2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

RESULT S PRESENTAT IO N AND INVESTO R DISCUSSIO N PACK

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1H16 Results

CEO Presentation	3
CFO Presentation	24
Specified Items Analysis	42
Corporate Profile	52
Treasury	66
Risk	75
Portfolio Composition	88
Divisional Performance
Australia Division	92
Institutional Division	105
New Zealand Division & Geography	117
Wealth Division	129

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2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

SHAY NE ELLI O T T CHIEF EXECUT IVE O FFICER

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Headline Financial Performance

	1H16 growth	1H16 growth
	vs 1H15	vs 2H15
Statutory Profit -22% -31%
Cash Profit -24% -21% Operating Income 1% 0% Operating Expenses 19% 15% Profit Before Provisions -14% -13% Provisions 80% 32%
Cash EPS (cents) -28% -24%

1H15 1H16
Cash ROE (%) 14.7 9.7 Dividend per share (cents) 86 80 CET1 (%) 8.7 9.8 CET1 Internationally Comparable Basel 31 12.1 14.0

Internationally Comparable methodology aligns with APRA’s information paper entitled International Capital Comparison Study (13 July 2015). Basel III Internationally Comparable ratios do not include an estimate of the Basel I capital floor.

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Business overview - Five key messages

Strong performance from Retail and Commercial businesses in Australia & NZ
Difficult trading conditions in Institutional markets globally, but decisive action taken to restructure our business
Tough decisions made across the Group to re-position for growth and return:
Big 4 “Specified Items”
Cost and FTE reductions
Setting the business for a subdued and challenging operating environment:
Amend risk appetite
Strengthen capital generation
Remove complexity
A well thought out plan to build a better bank for long term value creation:
Rebalancing the capital portfolio
Driving productivity
Building Digital capability

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Australia & NZ Retail and Commercial Strong overall performance

HIGHLIGHTS & DRIVERS1	1H16 vs 1H15	1H16 vs 1H15
	Australia	New Zealand (NZD)
Ongoing customer acquisition Improved share • Home Loans • Business Lending (NLAs) Margins managed Good revenue momentum Improved productivity: CTI Provisions absorbed Strong Profit growth	+102,000 Moved to #3 share +12% Small Bus. +1bp +10% 34.8% (-210bp) +$123m (+38%) +11%	+53,000 Uplift in #1 share +7% Commercial -15bp +3% 37.5% (-240bp) +$26m (+126%) +5%

Adjusted to remove ‘Specified items’: the impacts of software capitalisation policy changes, restructuring expenses and sale of Esanda Dealer Finance portfolio Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14. NZ growth rates based on NZD

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Institutional

Decisive action to reposition our business

HIGHLIGHTS & DRIVERS1	1H16 vs 2H15
Reduced off-strategy, low return customers Reduced NLAs Reduced RWAs Improved margins Short term revenue impact Reduced FTE	>10% reduction in customer base -$17b (-12%)
	-$16b (-8%)
	+10bp2
	-3%
	-4%

Adjusted to remove ‘Specified items’: the impacts of software capitalisation policy changes and restructuring expenses. Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Institutional NIM less markets

Business execution

1. Understand strengths & core competencies

2. Identify long term trends

3. Consider short term environment

4. Position business accordingly

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ANZ strengths & core competencies

1. Retail banking skewed to affluent base

Strong and loyal SME business segment
Leading Institutional customer franchises
Superior Regional Trade, FX, DCM and Cash Management capabilities
Differentiated regional footprint and connectivity

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Long term trends

1. Growth and transformation of Asia

2. Shift from trade in goods & commodities to data & services

Rise in economic power and influence of SME and the self-employed
Ever increasing rise in consumer power and expectations

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Operating environment remains challenging

Low and negative interest rates

Dynamic competitive landscape

Stubborn cost pressures

Turning credit cycle

Increased regulation

Higher capital and liquidity thresholds

Cyclical Structural

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Re-balancing our portfolio

COMPOSITION OF TOTAL ANZ CAPITAL*

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International & Institutional

Wealth

Retail & Commercial Australia & New Zealand

* chart is Illustrative only as at Sep 15

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Four Priorities Building a better bank

1. Create a simpler, better

capitalised, better balanced and more agile bank

3. Drive a purpose and values led transformation of the Bank

2. Focus our efforts on attractive areas where we can carve out a winning position

4. Build a superior everyday

experience for our people and

customers in order to compete in the digital age

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1. Create a simpler, better capitalised, better balanced and more agile bank

STRATEGIC FOCUS

Reduce operating costs and risks by removing product and management complexity
Exit low return and non-core businesses
Reduce reliance on low-return aspects of Institutional banking in particular
Further strengthen the balance sheet by rebalancing our portfolio

PROGRESS

Reduced absolute operating costs, FTE and RWA
Completed sale of Esanda & Wealth Oasis platform
Merged Asia Wealth with Asia Retail and commenced a strategic review
$138m restructuring charge taken to drive further simplification
Repositioned minority investments in Asia as Group assets, and took a $231m valuation adjustment
Reduced 1H16 dividend providing foundation for a conservative, sustainable and fully franked payout ratio of 60-65% of cash profit

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Dividend

o We recognise that stability of payout ratio and ability to fully frank dividends are critical considerations for our shareholders

Significant rebalancing of our business is underway to drive fundamental value improvement

o The adjustment to DPOR provides a more conservative and sustainable base in Fully Frankable DPS

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2. Focus our efforts on attractive areas where we can carve out a winning position

STRATEGIC FOCUS

Make buying and owning a home or starting, running and growing a small business in Australia and New Zealand easy
Be the best bank in the world for customers driven by the movement of goods and capital in our region

PROGRESS

New organisation structure and executive committee aligned with focus areas
Merged Wealth distribution activities with core Retail to align priority segments
Simplified and re-focused Institutional
Established new Digital Banking Division to support growth in priority areas

o Moved to #3 Market share in Australian Home Loans

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3. Drive a purpose and values led transformation of the Bank

STRATEGIC FOCUS

Create a stronger sense of core purpose, ethics and fairness,
Invest in leaders who can help sense and navigate the rapidly changing environment

PROGRESS

Signed up to ABA conduct review
Launched review of recruitment and remuneration
Invested in MIT Digital Leadership Program
Uncompromising approach to enforcing ANZ’s Code of Conduct

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4. Build a superior everyday experience for our people and customers in order to compete in the digital age

STRATEGIC FOCUS

Build more convenient, engaging banking solutions to simplify the lives of customers and our own people.

PROGRESS

Maile Carnegie, ex Google Australia CEO, appointed to lead Digital Division
Prepared for transfer of assets, projects, people and P&L to new Digital Division
New software capitalisation treatment recognises the nature and speed of digital change and supports innovation
Implementation of multi-channel digital platform for Australian Retail banking to support improved customer experience
First Australian bank to launch Apple Pay, augmenting existing Android Pay plans

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1H16 Financial Performance Drivers

Strong Operating Performance Aust/NZ Retail and Commercial

Turn in Credit Cycle

Impact of decisions to reposition Institutional

“Big 4” Specified Items

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Four Priorities Building a better bank

1. Create a simpler, better

capitalised, better balanced and more agile bank

3. Drive a purpose and values led transformation of the Bank

2. Focus our efforts on attractive areas where we can carve out a winning position

4. Build a superior everyday

experience for our people and

customers in order to compete in the digital age

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Executive focus Managing the Transition well

1) BUSINESS EARNINGS

2) CAPITAL GENERATION

Cash Profit (adjusted pro forma)1	Cash Profit (adjusted pro forma)1
	1H16 vs 2H15
Operating income 2% Operating expenses -1%
Profit Before Provisions 5% Provisions 43%
Profit before tax 0% Cash Profit (adj. pro forma) 0%

Common equity tier 1 generation

(bps)	1H avg 1H12 -	1H16
	1H15
Cash Profit1	102	87
RWA growth	(27)	1
Capital Deductions2	(18)	(12)
Net capital generation	57	76
Gross dividend	(70)	(69)
Dividend Reinvestment Plan	13	7
Core change in CET1	-	14
Other items	7	8
Net change in CET1	7	22

1H16 Cash profit is on pro forma basis adjusted for ‘Specified items’, which include the impacts of software capitalisation policy changes, Asian minority investment impairment charge (AMMB) and gain on cessation of equity accounting (Bank of Tianjin), restructuring expenses and the sale of Esanda Dealer Finance portfolio. Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14
Represents movement in retained earnings in deconsolidated entities, capitalised software (excluding the capitalised software policy change in 1H16) and other intangibles

Executive focus Managing the Transition well

3) BALANCE SHEET STRENGTH Position vs Internationally comparable banks (ex Aust banks)

CET1 RATIOS[1 ]

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Top
30% quartile
13.1% [3 ]
25%
20%
15%
10%
5%
0% ANZ
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LEVERAGE RATIOS [2 ]
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8%
7%
6%
5%
4%
3%
2%
1%
0%
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Top Quartile Banks (CET1)

CET1 and leverage ratios are based on ANZ estimated adjustment for accrued expected future dividends where applicable. ANZ ratios are on an Internationally Comparable basis. All data sourced from company reports and ANZ estimates based on last reported half/full year results assuming Basel III capital reforms fully implemented. 2. Includes adjustments for transitional AT1 where applicable. Exclude US banks as leverage ratio exposures are based on US GAAP accounting and therefore incomparable with other jurisdictions which are based on IFRS. 3. Based on Group 1 banks as identified by the BIS (internationally active banks with Tier 1 capital of more than €3 billion). The top quartile of this group was 13.1% as at June 2015. Excludes domestic peers to compare ANZ against international peers.

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Business Outlook and Future Focus

Continued strength and growth in Australia and NZ core franchise
Ongoing re-positioning of Institutional focused on Target Market selection

3. Strengthen balance sheet

Continued focus on re-balancing our business portfolio:
Capital
Productivity
Simplification
Execution on four business priorities:
Create a simpler better bank
Focus where we can win
Drive a purpose and values led transformation
Build a superior customer experience for the Digital age

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2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

G RAHAM HO DG ES CHIEF FINANCIAL O FFICER (ACT ING ) DEPUT Y CHIEF EXECUT IVE O FFICER

Financial performance

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$m
3,676 3,638
3,499
(38)
(139)
2,782
(717)
(3.8%)
(24%)
1H15 cash profit Specified 1H15 adjusted Operating 1H16 adjusted Specified 1H16 cash profit
items pro forma performance pro forma items
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Cash profit $2.78b, down 24%, specified items a significant impact on results
Cash profit (adjusted pro forma basis) down 4% PCP and flat on HoH

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‘Adjusted Pro forma’ refers to cash profit adjusted for ‘Specified items’: the impacts of software capitalisation policy changes, Asian Minority Investment impairment charge (AMMB) and gain of cessation of equity accounting (Bank of Tianjin), restructuring expenses and sale of Esanda Dealer Finance portfolio Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14. Note: Adjusted pro forma has not been adjusted for FX

• Impact of specified items

Operating performance
Key areas of focus

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Specified items 1H16 – All above the line

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Total Capitalised
Software
Costs, including
accelerated
amortisation,
resulting from
software
capitalisation
PROFIT IMPACT changes
1H16($m)
(441)
(717)
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CAPITALISED SOFTWARE POLICY CHANGES

Increased the threshold for capitalisation of software development costs
Directly expensing more project related costs

RATIONALE

Reflects the rapidly changing technology landscape & increased pace of innovation in financial services, resulting in increasingly shorter useful lives for smaller items of software in the “digital world”
Driving more disciplined commercial decisions

IMPACT

Accelerated amortisation of previously capitalised software balances with original costs below the revised threshold
Increased operating expenses for software projects in the current period that would otherwise have been capitalised and amortised in future periods
Higher software expenses in the near term but lower amortisation charges in future years
Reduced capitalised software balance

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

Total	Capitalised Software	Restructuring expenses
	Costs, including accelerated amortisation, resulting from software capitalisation changes	Expenses incurred in relation to organisational restructures

(717)	(441)	(101)

RESTRUCTURE EXPENSES

Reshaping the workforce to reduce complexity and duplication

o Aligning to the new organisation structure, including our changing emphasis on Institutional and international banking o $138m (pre tax) expenses associated with 1H16 organisational restructure & provision for planned actions in 2H16

BENEFITS

Streamlined divisions with improved connectivity and productivity
o Simpler organisational structure with fewer senior management required to run the business
o Right sized support and enablement functions to meet business requirements

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

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Total Capitalised Restructuring Asian Minority Esanda Dealer
Software expenses Investments Finance sale
Costs, including Expenses incurred AMMB Impairment Pro-forma
accelerated in relation to charge; Bank of adjustment to
amortisation, organisational Tianjin gain on remove the
resulting from restructures cessation of equity operating results of
software accounting that business and
capitalisation gain on sale
PROFIT IMPACT changes
56
1H16($m)
(101)
(231)
(441)
(717)
Restructure Partnerships
Zero Marginal Zero Positive
CET1 IMPACTS
Timing of Timing of One time OOI
P&L IMPACTS Negative
expenses Expenses impact
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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Operating performance (excludes specified items)

1H16 vs 1H15 (PCP)

($m) 398 3,638 (129) 56 3,499 (464) 1H15 adjusted Income Expenses Provisions Tax & NCI 1H16 adjusted pro forma pro forma

1H16 PCP	change
Income 4.0%
Expenses 2.8%
PBP 4.9%
Provisions 105.2%
Net Profit -3.8%
EPS(basic) -8.8%

1H16 vs 2H15 (HoH)

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($m) 31
247
3,507 3,499
(271) (15)
2H15 adjusted Income Expenses Provisions Tax & NCI 1H16 adjusted
pro forma pro forma
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1H16 HoH	change
Income	2.4%
Expenses	-0.7%
PBP	5.1%
Provisions	42.8%
Net Profit	-0.2%
EPS(basic)	-4.0%

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Income drivers (excludes specified items)

Retail	chg		Commercial	chg		Wealth	chg		Institutional	chg
Income 12% • Au 15% • NZ (NZD) 5% • Asia & PNG 8% Loans (NLAs) 8% Deposits 7%			Income 1% • Au 2% • NZ ($NZD) (2%) Loans (NLAs) 4% Deposits 6%			Income1 4% • Insurance1 8% • Funds Mgt (3%) • Private 12% Loans (NLAs) 7% Avg FUM 3%			Income (9%) • Transaction Bank’g (4%) • Loans & SF 1% • Markets (19%) Loans (NLAs) (13%) Deposits (4%)

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$m 473 25 29
128 10,438
(257)
10,040
4.0%
1H15 adjusted Retail Comm. Wealth Institutional Other 1H16 adjusted
pro forma pro forma
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Normalised to exclude the sale of the New Zealand medical insurance business in 1H16

‘Adjusted Pro forma’ refers to cash profit adjusted for ‘Specified items’: the impacts of software capitalisation policy changes, Asian Minority Investment impairment charge (AMMB) and gain of cessation of equity accounting (Bank of Tianjin), restructuring expenses and sale of Esanda Dealer Finance portfolio and FX adjustments to comparative periods to remove the impact of foreign currency translation. Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

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Net Interest Margin

GROUP NET INTEREST MARGIN

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(basis points) 3bp
includes growth in AFS &
Cash Assets due to
3 1
1 liquidity requirements
204
(2)
201
(4)
(2)
includes reduction in
lower margin assets
through business
realignment
(3bp)
2H15 Funding & Funding Cost Deposits Assets Markets & Esanda DF 1H16
Asset Mix Treasury sale
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AUSTRALIA NIM (%) INSTITUTIONAL NIM [1] (%) NEW ZEALAND NIM (%)
2.50 2.54 2.54 2.53 2.54 2.49 2.49 2.52 2.44 2.37
2 .26
2.14 2.16
2.06 2.06
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
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Excluding Markets

Markets performance

MARKETS INCOME

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($m)
1,129
995
1H16 vs 1H15 vs 1H avg
246
163 (PCP) (1H12-1H15)
Total Markets -19% -12%
Balance Sheet -41% -34%
278
334 Sales & Trading -10% 2%
885 899
607
565
Val’n adj. Trading
-2 Balance Sheet Sales
-67
1H avg 1H16
(1H12-1H15)
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Risk Weighted Asset reduction

TOTAL RISK WEIGHTED ASSETS

CREDIT RWA MOVEMENT

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$15.5b reduction
402 1H16 vs 2H15
$b
387 14 388 Risk
+0.3
14 16
38
361 362
33
21 38
24
FX
-8.1
impact
32
32
350
340 Esanda
334 -4.1
DF sale
305 309
-2.0 Lending
Data &
-1.6
Methodology review
Mar 14 Sep 14 Mar 15 Sep 15 Mar 16
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Market & IRRBB RWAs Op-Risk RWAs Credit RWAs

