Australia and New Zealand Banking Group Ltd. — Audit Report / Information 2025

Feb 23, 2025

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24 February 2025

Market Announcements Office ASX Limited Level 4 20 Bridge Street SYDNEY NSW 2000

Suncorp Bank APS 330 Pillar 3 Disclosure at 31 December 2024

Australia and New Zealand Banking Group Limited (ANZ) today released Suncorp Bank’s APS 330 Pillar 3 Disclosure as at 31 December 2024.

It has been approved for distribution by ANZ’s Continuous Disclosure Committee.

Yours faithfully

Simon Pordage Company Secretary

Australia and New Zealand Banking Group Limited

Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia ABN 11 005 357 522

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BASEL III PILLAR 3 DISCLOSURE

AS AT 31 DECEMBER 2024 APS 330: PUBLIC DISCLOSURE

SUNCORP BANK (NORFINA LIMITED) ABN 66 010 831 722

Suncorp Bank (Norfina Limited ABN 66 010 831 722 AFSL 229882 Australian Credit Licence 229882) The SUNCORP brand and Sun Logo are used by Suncorp Bank (Norfina Limited) under licence and Suncorp Bank is not part of the Suncorp Group.

Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Basis of Preparation

This document has been prepared by Norfina Limited and its wholly owned subsidiaries Norfina Advances Corporation Pty Ltd (trading as Suncorp Equipment Finance) and SME Management Pty Ltd to meet the disclosure obligations under the Australian Prudential Regulation Authority ( APRA ) Australian Prudential Standard ( APS ) 330 Public Disclosure .

Suncorp Bank is the trading name of Norfina Limited ABN 66 010 831 722 (formerly Suncorp-Metway Limited). Norfina Limited is an authorised deposit-taking institution ( ADI ) and a wholly owned subsidiary of Australia and New Zealand Banking Group Limited ( ANZBGL ). The ultimate parent entity is ANZ Group Holdings Limited ( ANZ ). ANZ and its subsidiaries are collectively referred to as the ANZ Group .

Other than statutory information required by a regulator (including APRA), all financial information is measured in accordance with Australian Accounting Standards. All figures have been quoted in Australian dollars and have been rounded to the nearest million.

Figures relate to the quarter ended 31 December 2024 (unless otherwise stated). This document has not been audited nor reviewed in accordance with Australian Auditing Standards. It should be read in conjunction with ANZ Group and Suncorp Bank’s consolidated annual and interim financial reports which have been either audited or reviewed in accordance with Australian Auditing Standards.

This document is prepared in accordance with Basel III Prudential Capital requirements effective for reporting periods beginning on or after 1 January 2023.

Disclaimer

This report contains general information which is current as at 24 February 2025. It is information given in summary form and does not purport to be complete.

It is not a recommendation or advice in relation to Norfina Limited, its wholly owned subsidiaries or the ANZ Group or any product or service offered by their entities or intended to be relied upon as advice.

The information in this report is for general information only. To the extent that the information may constitute forward-looking statements, the information reflects Suncorp Bank's intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices at the date of this report and undertakes no obligation to update any forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which are beyond Suncorp Bank's control, which may cause actual results to differ materially from those expressed or implied.

Registered office Investor Relations

Level 9, 833 Collins Street Cameron Davis Docklands, VIC 3008 Executive Manager, Investor Relations suncorpbank.com.au +61 3 8654 7716 +61 421 613 819 cameron.davis@anz.com

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table of contents

Basis of Preparation ...................................................................................................................................................... 2 Overview ....................................................................................................................................................................... 4 Loans and advances ..................................................................................................................................................... 5 Impaired assets and 90+ days past due loans .............................................................................................................. 6 Provision for impairment ................................................................................................................................................ 7 Appendix 1 – APS 330 Tables....................................................................................................................................... 8 Appendix 2 – Definitions .............................................................................................................................................. 16

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Overview

Suncorp Bank’s ( the Bank ) home lending portfolio grew $0.5 billion or 0.9% (3.6% annualised) through the December quarter. The Bank remains focused on balancing growth and margin while optimising riskadjusted returns and maintaining a high-quality and conservatively positioned home lending portfolio. The portfolio remains weighted towards owner occupiers, principal and interest repayment and loans with a loan-to-valuation ratio ( LVR ) below 80%.

