were impacted by balance sheet and trading revenues, including a widening of credit spreads on the Australian liquidity portfolio

Global Markets revenue pro forma FX adjusted

$m

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----- Start of picture text -----

2,500
2,011
2,000 1,752
1,563
1,500
1,000
500
0
FY09 FY10 FY11
Sales Trading & Balance Sheet
----- End of picture text -----

Global Markets revenue QOQ

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----- Start of picture text -----

$m Sales Trading & Balance Sheet
300
200
100
0
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
----- End of picture text -----

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Global Markets product offering

Global Markets delivers innovative product solutions through specialist teams operating across the Asian region

Interest rate risk hedging for clients • Pricing and risk management of credit
Fixed Income instruments • Management of the bank‟s liquidity portfolios and Trading of position risk
• Foreign exchange risk management advice and products for clients
Foreign • Commodity price risk advice and
Exchange & management
Commodities • Commodity derivatives (eg. gold, soft commodities and energy)
• Origination and distribution of credit products
Global Capital • Corporate and Financial Institutions Markets sourced listed and unlisted Bonds • Syndicated Loans • Securitisation

Global Markets revenue mix

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----- Start of picture text -----

6% 10%
10%
Other
30%
40%
Global Capital
42%
Markets
Foreign Exchange
& Commodities
Fixed Income
57%
49%
43%
FY09 FY10 FY11
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Sales, trading and balance sheet revenue

Global markets business focussed on client driven risk management and trading activity Also management of ANZ‟s own liquidity and balance sheet risk management

Direct client flow business on core products such as Fixed Income, FX, Commodities and
Sales Debt Capital Markets (DCM)
Revenue • Continued growth in FY11 through continued focus on client acquisition
• Growth of client flows in APEA • Trading represents management of positions taken as part of direct client sales flow and strategic positions
Trading • Trading in the rates and credit product, in
Revenue line with balance sheet trading • Difficult trading conditions particularly in Q4 with both domestic and global macroeconomic volatility
- Management of interest rate risk for the loan and deposit books
Balance Sheet • Management of the bank‟s liquidity position Revenue • Impacted in Q4 by the widening of credit spreads on semi government bonds to swap hedges with market movements taken at Fair Value through the Profit and Loss

Global Markets revenue composition (pro forma)

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----- Start of picture text -----

16%
22%
28%
19%
33% 21%
65%
51%
45%
FY09 FY10 FY11
Sales Trading Balance Sheet
----- End of picture text -----

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Global Capital Markets - becoming a leading Asia Pacific ca ital markets s ecialist p p

Achieved a number of milestones in 2011

A number of first in offshore RMB/CNH market
Joint Lead Manager for First offshore bond for an Australian bank
Joint Lead Manager for First offshore bond for a Japanese corporate
Joint lead manager for ANZ's first syndicated loan for a Chinese sovereign entity
Completed ANZ's First Korean securitisation transaction
Arranged the first syndicated loan by a foreign bank in Vietnam
Fastest execution of a secured bond transaction in Singapore Market YTD

Corporate and frequent issuer bonds league table rankings

Category	Rank	# Deals	Amount Arranged
Australia (ex-self led)	1	57	AUD11.5b
New Zealand (ex-self led)	1	30	NZD2.0b
SGD	3	11	SGD1.4b
Asia Pacific ex-Japan	8	102	USD12.2b

Source – Bloomberg as at end 3Q11

Extended leading position in domestic markets

No. 1 bond issuer in Australia with 19% market share YTD 2011
No. 1 bond issuer in New Zealand with 49% market share YTD 2011

Deepened our presence in Asia

Increased cross border deals across Asia with greater distribution into Europe and America
Grew APEA GCM revenue 77% FY11

Loan syndications mandated arranger league table rankings

Category	Rank	# Deals	Amount Arranged USD
Asia-Pac ex-Japan	1	182	$18.6b
Australia	1	81	$11.3b
Asia	10	77	$4.7b

Source – Thompson Reuters as at end 3Q11

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

New Zealand Businesses

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New Zealand Businesses - simplification & efficiency

Simplifying the business

Have simplified the management structure
Progressing with process and product simplification

Profit before provisions[1] NZDm

Moving to one IT system

Improved customer and employee engagement

Increasing customer satisfaction – up 3% YOY for both ANZ and NBNZ
Improved staff engagement scores
External recognition (awarded the two best banking brands New Zealand‟s Sunday Star-Times Canstar Cannex Bank of the Year Award)
Research indicates strong awareness of ANZ's sponsorship of the 2011 Rugby World Cup and increased overall ANZ brand awareness

