Australia and New Zealand Banking Group Limited
ABN 11 005 357 522

Half Year
31 March 2022

Consolidated Financial Report
Dividend Announcement
and Appendix 4D

The Consolidated Financial Report and Dividend Announcement contains information required by Appendix 4D of the Australian Securities
Exchange (ASX) Listing Rules. It should be read in conjunction with ANZ’s 2021 Annual Report, and is lodged with the ASX under listing rule
4.2A.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Name of Company:

APPENDIX 4D

Australia and New Zealand Banking Group Limited
ABN 11 005 357 522

Report for the half year ended 31 March 2022

Operating Results1

Statutory operating income from continuing operations



14%

to

9,542

Statutory profit attributable to shareholders



20%

to

3,530

Cash profit2



4%

to

3,108

Cash profit from continuing operations2



4%

to

3,113

AUD million



Dividends3

Cents

Proposed interim dividend4Frankedperamountshare

per share

72

100%

Record date for determining entitlements to the proposed 2022 interim dividend

10 May 2022

Payment date for the proposed 2022 interim dividend

1 July 2022

Dividend Reinvestment Plan and Bonus Option Plan
Australia and New Zealand Banking Group Limited (ANZ) has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate inrespect of the proposed 2022 interim dividend. For the 2022 interim dividend, ANZ intends to provide shares under the DRP and BOP through the issueof new shares. The 'Acquisition Price' to be used in determining the number of shares to be provided under the DRP and BOP will be calculated byreference to the arithmetic average of the daily volume weighted average sale price of all fully paid ANZ ordinary shares sold in the ordinary course of
trading on the ASX and Chi-X during the ten trading days commencing on 13 May 2022, and then rounded to the nearest whole cent. Shares provided
under the DRP and BOP will rank equally in all respects with existing fully paid ANZ ordinary shares. Election notices from shareholders wanting tocommence, cease or vary their participation in the DRP or BOP for the 2022 interim dividend must be received by ANZ's Share Registrar by 5.00pm(Australian Eastern Standard Time) on 11 May 2022. Subject to receiving effective contrary instructions from the shareholder, dividends payable toshareholders with a registered address in the United Kingdom (including the Channel Islands and the Isle of Man) or New Zealand will be converted toPounds Sterling or New Zealand Dollars respectively at an exchange rate calculated on 13 May 2022.

1.
2.

Unless otherwise noted, all comparisons are to the half year ended 31 March 2021.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the core business activities of the Group. The non-core items
are calculated consistently period on period so as not to discriminate between positive and negative adjustments, and comprise economic hedging and similar accounting items that
represent timing differences that will reverse through earnings in the future. The net after tax adjustment was a reduction to statutory profit of $422 million (all attributable to continuing
operations) made up of several items. Refer pages 71 to 73 for further details.

3.

There is no conduit foreign income attributed to the dividends.

4.

It is proposed that the interim dividend will be fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents per ordinary share.

2

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDABN 11 005 357 522

CONSOLIDATED FINANCIAL REPORT, DIVIDEND ANNOUNCEMENT AND APPENDIX 4D
Half year ended 31 March 2022

CONTENTS

PAGE

Disclosure Summary5

Summary

7

Group Results

19

Divisional Results

47

Profit Reconciliation

71

Condensed Consolidated Financial Statements

75

Supplementary Information

121

Definitions

131

ASX Appendix 4D - Cross Reference Index

134

Alphabetical Index

135

This Consolidated Financial Report, Dividend Announcement and Appendix 4D (Results Announcement) has been prepared for Australia and New
Zealand Banking Group Limited (‘ANZBGL’, ‘Company’, or ‘Parent Entity’) together with its subsidiaries which are variously described as ‘ANZ’, ‘Group’,‘ANZ Group’, ‘the consolidated entity’, ‘the Bank’, ‘us’, ‘we’ or ‘our’.
All amounts are in Australian dollars unless otherwise stated. The Company has a formally constituted Audit Committee of the Board of Directors. The
Condensed Consolidated Financial Statements were approved by resolution of a Committee of the Board of Directors on 3 May 2022.
DISCLAIMER & IMPORTANT NOTICE:
The material in the Results Announcement contains general background information about the Bank’s activities current as at 3 May 2022. It is information
given in summary form and does not purport to be complete. It is not intended to be and should not 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.
The Results Announcement may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations
with respect to ANZ’s business operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk
management practices. When used in the Results Announcement, the words ‘forecast’, ‘estimate’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’,‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to ANZ and its management, are intended to identify
forward-looking statements or opinions. Those statements are usually predictive in character; or may be affected by inaccurate assumptions or unknown
risks and uncertainties or may differ materially from results ultimately achieved. As such, these statements should not be relied upon when making
investment decisions. These statements only speak as at the date of publication and no representation is made as to their correctness on or after thisdate. Forward-looking statements constitute ‘forward-looking statements’ for the purposes of the United States Private Securities Litigation Reform Act of1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events orcircumstances after the date hereof to reflect the occurrence of unanticipated events.

3

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDABN 11 005 357 522

This page has been left blank intentionally

4

DISCLOSURE SUMMARY

SUMMARY OF 2022 HALF YEAR RESULTS AND ASSOCIATED DISCLOSURE MATERIALSThe following disclosure items were lodged separately with the ASX and NZX and can be accessed via the ANZ Shareholder Centre on the Groupwebsite https://www.anz.com/shareholder/centre/ within the disclosures for 2022 Half Year Results.

Consolidated Financial Report, Dividend Announcement and Appendix 4D

Half Year Results Investor Discussion PackNews Release

APS 330 Pillar III Disclosure as at 31 March 2022

Key Financial Data Summary (available on website only)

United Kingdom Disclosure and Transparency Rules Submission

5

DISCLOSURE SUMMARY
This page has been left blank intentionally

6

SUMMARYCONTENTS

Page

Guide to Half Year Results

8

Statutory Profit Results

9Cash Profit Results

10

Key Balance Sheet Metrics

11

Large/Notable Items - continuing operations

12

Full Time Equivalent Staff

17

Other Non-Financial Information

17

7

SUMMARY
Guide to Half Year Results
NON-IFRS INFORMATION
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report &Dividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian
Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers toassess Group and Divisional performance against prior periods and against peer institutions. The adjustments made in arriving at cash profit are included
in statutory profit which is subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cashprofit is not subject to review by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been
determined on a consistent basis across each period presented.
Adjustments between statutory profit and cash profit - To calculate cash profit, the Group excludes non-core items from statutory profit. Refer topages 71 to 73 for adjustments between statutory and cash profit.



Large/notable items within cash profit - The Group’s cash profit result from continuing operations includes a number of items collectively referred
to as large/notable items. While these items form part of cash profit, given their nature and significance, they have been presented separately
together with comparative information, where relevant, to provide transparency and aid comparison. Refer to pages 12 to 16 for details oflarge/notable items.

DISCONTINUED OPERATIONSThe Group completed the sale of its aligned dealer groups business to IOOF Holdings Limited (now known as Insignia Financial Limited) on 1 October
2018, its life insurance business to Zurich Financial Services Australia on 31 May 2019 and its OnePath pensions and investments business to IOOF
Holdings Limited on 31 January 2020.
The financial results of these divested businesses are treated as discontinued operations from a financial reporting perspective. The financial results after
transaction completion primarily relate to residual operational costs on separation and partial recovery of certain costs based on the respective Transition
Service Agreements.
There were no material financial impacts from the discontinued operations in the current or prior comparative periods.
DIVISIONAL PERFORMANCE - CONTINUING OPERATIONS
On 1 March 2022, the Group announced a structural change to the existing Australia Retail and Commercial division, and the digital businesses in theGroup Centre division (formerly known as the Technology, Services & Operations (TSO) and Group Centre division). This involves the integration of theAustralian retail and digital businesses, and the separation of the Australian commercial business into a new division. The new reporting segments will bereflected in the September 2022 half to align with the implementation of the changes from 1 April 2022. The segment disclosures in this document remainunchanged from those reported at 30 September 2021 and are consistent with internal reporting provided to the chief operating decision maker, being the
Chief Executive Officer, during the March 2022 half.
The presentation of divisional results has been impacted by the following structural changes during the period. Prior period comparatives have been
restated:Australia Retail and Commercial division - re-segmentation of customers from Business Banking to Small Business Banking within the division;Institutional division - a number of small operations were transferred from Markets to Central Functions within the division;the completion of the transfer of Banking Services operations from the Group Centre division to the Institutional division. As the associated costs
were previously recharged, there is no change to the previously reported divisional cash profits, however divisional balance sheets and full-time
equivalent employees (FTEs) have been restated to reflect this change.