Business lending contracted $264 million or 2.1% (8.2% annualised). The commercial portfolio contracted $143 million, predominantly driven by property finance, with intense pricing competition leading to heightened external refinances. The small and medium enterprise ( SME ) portfolio reduced by $63 million, also due to heightened external refinances. The agribusiness portfolio contracted $58 million, mainly driven by higher customer repayments in line with seasonal trends.

The Bank grew household deposits across all portfolios, including retail term deposits (15.5% annualised), retail transaction deposits (9.9% annualised), and savings account balances (8.6% annualised). The Bank continued to strategically manage the portfolio within funding requirements.

The total provision for impairment increased by 3.5% to $235 million, reflecting an increase of $8 million in specific provisions, a continued low level of write offs, and no change to the collective provision.

Gross impaired assets increased $36 million to $99 million, driven by the commercial lending portfolio, with decreases across all other lending portfolios. Total 90+ days past due loans increased $32 million to $559 million or 78 basis points of GLA, up 4 basis points of GLA from the previous quarter.

The Liquidity Coverage Ratio ( LCR ) was maintained at an elevated level, above the target operating range, averaging 145% over the quarter in line with the September quarterly average. The Net Stable Funding Ratio ( NSFR ) ended the period at 124%, demonstrating the continued strength of Suncorp Bank’s funding and liquidity position. The Bank’s capital levels remain sound, with a Common Equity Tier 1 ratio of 10.26% (Sep 2024: 10.01%), within the target operating range of 10.00% to 10.50%.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Loans and advances

				Dec-24	Dec-24
	Dec-24	Sep-24	Dec-23	vs Sep-24	vs Dec-23
	$M	$M	$M	%	%
Housing loans - term	52,900	52,021	49,975	1.7	5.9
Housing line of credit	341	359	435	(5.0)	(21.6)
Securitised housingloans and covered bonds	5,914	6,244	5,587	(5.3)	5.9
Total housing loans	59,155	58,624	55,997	0.9	5.6
Personal loans	14	17	25	(17.6)	(44.0)
Retail loans	59,169	58,641	56,022	0.9	5.6
SME	2,579	2,642	2,636	(2.4)	(2.2)
Commercial	5,323	5,466	5,406	(2.6)	(1.5)
Agribusiness	4,663	4,721	4,456	(1.2)	4.6
Total business loans	12,565	12,829	12,498	(2.1)	0.5
Total lending	71,734	71,470	68,520	0.4	4.7
Provision for impairment	(235)	(227)	(210)	3.5	11.9
Total loans and advances	71,499	71,243	68,310	0.4	4.7
Geographical breakdown - Total lending
Queensland	31,431	31,701	30,687	(0.9)	2.4
New South Wales	21,528	21,168	19,834	1.7	8.5
Victoria	10,524	10,366	10,080	1.5	4.4
Western Australia	4,575	4,592	4,474	(0.4)	2.3
South Australia and other	3,676	3,643	3,445	0.9	6.7
Outside ofQueensland loans	40,303	39,769	37,833	1.3	6.5
Total lending	71,734	71,470	68,520	0.4	4.7

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Impaired assets and 90+ days past due loans

	Dec-24 Dec-24 Dec-24 Sep-24 Dec-23 vs Sep-24 vs Dec-23 $M $M $M % % Quarter Ended
Gross balances of individually impaired loans Retail lending Agribusiness lending Commercial lending SME lending	25 27 29 (7.4) (13.8) 11 11 17 - (35.3) 63 22 18 186.4 250.0 - 3 7 (100.0) (100.0)
Gross impaired assets Impairmentprovision	99 63 71 57.1 39.4 (21) (13) (21) 61.5 -
Net impaired assets	78 50 50 56.0 56.0
Impairment provisions expressed as a percentage of gross impaired assets	21% 21% 30%
90+ days past due loans not shown as impaired assets	559 527 425 6.0 31.5
Gross non-performing loans(1)	658 590 496 11.5 32.7
Analysis of movements in gross individually impaired assets Balance at the beginning of the period Recognition of new impaired assets Other movements in impaired assets(2) Impaired assets which have been reclassed as performingassets or repaid
	63 73 76 (13.7) (17.1)
	51 2 10 n/a n/a
	1 - (4) n/a (128.2)
	(16) (12) (11) 30.7 42.6
Balance at the end of theperiod	99 63 71 57.5 39.8

(1) Gross non-performing loans in the above table excludes loans that meet additional requirements under the revised APS 220 Credit Risk Management .

