Australia and New Zealand Banking Group Ltd. — Investor Presentation 2014

Jun 24, 2014

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

==> picture [117 x 42] intentionally omitted <==

ANZ Corporate & Commercial Banking Overview

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

Direct revenue

==> picture [635 x 369] intentionally omitted <==

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

Corporate Large private, small listed and $m
12%
Bankingg multi-national corporations porations orations
3,500
3,000
Business Banking [[Small to medium companies ]]
with turnover $5m-$125m $5m-$125m 5m-$125m $125m 125m
2,500
Regional Business Non-metropolitan and Agri 2,000
Bankingg customers 1,500
Small Business Small businesses with turnover 1,000
Bankingg <$5m and lending <$1m $5m and lending <$1m 5m and lending <$1m g <$1m <$1m $1m 1m 500
Motor vehicle & equipment 0
Esanda
finance FY10 FY11 FY12 FY13 1H14
Net loans and advances Deposits
17%
$b $b
45%
65
56
14% Corporate Banking
47
18% Small Business Banking
11% Regional Business Banking
18% Regional Business Banking 32
28% Business Banking
25% Esanda
61% Small Business Banking
25% Business Banking
Mar 10 Mar 14 Mar 10 Mar 14
----- End of picture text -----

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

2

The current environment is challenging with subdued lendin conditions g

==> picture [632 x 412] intentionally omitted <==

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

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

Note: 1. Roy Morgan Business Single Source, Business Confidence, average for the preceding 12 months as at May 2014; 2. RBA Financial Aggregates, Total Business Credit, Seasonally Adjusted, September 2012 to March 2014; 3. ABS Lending Finance, Australia, 5671.0, Commercial Finance Commitments not drawn at end of month, September 2012 to March 2014

3

Our strategy will deliver a sustainable capability-led customer ro osition that ositions ANZ for rowth p p p g

• Reshaping banker roles to increase customer access and the amount of time bankers spend with customers

Enhance Customer Experience

• Developing our people’s capabilities and knowledge, with emphasis on embedding a more insights-based sales approach

• Building on our lead in mobile and digital to provide greater access to market leading products and further enable self-service

Improve Banker Capabilities

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

• Leveraging ANZ’s connectivity and footprint to provide seamless access to super regional opportunities

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

4

We have made significant progress executing this strategy throu h our Bankin on Australia transformation a enda g g g

	Reshaping banker roles	20%	Increase in time frontline C&CB Banker‟s spend with customers1
		24/7	Servicing availability via Business Response Team (BRT) with 100k requests actioned2
	Developing our people’s capabilities	35k	Training hours completed with specific focus on credit, sales and super regional
		32%	Frontline C&CB staff with experience in key Asian markets
	Building on our lead in mobile and digital	43%	ANZ FastPayTMtransactions3
		36k	Digital C&CB A-Z Reviews2conducted via iPad
	Simplifying our products and processes	17	Products offered on OneSwitch4
		13	Products decommissioned
	Leveraging ANZ’s connectivity and footprint	120%	Growth in Cross Border Referrals from Australia to Asia5
		#1	Can service my business needs in Australia, NZ & Asia6

Note: 1. Estimated time being freed up in the frontline by removing activities and streamlining processes, compared to October 2012 baseline; 2. Eight months to May 2014; 3. Represents compound monthly growth in the number of transactions processed on ANZ FastPay[TM] since launch in October 2012; 4. OneSwitch is a process that enables customers to open accounts with one signature and one form within one week; 5. Five months to February 2014 vs. PCP; 6. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, data sourced from majority of businesses with turnover of $1-40m in the three months to February 2014

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

5

C&CB has delivered good outcomes while driving cross sell revenue and FUM rowth g

Customer share[1 ]

Cross sell revenue[3 ]

==> picture [256 x 21] intentionally omitted <==

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

C&CB has maintained its customer share in a
subdued environment
----- End of picture text -----

==> picture [296 x 131] intentionally omitted <==

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

Peer 1 Peer 2 Peer 3 ANZ
101.0
97.0
93.0
89.0
Sep 12 Jan 13 May 13 Sep 13 Jan 14
----- End of picture text -----

C&CB has delivered further value by focusing on customer’s holistic needs

==> picture [298 x 130] intentionally omitted <==

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

$m
33%
1,500
1,000
500
0
FY10 FY11 FY12 FY13 1H14
----- End of picture text -----

Customer satisfaction[2]