Managing for changed conditions

Cost focus – aiming to be the most efficient bank in New Zealand with lowest CTI
Return focus – profitable growth, improved ROE, margin management
Risk focus – manage to the changed economic settings

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----- Start of picture text -----

1,493
----- End of picture text -----

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----- Start of picture text -----

1,445
----- End of picture text -----

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----- Start of picture text -----

1,326
1,317
----- End of picture text -----

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----- Start of picture text -----

FY08 FY09 FY10 FY11
----- End of picture text -----

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FY08 Underlying; FY09-FY11 Pro Forma

New Zealand Businesses – financial performance

==> picture [639 x 431] intentionally omitted <==

----- Start of picture text -----

Pro forma
Pro forma NPAT movement – FY11 v FY10
Growth Rates (NZD)
NZDm
299
Revenue
904
24
149
585 147
5%
1% 6
FY11 2H11
Up 55%
Expenses
0%
FY10 Net Other Expenses Provisons Tax and FY11
Interest Income OEI
-2%
FY11 2H11 Pro forma NPAT movement – 2H11 v 1H11
Profit before NZDm 6
Provisions 14
13%
453 3 2 451
2%
21
FY11 2H11
Flat
Provisions
21%
1H11 Net Other Expenses Provisions Tax and 2H11
Interest Income OEI
-58%
FY11 2H11
78
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New Zealand Businesses - balance sheet management

Net Interest Margin

Retail

Mortgages – have held share in the <80% LVR market and taken a more conservative approach to growth in >80% LVR segment
Deposit strategy focussed on growing better quality at call and savings accounts (up 15% YoY)
A disciplined approach to pricing on term deposits also achieved a margin improvement of 15-20bps on term deposit portfolio

Commercial

Continued strong Dairy sector pay-outs driving deleveraging in the Agri sector
1.4x system lending growth in Business Banking
Continued working with customers to achieve more sustainable debt levels resulting in a reduction in the level of impaired loans.
A focus on credit quality has seen a reduction in Commercial and Agri net impaired assets of 26% HOH

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----- Start of picture text -----

3.00%
2.50%
2.00%
1.50%
1H09 2H09 1H10 2H10 1H11 2H11
Net Loans & Advances Customer Deposits
(incl. acceptances)
----- End of picture text -----

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----- Start of picture text -----

NZDb
100
88.3 88.4 86.8
80
60 51.1 50.2
48.3
40
20
0
Sep 10 Mar 11 Sep 11 Sep 10 Mar 11 Sep 11
Retail Commercial Wealth
----- End of picture text -----

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Simplification program progressing well with good progress made in 2011

New regional management approach that simplifies decision making across all businesses

New Operating Model

Merged Commercial and Agri businesses to ensure an integrated focus right across the agribusiness sector
Made Business Banking a stand alone business focussed on the needs of small business customers
Simplified product set (reducing retail products from 140 to under 100)

Simpler Product and Fee Structure

Over 380,000 customers migrated to end state products with minimal negative feedback
Now easier for customers to transact across both the ANZ and NBNZ networks
Expenses down 2% YOY
Improved staff engagement

A Stronger Business

Increased levels of customer satisfaction
Additional productivity gains available in 2012 and 2013 from move to a single platform
An FY11 after tax charge of NZD111m has been taken outside underlying earnings with respect to this programme

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Super Regional capabilities provide real differentiation

Leveraging our Super Regional capabilities

Migrant Banking – on track to exceed 10,000 new customers through migrant banking channel this year
Wealth – migrant investor program targeting high net worth investors
First major New Zealand bank to have Chinese Renminbi (RMB) trade settlement deal capability
Set up first full payments and cash management implementation between ANZ New Zealand and ANZ China
Only New Zealand bank to structure Export Credit Agency funding, with over NZD200m of deals

Investing to further strengthen capabilities

Now have 61 retail branches with dedicated Chinese and Indian specialists
Established multilingual call centre with Mandarin, Cantonese, Korean and Hindi capabilities
Asian specialist team in Private Bank business managing 1,200 clients and NZD2b in assets
Launched ANZ Transactive, the first trans-Tasman internet banking platform for Institutional and Commercial customers
Cross-border connectivity - established single points of contact (“Asia desk”) for intra-region customer referrals

Providing leadership on New Zealand‟s growing opportunities with Asia

Partnerships with Education New Zealand and Ministry of Ethnic Affairs to support migrants
Supporting linkages with India through partnerships with the India business forum and joining the NZ Prime Minister's recent trade delegation to India
Business Banking China tour provided 25 delegates the opportunity to build connections in the Chinese market