(2) Net of increases in previously recognised impaired assets and impaired assets written off.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Provision for impairment

	Quarter Ended	Quarter Ended		Dec-24	Dec-24
	Dec-24	Sep-24	Dec-23	vs Sep-24	vs Dec-23
	$M	$M	$M	%	%
Collective provision
Balance at the beginning of the period	215	200	190	7.5	13.2
Charge against impairment losses	-	15	-	(100.0)	n/a
Balance at the end of theperiod	215	215	190	-	13.2
Specific provision
Balance at the beginning of the period	12	14	22	(14.3)	(45.5)
Charge/(release) against impairment losses	9	(1)	3	n/a	200.0
Impairmentprovision written off(1)	(1)	(1)	(5)	-	(80.0)
Balance at the end of theperiod	20	12	20	66.7	-
Totalprovision for impairment - Banking activities	235	227	210	3.5	11.9
(1)Includes unwind of discount.
Provision for impairment expressed as a percentage of gross
loans and advances are as follows:	%	%	%
Collective provision	0.30	0.30	0.28
Specificprovision	0.03	0.02	0.03
Totalprovision	0.33	0.32	0.31

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Appendix 1 – APS 330 Tables

• Table 1: Capital disclosure template – not applicable for this reporting period. This table was disclosed in the June 2024 reporting period.

• Table 2: Main features of capital instruments

• Table 3: Capital adequacy

• Table 4: Credit risk

• Table 5: Securitisation exposures

• Table 20: Liquidity Coverage Ratio Disclosure

Table 2: Main Features of Capital Instruments

Attachment B of Prudential Standard APS 330 details the continuous disclosure requirements for the main features of all capital instruments included in Suncorp Bank’s regulatory capital.

The Suncorp Bank’s main features of capital instruments are updated on an ongoing basis and are available at https://www.suncorpbank.com.au/about-us/investors/regulatory-disclosures-current.html.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 3: Capital Adequacy

Table 3: Capital Adequacy
	Risk Weighted Assets
	Dec-24 Sep-24 $M $M
On-balance sheet credit risk-weighted assets Claims secured by residential mortgage Other retail Bank Government Corporates(1) Securisation All other exposures	19,318 19,106 75 79 91 80 - - 8,448 8,641 5 6 218 242
Total on-balance sheet assets	28,155 28,154
Off-balance sheet exposures Non-market related off-balance sheet exposures Market related off-balance sheet exposures Securitisation	2,468 2,426 63 51 10 8
Total off-balance sheet exposures	2,541 2,485
Total on-balance sheet assets and off-balance sheet positions Market risk capital charge Operational risk capital charge	30,696 30,639 132 95 2,688 2,688
Total risk-weighted assets	33,516 33,422

(1) Includes commercial property and land acquisition, development, and construction exposures.

	Capital Ratios
	Dec-24 Sep-24 % %
Common Equity Tier 1 Tier 1 Tier 2	10.26 10.01 11.94 11.68 2.47 2.53
Total risk-weighted capital ratio	14.41 14.21

