Australia and New Zealand Banking Group Ltd. — Earnings Release 2012

Feb 28, 2012

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Media Release

For Release: 29 February 2012

ANZ NZ delivers good financial performance

- Cost management, customer focus drives results in subdued economic environment -

The Australia and New Zealand Banking Group Ltd (ANZ) NZ Branch disclosure statement for the three months ended 31 December 2011 was released today, showing a good performance for ANZ New Zealand[1] .

Underlying profit[2] for the three months was $351 million, up 17% on the corresponding period last year. Statutory profit for the three months was $415 million, with the difference mainly due to fair value gains on derivatives.

ANZ New Zealand Chief Executive Officer David Hisco said: “This is another good performance. We are continuing to strengthen the bank by focusing on our customers, simplifying the business and tightly managing costs. While economic growth in New Zealand remains subdued, our sound financial position means we are well placed to keep delivering to customers while supporting businesses and the economic recovery.

Highlights[2]

• Underlying profit of $351 million compared to $300 million in the three months to December 2010.

• Statutory profit of $415 million.

• Income up 8%.

• Costs tightly managed, down 1%.

• Provision for credit impairment charge of $45 million, up $13 million.

• Customer deposit growth of 1.7% over the quarter.

“During the quarter lending volumes remained relatively flat as businesses continued to deleverage and retail customers increased deposits rather than taking on new debt. We have continued to see customers moving from fixed to variable-rate mortgages.

“There are, however, positive signs for the economy. Retail sales were buoyed by the Rugby World Cup, and there was further encouraging news in house sales and primary production. However, global economic uncertainty, ongoing debt reduction and the high currency continue to dampen confidence among consumers and businesses.

1 ANZ New Zealand represents all of ANZ’s operations in New Zealand, including ANZ National Bank Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ.

2 Reported profit has been adjusted to exclude non-cash and significant items to arrive at underlying profit. All comparisons in Highlights are on an underlying profit basis and relate to the prior corresponding period unless otherwise stated.

“We are monitoring events in Europe and plotting a cautious path forward with the need to manage the balance between loan growth, costs and credit quality closely. ANZ New Zealand continues to be well capitalised with strong liquidity and has retained an AA category credit rating. This means we are well-placed to help customers maximise opportunities as the economy moves towards recovery.”

Mr Hisco said credit quality continued to improve. Individually impaired and past due loans are trending lower but there is still some uncertainty over the medium-term impacts of the Christchurch earthquakes.

“Good progress has been made with the move to a single core banking system aimed at simplifying the business for staff, which will make it easier to provide better products and services for customers,” Mr Hisco said.

“While agriculture commodity prices were off their highs of a year ago they remain at levels well above historical averages in many cases. The cost of entry into this important sector for the New Zealand economy remains high.

“As New Zealand's largest agricultural lender, we underlined our support with a $60 million start-up package to help young farmers take their first step in farming and progress towards farm ownership. The strong take-up of the package - which we have now doubled to $120 million - confirms that with appropriate support young farmers are ready to step up for the future of the industry.

“Despite pressures on the New Zealand economy, we remain positive about the outlook. ANZ’s strong domestic focus, super regional strategy and commitment to high levels of service positions us well to support our customers through the current uncertain global environment.”

A table of key financial information follows below.

For media inquiries contact:

Stefan Herrick Senior Manager External Relations Tel: 09-252 6418 or 021-819 044

Summary of key financial information ANZ New Zealand

Summary of key financial information ANZ New Zealand
	3 months December 2011 3 months December 2010 $M $M 679 644 235 199 914 843 386 388 528 455 45 32 483 423 132 123 351 300 64 (40) 415 260 116 76 145 146 7 9 268 231 83 80 - (11) 351 300 64 (40) 415 260	Movement Dec. 2011 v Dec. 2010 Movement Dec. 2011 v Dec. 2010 $M %
Net interest income Other external operatingincome		35 5% 36 18%
Operating income Operatingexpenses		71 8% (2) -1%
Profit before credit impairment and income tax Provision for credit impairment		73 16% 13 41%
Profit before income tax Income tax expense		60 14% 9 7%
Underlying profit		51 17%
Adjustments to statutory profit		104 large
Profit		155 60%
Consisting of: Retail Commercial Operations and support New Zealand Businesses Institutional Other		40 53% (1) -1% (2) -22%
		37 16% 3 4% 11 large
Underlying profit		51 17%
Adjustments to statutory profit		104 large
Profit		155 60%