1 MAY 2019

NEWS RELEASEANZ HALF YEAR 2019 RESULTANZ today announced a Statutory Profit after tax for the Half Year ended 31 March 2019 of $3.17
billion, down 5% on the prior comparable period. Cash Profit 1 for its continuing operations was $3.56
billion, up 2%.
ANZ’s Common Equity Tier 1 Capital Ratio increased to 11.5%, up 45 basis points (bps). Return on
Equity increased 13 bps to 12.0% with Cash Earnings per Share up 5% to 124.8 cents.
The Interim Dividend is 80 cents per share, fully franked. This equates to $2.27 billion to be paid toshareholders.
Group Financial Information
Earnings ($m)

1H19

1H18

Movement

Statutory Profit After Tax

3,173

3,323-5%

Cash Profit (including discontinued operations)

3,514

2,876

+22%

Cash Profit (continuing basis)

3,564

3,493

+2%

Profit before credit impairment & tax

5,381

5,397

0%

Earnings per share (cents)

124.8

119.4

+5%

Return on equity

12.0%

11.9%

+13bpsReturn on average assets

0.77%

0.79%

-2bps

8080-Credit Quality

1H19

1H18

Movement

Total credit impairment charge as a % of average GLAs

0.13%

0.14%-1bp

New impaired assets

890963-8%

Balance Sheet ($b)

1H19

1H18

Movement

Gross Loans and Advances (GLAs)

613.8

595.5

+3%

Total Risk Weighted Assets (RWAs)

396.3

395.80%

Customer Deposits

493.4

472.8

+4%

Common Equity Tier 1 Ratio (CET1)

11.5%

11.0%+45bps

CET1 Ratio Internationally Comparable Basel 3 2

16.9%

16.3%+55bps

Other

1H19

1H18

Movement

Full time equivalent staff (including discontinued)

39,35941,580-5%

Fully Franked Dividend per share (cents)

12All financials are on a Cash Profit Continuing Basis with growth rates compared to the Half Year ended 31 March 2018 unless otherwise stated
CET1 Internationally Comparable Basel 3 aligns with APRA’s Information Paper: International Capital Comparison Study, 13 July 2015

CEO COMMENTARYANZ Chief Executive Officer Shayne Elliott said: “The work started in 2016 to simplify our businessand strengthen our balance sheet has helped us weather the strong headwinds in Australian retailbanking, while still producing a balanced financial outcome for shareholders.
“Home loan demand in Australia has slowed significantly and this continued during the half. While
our decision to step back from certain segments compounded this impact, being more risk averse in
the current environment is prudent. However, we do accept we could have done a better job
implementing our new risk settings and are taking steps to improve processes.
“Other parts of the business performed solidly. Institutional has been transformed into a wellmanaged business delivering consistent and diversified results for shareholders as well as
customers. New Zealand also put in another good performance.
“The completion of our $3 billion buy-back resulted in a 3.7% reduction in shares, helping drive astrong increase in earnings per share. We also plan to neutralise the dividend reinvestment plan(DRP) for the fifth consecutive half and remain the only major Australian bank to have reduced
shares on issue.
“Action taken over the last three years to improve the composition of our lending book, combinedwith a relatively benign credit environment, resulted in a good credit quality outcome.
“Cost control was a highlight with absolute expenses down for another half. In fact, since the end of2015 we have absorbed inflation of around $550 million while also reducing the cost of running thebank by approximately $300 million, even when excluding divestments.
“The tough retail banking environment will be a reality for the foreseeable future. We knew threeyears ago there would be strong headwinds and have taken action to respond head-on, including
restructuring our Australian business,” Mr Elliott said.

HIGHLIGHTS
Business initiatives
 Introduced single home loan origination system for all channels in Australia to improve theapplication and assessment process. Increased the number of dedicated home loan
assessors in Australia to assist with enhanced verification.
 Grew home loans and retail deposits in New Zealand by 6% respectively year on year.
 Named number 1 trade financier in Australia in Institutional for eighth consecutive year 3.
 Maintained leading market position in Australia and New Zealand 4 and retained number 1
position for overall relationship quality in Asia for the second consecutive year 5. Named
Asian Bank of the Year for 2018 by IFR Asia.
 Maintained digital wallet leadership with more than 88 million transactions in the last 12months, with total customer spend up 114% in that same period.