8

SUMMARY
Statutory Profit Results
Half Year

Movement

Net interest income

Mar 22$M
7,100

Sep 21$M
7,175

Mar 21$M
6,986

Mar 22
v. Sep 21-1%

Mar 22v. Mar 21
2%

Other operating income

2,442

1,878

1,381

30%

77%

Operating income

9,542

9,053

8,367

5%

14%

Operating expenses(4,791)(4,569)(4,482)

5%

7%

Profit before credit impairment and income tax

4,751

4,484

3,885

6%

22%

284

76

491

large

-42%

Profit before income tax

Credit impairment (charge)/release

5,035

4,560

4,376

10%

15%

Income tax expense and non-controlling interests(1,500)(1,332)(1,425)13%

5%Profit attributable to shareholders of the Company from continuing operations

3,535

3,228

2,951

10%

20%

(5)

(9)

(8)

-44%

-38%

3,530

3,219

2,943

10%

20%

Profit/(Loss) from discontinued operations
Profit attributable to shareholders of the Company

Earnings Per Ordinary Share (cents)

Half Year

Basic
DilutedMovement

ReferencePage
93

Mar 22
125.7

Sep 21
113.4

Mar 21
103.7

Mar 22
v. Sep 21
11%

Mar 22v. Mar 21
21%

93

117.7

106.7

98.4

10%

20%

Half Year
Reference
Page
Ordinary Share Dividends (cents)
Interim1
Final1
Total
Ordinary share dividend payout ratio2

Mar 22

Sep 21Mar 21

70

92

72

-

92

-

72

-

92

72

72

70

92

57.0%

63.1%

67.7%

Profitability Ratios
Return on average ordinary shareholders' equity3

11.3%

10.2%

9.5%

Return on average assets

0.70%

0.63%

0.56%

Net interest margin

1.58%

1.65%

1.63%

Net interest income to average credit RWAs

4.10%

4.18%

3.99%

Efficiency Ratios
Operating expenses to operating income

50.5%

50.9%

53.8%

Operating expenses to average assets

0.96%

0.90%

0.87%

Credit Impairment Charge/(Release)
Individually assessed credit impairment charge ($M)
Collectively assessed credit impairment charge/(release) ($M)
Total credit impairment charge/(release) ($M)

100

87

69

187

(371)

(145)

(678)

(284)

(76)

(491)

Individually assessed credit impairment charge as a % of average gross loans and advances4

0.03%

0.02%

0.06%

Total credit impairment charge/(release) as a % of average gross loans and advances4(0.09%)(0.02%)(0.16%)

1.

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2022 interim dividend (2021 final dividend: NZD 8 cents;
2021 interim dividend: NZD 8 cents).
2. Dividend payout ratio for the March 2022 half is calculated using the proposed 2022 interim dividend of $2,012 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2021 half and the March 2021 half were calculated using actual dividends of $2,030 million and $1,992 million respectively.
3. Average ordinary shareholders’ equity excludes non-controlling interests.
4. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

9

SUMMARY
Cash Profit Results1
Half Year

Movement

Net interest income

Mar 22$M
7,100

Sep 21$M
7,175

Mar 21$M
6,986

Other operating income

1,848

1,849

Operating income

8,948

9,024

Operating expenses(4,791)

Profit before credit impairment and income tax
Credit impairment (charge)/release

Mar 22
v. Sep 21-1%

Mar 22v. Mar 21
2%

1,437

0%

29%

8,423

-1%

6%

(4,569)(4,482)

5%

7%

4,157

4,455

3,941

-7%

5%

284

76

491

large

-42%

Profit before income tax

4,441

4,531

4,432

-2%

0%

Income tax expense and non-controlling interests(1,328)(1,323)(1,442)0%-8%Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

Cash profit/(loss) from discontinued operations
Cash profit

(5)

(9)

(8)

-44%

-38%

3,108

3,199

2,982

-3%

4%

Earnings Per Ordinary Share (cents)

Half Year
Reference
Page

Basic
Basic - continuing operations

37

DilutedMovement
Mar 22
v. Sep 21-2%

Mar 22v. Mar 21
5%

105.3

-2%

5%

99.6

-2%

4%

Mar 22
110.7

Sep 21
112.7

Mar 21
105.0

110.8

113.0

104.0

106.1

Half Year
Reference
Page
Ordinary Share Dividends
Ordinary share dividend payout ratio2
Ordinary share dividend payout ratio - continuing operations2

38

Profitability Ratios
Return on average ordinary shareholders' equity3

Mar 22

Sep 21Mar 21

64.7%

63.5%

66.8%

64.6%

63.3%

66.6%

10.0%

10.2%

9.7%

Return on average assets

0.62%

0.62%

0.57%

Net interest margin

1.58%

1.65%

1.63%

Net interest income to average credit RWAs

4.10%

4.18%

3.99%

Efficiency Ratios
Operating expenses to operating income

53.9%

51.0%

53.5%

Operating expenses to average assets

0.96%

0.90%

0.87%

29

87

69

187

Collectively assessed credit impairment charge/(release) ($M)

29

(371)

(145)

(678)

Total credit impairment charge/(release) ($M)

29

(284)

(76)

(491)

Individually assessed credit impairment charge as a % of average gross loans and advances4

0.03%

0.02%

0.06%

Total credit impairment charge/(release) as a % of average gross loans and advances4(0.09%)(0.02%)(0.16%)

Credit Impairment Charge/(Release)
Individually assessed credit impairment charge ($M)

Cash Profit/(Loss) By Division - continuing operations

Half Year
Mar 22$M
1,986

Sep 21$M
1,835

Institutional

730

New Zealand

787

Australia Retail and Commercial

Movement
Mar 21$M
1,782

Mar 22
v. Sep 21
8%

Mar 22v. Mar 21
11%

939

948

-22%

-23%

737

771

7%

2%

(6)

(10)

7

-40%

large

Group Centre

(384)

(293)

(518)

31%

-26%

Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

Pacific

1.

Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the core business activities of the Group. Refer to pages 71
to 73 for the reconciliation between statutory and cash profit. Refer to pages 12 to 16 for information on large/notable items included in cash profit from continuing operations.
Dividend payout ratio for the March 2022 half is calculated using the proposed 2022 interim dividend of $2,012 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2021 half and the March 2021 half were calculated using actual dividends of $2,030 million and $1,992 million respectively.
3. Average ordinary shareholders’ equity excludes non-controlling interests.
4. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
2.

10

SUMMARY
Key Balance Sheet Metrics
As at

Movement

Reference
Page

Mar 22

Sep 21Mar 21- APRA Basel 3

42

11.5%

12.3%

12.4%

- Internationally Comparable Basel 31

42

18.0%

18.3%

18.1%

Credit risk weighted assets ($B)

42

348.8

342.5

Total risk weighted assets ($B)

42

437.9

416.1

APRA Leverage Ratio

44

5.2%

5.5%

5.5%

Balance Sheet: Key Items
Gross loans and advances ($B)

655.0

633.8

618.6

3%

6%

Net loans and advances ($B)

651.4

629.7

614.4

3%

6%

Mar 22
v. Sep 21

Mar 22v. Mar 21

341.9

2%

2%

408.2

5%

7%

Capital Management
Common Equity Tier 1 (Level 2)

1,017.4

978.9

1,018.3

4%

0%

Customer deposits ($B)

611.1

593.6

561.5

3%

9%

Total equity ($B)

61.8

63.7

62.6

-3%

-1%

Mar 22v. Mar 21-6%2%

Total assets ($B)

As at

Movement

Liquidity Risk
Liquidity Coverage Ratio2

Reference
Page
40

Mar 22132%

Sep 21
136%

Mar 21
138%

Mar 22
v. Sep 21-4%

Net Stable Funding Ratio

41

123%

124%

121%

-1%

Mar 21Mar 22
v. Sep 21

Mar 22v. Mar 21

-13%

-31%

-16%

-36%

-7%

-21%

-10%

-12%

As at
Reference
Page
Impaired Assets
Gross impaired assets ($M)

