Australia and New Zealand Banking Group Ltd. — Capital/Financing Update 2017

Dec 20, 2017

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. 143,294 options to be issued (if known) or 2. 1,458,748 fully paid ordinary shares maximum number which may be issued

• See chapter 19 for defined terms.

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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. 143,294 options

143,294 Performance Rights (options) exercisable from 19 December 2020 and before the close of business on 18 December 2022 (after which date the Rights will lapse), unless further deferred, at a zero exercise price and subject to the following performance conditions:

• The Performance Rights will be granted in two tranches:

• Tranche 1 (75% of the grant) will be subject to a relative Total Shareholder Return (TSR) performance condition with a Select Financial Services comparator group; and

• Tranche 2 (25% of the grant) will be subject to an Absolute Compound Annual Growth Rate Total Shareholder Return (CAGR TSR) performance condition.

• Tranche 1

• The proportion of Performance Rights that become exercisable in tranche 1 will depend upon the TSR achieved by ANZ relative to the companies in the comparator group, measured over the three year performance period from 22 November 2017 to, and calculated as at, the end of the three year performance period (close of business on 21 November 2020).

• Performance equal to the median TSR of the comparator group will result in half of the Performance Rights becoming exercisable on 19 December 2020.

• Performance above median will result in further Performance Rights for tranche 1 becoming exercisable on 19 December 2020, 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 comparator group. Where ANZ’s performance falls between two of the comparators TSR is measured on a prorata basis. The actual relative level of TSR, rather than simple ranking, will determine the level of vesting.

• Tranche 2

• The proportion of Performance Rights that become exercisable in tranche 2 will depend upon the Absolute Compound Annual Growth Rate (CAGR) TSR achieved by ANZ relative to the CAGR TSR targets set by the Board of ANZBGL for this award measured over the three year performance period (commencing 22 November 2017).

• Performance equal to 9.5% CAGR TSR will result in half the Performance Rights becoming exercisable (50% vesting) on 19 December 2020.

• Performance above 9.5% CAGR TSR 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 CAGR TSR is 14.3% (100% vesting) on 19 December 2020.

• Where ANZ’s performance falls between 9.5% and 14.5%, Absolute CAGR TSR is measured on a pro-rata basis.

• The Board retains discretion to adjust the Absolute CAGR TSR hurdle in exceptional circumstances to ensure that employees are neither advantaged nor disadvantaged by matters outside management’s control that materially affect achievement of the ATSR performance condition.

Tranches 1 and 2

• An averaging calculation is 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 (generally 5 years from the date of grant, unless further deferred), they will lapse.

• Each tranche is measured independently.

• 1,458,748 fully paid ordinary shares Terms of the shares will be the same as the terms of existing ordinary shares.

• See chapter 19 for defined terms.

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4 Do the+securities rank equally in 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? 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	1. 143,294 options Inapplicable, as no ANZ options are currently listed save that in the event of exercise the resulting ordinary shares issued will rank equally in all respects from the date of allotment with the existing class of quoted securities. 2. 1,458,748 fully paid ordinary shares Yes	1. 143,294 options Inapplicable, as no ANZ options are currently listed save that in the event of exercise the resulting ordinary shares issued will rank equally in all respects from the date of allotment with the existing class of quoted securities. 2. 1,458,748 fully paid ordinary shares Yes
	1. 2.	143,294 options – zero exercise price 1,458,748 fully paid ordinary shares at nil consideration
	1. 2.	143,294 Performance Rights issued to Mr Elliott for the purposes set out in the notice convening ANZ’s 2017 Annual General Meeting. 1,458,748 fully paid ordinary shares issued under the Bonus Option Plan (BOP).
	No
	N/A
	N/A
	N/A

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. 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 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
	N/A
	N/A
	N/A
	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.

1. 143,294 options – 19/12/17 2. 1,458,748 fully paid ordinary shares – 18/12/17

Cross reference: item 33 of Appendix 3B.

• See chapter 19 for defined terms.

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

Number	+Class
2,938,874,075 5,728,859 11,200,000 16,100,000 9,701,791 16,220,000 9,310,782	Fully paid ordinary shares Fully paid Convertible Preference Shares issued in 2011 (CPS3) ANZ Capital Notes 1 ANZ Capital Notes 2 ANZ Capital Notes 3 ANZ Capital Notes 4 ANZ Capital Notes 5

USD1,250,000,000 2.05 per cent Covered Bond due May 2020

CNY2,500,000,000 4.75 per cent Fixed Rate Subordinated Notes due January 2025

SGD500,000,000 3.75 per cent Fixed Rate Subordinated Notes due March 2027

AUD200,000,000 4.75 per cent Fixed Rate Subordinated Notes due May 2027

USD1,000,000,000 Perpetual Subordinated Contingent Convertible Securities

AUD225,000,000 4.75 per cent Fixed Rate Subordinated Notes due September 2032

• Number +Class

• 9 Number and +class of all 7,912,991 Options on issue +securities not quoted on ASX (there are no options ( including the +securities in approved for grant but section 2 if applicable) not yet granted)

• 10 Dividend policy (in the case of a 1. Not applicable trust, distribution policy) on the 2. Same as existing fully paid ordinary shares

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

Part 2 - Pro rata issue

art 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

• See chapter 19 for defined terms.

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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

• (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

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of+securities for which +quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally in 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 now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security) 42 Number and +class of all +securities quoted on ASX (_including_the+securities in clause 38)	N/A
	N/A
	N/A
	N/A
	Number	+Class
	N/A	N/A

• 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: 21 December 2017 Company Secretary

Print name: Simon Pordage

== == == == ==

• See chapter 19 for defined terms.

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