Australia and New Zealand Banking Group Ltd. — Interim / Quarterly Report 2011

May 31, 2011

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Overview and strategy

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ANZ is structured by Geography & Segment

Asia Pacific, Europe & America (APEA) Retail (including Wealth Commercial Institutional partnerships) Australia Retail Wealth Commercial Institutional New Zealand Retail Wealth Commercial Institutional

Institutional is a global business

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3

Coherent strategy – driving competitive advantage

Geographic opportunity

• Footprint - exposure to Asia‟s more rapid growth

• Growing financial services requirements

• Regional connectivity

• Strong domestic markets and businesses

Cross-border customer focus

• Regional customer insights

• Resources, agribusiness, infrastructure

• Trade and investment flows

• Migration/people flows, education

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Leading
Super
Regional
Bank
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Building Super Regional capabilities

• Bench strength/international talent

• Innovative product capability

• „Throw and catch‟ capability and culture

• Enabling technology and operations hubs

• Global core brand, regional reach

• Governance and risk management

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4

Delivering Super Regional performance momentum

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OUTPERFORM AND TRANSFORM

OUTPERFORM

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RESTORE

• Institutional growth

• Stronger risk and governance processes

• Increased international banking experience

• Balance sheet and capital management

• Move from a presence to a real business in Asia

• 14% of Group Earnings

• Beachhead in Greater China, SE Asia, India, Mekong

• Maintain strong domestic franchises

• Increased management bench strength

• Create hub foundation

• Improving balance sheet composition

• Improved funding diversity

Realise full potential of Super Regional aspiration

Capturing value:

• To Asia

• OUTPERFORM

• Within Asia

• From Asia

2009-2010

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2007-2009

2011-2017

5

Super Regional - driving long term growth and differentiated returns

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Denotes two way merchandise trade flow [3 ]
Forecast GDP growth [1 ] (% p.a, 2011-14) FDI inward flow [2] (USDb, 2009)
(2009)
KR
EU 2
4.0% US
1.6% JP
12 2.7%
UK 1.6%
2.3%
TW Asia-US
3
CN 78 5.1% Trade: US$0.8trn
8.7%
HK
48
Asia-Europe IN 5.0%
Trade: US$1.0trn 35
8.5%
VN
8
7.1%
TH
5 Pacific-Asia [4]
4.5%
Trade: US$6bn
PHI
2
4.6%
Intra-Asia MLY
1
Trade:$1.6trn 5.0%
PNG
0.4
5.0%
SG IND
17 5
4.6% 5.9% AUS
23
3.2% Aus/NZ-Pacific [5]
Trade: US$6bn
Aus/NZ-Asia
Trade: US$235bn
NZ
0.2
2.9%
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Source: 1. Global Insight; 2. Bloomberg; 3. WTO; 4. IMF; 5. ABS and Statistics NZ.

6

Super Regional connectivity provides a competitive advanta e g

Growth in trade flows and direct investment between Asia and Australia is tracking at 11% and 26% pa respectively

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Surplus savings
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There is approximately $75b in direct foreign investment into Australia from the Asian region

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Commodity
consumers
Commodity
producers
Migration &
Investment
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Natural resources account for ~$125b or ~65% of Australian and New Zealand exports to Asia

Linked through flows of trade, capital and population

Key focus is to bridge gaps across the region: Asia generates surplus liquidity, Australia and NZ generate hard and soft commodities

42% of our Corporate[*] clients depend on Asia for more than 25% of their business

Soft commodities account for ~$25b or ~12% of Australian and New Zealand exports to Asia

• Represents ANZ‟s Australian based clients with annual turnover of $40-400m

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Sources: Australian Bureau of Statistics (international direct investment positions, 2006-09), Trade Map (exports and 7 imports, 2007-2010)

Realising the full potential of Super Regional

2017 APEA sourced revenue to drive

Aspiration 25% - 30% of Group profit

• Expanded view of • The more mature our business, the greater our opportunities •

• opportunity in Increasing our footprint, customers and access to trade, liquidity APEA and investment flows

• Domestic • Regional connectivity will deliver additional revenue into

• outperformance Australia, New Zealand, Asia and the Pacific

• Centres of • Hubs provide a lower and more flexible cost base – access Excellence deeper pools of talent, provide better service with lower risk

• Focussed • Technology roadmap focused on customer facing (e.g. internet

• technology banking, goMoney) and cross-border systems (e.g. FX, Cash

• investments Management)

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8

Realising the full potential of Super Regional

2017 APEA sourced revenue to drive

Aspiration 25% - 30% of Group profit

• Continue to build depth in international management and banking experience

People

• Well defined succession planning

• Remuneration and incentives aligned to delivery of strategy and management of risk

• Risk management as a core competency

  • Increased expertise across the risk function

• Risk – Comprehensive set of asset writing strategies –

• Management Product and segment expertise – focus on sectors we know

• Customer driven rather than product focused

• Lower balance sheet intensity

• Greater balance sheet diversity

• Financial • Reduced reliance on interest income

• Management • Funding flexibility

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Growth levers - organic, partnerships and M&A

Continued Focus on Organic Growth

Leveraging Super Regional connectivity Increasing productivity Focus on core customers

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Managing the value of ANZ‟s Partnerships

Selective M&A opportunities

• Delivering access to attractive markets/ segments

• Linking partnership customers to ANZ‟s international network

• Actively managing the portfolio to optimise strategic positioning

• Dislocation in global markets continuing to create opportunities

• Consistent M&A disciplines – on strategy, delivers value, executable

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10

Emerging differentiation

• Super Regional strategy giving us greater exposure to Asia‟s growth

• Building blocks in place via both acquisition and investment in capability

• Developing stronger customer propositions

• Driving productivity gains from our hubs

• Integrating the Super Regional strategy into all our businesses

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11

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

2011 Interim Results

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Overview of financial performance

	1H11	Growth	Growth
	AUDm	vs 2H10	vs 1H10
Underlying Profit	2,818	3%	23%
Revenue	8,430	3%	11%
Expenses	3,821	3%	18%
Provisions	660	(9%)	(40%)
EPS (cents)	109.6	2%	20%
Customer deposits	268,705	4%	13%
Net loans and advances including acceptances	375,833	2%	7%
Performance by Division
Underlying Profit	1H11 $m	Growth vs 2H10	Growth vs 1H10
Australia Division (AUD)	1,962	2%	15%
Asia Pacific, Europe & America Division (USD)	396	11%	44%
New Zealand Businesses (NZD)	605	19%	63%
Institutional Division (AUD)	1,028	10%	24%

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13

Australia Division – Business update & strategy

ANZ Australia delivered a solid outcome

• Mortgages growth 1.2x system and customer deposit growth 1.6x system for the half

• Increased commercial customers - ANZ Commercial Banking customers[2] rose by 6.4% or 25.1k customers for the half

• Well advanced in Wealth business integration, launch of OnePath brand, increased management bench strength

• Targeting Asian migrant and student flows with pan-regional migrants making up ~20% of all new-to-market customers

• Leveraging links to Asia Pacific region with 169 referrals received from Asia Pacific Commercial customers in 1Q11

• Investing in customer facing technologies (e.g. internet & mobile platforms and multilingual ATMs) and group wide systems to deliver the business agenda.