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Re-weighting the portfolio

LENDING CRWA MOVEMENT

INSTITUTIONAL NLA MOVEMENT

$2.0b reduction

1H16 vs 2H15

2.4	Aus HL
2.8	Aus Non HL
1.5	NZ
	Other
~~0.5~~
-9.2	Institutional

1H16 vs 2H15

	Australia & New Zealand	International	Total
1H16 vs 2H15 1H16 vs 2H15 1H16 vs 2H15
Trade -$0.9b -$8.2b -$9.2b
Loans $0.8b -$6.8b -$6.0b
Other2 -$1.5b $0.1b -$1.4b

Industry sectors with largest NLA reduction:

Resources
Manufacturing
Wholesale Trade
Finance, Investment & Insurance (low returning trade loans

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Lending CRWA, excludes fx, risk movement and regulatory requirements 2. Mostly Markets

Expense focus

EXPENSES & FTE

ACTIONS

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5,479
o Strong underlying cost management
778
4,775
4,474 4,603 6 o FTE down 2.5% in 1H16, 4.6% PCP
4,286
$m
o Simplifying our organisational structure
and reducing duplication
51,243
o Productivity benefits from operations
50,152
50,328 automation & process improvements
49,850
48,896
EXPENSE MOVEMENT
2.4%
0.3%
-207 -101 -84
1H14 2H14 1H15 2H15 1H16
-1.4%
FTE Adjusted pro forma FX & Specified items 2Yr CAGR 1H16 PCP 1H16 HoH
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Simplifying our organisational structure and reducing duplication

Provisions

TOTAL PROVISION CHARGE

PROVISON DELTA (1H16 vs 2H15)

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1,050 $m $m
918 223
240
900 Large single names (~50%)
220
+223 o a small number of single
200
750 name customer exposures
695
180 due to continued weakness in
528 160 the resources sector [1 ]
600
461 140
510 Asia (~50%)
120
o ~ half of which related to
450
100 actions to exit the emerging
80 corporate loan book
300
60
40
150
20
0
0
-20
1H15 vs
2H15
-150
1H14 2H14 1H15 2H15 1H16
CP Institutional Aus / NZ
CP Consumer IP Commercial IP Institutional IP Retail & Commercial Institutional Asia
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As per 24 March 2016 disclosure

Credit Quality

GROSS IMPAIRED ASSETS

GROSS LOANS AND ADVANCES

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$b
$b
5 350
4.69
4.26
300
4
3.62
250
3 2.89 2.88
2.71 2.72 200
150
2
100
1
50
0 0
1H13 2H13 1H14 2H14 1H15 2H15 1H16 Institutional Commercial Consumer
<$10m $10 -100m >$100m 1H15 2H15 1H16
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Credit Quality

AUSTRALIA 90+ DAY ARREARS

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2.0
1.5
1.0
0.5
0.0
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16
Home Loans (inclusive of hardship change) Corporate & Commercial Banking³ Consumer Cards
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NEW ZEALAND 90+ DAY ARREARS

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2.0
1.5
1.0
0.5
0.0
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
Home Loans Commercial Agri
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Capital Management

APRA COMMON EQUITY TIER 1 (CET1) POSITION

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+76bp
0.01 Internationally
comparable [1]
Internationally 14.0%
(0.12)
comparable [1 ]
13.2%
0.87
0.08 9.81
9.59 (0.62)
9.21
(0.60)
Sep-15 Cash RWA usage [3 ] Capital Dividends Other Mar-16 Mortgage Mar-16
Profit [2 ] Deductions [4 ] (Net of DRP) RWA Pro forma
change [5 ]
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Internationally Comparable methodology aligns with APRA’s information paper entitled International Capital Comparison Study (13 July 2015). Basel III Internationally Comparable ratios do not include an estimate of the Basel I capital floor. 2. Cash profit is on pro forma basis adjusted for ‘Specified items’, which include the impacts of software capitalisation policy changes, Asian minority investment impairment charge (AMMB) and gain on cessation of equity accounting (Bank of Tianjin), restructuring expenses and the sale of Esanda Dealer Finance portfolio. 3. Includes EL vs. EP shortfall. 4. Represents the movement in retained earnings in deconsolidated entities, capitalised software and other intangibles.
Approximate impact of Australian IRB mortgage RWA at 25%, in line with APRA’s requirement of a minimum average risk weight of 25% to commence 1 July 2016

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Dividend

DIVIDEND CONSIDERATIONS

Setting a conservative, sustainable DPS
Confidence in the strong ongoing capital generation (NPAT) in our Retail / Commercial businesses and continued capital efficiency in Institutional
Credit quality trends
Expected capital requirements
The impact of expected asset sales on earnings and on opportunities for capital management initiatives
Importance of a stable payout ratio and franking credits

DIVIDEND & PAYOUT RATIO

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DPS DPOR
200 90
181 85
178
80
164
75
145 70
150
65
95 95 60
55
91
50
79
100 45
40
35
30
25
50
83 86 80 20
73
66 15
10
5
0 0
2012 2013 2014 2015 1H16
Cash DPOR (RHS) DPS 2nd Half
DPOR (Adjusted Pro forma) DPS 1st Half
(RHS)
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2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK SPECI FI ED IT EMS ANALY SI S

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Cash Profit (adjusted pro forma)

	$m	$m	$m	1H16 growth	1H16 growth
	1H15	2H15	1H16	vs 1H15	vs 2H15
Operating Profit (adjusted pro forma) Operating Income 10,040 10,191 10,438 4% 2% Operating Expenses 4,572 4,732 4,701 3% -1% Profit before Provisions 5,468 5,459 5,737 5% 5% Provisions 441 634 905 105% 43% Operating Profit 3,638 3,507 3,499 -4% 0%
Specified Items 38 33 -717
Cash Profit 3,676 3,540 2,782 -24% -21%

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Financial performance

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1H15 SPECIFIED ITEMS

Esanda (+$45m) pro-forma adjustment removes the results of that business
Restructuring costs (-$7m)

1H16 SPECIFIED ITEMS

Software capitalisation policy application changes (-$441m)
Restructuring costs (-$101m)
Asian Minority Investments impairment & gain (-$231m)
o Esanda (+$56m) pro-forma adjustment to remove the operating results of that business and gain on sale

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Financial performance – specific items

1H16 vs 1H15 (PCP)

$m 3,676 3,638 3,499 (38) (139) 56 2,782 (441) (231) (101) 1H15 cash 1H15 specified 1H15 pro Operating 1H16 pro Software Asian minority Restructuring Esanda Dealer 1H16 cash profit items forma Perfornance forma cap changes investments Finance sale profit

Revenue	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2015 Half Year	March 2015 Half Year	March 2015 Half Year	March 2015 Half Year	March 2015 Half Year	March 2015 Half Year	Mar 16 pro forma v. Mar 15	Mar 16 pro forma v. Mar 15	Mar 16 pro forma v. Mar 15
	Cash profit	Software cap change	Asian minority inv’s.	Restruct- uring	Esanda Dealer Finance	Adjusted pro forma	Cash profit	Restruct- uring	Esanda Dealer Finance	Adj pro forma pre FX	FX impact	Adj pro forma fx adj	Cash profit	Adj pro forma pre FX	Adj pro forma Fx adj
	10,316 - 231 - (109) 10,438 10,195 - (155) 10,040 226 10,266												1.2% 4.0% 1.7%
Expenses	(5,479) 629 - 138 11 (4,701) (4,603) 10 21 (4,572) (115) (4,687)												19.0% 2.8% 0.3%
PBP	4,837 629 231 138 (98) 5,737 5,592 10 (134) 5,468 111 5,579												-13.5% 4.9% 2.8%
Provisions	(918) - - - 13 (905) (510) - 69 (441) (5) (446)												80.0% large large
PBT	3,919 629 231 138 (85) 4,832 5,082 10 (65) 5,027 106 5,133												-22.9% -3.9% -5.9%
Tax & NCI	(1,137) (188) - (37) 29 (1,333) (1,406) (3) 20 (1,389) (27) (1,416)												-19.1% -4.0% -5.9%
Cash profit	2,782 441 231 101 (56) 3,499 3,676 7 (45) 3,638 79 3,717												-24.3% -3.8% -5.9%

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Financial performance – specific items

1H16 vs 2H15 (HOH)

3,540 3,507 3,499 (33) (8) 56 2,782 (441) (231) (101) 2H15 cash 1H15 specified 2H15 pro Operating 1H16 pro Software Asian minority Restructuring Esanda Dealer 1H16 cash profit items forma Performance forma cap changes investments Finance sale profit

Revenue	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	March 2016 Half Year	September 2015 Half Year	September 2015 Half Year	September 2015 Half Year	September 2015 Half Year	September 2015 Half Year	September 2015 Half Year	Mar 16 pro forma v. Sep 15	Mar 16 pro forma v. Sep 15	Mar 16 pro forma v. Sep 15
	Cash profit	Software cap change	Asian minority inv’s.	Restruct- uring	Esanda Dealer Finance	Adjusted pro forma	Cash profit	Restruct- uring	Esanda Dealer Finance	Adj pro forma pre FX	FX impact	Adj pro forma fx adj	Cash profit	Adj pro forma pre FX	Adj pro forma Fx adj
	10,316 - 231 - (109) 10,438 10,342 - (151) 10,191 135 10,326												-0.3% 2.4% 1.1%
Expenses	(5,479) 629 - 138 11 (4,701) (4,775) 21 22 (4,732) (37) (4,769)												14.7% -0.7% -1.4%
PBP	4,837 629 231 138 (98) 5,737 5,567 21 (129) 5,459 98 5,557												-13.1% 5.1% 3.2%
Provisions	(918) - - - 13 (905) (695) - 61 (634) (8) (642)												32.1% 42.7% 41.0%
PBT	3,919 629 231 138 (85) 4,832 4,872 21 (68) 4,825 90 4,915												-19.6% 0.1% -1.7%
Tax & NCI	(1,137) (188) - (37) 29 (1,333) (1,332) (6) 20 (1,318) (27) (1,345)												-14.6% 1.1% -0.9%
Cash profit	2,782 441 231 101 (56) 3,499 3,540 15 (48) 3,507 63 3,570												-21.4% -0.2% -2.0%

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Specified items 1H16 – All above the line

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

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CAPITALISED SOFTWARE BALANCE IMPACT ($m)

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2,332 2,533 2,689 2,893
2,249
Mar-14 Sep-14 Mar-15 Sep-15 Mar-16
Balance Impact of policy changes
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CAPITALISED SOFTWARE POLICY CHANGES

Increased the threshold for capitalisation of software development costs
Directly expensing more project related costs

RATIONALE

Reflects the rapidly changing technology landscape & increased pace of innovation in financial services, resulting in increasingly shorter useful lives for smaller items of software in the “digital world”
Driving more disciplined commercial decisions

IMPACT

Accelerated amortisation of previously capitalised software balances with an original costs below the revised threshold
Increased operating expenses for software projects in the current period that would otherwise have been capitalised and amortised in future periods
Higher software expenses in the near term but lower amortisation charges in future years
Reduced capitalised software balance

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

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Total Restructuring
expenses
Expenses incurred
in relation to
organisational
restructures
PROFIT IMPACT
1H16($m)
(101)
(717)
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RESTRUCTURE EXPENSES

Reshaping the workforce to reduce complexity and duplication
Aligning to the new organisation structure, including our changing emphasis on Institutional and international banking
$138m (pre tax) expenses associated with 1H16 organisational restructure & provision for planned actions in 2H16

BENEFITS

Streamlined divisions with improved connectivity and productivity
Simpler organisational structure with fewer senior management required to run the business
Right sized support and enablement functions to meet business requirements

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

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Total Asian Minority
Investments
AMMB Impairment
charge; Bank of
Tianjin gain on
cessation of equity
accounting
PROFIT IMPACT
1H16($m)
(231)
(717)
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ASIAN MINORITY INVESTMENT ADJUSTMENTS

During the March 2016 half, the Group recognised a $260 million impairment to its equity accounted investment in AMMB Holdings Berhad (Ambank) bringing the carrying value in line with value-in-use calculations

o On 30 March 2016, Bank of Tianjin (BoT), an equity accounted investment, completed a capital raising. As the Group did not participate in the capital raising, its ownership interest decreased from 14% to 12%. As a consequence, the Group ceased equity accounting the investment in BoT and commenced accounting for the investment as for as an available for sale asset. A net gain of $29 million was recognised in relation to the remeasurement of the investment to fair value and recycling the associated equity accounted reserves

Carrying value of Asia Minority Investments

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$b
1H16 BOT as for as an available for sale asset. A net
6 5 transferred to AFS asset gain of $29 million was recognised in
relation to the remeasurement of the
4
investment to fair value and recycling the
3
associated equity accounted reserves
2
1
0 Bank of Tianjin (BOT) PT Bank Pan Indonesia
FY09 FY10 FY11 FY12 FY13 FY14 FY15 1H16 AMMB Holdings Berhad Shanghai Rural Commercial Bank
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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

Specified items 1H16 – All above the line

Total Esanda Dealer Finance sale Pro-forma adjustment to remove the operating results of that business and gain on sale

PROFIT IMPACT 56 1H16($m) (717)

ESANDA DEALER FINANCE SALE

On 1 November 2015, the Group sold the Esanda Dealer Finance portfolios with the majority of the business transferred by 31 December 2015.
Proforma results have been prepared on the assumption that the sale which occurred during the March 2016 half took effect from 1 October 2014, effectively restating the Group’s cash profit for each of the March 2015, September 2015 and March 2016 halves.

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Further detail on ’Specified items’ is provided in the ANZ Half Year 2016 consolidated Financial Report page 14.

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSION PACK CO RPO RAT E PRO FI LE

Corporate profile

OVERVIEW

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Founded in 1835 and headquartered in Melbourne, Australia, ANZ is one of the four largest Australian banks and ranked in the top 25 banks globally by market capitalisation
ANZ serves over 10 million retail, commercial and institutional customers, with consumer and corporate offerings in our core markets and supporting regional trade and investment flows across the region
ANZ is listed on the Australian Stock Exchange (ASX) with a secondary listing on the New Zealand Stock Exchange (NZX)
Credit Ratings: S&P AA- / stable, Moody’s Aa2 / stable, Fitch AA- / stable

Customers1 Staff (FTE) Cash NPAT RoRWA2 Customer Lending3 Customer Deposits	Staff (FTE)	Cash NPAT	RoRWA2	Customer Lending3	Customer Deposits
~10m 48,896 $2,782m 1.40% $561.8b $446.8b

Australia ~6m 20,808 $1,830m 1.62% $386.7b $245.8b New Zealand ~2m 8,063 $693m 2.03% $105.9b $81.3b International ~2m 20,025 $259m 0.49% $69.1b $119.7b

Australia 8,791 $1,753 2.74% $320b $175.8b Institutional 4,056 $632m 0.65% $125.6b $176.1b New Zealand 5,022 $578m 2.11% $97.2b $62.3b Wealth 2,385 $261m nm $6.6b $18.9b

Customer numbers as at 30 September 2015
RoRWA: Return on Average Risk Weighted Assets 3. Net Loans and Advances

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Corporate profile - earnings

INCOME BY DIVISION

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$m
12,000
10,000
8,000
6,000
4,000
2,000
0
1H14 2H14 1H15 2H15 1H16
Australia Wealth
Institutional Asia Retail & Pacific
New Zealand
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PROFIT BY DIVISION[1]

INCOME BY REGION

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$m
12,000
10,000
8,000
6,000
4,000
2,000
0
1H14 2H14 1H15 2H15 1H16
Australia International
New Zealand
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PROFIT BY REGION

INCOME BY CUSTOMER

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$m
12,000
10,000
8,000
6,000
4,000
2,000
0
1H14 2H14 1H15 2H15 1H16
Retail Institutional
Commercial Other
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PROFIT BY CUSTOMER[1 ]

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2%
8%
19%
53%
18%
Australia Asia Retail & Pacific
New Zealand Wealth
Institutional
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9% 8%
20%
25%
47%
66%
25%
Australia International Retail Institutional
New Zealand Commercial Wealth
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Excludes TSO & Group Centre

