2017 HALF YEAR RESULTS

To be read in conjunction with ANZ 2017 half year results presentation available at ANZ Shareholder Centre Results Announcement page

Corporate Profile and Sustainability	3
Group Treasury	14
Risk Management	23
Housing Portfolio Trends	37
Divisional Performance
Australia Division	45
New Zealand Division & Geography	52
Institutional Division	61
Wealth Australia Division	71

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All figures within this investor discussion pack are presented on Cash basis in Australian Dollars unless otherwise noted. In arriving at Cash Profit, Statutory Profit has been adjusted to exclude non-core items, further information is set out on page 68 of the 2017 Half Year Consolidated Financial Report.

2017 HALF YEAR RESULTS

CORPORATE PROFILE

ABOUT ANZ

ANZ is one of the 5 largest listed companies in Australia and number one bank in New Zealand
Market capitalisation of AU$93.4b[1]
Total Assets of AU$896.5 billion[1]
We operate in 34 markets across
Australia
New Zealand
Asia
Pacific
Europe
America
Middle East
Our ~46,000 staff serve retail, commercial and institutional customers through
consumer and corporate offerings in our core markets, and
Regional trade and capital flows across the region
We have over 550,000 shareholders and paid ~$5b in dividends in 2016

BUILDING A BETTER BANK - OUR PRIORITIES

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As at 31 March 2017

STRATEGIC PRIORITIES

PROGRESS

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Reduce operating costs & risks	•	APRA CET1 ratio 10.1% (up 52bps); costs down 2%
Remove product and management complexity.	•	FTE down 1%
Exist low return and non-core businesses.	•	Announced sale of SRCB, UDC, Asia Retail & Wealth in 6 countries
Reduce reliance on low return aspects of	•	Further reduction in Credit Risk Weighted Assets in Institutional,
Institutional.		with continuedgrowth in Australia division
Make buying & owning a home or starting,	•	Home lending FUM up $8b in Aus & NZ
running & growing a small business in Aus. & NZ	•	5% increase in Small Business deposits
easy	•	33% of Institutional 1H17 revenue from Cross border flow2
Be the best bank in the world for customers driven	•	Our Institutional business in Aus & NZ ranks No.1 for overall market
by movement of goods and capital in our region.		and lead penetration and the quality of our service3
	•	Top4 Corporate Bank in Asia for a fifth successiveyear4
Build more convenient, engaging banking	•	20% of projects being delivered under the Agile framework that
solutions		delivered ApplePayTM
to simplify the lives of customers and our people	•	Delivery of Honcho and Blade to improve customer experience
	•	44 applications decommissioned reducing complexity and risk
Create a strong sense of core purpose, ethics &	•	Re-aligned staff performance objectives, increasing customer focus
fairness.	•	ESG board
Invest in leaders who can help sense and	•	Diversified leadership expertise, new Group Executive Talent and
navigate a rapidly changing environment.		Culture, established new Chief Tech officer and Data officer roles

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All financial numbers are on an Adjusted Pro-forma basis unless otherwise stated. All growth rates 1H17 vs 2H16 2. Cross border flows defined as thrown revenue (the region where the relationship with the customer exists is different to the region where the revenue is generated and booked). Region defined as Australia, Pacific, NZ, Asia, Europe and America 3. Peter Lee Associates 2016 Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand (issued in June and August 2016 respectively). Quality of service is based on No.1 ranking for Relationship Strength Index (RSI) that the bank achieved in the above surveys. 4. Greenwich Associates 2017 Asian Large Corporate Banking Study (issued in March 2017): =No.4

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CORPORATE SUSTAINABILITY

CORPORATE SUSTAINABILITY FRAMEWORK

PROGRESS ON FY17 SUSTAINABILITY TARGETS

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Our Corporate Sustainability Framework supports ANZ’s business strategy and is aligned with the bank’s Purpose, which is to shape a world where people and communities thrive. We report bi-annually on our sustainability performance.

Our 1H17 Corporate Sustainability Update, discussing progress against the bank’s FY17 sustainability targets, will be available on anz.com/cs on 10 May 2017.

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$5B funded and facilitated in low carbon and sustainable solutions

Almost 500,000 people reached through our financial inclusion programs[1 ]

177,149 customers registered for ANZ goMoney™ mobile banking in the Pacific[2 ]

41.4% women in management positions[3 ]

108 people employed from under-represented groups[4 ]

The information provided covers the period 1 October 2016 – 31 March 2017 and has not been externally assured. Our full year Corporate Sustainability Review, to be released in December 2017, will be assured by KPMG 1. This is the estimated number of people who have benefitted from ANZ’s MoneyMinded and SaverPlus programs since 2003. 2. Cumulative total since launch in 2013. 3. Includes all employees regardless of leave status excluding contractors (which are included in FTE). 4. Year to date, and Includes Aboriginal and Torres Strait Islander people, people with a disability and refugees

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CORPORATE SUSTAINABILITY

SUPPORTING THE TRANSITION TO A LOW CARBON ECONOMY

MANAGING OUR BUSINESS SUSTAINABLY

CLIMATE-RISK MANAGEMENT[1 ]

We seek to support companies with the capacity to manage and adapt to climate change.
We are supportive of the recommendations made by the FSB's Taskforce on Climate-related Financial Disclosures, and will adopt many of the recommendations as soon as practicable.
We have a $10 billion target to fund and facilitate low carbon and sustainable solutions to support our customers to transition to a low carbon economy. In the first 18 months of this five year target, we have funded and facilitated $5 billion.
Average emissions intensity of direct funding of electricity generation has reduced since 2014 (measured in tonnes CO2-e per megawatt hour of electricity generated):

	Australia3	Outside Australia3
20161	0.62 0.16
Movement 2014- 2016	-19% -36%

ANZ’S business lending exposure[2] and carbon emissions[3] of key industry sectors[4 ] in Australia and New Zealand

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This information will be updated in our full year Corporate Sustainability Review, to be released in December 2017
Size of ‘bubbles’ equates to ANZ’s Exposure at Default (EAD) in Australia and New Zealand – the ‘bubble’ for commercial services is not proportional 3. Scope 1 Emissions: direct GHG emissions, Scope 2 Emissions: indirect GHG emissions from consumption of purchased electricity, heat or steam 4. Refer to page 78, 2016 Corporate Sustainability Review for explanatory notes relating to financed emissions and business lending graph

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FIRST HALF 2017 PERFORMANCE[1]

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CASH PROFIT DIVIDEND PER SHARE
$b cents
3.4
80 80
2.8
1H16 1H17 1H16 1H17
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CET1 RATIO [3 ] RETURN ON EQUITY
% %
9.8 10.1 11.8
9.7
1H16 1H17 1H16 1H17
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	ANZ Group	Australia Division	NZ Division	Institutional Division
Income	$10,303m	$4,735m	$1,577m	$2,945m
Expenses	$4,731m	$1,693	$600m	$1,379
Cash NPAT	$3,411m	$1,798m	$677m	$1,021m
Customer lending2	$576b	$337b	$105b	$121b
Customer Deposits	$468b	$198b	$74b	$179b
RoRWA4	1.80%	2.27%	2.31%	1.23%
Staff (FTE)	46,046	11,518	6,250	4,899

Information is on a Cash basis unless otherwise specified. AUD
Net Loans & Advances
Common Equity Tier 1 Ratio

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Income is on an Annualised Adjusted Pro-forma basis

FIRST HALF 2017 EARNINGS[1 ]

CONTRIBUTION BY DIVISION

INCOME

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6%
30%
48%
16%
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PROFIT
3%
28%
50%
19%
Australia Division Institutional Division
New Zealand Division Wealth Australia
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CONTRIBUTION BY CUSTOMER

[INCOME ]

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6%
30%
44%
20%
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PROFIT
3%
28%
47%
22%
Retail Institutional
Commercial Wealth (Australia)
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INSTITUTIONAL INCOME

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36%
52%
12%
PROFIT
28%
54%
18%
Australia International
New Zealand
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Information is on a Cash basis unless otherwise specified. Excludes retail Asia & Pacific and TSO & Group Centre

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BALANCE SHEET[1 ]

DEPOSITS BY REGION[3 ]

LENDING BY REGION[2 ]

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$b $b
403
16% 262
17% 26%
21%
67% 112 88 97
7% 33% 48 53% 16% 15% 97
60% 100% 69% 100%
Australia New International Australia New International
Zealand Zealand
Retail Commercial Institutional
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INSTITUTIONAL GRADE

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INSTITUTIONAL TENOR
EAD$b [[4 ]]
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EAD$b [4 ] EAD$b [[4 ]]
377 367 368 159 169
1% 0% 0%
17% 17% 16% 38%
63%
82% 83% 84%
62%
29
37%
64%
36%
Mar 16 Sep 16 Mar 17 Australia NZ International
Investment Default
Sub-investment Tenor < 1 year Tenor > 1 Year
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BALANCE SHEET

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$b
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576 576
562
447 468
450
NLA NLA NLA
DEP DEP
DEP
.
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1H16 2H16 1H17

1H17 2H16 1H16	1H17 2H16 1H16	1H17 2H16 1H16	1H17 2H16 1H16	1H17 2H16 1H16
Lending2 Deposits3 1H16 1H17 1H16 1H17
Retail	58%	60%	44%	45%
Comm	19%	19%	15%	15%
Inst	23%	21%	41%	40%

As at 31 March 2017 2. Net Loans and Advances. Excludes TSO & Group Centre, Wealth ($1.8b) and Retail Asia & Pacific ($12.5b). Australia includes PNG 3. Customer Deposits. Excludes TSO & Group Centre, Wealth ($0.3b) and Retail Asia & Pacific ($21.9b). Australia includes PNG 4. Post CRM EAD, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Includes amounts for 'Securitisation' and 'Other Assets' Basel asset classes

VOLUMES & MARGINS

ANZ GROUP

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$b
570 576 576
558 562
2.09% 2.10%
2.07% 2.06%
2.00%
1H15 2H15 1H16 2H16 1H17
NLA NIM (RHS)
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GROUP NET INTEREST MARGIN[1 ]

bps

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206
0 202 200
-2 -1 -1 -2
2H16 Aus Div NZ Div Inst Div Asia 1H17 ex Markets 1H17
(ex Retails markets
Markets) & Pacific
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NET LOANS AND ADVANCES

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$b
10
576 -3 576
-5
-2
2H16 Aus Div NZ Div Inst Div Other 1H17
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Information is on a Cash basis unless otherwise specified

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PRODUCTIVITY

ANZ GROUP

COST TO INCOME 1H17

$’000

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230
223
209
206
199
46.2% 46.8% 46.3%
45.1% 44.8%
1H15 2H15 1H16 2H16 1H17
Revenue/FTE CTI (RHS)
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68% 68%
47%
36% 38%
Aus Div NZ Div Inst Div Wealth Asia Retail
Australia & Pacific
FTE 1H17
16,617
11,518
6,250
4,899 4,719
2,043
Aus Div NZ Div Inst Div Wealth Asia Retail TSO &
Australia & Pacific Group
Centre
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Information is on an Adjusted pro-forma basis for 1H16, 2H16 and 1H17

PROFITABILITY

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ANZ GROUP RoRWA [1] 1H17
$m 2.27% 2.31%
1.23%
3,676 3,637
3,540
3,224 3,264
Aus Div NZ Div Inst Div
RISK WEIGHTED ASSETS 1H17
$m
1.97% 1.83% 1.62% 1.65% 1.80%
160 159
57
Aus Div NZ Div Inst Div
PROFIT 1H17
$b
1,798
1,021
677
1H15 2H15 1H16 2H16 1H17
Aus Div NZ Div Inst Div
NPAT RoRWA(RHS)
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Information is on an Adjusted pro-forma basis for 1H16, 2H16 and 1H17 1. Income is on an Annualised Adjusted Pro-forma basis

2017 HALF YEAR RESULTS

REGULATORY CAPITAL

CAPITAL UPDATE

APRA COMMON EQUITY TIER 1 (CET1)

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% 52 bps
9.61 0.89 0.28 0.02 10.13
-0.51 -0.16
Net Organic Capital
Generation
+119 bps
Sep-16 Cash RWA Capital Dividends Other Mar-17
Earnings [3 ] (ex FX) Deductions [4 ] (Net of
DRP)
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Capital Position

APRA CET1 ratio of 10.1% on an APRA basis or 15.2% on an Internationally Comparable[1] basis – comfortably above Basel top quartile[2] CET1 of 13.8%.
APRA Leverage ratio of 5.3% or 6.0% on an Internationally Comparable basis.