Cross sell FUM[3 ]

==> picture [292 x 159] intentionally omitted <==

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

C&CB’s customer value proposition has delivered a
leading outcome
Peer 1 Peer 2 Peer 3 ANZ
108
104
100
96
Sep 12 Mar 13 Sep 13 Mar 14
----- End of picture text -----

C&CB manages the whole customer relationship

==> picture [285 x 140] intentionally omitted <==

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

$b
29%
60
40
20
0
Mar 10 Mar 14
----- End of picture text -----

Note: 1. DBM Business Financial Services Monitor, rolling 12 month average. Results based on most businesses with annual turnover <$100m with any business product. Indexed Customer Share ranked against other „Big 4‟ banks, where September 2012 is designated as 100; 2. DBM Business Financial Services Monitor, rolling 6 month average. Customer Satisfaction based on MFI (main financial institution) customers. Results based on most businesses with annual turnover <$100m. Indexed MFI Customer Satisfaction ranked against other „Big 4‟ banks, where September 2012 is designated as 100 3. Cross Sell Revenues and FUM consists of Retail, Institutional and Wealth revenue/FUM generated by C&CB Bankers. Not all products (e.g. Merchants) may have associated FUM

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

6

Early investment in Small Business is now paying dividends for C&CB

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

SBB lending book composition by sector

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

 16% Small Business lending

 10% Small Business customer deposits



 7%



SBB a key driver of cross sell

Small Business deposit sales through the branch

SBB a key source of liquidity – Funding ratio[2] (Mar 14) of 267%

Net loans and advances & deposits

==> picture [294 x 157] intentionally omitted <==

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

Net loans and advances incl. acceptances
Customer deposits
$b
28.8
27.8
26.1
11.3
10.6
9.8
Mar 13 Sep 13 Mar 14
----- End of picture text -----

Note: 1. All figures March 2014 vs March 2013, unless otherwise stated; 2. Funding ratio is the ratio of customer deposits to loans

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

7

We continue to invest in high growth opportunities across our business to drive future outperformance

Small Business

New South Wales

Continued investment in this attractive, higher growth segment

Investing to build further scale in a large and growing market

• Strong levels of lending and deposit growth

• Largest Australian state by Gross State Product[1 ]

• Higher return with significant ANZ wide „whole of wallet‟ opportunities

• Historically under-penetrated, relative to other States

Emerging Corporate

Priority Industries

Enhancing our offering in this key market segment

Building capability across higher growth industries

• Significant cross-over segment between Business Banking and Corporate

• Increases exposure to higher growth industries (e.g., Health & Professionals)

• Leverages existing strength in Corporate and pre-eminent Institutional product capabilities

• Builds on specialist knowledge and insights capability

Note: 1. ABS 5220.0 - Australian National Accounts: State Accounts, 2012-13, Gross State product (GSP) at June 2013; NSW GSP makes up 31% of the National GSP

8

C&CB oversees a diversified and well managed portfolio with improving loan quality

Diversified by business mix

Improved portfolio performance

Net Lending Assets ($b, %)

Net Impaired Assets and Gross Lending Assets

==> picture [307 x 346] intentionally omitted <==

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

Corporate Banking
18% 14%
Esanda
$65b 25% Regional Business Banking
25%
Business Banking
18%
Small Business Banking
Continued improvement in loan quality
Customer Credit Rating (CCR) [1]
Weaker
Existing portfolio
10.0
New to bank customer
6.0
5.5
5.0
Mar 13 Sep 13 Mar 14 0 Stronger
----- End of picture text -----

==> picture [311 x 143] intentionally omitted <==

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

$b Gross Lending Assets (RHS)
Net Impaired Assets as % GLA (LHS)
70 1.80%
65 1.30%
60 0.80%
55 0.30%
Mar 12 Sep 12 Mar 13 Sep 13 Mar 14
----- End of picture text -----

Prudent risk controls

• Loan sizes of <$1m approved via proven automated credit scoring technology

• Prudent lending limits set for sole sign-off

• Sole sign-off subject to hindsight review

• Dual sign-off required, for higher value or non-standard lending

• Quality Assurance testing on completed files

Note: 1. New to Bank Customers identified as new lending customers in the 6 months prior, Customer Credit Rating (CCR) based on customer limits in C&CB excluding Esanda

9

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

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ‟s business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words “estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

For further information visit

www.anz.com

or contact

Jill Craig Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 8886 e-mail: jill.craig@anz.com

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