32

Mar 22

Movement

Sep 21

1,709

1,965

2,473

0.26%

0.31%

0.40%

1,073

1,278

1,664

1.7%

2.0%

2.7%

636

687

809

37.2%

35.0%

32.7%

3,757

4,195

4,285

Collectively assessed provision as a % of credit risk weighted assets

1.08%

1.22%

1.25%

Net Tangible Assets
Net tangible assets attributable to ordinary shareholders ($B)3

57.7

59.5

58.5

-3%

-1%

Net tangible assets per ordinary share ($)

20.64

21.09

20.57

-2%

0%

Gross impaired assets as a % of gross loans and advances
Net impaired assets ($M)

32

Net impaired assets as a % of shareholders' equity
Individually assessed provision ($M)

31

Individually assessed provision as a % of gross impaired assets
Collectively assessed provision ($M)

31

As at

Movement

Net Loans and Advances by division
Australia Retail and Commercial

Mar 22$B
342.2

Sep 21$B
341.2

Mar 21$B
344.3

Mar 22
v. Sep 21
0%

Mar 22v. Mar 21-1%

Institutional4

175.0

158.2

147.5

11%

19%

New Zealand5

129.6

128.5

120.5

1%

8%

Pacific

1.7

1.8

1.7

-6%

0%

Group Centre

2.9

-

0.4

n/a

large

651.4

629.7

614.4

3%

6%

Net loans and advances by division1.

See page 43 for further details regarding the differences between APRA Basel 3 and Internationally Comparable Basel 3 standards.
2. Liquidity Coverage Ratio is calculated on a half year average basis.
3. Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.
4. Excluding the impact of foreign currency translation, the Institutional division Net loans and advances increased 13% compared to September 2021 and 18% compared to March 2021.
5. Excluding the impact of foreign currency translation, the New Zealand division Net loans and advances increased 4% compared to September 2021 and 6% compared to March 2021.

11

SUMMARY
Large/Notable Items - continuing operations
Large/notable items included in cash profit from continuing operations are described below.
Business Divestments/Closures
The following divestments and business closures form part of continuing operations as they did not qualify as discontinued operations under accounting
standards. The financial impacts from these divestments/closures are summarised below including the business results for those divestments that havecompleted during the half.

Cash Profit Impact
ANZ Worldline partnership

Gain/(Loss) from divestments/closures

Completed divested business results

Half Year

Half Year

Mar 22$M307

Sep 21$M-

Mar 21$M-

Mar 22$M
60

Sep 21$M
46

Mar 21
$M
77

-

-

(251)

-

-

-

Financial planning and advice business

(69)

-

-

-

-

-

Legal entity rationalisation

(65)

-

-

-

-

-

Other divestments

(5)

-

13

-

-

-

Profit/(Loss) before income tax

168

-

(238)

60

46

77

Income tax benefit/(expense) and non-controlling interests

37

-

-

(18)

(14)

(23)

Cash profit/(loss) from continuing operations

205

-

(238)

42

32

54

ANZ Share Investing

ANZ Worldline partnership
The Group announced in December 2020 that it had entered into a partnership with the European-based payments company Worldline AS(Worldline). The partnership arrangement involves ANZ and Worldline forming a newly created merchant acquiring group, with ANZ and Worldline
holding 49% and 51% interests respectively. The transaction completed in the March 2022 half and the Group recognised a $307 million gain in
Other operating income and an income tax benefit of $28 million in the Australia Retail and Commercial division. The divested business results wererecognised across the Australia Retail and Commercial and Institutional divisions.



ANZ Share Investing
During the March 2021 half, the Group recognised a $251 million loss in Other operating income on reclassifying its ANZ Share Investing businessas held for sale in the Australia Retail and Commercial division. This transaction completed during the September 2021 half with no further gain orloss recognised.

Financial planning and advice business
During the March 2022 half, the Group agreed to sell its financial planning and advice business servicing the affluent customer segment to Zurich
Financial Services Australia Ltd. As a result of the transaction, the Group recognised a $62 million loss largely comprising a goodwill write-off of $40
million in Other operating income, restructuring expenses of $7 million, and an income tax benefit of $9 million in the Australia Retail and Commercial
division.



Legal entity rationalisation
During the March 2022 half, in order to simplify the Group’s legal entity structure, the business previously conducted by Minerva Holdings Limited(Minerva) in the United Kingdom and ANZ Asia Limited (ANZ Asia) in Hong Kong were dissolved. As a result, the associated foreign currencytranslation reserves were recycled from Other comprehensive income to profit or loss, resulting in a $65 million loss recognised in Other operating
income in the Group Centre division.

Other divestments
During the March 2022 half, the Group announced the planned closure of the ANZ American Territories (ANZ American Samoa and ANZ Guam). A
cost of $18 million, comprising restructuring expenses of $12 million and a credit impairment charge of $6 million, was recognised in the Pacificdivision. In addition, the Group released excess provisions originally raised as part of the UDC Finance and Paymark Limited divestments completed
in prior years and recognised a $13 million gain in Other operating income in the Group Centre division.
During the March 2021 half, the Group disposed of its rights and obligations relating to a legacy portfolio of insurance underwritten by Tower Limited(Tower) to Tower and recognised a $13 million gain in Other operating income in the New Zealand division.

12

SUMMARY
Customer remediation
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation costs and outcomes.
Half Year

Cash Profit Impact
Operating income

Mar 22$M

Sep 21$M

Mar 21
$M

(25)

(68)

(74)

Operating expenses

(148)

(93)

(92)

Profit/(Loss) before income tax

(173)

(161)

(166)

50

48

58

(123)

(113)

(108)

Income tax benefit/(expense) and non-controlling interests
Cash profit/(loss) from continuing operations

Litigation settlements
During the March 2022 half, the Group entered into an in-principle agreement to settle a United States class action related to the trading of products
based on certain benchmark reference rates and recognised expenses of $10 million after tax in relation to the proposed settlement and related costs.
The settlement is without admission of liability and remains subject to negotiation and execution of complete settlement terms as well as court approval.
During the March 2021 half, the Group reached an agreement to settle a separate United States class action related to other benchmark based products
and activities and recognised expenses of $48 million after tax. The settlement is without admission of liability and remains subject to court approval.
Restructuring
In addition to the restructuring expenses associated with business divestments/closures, the Group recognised restructuring expenses of $31 million after
tax in the March 2022 half year (Sep 21 half: $16 million; Mar 21 half: $76 million) relating to operational changes across all divisions.
Withholding tax
During the March 2022 half, a dividend payment of $714 million (net of withholding tax) was made by ANZ Papua New Guinea (ANZ PNG) to Australia
and New Zealand Banking Group Limited (ANZBGL) in order to rebalance capital positions within the Group in response to APRA’s changes in the capitalrequirements for subsidiaries. ANZBGL made a capital injection into ANZ PNG equivalent to the dividend, net of withholding tax. As a result of thedividend payment, a dividend withholding tax expense of $126 million was recognised during the period.
Asian associate items
Half Year1.

2.

Mar 22$M

Sep 21$M

Mar 21$M

AmBank 1MDB settlement1

-

-

(212)

AmBank goodwill impairment2

-

-

(135)

Profit/(Loss) before income tax

-

-

(347)

Income tax benefit/(expense) and non-controlling interests

-

-

-

Cash profit/(loss) from continuing operations

-

-

(347)

Following AMMB Holdings Berhad’s (AmBank) agreement with the Malaysian Ministry of Finance to resolve potential claims relating to its involvement with 1Malaysia Development Berhad(1MDB), the Group recognised a $212 million reduction in equity accounted earnings after tax reflecting its share of the settlement provision during the March 2021 half.
AmBank partially impaired goodwill and the Group recognised a $135 million reduction in equity accounted earnings after tax reflecting its share of the impairment during the March 2021
half.