Organic Capital Generation & Dividend

1H17 organic capital generation of 119 bps is 58 bps higher than recent 1H averages[5] , driven mainly by the reduction in Institutional RWA.

BASEL III CET1

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% 13.2 14.0 14.5 15.2
9.6 9.8 9.6 10.1
Sep-15 Mar-16 Sep-16 Mar-17
APRA Internationally Comparable
TOTAL RWA MOVEMENT
$b
CRWA -$10.2b
408.6 405.6
0.8 0.7 397.0
-3.0
-8.7 -0.1 -1.3
Total Lending
-$7.9b
Sep-16 Credit Sep-16 Institutional Other Other Op RWA IRRBB Mar-17
FX Lending Divisional CRWA & Mkrt.
impacts Lending Impacts RWA
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Interim dividend of 80 cents consistent with revised 60%-65% payout target.

Capital Outlook

Announced asset sales (Asia Retail and Wealth business, SRCB and UDC Finance) expected to increase CET1 ratio by 65 to 70 bps, increasing the pro-forma CET1 ratio to ~ 10.8%.
ANZ intends to neutralise shares allocated under the 1H17 Dividend Reinvestment Plan (DRP) by acquiring an equivalent number of shares on market (as approved by APRA).
Capital management strategy and initiatives will be reviewed following further clarity in regards to APRA’s “unquestionably strong” requirements including further Basel reforms and any RWA modelling changes .
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. 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 13.8% as at June 2016. 3. Cash Earnings on pro forma basis adjusted for ‘Specified items’. 4. Represents the movement in retained earnings in deconsolidated entities, capitalised software, EL v EP shortfall and other intangibles. 5. 2012-2016 1H averages.

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REGULATORY CAPITAL GENERATION

COMMON EQUITY TIER 1 GENERATION (bps)	First half average 1H12 – 1H16	2H16	1H17
Cash Profit1 97 84 89
RWA movement (21) 22 28
Capital Deductions2 (15) 1 2
Net capital generation 61 107 119
Gross dividend (70) (60) (57)
Dividend Reinvestment Plan 11 6 6
Core change in CET1 capital ratio 2 53 68
Other non-core and non-recurring items 7 (73) (16)
Net change in CET1 capital ratio 9 (20) 52

Organic Capital Generation

Net capital generation for 1H17 is 119 bps, which is 58 bps higher than prior period averages. This reflects the benefit of strong balance sheet discipline and the Group’s strategic intent to run-off low return assets in Institutional, offsetting lower Cash NPAT.

Non-Core and non-recurring items

Non-core and non-recurring items in 1H17 predominantly driven by RWA measurement changes and the movement in Non-cash earnings.

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1.Cash profit for 1H16, 2H16 and 1H17 are on Adjusted Pro-forma basis adjusted for ‘Specified items’.

2.Represents movement in retained earnings in deconsolidated entities, capitalised software, EL v EP shortfall and other intangibles.

INTERNATIONALLY COMPARABLE[1] REGULATORY CAPITAL POSITION

APRA Common Equity Tier 1 (CET1) – 31 March 2017	10.1%
Corporate undrawn EAD and unsecured LGD adjustments Australian ADI unsecured corporate lending LGDs and undrawn CCFs exceed those applied in many jurisdictions	1.4%
Equity Investments & DTAAPRA requires 100% deduction from CET1 vs. Basel framework which allows concessional threshold prior to deduction	1.1%
Mortgages APRA requires use of 20% mortgage LGD floor vs. 10% under Basel framework. Additionally, APRA also requires a higher correlation factor vs 15% under Basel framework to target an average risk weighting of at least 25% for Australian residential mortgages	1.3%
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, currency conversion threshold and other retail standardised exposures	0.4%
Basel III Internationally Comparable CET1	15.2%
Basel III Internationally Comparable Tier 1 Ratio	18.2%
Basel III Internationally Comparable Total Capital Ratio	21.3%

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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 ]

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0% 5% 10% 15% 20% 25% 30%
Swedbank
Svenska Handelsbanken
SEB
Nordea
ABN Amro
Danske Bank
Morgan Stanley
ANZ Top
UBS
quartile
ING Group
13.8% [3 ]
Credit Agricole Group
Groupe BPCE
Intesa Sanpaolo
Standard Chartered
Raiffeisen Bank International (RBI)
HSBC
Rabobank
RBS
DBS
Erste Bank CET1
Goldman Sachs ANZ ranks in the top
Citibank quartile of the largest
Barclays internationally active
OCBC banks [3] and equally is
Commerzbank
ranked in the top
JP Morgan
UOB quartile of
Societe Generale internationally active
BNP Paribas G-SIBs and D-SIBs
Deutsche Bank
Credit Suisse
State Street
Scotia
UniCredit
BMO
RBC
BBVA
TD
Bank of America
Wells Fargo
Santander
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LEVERAGE RATIOS[1,2 ]

0% 1% 2% 3% 4% 5% 6% 7% 8% DBS UOB OCBC Intesa Sanpaolo Raiffeisen Bank International (RBI) Erste Bank Swedbank BBVA ANZ Standard Chartered RBS HSBC Credit Agricole Group SEB Nordea Rabobank Barclays Santander Groupe BPCE Leverage ING Group ANZ compares equally Svenska Handelsbanken UniCredit well on leverage, Commerzbank however international Danske Bank comparisons are more Credit Suisse difficult to make given UBS the favourable treatment BNP Paribas of derivatives under US Scotia GAAP RBC Societe Generale BMO TD ABN Amro Deutsche Bank

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 13.8% as at June 2016.

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BALANCE SHEET STRUCTURE

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FUNDED BALANCE SHEET BALANCE SHEET COMPOSITION CHANGE
Mar 2017 Sep 16 to Mar 17
$784b $784b LONG TERM SHORT TERM
Other Short
Term 6% +$14.7b improvement to Long Term +$14.7b reduction in Short
funding position Term funding
Short Term
Liquids
21% Funding 7%
Term Funding
<12M 3% 15.5
Other Customer
Other Short Term Deposits 11%
Assets & Trade 8%
-9.9
14.6 -2.8
-1.2
-1.6
Stable Customer
Deposits [1]
53% 1.8
Lending 5.8
69% -15.5
-6.7
Term Funding Stable Term Debt Term Debt FX on Capital Term ST Liquid Trade Other
Fixed >12M 12% Customer Deposits [1 ] Issuance <12 mths Term Debt Hybrids inc. Lending & Fixed Wholesale Funding Assets & Other Assets Funding
Assets & SHE & Hybrids Assets [2 ]
Other 2%
8%
Assets Funding
Sources of funds Uses of funds
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Stable customer deposits represent operational type deposits or those sourced from retail / business / corporate customers and the stable component of Other funding liabilities. 2. Excludes trade lending, repo, interbank and bills of acceptances

NET STABLE FUNDING RATIO

Pro-forma NSFR ~111%

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NSFR COMPOSITION NSFR MOVEMENT
Mar 2017 Sep 16 v Mar 17
$478b
Wholesale $423b
Funding
Liquids 1.8% 113%
& Other [1 ]
and
Other Assets [2 ]
Non 2.2% 0.1% 0.3% 1.1% 111%
Financial ~ -2%
Corporates
-1.1%
108%
Other
Loans [3 ]
Retail/SME
Residential
Mortgages [4 ]
<35%
Capital
Available Required Sep-16 Retail / Corporate / Wholesale Retail / Corp/FI Other [6 ] Mar-17 Asia Mar-17
Stable Funding Stable Funding SME FI Funding SME Loans Loans Retail & Proforma
Deposits Deposits [5 ] Wealth
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All figures shown on a Level 2 basis and based on current estimates. 1. ‘Other’ includes Sovereign, PSE and FI Deposits. 2. ‘Other Assets’ include Off Balance Sheet, Derivatives, Fixed Assets and Other Assets. 3. All lending other than Residential Mortgages <35% Risk Weight. 4. Includes NSFR impact of self-securitised assets backing the Committed Liquidity Facility (CLF). 5. Includes corporate, FI, PSE and central bank deposits. 6. Net of other ASF and other RSF.

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LIQUIDITY COVERAGE RATIO

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1H17 Average LCR 135%
LCR Composition Movement in Average LCR Surplus (A$b)
1H17 2H16 to 1H17
2H16 1H17
LCR LCR
$181b
125% 135%
Internal RMBS
$34b
1 47
$134b 2
Other ALA [1] 2
$16b Wholesale 3
HQLA 2 Funding 7
$14b
$4b
35
-3
Customer
HQLA 1
Deposits
$127b
& Other [2 ]
$120b
2H16 CLF [3 ] Liquid Retail / Corp / Wholesale Other 1H17
Assets SME FI / Funding
Liquid Assets Net Cash Sov
LCR LCR
Outflows
Surplus Surplus
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All figures shown on a Level 2 basis. 1. Comprised of assets qualifying as collateral for the Committed Liquidity Facility (CLF), excluding internal RMBS and any assets contained in the RBNZ’s Liquidity Policy – Annex: Liquidity Assets – Prudential Supervision Department Document BS13A12. 2. ‘Other’ includes off-balance sheet and cash inflows . 3. RBA CLF reduced by $6.5b, from 1 January 2017 (to $43.8b).