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 4: Credit Risk

Table 4A: Credit risk by gross credit exposure

Exposure Type	Dec-24 Sep-24 Dec-24 Sep-24 $M $M $M $M Gross Credit Exposure(1) Average Gross Credit Exposure(1)
Reverse repurchase agreements	900 1,300 1,100 1,466 790 909 850 824 1,739 1,843 1,791 1,999 86 63 75 79 10,251 9,768 10,010 9,776 68,684 68,101 68,393 67,439 5,963 5,961 5,962 5,883
Receivables due from other Banks(2)
Trading Securities Derivatives(3) Investment Securities Loans and Advances Off-balance sheet exposures(3)
Total gross credit risk(4) Securitisation exposures(5)	88,413 87,945 88,181 87,466 2,964 3,314 3,139 3,458
Total including securitisation exposures Impairment provision Total Portfolios Subject to the Standardised Approach	91,377 91,259 91,320 90,924 (235) (227) (231) (221)
	91,142 91,032 91,089 90,703
	Dec-24 Sep-24 Dec-24 Sep-24 $M $M $M $M Gross Credit Exposure(1) Average Gross Credit Exposure(1)
Claims secured by residential mortgage Other retail assets Bank Government Corporates(6) All other exposures	61,821 60,965 61,393 60,211 98 95 97 97 1,252 1,514 1,383 1,639 12,433 12,184 12,309 12,357 12,694 12,976 12,835 12,986 115 211 164 176
Total gross credit risk(4) Securitisation exposures(5)	88,413 87,945 88,181 87,466 2,964 3,314 3,139 3,458
Total including securitisation exposures Impairment provision Total	91,377 91,259 91,320 90,924 (235) (227) (231) (221)
	91,142 91,032 91,089 90,703

Notes:

(1) Gross credit exposures and Average gross credit exposures reflect on balance sheet exposures and credit equivalent amounts for off balance sheet exposures.

(2) Receivables due from other Banks include collateral deposits provided to derivative counterparties.

(3) Off-balance sheet exposures represent the credit equivalent amount in accordance with APS 112 Capital Adequacy: Standardised Approach to Credit Risk .

(4) Total credit risk excludes cash at bank and other money market placements.

(5) Securitisation exposures for December 2024 include $2,601 million in Loans and advances, $28 million in Investment Securities, $35 million in Derivatives and $300 million in Off-balance sheet exposures. The securitisation exposures for Loans and advances qualify for regulatory capital relief under APS 120 Securitisation and therefore do not contribute to the Bank’s total gross credit risk. The remaining securitisation exposures carry credit risk commensurate with their respective asset classes in accordance with APS 120 Securitisation .

(6) Includes commercial property and land acquisition, development, and construction exposures.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 4: Credit Risk (Continued)

Table 4B: Credit risk by portfolio

Table 4B: Credit risk by portfolio
Portfolios Subject to the Standardised Approach	Non-performing loans Specific Provisions(1) Charges/(Releases) for Specific Provisions & Write Offs Dec-24 Dec-24 Dec-24 $M $M $M
Claims secured by residential mortgage Other retail assets Bank Government Corporates(2) All other exposures	608 5 - 4 1 1 - - - - - - 199 14 8 - - -
Total gross credit risk Securitisation exposures	811 20 9 20 - 831 20 (17) - 814 20
Total including securitisation exposures Impairment provision Total

(1) The specific provisions of $20 million represents the specific provisions for accounting purposes. It excludes the ineligible collective provisions of $61 million which in accordance with APS 220 Credit Risk Management are regulatory specific provisions. The regulatory specific provisions under APS 220 Credit Risk Management are $81 million.

(2) Includes commercial property and land acquisition, development, and construction exposures.

Portfolios Subject to the Standardised Approach	Non-performing loans Specific Provisions(1) Charges/(Releases) for Specific Provisions & Write Offs Sep-24 Sep-24 Sep-24 $M $M $M
Claims secured by residential mortgage Other retail assets Bank Government Corporates(2) All other exposures	622 5 - 4 1 1 - - - - - - 157 6 (1)
	- - -
Total gross credit risk Securitisation exposures	783 12 - 22 - 805 12 (11) - 794 12
Total including securitisation exposures Impairment provision Total

(1) The specific provisions of $12 million represents the specific provisions for accounting purposes. It excludes the ineligible collective provisions of $46 million which in accordance with APS 220 Credit Risk Management are regulatory specific provisions. The regulatory specific provisions under APS 220 Credit Risk Management are $58 million.