13

SUMMARY
Large/Notable items - continuing operations
Cash Profit Results

March 2022 Half Year v. March 2021 Half Year

March 2022 Half Year v. September 2021 Half Year

Mar 21

Large/
notablesMar 21
ex. Large/
notablesMovt
ex. Large/
notables

$M

$M

$M

%

7,103

6,986

(56)

7,042

Mar 22Large/
notablesMar 22
ex. Large/
notables

$M

$M

$M

Net interest income

7,100

(3)

Sep 21
ex. Large/
notablesMovt
ex. Large/
notablesMar 22Large/
notablesMar 22
ex. Large/
notables

$M

$M

$M

$M

$M

$M

%

1%

7,100

(3)

7,103

7,175

(30)

7,205

-1%

Sep 21

Large/
notablesOther operating income

1,848

258

1,590

1,437

(500)

1,937

-18%

1,848

258

1,590

1,849

39

1,810

-12%

Operating income

8,948

255

8,693

8,423

(556)

8,979

-3%

8,948

255

8,693

9,024

9

9,015

-4%

Operating expenses(4,791)(236)(4,555)(4,482)(295)(4,187)

9%(4,791)(236)(4,555)(4,569)(146)(4,423)

3%

Profit before credit impairment and income tax

4,157

19

4,138

3,941

(851)

4,792

-14%

4,157

19

4,138

4,455

(137)

4,592

-10%

284

(4)

288

491

3

488

-41%

284

(4)

288

76

-

76

large

Credit impairment (charge)/release
Profit/(Loss) before income tax

4,441

15

4,426

4,432

(848)

5,280

-16%

4,441

15

4,426

4,531

(137)

4,668

-5%

Income tax benefit/(expense) and non-controlling interests(1,328)(58)(1,270)(1,442)85(1,527)-17%(1,328)(58)(1,270)(1,323)40(1,363)-7%

Cash profit/(loss) from continuing operations

3,113

(43)

3,156

2,990

(763)

3,753

-16%

3,113

(43)

3,156

3,208

(97)

3,305

-5%

Mar 21
ex. Large/
notablesMovt
ex. Large/
notablesCash Profit/(Loss) By Division

March 2022 Half Year v. March 2021 Half Year

March 2022 Half Year v. September 2021 Half Year

Mar 22Large/
notablesMar 22
ex. Large/
notablesMar 21

Large/
notables

$M

$M

$M

$M

$M

$M

%

Mar 22Large/
notablesMar 22
ex. Large/
notables

$M

$M

$M

Sep 21

Large/
notablesSep 21
ex. Large/
notablesMovt
ex. Large/
notables

$M

$M

$M

%

1,986

181

1,805

1,782

(373)

2,155

-16%

1,986

181

1,805

1,835

(76)

1,911

-6%

Institutional

730

(140)

870

948

(21)

969

-10%

730

(140)

870

939

(6)

945

-8%

New Zealand

787

(4)

791

771

6

765

3%

787

(4)

791

737

(11)

748

6%

(6)

(18)

12

7

(1)

8

50%

(6)

(18)

12

(10)

(1)

(9)

large

Group Centre

(384)

(62)

(322)

(518)

(374)

(144)

large

(384)

(62)

(322)

(293)

(3)

(290)

11%

Cash profit/(loss) from continuing operations

3,113

(43)

3,156

2,990

(763)

3,753

-16%

3,113

(43)

3,156

3,208

(97)

3,305

-5%

Australia Retail and Commercial

Pacific

14

SUMMARY
Large/Notable items - continuing operations
The Group has recognised some large/notable items within cash profit from continuing operations. These items are shown in the tables below.
March 2022 Half Year

March 2021 Half Year

Large/notable items included in continuing cash profit
Gain/(Loss)fromdivestments/closures$M
Cash Profit
Net interest income

Divestedbusinessresults$M

Customer
Litigation
remediation settlements$M$M

Large/notable items included in continuing cash profit

Restructuring1$M

Withholding
tax
$M

Total
$M

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements$M$M

Restructuring
$M

Asian
associate
items
$M

Total
$M

-

-

(3)

-

-

-

(3)

-

-

(56)

-

-

-

(56)

Other operating income

193

87

(22)

-

-

-

258

(238)

103

(18)

-

-

(347)

(500)

Operating income

193

87

(25)

-

-

-

255

(238)

103

(74)

-

-

(347)

(556)

Operating expenses

(19)

(29)

(148)

(10)

(30)

-

(236)

-

(29)

(92)

(69)

(105)

-

(295)

174

58

(173)

(10)

(30)

-

19

(238)

74

(166)

(69)

(105)

(347)

(851)

(6)

2

-

-

-

-

(4)

-

3

-

-

-

-

3

Profit before credit impairment
and income tax
Credit impairment (charge)/
releaseProfit before income tax

168

60

(173)

(10)

(30)

-

15

(238)

77

(166)

(69)

(105)

(347)

(848)

Income tax benefit/(expense)and non-controlling interests

37

(18)

50

-

(1)

(126)

(58)

-

(23)

58

21

29

-

85

Cash profit/(loss)
from continuing operations

205

42

(123)

(10)

(31)

(126)

(43)

(238)

54

(108)

(48)

(76)

(347)

(763)

Asian
associate
items
$M

Total
$M

March 2022 Half Year

September 2021 Half Year

Large/notable items included in continuing cash profit
Gain/(Loss)fromdivestments/closures$M
Cash Profit
Net interest income

Divestedbusinessresults$M

Customer
Litigation
remediation settlements Restructuring1
$M
$M
$M

Large/notable items included in continuing cash profit

Withholding
tax
$M

Total
$M

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements$M$M

Restructuring
$M

-

-

(3)

-

-

-

(3)

-

-

(30)

-

-

-

(30)

Other operating income

193

87

(22)

-

-

-

258

-

77

(38)

-

-

-

39

Operating income

193

87

(25)

-

-

-

255

-

77

(68)

-

-

-

9

Operating expenses

(19)

(29)

(148)

(10)

(30)

-

(236)

-

(31)

(93)

-

(22)

-

(146)

174

58

(173)

(10)

(30)

-

19

-

46

(161)

-

(22)

-

(137)

(6)

2

-

-

-

-

(4)

-

-

-

-

-

-

-

Profit before income tax

168

60

(173)

(10)

(30)

-

15

-

46

(161)

-

(22)

-

(137)

Income tax benefit/(expense)and non-controlling interests

37

(18)

50

-

(1)

(126)

(58)

-

(14)

48

-

6

-

40

Cash profit/(loss)
from continuing operations

205

42

(123)

(10)

(31)

(126)

(43)

-

32

(113)

-

(16)

-

(97)

Profit before credit impairment
and income tax
Credit impairment (charge)/
release1.

Restructuring expense before tax of $30 million (Sep 21: $22 million; Mar 21: $105 million) does not include restructuring expenses of $19 million (Sep 21: nil; Mar 21: nil) incurred as part of the business divestments/closures.

15

SUMMARY
Large/Notable items - continuing operations
The Group has recognised some large/notable items within cash profit from continuing operations. The impact of these items on the divisional results are shown in the tables below.
March 2022 Half Year

March 2021 Half Year

Large/notable items included in continuing cash profit

Large/notable items included in continuing cash profit

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements Restructuring1
$M
$M
$M

Withholding
tax
$M

Total
$M

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements$M$M

Restructuring
$M

Asian
associate
items
$M

Total
$M

Profit before income tax
Australia Retail and Commercial

238

53

(167)

-

(14)

-

110

(251)

59

(191)

-

(40)

-

(423)

Institutional

-

7

(6)

(10)

(4)

-

(13)

-

18

25

(69)

(16)

-

(42)

New Zealand

-

-

-

-

(6)

-

(6)

13

-

-

-

(10)

-

3

Pacific

(18)

-

-

-

-

-

(18)

-

-

-

-

(1)

-

(1)

Group Centre

(52)

-

-

-

(6)

-

(58)

-

-

-

-

(38)

(347)

(385)

Profit before income tax

168

60

(173)

(10)

(30)

-

15

(238)

77

(166)

(69)

(105)

(347)

(848)

Income tax benefit/(expense)and non-controlling interests

37

(18)

50

-

(1)

(126)

(58)

-

(23)

58

21

29

-

85

Cash profit/(loss)
from continuing operations

205

42

(123)

(10)

(31)

(126)

(43)

(238)

54

(108)

(48)

(76)

(347)

(763)

Restructuring
$M

Asian
associate
items
$M

Total
$M
(110)

March 2022 Half Year

September 2021 Half Year

Large/notable items included in continuing cash profit

Large/notable items included in continuing cash profit

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements Restructuring1
$M
$M
$M

Withholding
tax
$M

Total
$M

Gain/(Loss)fromdivestments/closures$M

Divestedbusinessresults$M

Customer
Litigation
remediation settlements$M$M

Profit before income tax
Australia Retail and Commercial

238

53

(167)

-

(14)

-

110

-

48

(146)

-

(12)

-

Institutional

-

7

(6)

(10)

(4)

-

(13)

-

(2)

3

-

(8)

-

(7)

New Zealand

-

-

-

-

(6)

-

(6)

-

-

(16)

-

1

-

(15)

Pacific

(18)

-

-

-

-

-

(18)

-

-

(2)

-

-

-

(2)

Group Centre

(52)

-

-

-

(6)

-

(58)

-

-

-

-

(3)

-

(3)

Profit before income tax

168

60

(173)

(10)

(30)

-

15

-

46

(161)

-

(22)

-

(137)

Income tax benefit/(expense)and non-controlling interests

37

(18)

50

-

(1)

(126)

(58)

-

(14)

48

-

6

-

40

Cash profit/(loss)
from continuing operations

205

42

(123)

(10)

(31)

(126)

(43)

-

32

(113)

-

(16)

-

(97)

1.