TERM WHOLESALE FUNDING PORTFOLIO[2 ]

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Maturities [[3 ]]
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Issuance[[1 ]]

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Issuance [[1 ]] Maturities [[3 ]]
$b
32
26
24 24 23
19 15 18 18 16 16
12
10
FY12 FY13 FY14 FY15 FY16 1H17 2H17 FY18 FY19 FY20 FY21 FY22 FY23+
Senior Unsecured Covered Bonds Tier 2 RMBS
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WEIGHTED AVERAGE TENOR

PORTFOLIO BY TYPE

PORTFOLIO BY CURRENCY

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years 5.5
4.9 5.1
3.9 3.9
3.5 3.2 3.3
2.8
FY15 FY16 1H17 FY15 FY16 1H17 FY15 FY16 1H17
Portfolio ex Total
Issuance
<12 months Portfolio
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11%
1%
16%
72%
Senior Unsecured Tier 2
Covered Bonds RMBS
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5%
1%
21% 36%
37%
Domestic (AUD, NZD) Other
North America (USD, CAD)
UK & Europe (£, €, CHF)
Asia (JPY, HKD, SGD, CNY)
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All figures based on historical FX. 1. Includes transactions with a call or maturity date greater than 12 months as at the respective reporting date. 2. Excludes AT1. 3. Tier 2 profile is based on the next optional call date

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2017 HALF YEAR RESULTS

RISK MANAGEMENT

TOTAL & COLLECTIVE PROVISION (CP) CHARGE

TOTAL PROVISION CHARGE

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$m
1,500
1,038 0.6
918
1,000 720
528 461 510 695 0.4
500
0.2
0 0.0
-500 -0.2
1H14 2H14 1H15 2H15 1H16 2H16 1H17
CIC as % Avg.GLA (RHS) CP Charge IP Charge
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TOTAL PROVISION CHARGE COMPOSITION

	1H14	2H14	1H15	2H15	1H16	2H16	1H17
CIC 528		461	510	695	918	1,038	720
CP Composition Lending Growth 85 61 54 50 56 -59 -30 Risk/Portfolio Mix -200 -52 8 62 -30 50 -78 Eco Cycle 41 -90 -7 -72 0 0 41

CP BALANCE BY DIVISION

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$m
3,000 2,876 2,785
Mar17 vs Sep16 $m
2,000
Divisional mvt (67)
FX impact (24)
1,000
0
Sep 16 Mar 17
AUS Insto. NZ Asia Retail & Pacific TSO Group Centre
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CRWA & CP AS A % OF CRWA

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340 350 334 352 342
0.82%
0.86% 0.85% 0.86% 0.81%
Mar’15 Sep’15 Mar’16 Sep’16 Mar’17
Credit Risk Weighted Assets CP Bal. as % of CRWA
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IP: Individual Provision charge CP: Collective Provision charge CIC: Total Credit Impairment charge

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RISK MANAGEMENT

INDIVIDUAL PROVISION (IP) CHARGE

ANZ HISTORICAL OBSERVED LOSS RATES

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bps
300
200
100
0
Sep Sep Sep Sep Sep Sep Sep Sep Sep Mar
90 93 96 99 02 05 08 11 14 17
IP Loss Rate Median IP Loss Rate
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IP CHARGE BY SEGMENT

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$m
1,200
1,047
1,000 892
787
800
655
602
542
600 455
400
200
0
1H14 2H14 1H15 2H15 1H16 2H16 1H17
Consumer Commercial Institutional
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IP CHARGE COMPOSITION

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$m
1,500 1,047
892 787
602 655
1,000 542 455
500
0
-500
1H14 2H14 1H15 2H15 1H16 2H16 1H17
New Increased Writebacks & Recoveries
IP CHARGE BY REGION
$m
1,200
1,047
1,000 892
787
800
655
602
542
600 455
400
200
0
1H14 2H14 1H15 2H15 1H16 2H16 1H17
Australia New Zealand APEA
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RISK MANAGEMENT

IMPAIRED ASSETS

CONTROL LIST

Index Sep 09 =100

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150
100
50
0
Sep Sep Sep Sep Sep Sep Sep Sep Mar
09 10 11 12 13 14 15 16 17
Control List by limits Control List by no. of groups
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NEW IMPAIRED ASSETS BY DIVISION

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$m
2,000 1,783 1,784 1,844 1,787
1,541
1,500 1,327
1,197
1,000
500
0
1H14 2H14 1H15 2H15 1H16 2H16 1H17
Australia New Zealand Institutional Other [1 ]
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GROSS IMPAIRED ASSETS BY DIVISION

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$m
4,000 3,620
3,173
3,000 2,889 2,708 2,719 2,883 2,940
2,000
1,000
0
Mar’14 Sep’14 Mar’15 Sep’15 Mar’16 Sep’16 Mar’17
Australia New Zealand Institutional Other [1 ]
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GROSS IMPAIRED ASSETS[1] BY EXPOSURE SIZE

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$m
4,000 3,620
3,173
3,000 2,889 2,708 2,719 2,883 2,940
2,000
1,000
0
Mar’14 Sep’14 Mar’15 Sep’15 Mar’16 Sep’16 Mar’17
< 10m 10m to 100m > 100m
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Other includes Retail Asia & Pacific and Australia Wealth

RISK MANAGEMENT

RISK WEIGHTED ASSETS

TOTAL RISK WEIGHTED ASSETS

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$b
409
402
397
387 388
39
38
361 362 33 38 39
14 18
32 32 14 16 17
24 21
340 350 334 352 342
305 309
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Mar’14 Sep’14 Mar’15 Sep’15 Mar’16 Sep’16 Mar’17 CRWA Mkt. & IRRBB RWA Op-RWA

TOTAL RWA MOVEMENT

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408.6
0.1 397.0
-10.2 -0.1 -1.4
Sep-16 Credit Op RWA IRRBB Mkt. RWA Mar-17
RWA RWA
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CRWA MOVEMENT

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

$b
352.0
2.9
341.8
-3.0
-7.9 -2.2
Sep-16 FX Impact Lending Data/Meth. Risk Mar-17
Mvmt. Review
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RISK MANAGEMENT

RISK WEIGHTED ASSETS

GROUP EAD[1 ] & CRWAs

GROUP EAD[1] MOVEMENT

MAR 17 V SEP 16

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$b
919 906 910 914
891
813
779
39.2% 38.0% 38.1% 38.1% 36.9% 38.7% 37.4%
Mar’14 Sep’14 Mar’15 Sep’15 Mar’16 Sep’16 Mar’17
CRWA/EAD % EAD
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$b
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----- Start of picture text -----

910.4 12.7 1.0 914.2
-9.9
Sep-16 FX Impact Lending Data/Meth. Mar-17
Mvmt. Review
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GROUP EAD[1] & CRWA GROWTH[2] MOVEMENT MAR 17 V SEP 16

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$b
9.7
2.5 1.6 2.0
0.1 0.5
-0.6 -0.7 -1.6
-8.7
AUS HL AUS Non HL NZ Other Institutional
EAD Gth. CRWA Gth.
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Post CRM EAD, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Includes amounts for ‘Securitisation’ and ‘Other Assets’ Basel asset classes

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Refers to lending movement, excluding FX Impact, Data/Meth Review and Risk

RISK MANAGEMENT

PORTFOLIO COMPOSITION

Category	% of Group EAD	% of Group EAD	% of Portfolio in Non Performing	% of Portfolio in Non Performing	Portfolio Balance in Non Performing
	Sep 16	Mar 17	Sep 16	Mar 17	Mar 17
Consumer Lending	40.6%	41.2%	0.1%	0.1%	$447m
Finance, Investment & Insurance	17.4%	17.7%	0.1%	0.0%	$25m
Property Services	6.8%	6.7%	0.4%	0.3%	$166m
Manufacturing	5.2%	5.0%	1.6%	1.2%	$550m
Agriculture, Forestry, Fishing	3.9%	3.8%	1.5%	1.4%	$485m
Government & Official Institutions	6.2%	6.1%	0.0%	0.0%	$0m
Wholesale trade	3.1%	3.0%	0.5%	0.5%	$142m
Retail Trade	2.4%	2.3%	1.2%	0.7%	$154m
Transport & Storage	2.2%	2.1%	0.4%	0.8%	$146m
Business Services	1.7%	1.7%	0.9%	1.0%	$146m
Resources (Mining)	1.8%	1.9%	2.9%	2.1%	$357m
Electricity, Gas & Water Supply	1.3%	1.3%	0.0%	0.1%	$16m
Construction	1.4%	1.4%	2.0%	1.9%	$234m
Other	6.0%	5.8%	0.4%	0.6%	$291m
Total	100.0%	100.0%
Total Group EAD1 $b	$895b	$899b

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

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EAD excludes amounts for ‘Securitisation’ and ‘Other Assets’ Basel classes and manual adjustments. Data provided is as at Mar 17 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 Post CRM basis from 30 June 2016

RISK MANAGEMENT

GROUP RESOURCES PORTFOLIO

RESOURCES EXPOSURE BY SECTOR

Total EAD (Mar 17): $17b

As a % of Group EAD (Mar 17): 1.9%

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9.4
8.3
6.8 7.2
4.5 4.6
4.0 3.7
2.8 2.6 2.7 3.0 2.4
1.8 1.4 1.0 1.1 1.1 0.9 1.4
Coal Mining Metal Ore Mining Oil & Gas Extraction Other Mining Services To Mining
Mar’14 Mar’15 Mar’16 Mar’17
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RESOURCES EXPOSURE CREDIT QUALITY (EAD)

RESOURCES PORTFOLIO MANAGEMENT

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AUS NZ ASIA OTHER
7.4 0.6 3.0 5.8
17% 12%
43% 37%
83% 88%
57% 63%
AUS NZ ASIA EA & Other
Investment Grade Sub-Investment Grade
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Portfolio is skewed towards well capitalised and lower cost resource producers. 25% of the book is less than one year duration
Investment grade exposures represent 70% of portfolio vs. 65% at Sep 16 and Trade business unit accounts for 12% of the total Resources EAD
Mining services customers are subject to heightened oversight given the cautious outlook for the services sector

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RISK MANAGEMENT

COMMERCIAL PROPERTY PORTFOLIO

COMMERCIAL PROPERTY OUTSTANDINGS BY REGION[1 ]

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$b
37.4 37.5 38.4 37.9 37.7 8.0
3.9 3.6 2.7
33.9 4.5 4.7
4.1 7.5
8.8 9.5
9.5
8.3 8.4
6.9
7.0
6.5
24.6 24.4 25.7 24.8 25.5 6.0
22.9
5.5
5.0
Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17
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% of Group GLA (RHS) New Zealand Australia APEA

COMMERCIAL PROPERTY OUTSTANDINGS BY SECTOR[1 ]

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%
100
80
60
40
20
Mar’16 Sep’16 Mar’17
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Offices Retail Industrial Residential Tourism Other

PROPERTY PORTFOLIO MANAGEMENT

Australian volumes grew 2.8% across 1H17, primarily driven by draw downs for residential development projects and loans to REITs to restock land inventories.
Overall New Zealand volumes were flat due to exchange rate movements offsetting underlying portfolio growth. Excluding FX movements a 3.5% half on half increase in draw downs for residential development projects was the main source of growth.
APEA volumes in 1H17 was primarily driven by run-off of lower return lending.