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Retail & Wealth - simplifying our business to make bankin easier for customers and staff g

Simplification initiatives undertaken across business

Re-engineering processes to allow frontline staff to spend more time with customers
Progressing optimisation of product portfolio with 140 products reduced to under 100 products to date
Opened new branches in key locations around Auckland

Program already yielding results

Productivity gains from simplification drove flat cost growth FY11 and a 3% reduction in costs 2H11
Increased retail customer satisfaction to record levels
Contact Centre recognised as the best in financial services in NZ at the CFM Contact Centre Industry awards

Wealth position continues to strengthen

OnePath #1 in the Retail Managed Funds market
Awarded the Morningstar KiwiSaver Fund Manager of the Year – KiwiSaver is NZ‟s primary retirement savings initiative
Divested non-core property businesses
Insurance profitability improved – favourable claims experience and reduced lapse rates

Customer satisfaction at historic highs[1]

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----- Start of picture text -----

90% 90% 89% 91%
85% 85%
3Q09 3Q10 3Q11
ANZ NBNZ
OnePath KiwiSaver FUM
NZDm
2,500
2,100
1,700
1,300
900
500
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11
----- End of picture text -----

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1 Source: Nielsen Consumer Finance Monitor

Commercial & Agri – unlocking value by bringing segments closer together

Managing for a lower growth environment

Disciplined management of risk, balance sheet and expenses

Enhanced customer focus

Unrivalled coverage, with customers having access to more relationship managers in more locations than any other bank
Continued investment in frontline efficiency and training to enhance relationship skills
Customer satisfaction stable in a highly competitive environment
Supporting customers through the economic cycle via customer forums and thought leadership, e.g. Viewpoint papers; Economy in 5 courses; Better by Design partnership; Farming for Profitability sessions
Working with customers to assist them in achieving more sustainable debt levels

Leveraging Super Regional connectivity

By connecting customers to our Super regional network we are differentiating ourselves in the New Zealand market, examples include:
Connecting a South Island Agri client to ANZ Indonesia who provided insights on the local market and assisted in facilitating new trade into Indonesia
Linking a commercial client to ANZ teams in Fiji and Australia and assisting expansion into new markets
Introducing wine production clients to the ANZ China team and help them commence distribution into the lucrative Chinese market.

Lending Composition By Segment

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----- Start of picture text -----

Agri
45% Commercial
49%
UDC
6%
Dairy Milk Payout/Price
$ per kg
8.00
6.00
4.00
2.00
0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
----- End of picture text -----

$ per kg

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Business Banking – ANZ has a compelling growth ro osition in Small Business p p

Strong performance in FY11

Maintained #1 market share position
Customer satisfaction improved from 87% to 88%[1]
Lending growth 1.4x system
Staff engagement lifted from 60% to 70%
Profit improvement from increased revenue and reduced costs

Increased coverage of small business customers

More Business Bankers in branches and in a greater number of locations
Small Business workshops – attended by 5,000 customers
Launch of the ANZ Biz Hub, a market leading online customer site supporting small business
Assisted more than 4,500 customers in the last two years with our business start-up package (providing business advice and a transactional account, fee-free for one year)
High growth potential with low risk as majority of lending is mortgage based

1 Source: TNS Business Finance Monitor Sep 2011

2 Source: NZ Department of Statistics Feb 2010

Small Business a significant part of the NZ economy

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----- Start of picture text -----

90% of NZ businesses employ
5 or fewer staff [2]
No employees
1-5
6-9
69%
21%
10-19
20+
----- End of picture text -----

Good growth in both margin and volume

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----- Start of picture text -----

110 Index NIM Net Loans & Advances
1H10
=100
105
100
1H10 2H10 1H11 2H11
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New Zealand Businesses - credit quality

Total impaired assets

Total provision charge

NZDm

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----- Start of picture text -----

2.47%
2.25%
2,215 2.06%
1.92% 2,020
1,809
1,718
1.25%
0.70% 1,132
631
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----- Start of picture text -----

Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
Impaired Assets IA as % GLA
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----- Start of picture text -----

NZDm
600 531
351
400
247
165 98 119
200
0
-200
1H09 2H09 1H10 2H10 1H11 2H11
IP Charge CP Charge
90+ Days arrears
1.20% Mortgages
Commercial
Rural
0.80%
0.40%
0.00%
2007 2008 2009 2010 2011
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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Risk Management

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Provision Charge and Impaired Assets

Total Provision Charge (IP charge by Division, total CP charge)