3East & Partners, Australian Trade Finance Markets, 2010 – October 2018
Lead Bank Penetration per Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand (results published inJune and August 2018 respectively)
5Greenwich Associates 2018 Asian Large Corporate Banking Study (results published in February 2019)4

Building trust, leading with purpose 6
 Increased dedicated remediation team by more than 50% to improve the speed in whichcustomers are refunded. This helped lead to a reduction in the time taken to pay customers
back, in some cases cutting the time to make the first customer payment by more than 50%.
 Proactively contacted more than 276,000 customers to help them get better value fromtheir banking products.
 First-phase of response to the Royal Commission with implementation of 16 initiatives toimprove the treatment of retail customers, small businesses and farmers in Australia. This
included new dispute resolution principles to ensure customer complaints and legal matters
are handled fairly and in-line with community expectations.
 Introduced the ‘Healthy Home Loan Package’ in New Zealand to encourage Kiwis to build orupgrade their homes to environmentally sustainable standards.
 Funded and facilitated $14.6 billion in environmentally sustainable solutions since 2015, with
$3.1 billion funded since September 2018.

Capital Allocation & Efficiency
 Further strengthened capital position with CET1 ratio of 11.5% at 31 March 2019, driven byorganic generation 13bps higher than historical average and proceeds of further asset sales.
 Shares on issue reduced by 3.7% as part of completed $3 billion share buyback program.
Intend to neutralise the DRP for fifth consecutive half.
 The Group’s funding and liquidity position remained strong with the Liquidity Coverage
Ratio at 137% and Net Stable Funding Ratio at 115%.
 Maintained the balance of capital allocation with Institutional reducing from 48% to 38%
since 2015.
 Continued simplification through divestment of non-core assets with completion of thesales of One Path Life (NZ) to Cigna Corporation and our 25% shareholding in Paymark toIngenico Group.

Expense Control & Productivity
 Absorbed inflation costs with operational expenses down for another half.
 Finalised roll-out of New Ways of Working to Australia and Technology divisions, with morethan 9,000 of our people now working in Agile teams 7. FTE reduced 5% to ~39,400.
 Improved automation in Institutional through robotics and machine learning technologies,
helping reduce turnaround times by up to 40% in trade, credit and customer service.
 ANZ’s software balance reduced a further 4% this half to $1.4 billion reflecting strong
discipline in the capitalisation of expenditure – continues to be lowest of domestic peers.

CREDIT QUALITY
The total provision charge for the half was $393 million, down 4% from this time last year. The Group
Loss rate decreased marginally to 13bps for the half (from 14bps in the first half of 2018). New
Impaired assets declined to $890 million, down 8% compared to this time last year with Gross
Impaired Assets broadly flat over the same period.

67ANZ’s progress against its sustainability targets are published on anz.com/cs
Includes both internal and managed services resources

NEW ZEALAND CAPITAL PROPOSALThe Reserve Bank of New Zealand is consulting on its proposal for increases in RWA and minimum
capital ratios. The overall impact on ANZ depends on a number of factors, including the outcome of
the consultation period, as well as regulatory changes underway by APRA. ANZ is in a better
position to manage any change given its transformation and has a number of practical options
available if circumstances require. Any changes are expected to be implemented over a five-yearperiod.

OUTLOOK
Commenting on the outlook Mr Elliott said: “While our performance this half was solid, there areheadwinds facing the sector and we are taking appropriate action.
“Retail banking in Australia will remain under pressure for the foreseeable future with subdued
credit growth, intense competition and increased compliance costs impacting earnings.
“New Zealand is performing well, however it is starting to share similar characteristics with theAustralian market due to strong competition and a slowing Auckland housing market. The major
concern in New Zealand remains the impact of the proposed capital changes on the broader
economy.
“Institutional banking is performing well and positioned to provide positive earnings diversification,
which will partially offset the headwinds in other parts of the Group,” Mr Elliott said.
Video interviews with Chief Executive Officer Shayne Elliott and Chief Financial Officer Michelle
Jablko are available at www.bluenotes.anz.com
For media enquiries contact:

For investor enquiries contact:

Stephen Ries, +61 409 655 551
Nick Higginbottom, +61 403 936 262

Jill Campbell, +61 412 047 448
Cameron Davis, +61 421 613 819