Australia and New Zealand Banking Group Ltd. — Interim / Quarterly Report 2014

May 7, 2014

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

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Banking on Australia is transforming the business

Building our lead in mobile & digital

• Expanding customer reach and deepening loyalty

• New mobile & digital foundations

• Rapid evolution of our market leading applications

Transforming our distribution channels

Retail

Corporate & Commercial Banking

• Transforming branches and contact centres to focus on more complex sales

• Multi-channel connectivity

• Migrating low value transactions to self service

• Using our super regional advantage to bring whole of ANZ

• • Providing market leading banker tools & centralised service

• Offering deep industry insight

Simplifying our products & process

Accelerating through customer insights

• Digitising and automating

• Paperless processing

• Simplifying product range

• New information platforms

• Single customer view enabled

• Insight driven offers

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We have made significant progress over 18 months since Bankin on Australia’s ince tion… g p

Building our lead in mobile & digital

Transforming our distribution channels

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>53% Customers that are digital users 1.1m ANZ goMoney[TM] active users  43%[goMoney][TM][ and Internet Banking ] logins[1] Transactions processed on $78b goMoney[TM 2]

400+ Smart ATMs 85 New look sales focused branches  9% Over the Counter transactions Branches offering simple wealth 600+ products 1,200[iPads (with 8 apps) deployed to ] C&CB bankers Building the capability of our people & systems

 43% ANZ FastPay[TM] transactions[3] Simplifying our products & processes

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Branch sales staff accredited to 69% sell home loans 1,500+[Branch staff accredited to sell ] Wealth products 1,600+[Branch staff trained to sell small ] business products Frontline C&CB staff with 32% experience in key Asian markets  13% Wealth revenue via Retail[4]  120%[C&CB Cross-border referrals ] from Australia to Asia[5 ]

 24%[Reduction in average monthly ] customer complaints[6 ]  110k[Net increase in customers across ] Retail and C&CB[7 ] 36k Digital C&CB A-Z Reviews[8 ]  20%[Increase in time frontline C&CB ] Banker‟s spend with customers[9 ]  28%[Business customers onboarded ] via OneSwitch[5 ] 5 Home loan refinance time Mins (reduced from 45 mins)[10 ]

Note: All figures have been measured since inception of the „Banking on Australia‟ Program (October 2012) unless otherwise stated; 1. Average monthly logins for the 6 months to March 2014 versus 12 months to September 2012; 2. Represents dollar value of transactions processed on ANZ goMoney[TM] since launch in September 2010; 3. Represents compound monthly growth in the number of transactions processed on ANZ FastPay[TM] since launch in October 2012; 4. Represents the 6 months to March 2014 versus 6 months to March 2013; 5. Represents the 5 months to February 2014 versus 5 months to February 2013; 6. Average monthly Customer Complaints for the 6 months to March 2014 versus 12 months to September 2012; 7. Net increase in customers for the 12 months to February 2014; 8. Represents 6 months to March 2014; 9. Estimated time being freed up in the frontline by removing activities and streamlining processes, compared to October 2012 baseline; 10. Applicable for non-credit critical renewals through ANZ channels;

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Australia Division 1H14 Financial Result

		Income ($m)	Expenses ($m)	PBP ($m)	NPAT ($m)	Cost to Income %
Australia Division	1H14	4,017	1,500	2,517	1,479	37.3%
	v 1H13 %	+4%	+2%	+5%	+5%	-80bps
Retail	1H14	2,515	1,002	1,333	933	39.8%
	v 1H13 %	+6%	+2%	+13%	+13%	-160bps
Corporate & Commercial Banking	1H14	1,502	498	781	546	33.2%
	v 1H13 %	0%	+2%	-6%	-7%	+60bps

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Australia Division 1H14 Financial Result