Multiple of system (1H11)[1]

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Household
1.2x
lending
System
Household
customer 1.6x
deposits
- 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
Commercial deposits growth
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15%
12% 12%
10% 10%
10%
5%
-
Total Regional Business Small
Commercial Commercial Banking Business
Banking Banking
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1. Source: APRA Statistics; 2. Excluding Esanda

14

Australia Division – Retail

Trial intention

(%) transactional account trial intention[1]

… leading to customer gains

(„000s; MFI Relationship)[2]

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30
25
20
15
10
5
0
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
Peer 1 Peer 2 Peer 3 ANZ
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180
150
120 116
90 77
72
60 61
30
0
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
Peer 1 Peer 2 Peer 3 ANZ
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• PBP up 7%

• Strong trial intention and customer acquisition

• Retail deposit FUM increased 7% HOH, particularly in term deposits and savings products such as Progress Saver

• Retail deposits market share increased to 12.5% over the five months to February

• Mortgages FUM up 4% HOH while NIM increased 4 bps

• NPAT growth was adversely impacted by flood provisions over the half

1.Source: Australian Retail Brand Monitor; 2. Source: Roy Morgan 12 month moving average

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Good outcomes for Business Bank & Small Business, tougher conditions in Regional Commercial

Net interest income SBB & BB

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$m SBB Business Banking
580
550
600 524
400
200
-
1H10 2H10 1H11
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Investment in frontline FTE staff in 2H10

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2,836
2,806
2,581
1H10 2H10 1H11
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Net loans and advances incl. acceptances & customer deposits

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$b NLA Deposit
50.0 44.5 45.7 46.2
37.2
40.0 33.2 33.7
30.0
20.0
10.0
-
1H10 2H10 1H11
Customer growth
(„000s; Main Bank Relationship) [2,3,4]
20
Peer 1 Peer 2 Peer 3 ANZ
15
10
8
6
5
4
2
-
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
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1. Small Business Banking (SBB), Business Banking (BB), Regional Commercial Banking (RCB); 2. Source: DBM Business Financial Services Monitor; 3. Based on rolling 12 months average and includes businesses that have changed MFI during the last 12 months; 4. Includes customers who did not have a MFI 12 months ago (start up businesses)

16

Australia Division – Regional Commercial Banking

Credit Quality

• Higher provisions partly due to long-term stress in the sector and also specifically for extreme weather events such as the Queensland floods. Delinquency trends higher in Western Australia (prolonged drought) while full effect of Queensland (Cyclone Yasi and flooding) is yet to emerge

• Majority of collective provision overlay for Commercial is related to RCB

Business Performance

• Significant increase in deposits (up 12% HOH, 20% PCP)

• Lending down 3% HOH, flat PCP

• Revenue down 1% HOH following reduced loan growth while expenses for the half were flat.

Significant pay down of debt occurring after high agri cash inflows

Productive Loans v. Deposit FUM

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Productive Loans Deposit FUM
($b) ($b)
14.0 Pay down of 14.0
debt
13.0
12.0
$0.6b
13.0
11.0
10.0
9.0
12.0
8.0
7.0
11.0 6.0
Oct-08 Jul-09 Apr-10 Jan-11
Productive Loans Deposit FUM
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17

Australia Division – Wealth

Insurance in-force premiums

Funds Under Management

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$m
Up 12 %
1,381
1,320
1,230
1H10 2H10 1H11
General Insurance Individual Group
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$m Up 2 %
44,608 44,493 45,456
1H10 2H10 1H11
ANZ Trustees Ppty & Infra'ure. Cash and FI
Global Equities Aus. Equities
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• Integration of former INGA business on track including OnePath new brand launch

• New ANZ Wealth business created (including OnePath, Private Bank and Investment and Insurance) and management bench-strength improved

• Wealth NPAT down $41m primarily due to reduced net interest income (repayment of loans)

• Other operating income higher due to insurance book growth and favourable claims experience offsetting higher funding costs and brokerage margin tightening

• Operating expenses flat HOH

• Strong growth across the insurance segments particularly in individual life

• Funds management growth subdued in difficult market conditions coupled with business transformation

• $11m gross impact in General Insurance due to natural disasters (includes ex-gratia payments to policy holders).

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Australia Division - Super Regional capabilities rovidin differentiated sources of rowth p g g

Retail Banking across Asia Pacific:

• From Asia Pacific:

• 20% of new-to-bank customers

• Biggest Australian bank in Asia Pacific

• 1,000 customer referrals per month

• Offshore account openings

Commercial Banking across Asia Pacific:

  - More than $200b in trade flows between Aust/NZ and Asia

  - Experts in cash-flow

  - Specialist industry expertise

  - Enhanced online payments

  - Expertise in Renminbi markets

  - Stakeholder relationships across the region

• To Australia:

• Specialist migrant branches

• Language capabilities

• Multi-lingual ATMS

• Multi-lingual marketing

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Case study: Leveraging regional retail connectivity through ANZ Migrant Banking channel

By 2015 15% of the Australian population will be of Asian origin and represent over 22% of the acquirable pool of new to bank customers

• Significant acquisition opportunities exist in pre-arrival and new-arrival migrant segments

• ANZ‟s pan-regional network ensures we are well placed to identify and assist clients ahead of their planned migration

• A specialist Migrant Banking channel developed to ensure and seamless referral process across regions

• Offering supported by a new „Moving to Australia‟ online portal and account opening tool

• Currently have 18 specialist migrant branches and an additional 340 branches with targeted language capabilities, initiatives underway to increase the number of specialist branches during 2011.