Corporate profile – Balance Sheet

BALANCE SHEET

LENDING BY REGION

INSTITUTIONAL GRADE

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$b $b EAD [1] $b
400
600 388
378 1% 361
1%
550 300 20% 18% 18%
500 200
80% 81% 81%
450 100
400
0
1H15 2H15 1H16
Australia NZ International
350
Retail Institutional Investment Default
Commercial Sub-investment
300
DEPOSITS BY REGION INSTITUTIONAL BY TENOR
250
$b EAD [1] $b
250
200
173
200 157
150
150 31
36% 59%
100 34%
100
50 50 64% 66%
41%
0 0
1H14 2H14 1H15 2H15 1H16 Australia NZ International Australia New International
Zealand
NLA Deposits Retail Institutional
Tenor > 1Yr Tenor < 1Yr
Commercial
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Exposure-at-default as defined by APRA Prudential Standards

Volume & Margins

ANZ TOTAL

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$b 558 570 562
513 522
2.15% 2.12% 2.04% 2.04% 2.01%
1H14 2H14 1H15 2H15 1H16
NIM (RHS) NLA
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INSTITUTIONAL DIVISION

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$b
145 142
131 132
126
1.41%
1.32%
1.19% 1.20%
1.15%
1H14 2H14 1H15 2H15 1H16
NIM (RHS) NLA
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AUSTRALIA DIVISION

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$b
314 320
298
288
278
2.54% 2.54% 2.53% 2.54%
2.50%
1H14 2H14 1H15 2H15 1H16
NIM (RHS) NLA
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NEW ZEALAND DIVISION
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108
NZDb 105
100
97
94
2.49% 2.49% 2.52%
2.44%
2.37%
1H14 2H14 1H15 2H15 1H16
NIM (RHS) NLA
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Productivity

ANZ TOTAL

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$k
206 211
198 197 199
53.1%
45.1% 45.1%
44.3%
46.2%
1H14 2H14 1H15 2H15 1H16
CTI (RHS) Revenue/FTE
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INSTITUTIONAL DIVISION

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$k
665 641 687 660 669
55.7%
51.0%
46.6%
45.9%
43.2%
1H14 2H14 1H15 2H15 1H16
CTI (RHS) Revenue/FTE
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AUSTRALIA DIVISION

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

$k
514 527
466 477 478
36.0% 35.6% 36.1% 35.9% 36.0%
1H14 2H14 1H15 2H15 1H16
CTI (RHS) Revenue/FTE
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NEW ZEALAND DIVISION

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NZDk
296
275 282 287
261
41.3%
40.6% 40.1%
39.2%
38.4%
1H14 2H14 1H15 2H15 1H16
CTI (RHS) Revenue/FTE [1 ]
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Profitability

ANZ TOTAL

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$ m
3,676
3,515 3,602 3,540
2,782
2.01% 2.01% 1.97%
1.83%
1.40%
1H14 2H14 1H15 2H15 1H16
RoRWA (RHS) NPAT
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INSTITUTIONAL DIVISION

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$m
1,062 1,079 1,071
893
1.20% 1.19%
1.13%
632
0.91%
0.65%
1H14 2H14 1H15 2H15 1H16
RoRWA (RHS) NPAT
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AUSTRALIA DIVISION

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$m
1,706 1,753
1,601 1,650
1,510
2.95% 2.93%
2.80% 2.84% 2.74%
1H14 2H14 1H15 2H15 1H16
RoRWA (RHS) NPAT
NEW ZEALAND DIVISION
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NZDb
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59.0 60.1
53.8 54.6 55.0
2.38
2.11 2.22 2.17 2.11
1H14 2H14 1H15 2H15 1H16
RoRWA (RHS) RWA
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RoRWA: Return on Average Risk Weighted Assets

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Operations

KEY ACHIEVEMENTS

Operations and service costs continue to fall whilst absorbing transactional volume growth.
TSO[1] FTE contained through productivity benefits from operations automation, process improvements and simplification initiatives.
Rollout of World Class Delivery model progressing well, delivering common operating model, methods, tools and standards across our regional footprint.
Implemented Robotic Process Automation, improving efficiency and accuracy, and enabling FTE savings.
Manila Hub awarded Best Global In-House Centre of the Year at the International ICT Awards in the Philippines.
Deepened relationship with strategic supply partners, with attendant cost and delivery benefits.

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OPERATIONS VOLUMES & EXPENSE
MOVEMENT 1H16 vs 1H15
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6%
5% 5% 5%
4%
0%
-1%
-2%
-3%
-6%
Aus Instit. NZ Wealth Total
Transaction volumes Expenses
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QUALITY IMPROVEMENT

Manual Payment defects per million transactions

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670
400
151
119
53
1H12 1H13 1H14 1H15 1H16
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Technology, Services and Operations.

Technology

KEY ACHIEVEMENTS

INCIDENT VOLUMES

Priority 1, 2 Incidents

Delivered the digital banking Multi-Channel Platform as a major foundational component of our Consumer Digital strategy.
Delivered standardised platform for payment and accounting services across 16 countries.
Delivering more frequent and better quality change through the rapid adoption of Agile methodologies.
Refreshed cloud strategy to reduce time to market, with 17 cloud services approved to date in FY16.

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100
50
0
Mar Jun Sep Dec Mar Jun Sep Dec Mar
14 14 14 14 15 15 15 15 16
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TECHNOLOGY CHANGE VOLUMES[1]

Index Mar 14 = 100

Reduced major incidents by 40% YoY whilst handling significant increases in change volumes.
Decommissioned 91 applications YTD as part of continued focus on asset lifecycle management.
Built a Digital Partner Ecosystem in Australia, focusing on relevant disruptive technologies, supported by an open innovation platform, and actively engaging the fintech community.

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200
150
100
50
0
Mar Jun Sep Dec Mar Jun Sep Dec Mar
14 14 14 14 15 15 15 15 16
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All changes to technology assets in production, from small enhancements through to major releases.

Project Investment

ANNUAL INVESTMENT SPEND ~$1B

Digitisation and CX

Risk

Drive consistent customer experience across segment channels
Minimised operating risks
Maintain the confidence of our customers and regulators
Foundations for omni-channel CX
23% 19% o Enterprise-wide data management
Divisional Product o
Enhancement analytics
o Product enhancements and changes 7%
o Continued improvement to customer servicing 35%
o Re-engineering and automating Service & Product
divisional platforms 16% Processing

Divisional Product Enhancement

Customer insight and related analytics
Product enhancements and changes
Increase systems and process standardisation

Stability and Security

Upgraded infrastructure
Enhanced resilience
Strong security
o Reduced cost-to-serve
Coordinated approach to endto-end wholesale lending
Global capabilities for consumer lending
Modern, resilient payments network
Supporting markets growth with scalable platforms

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Building key capabilities for digital delivery, improving customer experience

BUILDING KEY CAPABILITIES

FOUNDATION CAPABILITIES DELIVERED

Key Achievements

Over 1.3 million customers using goMoney iOS and Android apps on our new Digital Banking MultiChannel Platform
Banker Desktop platform implemented for Personal Loans to enable seamless and shared interaction with customers from discovery to fulfilment
Digital Identity Verification launched with 65% of customers applying for a savings account online having their identity verified successfully
Enablement of Touch ID and Apple Watch for Grow by ANZ and addition of comprehensive life and general insurance functionality
Leading levels of customer satisfaction with Mobile Banking channels (99%[1] in New Zealand, 92%[2] in Australia)

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ANZ Grow ANZ ANZ Currency goMoney by ANZ FastPay II Shield by ANZ

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Grow & goMoney Asia Digital Banker’s for Apple Watch Banking Desktop

SUPPORTED BY THE IMPLEMENTATION OF A MULTI-CHANNEL PLATFORM IN ANZ’S KEY AUSTRALIAN MARKET

Security

Multiple awards for customer service/excellence (ANZ Digital - Best Customer Experience Credit Cards, ANZ Pacific - Best Consumer Digital Bank in Pacific , ANZ Indonesia - Customer Experience Banking)
$72b transactions processed p.a. over goMoney mobile.

API Services

Multi-Channel Platform Real-time Sales & Transaction Rich Onboarding Service & Payments Content

Camorra RMM. 6 months to Mar-16.
Roy Morgan Research. MFI customers aged 14+ who conducted Internet banking using an App on a mobile phone or tablet. Proportion very or fairly satisfied. 12 months to Mar-16.

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Multi-channel Platform

FOUNDATIONS FOR A CONSISTENT DIGITAL EXPERIENCE ACROSS ANY CHANNEL OR DEVICE

MULTI-CHANNEL PLATFORM (MCP)	FUTURE CAPABILITIES
SIMPLIFICATION• Mobile banking app for iOS and Android (goMoney AU) replatformed onto MCP	• Migrate internet banking onto MCP to further reduce complexity
MODERN SECURITY • Scalable modern security capabilities to further protect ANZ customers from fraudulent activity	• Extend modern security capabilities across ANZ services
ARCHITECTURE • High availability architecture to support mobile banking growth goals. Over 1.3 million customers migrated without service disruption	• Ability to integrate more effectively with other channel offerings, as well as ecosystem partners via standard API services
CUSTOMER SERVICE • Significantly enhanced customer service and support capabilities, including simpler service tools for bankers	• Further consolidation of customer support processes for all Digital channels for a more seamless customer experience
FASTER DELIVERY• Automated testing improving quality of outcomes and speed to market	• More rapid and regular releases of new customer features

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Sustainability scorecard

	1H2016 2015 2014 2013
SERVING OUR CUSTOMERS
Retail Customer Satisfaction
Australia1(%) 80.8 82.1 82.6 80.2 New Zealand2(%) 88 89 85 84
Institutional Relationship Strength Index3
Australia 1 1 1 2 New Zealand 1 1 1 1
MANAGING OUR BUSINESS SUSTAINABLY
Direct financing commitment to renewables and gas4as a % of total 80.4 81.7 67.0 65.7
INVESTING IN OUR COMMUNITIES
Volunteer hours 51,000 108,142 101,801 89,289 Saver Plus number ofpeople enrolled 2,813 2,838 5,461 5,191
DEVELOPING OUR PEOPLE
Employee engagement survey results (%) Annual 76 73 72 Total women in management5 (%) 40.8 40.4 39.2 38.7

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Roy Morgan Research. Base: MFI Customers, aged 14+, based on 6 months rolling average.
Camorra Research Retail Market Monitor, March 2016. 3. Peter Lee Associates 2015 Large Corporate and Institutional Banking Relationship Survey, Australia/New Zealand. 4. Refers to our project finance commitments. 5. Based on employee headcount.

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Supporting the transition to a low carbon economy

MANAGING OUR BUSINESS SUSTAINABLY

Half year highlights:

$1.1 billion in finance and advisory services for energy efficiency improvements, low carbon energy generation, resilient infrastructure and carbon abatement towards a target of $10 billion by 2020
Average carbon emissions intensity of direct funding of electricity generation is down against 2014
(measured in tonnes CO2-e per megawatt hour of electricity generated):

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Outside
Australia
Australia
1H 16 0.66 0.17
2015 0.64 0.20
2014 0.77 0.25
Movement 14% 32%
2014- 1H16 reduction reduction
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New disclosure: our business lending¹ in Australia by sector against the greenhouse gas emissions attributed to those sectors. We are actively managing exposures through our strengthened due diligence processes for lending to high emissions sectors (e.g. power generation, coal mining and transport) and our commitment to fund and facilitate our customers’ transition to a low carbon economy

CARBON RISK MANAGEMENT

ANZ’S business lending exposure and carbon emissions of key industry sectors[²] in Australia

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Scope 1 Emissions: direct GHG emissions Scope 2 Emissions: indirect GHG emissions from consumption of purchased electricity, heat or steam

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Exposure at Default (EAD)
See anz.com/cs for methodologies used for financed emissions and EAD disclosures

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK T REASURY

Regulatory capital

CAPITAL UPDATE

Organic Capital Generation

Net Capital Generation of 76 bps in 1H16 is higher than recent first halves, reflecting balance sheet discipline and reduction of RWA in Institutional
Absorbed the maturity of the final tranche of ANZ Wealth debt (~10bps reduction in CET1) in March 2016

Improved Capital Position

CET1 ratio increased to 9.8% on an APRA basis or 14.0% on an Internationally Comparable[1] basis
Leverage ratio 5.1% on an APRA basis, 5.7% on an Internationally Comparable basis

Capital Efficiency and Dividend

Interim dividend of 80 cents per share reflects revised dividend strategy, targeting a payout ratio of 60-65% over time to:
Maintain an unquestionably strong capital and balance sheet position
Maintain a fully franked dividend
Improve capacity to absorb credit cycle volatility
Improve capital efficiency and support EPS growth via: lower reliance on DRPs (BAU assumption of only 10% participation); surplus

capital periodically returned to shareholders

APRA COMMON EQUITY TIER 1 (CET1) POSITION

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0.87 0.01 -0.12
-0.62
0.08 9.81 -0.60
9.59
9.21
Sep-15 Cash 2 RWA 3 Capital 4 Dividends Other Mar-16 Pro forma 5 Mar-16
Profit usage Deductions (Net of adj Pro
DRP) forma
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BASEL III CET1

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

14.0%
13.2%
12.1%
9.6% 9.8%
8.7%
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Sep-15

Mar-15

Mar-16

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APRA
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Internationally Comparable

Internationally Comparable methodology aligns with APRA’s information paper entitled International Capital Comparison Study (13 July 2015). Basel III Internationally Comparable ratios do not include an estimate of the Basel I capital floor. 2. Cash profit is on pro forma basis adjusted for ‘Specified items’, which include the impacts of software capitalisation policy changes, Asian minority investment impairment charge (AMMB) and gain on cessation of equity accounting (Bank of Tianjin), restructuring expenses and the sale of Esanda Dealer Finance portfolio. 3. Includes EL vs. EP shortfall. 4. Represents the movement in retained earnings in deconsolidated entities, capitalised software and other intangibles.
Approximate impact of Australian IRB mortgage RWA at 25%, in line with APRA’s requirement of a minimum average risk weight of 25% to commence 1 July 2016

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Internationally comparable[1] regulatory capital position

APRA Common Equity Tier 1 (CET1)	9.8%
Corporate undrawn EAD and unsecured LGD adjustments Australian ADI unsecured corporate lending LGDs and undrawn CCFs exceed those applied in many jurisdictions	1.7%
Equity Investments & DTA APRA requires 100% deduction from CET1 vs. Basel framework which allows concessional threshold prior to deduction	1.0%
Mortgage 20% LGD floor APRA requires use of 20% mortgage LGD floor vs. 10% under Basel framework	0.4%
Specialised Lending APRA requires supervisory slotting approach which results in more conservative risk weights than under Basel framework	0.6%
IRRBB RWA APRA includes in Pillar 1 RWA. This is not required under the Basel framework	0.3%
Other Includes impact of deductions from CET1 for capitalised expenses and deferred fee income required by APRA	0.2%
Basel III Internationally Comparable CET1	14.0%
Basel III Internationally Comparable Tier 1 Ratio	16.2%
Basel III Internationally Comparable Total Capital Ratio	18.7%

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Internationally Comparable methodology aligns with APRA’s information paper entitled International Capital Comparison Study (13 July 2015). Basel III Internationally Comparable ratios do not include an estimate of the Basel I capital floor.

CET1 and leverage in a global context

CET1 RATIOS[1 ]

LEVERAGE RATIOS[1,2 ]

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0% 5% 10% 15% 20% 25% 30% 0% 1% 2% 3% 4% 5% 6% 7% 8%
Swedbank Intesa Sanpaolo
Svenska Handelsbanken DBS
SEB RBS
Nordea UOB
Danske Bank OCBC
UBS Standard Chartered
ABN Amro Credit Agricole Group
RBS ANZ
ANZ HSBC
Morgan Stanley Erste Bank
Intesa Sanpaolo Swedbank
Top Credit Agricole Group Raiffeisen Bank International
quartile ING Group SEB
13.1% [3 ] Groupe BPCE BBVA
Standard Chartered Barclays
DBS Nordea
HSBC Svenska Handelsbanken
Commerzbank UniCredit
Citibank CET1 Credit Suisse Leverage
Erste Group ANZ ranks in the Commerzbank ANZ compares
Rabobank ING Group
top quartile of the equally well on
OCBC largest Danske Bank leverage, however
Goldman Sachs UBS
internationally international
UOB active banks [3] and BNP Paribas comparisons are
JP Morgan equally is ranked in Groupe BPCE more difficult to
Credit Suisse Scotia
the top quartile of make given the
State Street Societe Generale
internationally favourable treatment
Barclays active G-SIBs and RBC of derivatives under
Raiffeisen Bank International D-SIBs BMO US GAAP
BNP Paribas ABN Amro
Societe Generale Rabobank
Deutsche Bank TD
Wells Fargo Deutsche Bank
UniCredit
BBVA
BMO Top Quartile Banks (CET1)
Scotia
TD
RBC
Bank of America
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CET1 and leverage ratios are based on ANZ estimated adjustment for accrued expected future dividends where applicable. ANZ ratios are on an Internationally Comparable basis. All data sourced from company reports and ANZ estimates based on last reported half/full year results assuming Basel III capital reforms fully implemented. 2. Includes adjustments for transitional AT1 where applicable. Exclude US banks as leverage ratio exposures are based on US GAAP accounting and therefore incomparable with other jurisdictions which are based on IFRS. 3. Based on Group 1 banks as identified by the BIS (internationally active banks with Tier 1 capital of more than €3 billion). The top quartile of this group was 13.1% as at June 2015.