Australia Division 1H14 NPAT up 5% to $1.48 billion

Retail Corporate & Commercial Banking Strongest growth of the major #1 domestic banks in Home loans  16% Small Business lending growing at 1.2x system[1 ] Consecutive quarters of above 17 system home loan growth to  8% Deposit Growth March 2014 1.1x C&CB customers with 26k net new Deposit Growth[1 ]  6% customers[4 ] System Main Financial Institution (MFI) Total and Affluent Traditional #2 =#1 Customer Satisfaction in Banking market share[2 ] Commercial Banking[5 ] Cross-sell revenue generated by  8% Revenue per FTE[3 ]  4% C&CB Net Impaired Assets % of Gross  13% Wealth revenue via Retail 90bps Lending Assets (improved from 140bps in 1H13)

Note: All figures PCP unless otherwise stated; 1. Source: APRA Monthly Banking Statistics, 12 months to February 2014. System adjusted for new ADI incorporations; 2. Source: Roy Morgan Research, Australia Pop‟n aged 14+, 12 months to March 2014; Traditional banking includes FUM for total deposits, mortgages, personal/other loans, and credit cards. Affluent defined as customers with All Financial Services FUM between $400k and $1m (in all financial institutions) or income greater than $150k/year; Peers: CBA (excl Bankwest), NAB, Westpac (excl Bank of Melbourne & St George); 3. Represents average Retail FTE for the 6 months to March 2013 and March 2014; 4. Net new customers (excluding Esanda) for the 12 months to February 2014; 5. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, Commercial banking includes majority of businesses with turnover <$100m, data sourced in the six months to March 2014

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Corporate & Commercial Bank Overview

Corporate & Commercial Bank Businesses Corporate Large private, small listed and Banking multi-national corporations Business Banking[Small to medium companies ] with turnover $5m-$125m Regional Business Non-metropolitan and Agri Banking customers Small Business Small businesses with turnover Banking <$5m and lending <$1m Motor vehicle & equipment Esanda finance

Diversified by customers…

Net Lending Assets

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18% 14%
$65b 25%
25%
18%
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Corporate Banking
Esanda
Regional Business Banking
Business Banking
Small Business Banking
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C&CB Revenue

C&CB has achieved strong sales despite subdued demand for credit

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$m 1,518
1,501 1,502
1,459
1,445
1H12 2H12 1H13 2H13 1H14
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… by industry sector…
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Exposure at Default by industry sector (%) (as at Mar 14)

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ANZ has the lowest
origination LVR on
29% Commercial Real Estate
34% of all the major banks
Property & Construction
13% Agriculture
11% Retail
13% Consumer Lending
Other
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ANZ has the lowest
origination LVR on
Commercial Real Estate
of all the major banks
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Banking on Australia is delivering a better business in C&CB

in Australia

Banking on Australia is the vehicle through which we will:

• Transform distribution by reshaping banker roles to increase capacity and the amount of time bankers spend with customers

• Build on our lead in mobile and digital to provide easy access to industry leading products

• Develop our people’s capabilities and knowledge

• Simplify our products and processes to improve the customer experience and drive productivity

• Leverage ANZ‟s connectivity and footprint to provide seamless access to super regional opportunities

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C&CB – 2014 versus 2010

Net Loans and Advances

Deposits

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$b 17% $b
45%
65
56 14% Corporate Banking
47
17% Small Business Banking
11% Regional Business Banking
18% Regional Business Banking 32
28% Business Banking
25% Esanda
61% Small Business Banking
25% Business Banking
Mar 10 Mar 14 Mar 10 Mar 14
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Mar 10

Mar 14

EAD by Customer Credit Rating (CCR)

Net Impaired Assets and Gross Lending Assets

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Weaker
13% 13% 13% 7-10
78% 78% 78%
4-6
9% 9% 9% 0-3
Stronger
Mar 13 Mar-13 Sep 13 Sep-13 Mar 14 Mar-14
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Gross Lending Assets (RHS)

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$b
Net Impaired Assets as % GLA (LHS)
70 2.30%
65 1.80%
60 1.30%
55 0.80%
50 0.30%
Mar 10 Mar 11 Mar 12 Mar 13 Mar 14
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C&CB – increasing sales capability and capacity to drive out erformance p