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As per ARF230 disclosure 2. APEA = Asia Pacific, Europe & America

RISK MANAGEMENT

GROUP AGRICULTURE PORTFOLIO

AGRICULTURE EXPOSURE BY SECTOR (% EAD)

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Total EAD (Mar 17) As a % of Group EAD
A$33.9b 3.8%
Dairy
9.7% Beef
Sheep &
11.8% Other
38.6% Livestock
Grain/Wheat
16.5% Horticulture/
Fruit/
Other Crops
9.1% 14.2% Forestry & Fishing/Agriculture Services
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NEW ZEALAND DAIRY CREDIT QUALITY

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PD increase reflects impact of
NZ$b
lower milk prices
14.0
12.7 12.0 11.6 11.9 12.4 12.4 12.4
1.8% 1.6% 1.2% 0.9% 0.8% 1.1% 2.2% 1.9%
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Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Mar 17 Wt. Avg. PD (RHS)[1 ] NZ Dairy EAD

GROUP AGRICULTURE EAD SPLITS[2 ]

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0.3%
41.6%
58.1%
Australia New Zealand Intl. Markets
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----- Start of picture text -----

2.4%
97.6%
Productive Impaired
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----- Start of picture text -----

5.6%
4.4%
19.2%
70.8%
<60% Secured 80 - <100% Secured
60 - <80% Secured Fully Secured
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Wholesale PD model changes account for 55 bps in FY16 2. Security indicator is based on ANZ extended security valuations

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RISK MANAGEMENT

NEW ZEALAND

NEW ZEALAND GEOGRAPHY GROSS IMPAIRED ASSETS

NEW ZEALAND GEOGRAPHY TOTAL PROVISION CHARGE[2 ]

NZ$m

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

1,818
2.5
1,451
2.0
955 1.5
708
419 491 513 1.0
0.5
0.0
Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Mar 17
GIA as % GLA (RHS) Gross impaired Assets
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NZ$m

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

97
100 44 22 30 31 46 50 40
50
0
-50
-39
-100
1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17
IP Charge CP Charge
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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
Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar-
08 09 10 11 12 13 14 15 16 17
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MORTGAGE DYNAMIC LOAN TO VALUE RATIO[1 ]

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

% of Portfolio
4.0%
2.5%
12.8%
18.9%
61.8%
0-60% 61-70% 71-80% 81-90% 90%+
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Average dynamic LVR as at Feb 2017 (not weighed by balance)
Credit valuation adjustments (CVA) for customers with CCR10 are reported differently for cash profit and headline views of earnings. In the headline (statutory) view of provision reported above, changes in CVA are reported in Other Operating Income, but in the cash profit view of earnings the change in CVA is reclassified to IP

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RISK MANAGEMENT

ANZ INSTITUTIONAL PORTFOLIO (COUNTRY OF INCORPORATION[1] )

INSTITUTIONAL PORTFOLIO SIZE & TENOR (EAD[2] )

ANZ INSTITUTIONAL INDUSTRY COMPOSITION EAD (Mar 17): A$356b[2 ]

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400
350 26%
33%
300
3% 3%
51% 3%
250
3%
6% 15%
8%
200
40%
150
EAD (Mar 17): A$356b [[2 ]]
100
49%
24% 14%
60% 23%
50 1%
76% 13%
14%
87%
0
Total APEA Asia China
Institutional 10% 23%
Tenor <1 Yr Tenor 1Yr+
15%
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Finance (Banks and Central Banks) Government Admin. Property Services³ Services to Fin. & Ins. Machinery & Equip Mnfg Basic Material Wholesaling Electricity & Gas Supply Oil & Gas Extraction Other ⁴

ANZ INSTITUTIONAL PRODUCT COMPOSITION EAD (Mar 17): A$356b[[2 ]]

Loans & Advances Traded Securities (e.g. Bonds) Contingent Liabilities & Commitments Trade & Supply Chain Derivatives & Money Market Loans Gold Bullion Other

Country is defined by the counterparty’s Country of Incorporation. 2. Data provided is as at Mar17 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class ‘Securitisation’, ‘Other Assets’, ‘Retail’ and manual adjustments. 3. ~88% 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 2.4% of the Institutional portfolio.

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RISK MANAGEMENT

ANZ ASIAN INSTITUTIONAL PORTFOLIO (COUNTRY OF INCORPORATION[1] )

COUNTRY OF INCORPORATION[1 ]

EAD (Mar 17): A$87b[2 ]

ANZ ASIA INDUSTRY COMPOSITION EAD (Mar 17): A$87b[2 ]

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6%
3%
4%
24%
6%
8%
11%
23%
15%
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China Singapore Taiwan Indonesia Other Japan HK Sth Korea India

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

Finance
19%
Property Services
Basic Material Wholesaling
3%
3% Machinery & Equip Mnfg
5% 55% Petroleum,Coal,Chem & Assoc Prod Mnfg
Communication Services
5%
5% Pers & Household Good Wholesaling
5% Other³
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ANZ ASIA PRODUCT COMPOSITION

EAD (Mar 17): A$87b[2 ]

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

Loans & Advances
21%
24%
Traded Securities (e.g. Bonds)
Contingent Liabilities & Commitments
3%
Trade & Supply Chain
10% Derivatives & Money Market Loans
Gold Bullion
21%
6% Other
15%
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Country is defined by the counterparty’s Country of Incorporation. 2. Data provided is as at Mar17 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class ‘Securitisation’, ‘Other Assets’, ‘Retail’ and manual adjustments. 3. “Other” within industry is comprised of 46 different industries with none comprising more than 2.7% of the Asian Institutional portfolio; Other product category is predominantly exposure due from other financial institutions.

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RISK MANAGEMENT

ANZ CHINA PORTFOLIO (COUNTRY OF INCORPORATION[1] )

COUNTRY OF INCORPORATION[1 ]

EAD (Mar 17): A$21b[2 ]

ANZ CHINA INDUSTRY COMPOSITION EAD (Mar 17): A$21b[2 ]

China EAD

Total China EAD of A$21b, with 39% or A$8.2b booked onshore in China

Tenor

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

Risk rating

China exposure has a stronger average credit rating

compared to Asia, Australia and NZ

Industry

63% of China exposures to Financial institutions, with ~54% of this to China’s central bank and its Top 5 largest banks

Products

Largest growth in ‘Derivatives & Money Market Loans’ (+A$1.9b) mostly from increase in Money Market Loans whilst reduction in ‘Other’ (A$1.7b) due to decline in Nostro accounts
Within Loans and Advances ~77% have a tenor of less than 1 year, up from 74% as at Sep 16

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8%
3%
Finance (Banks and Central Banks)
10%
Manufacturing
Wholesale Trade
Transport & Storage
16%
Other
63%
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ANZ CHINA PRODUCT COMPOSITION

EAD (Mar 17): A$21b[2 ]

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

6%
19%
10%
3%
4%
36%
22%
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----- Start of picture text -----

Loans & Advances
Traded Securities (e.g. Bonds)
Contingent Liabilities & Commitments
Trade & Supply Chain
Derivatives & Money Market Loans
Gold Bullion
Other
----- End of picture text -----

Country is defined by the counterparty’s Country of Incorporation
Data provided is as at Mar17 on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Position excludes Basel Asset Class ‘Securitisation’, ‘Other Assets’, ‘Retail’ and manual adjustments.

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2017 HALF YEAR RESULTS

AUSTRALIA HOME LOANS

PORTFOLIO OVERVIEW

	Portfolio1	Portfolio1	Flow			Portfolio	Portfolio
	1H16	1H17	1H17			1H16	1H17
Number of Home Loan accounts Total FUM1 Average Loan Size % Owner Occupied % Investor % Equity Line of Credit % Paying Variable Rate Loan3 % Paying Fixed Rate Loan3 % Paying Interest Only3 % Paying Principal & Interest3 % Broker originated	976k 992k 89k2 $243b $256b $34b $249k $258k $382k 60% 62% 67% 36% 34% 31% 4% 4% 2% 87% 85% 84% 13% 15% 16% 38% 37% 43% 62% 63% 57% 48% 50% 55%				Average LVR at Origination4,5,6 Average Dynamic LVR5,6,7 Market Share8 % Ahead of Repayments9 Offset Balances10 % First Home Buyer % Low Doc11 Home Loan IP Loss Rate Group IP Loss Rate % of Australia Geography Lending12 % of Group Lending12,13	71% 70% 51% 51% 15.6% 15.6% 40% 39% $24b $26b 7% 6% 7% 5% 0.01% 0.03% 0.32% 0.27% 63% 63% 43% 44%

Home Loans (exclusive of Non Performing Loans, exclusive of offset balances) 2. New accounts includes increases to existing accounts and split loans (fixed and variable components of the same loan) 3. Excludes Equity Manager 4. Originated 1H16 for 1H16, originated 1H17 for 1H17 5. Unweighted 6. Including capitalised premiums 7. Valuations updated Mar’17 where available 8. Source for Australia: APRA 9. % of Owner Occupied and Investment Loans that are one month or more ahead of repayments. Excludes Equity Loans 10. Balances of Offset accounts connected to existing Instalment Loans 11. Low Doc is comprised of less than or equal to 60% LVR mortgages primarily for self-employed without scheduled PAYG income. However, it also has ~A$500m of less than or equal to 80% LVR mortgages, primarily booked pre-2008 12. Based on Gross Loans and Advances 13. Based on Group Cash Profit basis.

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AUSTRALIA HOME LOANS

PORTFOLIO TRENDS

HOME LOAN PORTFOLIO: LOAN TO VALUE RATIO[1,2,3 ]

HOME LOAN BALANCE & LENDING FLOWS[1 ]

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

$b
+5%
15
1
243 52 -55 256
1H16 New sales Net OFI Refi Redraw & Repay 1H17
exc Refi-in Interest / Other
----- End of picture text -----

% of portfolio

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

50
15
1 40
243 52 -55 256
30
20
10
0
1H16 New sales Net OFI Refi Redraw & Repay 1H17 0-60% 61-75% 76-80% 81-90% 91-95% 95%+
exc Refi-in Interest / Other
Sep-12 Sep-13 Sep-14 Sep-15 Sep-16
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
PORTFOLIO [1] & FLOW COMPOSITION
By purpose: By channel: By location:
Portfolio Flow Portfolio Flow Portfolio 6% Flow
7% 6% 14% 5%
5% 4% 4% 2%
8%
38% 36% 34% 31% 47% 48% 50% 55% 16%17% 15%16% 16% 12%
36%
27% 30% 31%
57% 60% 62% 67% 53% 52% 50% 45% 33% 33% 33% 39%
1H15 1H16 1H17 1H17 1H15 1H16 1H17 1H17 1H15 1H16 1H17 1H17
Equity Investor Owner Occ Broker Proprietary SA WA QLD/NT NSW/ACT VIC/TAS
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Exclusive of Non Performing Loans. 2. Including capitalised premiums 3. Dynamic LVR reported. Valuations updated Mar-17 where available

AUSTRALIA DIVISION

PORTFOLIO PERFORMANCE

PRODUCT 90+ DAY DELINQUENCIES[1 ]