Restructuring expense before tax of $30 million (Sep 21: $22 million; Mar 21: $105 million) does not include restructuring expenses of $19 million (Sep 21: nil; Mar 21: nil) incurred as part of the business divestments/closures.

16

SUMMARY
Full Time Equivalent Staff
As at 31 March 2022, ANZ employed 40,012 staff (Sep 21: 40,221; Mar 21: 38,555) on a full-time equivalent (FTE) basis.
As at

Division

Movement

Australia Retail and Commercial

Mar 22
14,505

Sep 21
14,480Mar 21
14,118Mar 22
v. Sep 21
0%

Mar 22v. Mar 21
3%

Institutional1

6,236

6,196

6,061

1%

3%

New Zealand

7,026

7,060

6,691

0%

5%

Pacific

1,092

1,089

1,101

0%

-1%

Group Centre1,2

10,67010,859

9,873

-2%

8%

Total FTE from continuing operations

39,52939,68437,844

0%

4%

483

537

711

-10%

-32%

Total FTE including discontinued operations

40,01240,221

38,555-1%

4%

Average FTE from continuing operations

40,01338,48937,594

4%

6%

Average FTE including discontinued operations

40,52239,09338,5324%

5%Discontinued operations

As atGeography

Movement
Mar 22
v. Sep 21
1%

Mar 22v. Mar 21
5%

Australia

Mar 22
19,650

Sep 21
19,552

Mar 21
18,664

Asia, Pacific, Europe & America

12,931

13,196

12,678-2%

2%

New Zealand

7,431

7,473

7,213

-1%

3%

Total FTE

40,01240,221

38,555

-1%

4%

1.
2.

FTE has been restated to reflect the transfer of Banking Services from the Group Centre division to the Institutional division during the March 2022 half (Sep 21: 864; Mar 21: 846).
Excludes FTE of the consolidated investments managed by 1835i Group Pty Ltd (1835i).

Other Non-Financial Information
Half Year

Movement
Mar 22
v. Sep 21

Mar 21Mar 22v. Mar 21

Mar 22

Sep 21- high

28.98

29.64

29.55

-2%

-2%

- low

24.65

26.65

16.97

-8%

45%

- closing

Shareholder value - ordinary shares
Share price ($)

27.60

28.15

28.18

-2%

-2%

Closing market capitalisation of ordinary shares ($B)

77.1

79.5

80.2

-3%

-4%

Total shareholder returns (TSR)

0.5%

2.4%

66.6%

large

large

As at Mar 22
Credit ratings
Moody's Investors Service
Standard & Poor's
Fitch Ratings

17

ShortTerm
P-1

LongTerm
Aa3

Outlook
StableA-1+

AA-

StableF1

A+

Stable

SUMMARYThis page has been left blank intentionally18

GROUP RESULTSCONTENTS

Page

Cash Profit

20

Cash Net Interest Income - continuing operations

21

Cash Other Operating Income - continuing operations

23

Cash Operating Expenses - continuing operations

26

Investment Spend - continuing operations

28

Software Capitalisation - continuing operations

28

Credit Risk - continuing operations

29

Cash Income Tax Expense - continuing operations

34

Impact of Foreign Currency Translation - continuing operations

35

Earnings Related Hedges - continuing operations

37

Cash Earnings Per Share - continuing operations

37

Dividends - continuing operations

38

Economic Profit - continuing operations

38

Condensed Balance Sheet - including discontinued operations

39

Liquidity Risk - including discontinued operations

40

Funding - including discontinued operations

41

Capital Management - including discontinued operations

42

Leverage Ratio - including discontinued operations

44

Capital Management - Other Developments

45

19

GROUP RESULTS
Non-IFRS Information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report &Dividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian
Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this information.

Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers toassess Group and Divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items
from statutory profit (refer to Definitions on pages 131 to 132 for further details). The adjustments made in arriving at cash profit are included in statutory
profit which is subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash profit is not
subject to review by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on aconsistent basis across each period presented.
This Group Results section is reported on a cash profit basis from continuing operations unless otherwise stated.

Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

3,535

3,228

2,951

10%

20%

(373)

(128)

51

large

large

(49)

108

(12)

large

large

Total adjustments between statutory profit and cash profit fromcontinuing operations

(422)

(20)

39

large

large

Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

Statutory profit attributable to shareholders of the Company fromcontinuing operations
Adjustments between statutory profit and cash profit1
Economic hedges
Revenue and expense hedges

1.

Refer to pages 71 to 73 for analysis of the adjustments between statutory profit and cash profit.

Half Year

Group performance - cash profit

Movement

Net interest income

Mar 22$M
7,100

Sep 21$M
7,175

Mar 21$M
6,986

Other operating income

1,848

1,849

Operating income

8,948

9,024

Operating expenses(4,791)

Profit before credit impairment and income tax
Credit impairment (charge)/release

Mar 22
v. Sep 21-1%

Mar 22v. Mar 21
2%

1,437

0%

29%

8,423

-1%

6%

(4,569)(4,482)

5%

7%

4,157

4,455

3,941

-7%

5%

284

76

491

large

-42%

Profit before income tax

4,441

4,531

4,432

-2%

0%

Income tax expense and non-controlling interests(1,328)(1,323)(1,442)0%-8%Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

Half Year

Movement

Cash Profit/(Loss) by Division

Mar 22$M

Sep 21$M

Mar 21$M

Australia Retail and Commercial

Mar 22
v. Sep 21

Mar 22v. Mar 21

1,986

1,835

1,782

8%

11%

Institutional

730

939

948

-22%

-23%

New Zealand

787

737

771

7%

2%

(6)

(10)

7

-40%

large

Pacific
Group Centre

(384)

(293)

(518)

31%

-26%

Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

20

GROUP RESULTS
Cash Net Interest Income - continuing operations
Half Year

Movement

Mar 22$M
7,100

Sep 21$M
7,175

Mar 21$M
6,986

Mar 22
v. Sep 21-1%

Mar 22v. Mar 21
2%

Average interest earning assets

899,678

869,825

857,524

3%

5%

Average deposits and other borrowings

768,118

728,925

696,066

5%

10%

1.58

1.65

1.63

-7 bps-5 bpsGroup
Net interest income1

Net interest margin (%)
Group (excluding Markets business unit)
Net interest income1

6,684

6,736

6,584

-1%

2%

Average interest earning assets

645,467

618,904

580,971

4%

11%

Average deposits and other borrowings

593,241

563,767

532,132

5%

11%

2.08

2.17

2.27

-9 bps-19 bps

Net interest margin (%)

Half Year
Mar 22$M

Net interest margin by major division1
Australia Retail and Commercial
Net interest margin (%) - cash

Sep 21$M

Movement
Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

2.55

2.59

2.56

-4 bps-1 bpsAverage interest earning assets

303,623

308,937

311,211-2%-2%

Average deposits and other borrowings

258,812245,089

240,094

6%

8%

0.83

0.85

0.77

-2 bps

6 bps

Average interest earning assets

390,901

374,019397,339

5%-2%

Average deposits and other borrowings

323,662

302,551

292,475

7%

11%

Institutional
Net interest margin (%) - cash

New Zealand
Net interest margin (%) - cash

1.