Improved sales capability…

Training hours completed with specific 35k focus on credit, sales & Super Regional[1 ] 32%[Relationship Frontline staff with hands-on ] experience in key Asian markets 1,200 iPads deployed to frontline bankers Digital C&CB A-Z Reviews conducted via 36k iPads[1 ]

… and investments in improving capacity …  20%[Increase in the amount of time frontline ] C&CB Banker‟s spend with customers[6 ] Processes moved from frontline to 47 Business Response Team (BRT) 24/7[Servicing availability via BRT with 56k ] service requests actioned[1 ]

• … are translating to improved performance

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Net Loans & Advances ($b) Deposits ($b)
=#1 [Main Financial Institution (MFI) Customer ]
Satisfaction in Commercial Banking [2 ]
3%
Can service my business needs in
#1 65
Australia, NZ & Asia [3 ] 63
8%
 6% [C&CB customers with 26k net new ]
customers [4 ] 47
37% Growth in leads sent to the frontline 44
120% [Growth in Cross Border Referrals from ]
Australia to Asia [5 ] Mar 13 Mar 14 Mar 13 Mar 14
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1. Six months to March 2014; 2. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, Commercial banking includes majority of businesses with turnover <$100m, data sourced in the six months to March 2014; 3. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, data sourced from majority of businesses with turnover of $1-40m in the three months to February 2014; 4. Net new customers (excluding Esanda) for the 12 months to February 2014; 5. Five months to February 2014 vs. PCP; 6. Estimated time being freed up in the frontline by removing activities and streamlining processes, compared to October 2012 baseline;

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C&CB is seeing strong lending sales despite subdued demand for credit

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… however this is yet to Despite this we have
Business confidence has
translate into demand for increased our customer
improved recently…
business credit. numbers…
Business Confidence [1 ] System Lending Growth [2 ] & # Customers
Average System Undrawn Limits [3]
% $b 26k
125 System Lending Growth (LHS)
5 52
System Undrawn Limits (RHS)
120 4 50
48
3
115
46
2
44
110
1 42
105 0 40
Mar Sep Mar Sep Mar Sep Dec Mar Jun Sep Dec Feb 13 Feb 14
12 12 13 13 14 12 12 13 13 13 13
… achieved strong sales in a challenging
… and grown in our target segments
environment…
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Net Loans and Advances Net Loans and Advances
$b $b
22.8 1.6 0.1 0.6 65.2
63.2 65.2 63.2
0.2 0.1
12.9
7.7
0.2
1H13 Sales Partial Full Insto 1H14 Mar 13 Small Bus. Reg. Corp. Esanda Mar 14
Pay- Pay- Up-Tier Bus. Banking Bus. Banking
downs downs Banking Banking
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1. Roy Morgan Business Single Source, Business Confidence, average for the preceding 12 months

2. RBA Financial Aggregates, Total Business Credit, Seasonally Adjusted, September 2012 to February 2014

3. ABS Lending Finance, Australia, 5671.0, Commercial Finance Commitments not drawn at end of month, September 2012 to January 2014

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Small Business Banking is a strong performer

Lent to new Australian small $1.2b business as part of our $2 billion pledge

 16% Small Business lending

 10% Small Business customer deposits



SBB a key driver of cross sell

Small Business deposit sales  7% through the branch

SBB a key source of liquidity – Funding ratio[1] (Mar 14) of 267%



SBB lending book composition by sector

Exposure at Default by industry sector (%) (as at Mar 14)

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Retail
19% Property & Construction
30%
Agriculture
Business Services
18%
Hospitality
7%
7% 11% Manufacturing
8% Other
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Net loans and advances & deposits

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Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
$b Loan to deposit ratio (RHS)
30 40%
38%
20
36%
34%
10
32%
- 30%
Sep 12 Sep 13 Mar 14
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Note: All figures PCP unless otherwise stated 1. Funding ratio is the ratio of customer deposits to loans

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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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