(2) Includes commercial property and land acquisition, development, and construction exposures.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 4: Credit Risk (Continued)

Table 4C: Provisions eligible for inclusion in Tier 2 capital[ (1)]

Table 4C: Provisions eligible for inclusion in Tier 2 capital(1)
	Dec-24	Sep-24
	$M	$M
Collective provision for impairment	215	215
Ineligible collectiveprovisions(2)	(61)	(46)
Eligible collective provisions	154	169
General equityreserve(3)	76	76
Provisions eligible for inclusion in Tier 2 capital (Standardised approach)	230	245

(1) Provisions held against performing exposures that represent a purely forward-looking amount for future losses that are presently unidentified.

(2) Ineligible collective provisions represent the collective provision for impairment on Stage 3 ECL loans and advances and Stage 2 ECL loans and advances with any level of arrears. Ineligible collective provision is considered a specific provision for regulatory purposes under APS 220 Credit Risk Management .

(3) Following removal of the ERCL (equity reserve for credit losses) requirement in APS 220 Credit Risk Management from 1 January 2022, the general equity reserve has been established in its place. The general equity reserve will be maintained at this level ($76 million) pending further consideration of its future treatment.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 5: Securitisation Exposures

Table 5A: Summary of securitisation activity for the period

There was no new securitisation activity undertaken during the quarter ending 31 December 2024 (quarter ending 30 September 2024: Nil).

ending 30 September 2024: Nil).
	Exposures Securitised Recognised Gain or (Loss) on Sale
	Dec-24	Sep-24	Dec-24	Sep-24
	$M $M $M $M
Residential mortgages	- - - -
Total exposures securitised during theperiod	- - - -

Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type

Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type	sure type
Dec-24 Sep-24 Exposure type $M $M	Dec-24	Sep-24
28 29 Debt securities
28 29 Total on-balance sheet securitisation exposures

Table 5B(ii): Aggregate of off-balance sheet securitisation exposures by exposure type

Dec-24 Sep-24 Exposure type $M $M	Dec-24	Sep-24
16 18 35 28 Liquidity facilities Derivative exposures
Total off-balance sheet securitisation exposures 51 46

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Table 20: Liquidity Coverage Ratio Disclosure

Table 20: Liquidity Coverage Ratio Disclosure
Total unweighted value (average)	Total weighted value (average) Total unweighted value (average)	Total weighted value (average) Total unweighted value (average)	Total weighted value (average)
Dec-24 Dec-24 Sep-24 Sep-24 Jun-24 Jun-24
$M $M $M $M $M $M
Liquid assets, of which: High-quality liquid assets (HQLA) 13,324 13,037 13,874 Alternative liquid assets(ALA) - - -
Cash outflows Retail deposits and deposits from small business customers, of which: 37,438 3,726 36,632 3,621 36,140 3,579 stable deposits 23,500 1,175 23,216 1,161 22,919 1,146 less stable deposits 13,938 2,551 13,416 2,460 13,221 2,433 Unsecured wholesale funding, of which: 5,085 3,341 4,796 3,132 5,132 3,298 operational deposits (all counterparties) and deposits in networks for cooperative banks - - - - - - non-operational deposits (all counterparties) 3,550 1,806 3,605 1,941 3,635 1,801 unsecured debt 1,535 1,535 1,191 1,191 1,497 1,497 Secured wholesale funding 103 93 450 Additional requirements, of which: 10,011 1,434 9,577 1,288 9,815 1,607 outflows related to derivatives exposures and other collateral requirements 975 975 841 841 1,164 1,164 outflows related to loss of funding on debt products - - - - - - credit and liquidity facilities 9,036 459 8,736 447 8,651 443
Other contractual funding obligations 1,344 987 1,372 1,064 1,107 797 Other contingent fundingobligations 7,734 670 8,689 833 8,251 706
Total cash outflows 10,261 10,031 10,437
Cash inflows Secured lending (e.g. reverse repos) 938 - 768 - 754 - Inflows from fully performing exposures 745 388 650 341 675 364
Other cash inflows 700 700 692 692 1,118 1,118
Total cash inflows 2,383 1,088 2,110 1,033 2,547 1,482
Total adjusted value Total adjusted value			Total adjusted value
Total liquid assets 13,324 13,037 13,874
Total net cash outflows 9,173 8,998 8,955
Liquidity Coverage Ratio(%) 145 145 155
Number of datapoints used 64 66 63

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Overview

The Liquidity Coverage Ratio ( LCR ) promotes shorter-term resilience by requiring ADIs to maintain sufficient qualifying High Quality Liquid Assets ( HQLA ) to meet expected net cash outflows ( NCO ) under an APRA prescribed 30 calendar day stress scenario. Suncorp Bank manages its LCR on a daily basis and maintains a buffer over the regulatory minimum of 100%.