Example

Shanghai

• ANZ Relationship Manager identifies referral opportunity for a client relocating to Australia for work.

ANZ Migrant Banking

Referral provided to the ANZ migrant banking team.

ANZ Migrant Banking specialist:

• Determines specific language and financial needs of client

• Commences account opening and other necessary processes

Chinatown branch Haymarket, Sydney

• Asian banking manager is introduced to client pre - departure.

• Meeting is arranged to occur upon arrival to finalise banking arrangements and address any other needs.

• Identifies appropriate branch to be primary relationship point for client.

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20

Case study: Building regional connectivity

ANZ’s regional capability connects customers and creates revenue opportunities. The following is one example out of the 169 referrals made in the first quarter:

ANZ Indonesia refers connects client with a Relationship Manager in ANZ Business Banking Australia.

An Indonesian customer contacts Manager in ANZ Business their ANZ Indonesia Commercial Banking Australia. Relationship Manager to talk about additional banking requirements they A suite of banking facilities have in Australia. including $1.2m in term debt are established.

Business Banking Relationship Manager also identifies trade requirements and connects client with a Trade Finance Specialist who arranges a further $5.5m in facilities.

Customer Indonesia RM

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Australia RM

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Trade Finance Specialist

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ANZ Commercial Asia Presence

ANZ Commercial Australia

ANZ Institutional Expertise

ANZ Commercial presence in 14 Asian markets with access to 281 Commercial frontline staff • China • Indonesia • Vietnam • Hong Kong • Malaysia • Taiwan • South Korea • Thailand • Philippines • Japan • India • Laos • Singapore • Cambodia

Access to 1.5k frontline staff across: • 814 branches • 202 business centres Specialists in: • Agribusiness • Property • Asset Finance

Leverage ANZ Institutional’s Asian Trade Finance and Markets expertise

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Best Trade Bank in Trade Finance House of Australia & the the Year (‟08, ‟09, ‟10) Pacific (2009)

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21

APEA - Business update and strategy

The APEA business continues to grow via organic build of customer relationships and core capabilities, and inter-connectivity across the network, together with Partnerships

Performance Highlights

• APEA derived revenue delivers an additional 3% of Group revenues over revenues earned in the APEA geography

• 6[th] in Asia-Pacific ex-Japan DCM market

• Five-fold increase in Wealth AUM PCP

Focused investment and increased cost efficiency drives continued revenue and profit growth

• Positive jaws despite high revenue growth and continued investment, including local incorporation in China, India branch build, further investment in Partnerships, and rollout of platforms such as Transactive Asia

Institutional business continuing to grow…

• Continuing to grow customer base and client penetration through increasing industry focus, build out of regional product suite and improved of relationship management

• Accelerating „catch' and „throw' model to capitalise on multi-national companies increasing business to/from Asia

…while Retail & Wealth, Private Bank and Commercial businesses growing in target segments

• RBS integration nearing completion - over 2.4m customers in Asia

• Launched Signature Priority Banking proposition in 8 countries

• Commercial build out focusing on customer acquisition and increasing management bench strength

• Growth in deposits a priority

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22

APEA Division overview

Pro forma revenue & expenses

1H11 revenue by geography

(USD m)

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2,500
2,094
2,000
1,500 1,268
1,214
1,023 1,071
1,000 730
641
573
500
0
FY10 1H10 2H10 1H11
Revenue Expenses
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Pro forma NPAT

(USD m)

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700
615
600
500
385
400 335
280
300
200
100
0
FY10 1H10 2H10 1H11
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14% South East Asia
36% North East Asia
12%
Pacific
38% Europe & America
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1H11 revenue by business

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36%
Institutional
12%
Retail
Asia Partnerships
52%
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APEA Institutional

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Pro forma
Growth Rates
Revenue
30% 29%
HOH PCP
Expenses
37%
15%
HOH PCP
Provisions
69%
-56%
HOH PCP
Net Profit after Tax
41%
28%
HOH PCP
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APEA Institutional revenue
driven by Asia
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Strong contribution by Global Markets

Underlying revenue (USD ‘000)

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9% 800 FY09 benefited
Asia from increased
13% market
600
volatility
9% Europe
400
America 200
68%
0
Pacific
FY08 FY09 FY10 1H102 2H10 1H11
Trading Sales
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Continue momentum across the region

• ~600 new clients over last 12 months[1]

• 23% lending growth and 28% deposit growth in 1H11

• Revenue contribution to Global Institutional increased to 26%

Ongoing investment in capability

• Global Markets platform and footprint

• ANZ Transactive cash management platform launched, with Singapore and Hong Kong on-line later this year

• Core banking platform development

• ~50 new products deployed into region

Increasing footprint, building connectivity

• Continue to invest in front line staff

• Expanding footprint in China, India, London and New York

• Continue to develop key markets of Indonesia, Singapore, Hong Kong and Japan

Ongoing sales momentum

• Industry specialisation

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• Focus on product cross-sell and capturing intra Asia flows

• Diversifying business mix

24

1. APEA includes Commercial Bank

APEA Retail & Wealth

Pro forma Growth Rates

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Revenue
18%
14%
HOH PCP
Expenses
17%
7%
HOH PCP
Provisions
-64%
-66%
HOH PCP
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Net Profit after Tax
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large
large
HOH PCP
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Growth momentum in Asian Significant customer Wealth AUM[1] build-out

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USD m Customer Numbers (‘000)
Includes 5,248 5,838 accounts from Includes 4316 4206
accounts from
RBS acquisition
RBS acquisition
5
433 2,037 2,058
1,439
715
1H10 2H10 1H11 1H10 2H10 1H11
R&W Asia2 R&W Pacific2 Private Bank
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Strong revenue growth in chosen customer segments

• 14% revenue increase HOH; positive JAWS

• Wealth AUM increased 11% HOH

• Focused acquisition on target segments; closed 82,500 accounts HOH

Customer Centricity

• Launched Signature Priority Banking in 6 Asian and 2 Pacific Countries

• Revamped sales incentive scheme - focus on customer satisfaction

• Expanded wealth management products (added 700+ products HOH)

• Launched mortgages in Singapore, Taiwan & Indonesia

Connectivity

• Focus on deposits / cross-sell of wealth management products

• Leveraging of strategic partnerships, e.g. Singapore Airlines

Channels

• Updated website look-and-feel

• Established standardised service levels for call centres

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• Launched mobile banking application on iPhone in Taiwan