New Impaired Assets by Division

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$m
4,000
3,600
3,500
3,126
3,035
3,000
2,436
2,500 2,319
2,000 1,824
1,500
1,000
500
0
1H09 2H09 1H10 2H10 1H11 2H11
APEA ex-Institutional CP charge
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----- Start of picture text -----

$m
1,800
1,621
1,435
1,600
1,400
1,200 1,098
1,000
722
800
660
551
600
400
200
0
-200
1H09 2H09 1H10 2H10 1H11 2H11
Institutional Australia Division NZ Businesses
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Individual Provision Charge

Individual Provision Charge by Segment

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----- Start of picture text -----

$m
2,000
1,800
1,531
1,600
1,400 1,283
1,200
1,062
1,000
762
800
594 609
600
400
200
0
1H09 2H09 1H10 2H10 1H11 2H11
Institutional Commercial Consumer
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Individual Provision Charge composition

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----- Start of picture text -----

$m
2,000 1,531
1,283
1,062
1,500
762 609
594
1,000
500
0
-500
-1,000
1H09 2H09 1H10 2H10 1H11 2H11
New Increased Writebacks & Recoveries
Individual Provision Charge
by Region
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----- Start of picture text -----

$m
2,000
1,531
1,500 1,283
1,062
1,000 762
594 609
500
0
1H09 2H09 1H10 2H10 1H11 2H11
Australia New Zealand APEA
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Collective Provision Charge

Collective Provision Charge by Source

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----- Start of picture text -----

$m $m
CP Charge by Division 2H11
80
(96) 331 36 (40) 65 (58) (74) (42) 29 29
60
40
20
0
-20
-40
-60
-80
-100
-120
Australia New Institutional APEA
1H09 2H09 1H10 2H10 1H11 2H11
Zealand & Other
Lending Growth Economic Cycle & Concentration Risk Profile Portfolio Mix
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Collective Provision Charge

Collective Provision Charge by Source

FY11	Risk Impact	Lending Growth	Portfolio Mix	Cycle & Concentration	Total
Australia Division	20	42	(6)	(14)	42
Institutional	(29)	65	(14)	12	34
New Zealand	(35)	(6)	(1)	(47)	(89)
APEA & Group Centre	(47)	29	1	37	20
Total	(91)	130	(20)	(12)	7

2H11	Risk Impact	Lending Growth	Portfolio Mix	Cycle & Concentration	Total
Australia Division	(1)	26	(6)	(93)	(74)
Institutional	(20)	36	1	12	29
New Zealand	(8)	(5)	(1)	(28)	(42)
APEA & Group Centre	(27)	17	2	37	29
Total	(56)	74	(4)	(72)	(58)

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Credit Risk Weighted Assets

Total Credit Risk Weighted Assets

Credit Risk Weighted Assets Movement FY11 v FY10

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----- Start of picture text -----

$b $b
257.8
248.8 1.3
15.8 248.8
233.5 233.2
229.8 0.5
1.3
220.4 233.5
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Sep 10 Growth Data FX Risk Sep 11
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Sep 10 Growth Data FX Risk Sep 11 Review Impact

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Impaired Assets

Gross Impaired Assets by Type

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----- Start of picture text -----

$m
Impaired Loans NPCCD Restructured
8,000
7,000
6,561 6,561
6,221
6,000 5,595 5,581
5,000
4,158
4,000
3,000
2,000
1,000
0
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
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Gross Impaired Assets by Size of Exposure

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----- Start of picture text -----

$m
8,000
6,561 6,561
6,221
5,595 5,581
6,000
4,158
4,000
2,000
0
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Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 > $100m $10-$99m < $10m

New Impaired Assets by Segment

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----- Start of picture text -----

$m
4,000 3,600
3,126
3,035
3,000
2,319 2,436
1,824
2,000
1,000
0
1H09 2H09 1H10 2H10 1H11 2H11
Institutional Commercial Retail
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Watch & Control Lists and Risk Grade Profiles

Watch & Control List

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----- Start of picture text -----

Index Watch List by Limits
Mar 2009
Watch List by No. Groups
= 100
Control List by Limits
Control List by No. Groups
180
160
140
120
100
80
60
40
20
0
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
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Group Risk Grade profile by Exposure at Default

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----- Start of picture text -----

59% 59% 58% 60% 61%
13% 13% 14% 14% 13%
13% 13% 13% 12% 12%
9% 9% 9% 8% 8%
6% 6% 6% 6% 6%
Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
AAA to BBB BBB- BB+ to BB BB- >BB-
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Commercial Industry Exposures

Finance & Insurance

Property Services

Manufacturing


0 20 40 60 80							0% 2% 4% 6% 8% 10% 12% 14% 16%

Sep 10 Mar 11 Sep 11

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----- Start of picture text -----