2.33

2.34

2.32

-1 bps

1 bps

Average interest earning assets

129,773

125,729

120,580

3%

8%

Average deposits and other borrowings

105,179

100,444

95,8645%

10%Includes large/notable items of -$3 million for the March 2022 half (Sep 21 half: -$30 million; Mar 21 half: -$56 million). Refer to pages 12 to 16 for further details on large/notable items. Also
includes the major bank levy of -$165 million for the March 2022 half (Sep 21 half: -$157 million; Mar 21 half: -$189 million).

Group net interest margin - March 2022 Half Year v March 2021 Half Year1.

Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.

March 2022 v March 2021
Net interest margin (-5 bps)
Wholesale funding & deposit pricing (+8 bps): driven by deposit margin management across all divisions and wholesale funding costs.



Asset pricing (-10 bps): driven by pricing competition in home lending in the Australia Retail and Commercial and New Zealand divisions.



Asset and funding mix (-3 bps): driven by unfavourable product mix reflecting impacts of customers switching from variable to fixed rate homeloans, lower unsecured lending and lower overall growth in the Australia Retail and Commercial division. This was partially offset by favourable
deposit mix with growth in at-call deposits, and increased customer deposits relative to wholesale funding.

Liquidity (-5 bps): driven by growth in lower yielding liquid assets.



Earnings on capital and replicating portfolio (+1 bps): driven by growth in volumes, partially offset by a lower earnings yield.

Markets Balance Sheet activities (+3 bps): driven by a reduction in lower margin Markets average interest earning assets.



Large/notable items (+1 bps): driven by reduced customer remediation.

21

GROUP RESULTS
Average interest earning assets (+42.2 billion or +5%)


Average net loans and advances (+20.6 billion or +4%): driven by lending growth in the Institutional division, home loan growth in the New
Zealand division and the impact of foreign currency translation movements, partially offset by a decline in the Australia Retail and Commercial
division.



Average trading and investment securities (-24.1 billion or -17%): driven primarily by portfolio rebalancing activities in Markets, partially offset by
the impact of foreign currency translation movements over the period.



Average cash and other liquid assets (+45.6 billion or +36%): driven by higher central bank balances, partially offset by lower reverse repurchaseagreements.

Average deposits and other borrowings (+$72.0 billion or +10%)


Average deposits and other borrowings (+$72.0 billion or +10%): driven by growth in at-call deposits across all divisions and increases incommercial paper and certificates of deposit, partially offset by lower term deposits.

Group net interest margin - March 2022 Half Year v September 2021 Half Year1.

Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.

March 2022 v September 2021
Net interest margin (-7 bps)
Wholesale funding & deposit pricing (+4 bps): driven by deposit margin management across all divisions and wholesale funding costs.



Asset pricing (-6 bps): driven by continued competition in home lending in the Australia Retail and Commercial and New Zealand divisions.



Asset and funding mix (-3 bps): driven by the impacts of customers switching from variable to fixed rate home loans and lower growth in theAustralia Retail and Commercial division. This was partially offset by favourable deposit mix with growth in at-call deposits, and increased
customer deposits relative to wholesale funding.

Liquidity (-2 bps): driven by growth in lower yielding liquid assets.



Earnings on capital and replicating portfolio (+1 bps): driven by growth in volumes and improvement in earnings yield.

Markets Balance Sheet activities (-2 bps): driven primarily by an increase in lower margin Markets average interest earning assets.



Large/notable items (+1 bps): driven by lower customer remediation.

Average interest earning assets (+29.9 billion or +3%)


Average net loans and advances (+19.8 billion or +3%): driven by growth in Institutional lending as well as home lending growth in the New
Zealand division and the impact of foreign currency translation movements, partially offset by a decline in the Australia Retail and Commercial
division.



Average trading and investment securities (-10.2 billion or -8%): driven primarily by portfolio rebalancing activities in Markets, partially offset by
the impact of foreign currency translation movements over the period.



Average cash and other liquid assets (+20.3 billion or +13%): driven by higher central bank balances and higher reverse repurchase agreements.

Average deposits and other borrowings (+$39.2 billion or +5%)


Average deposits and other borrowings (+$39.2 billion or +5%): driven by growth in at-call deposits across all divisions, increases in commercial
paper and the impact of foreign currency translation movements, partially offset by lower term deposits and certificates of deposits.

22

GROUP RESULTS
Cash Other Operating Income - continuing operations
Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Net fee and commission income1

953

1,052

1,011

-9%

-6%

Markets other operating income

396

492

638

-20%

-38%

Mar 22
v. Sep 21

Mar 22v. Mar 21

Share of associates' profit/(loss)

74

66

(242)

12%

large

Other1

425

239

30

78%

large

Total

1,848

1,849

1,437

0%

29%

Other operating income by division
Australia Retail and Commercial

Mar 22$M746

Sep 21$M
587

Mar 21$M
302

Mar 22
v. Sep 21
27%

Mar 22v. Mar 21
largeInstitutional

782

864

1,014

-9%

-23%

New Zealand

245

231

238

6%

3%

Pacific

34

32

33

6%

3%

Group Centre

41

135

(150)

-70%

large

1,848

1,849

1,437

0%

29%

Mar 21$M
402

Mar 22
v. Sep 21-5%

Mar 22v. Mar 21
3%

Half Year

Total

Movement

Half Year

Markets income

Movement

Mar 22$M416

Sep 21$M
439

Other operating income

396

492

638

-20%

-38%

Total

812

931

1,040

-13%

-22%

Net interest income

Other operating income (excluding large/notable items)
Other operating income included a number of items collectively referred to as large/notable items of $258 million for the March 2022 half (Sep 21 half:$39 million; Mar 21 half: -$500 million). While these items form part of total cash other operating income from continuing operations, they have been
excluded from the tables below given their nature and significance. Refer to items on pages 12 to 16 for further details on large/notable items.
Other operating income (excluding large/notable items)

Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Net fee and commission income1

883

1,012

948

-13%

-7%

Markets other operating income

396

491

610

-19%

-35%

Mar 22v. Mar 21

Share of associates' profit/(loss)

74

66

105

12%

-30%

Other1

237

241

274

-2%

-14%

1,590

1,810

1,937

-12%

-18%

Mar 21$M
522

Mar 22
v. Sep 21-20%

Mar 22v. Mar 21-13%

Total excluding large/notable items

Half Year

Other operating income by division (excluding large/notable items)

Movement

Mar 22$M452

Sep 21$M
566

Institutional

766

846

960

-9%

-20%

New Zealand

245

231

225

6%

9%

Pacific

34

32

33

6%

3%

Group Centre

93

135

197

-31%

-53%

1,590

1,810

1,937

-12%

-18%

Australia Retail and Commercial

Total excluding large/notable items
1.

Excluding the Markets business unit.

23

GROUP RESULTS
Other operating income - March 2022 Half Year v March 2021 Half YearMarch 2022 v March 2021
Other operating income increased by $411 million (+29%). Excluding large/notable items, Other operating income decreased $347 million (-18%).
Net fee and commission income (-$58 million or -6%)


$59 million decrease in the Australia Retail and Commercial division largely driven by Breakfree package fee changes.

$16 million decrease from lower divested business results in the Australia Retail and Commercial and Institutional divisions.

$23 million increase driven by lower customer remediation.

Markets income (-$228 million or -22%)
Markets income decreased $228 million (-22%) driven by a $242 million decrease in Other operating income, partially offset by a $14 million increase
in Net interest income. This was primarily attributable to the following business activities:$179 million decrease in Balance Sheet income from lower realised gains and unfavourable mark-to-market movements attributable tosteepening yield curves.

$107 million decrease in Credit and Capital Markets income driven by stronger Credit Trading conditions in the March 2021 half.

$22 million decrease from Derivative Valuation Adjustments from higher mark-to-market credit valuation adjustments.

$53 million increase in Rates income driven by more favourable trading conditions in a rising interest-rate environment.

$17 million increase in Foreign Exchange income driven by customer demand for hedging solutions with increased volatility and interest rate
differentials across currencies, partially offset by the release of customer remediation provisions in the March 2021 half.

$10 million increase in Commodities income driven by increased demand for hedging solutions and more favourable trading conditions.

Share of associates’ profit/(loss) (+$316 million)$347 million increase driven by the Group’s share of charges recognised by AmBank in the March 2021 half in respect of the 1MDB settlement($212 million) and goodwill impairment ($135 million).

$31 million decrease in share of associates’ profits from PT Panin ($41 million), partially offset by an increase from AmBank ($10 million).

