Australia and New Zealand Banking Group Ltd. — Earnings Release 2015

Feb 16, 2015

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Media Release

For Release: 17 February 2015

ANZ New Zealand continues strong performance

Australia and New Zealand Banking Group Limited (ANZ) NZ Branch Disclosure Statement for the three months ended 31 December 2014 was released today, showing a lift in performance for ANZ New Zealand[1] with unaudited statutory profit of NZ$425 million, up from NZ$393 million in the three months ended 31 December 2013.

Unaudited cash profit[2] , boosted last year by a net release of credit impairment provisions, was steady at NZ$415 million compared with NZ$416 million in the prior comparative period.

Continuing confidence in the New Zealand economy is seeing a lift in economic activity, reflected in increased lending. This has resulted in improved profit before credit impairment.

Key points[2]

• Unaudited cash profit of NZ$415 million.

• Unaudited statutory profit of NZ$425 million.

• Profit before credit impairment up 5%.

• Gross lending up 5%.

• Customer deposits up 7%.

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 (All figures in New Zealand dollars)

Profit (unaudited)	3 Months 31 Dec 2014 3 Months 31 Dec 2013 Movement Dec 14 v Dec 13 Movement Dec 14 v Dec 13 Year September 2014 $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	717 688 29 4% 2,765 252 242 10 4% 1,023
	969 930 39 4% 3,788 384 372 12 3% 1,490
	585 558 27 5% 2,298 13 (19) 32 large (9)
	572 577 (5) -1% 2,307 157 161 (4) -2% 624
Cashprofit	415 416 (1) 0% 1,683
Reconciliation of cash profit to statutory profit Cash profit 415 416 (1) 0% 1,683 Reconciling items (net of tax): Economic hedging volatility1 (6) (19) 13 -68% 11 Insurancepolicyasset valuations2 16 (4) 20 large 17
Statutory profit	425 393 32 8% 1,711
Consisting of: Retail Commercial Operations & Support New Zealand Businesses Wealth Institutional Other	125 127 (2) -2% 451 192 183 9 5% 725 (1) (12) 11 -92% 2
	316 298 18 6% 1,178 31 26 5 19% 181 68 98 (30) -31% 322 - (6) 6 -100% 2
Cashprofit	415 416 (1) 0% 1,683
Reconcilingitems	10 (23) 33 large 28
Statutory profit	425 393 32 8% 1,711
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.