80 14% 80 14%
12% 12%
60 60
10% 10%
8% 8%
40 40
6% 6%
4% 4%
20 20
2% 2%
0 0% 0 0%
Sep 10 Mar 11 Sep 11 Sep 10 Mar 11 Sep 11
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Agri, Forestry & Fishing

Wholesale Trade

Other Commercial Exposures

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----- Start of picture text -----

80 14% 140 24%
12% 120 20%
60
10% 100
16%
8% 80
40 12%
6% 60
8%
20 4% 40
2% 20 4%
0 0%
0 0%
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0 20 40 60 80					0% 2% 4% 6% 8% 10% 12% 14%

Sep 10 Mar 11 Sep 11

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Exposure at Default ($b) (LHS)

% of Group Portfolio (RHS)

% in Non-Performing (RHS)

Australia 90+ Day Delinquencies

Australia Retail 90+ day delinquencies

1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Total Mortgage Portfolio NSW & ACT Mortgages QLD Mortgages VIC Mortgages WA Mortgages Total Credit Cards

Australia Division 90+ day Delinquency Balance ($m)

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2,000
1,500
1,000
500
0
Sep 10 Mar 11 Sep 11
Mortgages Other Lending
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Mortgages have low loss rates

Individual Provision Loss Rates	Individual Provision Loss Rates	Individual Provision Loss Rates	Individual Provision Loss Rates
	FY09	FY10	FY11
Group	0.79%	0.52%	0.31%
Australia Region	0.87%	0.51%	0.30%
Australia Mortgages	0.03%	0.01%	0.02%

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Australia Mortgages

Portfolio Statistics	Portfolio Statistics
Total Number of Mortgage Accounts	832k
Total Mortgage FUM	$170b
% of Total Australia Region Lending	60%
% of Total Group Lending	43%
Owner Occupied Loans - % of Portfolio	64%
Average Loan Size at Origination	$231k
Average LVR at Origination	63%
Average Dynamic LVR of Portfolio	48%
% of Portfolio Ahead on Repayments1	37%
First Home Owners - % of Portfolio	9%
First Home Owners - % of New Lending	8%

Dynamic Loan to Valuation Ratio

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% Portfolio
60%
50%
40% 13% of Portfolio
>80% LVR
30%
20%
10%
0%
0-60% 61-75% 76-80% 81%-90% 91%+
Sep-09 Sep 10 Sep 11
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----- Start of picture text -----

Mortgage Portfolio by State
(Sep 2011)
28% NSW & ACT
16%
QLD
VIC
10%
19%
WA
OTHER
27%
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One month or more ahead of repayments. Excludes funds in offset accounts.

Australia Commercial

Australia Commercial 90+ day delinquencies

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----- Start of picture text -----

3.00%
Business Banking Regional Commercial Banking
2.50%
Esanda Small Business Banking
2.00%
1.50%
1.00%
0.50%
0.00%
Sep-07 Sep-08 Sep-09 Sep-10 Sep-11
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Regional Commercial Banking 90+ day delinquencies

Australia Commercial Lending Mix

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----- Start of picture text -----

RCB Total Agri Other Commercial
3.00%
2.50% 30%
28%
2.00%
8%
1.50%
34%
1.00%
0.50%
0.00%
Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11
97
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Business Banking Regional Commercial Banking Esanda Small Business Banking

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New Zealand businesses

Total Impaired Assets

NZDm

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----- Start of picture text -----

2.47%
2.25%
2,215 2.06%
1.92% 2,020
1,809
1,718
1.25%
0.70% 1,132
631
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
Impaired Assets IA as % GLA
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Total Provision Charge

NZDm

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----- Start of picture text -----

600 531
351
400
247
165 98 119
200
0
-200
1H09 2H09 1H10 2H10 1H11 2H11
IP Charge CP Charge
90+ Days Arrears
1.20% Mortgages
Commercial
Rural
0.80%
0.40%
0.00%
2007 2008 2009 2010 2011
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Credit Intermediation Trades

Position as at 30 September 2011 Counterparty Rating No. Notional purchased protection principal amount (USDm) Mark to Market (USDm) Life to Date Credit Risk on Derivatives (USDm) Credit Risk on Derivatives (AUDm)	Notional Principal Amount on corresponding Sold Protection (USDm)

AA+/Aa3 2 1,911 206 64 66	1,423
BB/Ba1 1 3,100 262 62 63	3,100
Withdrawn Rating / No rating 3 3,729 314 66 68	3,729
Other costs1 - - - 303 314 Position 30 September 2011 6 8,740 782 495 511	8,252

Position 31 March 2011 6 8,888 458 443 461	8,400

Other costs are cumulative life to date costs which include realised losses relating to restructuring trades to reduce risks which were unhedged due to default by the purchased protection counterparty and realised losses on termination of sold protection trades. It also includes foreign exchange hedging losses.

