Australia and New Zealand Banking Group Ltd. — Investor Presentation 2016

Oct 30, 2016

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Sale of retail and w ealth business in five Asian countries

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 31 O CTOBER 2016

All figures in this presentation are represented in AUD and on current FX rates unless otherwise stated

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OVERVIEW

Overview

• ANZ to sell its retail and wealth business in Singapore, China, Hong Kong, Taiwan and Indonesia to DBS Bank Limited

• Sale reflects the bank’s strategic priority to create a simpler, better capitalised and better balanced bank, and follows a review of the retail and wealth business in Asia, taking into consideration:

• changes in the retail regulatory environment

• ongoing investment required to build a distinctive Asia retail customer proposition

• strategic focus of the bank to grow in attractive areas where we can carve out winning positions and improve capital efficiency and shareholder returns

• Transaction enables resources in Asia to be focused on running a world class institutional business in the region, serving key institutional clients connected to the region via trade and capital flows

Transaction summary (ANZ financials as at 30 September 2016)

• Business being sold includes ~$11 billion in gross loans and advances, ~$7 billion in credit risk weighted assets and ~$17 billion in deposits

• In FY16, the business generated revenue of ~$825 million, provisions of ~$160 million; and net profit of ~$50 million

• Sale price represents an estimated premium to net tangible assets at completion of approximately $110 million

• As part of the transaction, ANZ will take a net loss of ~$265 million including write-downs of software, goodwill and fixed assets; and separation and transaction costs. The impact is expected to be slightly higher in the first half of financial year 2017, but offset back to ~$265 million in subsequent periods

Capital impact

• Sale is expected to improve ANZ’s CET1 ratio by ~15 to ~20 bps (~30 bps internationally comparable Basel 3[1] ), and excluding the write-downs in 1HFY17, there will be a small impact on ROE and EPS

Timing

• Sales of the business will occur progressively over the next 18 months, with 3 of the 5 countries expected to occur during the second half of the 2017 financial year, and the remaining 2 in the first half of financial year 2018. Sale is conditional upon regulatory approval in each market

• ANZ’s interpretation of the regulations documented in the Basel Committee publications; “Basel 3: A global regulatory framework for more resilient banks and banking systems” (June 2011) and “International Convergence of Capital Measurement and Capital Standards” (June 2006). Also includes differences identified in APRA’s information paper entitled International Capital Comparison Study (13 July 2015)

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ANZ ASIA PORTFOLIO

O N G O I N G B U S I N E S S 1
ANZInstitutional Asia
Gross loans and advances $43b
Deposits $41b FTE 1,490
Coverage (Asian Markets) 15
Products
• Relationship banking - corporate and institutional banking
• Markets, loans and specialised finance - customer solutions,
corporate and institutional sales, commodities solutions, trading,
debt capital markets, syndications, project & structured finance,
structured asset finance, structured export finance
• Transaction banking - trade and supply chain, payments and cash
management and clearing services
ANZ operational hubs
FTE >9,100
Locations: Bengaluru, India; Manila, Philippines; Chengdu, China

**N O N C O R E B U S I N E S S **
**Retail and Wealth Asia – this transaction2 **
Gross loans and advances ~$11b
Deposits ~$17b
Countries 5
**Minority investments in Asia3 **
# of material minority investments 4
Carrying value ~4.1bn

1. as at 30 September 2016

2. excludes ANZ retail and wealth businesses in Vietnam, Cambodia, Philippines & Japan

3. carrying value as at 31 March 2016 refers to ANZ’s equity accounted investments in AMMB Holdings Berhad, PT Bank Pan Indonesia and Shanghai Rural Commercial Bank. The fourth minority investment refers to ANZ’s investment in Bank of Tianjin, accounted for as an available-for-sale asset

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TRANSACTION DETAILS

C O U N T R I E S[1 ]

TAIWAN

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• Customers ~527,000 • FUM $4.6 billion

CHINA

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• Customers ~9,000 • FUM $0.9 billion

HONG KONG

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• Customers ~24,000

• • FUM $5.6 billion

SINGAPORE

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• Customers ~292,000 • FUM $14.0 billion INDONESIA • Customers ~412,000 • FUM $2.2 billion

