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

Oct 16, 2017

News Release

For release: 17 October 2017

ANZ agrees to sell pensions and investments and aligned dealer group businesses to IOOF - continues to review options for Life Insurance business -

ANZ today announced the sale of its OnePath pensions and investments (OnePath P&I) and aligned dealer groups (ADG) business to IOOF Holdings Limited (IOOF) for $975 million.

As part of the agreement, ANZ will also enter into a 20–year strategic alliance to make available IOOF superannuation and investment products to ANZ customers.

IOOF Transaction Scope1	IOOF Transaction Scope1	Other ANZ Wealth Businesses	Other ANZ Wealth Businesses
	OnePath P&I business - $48 billion FUM.		OnePath Life Insurance – in-force
	P&I platform and products: Advised		premiums $1.6 billion.
	(Retail) including OneAnswer		OnePath General Insurance – in force
	Mastertrust; Advised (Wrap) including		premiums $226 million.
	ANZ Grow Wrap and Oasis badged wrap;		Life Company Products - including Group
	Employer Super (ANZ Smart Choice		and Individual Insurance.
	Employer); Direct Products (ANZ Smart		ANZ Financial Planning (ANZFP) – 286
	Choice Retail) and other closed		advisors3licensed under ANZ (will be part
	superannuation products issued by		of the Australia Division).
	OnePath P&I.		Lenders Mortgage Insurance.
	ADG comprising 7172aligned advisors
	and $19.5 billion FUA.
	ADG Brands: Millennium3, RI Advice,
	Elders Financial Planning, Financial
	Services Partners.

Transaction Summary

• Sale price of $975 million represents a multiple of ~25x FY17 NPAT.

• Aggregate P&I and ADG annual profit is $39 million[4] .

• Equates ~17x FY17 NPAT after separation and transaction costs.

• Estimated accounting loss on sale of ~$120 million[5] includes sale proceeds of $975 million, separation and transaction costs of ~$300 million post-tax, and an accounting adjustment of ~$500 million for Treasury shares.

• Expected to increase ANZ’s APRA CET1 capital ratio by ~15 basis points on completion.

• EPS and RoE impacts[6] are not material to ANZ.

• Small ongoing payments through the 20 year Strategic Alliance Agreement.

• Completion is expected in around 12 months subject to certain conditions including regulatory approvals and the completion of the extraction of the OnePath P&I business from OnePath Life Insurance.

1 FUA, FUM and in-force premium numbers for Transaction Scope and ANZ retained businesses are current at 31 March 2017.

2 Number of advisors as at October 2017.

3 Advisor number to 31 March, 2017 . Excludes ANZ Private Bank advisors.

4 $39 million includes DAC amortisation but is pre ANZ consolidation adjustments and amortisation of acquisition related intangibles.

5 The final gain/loss on sale will be determined at completion and will be impacted by transaction and separation costs, final determination of goodwill to be disposed, other balances and final taxation impacts.

6 On a Cash basis.

Australia and New Zealand Banking Group Limited ABN 11 005 357 522

The sale of the pensions and investments and ADG businesses is consistent with ANZ’s strategy to create a simpler, better balanced bank focussed on retail and business banking in Australia and New Zealand, and Institutional Banking supporting client trade and capital flows across the region.

ANZ Group Executive Wealth Australia Alexis George said: “Financial services such as superannuation, investments and advice are a core part of the support we provide ANZ customers now and in the future.

“By partnering with IOOF, we are able to create greater value for our shareholders while also providing our customers with access to quality wealth products from a specialist provider with the right cultural fit, financial strength and digital capability.

“The sale of our P&I and ADG businesses provides ANZ with greater flexibility to consider options for the life insurance business including strategic and capital markets solutions,” Ms George said.

A video interview with Group Executive, Wealth Australia, Alexis George discussing this transaction is available at www.bluenotes.anz.com.

For media enquiries contact: For investor enquiries contact: Paul Edwards +61 434 070101 Jill Campbell +61 3 8654 7749 +61 412 047 448 Stephen Ries+61 409 655 551

Jill Campbell +61 3 8654 7749 +61 412 047 448 Cameron Davis +61 3 8654 7716 +61 421 613 819