25

1. Assets Under Management (AUM); 2. Retail & Wealth (R&W);

Asia Partnerships' contribution continues to be significant

Partnership contribution to APEA NPAT

Growth in value in Partnerships ANZ share as at (31 March 2011)

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USD m USD b
200 5
Listed investment Unlisted investment
Others
4
150
BoT
Panin 3
100
AMMB
2
SRCB
50
1
Sacombank
- Impacted by write-down of 0
investment in Sacombank Net cash Current book Current book +
principally due to a decline investment value additional market
in the Vietnamese currency
value of listed
-50 1H11
partners
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Profit contribution remained significant

• Sacombank impairment charge taken in 1H11 with weak Vietnamese Dong and share price

Driving outperformance

• Continue to add value to Partnerships through infusion of ANZ talent and skills to “outperform”

• Key Partnerships delivering majority of profit

• Invest in expansion opportunities at appropriate times and as price, policy and regulations allow

• Note: AMMB Holdings Berhad (AMMB), Shanghai Rural Commercial Bank (SRCB), P.T. Bank Pan Indonesia (Panin), Bank of Tianjin (BoT) and Saigon Thung Tin Commercial Joint-Stock Bank (Sacombank)

26

New Zealand – simplifying structure, systems and processes

Simplifying our structure to be more customer focused

• Management structure change will deliver greater external focus and faster decision making while reducing costs

• Moved from six national management structures to three across Retail, Business Banking and Commercial & Agri

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• Business Banking now a standalone specialist business

• Commercial and Rural Businesses merged to form Commercial & Agri, broadens service provided to agricultural sector

• Four distinct regions created & aligned across segments to bring decision making closer to customer

Simplifying systems, products and processes

• Moving to a single technology platform will drive efficiencies and improve customer experience

• A NZD98 million post tax significant item charge related to this project is reflected in the half year accounts

• Single refreshed core banking platform & single set of channel platforms

• Removing product duplication to provide a simplified, market competitive product suite

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27

New Zealand Businesses – Revenue composition

NZ Businesses Pro forma Revenue Composition (NZDm)

Mortgage portfolio composition

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NZDm
1,600 2.50%
2.45%
1,400
2.40%
1,200
2.35%
1,000 2.30%
2.25%
800
2.20%
600 2.15%
2.10%
400
2.05%
200
2.00%
0 1.95%
1H09 2H09 1H10 2H10 1H11
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NII (LHS) Other operating income (LHS) NZ Bus NIM (RHS)

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100%
23% 23%
32%
80% 42%
54%
60%
40% 77% 77%
68%
58%
20% 46%
0%
1H09 2H09 1H10 2H10 1H11
% Fixed % Variable
Mortgage portfolio repricing profile
% of portfolio repriced
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100%
100% 97%
88%
80% 73%
60%
40%
40%
20%
0%
FY09 FY10 FY11 FY12 FY13
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28

New Zealand – Retail & Wealth

Well managed business in a subdued economy

• Strong NPAT growth driven by significant decline in provisions both HoH and PCP

• Revenue has absorbed ~1% PCP impact of exception fee reductions effective 1st December 2009

• Expenses well managed down 4% HoH

• Share of new mortgage business increasing in <80% LVR market

• The ongoing repricing of the Fixed Mortgage book estimated 73% complete at FY10 with a further 15% to reprice during FY11

• Integration of OnePath into Wealth business progressing well - 20% share of new life risk business for the March quarter, market-leading KiwiSaver provided with $1.95b FUM and 24% market share

Changes to fees and launching market leading products has restored customer growth

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Main Bank Customers
Thousands
(Seasonally Adjusted)
1,210
1,205
1,200
1,195
1,190
1,185
1,180
1,175
1,170
Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
08 08 08 09 09 09 09 10 10 10 10
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ANZ brand customer satisfaction at historic highs[1]

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100%
89%
85% 85%
80%
60%
40%
20%
0%
1Q09 1Q10 1Q11
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1. Nielsen CFM survey

29

New Zealand – Commercial & Agri

Successful consolidation of the Agri division into Commercial division now better placed to support customers growth

• New Zealand Commercial business now comprises of Commercial division, Agri division and Business Banking

• Guiding customers through the current challenging economic cycle via customer learning forums

• Super Regional strategy continues to support New Zealand business‟ regional growth aspirations, e.g. Transactive platform enables seamless Trans-Tasman banking; first Australasian bank to complete Chinese RMB deal

• Reduction in lending due to increased Fonterra payouts, and continued debt reduction in market

• Maintaining good cost management disciplines

Activity Outlook Index[1]

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----- Start of picture text -----

60
50
40
30
20
10
0
-10
-20
-30
-40
Total Agriculture Manufacturing
Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11
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• 2 National Bank Business Outlook March 2011

• ANZ National Bank

Dairy Milk Payout/Price[2]

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----- Start of picture text -----

$ per kg MS.
8.0
6.0
4.0
2.0
0.0
Oct Oct Oct Oct Oct Oct Oct Oct Oct
02 03 04 05 06 07 08 09 10
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30

New Zealand – Business Banking

Establishment of a standalone specialist business bringing a new level of focus to managing small business customers

• FUM and revenue growth solid in a subdued market

• Strong NPAT growth and a significant decline in provisions evident in the HoH and PCP outcomes

• Investment in frontline roles to grow the business has been managed through other cost savings, leaving expenses largely flat

• Customer Satisfaction has improved across both Brands in the last 6 months[1]

One third of the SME market in NZ has a banking relationship with ANZ[1]

Business Banking has seen steady growth in customer numbers over the half year

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32%
21% 20%
15%
ANZ/NBNZ Peer 1 Peer 2 Peer 3
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101,600

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----- Start of picture text -----

101,400
101,200
101,000
100,800
100,600
100,400
100,200
Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11
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1. Source: TNS Conversa

31

Institutional Division

Making Clear Progress on our Strategy

Growing connectivity driven revenue

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----- Start of picture text -----

Domestic
Booked Cross
Border
78% Cross border
22%
revenues
up 10% PCP
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• Growing our client base and diversifying our geographic mix:

• Brought on 676 new Institutional, Corporate and Financial Institutions clients in the past half, a 10% increase HOH

• ANZ recognised as “One of the Fastest-growing corporate banks in Asia” in the Greenwich Associates‟ 2011 Large Corporate Banking Survey

• 28% of total lending now in APEA, up from 21% in 2009

• Investing in support infrastructure:

• ANZ Transactive Trans-Tasman cash management platform launched, with Singapore and Hong Kong on-line later this year – 3,241 client sites activated for ANZ Transactive in Australia and New Zealand

Growing and diversifying regional client base Geographic Mix of new clients won past 12 months

• New capabilities have been introduced including new FX liquidity and rates platforms

• Core Market Risk and Credit Risk capabilities are in the process of being enhanced

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----- Start of picture text -----

16% Australia
Asia
20%
New Zealand
60%
4%
Europe & America
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• Strengthening our relationships:

• Further strengthened our position in Australia and New Zealand relationships as measured by Peter Lee Associates[1]

• Making progress in our priority sectors of resources, agriculture and infrastructure:

• Lead Arranger and book-runner for Woodside‟s $1bn Syndicated Term Loan Facility

• Sole arranger of AUD475m Emerald grain repurchase syndication

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1. Based on ANZ‟s Relationship Strength Index scores in the Peter Lee Associates Large Corporate and Institutional Relationship Banking Survey – Australia and New Zealand 2009 and 2010.

32

Institutional - laying foundations for the future

Foundations Laid

• Strengthened the Institutional Leadership Team, additional team members with international experience

• Starting to execute the technology and operations roadmap

• Improving capital discipline

• Exiting non-core businesses

• Delivering record pre provision profits

• Substantive progress in remediation completion

Clear Goals Set

• To become the bank of choice for Resources, Agribusiness and Infrastructure in the region

• Building leading cash, trade and markets platforms with capabilities across Australia, New Zealand and Asia

• Building out new (material) revenue streams in transaction banking, trade, FX, DCM and commodities, relative to our historic reliance on rates, balance sheet trading and lending

Revenue Contribution by Product

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1H11 Mix Target Mix
22%23%
40%
38% 40% 40%
38%
39%
20%20%
Global Loans
Global Markets
Transaction Banking
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• Targeting significant growth in customer relationships

• Generating well balanced and sustainable earnings across geographies and segments

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33

Priority segments

• Well positioned to develop a super regional natural resources business linking Australian producers with Asian processors and consumers

Natural

Resources

• Strong Australian natural resources client base and an established and growing network in Australia

• Clients of our natural resources group account for 4% of our Risk Weighted Assets

• The weighted average client credit rating (CCR) of our natural resources client base is 4.3

Agriculture

• Growing demand from Asia for soft commodities

• Primary emphasis on providing Markets, Working Capital and supply chain solutions

• Focus on capturing an increased share of clients‟ wallet as well as banking selected new names

Financial Institutions

&

Public Sector

• Maintain dominant position in Australia and NZ and invest selectively in Asia

Infrastructure

• Infrastructure specialists, by adding Advisory, Equity placement, underwriting and DCM to lending and markets capabilities

• Focus on power and utilities corresponding with Asia demand in this category

• Segments include Power & Utilities, Economic Infrastructure (roads, airports etc) and Availability Infrastructure

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34

Priority products – Cash management & Trade

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----- Start of picture text -----

ANZ Transactive
Monthly Transaction Volumes
2,500,000 8,000
7,000
2,000,000
6,000
5,000
1,500,000
4,000
1,000,000
3,000
2,000
500,000
1,000
0 0
Nov-09 May-10 Nov-10
Australia (LHS) Asia (RHS)
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Payments & Cash Management

• Vision to be a lead provider of pan-regional cash management solutions via a single transactional interface

• Launched ANZ Transactive across Australia in January 2009 and Trans-Tasman platform February 2011

• ANZ Transactive Asia also launched into eight Asian countries during 1H11, and currently has ~3,500 registered clients

• ANZ Transactive monthly transaction volumes up 27% in the first half of 2011

Trade & Supply Chain

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Total Trade Exposures
AUDb
Funded & Unfunded
35
30
25
20
15
10
5
0
1H10 2H10 1H11
Asia Australia NZ E&A
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• Support trade flows in core operating geographies by building on strong market position in Australia and establish presence as a trade bank in Asia

• Awarded best trade bank in Australia by Global Finance, Insto and Global Trade Review magazines

• One of the Top 5 trade banks in the Asia Pacific region

• Completed AUD475M Syndicated Warehouse Finance Repurchase Facility - the first ever in the global market place

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35

Priority products – Global Markets

Regional Rates and FX

Borrowers

Seeking access to low cost capital and related hedging

• Corporates

• Financial Institutions

• Public sector

• Largest domestic markets business

• Aus/NZ/Pacific Niche, opportunity to expand into Asian currencies & clients (to become Asian USD specialist)

• FX revenues growing at 40% p.a since 2007

• Rates revenues growing at 75% p.a since 2006

• 5 key rates components & natural growth opportunities: hedging client interest rates, hedging client currency futures and swaps, selling investors Gvt. and Semi Gvt. Bonds, rates and credit trading, and managing ANZ‟s balance sheet

Global Markets

• Research and advice

• Loan syndication

• Bonds

• Securitisation

• Hedging

Debt Capital Markets

• Uniquely positioned with Super Regional strategy, with significant Asian Capital Market revenue pools

• Borrower / investor multiplier effect

• We raise more debt capital in Asia for Australian and New Zealand borrowers than anyone else

Investors

Commodities

• Commodity revenue split:

Seeking diverse and quality credit exposure

• Wholesale (funds

• insurers)

• Public sector

• Hedging exposures of commodity producers and consumers ~60% of revenue

• Trading customer flows ~40%

• Growth opportunities include capturing hedging opportunities in domestic agri/middle market and commodity consumers in Asia

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36

Institutional - Our future focus

The best bank in the world for clients with trade and capital flows across the region, particularly for those in the Natural Resources, Agriculture and Infrastructure sectors

• Supported by an expanded FI business, with more income from Funds, and with less reliance on the Property sector

A more balanced and more annuity-like portfolio in terms of products and geographic coverage

• A top 4 regional Trade bank

• A regionally connected online cash platform across 15 markets

• A top 3 provider of AUD, NZD FX and Rates and a top 10 provider of local Asian FX and Rates for regional Corporate clients

• A top 3 debt issuer in Australia, Hong Kong and Singapore with US PP capability

• Strong commodities and equities businesses, generating ~$300m in revenues between them

• A lower reliance on Lending and Trading

3-5 markets beyond Australia and NZ with more than 5% market share and a broader footprint beyond Asia to serve our priority clients

• Retain our leadership position in Australia and NZ

• Focus on 8 priority markets in Asia (Greater China, India, Singapore, Indonesia, Korea, Malaysia – targeting more than $100m in NPAT)