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

2.0
1.5
1.0
0.5
0.0
Mar- Mar- Mar- Mar- Mar- Mar-
12 13 14 15 16 17
Home Loans Consumer Cards
Corporate & Commercial Banking³ Personal Loans
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HOME LOANS REPAYMENT PROFILE[4 ]

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

58%
54%
33% 30%
3% 3% 6% 6% 4% 3%
Overdue On Time 1 Month 2 Months >3 Months
ahead ahead ahead
Mar-15 Sep-15 Mar-16 Sep-16 Mar-17
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HOME LOAN DELINQUENCIES[1 ]

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%
2.0
1.5
1.0
0.5
0.0
Mar- Mar- Mar- Mar- Mar- Mar-
12 13 14 15 16 17
30+ DPD 90+ Owner Occupied 90+ Investor
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HOME LOANS 90+ DPD BY STATE[1,2 ]

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%
1.5
1.2
0.9
0.6
0.3
0.0
VIC NSW QLD WA Portfolio
& ACT
Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17
Sep 12 Sep 13 Sep 14 Sep 15 Sep 16
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Exclusive of Non Performing Loans 2. VIC, NSW & ACT, QLD and WA represent 91% of total portfolio, with remaining 9% distributed between TAS, NT and SA 3. Comprises Small Business, Commercial Cards and Asset Finance 4. Repayment profile on % of Owner Occupied and Investment loans. Excludes Equity Manager, non performing loans and offset balances

AUSTRALIA HOME LOANS

UNDERWRITING PRACTICES AND MATERIAL POLICY CHANGES[1 ]

Multiple checks during origination process

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Pre - application [2] Income & Expenses
Application Know Your Customer
Income Verification
Income Shading
Serviceability Expense Models
Interest Rate Buffer
Repayment Sensitisation
LVR Policy
Collateral / LMI policy
Valuations
Valuations Policy
Credit Credit History
Assessment
Bureau Checks
Documentation
Fulfilment
Security
Quality assurance, info verification & policy reviews
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Serviceability

Interest rate floor applied to new and existing mortgage lending introduced at 7.25%
Introduction of an income adjusted living expense floor (HEM)
Introduction of a 20% haircut for overtime and commission income
Increased income discount factor for residential rental income from 20% to 25%

Material Policy changes

LVR cap reduced to 90% for investment loans
LVR cap reduced to 70% in high risk mining towns
Decreased maximum interest only term of owner occupied interest only loans to 5 years
Withdrawal of lending to non-residents
Limited acceptance of foreign income to demonstrate serviceability and tightened controls on verification
Tightening of acceptances for guarantees
End-to-end home lending responsibility managed within ANZ
Effective hardship & collections processes
Full recourse lending
ANZ assessment process across all channels
LVR cap introduced on new Interest Only Owner Occupied at 90%
Reduced LVR cap of 80% for external refinances for Interest Only Owner Occupied
2015 to 2017 changes to lending standards and underwriting 2. Customers have the ability to assess their capacity to borrow on ANZ tools

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AUSTRALIAN HOME LOANS

STRESS TESTING THE AUSTRALIAN MORTGAGE PORTFOLIO

ANZ conducts regular stress tests of its loan portfolios to meet risk management objectives and satisfy regulatory requirements.
Stress tests are highly assumption-driven; results will depend on economic assumptions, on modelling assumptions, and on assumptions about actions taken in response to the economic scenario.
This illustrative recession scenario assumes significant reductions in consumer spending and business investment, which lead to eight consecutive quarters of negative GDP growth. This results in a significant increase in unemployment and material nationwide falls in property prices.
Estimated portfolio losses under these stressed conditions are manageable and within the Group’s capital base, with cumulative total losses of A$1.6b over three years (net of LMI recoveries).

Assumptions	Current	Year 1	Year 2	Year 3
Unemployment rate	5.8%	9.0%	10.5%	11.5%
Cash Rate	1.5%	0.25%	0.25%	0.25%
Real GDP year ended growth	3.1	-3.8%	-2.4%	4.7%
Cumulative reduction in house prices	-	-26.8%	-38.3%	-32.7%
Portfolio size1 (A$b)	274	275	264	253

Outcomes	Base	Year 1	Year 2	Year 3
Net Losses (A$m)	-	193	698	745
Net losses (bps)	-	7	26	29

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Exposure at default.

NEW ZEALAND MORTGAGES

PORTFOLIO OVERVIEW [1]

	Portfolio	Portfolio	Growth
	1H16	1H17	1H17
Number of Home Loan accounts Total FUM Average Loan Size at Origination Average Loan Size % of NZ Geography Lending % of Group Lending % Owner Occupied % Investor % Paying Variable Rate Loan % Paying Fixed Rate Loan % Broker originated	508k 515k 1.4% NZ$70b NZ$75b 6.5% NZ$295k NZ$295k -0.0% NZ$138k NZ$145k 5.1% 60% 61% 107bps 11% 12% 60bps 73% 73% -32bps 27% 27% 32bps 24% 22% -259bps 76% 78% 259bps 32% 34% 174bps

	Portfolio	Portfolio	Growth
	1H16	1H17	1H17
Average LVR at Origination2 Average Dynamic LVR3 Market Share4 % Paying Interest Only5 % Paying Principal & Interest % First Home Buyer % Low Doc Mortgage Loss Rates Group IP Loss Rates	63% 59% -392bps 46% 42% -376bps 32% 31% -38bps 24% 23% -84bps 76% 77% 84bps N/A N/A N/A 0.55% 0.48% -7bps 0.00% -0.01% -1bps 0.32% 0.27% -5bps

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New Zealand Geography
Average LVR at origination (not weighted by balance) 4. Source for New Zealand: RBNZ as at February 2017
Average dynamic LVR as at March 2017 (not weighted by balance)

Excludes revolving credit facilities

NEW ZEALAND

HOME LENDING[1 ]

FLOW[2 ]

PORTFOLIO

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10% 11% 6% 6%
24% 22%
23% 22%
39% 38% 9% 8%
7% 9%
11% 10%
76% 78%
51% 51% 44% 45%
1H16 1H17 1H16 1H17 1H16 1H17
Auckland Christchurch Other Nth Is.
Branch Broker Mobile mortgage managers Fixed Variable
Wellington Other Sth Is. Other³
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MARKET SHARE[4]

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31.6% 31.6% 31.5% 31.2%
5.4% 4.0% 4.1% 4.0% 4.5% 5.0%
1.9% [2.6% ]
2H15 1H16 2H16 Feb-17
ANZ market share ANZ growth System growth
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ANZ MORTGAGE LVR PROFILE FOR AUCKLAND[5 ]

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19%
0-60%
61-70%
71-80% 11%
81-90%
90%+ 64% 2% 4%
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New Zealand Geography
Retail and Small Business Banking mortgage flow. Branch includes Small Business Banking Managers Lending Services, Property Finance) prior periods 5. Source: Dynamic basis, as of March 2017

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Other includes loans booked centrally (Business Direct, Contact Centre, 4. Source: RBNZ, Changes in RBNZ data reporting from February 2017 onwards has resulted in a step change in data vs

2017 HALF YEAR RESULTS

AUSTRALIA

STRATEGIC FOCUS

Create a simpler, better capitalised, better balanced and more agile bank
Focus efforts on attractive areas where we can carve out a winning position
Build a superior experience for our people and customers to compete in the digital age

PROGRESS

Simpler, better capitalised, better balanced, more agile:

Efficient operations, 3% more activity, 3% lower cost
More effective frontline bankers, more customer solutions, more self service, more digital sales
Simplified organisation: 7% fewer FTEs over past 2 years and reduced expense growth

Efforts on attractive areas:

Home Loans: above system performance, digital applications launched, good momentum, NSW performance strong, margins stable
Small Business: continues to grow well, increased digital ability to meet customer needs through Honcho online business setup and EmploymentHero payroll solution, enhanced payment and transaction solutions
NSW investment continues to generate outperformance against other states

Superior experience for our people and customers:

Better banker tools for Small Business, accelerating origination, lending and assessment activities
Enhanced customer features – TouchID for goMoney, Digital Card Replacement, Falcon fraud protection security
More digital customers, more digital transactions, more digital branches, more customers able to bank where and when they want to

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AUSTRALIA

SIMPLER, BETTER CAPITALISED & MORE AGILE BANK

SIMPLER ORGANISATION

MORE EFFICIENT OPERATIONS

FTE

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7% Reduction
12,389
12,017
11,518
1H15 1H16 1H17
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Reduction in
3% more transactions -5%
operations unit
costs
3% lower
($/txn/min)
operational costs
1H16 1H17
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MORE SELF SERVICE

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22% fewer OTC transactions
31% higher revenue / FTE
19,001
17,345
14,787
847 922
702
1H15 1H16 1H17
Over the counter transactions (#’000) Retail Rev/FTE ($’000) [1 ]
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REDUCING EXPENSE GROWTH AND CTI

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5.0%
4.0%
37.9%
2.0%
35.8% 35.8%
1H15 1H16 1H17
Expense Growth CTI
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Income is on an annualised basis

AUSTRALIA

HOME LOANS

BUSINESS MOMENTUM

GROWTH

MANAGED PRUDENTLY

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$256b [Home Loan Portfolio ] $64b Gross sales [2 ] 51% Dynamic LVR
(44% of group lending)
Good momentum, stable
15.6% Market share, ranked 3rd [1 ]  5% FUM growth [2 ] 
margins
Number of customers we Portfolio delinquencies
169k  12% [Increase in applications ] 
helped to buy a property [2 ] ($ volume) [ 3] stabilising
1.2x System growth [1 ]  11% [NSW Home Loan ] 3bps IP loss rate
FUM growth [2 ]
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Comparisons are on a prior comparable period basis (Mar 17 v Mar 16) unless otherwise stated.

APRA market share as at March 2017
12 months to 31 March 2017
Comparing 1H17 to 1H16

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AUSTRALIA

SMALL BUSINESS BANKING

BUSINESS MOMENTUM

Small Business Lending $51b & Deposit Portfolio

Expanded partnership with  Honcho helping customers set up their business

Launched Employment Hero  and Be Trade Ready helping customers to run and grow their business

Launched new banker tools,  accelerating origination lending and assessment

GROWTH[1 ]

MANAGED PRUDENTLY

 18%[Increase in core transaction ] account deposits

70%

% of portfolio that is well secured Balanced growth, diversified portfolio, low concentration risk

8% deposit FUM growth 4% lending FUM growth



[Increase in small business ] customers who bank with us

Individual provisions have stabilised



 5%

7% NSW lending FUM growth 11% NSW deposit FUM growth[]

Growth in credit charges slower than growth in lending



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12 months to 31 March 2017

AUSTRALIA

BUILDING A SUPERIOR EXPERIENCE FOR OUR PEOPLE AND CUSTOMERS TO COMPETE IN THE DIGITAL AGE

BUILDING A SUPERIOR EXPERIENCE

IMPROVING BUSINESS OUTCOMES

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Launched Home Loans Online Application, making it easier to obtain approval in principle for home loans

Launched new systems, FastPay II and BladePay making it easier for customers to transact and make payments.