Liquidity and Funding Risk Management Framework

The Suncorp Bank (Norfina Limited) Board is responsible for the sound and prudent management of liquidity risk across the Bank, with authority delegated to the Suncorp Bank Board Risk Committee.

Executive management of liquidity and funding risk is overseen through the Suncorp Bank Asset and Liability Committee ( SBALCO ) which reviews risk measures and limits, endorses and monitors funding and liquidity strategies and ensures stress tests, the Contingency Funding Plan ( CFP ) and holdings of HQLA are effective and appropriate. Operational management of liquidity risk is delegated to a centralised function in the Suncorp Bank Treasury division.

The Bank's stress testing framework includes several scenarios designed to test the Bank's response to liquidity stress under different criteria and understand the range of mitigating actions available. The Bank integrates stress test outcomes and liquidity metrics into the Bank’s overall risk management framework and strategic planning, thereby undertaking comprehensive risk management.

Liquidity and Funding Management

The quantum of liquid assets held considers the amount needed to meet prudential and internal requirements (including a variety of internal stress scenarios as part of the risk management framework) and suitable buffers as appropriate.

Liquid assets included in the LCR consist of HQLA (such as cash, Australian Semi-Government and Commonwealth Government securities).

Other contractual funding obligations and other net inflows represent gross flows not included elsewhere in the LCR. Over time, key balances in these categories can be material to the Bank’s net cash outflow.

During the December quarter, the material balances of net other cashflows were due to forecast loan disbursements, regulatory liquidity held against the NCD portfolio as well as settlement periods for liquid assets and funding transactions (such as the $250m private placement). On average, the Bank's contingent funding obligations decreased from the September quarter to the December quarter due to a reduction in liquid asset purchases and the size of funding transactions undertaken.

Contingency Funding Plan

Suncorp Bank maintains a CFP which outlines funding and management strategies to address liquidity shortfalls under stressed conditions. The CFP establishes clear lines of responsibility and provides a comprehensive list of liquidity options to enable swift, decisive action to support the mitigation of any potential liquidity risks.

Suncorp Bank also monitors several Early Warning Indicators that serve as metrics complementary to its other liquidity risk limits, to identify the emergence of increased risk or vulnerabilities and support in the decision-making around any activation of the CFP.

Liquidity Coverage Ratio

Suncorp Bank calculates its LCR position on a daily basis, ensuring a buffer is maintained over the regulatory requirement of 100% and the Board’s approved Risk Appetite. Over the December quarter, the average LCR remained steady at 145% and excess liquid assets were $4bn on average.

There was approximately $625m in domestic term funding maturities across the December quarter. These were partially replaced by a $250m private placement in November. On average, unsecured debt exposure was higher through the quarter driven mainly by an increase in US Commercial Paper in the LCR 30-day window. The Bank saw a decrease in net derivative flows over the quarter.

Additional liquidity was held over the end of year period contributing to an LCR of 152% on 31st December 2024. During the quarter the lowest point of the LCR was 132% on 27 November, coinciding with a high point in the NCO which was driven by an increased volume of wholesale funding maturities in the 30-day window.