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Regulatory capital generation

COMMON EQUITY TIER 1 GENERATION (BPS)

	First half
	average 1H12 -	1H16
	1H15
Cash Profit1	102	87
RWA growth	(27)	1
Capital Deductions2	(18)	(12)
Net capital generation	57	76
Gross dividend	(70)	(69)
Dividend Reinvestment Plan	13	7
Core change in CET1 capital ratio	-	14
Other non-core and non-recurring items	7	8
Net change in CET1 Capital ratio	7	22

Net capital generation of 76bps is higher than previous first halves, reflecting the benefit of strong balance sheet discipline and the Group’s strategic intent to run-off low return assets in Institutional

 Non-core and non-recurring items broadly in line with prior halves. For 1H16 this includes capital benefits from the sale of Esanda Dealer Finance assets (~16bps), partially offset by maturity of the final tranche of ANZ Wealth debt (~-10bps)

1H16 Cash profit is on pro forma basis adjusted for ‘Specified items’, which include the impacts of software capitalisation policy changes, Asian minority investment impairment charge (AMMB) and gain on cessation of equity accounting (Bank of Tianjin), restructuring expenses and the sale of Esanda Dealer Finance portfolio
Represents movement in retained earnings in deconsolidated entities, capitalised software (excluding the capitalised software policy change in 1H16) and other intangibles

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Balance sheet composition

Structural Funding

$761bn

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$761bn $761bn
Other Short Term
5%
Liquids Short Term Funding
Short-te rm
19% 9%
assets
funded with
Term Funding <12M
short-term
4%
liabilities
Other Short Term Other Customer
Assets & Trade 9% Deposits
12%
Term ass et s
funded with Stable Customer
stable Deposits [1]
fundi n g 51%
sources Lending
70%
Term Funding >12M
11%
Fixed Assets SHE & Hybrids
& Other 2% 8%
Assets Funding
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Term assets almost entirely funded by equity, longterm funding and stable customer deposits.
The funding profile is broadly unchanged from FY15. Some FX impacts due to higher AUD reversing prior period depreciation.

NSFR

Group NSFR at Mar-16 estimated to be modestly above 100%.
Focus is on building a suitable buffer over time. This is likely to include balance sheet actions such as reducing high NSFR intensive assets rather than a material increase in term wholesale debt.

Short term Wholesale Debt

Short term wholesale debt (both domestic and offshore) used to fund liquids, trade lending and other short term assets.
Offshore short-term wholesale only represents ~3% of total funding.

Stable customer deposits represent operational type deposits or those sourced from retail / business / corporate customers and the stable component of Other funding liabilities

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Basel III Liquidity Coverage Ratio

SEPTEMBER 2015

MARCH 2016

Average[1] LCR 124% ($30b Surplus)

Average[1 ] LCR 126% ($37b Surplus)

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$b 158 $b
176
17
19
128
139
40 15 37
16
3
3
113
123
98 117
Liquid Assets [2 ] Net Cash Outflows [3 ] Liquid Assets [2 ] Net Cash Outflows [3 ]
HQLA 1 Internal RMBS Customer deposits and other [4 ]
HQLA 2 Other Alternative Liquid Assets [5 ] Wholesale funding
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Half year average calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.
Post Haircut market value as prescribed per APS 210, includes Committed Liquidity Facility : $54bn as at 30 September 2015, $50bn as at 31 March 2016 3. Basel III LCR 30 day stress scenario cash outflows
Other includes off-balance sheet and cash inflows
Comprised of assets qualifying as collateral for the CLF, excluding internal RMBS, up to approved facility limit; and any liquid assets contained in the RBNZ's Liquidity Policy - Annex: Liquidity Assets - Prudential Supervision Department Document BS13A12

Term wholesale funding portfolio

TERM FUNDING PROFILE

Maturities[[2 ]]

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Issuance [1 ] Maturities [[2 ]]
$bn 26 Annual
24 24 indicative
22 issuance
19 18 volume
17
16 16 16
11
9
8
FY11 FY12 FY13 FY14 FY15 1H16 2H16 FY17 FY18 FY19 FY20 FY21 FY22+
Senior Unsecured Covered Bonds Tier 2
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Portfolio by Type

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10%
Senior
Unsecured
17%
Covered
Bonds
Tier 2
73%
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Portfolio by Currency

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1%
Domestic
6%
(AUD,NZD)
North America
23% 36% (USD, CAD)
UK & Europe
(€,£,CHF)
Asia (JPY, HKD,
SGD, CNY)
34% Other
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All figures based on historical FX and excludes hybrids.

Includes transactions with a call or maturity date greater than 12 months as at the respective reporting date. 2. Tier 2 profile is based on the next callable date.

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Foreign currency hedging – earnings benefit from lower AUD

1H16 EARNINGS COMPOSITION EARNINGS PER SHARE FX IMPACT (BY CURRENCY)

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AUD
INR 55%
Other
19%
CNY
NZD
26%
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The key objective of hedging is to manage short term EPS volatility arising from foreign currency earnings
Hedges currently in place:
FY16: ~70% of NZD and ~ 34% of USD (inc. currencies that are highly correlated to AUD/USD) earnings.
FY17: ~54% of NZD earnings.
FY18: ~48% of NZD earnings.
Hedging has reduced the impact of a 5% movement of the AUD on FY17 EPS to ~1.3%.

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2.2%
1.7%
1H16 v 1H15 1H16 v 2H15
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TRANSLATION RATES (INCLUSIVE OF HEDGES)

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1.20 1.00
0.95
1.15
0.90
1.10 0.85
0.80
1.05
0.75
1.00 0.70
1H14 2H14 1H15 2H15 1H16
NZD Translation (LHS) USD Translation (RHS)
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2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK RISK

Total & Collective Provision Charge

TOTAL PROVISION CHARGE

CP BALANCE BY DIVISION

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$m %
2,000 0.6
0.5
1,500
0.4
1,000
0.3
500
0.2
0
0.1
-500 0.0
FY10 FY11 FY12 FY13 FY14 FY15 1H16
CIC as % Avg. GLA IP charge (LHS) CP charge (LHS)
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----- Start of picture text -----

$m
33
10 [2 ]
2,956
(16) (1)
(73)
2,862
(47)
Sep 15 AUS Insto. NZ Other Esanda FX Mar 16
Sale Mvmt.
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TOTAL PROVISION CHARGE COMPOSITION

	1H14	2H14	1H15	2H15	1H16
Total IP	602	542	455	655	892
Total CP	(74)	(81)	55	40	26
CP composition:
Lending Growth	85	61	54	50	56
Risk Profile	(190)	(42)	5	65	(30)1
Portfolio Mix	(10)	(10)	3	(3)	0
Eco cycle	41	(90)	(7)	(72)	0

CP as a % of cRWA

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$b
340 350 334
305 309
288
276
1.00% 1.00% 0.93% 0.89% 0.86% 0.85% 0.86%
Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16
Collective Provision as a % of CRWA (RHS)
Credit Risk Weighted Assets
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Total CP reduction captured within the 1H16 risk component is impacted by customer downgrades to impaireds / IP.
The number includes Retail Asia & Pacific, Global Wealth and Central Functions IP: Individual Provision charge CP: Collective Provision charge

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CIC: Total Credit Impairment charge

Individual Provision Charge

ANZ HISTORICAL OBSERVED LOSS RATES

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bps
250
200
150
100
50
0
01/90 01/95 01/00 01/05 01/10 01/15
IP Loss Rate Median IP Loss Rate
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IP CHARGE BY SEGMENT

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

$m
1,000 892
800
655
600 595 572 602 542
455
400
200
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16
Institutional Commercial Consumer
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IP CHARGE COMPOSITION

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

$m 892
595 572 602 655
1,000 542 455
500
0
-500
1H13 2H13 1H14 2H14 1H15 2H15 1H16
New Increased Writebacks & Recoveries
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IP CHARGE BY REGION

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

$m
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----- Start of picture text -----

1,000 892
800
655
600 595 572 602 542
455
400
200
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16
Australia New Zealand APEA
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IP: Individual Provision charge

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High Risk & Impaired Assets

CONTROL LIST

Index Sep 09 = 100

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

120
100
80
60
40
20
Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16
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Control List by Limits Control List by No. of Groups

GROSS IMPAIRED ASSETS BY DIVISION

$m

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

5,000 4,685
4,264
4,000 3,620
2,889 2,883
3,000 2,708 2,719
2,000
1,000
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16
Australia New Zealand Institutional Other
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NEW IMPAIRED ASSETS BY DIVISION

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

2,000
1,783 1,784
1,716
1,571 1,541
1,500 1,327
1,197
1,000
500
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16
Australia New Zealand Institutional Other
GROSS IMPAIRED ASSETS BY SIZE OF
EXPOSURE
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----- Start of picture text -----

$m
5,000 4,685
4,264
4,000 3,620
2,889 2,883
3,000 2,708 2,719
2,000
1,000
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16
<$10m $10 -100m >$100m
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Risk Weighted Assets

TOTAL RISK WEIGHTED ASSETS

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

402
387 388
38
361 362 33 38
14
340
32 32 14 16
29
24 21
23
340 350 334
305 309
288
Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16
Op-Risk Risk Weighted Assets
Market & IRRBB Risk Weighted Assets
Credit Risk Weighted Assets
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TOTAL RWA MOVEMENT

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

$b
401.9
2.8 388.3
(0.8)
(15.5) (0.1)
Sep 15 Credit Op IRRBB Mkt. Mar 16
RWA RWA RWA RWA
CRWA MOVEMENT - MAR 16 V SEP 15
$b
Includes $4.1m reduction
for Esanda sale
349.8
0.3 334.3
(8.1)
(6.1) (1.6)
Sep 15 FX Lending Data / Risk Mar 16
Impact Movement Meth
review
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Risk Weighted Assets

GROUP EAD[1] & CRWAs

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

$b 919 906
891
813
779
741
692
39.8% 38.9% 39.2% 38.0% 38.1% 38.1%
36.9%
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Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16

CRWA / EAD (RHS) Exposure at Default

GROUP EAD[1] MOVEMENT - MAR 16 v SEP 15

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

$b
3.7
918.6 3.5
12.1
3.8 (10.2) 0.2 905.6
(7.4)
(18.7)
Sep-15 FX Data AUS AUS NZ Insto. Esanda Other Mar-16
HL Non HL
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GROUP EAD & CRWA GROWTH MOVEMENT - MAR 16 V SEP 15

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

$b
12.1
2.4 3.5 2.8 3.7 1.5
0.2 0.5
(4.1)
(7.4)
EAD Growth cRWA Growth (10.2) (9.2)
AUS HL AUS NZ Other Esanda Insto.
Non HL
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Post CRM EAD, net of credit risk mitigation such as guarantees, credit derivatives, netting & financial collateral. Includes amounts for ‘Securitisation’ and ‘Other Assets’ Basel asset classes.

Portfolio Composition

EXPOSURE AT DEFAULT (EAD) AS A % OF GROUP TOTAL

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

ANZ Group
Total Group EAD (Mar 16)
$882b [1 ]
5.6%
1.5%
1.9%
1.4%
2.4%
1.8%
2.6%
3.5%
40.2%
5.1%
3.8%
5.7%
7.0%
17.5%
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Category	% of Group EAD	% of Group EAD	% of Portfolio in Non Performing	% of Portfolio in Non Performing	Portfolio Balance in Non Performing
	Mar-15	Mar-16	Mar-15	Mar-16	Mar-16
Consumer Lending	38.2%	40.2%	0.2% 0.1% 426m
Finance, Investment & Insurance	18.7%	17.5%	0.1% 0.1% 88m
Property Services	6.8%	7.0%	1.3% 0.4% 247m
Manufacturing	6.5%	5.7%	0.5% 1.3% 625m
Agriculture, Forestry, Fishing	3.9%	3.8%	2.1% 1.5% 496m
Government & Official Institutions	4.4%	5.1%	0.0% 0.0% 0m
Wholesale trade	4.0%	3.5%	0.4% 0.7% 201m
Retail Trade	2.6%	2.6%	0.4% 0.7% 167m
Transport & Storage	2.2%	2.4%	1.3% 1.3% 268m
Business Services	1.8%	1.8%	0.9% 1.1% 181m
Resources (Mining)	2.2%	1.9%	0.5% 2.4% 409m
Electricity, Gas & Water Supply	1.6%	1.4%	0.1% 0.1% 10m
Construction	1.6%	1.5%	1.7% 2.2% 290m
Other	5.5%	5.6%	0.5% 0.4% 197m
TOTAL	100.0%	100.0%	0.4% 0.4% 3,605m
TOTAL $b	$8691	$8821

EAD excludes amounts for ‘Securitisation’ and ‘Other Assets’ Basel asset classes and manual adjustments. Data provided is as at Mar 16 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Note that APS330 disclosure is reported on a Pre CRM basis.

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Group Resources Portfolio

RESOURCES EXPOSURE BY SECTOR (EAD)

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

Total EAD (Mar 16) : $17b $2.5b YoY As a % of Group EAD: 1.9% 30bp YoY
$b % of Mar'16 Resources EAD
8.3 Coal Mining 10%
7.2 Metal Ore Mining 27%
6.8
Oil & Gas 43%
Other Mining 6%
4.5 4.6 4.4 Services To Mining 14%
4.0
2.0 2.8 2.6 1.8 2.9 2.2 2.7 3.0 2.4
1.1 1.0 1.1 1.1
Coal Mining Metal Ore Mining Oil & Gas Other Mining Services to Mining
Mar 13 Mar 14 Mar 15 Mar 16
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RESOURCES EXPOSURE CREDIT QUALITY (EAD)

RESOURCES PORTFOLIO MANAGEMENT

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

$b
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----- Start of picture text -----

AUS (includes NZ ASIA EA & Other
8.6 Iron Ore 10%0.7 ) 3.3 4.4
24% 28% 19%
47%
76% 72% 81%
53%
AUS NZ ASIA OTHER
Sub-Investment Grade Investment Grade
----- End of picture text -----

Portfolio is skewed towards well capitalised and lower cost resource producers. 27% of the book is less than one year duration.
Investment grade exposures represent 65% of portfolio vs. 68% at Sep15.
Trade business unit accounts for 17% of the total Resources EAD.
Mining services customers are subject to heightened oversight given the cautious outlook for services sector.

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Commercial Property Portfolio

COMMERCIAL PROPERTY OUTSTANDINGS BY REGION[1 ]

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

$b %
8.0
38.8
37.4 37.5
7.5
4.5
34.4 33.9 4.5 4.7
32.0
30.6 4.5 4.1
4.1 8.9 7.0
4.0 8.3 8.4
6.9 6.9
6.1
5.4
6.5
6.0
24.6 24.4 25.4
23.0 22.9
21.2 21.8
5.5
5.0
Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Dec 15
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% of Group GLA’s (RHS) New Zealand APEA Australia

COMMERCIAL PROPERTY OUTSTANDINGS BY SECTOR[1 ]

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

%
35
30
25
20
15
10
5
0
Offices Retail Industrial Residential Tourism Other
Sep 14 Sep 15 Dec 15
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PROPERTY PORTFOLIO MANAGEMENT

Continued to tighten our risk appetite within agreed strategy parameters.
This includes tightened criteria around LVR and presales qualifications, as well as reduced lending discretions for non-specialist lenders to originate residential development business.
EAD growth has primarily occurred in the metro capital city markets on the Eastern seaboard of Australia, driven by the strong residential development cycle underway.

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As per ARF230 disclosure.

