Australia and New Zealand Banking Group Ltd. — Capital/Financing Update 2015

Jan 11, 2015

Ote Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Australia and New Zealand Banking Group Limited ( ANZ )

ABN

11 005 357 522

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to 1. Options to subscribe for ordinary shares be issued 2. Fully paid ordinary shares 2 Number of[+] securities issued or 1. 233,418 options to be issued (if known) or 2. 9,329,955 fully paid ordinary shares maximum number which may be issued

3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)		1. 233,418 options (i)(a) In accordance with the ANZ Share Option Plan (the “Option Plan”), and as part of the LTI arrangements for the CEO, a total of 229,272 LTI Performance Rights (the “Performance Rights”) in ANZ were granted to Mr Michael Smith on 18 December 2014 to acquire the number of ordinary fully paid shares in ANZ, subject to: • the Rules of the Option Plan; and • the conditions set out below (which reflect the terms contained in ANZ’s Notice of 2014 AGM in respect of the grant to Mr Smith which was approved by shareholders).

• See chapter 19 for defined terms.

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(b)		the exercise price is zero for all
Performance Rights;
(c)	the ANZ Board retains a discretion to make
a	cash equivalent payment in lieu of an
allocation of shares on vesting and exercise of
Mr	Smith’s Performance Rights and this
discretion is to be used only in limited
circumstances (see below);
(d)	subject to satisfactorily meeting the time and
performance hurdles the Performance Rights
will	vest three years from the date of grant;
(e)	the Performance Rights may be exercised,
subject to the forfeiture conditions, after 18
December 2017 and before the close of
business on 17 December 2019 (after which
date		the Performance Rights will lapse) subject
to	satisfactorily meeting the performance
conditions;
(g)	the Performance Rights are split into two
tranches and are subject to the following
performance conditions:
	•	Vesting of Tranche 1 (119,382 options)
		will depend on the TSR performance of
		ANZ relative to a peer group
		comprising a selection of financial
		services companies (Tranche 1
		Comparator Group) and vesting of
		Tranche 2 (109,890 options) will
		depend on the TSR performance of
		ANZ relative to a peer group
		comprising the companies making up
		the S&P/ASX 50 Index as at the
		commencement of the performance
		period (21 November 2014) (the
		Tranche 2 Comparator Group). Each
		tranche will be measured
		independently from the other.
	•	The proportion of Performance Rights
		that become exercisable will depend
		upon the TSR achieved by ANZ relative
		to the companies in each of the
		comparator groups, measured over the
		3 year Performance Period.
	•	The Performance Period commences
		on 21 November 2014 and ends on 20
		November 2017.
	•	Performance equal to the median TSR
		of the relevant comparator group will
		result in half of the Performance Rights
		becoming exercisable.
	•	Performance above median will result
		in further Performance Rights
		becoming exercisable, increasing on a
		straight-line basis until all of the
		Performance Rights become
		exercisable where ANZ’s TSR is at or
		above the 75th percentile of TSRs in
		the relevant comparator group.

• An averaging calculation will be used for TSRs over a 90 trading day period for start and end values in order to reduce share price volatility.

• (h) the TSR performance hurdle will only be tested once at the end of the vesting period for each tranche. The percentage of Performance Rights that vest as a result of the TSR calculation will be fixed for the duration of the exercise period. If the Rights do not pass the performance hurdle on the testing date, or they are not exercised by the end of the relevant exercise period (2 years from the date of vesting) they will lapse. (i) subject to the rules of the Option Plan, if Mr Smith ceases employment with ANZ:

• Due to resignation: all unexercised Performance Rights will lapse;

• • Due to termination on notice or cessation of employment by mutual agreement: all Performance Rights which have vested or which vest during the notice period will be retained and become exercisable by Mr Smith; all remaining Performance Rights will vest and become exercisable, subject to the relevant time and performance conditions being satisfied, unless the Board determines otherwise and unless the Board determines to deliver them to Mr Smith as a cash equivalent payment (see below);