Launched two new initiatives, Employment Hero and Be Trade Ready to help our business customers start, run and grow their business

Enhanced features on existing applications, including TouchID for goMoney and Digital Card Replacement

65% Growth in digital logins since 2014 Digitally active retail customers, from 54% in 2014 60% (Roy Morgan) 67% Growth in digital sales transactions since 2014 Digital proportion of value transactions, from 71% 81% in 2014 Percentage of all Retail sales via digital, from 12% 20% in 2014

58 Number of digital branches from zero in 2014

Roy Morgan Research – Digitally Active customers – All Financial Services customer who conducted Internet Banking (using institution’s website or using an app on a mobile phone or tablet) in the last 4 weeks – 12 months to March 2014 (53.7%); 12 months to March 2017 (59.8%)

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AUSTRALIA

PERFORMANCE DRIVERS

OVER 6 MILLION CUSTOMERS

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000’s
331k
6,100
6,000
5,900
5,800
5,700
5,600
5,500
Mar 15 Mar 16 Mar 17
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GOOD MOMENTUM

MORE PRODUCTS PER CUSTOMER (%) Products per Customer

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Multiple
58.4 59.3 60.3
Single
41.6 40.7 39.7
Mar-15 Mar-16 Mar-17
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NSW INVESTMENT DELIVERING

System growth (APRA)

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1.6x
1.5x
1.4x
1.2x
1.1x
0.8x
0.6x
0.5x
2H15 1H16 2H16 1H17
Home Loans Retail Deposits
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11% 11% 8% 8% 8% 7% 5% 4% 5% 4% Home Loans Small Bus Household Small Bus. Customer FUM Lending deposit deposit Growth FUM FUM FUM NSW National

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2017 HALF YEAR RESULTS

NEW ZEALAND

STRATEGIC FOCUS

Continue to grow our customer satisfaction and brand consideration
Make buying a home or starting, running and growing a small business easier
Build a digital bank with a human touch by having customer led digital solutions and attracting, developing and retaining the best staff
Continue to leverage our leading position in migrant banking

PROGRESS

Grow customer satisfaction and brand consideration

Reached #1 in consumer brand consideration in Feb-17 while we continue to increase net promoter score and customer satisfaction
This focus has seen continued customer growth with net acquisition of 35k customers in the first half of FY17
Corresponding strong FUM growth has been seen in target segments of deposits, home loans and migrants

Make it easier for home and business owners. Leverage leading position in migrant banking

Maintained our #1 market share position while continuing to lead the market in responsible lending
Extended our leading position in the key migrant banking segment with consideration at an all-time high
Focused on customer deposits, gaining deposit share to continue reducing funding gap

Build a digital bank with a human touch. Attract, develop and retain the best staff

First bank in NZ to launch Apple Pay[TM]
1.3m digitally active customers, up 124k from Sept-15
Over 80% of value transactions now completed digitally, up 5 pps from Sept-15

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32.6%

28.0%

NEW ZEALAND

KEY PRODUCTS MARKET SHARE

OVERALL

Maintained our leading position in core banking products to support our vision of helping more Kiwis succeed
Our focus on well managed sustainable growth means our deposit growth has exceeded that of lending

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31.2%
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Mortgages[1 ]

Maintained our #1 market share position while continuing to lead the market in responsible lending
Managed risk by taking a cautious approach in selected segments (overseas income earners and long term interest only loans)

Household deposits[1]

We have continued to experience strong household deposit growth in an increasingly competitive marketplace with our emphasis on encouraging New Zealanders to save

Credit cards[1]

Our focus on productive business has seen our attention remain on interest bearing balances and share remains strong
We have simplified our product offerings in the market, reducing the number of active consumer products from 11 to 5

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26.6%
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9.7%
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KiwiSaver[2]

1 KiwiSaver provider with more than 725,000 KiwiSaver members. FUM growth of $700m in 1H17 to almost $10b
Annualised defection rate is 150bps better than the market

Life insurance[3]

Maintained share in an increasingly competitive insurance landscape
We continue to improve the quality of proprietary distribution, with bank channel lapse rates improving 120bps from last year (PCP)
Source: RBNZ, share of all banks as of February 2017
Source: IRD, member market share as of March 2017

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Source: FSC (Financial Services Council), share of all providers as of December 2016

NEW ZEALAND

STRATEGIC FOCUS SIMPLER, BETTER CAPITALISED & MORE AGILE BANK

FUNDING GAP[1]

MAINTAINING LEADING BRANCH COVERAGE

NZD$b

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28.7 27.4 26.7
109.0 117.5 123.0
90.1 96.3
80.3
1H15 1H16 1H17
Funding gap NLA Deposits
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229 223 100%
191 188 199
169 90%
80%
70%
60%
50%
Mar-15 Mar-16 Mar-17
ANZ Coverage (RHS) ANZ Branch no.
Nearest Peer Coverage (RHS) Nearest Peer Branch no.
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MORTGAGES LOAN TO VALUE RATIO[2]

SIMPLIFYING & AUTOMATING OUR BUSINESS[3 ]

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92.2%
85.8% 88.3%
14.2% 11.7%
7.8%
Mar-15 Mar-16 Mar-17
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< 80% LVR mortgages > 80% LVR mortgages
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8,000 60%
6,540 6,401 6,250
6,000
40%
4,000
2,000 20%
1H15 1H16 1H17
CTI FTE
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NZ Geography

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Dynamic basis, as of March 2017 3. NZ Division

NEW ZEALAND

STRATEGIC FOCUS – CUSTOMER OUTCOMES

NET CUSTOMER GROWTH

New Zealand Division (‘000)

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40
35
29
Mar-15 Mar-16 Mar-17
Net Retail acquisition (new less defection)
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BRAND CONSIDERATION[1]

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2 #2 #1
51.6%
45.8%
43.8%
Mar-15 Mar-16 Mar-17
ANZ brand consideration
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RETAIL NET PROMOTER SCORE[2]

BRAND CONSIDERATION – MIGRANTS

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%
9.9
0.1
-7.7
Mar- Mar- Mar-
15 16 17
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71,932
75,000 67,619 100%
60,000 56,275 80%
45,000 60%
30,000 40%
15,000 20%
0 0%
Mar-15 Mar-16 Mar-17
Brand consideration [1] Net migration [3]
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McCulley Research Brand Tracking (online survey, first choice or seriously considered); six month rolling average 2. Camorra Retail Market Monitor (RMM); six month rolling score 3. Source: Statistics NZ

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NEW ZEALAND

AUCKLAND

NET MIGRATION FOR AUCKLAND[1 ]

Net Migration (000’s)

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26.0k 31.2k 35.8k
60
40
20
0
Mar-15 Mar-16 Mar-17
Arrivals Departures
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HOUSE PRICES[2 ]

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$’000 NZD
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1,000
Auckland
800
600
Total NZ
400
200
0
Mar- Mar- Mar- Mar- Mar-
01 05 09 13 17
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EXPOSURE TO AUCKLAND HOME LOANS[3 ]

ANZ MORTGAGE LVR PROFILE FOR AUCKLAND[4 ]

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69% 71% 66%
31% 29% 34%
Market ANZ Top 3 Peers
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19%
0-60%
61-70%
71-80% 11%
81-90%
90%+ 64% 2% 4%
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Auckland Rest of country

Statistics NZ; six month rolling average
REINZ
CoreLogic, stock (number) of mortgage registrations. Top 3 peer banks are ASB, WBC and BNZ, as of March 2017 4. Dynamic basis, as of March 2017

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NEW ZEALAND

AGRICULTURE PORTFOLIO[1]

AGRI PORTFOLIO (GLA)

AGRI CREDIT QUALITY – GIA AS % OF GLA

NZ$b

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Dairy as a % of total NZ Geography [2]
25
12.4% 11.9% 11.7% 10.9% 10.4%
20
15
10
FY13 FY14 FY15 FY16 1H17
Dairy Sheep & Beef Other rural
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AGRICULTURE MARKET SHARE[3 ]

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31.3% 30.9% 30.3% 29.9%
6.8%
3.9%
2.5%
1.4%
0.6%
0.0%
-2.6%
-4.1%
2H15 1H16 2H16 Feb-17
ANZ market share ANZ growth System growth
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1.15%
1.05% 1.04%
0.69%
0.54%
1H15 2H15 1H16 2H16 1H17
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APPROACH TO THE AGRICULTURE SECTOR

Portfolio: Agri portfolio comprises 63% Dairy, 20% Sheep & (NZ$19b) Beef, 17% Other

Profile Customer base remains well established and highly secured. GIA as a % of GLA increased in FY16 driven by a downturn in the dairy sector. The portfolio has performed well and this measure has improved in 1H17. We are now seeing dairy prices rise leaving farmers with positive cash flow in 2017

Customer Long-standing relationships with a focus on approach supporting existing customers and diversifying our portfolio

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NZ Geography (Gross Loans and Advances)
Due to change in methodology for calculating the split of the Agri Portfolio GLA, dairy percentages for prior periods have been restated

Source: RBNZ, share of all banks as of February 2017. Changes in RBNZ data reporting from February 2017 onwards has resulted in a step change in data vs prior periods

NEW ZEALAND

DIGITAL

DELIVERING SUPERIOR EXPERIENCE FOR OUR PEOPLE AND CUSTOMERS…

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First bank in NZ to launch Apple Pay[TM]

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Improved payment capabilities with near real-time payments

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Improved frontline tools. Time for staff to book a customer appointment reduced by 75%

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Continual focus on simplification with 65% of credit card maintenance now straight through processed

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Delivering better functionality more often in Internet Banking and goMoney using an agile approach

…IS TRANSLATING INTO BUSINESS OUTCOMES

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1.4m +136k
1.3m 1.3m
1.2m
digitally active customers 1.1m
Sep-15 Sep-16 Mar-17
+4%
65%
64%
60%
of retail customer base banking
digitally [1] 55%
Sep-15 Sep-16 Mar-17
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85%
+5%
80%
75%
70%
Sep-15 Sep-16 Mar-17
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of value transactions (deposits and withdrawals) are now completed digitally

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Total active digital customers over total retail bank customers. Active customers based on a 90 day period

NEW ZEALAND GEOGRAPHY

	CASH PROFIT
	1H17	2H16	1H16
	NZ$m	NZ$m	NZ$m
Income	2,048	1,929	1,895
Net interest	1,534	1,536	1,493
Other income	514	393	402
Expenses	718	765	815
PBP	1,330	1,164	1,080
Provisions charge	40	99	50
Cash profit	928	778	751
CTI	35.0%	39.7%	43.0%
Customer deposits	96,259	91,360	90,148
NLA	122,954	120,651	117,470
RWA2	74,511	76,005	74,537

ADJUSTED PRO-FORMA1	ADJUSTED PRO-FORMA1	ADJUSTED PRO-FORMA1
	1H17	2H16	1H16
	NZ$m	NZ$m	NZ$m
Income	2,048	1,971	1,895
Net interest	1,534	1,536	1,493
Other income	514	435	402
Expenses	718	745	737
PBP	1,330	1,226	1,158
Provisions charge	40	99	50
Cash profit	928	823	807
CTI	35.0%	37.8%	38.9%
Customer deposits	96,259	91,360	90,148
NLA	122,954	120,651	117,470
RWA2	74,511	76,005	74,537