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Credit Intermediation Trade Portfolio

Credit Intermediation Trades

Cumulative Credit Risk on Derivative expense for the Credit Intermediation Trade portfolio as at 30/9/2011 was $511m (up $50m from 31/3/2011)

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AUDb USDb
3.5 12
3.0
10
2.5
8
2.0
6
1.5
4
1.0
2
0.5
0.0 0
Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
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Recent volatility and uncertainty in European and American markets have lead to an increase in MtM and CVA compared to March 2011. Credit markets have widened accordingly as governments struggle to reign in sovereign debt and stimulate financial growth.
ANZ‟s European sovereign debt exposure to the PIIGS is zero, with minimal exposure (less than 1%) to financial institutions in these countries.
The total notional value of the sold protection outstanding was USD 8,252m (31/3/11 USD 8,400m).
There have been no trade maturities, or unwinds during the 2HY. Notional value reductions are attributable to CLO amortisations for trades that are past their respective reinvestment periods and exchange rate movements.
The CDO portfolio has experienced 2 credit events in the underlying reference entities in the last 6 months.
ANZ has strong levels of protection under the sold protection trades with weighted average attachment points of:
~ 15% for the 12 CDO‟s
~ 32% for the 6 CLO‟s

Mark to Market AUD(LHS)

LTD Credit Valuation Adjustment AUD (LHS) Notional Sold Exposure USD (RHS)

ANZ has USD 8,740m in bought protection outstanding including approximately USD 488m of bought protection for which ANZ has no remaining underlying sold protection exposure.

100

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

2011 Financial Result

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Overview of financial performance


	$m	%
Underlying Profit	5,652	+12%
Operating Income	16,812	+7%
Expenses	7,718	+11%
Provisions	1,211	-33%
Statutory Net Profit After Tax	5,355	+19%
EPS (cents)	218.4	+10%
Dividend per Share (cents)	140	+11%
Net Interest Margin	2.46%	-1bps
Customer deposits	296,753	16%
Net loans and advances1	397,285	8%

All figures other than Statutory Net Profit after Tax and Dividend are presented on an underlying basis. 1. Including acceptances

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102

2011 Full Year

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$m
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Performance FY11 v FY10

609 5,652 283 5,355 524 5,025 265 4,501 297 3% 33% Up 12% Up 19% FY10 Non-Core FY10 Profit Provisions Tax & OEI FY11 Non-Core FY11 Statutory Items Underlying Before Underlying Items Statutory Profit Profit Provisions profit Profit

Performance 2H11 v 1H11

1H11 Statutory Profit	Non-Core Items	1H11 Underlying Profit	Profit Before Provisions	Provisions	Tax & OEI	2H11 Underlying Profit	Non-Core Items	2H11 Statutory Profit
2,664	154	2,818	(124)	109	31	2,834	143	2,691
			Down 3%	Down 17%		Up 1%		Up 1%

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103

Impact of trading income and provision trends 2H11

2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11	2,818 2,834 248 109 31 $m Performance 2H11 v 1H11
	296 76 Down 70% Up 3% Up 2% Down 17% Down 3% Up 1%

1H11 Underlying Profit Trading Income Income ex-Trading Expenses Provisions Tax & OEI 2H11 Underlying Profit Performance FY10 v FY11
FY10 Underlying Profit		Trading Income	Income ex-Trading	Expenses	Provisions	Tax & OEI	FY11 Underlying Profit
5,025		(337)	1,367	(747)	609	(265)	5,652
		Down 36%	Up 9%	Up 11%	Down 33%	Up 13%	Up 12%
				Up 8% Pro Forma

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104

Trends September Quarter 2011

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Trading Income weaker than expected Lower provision charge
$m
Sales Trading & Balance Sheet
300 328
250
200 223
150
100
50
0
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
3Q11 4Q11
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Higher recoveries & write-backs driven by Release of collective flood provision taken Institutional division in 1H11 253 200 (10) (48) 3Q11 4Q11 3Q11 4Q11