• • Due to termination without notice: all unexercised Performance Rights will lapse (whether or not the Performance Rights have vested); or

• Due to death or total and permanent disablement: the performance conditions will be waived and all unvested Performance Rights will vest. (j) in the event of a takeover, scheme of arrangement or other change of control event occurring, the performance condition applying to the Performance Rights will be tested and the Performance Rights will vest based on the extent to which the performance condition is satisfied. No pro rata reduction in vesting will occur based on the period of time from the date of grant to the date of the change of control event occurring, and vesting will only be determined by the extent to which the performance condition is satisfied. Any Performance Rights which vest based on satisfaction of the performance condition will vest at a time (being no later than the final date on which the change of control event will occur) determined by the

• See chapter 19 for defined terms.

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Board. Any Performance Rights which do not vest will lapse with effect from the date of the change of control event occurring, unless the Board determines otherwise.

(k) if the Board exercises a discretion to make a cash equivalent payment to Mr Smith in lieu of an allocation of shares, Mr Smith will receive a cash equivalent payment in respect of any Performance Rights that vest. This payment will be in lieu of the shares that would otherwise have been received and will be calculated based on a 5 day Volume Weighted Average Price (VWAP) of shares up to and including the date of vesting. The cash payment will be made in Australian dollars, unless the Board determines otherwise, in which case the foreign exchange rate applied will be the ‘spot’ price for the relevant currency on the date of exercise. (ii) 4,146 Long Term Incentive (LTI) Performance Rights (options) exercisable from 21 November 2017 and before the close of business on 20 November 2019 (after which date the Rights will lapse) at a zero exercise price and subject to the following performance conditions:

• The Performance Rights will be granted in two equal tranches.

• Tranche 1 (50% of the grant) will be subject to a relative TSR performance condition, with a Selected Financial Services comparator group; and

• • Tranche 2 (50% of the grant) will be subject to a relative TSR performance condition, with a S&P/ASX50 comparator group; and

• The proportion of Performance Rights that become exercisable will depend upon the TSR achieved by ANZ relative to the companies in the applicable comparator group for each tranche. Both tranches will be measured over the same period (since date of grant) and calculated as at the end of the three year performance period. Performance equal to the median TSR of the relevant comparator group will result in half of the Performance Rights for that tranche becoming exercisable. Each tranche is measured independently.

• Performance above median will result in further Performance Rights for that tranche becoming exercisable, increasing on a straight-line basis until all of the Performance Rights for that tranche become exercisable where ANZ’s TSR is at or above the 75th percentile of TSR in the relevant comparator group. Where ANZ’s performance falls between two of the comparators TSR is measured on a pro-rata basis. The actual relative level of

TSR, rather than simple ranking, will determine the level of vesting. An averaging calculation will be used for TSR over a 90 trading day period for start and end values in order to reduce share price volatility. Each TSR performance hurdle for the two tranches of Performance Rights will only be tested once at the end of the three year performance period. The percentage of Performance Rights in a tranche that vest as a result of the TSR calculation will be fixed for the duration of the exercise period. If the Performance Rights do not pass the performance hurdle on the testing date, or they are not exercised by the end of the exercise period (5 years from the date of grant), they will lapse.

1. 9,329,955 fully paid ordinary shares Terms of the shares will be the same as the terms of existing ordinary shares

2. 4 Do the[+] securities rank equally 1. 233,418 options in all respects from the[+] issue date with an existing[+] class of Inapplicable, as no ANZ options are currently quoted[+] securities? listed save that in the event of exercise the resulting ordinary shares issued will rank

3. If the additional[+] securities do equally in all respects from the date of allotment with the existing class of quoted securities.

4. not rank equally, please state: • the date from which they do 2. 9,329,955 fully paid ordinary shares

5. • the extent to which they participate for the next Yes.