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Specified items relevant to New Zealand Geography are software capitalisation changes, derivative credit valuation adjustment changes and restructuring 2. RWA is on an APRA basis

2017 HALF YEAR RESULTS

INSTITUTIONAL

A SIMPLER, BETTER-BALANCED AND HIGH RETURNING INSTITUTIONAL

REVENUE[1 ]

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$m
+8% +9%
2,961 2,945
2,786 2,716 2,701
1,172
1,006
932 894 940
-237
1H15 2H15 1H16 2H16 1H17
Revenue Revenue/FTE ($k)
Specified Items
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EXPENSES[1 ]

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$m
-6% -2%
1,413 1,449 1,460 1,406 1,379
54%
52% 52%
48% 47%
3 7 53 39
1H15 2H15 1H16 2H16 1H17
Specified Items Cost-to-income ratio
Expenses
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TOTAL PROVISIONS

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$m
-61% -70%
419
324
147
54
24
88 111 270 248 125
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1H15 2H15 1H16 2H16 1H17 Credit Impairment Charge Oswal Settlement Emerging Corporates

CASH PROFIT[1 ]

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

$m
+52% +69%
1,047 1,021
871
670 603 406
330
280
232 225
-2 -5 -37
-195
1H15 2H15 1H16 2H16 1H17
Specified Items Cash Profit/FTE ($k)
Cash Profit
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RISK WEIGHTED ASSETS

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$b
-13% -5%
196 198
182
168 159
Mar 15 Sep 15 Mar 16 Sep 16 Mar 17
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RETURN [1]
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+27% +16%
3.5%
3.1% 2.8% 2.8% 3.1%
2.7% 2.6% 2.6% 2.7% 2.8%
1.1% 1.2%
0.9%
0.7% 0.7%
1H15 2H15 1H16 2H16 1H17
Institutional Revenue/RWA
Institutional ex-Markets Revenue/RWA
Institutional Return on RWA [2 ]
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On a pro-forma basis excluding Specified Items relating to restructuring (FY15 and FY16) and the derivative CVA methodology change (2H16) which are separately identified above. Metrics and percentage changes are calculated on a pro-forma basis and using average FTE and RWA for the period where applicable
Pro-forma cash profit divided by average risk weighted assets

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INSTITUTIONAL

CONSISTENTLY DELIVERING ON OUR TRANSFORMATION AGENDA

			MOVEMENTS VS PRIOR HALF
PRIORITIES		ACTIONS METRICS1	1H16 2H16 1H17 -$16b -5bps -$14b +25bps -$9b +49bps -8% +177bps +1% -9% -174bps -4% -4% -520bps -2% +38bps +196bps -56bps +15% +9% +14% +12% +11% +3% -1% +3% 0% +3% -11% 0%
IMMEDIATE FOCUS	Improve capital efficiency	Exit low-returning customers Improve return through disciplined pricing and active customer management RWA Return2
	Reduce costs	Lower FTE by reducing organisational complexity and rightsizing support and enablement functions Simplify and streamline business to improve productivity Build an appropriately scaled coverage model to win on the basis of customer and industry insights FTE Cost-to-income ratio Costs
	Connect customers across the region	Focus on and serve key institutional customers connected to the region via trade and capital flows Increase geographic focus to move decision-making closer to the customer Cross border flow3
GROWTH	Continue targeted investment	Target the build out of regional Trade, Cash Management and Markets platforms Improve customer experience and straight-through- processing rates, and reduce operational risk Customers on digital platform4 # customers # transactions
	Grow profitable businesses	Grow our Markets Franchise Sales and Cash Management businesses Markets Franchise Sales Cash

On a pro-forma basis excluding Specified Items relating to restructuring (FY15 and FY16) and the derivative CVA methodology change (2H16); 2. Revenue on average RWA; 3. Cross border flows defined as thrown revenue (the region where the relationship with the customer exists is different to the region where the revenue is generated and booked). Region defined as Australia, Pacific, NZ, Asia, Europe and America; 4. Number of Cash Management customers and transactions processed through Global Customer Integration Solution (GCIS). GCIS provides host-tohost connectivity that allows two-way data exchange with our customers in a highly secure, file agnostic environment

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INSTITUTIONAL

MAINTAINING OUR LEADING MARKET POSITIONS

AUSTRALIA

NEW ZEALAND

1 Lead Bank Penetration[1 ]

Clear leadership positions for key performance indicators including overall market share, lead penetration and quality of service

ASIA

Top 4 Corporate Bank[2 ] Top 4 Corporate Bank in Asia for a fifth successive year[2 ]

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36%
27%
25%
20%
ANZ Bank 2 Bank 3 Bank 4
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----- Start of picture text -----

49% 54%
43%
42%
34%
27%
28% 28%
6%
ANZ Bank 2 Bank 3 Bank 4 Bank 1 Bank 2 Bank 3 ANZ Bank 5
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Peter Lee Associates 2016 Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand (issued in June and August 2016 respectively 2. Greenwich Associates 2017 Asian Large Corporate Banking Study (issued in March 2017): =No.4

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INSTITUTIONAL

STRONG MARKETS RESULTS DRIVEN BY BALANCE SHEET AND VALUATION ADJUSTMENTS

MARKETS INCOME[1 ]

FRANCHISE SALES

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$m 42% 27% [$m ]
-11% -11%
1,364 630
1,182 988 961 1,074 547 542 542 483
16.3
140
161
-237 12.9
1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17
VIX half-yearly average
CVA methodology change
Institutional CRWA average ($b) [2 ]
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FRANCHISE TRADING[3 ]

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

$m
20% 1%
361 363
311 302
252
1H15 2H15 1H16 2H16 1H17
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BALANCE SHEET

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$m 135% 50%
356
278
238
152
118
1H15 2H15 1H16 2H16 1H17
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VALUATION ADJUSTMENTS[4 ]

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

[$m ]
162
71
-67
-38 -35
$40m for movements in FY16, -237
$197m one-off adjustments for
prior periods to mark to market
current portfolio -304
1H15 2H15 1H16 2H16 1H17
CVA methdology change Valuation adjustments
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AVERAGE VALUE AT RISK

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

$m
68
63
46 47
43
41 42
29 31 33
10 13 16 11 11
1H15 2H15 1H16 2H16 1H17
Traded market risk
Non-traded interest rate risk
High Quality Liquid Assets ($b) [5 ]
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On a pro-forma basis excluding Specified Items relating to the derivative CVA methodology change (2H16) which is separately identified above. Totals and percentage changes are calculated on a pro forma basis; 2. Counterparty credit risk-weighted assets; 3. Markets Franchise Trading excluding Valuation Adjustments; 4.Credit and funding adjustments (collectively referred to as XVA) net of associated hedges. 5 Market value of HQLA1 securities

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INSTITUTIONAL

TRANSACTION BANKING AND LENDING BUSINESSES IMPACTED BY PORTFOLIO RE-POSITIONING

PAYMENTS AND CASH MANAGEMENT

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$m $b
+3% 0%
0% 0%
560 578 576 91 92 92
1H16 2H16 1H17 1H16 2H16 1H17
Revenue Customer deposits (Average)
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TRADE AND SUPPLY CHAIN

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

$m $b
-20% -8%
-28% -10%
277
25
240
221 20
18
1H16 2H16 1H17 1H16 2H16 1H17
Revenue CRWA (Average)
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LOAN PRODUCT

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

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

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

$m
----- End of picture text -----

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

-19% -6%
-17% -8%
623
81
536 506 73 67
1H16 2H16 1H17 1H16 2H16 1H17
Revenue CRWA (Average)
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SPECIALISED FINANCE

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

$b
$m
-4% +2%
-2% -2%
247 232 236 18 18 18
1H16 2H16 1H17 1H16 2H16 1H17
Revenue CRWA (Average)
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INSTITUTIONAL

REDUCING RWA, OPTIMISING PORTFOLIO MIX AND MANAGING MARGINS

RWA

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$b
-13% -5%
196 198
182
28 29 168
30 159
26
26
168 169 152
142
133
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Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 CRWA[1 ] Other RWAs

RWA REDUCTION

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

$b
-$9b
168
-1
159
-6
-2
Sep 16 FX RWA Other [2 ] Mar 17
active
management
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RWA REDUCTION BY REGION

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

$b
-$9b
168
-2
-2
159
-5
Sep 16 Au & NZ Intl Mar 17
PNG
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INTEREST EARNING ASSETS[3 ]

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

41% 41% 46% 49% 51%
6% 6%
6%
7% 8%
53% 53% 48% 44% 41%
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----- Start of picture text -----

1H15 2H15 1H16 2H16 1H17
Au & PNG NZ Intl
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MARGINS BY REGION[4 ]

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

2.46%
2.40%
2.58%
2.16% 2.21% 2.17%
2.05%
1.94%
2.09%
1.79%
1.70%
1.86%
1.59% 1.66% 1.62%
1H16 2H16 1H17
Au & PNG Institutional
NZ Institutional (risk adjusted) [5 ]
International
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1H17 MARGINS[4 ]

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

bps
-4bps
2
221
-2
1 217
Active
Management
-5
2H16 Client Asset/ Asset Deposit 1H17
Exits Deposit Margins Margin
Mix
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Counterparty credit risk-weighted assets; 2. Movement includes Operating Risk and Market Risk; 3. External average interest earning assets excluding Markets; 4. NIM excluding Markets; 5. Risk adjusted NIM is Net Interest Income / total Credit Risk Weighted Assets.