Group Agriculture Portfolio

AGRICULTURE EXPOSURE BY SECTOR (% EAD)

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

Total EAD (Mar 16) As a % of Group EAD
A$33b 3.8%
Dairy
9%
11% Beef
39%
Sheep & Other Livestock
17%
Grain/Wheat
10% Horticulture/Fruit/Other
14%
Crops
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NEW ZEALAND DAIRY CREDIT QUALITY

PD increase reflects re-grading to current milk prices.

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

$NZDb
----- End of picture text -----

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

14.0
12.7 12.0 11.6 11.9 12.4 12.5
1.75%
1.59% 1.55%
1.22%
1.12%
0.88%
0.77%
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Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Mar 16

1 Wt. Avg. Probability of Default NZD Dairy EAD

GROUP AGRICULTURE EAD SPLITS

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

1% 2% 6% [5% ]
40%
20%
59% 98% 69%
Australia New Zealand Int Markets Productive Impaired <60% Secured 60 - < 80% Secured
80 - < 100% Secured Fully Secured
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Wholesale PD model changes account for 16bps increase in FY15.

Australia Division

AUSTRALIA DIVISION CREDIT EXPOSURE

(EAD)

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

1%
6%
Home Loans
22%
Corporate and Commercial
Banking³
Personal Loans
71%
Consumer Cards
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DYNAMIC LOAN TO VALUE RATIO (1H16)[2,4 ]

% of Portfolio

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

50
40
30
20
10
0
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0-60% 61-75% 76-80% 81-90% 91-95% 95%+ Sep-12 Sep-13 Sep-14 Sep-15 Mar-13 Mar-14 Mar-15 Mar-16

AUSTRALIA DIVISION 90+ DAY DELINQUENCIES[1 ]

AUSTRALIA HOME LOANS 90+ DPD BY STATE[1 ]

Percentage of total portfolio (Mar 16)[5] :

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2.0
Home Loans (inclusive of hardship change)
Corporate & Commercial Banking³
1.5 Consumer Cards
1.10%
1.0 1.07%
0.5 0.70%
0.0
Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16
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----- Start of picture text -----

29% 30% 17% 15% 100%
1.2
1.0
0.8
0.6
0.4
0.2
0.0
VIC NSW QLD WA Portfolio
& ACT
Sep 12 Sep 13 Sep 14 Sep 15 Mar 16
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Exclusive of Non Performing Loans.
Including capitalised premiums.
Includes Small Business, Commercial Cards and Esanda Retail.
Valuations updated Mar-16 where available.
VIC, NSW & ACT, QLD and WA represent 91% of total portfolio, with remaining 9% distributed between TAS, NT and SA.

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New Zealand – market characteristics

GDP CONTRIBUTION BY INDUSTRY[1 ]

BANKING MARKET[2 ]

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

Transport and
Comms
8%
Wholesale &
Retail
12% Finance &
Business
27%
Construction
6%
Government
Utilities 4%
3% Services
and other
Manufacturing 22%
11%
Primary sector
7%
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88% of NZ banking sector Net Loans & Advances ($365b) are with the big 4 banks

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

Other
banks
12%
ANZ
31%
Peer 3
19%
Peer 2 Peer 1
19% 19%
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PRIMARY SECTOR GDP CONTRIBUTION[3 ]

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

Agriculture industry [3]
Output analysis:
• Dairy ~30%
• Cattle & Sheep ~20%
Mining • Agri Services ~15%
23% • Veg., Fruit, Nut ~12%
• Other ~23%
Fishing,
Aquaculture,
Support Agriculture
services 57%
11%
Forestry &
Logging
9%
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POSITIVE MIGRATION IMPACT ON POPULATION[4]

Persons, 12 month total (‘000)

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140
PLT Arrivals
100
60
PLT Departures
20
-20 Net PLT Immigration
92 94 96 98 00 02 04 06 08 10 12 14 16
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Statistics NZ.
Source: 2015 KPMG Financial Institutions Performance Survey. 3. Statistics NZ, ANZ analysis, as at June 2015.
PLT refers to Permanent Long Term. Data as at February 2016.

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New Zealand

NEW ZEALAND GEOGRAPHY GROSS IMPAIRED ASSETS

NZDm

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2,000 1,818 GIA as % GLA 3.0
Gross Impaired Assets
2.5
1,451
1,500
2.0
955
1,000 1.5
708
1.0
419
500 343
0.5
0 0.0
Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Mar 16
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NEW ZEALAND DIVISION 90+ DAYS DELINQUENCIES

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

1.5
Home Loans Commercial Agri
1.0
0.5
0.0
Jan-08 Jan-10 Jan-12 Jan-14 Jan-16
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NEW ZEALAND GEOGRAPHY TOTAL PROVISION CHARGE

NZDm

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

200 105
85 CP Charge IP Charge
103
150
99
100 44
22 30 46 50
31
50
0
-50
-39
-100
1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16
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MORTGAGE DYNAMIC LOAN TO VALUE RATIO[1 ]

% of Portfolio

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6% [4% ]
0-60%
61-70%
17%
71-80%
54% 81-90%
90%+
19%
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Average dynamic LVR as at Feb 2016 (not weighted by balance)

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2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK PORT FO LI O CO MPO SI T IO N

ANZ Institutional Portfolio Country of Incorporation[2 ]

INSTITUTIONAL PORTFOLIO SIZE & TENOR (EAD)[1 ]

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$b
400
350
300
53%
250
200
43%
150
100
47%
27%
57%
50
73% 13%
87%
0
Total APEA Asia China
Institutional
Tenor < 1 Yr Tenor 1 Yr+
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ANZ INSTITUTIONAL INDUSTRY COMPOSITION

EAD (March16): AU$361b[1]

Finance (Banks and Central Banks) Government Admin. 28% Property Services³ 34% Services to Fin. & Ins. Machinery & Equip Mnfg 3% Basic Material Wholesaling 3% 3% Electricity & Gas Supply 12% 4% 5% Food,Beverage & Tobacco 9% Mnfg Other⁴

ANZ INSTITUTIONAL PRODUCT COMPOSITION

EAD (March16): AU$361b[1]

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Loans & Advances
14%
Traded Securities (e.g.
1% 25%
Bonds)
Contingent Liabilities &
12% Commitments
Trade & Supply Chain
Derivatives & Money Market
11% 20% Loans
Gold Bullion
16% Other
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Data provided is as at Mar 16 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class “Retail”.
Country is defined by the counterparty’s Country of Incorporation.
~83% of the ANZ Institutional “Property Services” portfolio is to entities incorporated in either Australia or New Zealand. 4. Other is comprised of 48 different industries with none comprising more than 2.2% of the Institutional portfolio

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ANZ Asian Institutional Portfolio Country of Incorporation[2 ]

COUNTRY OF INCORPORATION[2 ]

EAD (March16): AU$88b[1]

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7%
4%
24%
5%
5%
7%
13%
21%
14%
China Japan Singapore
HK Taiwan Sth Korea
Indonesia India Other
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ANZ ASIA INDUSTRY COMPOSITION

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

EAD (March16): AU$88b [1]
Finance (Banks & Central
Banks)
Machinery & Equip Mnfg
24%
Property Services
Petrol,Coal,Chem & Assoc
Prod Mnfg
3% 51% Basic Material Wholesaling
4%
Pers & Household Good
4%
Wholesaling
4% Communication Services
5%
6% Other³
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ANZ ASIA PRODUCT COMPOSITION

EAD (March16): AU$88b[1]

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

Loans & Advances
Trade & Supply Chain
22%
29%
Derivatives & Money Market
Loans
Traded Securities (e.g.
5%
Bonds)
5% Contingent Liabilities &
Commitments
8% Gold Bullion
17%
Other
14%
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Data is provided is as at Mar16 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class “Retail”. 2. Country is defined by the counterparty’s Country of Incorporation. 3. “Other” within industry is comprised of 45 different industries with none comprising more than 2.3% of the Asian Institutional portfolio; Other product category is predominantly exposure due from other financial institutions.

ANZ China Portfolio Country of Incorporation[2 ]

COUNTRY OF INCORPORATION[2 ]

ANZ CHINA INDUSTRY COMPOSITION (EAD)[1]

China EAD

Total China EAD of A$22b, with 49% or $10.5b booked onshore in China.

Tenor ~87% of EAD has a tenor less than 1 year

Risk rating

Compared to Asia, Australia and NZ, China exposure has a stronger average credit rating.

Industry

63% of China exposures to Financial institutions, with ~55% of this to China’s central bank and its Top 4 largest banks.

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8% Finance (Banks and Central
3% Banks)
9% Manufacturing
Wholesale Trade
17%
63% Transport & Storage
Other
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ANZ CHINA PRODUCT COMPOSITION (EAD)[1]

Products

Product reduction seen in Trade & Supply chain (1.0b in Finance Industry, 1.0b in Manufacturing), while largest growth in Other (+1.8b) due to increase in Nostro accounts
Within loans and advances circa 87% have a tenor of less than 1 year, up from 63% at Sep15.

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Loans & Advances
13%
18% Gold Bullion
2%
4% Trade & Supply Chain
Derivatives & Money Market
14% Loans
Traded Securities (e.g.
26% Bonds)
Contingent Liabilities &
Commitments
Other
24%
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Data is provided is as at Mar16 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class “Retail”. 2. Country is defined by the counterparty’s Country of Incorporation

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK AUST RALI A DI VISI O N

Australia Division - Financial Performance (PCP)

PROFIT

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

11%
$m
1,780
1,753
(27)
1,650 175
1,605
(45)
1H15 Specified 1H15 Movt 1H16 Specified 1H16
Cash items Adjusted Adjusted items Cash
profit pro forma pro forma profit
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PRO FORMA PROFIT CONTRIBUTION

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

$m
31
27
(62)
1,780
377 (123)
1,605 (75)
1H15 Volume Margin Other Exp Provisions Tax 1H16
adj pro Income adj pro
forma forma
profit profit
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PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1
	Drivers	1H16 $m	Change
Cash Profit Increase in cash profit driven primarily by volume growth 1,780 11%
Income 4,589 10% NII Lending growth in Home Loans +11% and SBB +12%, Deposits +8% 11% OOI Fee income growth across Retail and SBB 5% Expenses Investment in priority segments, wage inflation and volume related costs largely offset by productivity 1,597 4%
Provisions Charge Lower write backs in C&CB (1H16) and higher charges in SBB, Personal Loans and Regional Business Bank 449 38%
Net Interest Margin Margin improvement across Retail, partially offset by ongoing competitive pressures 2.54% +1bps

Financial results and growth rates have been adjusted for sale of Esanda Dealer Finance, restructuring costs and changes to software capitalisation policy. For reported numbers, refer to Results Announcement pages 52-59. PCP: Comparisons are on an underlying cash basis comparing 6 months to 31 March 2016 to 6 months to 31 March 2015.
C&CB refers to Corporate and Commercial Banking

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Australia Division - Financial Performance (HoH)

PROFIT

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$m 7%
1,780
1,753
1,706
1,660 120 (27)
(46)
2H15 Specified 2H15 adj Movt 1H16 Specified 1H16
Cash items pro forma Adjusted items Cash
profit pro forma profit
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PRO FORMA PROFIT CONTRIBUTION

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

$m 40 2
(4)
(52) 1,780
197
(63)
1,660
2H15 Volume Margin Other Exp Provisions Tax 1H16
adj pro Income adj pro
forma forma
profit profit
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PRO FORMA (HoH)1	PRO FORMA (HoH)1
	Drivers	1H16 $m	Change
	Increase in cash profit driven primarily by
Cash Profit	volume growth and disciplined cost	1,780	7%
	management, partly offset by higher provision
	charges
Income			5%
NII	Lending growth in Home Loans +5% and SBB +5%, Deposits +4%	4,589	6%
OOI	Seasonal impact in Cards, offset by growth in Deposits & Payments		flat
Expenses	Investment in priority segments, wage inflation and volume related costs	1,597	flat
	largely offset by
	productivity
Provisions Charge	Higher charges in SBB, Regional BB and Corporate Banking	449	13%
Net Interest Margin	Margin improvement across Retail, partially offset by ongoing competitive pressures	2.54%	+2bps

Financial results and growth rates have been adjusted for sale of Esanda Dealer Finance, restructuring costs and changes to software capitalisation policy. For reported numbers, refer to Results Announcement pages 52-59. HoH: Comparisons are on an underlying cash basis comparing 6 months to 31 March 2016 to 6 months to 30 September 2015.

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Home Loans, Small Business & NSW driving strong financial results

REVENUE & NIM

PROFIT BEFORE PROVISIONS CASH PROFIT

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$m
4,589
4,352
4,114 4,155
3,918
2.57
2.53 2.53 2.52 2.54
1H14 2H14 1H15 2H15 1H16
NIM % (RHS) Revenue
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----- Start of picture text -----

$m
2,993
2,758
2,594 2,620
2,471
1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

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

$m
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----- Start of picture text -----

1,780
1,573 1,605 1,660
1,484
1H14 2H14 1H15 2H15 1H16
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REVENUE PER FTE & CTI

CREDIT QUALITY[1 ]

RWA AND RORWA

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

$k % $b
126
527 0.47
501
465 474 465 115
0.39 0.38 109
104 104
0.34 0.34
0.29
37.3 36.9 36.9 36.6 0.27 0.28 0.27
34.8 3.01
2.86 2.94 2.88 2.82
0.23
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
CTI % (RHS) Revenue/FTE IP loss rate GIA as % of GLA RoRWA % (RHS) RWA
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Adjusted pro forma basis except for IP loss rates, which is on a statutory basis 1. IP loss rates are inclusive of the Esanda Dealer Financial portfolio

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Strong outcomes in customer acquisition, product penetration and sales

CUSTOMERS

PRODUCTS PER CUSTOMER

Australia Division

Retail products per customer

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

‘000
5,900
5,800 +~402k
5,700
5,600
5,500
5,400
5,300
5,200
Mar-13 Mar-14 Mar-15 Mar-16
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----- Start of picture text -----

Multiple 56.6% 57.9% 58.4% 59.3%
Single 43.4% 42.1% 41.6% 40.7%
Mar-13 Mar-14 Mar-15 Mar-16
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CUSTOMER RELATIONSHIPS

SALES OUTCOMES (PCP[1] )

C&CB Contribution of Cross Sell

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

$m
Cross sell 626 649 730
revenue
Direct
1,470 1,513 1,543
revenue
Mar-14 Mar-15 Mar-16
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Sales growth

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

Home Loans 19%
Business Lending 10%
Cards Spend 6%
Deposit Transact
4%
accounts
Personal Loans 4%
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Sales metrics are on a pro forma basis and relate to gross lending FUM on acquisition except for Cards Spend and Deposit Transact accounts. Cards spend relates to the cards spend volume in dollars. Business Lending sales exclude Esanda. PCP: Comparing half year ended 31 March 2016 to half year ended 31 March 2015.

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Australia Division: strong revenue and volume growth, while managing costs and credit quality

FUM GROWTH PCP[1 ] EFFECTIVE MARGIN MANAGEMENT (NIM)

FUM growth

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

Home Loans 11%
Retail Deposits 9%
Personal loans 8%
Business
8%
Lending
Business
6%
Deposits
----- End of picture text -----

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

2.57%
2.54%
2.53% 2.53%
2.52%
1H14 2H14 1H15 2H15 1H16
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STRONG REVENUE GROWTH

COSTS AND PROVISIONS WELL MANAGED

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

10%
6%
4%
1H14 1H15 1H16
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----- Start of picture text -----

CTI (%) GIA as a % of GLA (%)
0.38
36.9
34.8
0.34
1H15 1H16 1H15 1H16
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Adjusted pro forma basis

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PCP: Comparing half year ended 31 March 2016 to half year ended 31 March 2015.

Retail

LENDING

FUM

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

$b
+9%
254
242
212 220 229
1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

REVENUE

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

$m
+12%
3,047
2,822
2,590 2,641
2,443
1H14 2H14 1H15 2H15 1H16
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DEPOSITS

FUM

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

+6%
110 112 113 118 123
1H14 2H14 1H15 2H15 1H16
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COST TO INCOME

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

40.4%
40.0%
39.6%
38.5%
36.1%
1H14 2H14 1H15 2H15 1H16
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Adjusted pro forma basis

Corporate and Commercial

CUSTOMERS[1 ]

SMALL BUSINESS A PRIORITY SEGMENT

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

‘000
426 443 456 474 484
9%
4%
3%
1% 1%
1H14 2H14 1H15 2H15 1H16
Cross sell growth (LHS) Customers (LHS)
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----- Start of picture text -----

$b
15.1
14.4
13.5
12.7
11.7
1H14 2H14 1H15 2H15 1H16
Lending FUM
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ASSET QUALITY

COST MANAGEMENT

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

$b $m
70 2.5
60 475 484 489 507 497
2.0
50
32.3 32.0 32.3 33.1 32.2
40
1.5
30
20
1.0
10
0 0.5
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
GIA as a % GLA (RHS) GLA (LHS) CTI (%) (RHS) Expenses
----- End of picture text -----

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Adjusted pro forma basis

Corporate and Commercial Banking customers excluding Esanda.