• Rep offices in ~3 new markets

• 40%+ of „total effort revenues‟ from cross-border

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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Treasury

ANZ well capitalised and positioned to manage transition to Basel III

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Basel II Basel III – Core Tier 1
~15.5%
~14.1%
13.0%
12.1%
11.9%
10.7%
10.5% ~9.5% ~9.5%
10.1%
Core
~8.3% ~8.5% Tier 1
~7.7% surplus
over
7.0%
~7.4%
~7.0%
Capital
Buffer ~11.8%
2.5%
Additional Basel 3 Full alignment to
8.5% 8.5%
8.0% requirements ~ -150bps Basel ~ +250bps
Minimum
Target
4.5%
Mar-10 Sep-10 Mar-11 Core Tier-1 Higher RWA 10%/15% Dividend DTA incl. in RWA: IRRBB Mar-11 FSA Mar-11
Deduction Charges threshold accrual,net EL v EP & Basel III Minimum
(Insur,banking (market & insur,assoc, capitalised deduction+ mortgage Core Tier-1
assoc,ELvEP) credit risk, DTA expenses+ LGDs Ratio Target:
securitisation) 4.5%
Core Tier 1 Tier-1 Total
excludes impact of BIII liquidity reforms in RWA
+includes increase in 10% threshold insurance & associates
39
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Tier-1 position continues to strengthen with solid organic capital generation

Capital Position (Tier-1 Ratio)

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~14.1
~11.3
1.06 (0.37)
(0.11) (0.10) (0.07) 10.51
10.10
Portfolio growth & mix: 18bp decrease
Risk Migration: 8bp increase
Non credit RWA: 1bp decrease
net organic up 48bp
up 41bp
Sep-10 NPAT(1) Dividend/ RWA Other(4) Investments Mar-11 Mar-11 Basel Mar-11 FSA
DRP(2) movement(3) III(5)
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1. Underlying NPAT. 2. Includes prior period under-accrual of DRP . 3.Includes impact of movement in Expected Loss versus Eligible Provision excess. 4. Includes OnePath Insurance Business, Asian Banking Associates, Non-Core NPAT items, Capitalised Costs and Software, FX, Net Deferred Tax Assets, Pensions, MTM gains on own name included in profit. 5. Includes 10% reduction in hybrid Tier-1 volumes.

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40

Solid organic capital generation underpins strong Core Tier-1 position

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Capital Position (Core Tier-1 Ratio)
~11.8
~9.5
1.06 (0.37)
(0.09) (0.09) (0.07) 8.49
8.05
Portfolio Growth & mix: 15bp decrease
Risk Migration: 7bp increase
Non credit RWA: 1bp decrease
net organic up 51bp
up 44bp
Sep-10 NPAT(1) Dividend/ RWA Other(4) Investments Mar-11 Mar-11 Basel III Mar-11 FSA
DRP(2) movement(3)
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1. Underlying NPAT. 2. Includes prior period under-accrual of DRP . 3.Includes impact of movement in Expected Loss versus Eligible Provision excess. 4. Includes OnePath Insurance Business, Asian Banking Associates, Non-Core NPAT items, Capitalised Costs and Software, FX, Net Deferred Tax Assets, Pensions, MTM gains on own name included in profit

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41

Reconciliation of ANZ’s capital position to FSA Basel 2 guidelines

APRA regulations are more conservative than current FSA regulations, in that APRA requires:

• A 20% Loss Given Default floor for mortgages (FSA: 10% floor)

• Interest Rate Risk in the Banking Book (IRRBB) included in Pillar I risks (FSA: Pillar II)

• Capital deductions for investments in funds management subsidiaries (FSA: RWA assets)

• Insurance subsidiaries to be a mixture of Tier 1 and Tier 2 deductions (FSA: transitional regulations permit Total Capital deductions under certain circumstances)

• Expected dividend payments (net of dividend reinvestments) to be deducted from Tier-1 (FSA: no deduction)

• Collective Provision to be net of tax when calculating EL v EP deduction (FSA: tax effect difference between EL and EP on gross basis)

• Associates to be a mixture of Tier-1 and Tier-2 deductions (FSA: permits proportional consolidation under certain circumstances)

	Core Tier-1	Tier 1	Total Capital
Mar-11 under APRA standards	8.5%	10.5%	12.1%
RWA (Mortgages, IRRBB)	1.4%	1.6%	1.8%
OnePath Funds Management and Life Co. businesses	0.9%	0.9%	0.3%
Interim dividend accrued net of DRP & BOP	0.4%	0.4%	0.4%
Expected Losses v Eligible Provision	0.2%	0.2%	0.3%
Insurance subsidiaries (excluding OnePath businesses)	0.2%	0.2%	0.0%
Investment in associates	0.2%	0.2%	0.4%
Other1	0.0%	0.1%	0.2%
Total adjustments	3.3%	3.6%	3.4%
Mar-11 FSA equivalent ratio	11.8%	14.1%	15.5%

1. Other includes Net Deferred Tax Assets, Capitalised Expenses, Deferred Income and roundings.

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42

Stable term debt issuance, portfolio costs continue to increase

Stable term funding profile

Portfolio term funding costs continue to increase as pre 2008 debt reprices

Senior Debt Government Guarantee 1 Subordinated Debt Pre funded in FY10

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1 Bps
Subordinated Debt Pre funded in FY10
140.0
30.0 Issuance Maturities
120.0
25.0
100.0
20.0
80.0
15.0
60.0
10.0
40.0
5.0
20.0
0.0 0.0
Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep
05 06 07 08 09 10 11 12 13 14
Excludes perpetual debt
43
FY08 FY09 FY10 FY11 YTD FY 11 FY12 FY13 FY14 FY15+
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1 Excludes perpetual debt

ANZ’s has a well diversified and improved funding profile 85% of FY11 term funding task complete as at May 2011 Strong Funding Composition Minimal offshore short-term wholesale funding;

Minimal offshore short-term wholesale funding; Offshore CP accounts for <2% (~$8.6b)

Short Term Wholesale Customer Funding Funding Shareholders equity & Term Debt < 1 year Hybrid debt Residual Maturity Term Debt > 1 year Residual Maturity

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Gross Interbank, Other
2%
1% APEA CDs
2% Equity/
11% Hybrids Offshore CP
8%
6%
Domestic CDs
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----- Start of picture text -----