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105

Adjust for acquisitions & FX – The Pro Forma Numbers

Growth FY11 v FY10 – Underlying & Pro forma

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Profit before
Revenue Expenses Net Profit after Tax
Provisions
12.5% 12.7%
10.7%
Ex-Trading
Ex-Trading
8.2%
7.6%
7.0%
6.5%
5.2%
3.2% 2.9%
Underlying Pro Forma Underlying Pro Forma Underlying Pro Forma Underlying Pro Forma
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Growth 2H11 v 1H11 – Underlying & Pro forma

Revenue	Expenses	Profit before Provisions	Net Profit after Tax
Underlying Pro forma	Underlying Pro forma	Underlying Pro forma	Underlying Pro forma
(0.6%) (0.8%)	2.0% 2.4%	(2.7%) (3.4%)	0.6% (0.1)%
Ex-Trading 2.9%		Ex-Trading 3.3%

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106

Divisional overview

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Net Profit after Tax (Pro Forma)
2H11 v 1H11 2H11 HOH FY11 YOY
Australia Division (AUD) 1,445 8% 2,777 2%
APEA (USD) 353 (9%) 739 20%
Institutional (AUD) 867 (15%) 1,895 9%
NZ Businesses (NZD) 451 0% 904 55%
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Profit Before Provisions (Pro forma)
2H11 v 1H11 2H11 HOH FY11 YOY
Australia Division (AUD) 2,361 2% 4,673 5%
APEA (USD) 491 (9%) 1,030 17%
Institutional (AUD) 1,314 (17%) 2,905 (8%)
NZ Businesses (NZD) 755 2% 1,493 13%
1H11 2H11 Increase 2H11 Decrease
107
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Net Interest Margin

Movement 2H11 v 1H11 (bps)

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----- Start of picture text -----

3.8
247.2
1.0
2.5 244.2
4.5
3.4
2.4
280.9 Down 0.6 bps ex-markets 280.3
Down 3.0 bps
1H11 Funding Funding Costs Deposits Assets Other Markets 2H11
&
Asset Mix
Movement FY11 v FY10 (bps)
Funding &
FY10 Funding Costs Deposits Assets Other Markets FY11
Asset Mix
247.4 2.8 (3.4) (7.8) 16.3 (1.1) (8.5) 245.7
Down 1.8 bps
273.9 Up 6.7 bps ex-markets 280.6
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108

Net Interest Margin

Net Interest Margin 2H11 v 1H11

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----- Start of picture text -----

Institutional
Australia Division
ex-Markets
8.4%
2.7%
Down 2bps Down 17bps
-0.8%
-5.4%
Volume Margin Volume Margin
New Zealand APEA Division
Businesses (NZD) ex-Markets (USD)
21.9%
Up 6bps Down 36 bps
2.5%
-1.5%
-12.2%
Volume Margin Volume Margin
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Net Interest Margin

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----- Start of picture text -----

ANZ Group ex-markets
Australia Division
NZ Businesses
3.50%
APEA ex-markets
Institutional ex-markets
3.30%
3.10%
2.90%
2.70%
2.50%
2.30%
2.10%
1.90%
1.70%
1.50%
1H10 2H10 1H11 2H11
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109

Operating Expenses

Operating Expense Growth Pro Forma HOH

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----- Start of picture text -----

Group Operating Expense growth
Australia New Zealand
Group
5.5% Division Businesses
0.7% 4.1%
6% 5%
New Zealand
4% 3%
Businesses 2%
1% 1% 0%
Institutional 1.9%
2.2%
2.4%
-5%
0.1%
APEA ex-
Institutional APEA APEA
1.0% Institutional
Institutional ex-Institutional
1.3%
1.2%
Australia Division 20%
19%
0.4% 13%
0.3% 1.6%
10% 10%
8%
Group Centre 6% 5%
0.9% 1.0%
0.3%
-0.4%
-0.7%
-4%
2H10 1H11 2H11
2H10 1H11 2H11
110
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Continue to invest for future growth and productivity

Operating Expense Growth Pro Forma FY11 v FY10

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----- Start of picture text -----

64
269
421 83 7,718
251
7,132
• Risk management systems
• Payments & IT infrastructure
• Back & middle office FTE
• Frontline FTE in Institutional & APEA
• Institutional cash management platform
rollout, Global Markets systems
• Investment in regional support hubs
• Operational process transformation
• Super Regional Sourcing program
• Regional support hubs
• New Zealand simplification
• RBS, One Path and Landmark integration synergies
FY10 Running the Infrastructure Investment for Productivity Realised FY11
Business Upgrade & Growth Investment productivity
Compliance Benefits
111
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Credit quality is improving

Total Provision Charge

New Impaired Assets

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----- Start of picture text -----