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INSTITUTIONAL

DRIVING PRODUCTIVITY BY FURTHER RESHAPING THE WORKFORCE

EXPENSES[1 ]

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$m -6% -2%
1,413 1,449 1,460 1,406 1,379
54%
52% 52%
48% 47%
3 7 53 39
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1H15 2H15 1H16 2H16 1H17
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Specified Items Cost-to-income ratio Expenses

PRODUCTIVITY[1 ]

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

$k
1,172
932 894 940 1,006
0.76% 0.75%
0.72%
0.68% 0.69%
1H15 2H15 1H16 2H16 1H17
Revenue/FTE
Operating Expenses/Average Assets
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FTE

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

[#]
-13% -4%
6,331 6,103
5,601
5,112 4,899
Mar 15 Sep 15 Mar 16 Sep 16 Mar 17
EXPENSE DRIVERS [1 ]
$m
-1%
12
1,406
1,399
-7 1,379
-26
-6
2H16 FX 2H16 D&A Other 1H17
FX Personnel
Adj
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FTE REDUCTIONS[2 ]

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

-12%
-17%
-19%
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Senior Mgmt Other Staff Central Functions Mar 16 Sep 16 Mar 17

CUSTOMERS ON DIGITAL PLATFORM[3 ]

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

145 67 69
131 60
115
Mar Sep Mar Mar Sep Mar
16 16 17 16 16 17
Number of Transaction
customers [4 ] volumes (m)
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On a pro forma basis excluding Specified Items relating to restructuring (FY15 and FY16) which are separately identified above. Metrics and percentage changes are calculated on a pro forma basis; 2. Senior management and other staff include central functions. Central functions comprises enablement and support functions within Institutional; 3. Cash Management customers and transactions on Global Customer Integration Solution (GCIS); 4. Indexed to 100 at Sep 15

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INSTITUTIONAL

DISCIPLINED PORTFOLIO MANAGEMENT AND BENIGN CREDIT ENVIRONMENT DELIVERING LOWER LOSS RATES

EXPOSURE-AT-DEFAULT[1 ]

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

377 367 368
1% 0% 0%
17% 17% 16%
82% 83% 84%
Mar 16 Sep 16 Mar 17
Investment Sub-investment Default
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GROSS IMPAIRED ASSETS

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

$m
1,405
1,282
499 1,061
544
340
121
37 58
701 785 663
Mar 16 Sep 16 Mar 17
Au & PNG NZ International
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NEW IMPAIRED ASSETS

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

652
547
499
340
131
357
3 109
14
309 259
176
Mar 16 Sep 16 Mar 17
Au & PNG NZ International
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IP CHARGES

TOTAL LOSS RATES

CP CHARGES

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

$m
436
340
147
54
24 210
286 265
1H16 2H16 1H17
Oswal Settlement Individual Provisions
Emerging Corporates IP
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----- Start of picture text -----

$m
-16 -17
-85
1H16 2H16 1H17
----- End of picture text -----

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

0.65%
0.47% 0.23% 0.42%
0.0 8% 0.04 %
0.20%
0.39% 0.39%
1H16 2H16 1H17
Credit Provisions/GLA (%)
Emerging Corporates provisions/GLA (%)
Oswal settlement/GLA (%)
20+ yr Historical Median Loss Rate [2 ]
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Post CRM EAD, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Includes amounts for 'Securitisation' and 'Other Assets' Basel asset classes. Includes liquid assets. Includes FX Impact, Data/Meth Review and Risk

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Median Loss Rate is Individual Provisions divided by Net Loans & Advances

INSTITUTIONAL

ANZ’S NETWORK CONTINUES TO BE A KEY DIFFERENTIATOR FOR INSTITUTIONAL

CROSS BORDER FLOW

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

~1% of International
6% of International
revenue sourced from NZ
revenue sourced from
Australia
35% of Australian
revenue sourced from
International
29% of NZ revenue
1% of Australian sourced from International
revenue sourced from NZ
17% of NZ revenue
sourced from Australia
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Since October 2015, Institutional has been repositioning the business to lift returns and position it for growth. Our network, particularly Asia, continues to be core to our strategy and remains a key differentiator that is valued by our customers
Cross border flow[1] as a proportion of total revenue is marginally lower at 33.0% in 1H17 compared to 33.6% in 2H16
To maximise our network advantage, we have:
realigned our coverage model, by strengthening the geographic focus and moving decision-making closer to the customer
sharpened the focus of our countries, to have a clear mission aligned to our strategy
reduced organisational complexity, by delayering the organisation and reducing the size of the central functions

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Cross border flows defined as thrown revenue (the region where the relationship with the customer exists is different to the region where the revenue is generated and booked). Region defined as Australia, Pacific, NZ, Asia, Europe and America

2017 HALF YEAR RESULTS

WEALTH AUSTRALIA

FINANCIAL HIGHLIGHTS

FINANCIAL PERFORMANCE EXPLANATION

Insurance revenue impacted by adverse disability and lump sum claims experience and a one-off loss as a result of the exit of a Group Life insurance plan, partially offset by reinsurance profit share benefits and favourable claims experience in Lenders Mortgage Insurance.
Funds Management decline in profitability reflects planned strategy to rationalise the legacy portfolio to SmartChoice, a simpler and lower risk model.
Corporate & Other revenue declined due to unrealised losses arising from the guaranteed business. 2H16 also benefited from realised gains as a result of rebalancing invested capital.
Expenses decreased as a result of good cost discipline and productivity initiatives.

PROFIT CONTRIBUTION - HOH

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

157
11 123
21
-30
-14
-22
2H16 Ins. FM. Corp & Exp. [2 ] Tax [2 ] 1H17
Other
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EMBEDDED VALUE[1 ]

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

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

CAGR
+8.9%
4,505 4,559
4,261
4,012
2H15 1H16 2H16 1H17
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COST MANAGEMENT

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

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

CAGR
-1.2%
397
377 384
16 370
27 31 23
381
350 353 347
2H15 1H16 [3 ] 2H16 [3 ] 1H17
Regulatory & Compliance Expenses ($m) BAU Expenses ($m)
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Embedded value includes Insurance and Funds Management businesses only. The product lines used are on the same basis as the Results Announcement in prior periods. This is different to the product lines used in the strategic review. Embedded value is adjusted to allow for the impact of dividends and net transfers.
Expenses include specified items representing restructuring costs of $7m. Tax includes tax on restructuring costs of -$2m. 3. BAU expenses have been pro-forma adjusted for restructuring costs (1H16: $13m and 2H16: $7m)

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WEALTH AUSTRALIA

INSURANCE

PRODUCT MIX IN INDIVIDUAL LIFE INSURANCE IN-FORCE

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

$m +4%
1,130 1,158 1,173
31% 31% 31%
69% 69% 69%
1H16 2H16 1H17
Income Protection Lump Sum
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RETAIL LIFE LAPSE RATES

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

%
15.0%
14.0% 13.8%
13.0%
2H15 1H16 2H16 1H17
----- End of picture text -----

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

COMPOSITION OF LIFE INSURANCE IN-FORCE
$m
+2%
1,569 1,603 1,600
28% 28% 27%
72% 72% 73%
1H16 2H16 1H17
Group Individual
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----- Start of picture text -----

EMBEDDED VALUE [1]
$m
----- End of picture text -----

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

151
4,670
50
4,536 -67
-80 4,447
-143
Sep-16 Value of Expected Experience Subtotal Economic Net Mar-17
New Return Deviations Assumption Transfers
Business changes
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Embedded value includes Insurance and Funds Management businesses only. The product lines used are on the same basis as the Results Announcement in prior periods. This is different to the product lines used in the strategic review.

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WEALTH AUSTRALIA

FUNDS MANAGEMENT

FUNDS MANAGEMENT AVERAGE FUM

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

+3%
47 48 48
1H16 2H16 1H17
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FUNDS MANAGEMENT FUM BY SOLUTION

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

FUM $b
Open solutions [1 ] Closed solutions [1]
+35%
-18%
28 26 25
23 21
21
15
10 11 19 19
2 2 3 18
9 10 11 6 6 3
1H16 2H16 1H17 1H16 2H16 1H17
ANZ Smart Choice
Legacy Retail
Wrap (Voyage & Grow)
Legacy Employer
OneAnswer Frontier
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SMARTCHOICE ACTIVE MEMBERS

% growth

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

32%
28% 29%
13%
Retail Employer
HOH PCP
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1H17 FUNDS MANAGEMENT NETFLOWS BY SOLUTION

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

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

Open solutions [1 ] Closed solutions [1]
493
88 162
(252)
(1,151)
OneAnswer ANZ Wrap Retail Employer
Frontier Smart Choice (Voyage
& Grow)
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Includes the transition of Closed Employer Super plans to ANZ Smart Choice (Employer)

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 Investors

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]

Scott Gifford

Head of Debt Investor Relations +61 3 8655 5683 +61 434 076 876 [email protected]

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AI assistant

Australia and New Zealand Banking Group Ltd. — Interim / Quarterly Report 2017

10425_rns_2017-05-01_7402ddd6-bbe3-4aad-9a73-53a0e90e0741.pdf

2017 HALF YEAR RESULTS

CONTENTS

2017 HALF YEAR RESULTS

2017 HALF YEAR RESULTS

CORPORATE PROFILE

ABOUT ANZ

BUILDING A BETTER BANK - OUR PRIORITIES

STRATEGIC PRIORITIES

PROGRESS

CORPORATE SUSTAINABILITY

CORPORATE SUSTAINABILITY FRAMEWORK

PROGRESS ON FY17 SUSTAINABILITY TARGETS

CORPORATE SUSTAINABILITY

SUPPORTING THE TRANSITION TO A LOW CARBON ECONOMY

MANAGING OUR BUSINESS SUSTAINABLY

CLIMATE-RISK MANAGEMENT[1 ]

FIRST HALF 2017 PERFORMANCE[1]

FIRST HALF 2017 EARNINGS[1 ]

CONTRIBUTION BY DIVISION

CONTRIBUTION BY CUSTOMER

BALANCE SHEET[1 ]

DEPOSITS BY REGION[3 ]

LENDING BY REGION[2 ]

INSTITUTIONAL GRADE

BALANCE SHEET

VOLUMES & MARGINS

ANZ GROUP

GROUP NET INTEREST MARGIN[1 ]

NET LOANS AND ADVANCES

PRODUCTIVITY

ANZ GROUP

COST TO INCOME 1H17

PROFITABILITY

2017 HALF YEAR RESULTS

REGULATORY CAPITAL

CAPITAL UPDATE

APRA COMMON EQUITY TIER 1 (CET1)

Capital Position

Organic Capital Generation & Dividend

BASEL III CET1

Capital Outlook

REGULATORY CAPITAL GENERATION

Organic Capital Generation

Non-Core and non-recurring items

INTERNATIONALLY COMPARABLE[1] REGULATORY CAPITAL POSITION

CET1 AND LEVERAGE IN A GLOBAL CONTEXT

CET1 RATIOS[1 ]

LEVERAGE RATIOS[1,2 ]

BALANCE SHEET STRUCTURE

NET STABLE FUNDING RATIO

Pro-forma NSFR ~111%

LIQUIDITY COVERAGE RATIO

TERM WHOLESALE FUNDING PORTFOLIO[2 ]

Issuance[[1 ]]

WEIGHTED AVERAGE TENOR

PORTFOLIO BY TYPE

PORTFOLIO BY CURRENCY

2017 HALF YEAR RESULTS

RISK MANAGEMENT

TOTAL & COLLECTIVE PROVISION (CP) CHARGE

TOTAL PROVISION CHARGE

TOTAL PROVISION CHARGE COMPOSITION

CP BALANCE BY DIVISION

CRWA & CP AS A % OF CRWA

RISK MANAGEMENT

INDIVIDUAL PROVISION (IP) CHARGE

ANZ HISTORICAL OBSERVED LOSS RATES

IP CHARGE BY SEGMENT

IP CHARGE COMPOSITION

RISK MANAGEMENT

IMPAIRED ASSETS

CONTROL LIST

NEW IMPAIRED ASSETS BY DIVISION

GROSS IMPAIRED ASSETS BY DIVISION

GROSS IMPAIRED ASSETS[1] BY EXPOSURE SIZE

RISK MANAGEMENT

RISK WEIGHTED ASSETS

Australia and New Zealand Banking Group Ltd. Interim / Quarterly Report 2017