12% 11%
17%
22%
6% 6%
5%
7% 16% 15%
15%
14%
58% 60%
55%
50%
7% 8% 8% 8%
Sep 08 Sep 09 Sep 10 Mar 11
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Well diversified term wholesale funding portfolio

Offshore PPs (Multi ccy 4% incl. HKD,SGD,RMB) 2% Japan (¥) 4% 21% UK & Europe (€,£,CHF) 5% North America (USD, CAD) 6% Domestic (AUD, NZD)

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44

Solid Liquidity position however B3 liquidity requirements remain uncertain

Strong liquidity position ($b)

Recent Basel III Developments

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----- Start of picture text -----

7.8
28.2
3.2
7.7
66.7 67.0
60.2
34.7
31.1
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• The implementation of the new B3 liquidity requirements remains subject to consultation and clarification

• Key Definitions including Financial Institutions and Operational Deposits remain outstanding and are likely to be clarified by APRA later in 2011

• Given the lack of eligible liquid assets in Australia, APRA will allow banks to meet their LCR requirements through a committed liquidity facility at the RBA backed by repo eligible stock

• The banks will pay a fee for this facility in line with cost of holding B3 eligible liquid assets

Sep 08 Sep 09 Sep 10 Mar 11 Mar 11

Timing / Next steps

Prime Liquidity Portfolio

Other Eligible Securities

Class 1 – AAA & Cash Class 2 – AA or better

Class 3 – Internal RMBS

• Extended transition period with implementation of the LCR expected in 2015

• Final quantum of the LCR shortfall will depend on exact definitions adopted and product innovation and development during the transition period

• Expected NSFR implementation in 2018

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45

Foreign Exchange impacts

Earnings Composition by Region & Average Translation Rates

% Group
Underlying
Profit
90% 100%												1.30 1.40
80%
												1.20
70%
60%												1.10
40% 50%												0.90 1.00
30%
20%												0.80
10%												0.70
0%												0.60
			2H09		1H10		2H10			1H11
APEA			(LHS)					New Zealand				(LHS)
Australia (LHS)								AVG AUD/USD (RHS)
AVG		AUD/NZD (RHS)

EPS Impact

Current Hedging Unhedged

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----- Start of picture text -----

~(3.1%)
~(1.5%)
FY11 PCP
@Current rates
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----- Start of picture text -----

(2.5%)
(1.9%)
1H11 HoH
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• Hedge profits partially mitigated the impact of AUD strength on 1H11 earnings

• For 2H11, hedges are in place to cover ~60% of NZD, USD and other significant currencies - each 5% appreciation of the AUD negatively impacts FY11 EPS by ~0.3%

• FY12 FX headwind estimated to be ~1%, with ~60% of USD and other significant currency exposures hedged at an equivalent AUD/USD rate of 0.97, however only modest NZD hedges in place

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46

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Risk Management

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Provision Charge and Impaired Assets

Total Provision Charge (IP charge by Division, total CP charge)

New Impaired Assets by Division

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----- Start of picture text -----

$m
$m
1,800 4,000
1,621
3,600
1,435
1,600 3,500
3,126
3,035
1,400
3,000
1,200 1,098 2,437
2,500 2,319
1,000 Oswal
2,000
722
800
660
1,500
600
1,000
400
500
200
0 0
1H09 2H09 1H10 2H10 1H11
-200
1H09 2H09 1H10 2H10 1H11
Institutional Australia Division NZ Businesses APEA ex-Institutional CP charge
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48

Individual Provision Charge

Individual Provision Charge by Segment

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----- Start of picture text -----

$m
2,000
1,800
1,531
1,600
1,400 1,283
1,200 1,062
1,000
762
800
594
600
400
200
0
1H09 2H09 1H10 2H10 1H11
Institutional Commercial Consumer
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Individual Provision Charge composition

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----- Start of picture text -----

$m
2,000 1,531
1,283
1,062
1,500 762
594
1,000
500
0
-500
1H09 2H09 1H10 2H10 1H11
New Increased Writebacks & Recoveries
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Individual Provision Charge by Region

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----- Start of picture text -----

$m
2,000
1,531
1,283
1,500
1,062
1,000 762
594
500
0
1H09 2H09 1H10 2H10 1H11
Australia New Zealand APEA
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49

Collective Provision Charge

Collective Provision Charge by Source

-400 -300 -200 -100 0 100 200 300 400 500 $m	Lending Growth	Lending Growth		Economic Cycle &	Concentration	Concentration	Concentration	Concentration		Risk Profile	Risk Profile	Risk Profile	Risk Profile	Risk Profile
				2H10 1H11
					Total Group			Australia Division			New Zealand Businesses		Global Institutional			APEA (ex-Inst.)
					66			116				(46)	5			(9)
					60 56 -34 -16			16					29			12 -20 -1
								79				-1
								21				-19
													-9
		1H09 2H09 1H10

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50

Credit Risk Weighted Assets

Total Credit Risk Weighted Assets

Credit RWA movement 1H11

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----- Start of picture text -----

$b $b
257.8
4.6
233.5 233.2 233.5 0.1 233.2
229.8
3.7
220.4
1.1
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 10 Growth Data FX Risk Mar 11
Review Impact
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51

Impaired Assets

Gross Impaired Assets by Size of Exposure

Gross Impaired Assets by Type

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----- Start of picture text -----

$m
$m
8,000
Impaired Loans NPCCD Restructured 6,561 6,561
6,221
5,595
6,000
8,000 4,158
4,000
7,000 6,561
6,561 2,000
6,221
0
6,000 5,595 Oswal
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11
> $100m $10-$99m < $10m
5,000
4,158
New Impaired Assets by Segment
4,000
$m
4,000 3,600
3,000 3,126
3,035
3,000
2,319 2,437
2,000
2,000
1,000 1,000
0
0
1H09 2H09 1H10 2H10 1H11
Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Institutional Commercial Retail
----- End of picture text -----

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----- Start of picture text -----

4,000 3,600
3,126
3,035
3,000
2,319 2,437
2,000
1,000 Oswal
0
1H09 2H09 1H10 2H10 1H11
Institutional Commercial Retail
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52

Watch & Control Lists and Risk Grade Profiles

Watch & Control List

Index Watch List by Limits Mar 2009 Watch List by No. Groups = 100 Control List by Limits Control List by No. Groups 180 160 140 120 100 80 60 40 20 0 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11

Group Risk Grade profile by Exposure at Default

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----- Start of picture text -----