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Suncorp Bank Basel III Pillar 3 Disclosure December 2024

Appendix 2 - Definitions

AASB 9	AASB 9_Financial Instruments_was issued in December 2014. It addresses recognition and
	measurement requirements for financial assets and financial liabilities, impairment requirements that
	introduce a forward-looking expected credit loss impairment model, and general hedge accounting
	requirements which more closely align with risk management activities undertaken when hedging
	financial and non-financial risks. This standard became mandatory for the annual reporting period from
	1 July 2018.
Capital adequacy ratio	Capital base divided by total assessed risk, as defined by APRA.
Collective provision	A collective provision is established to determine expected credit losses (see also Expected Credit
	Losses definition below) for loan exposures which are not specifically provisioned and can be in the
	performing or non-performing portfolios. For business banking exposures, a ratings-based approach is
	applied using estimates of probability of default and loss given default, at a customer level. For
	portfolio managed exposures, the portfolios are split into pools with homogenous risk profiles and pool
	estimates of probability of default and loss given default are used to calculate the collective provision.
Common Equity Tier 1 (CET1)	Common Equity Tier 1 capital comprises accounting equity plus adjustments for intangible assets and
	regulatory reserves.
Common Equity Tier 1 ratio	Common Equity Tier 1 divided by total risk weighted assets, as defined by APRA.
Credit value adjustment (CVA)	A capital charge that covers the risk of mark-to-market losses on the counterparty credit risk.
Eligible collective provisions	Primarily represents the collective provision for impairment on loans and advances in Stage 1
	(performing and/or newly originated assets) and Stage 2 (without any arrears). Provisions for loans
	and advances in Stage 1 are established to provide for expected credit losses (ECL) for a period of 12
	months. Forward-looking provisions for future, presently unidentified losses are also included within the
	Eligible collective provision balance.
Expected credit losses (ECL)	Expected credit losses (ECL) are calculated as the probability of default (PD) x loss given default
	(LGD) x exposure at default. The credit models are calibrated to reflect PD and LGD estimates based
	on historical observed experience, as well as reflecting unbiased forward-looking views of
	macroeconomic conditions, through macroeconomic variables that influence credit losses, for example
	unemployment rates and changes in house prices.
Ineligible collective provisions	Represents the collective provision for impairment on loans and advances in Stage 2 (with any level of
	arrears) or Stage 3. Stage 3 assets within ineligible collective provisions include ‘past due but not
	impaired’ and ‘impaired assets’ (non-performing loans, other than those for which a specific provision
	is held under AASB 9). Collective provisions for loans and advances in Stage 2 and Stage 3 are
	established to provide for ECL for the remaining term of the loans and advances (lifetime ECL).
	Ineligible collective provision is considered as specific provision for regulatory purposes under APS
	220_Credit Risk Management_.
Liquidity coverage ratio (LCR)	An APRA requirement to maintain a sufficient level of qualifying high-quality liquid assets to meet
	liquidity needs under an APRA-defined significant stress event lasting for 30 calendar days. Absent of
	a situation of financial stress, the LCR must not be less than 100%. The LCR is calculated as the ratio
	of qualifying high-quality liquid assets relative to net cash outflows in a modelled APRA-defined 30-day
	stress scenario.
Loan-to-value ratio (LVR)	Ratio of a loan to the value of the asset purchased.
Non-performing exposure	An exposure that is in default. A default is considered to have occurred with regard to a particular
	borrower when either, or both, of the events in sub-paragraphs (i) or (ii) have taken place: (i) the ADI
	considers that the borrower is unlikely to pay its credit obligations to the ADI in full, without recourse by
	the ADI to actions such as realising available security;
	(ii) the borrower is 90 days or more past-due on a credit obligation to the ADI or, in the case of
	subsidiaries in jurisdictions where a different number of days past-due is set for exposures to
	individuals (i.e. natural persons) or public sector entities by the national regulator, the borrower is past-
	due by the number of days (or more) specified by that national regulator.
Past due loans	An exposure for which any amount due under a contract (interest, principal, fee or other amount) has
	not been paid in full at the date when it was due. An exposure is considered past-due from the first day
	of missed payment.
Risk weighted assets	Total of the carrying value of each asset class multiplied by their assigned risk weighting, as defined by
	APRA.
Specific provision	A specific provision for impairment is recognised where there is objective evidence of impairment and full recovery of principal and interest is considered doubtful. The present value of the expected future
	cash flows is compared to the carrying amount of the loan to determine the specific provision required.
Total assessed risk	Credit risk-weighted assets, off-balance sheet positions, market risk capital charge and operational risk
	charge, as defined by APRA.

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