Australia and New Zealand Banking Group Ltd. — Earnings Release 2013

Aug 15, 2013

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Media Release

For Release: 16 August 2013

ANZ New Zealand maintains positive performance

Australia and New Zealand Banking Group Limited (ANZ) NZ Branch Disclosure Statement for the nine months ended 30 June 2013 was released today, showing a lift in performance for ANZ New Zealand[1] with statutory profit of $1,030 million, up from $965 million in the nine months ending 30 June 2012.

Cash profit[2] was NZ$1,061 million, up from $928 million, reflecting a reduction in provisions for bad and doubtful debts as well as reduced restructuring costs and productivity gains from simplifying the business, offset by the impact of a decline in net interest margin earlier in the financial year.

The successful merger of the ANZ and National Bank brands has enabled the business to continue growing deposits and lending, including above-market growth in the key markets of mortgages and credit cards.

Key points[2]

• Statutory profit of $1,030 million, up 7% compared with the nine months ending 30 June 2012

• Cash profit of $1,061 million, up 14%

• Profit before credit impairment up 7%

• Significant cost reductions, including an $85 million reduction in restructuring costs as work on integrating the core banking system winds down, and productivity gains from simplifying the business

• Lower credit impairment provisions charges as credit quality continues to improve

• Growth of 6% in customer deposits over the period

A table of key financial information follows below

For media enquiries contact: Pete Barnao Communications Manager, Media Tel: +64-9-252 6623 or +64-27-277 3139 Email: Pete.Barnao@anz.com

1 ANZ New Zealand represents all of ANZ’s operations in New Zealand, including ANZ Bank New Zealand Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ. 2 Statutory profit has been adjusted to exclude non-core items to arrive at cash profit, the result for the ongoing business activities of ANZ New Zealand. All comparisons in Key Points are on a cash profit basis and relate to the prior comparative period unless otherwise stated. Refer to Summary of Key Financial Information for details of reconciling items between cash profit and statutory profit.

Summary of Key Financial Information - ANZ New Zealand

Profit	9 Months June 2013 9 Months June 2012 Movement June 13 v June 12 Movement June 13 v June 12 Year Sept 2012 $M $M $M % $M
Net interest income Other external operating income Operating income Operating expenses Profit before credit impairment and income tax Provision for credit impairment Profit before income tax Income tax expense	1,958 2,031 (73) -4% 2,709 689 636 53 8% 927
	2,647 2,667 (20) -1% 3,636 1,153 1,268 (115) -9% 1,744
	1,494 1,399 95 7% 1,892 49 145 (96) -66% 195
	1,445 1,254 191 15% 1,697 384 326 58 18% 412
Cashprofit	1,061 928 133 14% 1,285
Reconciliation of cash profit to statutory profit Cash profit 1,061 928 133 14% 1,285 Reconciling items (net of tax): Economic hedging volatility1 (14) 16 (30) large (45) Insurance policy asset valuations2 (17) 21 (38) large 25
Statutory profit	1,030 965 65 7% 1,265
Consisting of: Retail Commercial Operations & Support New Zealand Businesses Wealth Institutional Other	269 265 4 2% 364 524 448 76 17% 596 (13) (65) 52 -80% (133)
	780 648 132 20% 827 55 44 11 25% 65 232 245 (13) -5% 314 (6) (9) 3 -33% 79
Cashprofit	1,061 928 133 14% 1,285
Reconcilingitems	(31) 37 (68) large (20)
Statutory profit	1,030 965 65 7% 1,265
1. Economic hedging - fair value gains/(losses) 2. Insurance policy assets ANZ New Zealand enters into economic hedges to manage its interest rate and foreign exchange risk. Statutory profit includes volatility from fair value gains or losses on economic hedges that are not designated in accounting hedge relationships under IFRS, as well as ineffectiveness from designated accounting cash flow and fair value hedges. Fair value gains/(losses) on all of these economic hedges are excluded from cash profit, as the profit or loss resulting from these transactions will reverse over time to match the profit or loss from the economically hedged item. Profit and loss volatility is created by the remeasurement of policyholder assets for changes in market discount rates, which over time reverses to zero.