$m
$m
1,800 4,000
1,621 3,600
1,435
1,600 3,500
3,126
3,035
1,400
3,000
1,200 1,098 2,500 2,319 [2,437]
1,000
2,000 1,842
722
800
660
551 1,500
600
1,000
400
500
200
0 0
1H09 2H09 1H10 2H10 1H11 2H11
-200
1H09 2H09 1H10 2H10 1H11 2H11
Institutional Australia Division NZ Businesses APEA ex-Institutional CP charge
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112

Collective Provision Charge & Management Overlay

Collective Provision Charge

Economic Cycle & Concentration (Management) Overlay Balance

Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m	Lending Growth Risk Profile Portfolio Mix Cycle & Concentration (Management Overlay) 600 $m						Additional natural disaster overlay	Additional natural disaster overlay	Additional natural disaster overlay
500 $m									500
300 400									400
200
									300
100



0									200



-100
									100
-200
					Total		charge
-300						$8m			0
-400											Sep09	Mar10	Sep10	Mar 11	Natural Disasters	Global Volatility	Sep 11
	1H09	2H09	1H10	2H10	1H11			2H11
										113

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 potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ‟s business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words

“estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

For further information visit

www.anz.com

or contact

Jill Craig Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 9977 e-mail: [email protected]

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AI assistant

Australia and New Zealand Banking Group Ltd. — Annual Report 2011

10425_rns_2011-11-13_adcea8df-4691-4739-84f4-eaf3572ec349.pdf

ANZ has established a strong business foundation

A clear company wide focus on our super regional strategy:

ANZ is structured by Geography & Segment

Coherent strategy – driving competitive advantage

Geographic opportunity

Cross-border customer focus

Building Super Regional capabilities

Delivering Super Regional performance momentum

OUTPERFORM AND TRANSFORM

OUTPERFORM

RESTORE

Super Regional - driving long term growth and differentiated returns

Super Regional connectivity provides a competitive advanta e g

Realising the full potential of Super Regional

Realising the full potential of Super Regional

Growth levers - organic, partnerships and M&A

Continued Focus on Organic Growth

Emerging differentiation

Group loans and deposits

Group net loans and advances (including acceptances)

Group customer deposits

Customer deposits by geography

Customer deposit composition by segment

Net loans and advances by geography

Lending composition by segment

ANZ well capitalised and positioned to transition to Basel III

Still subject to discussion paper feedback

Solid organic capital generation continues to underpin the strong Common Equity Tier 1 position

Capital Position (Common Equity Tier 1 Ratio)

Tier 1 position strengthened significantly with recent CPS3 issuance and solid organic capital generation

Capital Position (Tier 1 Ratio)

Reconciliation of ANZ‟s capital position under Basel III

ANZ capital ratios under a Basel III fully harmonised approach :

ANZ has a well diversified funding profile with an increasing weighting to customer funding

Strong Funding Composition

Well diversified term wholesale funding portfolio

Stable term debt issuance, portfolio costs increasing

Portfolio term funding costs expected to increase further due to current market volatility

Stable term funding profile

Total liquid assets exceed TOTAL offshore wholesale debt portfolio

Composition of prime liquid asset portfolio ($71.4b)

Hedging has lessened the impact on earnings of the stronger $A

Earnings Composition by Region EPS Impact & Average Translation Rates

Australia Division – Consistent customer focus and wellestablished market ositionin drivin solid results p g g

1. Delivered customer propositions targeted at key segments aligned to our Super Regional Strategy

2. Driving customer growth and improving productivity and efficiency

3. Successful implementation of technology and innovation initiatives

$m

Australia Division – Financial performance

Australia Geography – Balance sheet and funding

Balance sheet management strategy

Outcome

Significant improvement in loan to deposit ratio

Australia Geography – loans and deposits

Australia Division – Net Interest Margin

Margin strategy

Net Interest Margin

Outcome

NIM movement 2H11 vs. 1H11

Retail – ANZ value proposition: “easy and empowering”

Superior customer service

Priorities

Capabilities

Retail – Strategy delivering results

Using a combination of short & long-term strategies to drive growth

Outcome

Customer deposit composition

Cost to income (CTI) ratio

Retail - Focused on profitable growth and market share

With MFI Customer Satisfaction again approaching 80%...

(%) MFI Customers[1]

… purchase intention for ANZ home loans is up YOY and HOH

… and Peer leading Customer Advocacy

Retail – Mortgages

Dynamic Loan to Valuation Ratio

Retail – Becoming the bank of choice for Asia Region customers

Retail – Delivering customer propositions targeted at key segments aligned to our Super Regional Strategy

Australia and New Zealand Banking Group Ltd. Annual Report 2011