Other (+$395 million)$431 million increase driven by divestments/closures:- $496 million increase in the Australia Retail and Commercial division from the gain on sale on completion of the ANZ Worldline partnership($307 million) and the loss on reclassification of ANZ Share Investing to held for sale ($251 million) in the March 2021 half, partially offset byloss on sale of the financial planning and advice business ($62 million).
- $52 million decrease in the Group Centre division driven by the recycling of foreign currency translation reserves from Other comprehensive
income to profit or loss on dissolution of Minerva and ANZ Asia ($65 million), partially offset by the release of excess provisions originallyraised as part of the UDC Finance and Paymark Limited divestments completed in the prior years ($13 million).
- $13 million decrease in the New Zealand division from the gain on sale of a legacy insurance portfolio to Tower in the March 2021 half.

$29 million increase in the New Zealand division driven by realised gains from the sale of government securities.

$18 million increase in the Institutional division driven by higher international payment volumes in Transaction Banking and favourable
adjustments to loans measured at fair value in Corporate Finance.

$76 million decrease in the Group Centre division primarily driven by lower realised gains on economic hedges against foreign currency
denominated revenue streams offsetting net favourable foreign currency translations elsewhere in the Group and lower valuation adjustmentsfrom investments measured at fair value in the digital business.

$11 million decrease in the Australia Retail and Commercial division driven by a gain on disposal of the offsite ATM network in the March 2021
half.

24

GROUP RESULTS
March 2022 v September 2021
Other operating income decreased by $1 million (flat). Excluding large/notable items, Other operating income decreased $220 million (-12%).
Net fee and commission income (-$99 million or -9%)
$113 million decrease in the Australia Retail and Commercial division driven by Breakfree package fee changes, the timing of recognition ofcards incentives and seasonality of fees.

$15 million decrease in the New Zealand division driven by the removal or reduction of funds under management fees.

$30 million increase driven by lower customer remediation.

Markets income (-$119 million or -13%)
Markets income decreased $119 million (-13%) driven by a $96 million (-20%) decrease in Other operating income and a $23 million (-5%) decrease
in Net interest income. This was primarily attributable to the following business activities:$222 million decrease in Balance Sheet income with lower realised gains following portfolio rebalancing in the prior half, and lower interest
income.

$29 million decrease in Credit and Capital Markets income driven by lower fee revenues from reduced customer issuance volumes and valuation
impacts from widening credit spreads.

$8 million decrease from Derivative Valuation Adjustments from higher mark-to-market credit valuation adjustments.

$62 million increase in Foreign Exchange income driven by customer demand for hedging solutions with increased volatility and interest rate
differentials across currencies.

$57 million increase in Rates income driven by more favourable trading conditions in a rising interest-rate environment.

$21 million increase in Commodities income driven by increased demand for hedging solutions and more favourable trading conditions.

Share of associates’ profit/(loss) (+$8 million or +12%)$8 million increase in the share of associates’ profits from AmBank ($34 million), partially offset by a decrease from PT Panin ($26m).

Other (+$186 million or +78%)$193 million increase driven by divestments/closures:- $245 million increase in the Australia Retail and Commercial division from the gain on sale on completion of the ANZ Worldline partnership($307 million) partially offset by loss on sale of the financial planning and advice business ($62 million).
- $52 million decrease in the Group Centre division driven by the recycling of foreign currency translation reserves from Other comprehensive
income to profit or loss on dissolution of Minerva and ANZ Asia ($65 million) partially offset by the release of excess provisions originallyraised as part of the UDC Finance and Paymark Limited divestments completed in the prior years ($13 million).

$29 million increase in the New Zealand division driven by realised gains from the sale of government securities.

$15 million increase in the Institutional division driven by higher international payment volumes in Transaction Banking and favourable
adjustments to loans measured at fair value in Corporate Finance.

$50 million decrease in the Group Centre division primarily driven by lower realised gains on economic hedges against foreign currency
denominated revenue streams offsetting net favourable foreign currency translations elsewhere in the Group and lower valuation adjustmentsfrom investments measured at fair value in the digital business.

25

GROUP RESULTS
Cash Operating Expenses - continuing operations
Half Year

Personnel

Mar 22$M
2,654

Sep 21$M
2,497

Movement
Mar 21$M
2,449

Mar 22
v. Sep 21
6%

Mar 22v. Mar 21
8%-3%

Premises

341

355

350

-4%

Technology

815

803

785

1%

4%

Restructuring

49

22

105

large

-53%

Other

932

892

793

4%

18%

Total

4,791

4,569

4,482

5%

7%

Half Year

Movement

Operating expenses by division
Australia Retail and Commercial

Mar 22$M
2,155

Sep 21$M
2,024

Mar 21$M
2,000

Mar 22
v. Sep 21
6%

Mar 22v. Mar 21
8%

Institutional

1,241

1,173

1,274

6%

-3%

New Zealand

678

702

623

-3%

9%

Pacific

80

73

71

10%

13%

Group Centre
Total

637

597

514

7%

24%

4,791

4,569

4,482

5%

7%

Mar 22v. Mar 21
3%
3%

Half Year

Movement

FTE by division
Australia Retail and Commercial

Mar 22
14,505

Sep 21
14,480Mar 21
14,118Mar 22
v. Sep 21
0%

Institutional1

6,236

6,196

6,061

1%

New Zealand

7,026

7,060

6,691

0%

5%

Pacific

1,092

1,089

1,101

0%

-1%

Group Centre1,2

10,67010,859

9,873

-2%

8%

Total FTE

39,52939,68437,8440%

4%

Average FTE

40,01338,48937,594

4%

6%

1.
2.

FTE has been restated to reflect the transfer of Banking Services from the Group Centre division to the Institutional division during the March 2022 half (Sep 21: 864; Mar 21: 846).
Excludes FTE of the consolidated investments managed by 1835i.

Operating expenses (excluding large/notable items)
Operating expenses included a number of items collectively referred to as large/notable items of $236 million for the March 2022 half (Sep 21 half:$146 million; Mar 21 half: $295 million). While these items form part of total cash operating expenses from continuing operations, they have been
excluded from the tables below given their nature and significance. Refer to pages 12 to 16 for further details on large/notable items.
Expenses (excluding large/notable items)

Half Year

Movement

Personnel

Mar 22$M
2,601

Sep 21$M
2,432

Premises341

Technology

801

Restructuring
Other
Total excluding large/notable items

Mar 21$M
2,390

Mar 22
v. Sep 21
7%

Mar 22v. Mar 21
9%

355

351

-4%

-3%

779

763

3%

5%

-

-

-

n/a

n/a

812

857

683

-5%

19%

4,555

4,423

4,187

3%

9%

Mar 22
v. Sep 21
3%

Half Year

Expenses by division (excluding large/notable items)

Movement

Australia Retail and Commercial

Mar 22$M
1,974

Sep 21$M
1,918

Mar 21$M
1,857

Institutional

1,210

1,149

1,171

5%

3%

New Zealand

672

691

613

-3%

10%

Mar 22v. Mar 21
6%

Pacific

68

71

70

-4%

-3%

Group Centre

631

594

476

6%

33%

4,555

4,423

4,187

3%

9%

Total excluding large/notable items

26

GROUP RESULTS
Operating expenses - March 2022 Half Year v March 2021 Half YearMarch 2022 v March 2021
Operating expenses increased by $309 million (+7%). Excluding large/notable items, operating expenses increased $368 million (+9%).

Personnel expenses increased $205 million (+8%) driven by higher resourcing during the period to support investments to meet regulatory andcompliance obligations and to develop digital capabilities, as well as Home Loan processing. Wage inflation and the impact of unfavourable
foreign currency translation movements also contributed to the overall increase. This was partially offset by the benefits of customers continuing
to embrace digital channels and productivity improvements arising from technology and back-office optimisation.

Premises expenses decreased $9 million (-3%) driven by ongoing optimisation of property footprint and the sale of the offsite ATM network.

Technology expenses increased $30 million (+4%) driven by higher software license costs and increased spend on investment initiatives,
partially offset by lower amortisation charges.



Restructuring expenses decreased $56 million (-53%) with lower charges across all divisions.



Other expenses increased $139 million (+18%) driven by increased spend on investment initiatives and higher customer remediation. This waspartially offset by expenses relating to a litigation settlement agreed in the March 2021 half.