Australian Home Loans: Composition and flows

HOME LOAN LENDING FLOWS ($B)

HOME LOAN MARKET SHARE MOVEMENT

APRA Mortgage Market Share

Index Mar 15 = 100

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

+11%
15
5
-50
243
56
218
1H15 New Net OFI Redraw Repay 1H16
sales exc Refi & / Other
Refi-in Interest
----- End of picture text -----

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

103
102
101
100
99
98
Mar-15 Jun-15 Sep-15 Dec-15
ANZ Peer 1 Peer 2 Peer 3
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HOME LOAN PORTFOLIO & FLOW COMPOSITION

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

By purpose By channel
Portfolio Flow
5% 4% 4%
28%
38% 36% 47%
68%
57% 60% 53%
1H15 1H16 1H16 1H15
Equity Owner Occ
Investor
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----- Start of picture text -----

Portfolio Flow
47% 48% 53%
53% 52% 47%
1H15 1H16 1H16
Broker Proprietary
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----- Start of picture text -----

By state
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----- Start of picture text -----

Portfolio Flow
7% 6% 10% [5%]
16% 15%
12%
17% 16%
39%
27% 30%
33% 33% 34%
1H15 1H16 1H16
SA QLD/NT VIC/TAS
WA NSW/ACT
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100

Australian Home Loans: Balanced portfolio growth

PORTFOLIO STATISTICS1	1H15 1H16	1H15 1H16
Total Number of Home Loan Accounts	934k	976k
Total Home Loans FUM	$218b	$243b
% of Total Australia Geography Lending10	60%	63%
% of Total Group Lending10	39%	43%
Owner Occupied Loans - % of Portfolio2	60%	63%
Investor Loans - % of Portfolio2	40%	37%
Offset balances	$19b	$24b
% of Portfolio Paying Interest Only8,9	35%	38%
% of Portfolio Ahead on Repayments7,8	43%	40%

ced portfolio growth	ced portfolio growth
PORTFOLIO STATISTICS1 1H15 1H16
Average Loan Size at Origination3,4 $376k	$415k
Average Loan Size $233k	$249k
Average LVR at Origination3,4,5 71%	71%
Average Dynamic LVR of Portfolio4,5,6 51%	51%
First home buyer 7%	7%
Broker originated 47%	48%
Low doc 9%	7%
Group Loss Rates 0.19%	0.32%
Home Loans Loss Rate 0.01%	0.01%

Home Loans (inclusive of NPLs, exclusive of offset balances) 2. Excludes Equity Manager 3. Originated 1H15 for 1H15 and 1H16 for 1H16 4. Unweighted 5. Including capitalised premiums 6. Valuations updated Mar 2015 (for 1H15) and Mar 2016 (for 1H16) where available 7. % of Customer >30 days ahead of repayments 8. Excludes revolving credit 9. At reporting period 10. Based on Net Loans and Advances

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101

Australian Home Loans: Sound underwriting practices

Multiple checks during origination process

End-to-end home lending responsibility managed within ANZ

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

Pre-application Income & Expenses
Application Know Your Customer
Income Verification
Income Shading
Serviceability Expense Models
Interest Rate Buffer
Repayment Sensitisation
LVR Policy
Collateral /
Valuations LMI policy
Valuations Policy
Credit Credit History
Assessment
Bureau Checks
Documentation
Fulfilment
Security
Quality assurance, info verification & policy reviews
----- End of picture text -----

Pre-sales (digital & marketing)
Proprietary sales and/or verification of 3[rd] parties[1 ]
In-house loan origination, assessment, fulfilment
Collections activity

Effective hardship & collections processes

Dedicated hardship team
Early warning based on system triggers

Full recourse lending

Multiple actions to manage potential losses

ANZ assessment process across all channels

ANZ network
Mobile
Broker
Digital
Ongoing management of serviceability requirements
3rd party sales channels (e.g. Broker) require ANZ accreditation & are subject to ongoing compliance monitoring to distribute ANZ home lending products

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102

Small Business Banking: Priority segment

LENDING

DEPOSITS

Net Loans and Advances

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

$b
+13%
14.4 15.1
12.7 13.5
11.7
1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

Deposit FUM

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

$b
+6%
30.9 31.8 32.5
28.8 29.7
1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

ASSET QUALITY

INVESTMENT FOR GROWTH

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

$b %
16 2.0

14
1.5
12
10 1.0 
8
0.5
6
4 0.0 +3%
1H14 2H14 1H15 2H15 1H16
GIA as a % of GLA (RHS) GLA ($b) (LHS)
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ANZ Business Ready providing tailored tools, packages and a $2b lending pledge

Automated data integration with major accounting software providers

Increase in Small Business bankers

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NSW: Expansion into NSW delivering strong results

FOCUSED INVESTMENT IN NSW

DRIVING STRONGER GROWTH IN NSW VS NATIONAL GROWTH[1 ]

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Expanding our sales capacity with 170
170 additional FTE hired in NSW since 1H15 Home Loans 23%
FUM 11%
Investing in our branch network with 14 C&CB cross 18%
14 new and refurbished branches across the sell 2 13%
state in 1H16
Business 10%
Lending FUM 2 8%
23% Increasing the investment in our
marketing spend in NSW
Business 9%
Deposits FUM 6%
Rank in Top of Mind Awareness in
#2 Sydney [5] 9%
Cards Spend
6%
Rank in both Home Loans and Overall
Purchase Intention [5] Retail Deposits 7%
3
#2 FUM 6%
Transact
5%
Australia’s first dedicated Home Loans Deposit NSW
4 2%
Acquisitions
1 [st] centre opened in Parramatta National
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PCP: Comparing end of period 31 March 2016 to 31 March 2015 for FUM. Card spend relates to card spend volume in dollars. All other metrics are comparing half year ended 31 March 2016 to half year ended 31 March 2015. 2. Excludes Esanda 3. Excludes offset balances 4. Refers to Branch channel only 5. ANZ Brand and Advertising Monitor conducted by Ipsos – rolling 3 months, Jan 2016

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104

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK I NST I T UT IO NAL

Institutional Division – financial performance

PROFIT[1 ]

PERFORMANCE DRIVERS[2]

$m

1,071 178 893 261 40 672 632 1H15 Movt. 2H15 Movt. 1H16 Specified 1H16 Cash Cash Cash Items Adjusted Profit Profit Profit pro forma Profit

Institutional	1H16 $m	Movement % PCP % HoH	Movement % PCP % HoH
Total Income	2,713	-9%	-3%
Expenses Profit Before Provisions	1,510 1,203	9% -24%	6% -12%
Provision Charge	323	Large	Large
Cash Profit	632	-41%	-29%
Specified Items Cash Profit ex. Specified Items	40 672	Large -37%	Large -25%
Net Loans and Adv. ($b)	126	-13%	-12%
Customer Deposits ($b)	176	-4%	-4%

  - Mainly impacted by market conditions (including market dislocation, price competition, lower commodity prices and lower trade volumes) resulting in revenue weakness across most products, in particular Balance Sheet Trading and FICC[3] related flow income

Income • Targeted growth businesses (Market Sales and Cash Management) continued to perform well given market conditions
• Active RWA reduction contributed to ~25% of the revenue decline
• Impacted mainly by FX (5%), as well as restructuring and
Expenses increased D&A. Organisational streamlining is now having a clear positive impact on the underlying expense base
• The provision charge has increased off a cyclical low
Provisions • Increased charges mainly in Loans & Specialised Finance and Trade due to the challenging macro-economic environment
• NLA down mainly as a result of active RWA management and controlled asset growth
Loans & • Deposits declined in Asia, impacted by the slowdown in the
Deposits Resources sector, offset partially by growth in Australia
• Markets: Sales impacted by subdued demand for hedging products compared to 1H15, due to a low AUD and continued low interest rates. Trading impacted by challenging market conditions
• Balance Sheet Trading impacted by widening asset swap spreads, continued market dislocation and regulatory
Products requirement to hold more higher quality (lower yielding) assets
- Increased charges mainly in Loans & Specialised Finance and Trade due to the challenging macro-economic environment
- NLA down mainly as a result of active RWA management and controlled asset growth
- Markets: Sales impacted by subdued demand for hedging products compared to 1H15, due to a low AUD and continued low interest rates. Trading impacted by challenging market conditions
- Loans: NIM continues to stabilise through management actions related to loan book rebalancing
- Transaction Banking: Strong growth in Cash Management business offset by management actions to reduce dilutive trade assets
Specified Items relevant to Institutional are software capitalisation changes and restructuring 2. Excluding Specified Items
FICC includes Rates, Credit, FX and Commodities businesses

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Portfolio reshaping, together with the challenging economic & market conditions, have impacted Institutional’s performance

REVENUE

EXPENSES[1]

PROVISIONS

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

-9% -3%
2,931 2,970
2,784 2,792
2,713
1,379
1,334 1,316 1,338
1,279
1H14 2H14 1H15 2H15 1H16
Revenue ($m) Rev/FTE ($k)
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----- Start of picture text -----

9% 6%
1,510
1,385 1,425
1,265 1,277 2 6 56
1,265 1,277 1,383 1,419 1,454
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----- Start of picture text -----

1H14 2H14 1H15 2H15 1H16
Expense ex. Specified Items ($m)
Specified Items ($m)
----- End of picture text -----

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

$m
269% 192%
323
154
111
88
-10
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==> picture [175 x 9] intentionally omitted <==

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

1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

PROFIT BEFORE PROVISIONS

CASH PROFIT

RISK WEIGHTED ASSETS

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

$m
-24% -12% -41% -29%
1,666 1,585 1,062 1,079 1,071
1,507
1,367 893
1,203
632
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
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==> picture [184 x 155] intentionally omitted <==

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

$b
-7% -8%
195 198
181 182 182
1H14 2H14 1H15 2H15 1H16
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Specified items relevant to Institutional are software capitalisation changes and restructuring

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Markets Sales and Trading has performed well given market conditions

SALES AND TRADING REVENUES CONTINUE TO DRIVE MARKETS PERFORMANCE…

… AND HAVE PERFORMED WELL GIVEN MARKET CONDITIONS

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

$m
1,216 1,223 995
14%
23% 21%
26% 24% 31%
86%
77%
Sales &
Sales &
Trading
Trading 51% 55% 55%
1H14 1H15 1H16
Sales Trading ex BS Balance Sheet
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----- Start of picture text -----

Sales Trading ex BS Balance Sheet
$m
-6%
668
621
549
-2% -29%
313 296 303 282 259
143
1H14 1H15 1H16 1H14 1H15 1H16 1H14 1H15 1H16
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OUR FX FRANCHISE CONTINUES TO GROW…

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

Markets Revenue
28%
39%
23%
18%
49%
43%
1H14 2H14 1H15 2H15 1H16
Others Rates FX
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…AND VAR REMAINS CONSERVATIVE

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

$
250
200
150
100
50
0
1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16
Sales/Trading per $ VaR Balance Sheet per $ VaR
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108

ANZ is reducing lending exposure and rebalancing the portfolio to address the change in the credit cycle

81% OF THE PORTFOLIO IS INVESTMENT GRADE…

… AND IN INTERNATIONAL 59% OF THE PORTFOLIO IS LESS THAN A YEAR IN DURATION[1 ]

EAD[3] $b

==> picture [247 x 146] intentionally omitted <==

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

388
378
1% 361
1%
20% 18%
18%
80% 81% 81%
1H15 2H15 1H16
Investment Sub-investment Default
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BUT PROVISION CHARGES HAVE INCREASED OFF A CYCLICAL LOW…[4 ]

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

0.41%
0.37%
0.66% 0.05% 0.08%
0.06% 0.02% 0.06%
0.31% 0.25%
0.17% 0.12% 0.12%
FY10 FY11 FY12 FY13 FY14 FY15 1H16
1H IPC/NLA (%) 20+ yr Historical Median Loss Rate
2H IPC/NLA (%)
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EAD[3] $b

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

Australia [2 ] NZ International
-2%
-7%
-3%
161 157
185
32 31 173
38% 36%
33% 34%
64% 59%
62% 64% 67% 66%
36% 41%
1H15 1H16 1H15 1H16 1H15 1H16
Tenor > 1 Year Tenor < 1 Year
...WITH INCREASES IN RESOURCES-
RELATED INDUSTRIES IN PARTICULAR [4 ]
$m Individual Provisions Individual Provisions
by Region by Sector
114
114 339 18% 339
2% 1%
30%
61% 68%
88% 29%
19%
38% 32% 22%
10%
-18%
2H15 1H16
2H15 1H16
NZ Australia [2 ] Manufacturing Wholesale Trade
International Mining Other
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Asset risk grade profile includes Institutional exposure excluding PNG. International includes Asia, Middle East, Europe and America 2. The Australian region includes Australia and PNG
Exposure-at-default as defined by APRA Prudential Standards
18% of the net IP charges in 1H16 are to customers classified as Emerging Corporates

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109

Our Institutional priorities will deliver improved returns

PRIORITIES	PRIORITIES	ACTIONS	PROGRESS
Immediate Focus	Improve Capital Efficiency	Actively sell down or run off low-returning RWAs across Loans & Specialised Finance, Markets and Transaction Banking Improve return on RWA through disciplined pricing and active customer management	RWA
			Margin Stabilised
	Reduce Costs	Lower FTE by reducing organisational complexity and rightsizing support and enablement functions Simplify and streamline the division to improve productivity Build an appropriately scaled coverage model to win on the basis of customer and industry insight	FTE
			Cost
	Connect customers across the region	Focus on and serve key institutional clients connected to the region via trade and capital flows Increase geographic focus to move decision-making closer to the customer	Cross-border flow
Growth	Continue targeted investment	Target the build out of regional Trade, Cash Management and Markets platforms Improve customer experience and STP rates, and reduce operational risk	STP rates
	Grow Profitable Businesses	Grow our Markets Sales and Cash Management businesses	Cash
			Markets Sales

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110

GROW PROFITABLE BUSINESES

Our targeted growth products have performed relatively well

CASH MANAGEMENT REVENUE CONTINUED TO SHOW STRONG GROWTH

MARKETS SALES PERFORMED SOLIDLY IN TOUGH CONDITIONS

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

5% 4%
$m
565
538 542
512
491
1H14 2H14 1H15 2H15 1H16
----- End of picture text -----

==> picture [286 x 154] intentionally omitted <==

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

-18% -5%
$m
668
621
577
563 549
1H14 2H14 1H15 2H15 1H16
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~1/4 OF THE REVENUE DECLINE WAS A RESULT OF RWA REDUCTION INITIATIVES

KEY IMPACTS ON REVENUE

Active sell-down and run-off of Loans, Trade and Commodities books has significantly reduced RWAs and contributed to 1/4 of the revenue decline

==> picture [633 x 171] intentionally omitted <==

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

$m of Loans, Trade and
2,970 Commodities books has significantly reduced RWAs and
contributed to 1/4 of the revenue decline
• Balance Sheet Trading has been impacted by widening
(80) asset swap spreads, continued market dislocation and
regulatory requirement to hold more higher quality (lower
yielding) assets
(116) 26 21 1 2,712 • Markets Sales was down significantly PCP after a
(13) 7
particularly strong 1H15. Global economic uncertainty and
(104) the low interest rate environment have contributed to
reduced customer appetite for hedging
• Trade revenues were impacted by active RWA
1H15 RWA Markets Markets Trade Markets Cash Loans Institutional 1H16 management, ongoing weakness in commodity prices and
Mgmt Balance Sales Markets Trading Mgmt ex RWA Central lower trade volumes
Actions Sheet ex RWA Conditions Mgmt Functions
Mgmt
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111

IMPROVE CAPITAL EFFICIENCY

We have made further progress on our capital efficiency initiatives

RISK WEIGHTED ASSETS DRIVERS

RISK WEIGHTED ASSETS BY GEOGRAPHY[1 ]

Active reduction in RWAs by $24bn over 18 months, has offset FX movement, portfolio growth and regulatory imposts…

… Targeting lower returning geographies

% of Total RWA

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

$b 6
2
10
182 (14) 6 182
(10)
2H14 FX Credit Growth Dilutive Business Reg. 1H16
migration asset practice Require.
reductions initiatives
----- End of picture text -----