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	A N Z F I N A N C I A L I M P L I C AT I O N S 2
	FY16 (contribution from the business in the 5 countries)
	Profit & Loss $ million
	Revenue ~825
	Expenses ~600
	Provisions ~160
	Cash Profit ~50
	Balance Sheet (September 16) $ billion
	Gross loans and advances ~11
	Credit risk weighted assets ~7
	Deposits ~17
	FY17 onward
	Direct transaction • As part of the transaction, ANZ will take a net loss of ~$265 million including write-
	downs of software, goodwill and fixed assets; and separation and transaction costs.
	The impact is expected to be slightly higher in the first half of financial year 2017, but offset back to ~$265 million in subsequent periods ANZ’s ongoing business • No material impact on financial contribution to ANZ in 1H17
	• Progressive reduction in financial contribution as the business is transitioned on a
	rolling country basis from 2H17 • Amortisation savings of ~$30 million pa from impairment of software
	• Increase in funding gap as a result of net deposit transition to be actively managed
	on a Group basis and in line with ANZ’s simplification strategy, including reducing low returning assets

1. As at 30 September 2016

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1. Profit and Loss implications associated with the retail and wealth business across the 5 countries

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BUSINESS TRANSITION (ILLUSTRATIVE ONLY) ILLUSTRATIVE[1] IMPACT ON ANZ REVENUE AND EXPENSES ASSOCIATED WITH THE RETAIL AND WEALTH BUSINESS IN THE 5 ASIAN COUNTRIES

DIRECT TRANSACTION	DIRECT TRANSACTION	DIRECT TRANSACTION
Item	Impact	Indicative timing
CET1 benefit Loss on sale	~15 to ~20 bps (Internationally comparable Basel 32: ~30 bps) ~265m	In line with business transition Slightly higher in 1H17 Offset back to ~$265m in 2H17 and 1H18
IMPACT ON ANZ’S ONGOING BUSINESS
Item	Indicative annualised impact3	Indicative timing
Revenue	~$800m	~50% in 2H17 ~50% in 1H18
Expenses	~$600m
Direct expenses	A little under half of expenses	>50% in 2H17 <50% in 1H18
Indirect / allocated expenses	A little over half of expenses	Slower roll off over the next 2 - 3 years
Amortisation saving from impairment of software	~$30m pa	From 1H17

REVENUE

3 countries 2 countries

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2H16 1H17 2H17 FY18 FY19

Revenue reduction from business transition from ANZ ANZ revenue from the retail and wealth buinsess in the 5 countries

EXPENSES – EXCLUDES LOSS ON SALE

Residual expenses relating to ANZ indirect or centrally allocated costs

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2H16 1H17 2H17 FY18 FY19
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Expense reduction from business transition from ANZ ANZ expenses associated with the retail and wealth business in the 5 countries

1. Revenue and expense impacts will vary by country with chart not necessarily representative of relative size of impact per country. Timing of country transfers, revenue impacts and expense impacts may also vary to that illustrated 2. ANZ’s interpretation of the regulations documented in the Basel Committee publications; “Basel 3: A global regulatory framework for more resilient banks and banking systems” (June 2011) and “International 5 Convergence of Capital Measurement and Capital Standards” (June 2006). Also includes differences identified in APRA’s information paper entitled International Capital Comparison Study (13 July 2015)

2. Impact refers to the annual financial contribution from the retail and wealth business in the 5 Asian countries based on FY16 financial performance

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Sale of retail and w ealth business in five Asian countries

AUST RALIA AND NEW ZEALAND BANKING G RO UP LIMIT ED 31 O CTOBER 2016

APPENDIX

All figures in this presentation are represented in AUD unless otherwise stated

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ONGOING BUSINESS - INSTITUTIONAL ASIA

ASIA REMAINS CORE TO ANZ INSTITUTIONAL PRIORITIES[1 ]

PRIORITIES	PRIORITIES	ACTIONS
Growth	Continue targeted investment	Target the build out of regional Trade, Cash Management and Markets platforms Improve customer experience and straight through processing (STP) rates, and reduce operational risk
	Grow Profitable Businesses	Grow our Markets Sales and Cash Management businesses
Immediate Focus	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
	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
	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

1. Priorities announced in 1H16

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FURTHER INFORMATION

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Our Shareholder information

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.

shareholder.anz.com

Equity Investor

Jill Campbell

Group General Manager Investor Relations

+61 3 8654 7749

+61 412 047 448 jill.campbell@anz.com

Cameron Davis

Executive Manager Investor Relations

+61 3 8654 7716 +61 421 613 819 cameron.davis@anz.com

Katherine Hird

Senior Manager Investor Relations +61 3 8655 3261 +61 435 965 899 katherine.hird@anz.com

Retail Investors

Debt Investors

Michelle Weerakoon

Manager Shareholder Services & Events

+61 3 8654 7682

+61 411 143 090

michelle.weerakoon@anz.com

Donna Chow

Associate Director, Debt Investor Relations +61 3 8655 1402 donna.chow@anz.com

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