6. dividend, (in the case of a trust, distribution) or interest payment

7. the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

8. 5 Issue price or consideration

9. 233,418 options – zero exercise price 2. Fully paid ordinary shares: 9,696 Shares at $23.71 1,288,434 Shares at nil consideration 8,031,825 Shares at $32.02

• See chapter 19 for defined terms.

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6 Purpose of the issue 1 i) 229,272 Performance Rights issued to Mr (If issued as consideration for Michael Smith, Chief Executive Officer of ANZ the acquisition of assets, clearly for the purposes set out in the notice convening identify those assets) ANZ’s 2014 Annual General Meeting. ii) 4,146 options issued for employee incentive and/or retention purposes.

2 i) 9,696 fully paid ordinary shares issued on exercise of options. ii) 1,288,434 shares issued under Bonus Option Plan (BOP). iii) 8,031,825 shares issued under Dividend Reinvestment Plan (DRP).

• 6a Is the entity an[+] eligible entity No that has obtained security holder approval under rule 7.1A?

	No
If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

6h If[+] securities were issued under rule 7.1A for non‐cash consideration, state date on which valuation of consideration was released to ASX Market Announcements

N/A

• 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

N/A

7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

1 i) 229,272 options – 18 December 2014 ii) 4,146 options – 21 November 2014 (the Issue was subject to a regulatory approval which has now been received) 2. Fully paid ordinary shares: 9,696 shares 09/01/2015 9,320,259 shares 16/12/2014

• 8 Number and +class of all +securities quoted on ASX ( including the +securities in section 2 if applicable)

Number	+Class
2,765,980,222 19,687,224 13,400,000 15,086,520 11,200,000 16,100,000	Fully paid ordinary shares Fully paid Convertible Preference Shares issued in 2009 (CPS2) Fully paid Convertible Preference Shares issued in 2011 (CPS3) ANZ Subordinated Notes ANZ Capital Notes 1 ANZ Capital Notes 2

USD1,500,000,000 1.00% Covered Bond due October 2015

USD750,000,000 Floating Rate Covered Bond due October 2015 AUD1,000,000,000 Floating Rate TCD due October 2015 AUD1,450,000,000 Floating Rate TCD due May 2016 AUD775,000,000 6.75% TCD due May 2016

• See chapter 19 for defined terms.

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• 9 Number and +class of all +securities not quoted on ASX ( including the +securities in section 2 if applicable)

Number	+Class
6,535,419	Options on issue

• 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

• Not applicable

• Same as existing fully paid ordinary shares

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non‐ renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

N/A

• 33 +Issue date

N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1 (NB: this relates only to the fully paid ordinary shares described in Part 1)

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 ‐ 1,000

• 1,001 ‐ 5,000

• 5,001 ‐ 10,000 10,001 ‐ 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

• 38 Number of[+] securities for which N/A +quotation is sought

39 +Class of +securities for which N/A quotation is sought 40 Do the[+] securities rank equally in N/A all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation N/A now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and +class of all N/A N/A +securities quoted on ASX ( including the +securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no‐one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 12 January 2015 Company Secretary

Print name: John Priestley

== == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

==> picture [415 x 463] intentionally omitted <==

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

Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
Insert number of fully paid [+] ordinary
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid [+] ordinary securities
issued in that 12 month period with
shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary
securities cancelled during that 12 month
period
“A”
----- End of picture text -----

• See chapter 19 for defined terms.

Appendix 3B Page 13

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Step 2: Calculate 15% of “A”

“B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period not counting those issued:

• Under an exception in rule 7.2

• Under rule 7.1A

• With security holder approval under rule 7.1 or rule 7.4

Note:

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• It may be useful to set out issues of securities on different dates as separate line items

“C”

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

“A” x 0.15

Note: number must be same as shown in Step 2

Subtract “C” Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” [Note: this is the remaining placement capacity under rule 7.1]

Part 2

Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E”

• See chapter 19 for defined terms.

Appendix 3B Page 15

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

“A” x 0.10 Note: number must be same as shown in Step 2 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E”

Note: this is the remaining placement capacity under rule 7.1A