==> picture [304 x 133] intentionally omitted <==

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

48% 46% 47% 50%
7% 7% 6% 7%
45% 47% 47% 43%
2H14 1H15 2H15 1H16
Australia [2] NZ International
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CRWA SAVING & REVENUE IMPACT

RWAs have reduced in 1H16 through a combination of continued active management and controlled portfolio growth…

… and the impact on revenue is lower than the CRWA[3] reduction, leading to improving returns[4 ]

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

-8%
198
1
2
(8) (3)
2 182
(7) (3)
2H15 FX Credit Growth TB Dilutive Business Reg. 1H16
migration (ex. TB) market asset practice Require.
conditions reduct. initiatives
----- End of picture text -----

==> picture [267 x 117] intentionally omitted <==

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

12%
8%
6%
4%
CRWA saving Revenue CRWA saving Revenue
impact impact
2H15 1H16
----- End of picture text -----

International includes Asia, Middle East, Europe and America
The Australian region includes Australia and PNG. PNG represents 4% of the total amount shown
Counterparty credit risk-weighted-assets
Revenue and cRWA for 2H15 is limited to impact from active reduction of low returning assets for Loan Products and Trade run-off; 1H16 includes impact of run-off from Loans, Trade, and Commodities

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112

IMPROVE CAPITAL EFFICIENCY

Balance sheet usage has remained disciplined

ACTIVE MANAGEMENT HAS REDUCED THE SIZE OF THE LOAN AND TRADE BOOKS…

… AND WE HAVE REBALANCED THE PORTFOLIO TOWARDS AUSTRALIA

Net Loans and Advances[1 ]

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

$b
-15% -12%
122
118
103
32 26
17
19 20 20
71 72 66
0.1
1H15 2H15 1H16
Loan Product Specialised Finance Trade
OVERALL MARGINS ARE IMPROVING AS
A RESULT [[1]] …
2.08%
2.01%
1.86%
1.62%
1.54% 1.55%
1.44%
1.52%
1.48%
1.08%
1.28%
1.18%
1H15 2H15 1H16
Australia [3] NZ International Institutional
----- End of picture text -----

OVERALL MARGINS ARE IMPROVING AS A RESULT[[1]] …

Net Loans and Advances[1 ]

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

$b
----- End of picture text -----

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

122 118 103
54% 53% 45%
0.0 0.0
6% 0.0
6% 6%
49%
40% 41%
0.1 0.1
1H15 2H15 1H16
Australia [3] NZ International
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… AND WE ARE INCREASING OUR CROSSSELL PENETRATION FROM THE LENDING BOOK[2]

Number of customers

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

54% 55% 57%
46% 45% 43%
1H15 2H15 1H16
LP +2 other products LP +3 or more other products
----- End of picture text -----

Consisting of Loans, Specialised Finance and Trade; International includes Asia, Middle East, Europe and America 2. Refers to any additional product(s) other than Loan Product 3. The Australian region includes Australia and PNG

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113

REDUCE COSTS

Simplification initiatives are reducing structural cost

- but FX, restructuring costs and D&A have dampened the impact in the first half

OUR COST BASE INCREASED 9% PCP ...

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

$m 9% 6%
1,510
1,425
1,385 2 6 56
1,383 1,419 1,454
1H15 2H15 1H16
Expense ex. Specified Items Specified Items [1 ]
----- End of picture text -----

... MAINLY DRIVEN BY FX, RESTRUCTURING AND D&A

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

$m 9%
1,510
18 6 5
49 (26)
73
1,385
1H15 FX Restruct’ng D&A Regulatory Net Other 1H16
Costs Software
Cap.
----- End of picture text -----

BUT BY SIMPLIFYING THE BUSINESS…

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

-6% -4%
4,008 3,944
3,783
1H15 2H15 1H16
----- End of picture text -----

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

FTE Institutional (ex Retail PNG)
----- End of picture text -----

...WE HAVE REDUCED UNDERLYING COST[2]

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

-2%
4%
$m
1,355
1,327 1,329
1,246 73
129
179
1,198 1,282 1,329
1,067 5
3 68 5 69 4 14 87 2 105 20
51
1H13 1H14 1H15 1H16
Reported BAU Costs Restructuring Costs Depreciation & Amortisation
FX Regulatory Costs Net Sotware Capitalisation
----- End of picture text -----

Specified items relevant to Institutional are software capitalisation changes and restructuring 2. Chart totals refer to Reported BAU costs and FX

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114

CONNECT CUSTOMERS ACROSS THE REGION

ANZ’s network is a major contributor to the strength of the Institutional home markets franchise

INSTITUTIONAL NETWORK REVENUES ARE STRONG

... AND WE HAVE STREAMLINED OUR STRUCTURE TO DRIVE AGILITY AND EFFICIENCY

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

~1% of International
5% of International revenue sourced from NZ
revenue sourced from
Australia
35% of Australian
revenue sourced from
International
26% of NZ
1% of Australian revenue sourced from
International
revenue sourced from
NZ
18% of NZ
revenue sourced from
Australia
----- End of picture text -----

The International[1] network is connecting the world to our home markets
Institutional is positioned for further growth in trade and capital flows in Asia – the largest export destination for our home markets
To maximise our network advantage, we have:
realigned our coverage model, by strengthening the geographic focus and moving decisionmaking closer to the customer
Reduced organisational complexity, by delayering the organisation and significantly reducing the size of the central functions

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International includes Asia, Middle East, Europe and America

115

CONTINUE TARGETED INVESTMENT

Our platform investments are improving customer experience and reducing operational risk

STP[1] RATES CONTINUE TO IMPROVE IN MARKETS OPERATIONS…

… AND IN APEA PAYMENTS

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

18ppt
85%
78%
67%
1H15 2H15 1H16
STP Rates (%)
----- End of picture text -----

==> picture [259 x 148] intentionally omitted <==

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

17ppt 37%
29%
20%
1H15 2H15 1H16
STP Rates (%)
----- End of picture text -----

OUR INVESTMENT IN CASH PLATFORMS IS SUPPORTING INCREASING VOLUMES…

… AND A HIGHER AVERAGE DEPOSIT BALANCE PER CLIENT[2 ]

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

10% 132
128
120
1H15 2H15 1H16
No. of transactions (m)
----- End of picture text -----

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

10% 2,428
2,315
2,209
1H15 2H15 1H16
Average Balance ($k per client)
----- End of picture text -----

STP refers to straight-through-processed transactions
Average balance per client excludes clients with zero balance

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116

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK NEW ZEALAND

New Zealand Division – Financial performance (PCP)

PROFIT

==> picture [295 x 142] intentionally omitted <==

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

$NZDm
28 635
626
606 1 607 (9)
1H15 Specified 1H15 Movt. 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
----- End of picture text -----

PRO FORMA PROFIT CONTRIBUTION

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

$NZDm
100
16
21
2 635
607
(26)
(74) (11)
1H15 Vol. Margin Other OOI Exp. Prov. Tax 1H16
Adjusted NII Adjusted
pro pro
forma forma
----- End of picture text -----

PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1
	Drivers	1H16 NZDm	Change
Cash Profit Increase in cash profit driven primarily by volume growth and disciplined cost management, partly offset by higher provision charges 635 5%
Income 1,487 3% NII Lending growth, average gross loans grew 9% 2% OOI Fixed asset gain on sale and higher fee income 11% Expenses Productivity gains more than offset inflationary and investment impacts 558 (3%)
Provisions Charge Primarily driven by lower write-backs 46 large
Net Interest Margin Competition for lending assets, customer preference for lower margin fixed rate lending 2.37% (15bps)

PCP: Comparisons are on a cash basis comparing 6 months to 31 March 2016 with 6 months to 31 March 2015.
‘Specified items’ include the impacts of software capitalisation policy changes and restructuring expenses. Further detail provided in the ANZ Half Year 2016 Consolidated Financial Report page 14.

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118

New Zealand Division – Financial performance (HoH)

PROFIT GROWTH

==> picture [293 x 146] intentionally omitted <==

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

$NZDm
24 635
626
610 1 611
(9)
2H15 Specified 1H15 Movt. 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
----- End of picture text -----

PRO FORMA PROFIT CONTRIBUTION

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

$NZDm
49 13
16 635
611 (7)
(28) (11)
(8)
2H15 Vol. Margin Other OOI Exp. Prov. Tax 1H16
Adjusted NII Adjusted
pro pro
forma forma
----- End of picture text -----

PRO FORMA (HoH)1	PRO FORMA (HoH)1	PRO FORMA (HoH)1	PRO FORMA (HoH)1
	Drivers	1H16 NZDm	Change
Cash Profit Cash profit increase driven primarily by volume growth and disciplined cost management 635 4%
Income 1,487 2% NII Lending growth, average gross loans grew 4% 1% OOI OOI increase driven by fixed asset gain on sale 8% Expenses Productivity gains more than offset inflationary and investment impacts 558 (2%)
Provisions Charge Driven by lower write- backs 46 18%
Net Interest Margin Competition for lending assets, customer preference for lower margin fixed rate lending 2.37% (7bps)

HoH: Comparisons are on a cash basis comparing 6 months to 31 March 2016 with 6 months to 30 September 2015.
‘Specified items’ include the impacts of software capitalisation policy changes and restructuring expenses. Further detail provided in the ANZ Half Year 2016 Consolidated Financial Report page 14.

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119

New Zealand Division – overview

REVENUE & NIM

==> picture [197 x 146] intentionally omitted <==

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

$NZDm
1,361 1,393 1,438 1,458 1,487
2.49 2.49 2.52 2.44 2.37
1H14 2H14 1H15 2H15 1H16
NIM (%) (RHS) Revenue
----- End of picture text -----

PROFIT BEFORE PROVISIONS $NZDm $NZDm

CASH PROFIT

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

799 828 862 886 916
601 576 606 610 626
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
PBP Cash Profit
----- End of picture text -----

REVENUE PER FTE & CTI

CREDIT QUALITY

RISK WEIGHTED ASSETS

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

NZDk
275 282 287 296
261
41.3 40.6 40.1 39.2 38.4
1H14 2H14 1H15 2H15 1H16
CTI (%) (RHS)
Revenue/FTE
----- End of picture text -----

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

%
----- End of picture text -----

==> picture [188 x 100] intentionally omitted <==

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

0.75%
0.61%
0.44%
0.35%
0.28%
1H14 2H14 1H15 2H15 1H16
GIA as a % of GLAs
----- End of picture text -----

NZDb

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

59.0 60.1
53.8 54.6 55.0
2.38
2.11 2.22 2.17 2.11
1H14 2H14 1H15 2H15 1H16
Return on avg. RWA (%) (RHS)
RWA
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120

New Zealand – continuing to build scale

COMPARATIVE SCALE[1 ]

==> picture [467 x 157] intentionally omitted <==

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

NLA Branches FTE
$NZDb ‘000
140 250 9
8
120
200
7
100
6
150
80 5
60 100 4
3
40
50 2
20
1
0 0 0
ANZ Peer 1 Peer 2 Peer 3 ANZ Peer 1 Peer 2 Peer 3 ANZ Peer 1 Peer 2 Peer 3
----- End of picture text -----

ATMs

==> picture [151 x 130] intentionally omitted <==

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

800
700
600
500
400
300
200
100
0
ANZ Peer 1 Peer 2 Peer 3
----- End of picture text -----

GROWTH IN KEY PRODUCTS

Market Share

Mortgages[2 ]

+3bps

Household Deposits[2 ] Credit Cards[2 ] +50bps -26bps

Life Insurance[3 ] KiwiSaver[4 ] +4bps +1bp

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31.59% 31.62% 31.19% 31.69%
29.66% 29.40%
26.86% 26.87%
9.78% 9.82%
Sep 15 Mar 16 Sep 15 Mar 16 Sep 15 Mar 16 Sep 15 Mar 16 Sep 15 Mar 16
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Source: KPMG Financial Institutions Performance Survey, ANZ = New Zealand Geography 2. Source: RBNZ, share of all banks. 3. Source: FSC (Financial Services Council), share of all providers. 4. Source: IRD, member share of all providers.

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121

New Zealand – Agri[1]

AGRI PORTFOLIO[2] (GLA)

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$NZDb
Dairy as a % of total NZ Geog
40
12% 11% 11% 10% 10%
30
2%
20
10
0
FY12 FY13 FY14 FY15 Mar 16
Dairy Sheep & Beef Other Rural
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MARKET SHARE[3 ]

Agriculture

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32.33% 32.11% 31.33% 30.88%
6.46%
3.34% 3.90%
2.53%
1.63% 1.82% 1.41%
-0.04%
2H14 1H15 2H15 1H16
ANZ market share System growth
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AGRI CREDIT QUALITY – GIA AS % OF GLAs

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3.61%
1.99%
1.05%
0.69%
0.54%
1H14 2H14 1H15 2H15 1H16
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APPROACH TO THE AGRICULTURE SECTOR

Portfolio[2] : Diversified Agriculture portfolio (NZD17b) 70% Dairy, 19% Sheep and Beef, 11% Other Rural Profile Well established customer base and a highly secured portfolio. ANZ’s Agri lending reduced during the half while system has grown and our customers also increased deposits faster than system Customer Long-standing relationships with a focus approach on supporting existing dairy customers. Stringent credit assessment process

ANZ growth

New Zealand Geography.
Gross loans and advances.

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122

Source: RBNZ March 2016, share of all banks.

New Zealand – Home Loan Portfolio[1 ] Composition and flows

FLOW[2 ]

PORTFOLIO

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11% 10%
38% 39%
51% 51%
1H15 1H16
Branch Mobile mortgage managers
Broker
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----- Start of picture text -----

6% 6%
27% 24% 9% 9%
24% 23%
7% 7%
12% 11%
73% 76%
42% 44%
1H15 1H16 1H15 1H16
Auckland Other Nth Is.
Fixed Variable
Wellington Other Sth Is.
Chch Other³
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MARKET SHARE[4 ]

#1 IN AUCKLAND[5 ]

Housing

Share of new home loans registrations in Auckland

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32%
31.04% 31.17% 31.59% 31.62%
29%
24% 25%
5.37%
3.97% 4.10% 4.00%
3.31%
2.88%
2.14% 2.16%
2H14 1H15 2H15 1H16 1H15 1H16
ANZ market share System growth ANZ Leading peer bank
ANZ growth
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New Zealand Geography. 2. Retail and Small Business Banking mortgage flow. Branch includes Small Business Banking Managers.
Other includes loans booked centrally (Business Direct, Contact Centre, Lending Services, Property Finance). 4. Source: RBNZ March 2016, share of all banks. 5. Source: CoreLogic February 2016.

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123

Auckland

NET MIGRATION FOR AUCKLAND[1 ]

HOUSE PRICES[2]

Net Migration

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60,000 13.7K 25.3K 31.0K
40,000
20,000
0
Feb-14 Feb-15 Feb-16
Arrivals Departures
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$’000 NZD
Auckland
$900
$800
$700
$600
$500
$400
$300 New Zealand
$200
$100
$0
Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16
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TOTAL NUMBER OF AUCKLAND HOME LOANS HELD[3 ]

ANZ MORTGAGE LVR PROFILE FOR AUCKLAND[4 ]

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70% 71% 67%
30% 29% 33%
Market ANZ Top 3 Peers
Auckland Rest of country
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19%
0-60% 13%
61-70%
4%
71-80% 2%
81-90%
62%
90%+
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Statistics NZ.
REINZ.
Core Logic, stock (number) of mortgage registrations. Top 3 peer banks are ASB, WBC and BNZ, as of February 2016.
Dynamic basis, as of March 2016.

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124

New Zealand Geography – Financial performance (PCP)

PROFIT

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$NZDm
841 2 843
817
(26) 751
(66)
1H15 Specified 1H15 Movt. 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
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PRO FORMA PROFIT CONTRIBUTION

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

$NZDm
71
843
13 16 817
(107) (19)
1H15 NII OOI Exp. Prov. Tax 1H16
Adjusted Adjusted
pro forma pro forma
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PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1	PRO FORMA (PCP)1
	Drivers	1H16 NZDm	Change
Cash Profit Lower Institutional revenue and higher provision charges, partly offset by lending volume growth and disciplined cost management 817 (3%)
Income 1,895 (2%) Institutional Lower earnings, driven by credit spread widening Wealth Non recurring $9m pre- tax loss arising from the sale of the NZ medical business (nil on after tax basis) NZ Division Impacts above partly offset by lending and deposit growth and fixed asset gain on sale Expenses Productivity gains more than offset inflationary and investment impacts 724 (2%)
Provisions Charge Individual provision higher driven by lower write-backs 50 61%

PCP: Comparisons are on a cash basis comparing 6 months to 31 March 2016 with 6 months to 31 March 2015.
‘Specified items’ include the impacts of software capitalisation policy changes and restructuring expenses. Further detail provided in the ANZ Half Year 2016 Consolidated Financial Report page 14.