6% 6% 6% 6%
9% 9% 9% 8%
13% 13% 13% 12%
13% 13% 14% 14%
59% 59% 58% 60%
Sep 09 Mar 10 Sep 10 Mar 11
AAA to BBB BBB- BB+ to BB BB- >BB-
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53

Commercial Industry Exposures

Finance & Insurance

Property Services

Manufacturing

0 20 40 60 80	0% 2% 4% 6% 8% 10% 12% 14%	0% 2% 4% 6% 8% 10% 12% 14%	0% 2% 4% 6% 8% 10% 12% 14%	0% 2% 4% 6% 8% 10% 12% 14%

Mar 10 Sep 10 Mar 11

0 20 40 60 80	0% 2% 4% 6% 8% 10% 12% 14% Mar 10 Sep 10 Mar 11 0 20 40 60 80	0% 2% 4% 6% 8% 10% 12% 14% Mar 10 Sep 10 Mar 11

Agri, Forestry & Fishing

Wholesale Trade

Other Commercial Exposures

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----- Start of picture text -----

120 24%
100 20%
80 16%
60 12%
40 8%
20 4%
0 0%
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0 20 40 60			0% 2% 4% 6% 8% 10% 12%

0 20 40 60 80					0% 2% 4% 6% 8% 10% 12% 14%

Mar 10 Sep 10 Mar 11

Mar 10 Sep 10 Mar 11

Mar 10 Sep 10 Mar 11

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Exposure at Default ($b) (LHS) % in Non-Performing (RHS)

% of Group Portfolio (RHS)

54

Australia 90+ Day Delinquencies

Australia Retail 90+ day delinquencies

Mortgage Delinquencies

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----- Start of picture text -----

Total Mortgage Portfolio
NSW & ACT Mortgages
1.50% QLD Mortgages
VIC Mortgages
WA Mortgages
Total Credit Cards
1.00%
0.50%
0.00%
Sep 07 Sep 08 Sep 09 Sep 10
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• South East Queensland – higher than national average unemployment, impacted by stronger AUD (tourism), natural disasters

• 2008 vintage greater propensity for stress

• Credit underwriting tightened considerably at the end of 2008 and ANZ took a more cautious approach to volume in 2009

Mortgage loss rates

Individual Provision Loss Rates

1H09 2H09 1H10 2H10 1H11 Group 0.85% 0.74% 0.61% 0.42% 0.31% Australia Region 1.03% 0.72% 0.59% 0.42% 0.31% Australia Mortgages 0.03% 0.02% 0.02% 0.01% 0.01%

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55

Australia Mortgages

Portfolio Statistics	Portfolio Statistics
Total Number of Mortgage Accounts	831k
Total Mortgage FUM	$165b
% of Total Australian Lending	59%
% of Total Group Lending	44%
Owner occupied loans - % of portfolio	64%
Average Loan Size at Origination	$227k
Average LVR at Origination	63%
Average Dynamic LVR of Portfolio	47%
% of Portfolio Ahead on Repayments	38%
First Home Owners – % of Portfolio	11%
First Home Owners – % of New lending 1H11	7%

Dynamic Loan to Valuation Ratio

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% Portfolio
60%
March 2009
50% 19% >80% LVR
40% March 2011
11% >80% LVR
30%
20%
11%
9% 8%
10%
2%
0%
0-60% 61-75% 76-80% 81%-90% 91%+
Mar 2009 Mar 2010 Mar 2011
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Mortgage Portfolio by State
(Mar 2011)
NSW & ACT
27%
16% QLD
VIC
10%
20%
WA
27%
OTHER
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56

Australia Commercial

Australia Commercial 90+ day delinquencies

Regional Commercial Banking 90+ day delinquencies

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3.00% RCB Total Agri Other Commercial
Business Banking 3.00%
Regional Commercial Banking 2.50%
2.50%
Esanda 2.00%
Small Business Banking 1.50%
1.00%
2.00%
0.50%
0.00%
1.50% Jan-10 May-10 Sep-10 Jan-11
Australia Commercial Lending Mix
1.00%
Business Banking
31%
Regional Commercial Banking
0.50%
29%
Esanda
7%
33% Small Business Banking
0.00%
Sep-07 Sep-08 Sep-09 Sep-10
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57

The Queensland economy faced challenges before the onset of natural disasters

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Unemployment did not experience the Tourism flows have been declining
level of decline experienced in the impacted by a strong AUD
national average
% 2,000 0.40
Net Tourism (lhs)
9.0 0.50
AUD/USD (rhs)
Australia 1,000 0.60
0.70
8.0 Queensland -
0.80
0.90
-1,000
7.0 1.00
-2,000 1.10
2000 2002 2004 2006 2008 2010
6.0
Mining is a key driver of economy but
less significant than in WA
5.0
Mining as % of Total Industry
4.0
30%
14%
3.0
2001 2003 2005 2007 2009 2011 QLD WA
(„000)
AUD/USD Inverted
Net Tourism Annual Rolling Sum
Level of unemployment
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Mining as % of Total Industry
30%
14%
QLD WA
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58

New Zealand

Total Impaired Assets

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NZDm
2.31%
2.13%
1.89% 2,236
2,079
1,837
1.24%
1,220
0.64%
639
Mar 09 Sep 09 Mar 10 Sep 10 Mar 10
Impaired Assets IA as % GLA
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Total Provision Charge

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NZDm
800
598
600
330
400 291
131
85
200
0
-200
1H09 2H09 1H10 2H10 1H11
IP Charge CP Charge
90+ Days Arrears
1.20% Mortgages
Commercial
Rural
0.80%
0.40%
0.00%
2007 2008 2009 2010 2011
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59

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Economic Update

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Record terms of trade will drive investment and economic growth

Annual private business capital expenditure (capex), actual and expected

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120
Early estimates indicate
Mining Manufacturing Other industries a $100bn mining capex
spike in 2011-12
100
80
60
40
20
0
05-06 06-07 07-08 08-09 09-10 10-11 (est. 11-12 (est.
5) 1)
Estimates based on 5 year average realisation ratios
$bn p.a., nominal
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Sources: ABS and ANZ

61

A strong outlook for natural resources investment

Advanced minerals and energy projects, April 2011

Source - Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

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62

The material in this presentation is general background information about the Bank‟s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ‟s business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words

“estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

For further information visit

www.anz.com

or contact

Jill Craig Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 9977 e-mail: jill.craig@anz.com

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