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125

New Zealand Geography – Financial performance (HoH)

PROFIT

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$NZDm
846 2 848
817
(31) 751
(66)
2H15 Specified 1H15 Movt. 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
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PRO FORMA PROFIT CONTRIBUTION

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$NZDm
35
848
13 20 817
(94) (5)
2H15 NII OOI Exp. Prov. Tax 1H16
Adjusted Adjusted
pro forma pro forma
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PRO FORMA (HoH)1	PRO FORMA (HoH)1	PRO FORMA (HoH)1	PRO FORMA (HoH)1
	Drivers	1H16 NZDm	Change
Cash Profit Cash profit decrease due to lower Institutional revenue and higher provision charges, partly offset by lending volume growth and disciplined cost management 817 (4%)
Income 1,895 (3%) Institutional Lower earnings, driven by credit spread widening Wealth Non recurring $9m pre- tax loss arising from the sale of the NZ medical business (nil on after tax basis) NZ Division Impacts above partly offset by lending and deposit growth and fixed asset gain on sale Expenses Productivity gains more than offset inflationary and investment impact 724 (2%)
Provisions Charge Individual provision higher driven by lower write-backs 50 11%

HoH: Comparisons are on a cash basis comparing 6 months to 31 March 2016 with 6 months to 30 September 2015.
‘Specified items’ include the impacts of software capitalisation policy changes and restructuring expenses. Further detail provided in the ANZ Half Year 2016 Consolidated Financial Report page 14.

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126

New Zealand Geography – overview

REVENUE & NIM[1 ]

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$NZDm
1,904 1,858 1,931 1,954 1,895
2.49 2.49 2.52 2.44 2.37
1H14 2H14 1H15 2H15 1H16
NIM (%) (RHS) Revenue
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PROFIT BEFORE

CASH PROFIT

PROVISIONS $NZDm $NZDm

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1,179 1,119 1,192 1,215 1,080
887 795 841 846 751
1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16
PBP Cash Profit
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REVENUE PER FTE[2] & CTI

CREDIT QUALITY

RISK WEIGHTED ASSETS

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$k
240 239 245 251 244
43.0
38.1 39.8 38.3 37.8
1H14 2H14 1H15 2H15 1H16
CTI (%) (RHS) Revenue/FTE
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%
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0.82%
0.67%
0.48%
0.36%
0.29%
1H14 2H14 1H15 2H15 1H16
GIA as a % of GLAs
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2.73%
2.30% 2.43% 2.39%
2.03%
1H14 2H14 1H15 2H15 1H16
Return on avg. RWA
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New Zealand Division NIM
FTE exclusive of Global Hubs FTE in NZ

127

New Zealand – Home Loan Portfolio[1]

PORTFOLIO STATISTICS

1H15 1H16

PORTFOLIO STATISTICS	1H15	1H16
Total Number of Home Loan Accounts	494k	508k
Total Home Loans FUM	$64b	$70b
% of Total New Zealand Geography Lending	59%	60%
% of Total Group Lending	11%	11%
Owner Occupied Loans Fixed Rate - % of Portfolio	54%	54%
Owner Occupied Loans Variable
Rate - % of Portfolio	21%	19%
Investor Loans Fixed Rate - % of Portfolio	19%	21%
Investor Loans Variable Rate - %
of Portfolio	6%	6%

PORTFOLIO STATISTICS 1H15 1H16

PORTFOLIO STATISTICS	1H15	1H16
% of Portfolio Paying Interest
Only2	22%	24%
Average Loan Size at Origination	$289k	$295K
Average LVR at Origination3	64%	63%
Average Dynamic LVR of Portfolio4	49%	47%
Broker originated	29%	32%
Low doc (discontinued in 2009)	1%	1%
Group Loss Rates	0.19%	0.32%
NZ Mortgage Loss Rates	0.01%	0.00%

New Zealand Geography.
Excludes revolving credit facilities.
Average LVR at Origination (not weighted by balance).

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128

Average dynamic LVR as at February 2016 (not weighted by balance).

2016 HALF YEAR RESULTS

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 3 MAY 2016

INVESTO R DISCUSSIO N PACK WEALT H

Wealth Division - Financial performance (PCP)[2 ]

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PROFIT [1]
$m
10 274 (13)
263 1 264 261
1H15 Specified 1H15 Movt. 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
PROFIT CONTRIBUTION [1]
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$m
28 (9) 4 3 (20)
12 (1) (7) 274
264
1H15 NII Ins. FM. Private Corp Exp. Prov. Tax 1H16
Adjusted Wealth & Adjusted
pro Other pro
forma forma
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PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS
	Drivers	1H161 $m	Change
Cash Profit Favourable lapse experience & growth in customer deposits & NLAs, partly offset by adverse claims experience, market volatility, lower margin product mix and expense growth. 274 4%
Income 889 4% Insurance Favourable insurance experience with improved lapses as a result of retention initiatives. Consistent with broader industry experience, retail new business volumes are slowing. 8% Funds Mgt Revenue challenged by margin compression, lower netflows and increased market volatility. (3%) Private Wealth Strong volume growth in average customer deposits and net loans and advances. 12%
Expenses Driven by inflationary growth and spend on strategic projects. 503 4%
Life inforce premiums 1,736 6%
Embedded Value3 4,860 11%

1H16 profit has been pro-forma adjusted for the following specified items: non-recurring income loss arising from sale of the New Zealand medical insurance business (+$9m), Restructuring costs (-$13m), Capitalisation write-offs (-$5m), New Zealand reversal of tax credits (+$8m), NPAT net impact ($13m). 1H15 profit has been pro-forma adjusted for the following specified items: Restructuring costs (+$1m).

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PCP: Comparisons are on a pro-forma adjusted basis comparing 6 months to 31 March 2016 to 6 months to 31 March 2015. 3. Embedded value is gross of transfers.

130

Wealth Division - Financial performance (HoH)[2 ]

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PROFIT [1]
$m
346 (56)
290 (16)
274 (13)
261
2H15 Specified 2H15 Movement 1H16 Specified 1H16
cash items Adjusted Adjusted items cash
profit pro pro profit
forma forma
PROFIT CONTRIBUTION [1]
$m 10 (15)
10 4 (1) (22)
290
1 (3) 274
2H15 NII Ins. FM. Private Corp Exp. Prov. Tax 1H16
Adjusted Wealth & Adjusted
pro Other pro
forma forma
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PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS	PRO FORMA HIGHLIGHTS
	Drivers	1H161 $m	Change
Cash Profit Cash Profit impacted by market volatility, lower margin product mix and expense growth, partly offset by growth in life insurance in-force premiums, improved lapse experience and growth in customer deposits & NLAs. 274 (6%)
Income 889 1% Insurance Stable insurance experience with continued favourable lapses. Insurance business momentum remains positive despite growing challenges. 3% Funds Mgt Impacted by a shift in business towards lower margin products and volatile investment markets. (5%) Private Wealth Solid volume growth continues in Private Wealth with average customer deposits and Investment FUM up by 7% and 6%, respectively. 10%
Expenses Driven by inflationary growth and spend on strategic projects. 503 5%
Life inforce premiums 1,736 2%
Embedded Value3 4,860 6%

1H16 profit has been pro-forma adjusted for the following specified items: non-recurring income loss arising from sale of the New Zealand medical insurance business (+$9m), Restructuring costs (-$13m), Capitalisation write-offs (-$5m), New Zealand reversal of tax credits (+$8m), NPAT net impact ($13m). 2H15 profit has been proforma adjusted for the non-recurring tax consolidation benefit (-$56m).
HoH: Comparisons are on a pro-forma adjusted basis comparing 6 months to 31 March 2016 to 6 months to 30 September 2015. 3. Embedded value is gross of transfers.

131

Progress on strategic priorities

STRATEGIC PRIORITIES

REGULATORY ENVIRONMENT

1. Strengthening and deepening customer relationships by successfully integrating into ANZ Channels

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Customer Attrition Revenue per customer
-56% +46%
Without With Without With
Wealth Wealth Wealth Wealth
2. Drive value from existing businesses
Wealth solutions held (m)
+31%
3.8
3.3 3.4
2.9 1.0
1.0 0.9
1.0
1.9 2.3 2.5 2.8
Mar-13 Mar-14 Mar-15 Mar-16 [1 ]
Non-ANZ channels ANZ channels
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2. Drive value from existing businesses

3. Deliver digitalised platform to improve planner productivity

Responding to regulatory & compliance obligations

Superannuation related compliance (Stronger Super reforms, MySuper).
Life Insurance recommendations regarding advisor commissions for life insurance products.
Increased scrutiny on financial advice.
Regulators’ response to industry wide issues relating to wealth products.
Foreign Account Tax Compliance Act (FATCA) reporting obligations.

EXPENSES

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

$m
60
503
484 479 483 481 17
13 27
55
470 454 486 50
45
1H14 2H14 [2 ] 1H15 [3 ] 2H15 1H16 [4 ]
CTI % (incl. Regulatory & Compliance costs)
CTI % (excl. Regulatory & Compliance costs)
Regulatory & Compliance Expenses ($m)
BAU Expenses ($m)
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March 2016 Wealth Solutions number is based on Q1 2016 Actuals. 2. 2H14 normalised for ANZ Trustees gain on sale income (-$125m), and ANZ Trustees related expenses ($41m). 3. 1H15 has been pro-forma adjusted for Restructuring costs (-$1m). 4. 1H16 has been pro-forma adjusted for the following specified items: non-recurring income loss arising from sale of the New Zealand medical insurance business (+$9m), Restructuring costs (-$13m), Capitalisation write-offs (-$5m), New Zealand reversal of tax credits (+$8m), NPAT net impact ($13m).

132

Insurance delivering a consistent outcome

DIVERSIFIED MIX OF LIFE INSURANCE INFORCE

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

$m
+6%
1,636 1,707 1,736
24% 25% 25%
12% 11% 10%
64% 64% 65%
1H15 2H15 1H16
Group - Australia Individual - Aus.
Individual - NZ
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LAPSE RATES (%)

Australia[1 ]

New Zealand

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

%
+50bps
+40bps
16.8
14.0 14.3 14.8
12.6 13.0
1H15 2H15 1H16 1H15 2H15 1H16
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CONSISTENT PRODUCT MIX IN INDIVIDUAL LIFE INSURANCE

EMBEDDED VALUE GROWTH[2]

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

$m +4%
1,246 1,284 1,297
28% 28% 29%
72% 72% 71%
1H15 2H15 1H16
Income Protection Lump Sum
----- End of picture text -----

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

$m 115 4,975
186 29 3 4,860
76
4,566
+6%
Sep-15 Value of Expec. Exper. Risk Subtotal Net Mar-16
New Return Deviat’s Disc. Transfers
Bus. & FX
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A definition change to the Australian Retail risk lapse rate was implemented in September 2015 to reflect the inclusion of partial premium reductions within the policy renewal period. Prior comparative periods have been restated to align with revised methodology.

==> picture [59 x 22] intentionally omitted <==

Embedded value includes Insurance and Funds Management businesses in Australia and New Zealand.

133

Solid growth in Private Wealth volume whilst Funds Management impacted by lower netflows

==> picture [613 x 385] intentionally omitted <==

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

FUNDS MANAGEMENT AVERAGE PRIVATE WEALTH
FUM [[1 ]] $b Average Customer Deposits Net Loans & Advances
$b
+3%
+22% +7%
67.0 66.8
64.6 17.9 19.1 6.5 6.6
15.6
6.2
1H15 2H15 1H16 1H15 2H15 1H16 1H15 2H15 1H16
FUNDS MANAGEMENT NETFLOWS [[1]] 1H16 FUNDS MANAGEMENT NETFLOWS BY SOLUTION
$m $m Open solutions Closed solutions
694
-34%
472
343 395
1,050
133 134
883
587
(697)
(887)
OneAnswer ANZ Oasis Private Kiwisaver Other Retail Employer
1H15 2H15 1H16 Frontier Smart Voyage Wealth New Super
Choice Zealand
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FUNDS MANAGEMENT AVERAGE FUM[[1 ]]

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

$b
+3%
67.0 66.8
64.6
1H15 2H15 1H16
----- End of picture text -----

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

+22% +7%
19.1 6.6
17.9 6.5
15.6
6.2
1H15 2H15 1H16 1H15 2H15 1H16
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FUNDS MANAGEMENT NETFLOWS[[1]]

1H16 FUNDS MANAGEMENT NETFLOWS BY SOLUTION

Funds Management FUM and netflows include Private Wealth Investment FUM and netflows.

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134

Further Information

==> picture [165 x 132] intentionally omitted <==

Our Shareholder information

shareholder.anz.com

DISCLAIMER & IMPORTANT NOTICE: 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.

Equity Investor

Jill Campbell

Group General Manager Investor Relations +61 3 8654 7749 +61 412 047 448 [email protected]

Cameron Davis

Executive Manager Investor Relations +61 3 8654 7716 +61 421 613 819 [email protected]

Katherine Hird

Senior Manager Investor Relations +61 3 8655 3261 +61 435 965 899 [email protected]

Retail Investors

Debt Investors

Michelle Weerakoon

Manager Shareholder Services & Events +61 3 8654 7682 +61 411 143 090 [email protected]

Andrew Minton

Head of Debt Investor Relations +61 3 8655 9029 +61 413 019 633 [email protected]

Donna Chow

Associate Director Debt Investor Relations +61 3 8655 1402 +61 401 385 126 [email protected]

AI assistant

Australia and New Zealand Banking Group Ltd. — Interim / Quarterly Report 2016

10425_rns_2016-05-02_87e086f1-bcd3-4d2b-ba03-14b863bc9dc6.pdf

2016 HALF YEAR RESULTS

Contents

1H16 Results

2016 HALF YEAR RESULTS

Headline Financial Performance

Business overview - Five key messages

Australia & NZ Retail and Commercial Strong overall performance

Institutional

Decisive action to reposition our business

Business execution

ANZ strengths & core competencies

1. Retail banking skewed to affluent base

Long term trends

1. Growth and transformation of Asia

2. Shift from trade in goods & commodities to data & services

Operating environment remains challenging

Re-balancing our portfolio

COMPOSITION OF TOTAL ANZ CAPITAL*

Wealth

Four Priorities Building a better bank

1. Create a simpler, better capitalised, better balanced and more agile bank

STRATEGIC FOCUS

PROGRESS

Dividend

2. Focus our efforts on attractive areas where we can carve out a winning position

STRATEGIC FOCUS

PROGRESS

3. Drive a purpose and values led transformation of the Bank

STRATEGIC FOCUS

PROGRESS

4. Build a superior everyday experience for our people and customers in order to compete in the digital age

STRATEGIC FOCUS

PROGRESS

1H16 Financial Performance Drivers

Four Priorities Building a better bank

Executive focus Managing the Transition well

1) BUSINESS EARNINGS

2) CAPITAL GENERATION

Common equity tier 1 generation

Executive focus Managing the Transition well

CET1 RATIOS[1 ]

Business Outlook and Future Focus

3. Strengthen balance sheet

2016 HALF YEAR RESULTS

Financial performance

• Impact of specified items

Specified items 1H16 – All above the line

CAPITALISED SOFTWARE POLICY CHANGES

RATIONALE

IMPACT

Specified items 1H16 – All above the line

RESTRUCTURE EXPENSES

BENEFITS

Specified items 1H16 – All above the line

Operating performance (excludes specified items)

1H16 vs 1H15 (PCP)

1H16 vs 2H15 (HoH)

Income drivers (excludes specified items)

Net Interest Margin

GROUP NET INTEREST MARGIN

Markets performance

MARKETS INCOME

Risk Weighted Asset reduction

TOTAL RISK WEIGHTED ASSETS

CREDIT RWA MOVEMENT

Re-weighting the portfolio

LENDING CRWA MOVEMENT

INSTITUTIONAL NLA MOVEMENT

$2.0b reduction

Expense focus

EXPENSES & FTE

ACTIONS

Provisions

TOTAL PROVISION CHARGE

PROVISON DELTA (1H16 vs 2H15)

Credit Quality

GROSS IMPAIRED ASSETS

Australia and New Zealand Banking Group Ltd. Interim / Quarterly Report 2016