March 2022 v September 2021
Operating expenses increased by $222 million (+5%). Excluding large/notable items, operating expenses increased $132 million (+3%).
Personnel expenses increased $157 million (+6%) resulting from higher resourcing during the period to support investments to meet regulatory
and compliance obligations and to develop digital capabilities, as well as Home Loan processing. Wage inflation and the impact of unfavourable
foreign currency translation movements also contributed to the overall increase. This was partially offset by the benefits of customers continuing
to embrace digital channels and productivity improvements arising from technology and back-office optimisation.

Premises expenses decreased $14 million (-4%) driven by ongoing optimisation of property footprint and the sale of the offsite ATM network.

Technology expenses increased $12 million (+1%) driven by higher software licence costs, partially offset by lower amortisation charges.



Restructuring expenses increased $27 million driven by the planned closure of ANZ American Territories and retrenchment costs relating to thebusiness changes in the Australia Retail and Commercial division.

Other expenses increased $40 million (+4%) driven by higher customer remediation partially offset by seasonally lower marketing spend.

27

GROUP RESULTS
Investment Spend - continuing operations
Half Year
Mar 22$M
913

Investment expensed1
Investment capitalised
Total investment spend from continuing operations1

Sep 21$M
841

Movement
Mar 21$M
593

Mar 22
v. Sep 21
9%

Mar 22v. Mar 21
54%

130

217

159

-40%

-18%

1,043

1,058

752

-1%

39%

Investment spend by division

Half Year

Movement

Mar 22$M
332

Sep 21$M
319

Mar 21$M
236

Mar 22
v. Sep 21
4%

Mar 22v. Mar 21
41%

Institutional2

144

161

123

-11%

17%

New Zealand

136

147

98

-7%

39%

Group Centre2

431

431

295

0%

46%

1,043

1,058

752

-1%

39%

Australia Retail and Commercial

Total investment spend from continuing operations
1.
2.

Includes investment expensed associated with large/notable items of $56 million (Sep 21 half: $79 million; Mar 21 half: $82 million).
Investment spend from continuing operations has been restated to reflect the transfer of Banking Services from the Group Centre division to the Institutional division in the March 2022 half
(Sep 21: $53 million; Mar 21: $40 million).

Software Capitalisation - continuing operations
Capitalised software comprises both costs incurred to develop software, which are included within investment spend, and costs to acquire software.
These costs are capitalised as intangible assets and amortised over the expected useful lives. Details are presented in the table below:
Movement

Half Year
Mar 22$M
960

Balance at start of period

Sep 21$M
961

Mar 21$M
1,039

Mar 22
v. Sep 21
0%

Mar 22v. Mar 21-8%

Software capitalised during the period

155

200

156

-23%

-1%

Amortisation during the period

(189)

(201)

(233)

-6%

-19%

Software impaired/written-off
Total capitalised software from continuing operations

(2)

-

(1)

n/a

100%

924

960

961

-4%

-4%

Capitalised software by division

As at

Movement

Mar 22$M123

Sep 21$M
130

Mar 21$M
133

Institutional1

399

393

386

2%

3%

New Zealand

20

14

8

43%

large

Group Centre1

382

423

434

-10%

-12%

Total capitalised software from continuing operations

924

960

961

-4%

-4%

Australia Retail and Commercial

1.

Mar 22
v. Sep 21-5%

Mar 22v. Mar 21-8%

Software capitalisation from continuing operations has been restated to reflect the transfer of Banking Services operations from the Group Centre division to the Institutional division in the
March 2022 half (Sep 21: $262 million; Mar 21: $251 million).

28

GROUP RESULTS
Credit Risk - continuing operations
The Group’s assessment of expected credit losses (ECL) from its credit portfolio is subject to judgements and estimates made by management based ona variety of internal and external information, as well as the Group’s experience of the performance of the portfolio under previously stressed conditions.
Refer to Note 1 of the Condensed Consolidated Financial Statements for further information.

Credit impairment charge/(release)
Half Year
Collectively assessed

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Australia Retail and Commercial

(323)

(106)

(515)

large

-37%

Institutional

(27)

(49)

(110)

-45%

-75%

New Zealand

(17)

(8)

(53)

large

-68%

Pacific

(3)

15

-

large

n/a

Group Centre

(1)

3

-

large

n/a

(371)

(145)

(678)

large

-45%

Individually assessed
Australia Retail and Commercial

88

61

134

44%

-34%

Institutional

(8)

15

55

large

large

New Zealand

(4)

(10)

(5)

-60%

-20%

Pacific

6

3

3

100%

100%

Total collectively assessedGroup Centre

5

-

-

n/a

n/a

Total individually assessed

87

69

187

26%

-53%

Australia Retail and Commercial

(235)

(45)

(381)

large

-38%

Institutional

(35)

(34)

(55)

3%

-36%

New Zealand

(21)

(18)

(58)

17%

-64%

Pacific

3

18

3

-83%

0%

Group Centre

4

3

-

33%

n/a

(284)

(76)

(491)

large

-42%

Total credit impairment charge/(release)

Total credit impairment charge/(release)

29

GROUP RESULTS
Credit impairment charge/(release), cont'dCollectively assessed

Individually assessedStage 3 Recoveries
and writebacks
$M

Total
$M

Total
$M

Stage 1
$M

Stage 2
$M

Stage 3
$M

Total
$M

Stage 3 New andincreased$M

Australia Retail and Commercial

56

(391)

12

(323)

239

(151)

88

(235)

Institutional

53

(71)

(9)

(27)

20

(28)

(8)

(35)

New Zealand

4

(23)

2

(17)

33

(37)

(4)

(21)

Pacific

(5)

-

2

(3)

9

(3)

6

3

Group Centre

(1)

-

-

(1)

-

5

5

4

107

(485)

7

(371)

301

(214)

87

(284)

(45)

March 2022 Half Year

Total
September 2021 Half Year
Australia Retail and Commercial

(32)

(62)

(12)

(106)

285

(224)

61

Institutional

(14)

(41)

6

(49)

57

(42)

15

(34)

New Zealand

8

(10)

(6)

(8)

21

(31)

(10)

(18)

Pacific

(1)

5

11

15

6

(3)

3

18

Group Centre

3

-

-

3

-

-

-

3

(36)

(108)

(1)

(145)

369

(300)

69

(76)

Australia Retail and Commercial

(136)

(357)

(22)

(515)

326

(192)

134

(381)

Total
March 2021 Half Year

Institutional

(89)

(8)

(13)

(110)

88

(33)

55

(55)

New Zealand

(6)

(30)

(17)

(53)

34

(39)

(5)

(58)

Pacific

(2)

(1)

3

-

7

(4)

3

3

Group Centre

-

-

-

-

-

-

-

-

(233)

(396)

(49)

(678)

455

(268)

187

(491)

Total

Collectively assessed credit impairment charge/(release)March 2022 v March 2021
The collectively assessed credit impairment release decreased $307 million (-45%) driven by lower releases across the Australia Retail andCommercial ($192 million), Institutional ($83 million) and New Zealand ($36 million) divisions. Collectively assessed credit impairment provision
decreased substantially in the March 2021 half primarily due to improvements in the economic outlook and improvements in portfolio mix. The
collectively assessed credit impairment release in the March 2022 half was primarily driven by underlying improvement in risk profile, portfolio mix
and the reduction in COVID-19 specific management overlays, partially offset by changes in economic scenario weights and new management
overlays for floods.

March 2022 v September 2021
The collectively assessed credit impairment release increased $226 million driven a higher release in the Australia Retail and Commercial division($217 million). Collectively assessed credit impairment provisions decreased in the September 2021 half as a result of underlying changes in portfolio
risk combined with a relatively stable view of forward-looking economic outlook. The collectively assessed credit impairment release in the March2022 half was primarily driven by underlying improvement in risk profile, portfolio mix and the reduction in COVID-19 specific management overlays,
partially offset by changes in economic scenario weights and new management overlays for floods.

Individually assessed credit impairment charge/(release)March 2022 v March 2021
The individually assessed credit impairment charge decreased $100 million (-53%) driven by decreases across the Australia Retail and Commercial
division (-$46 million) with underlying delinquency and impairment flows remaining subdued post government and bank COVID-19 support packages,
and the Institutional division (-$63 million) due to higher impairments taken in the March 2021 half.

March 2022 v September 2021
The individually assessed credit impairment charge increased by $18 million (26%) driven by increases across the Australia Retail and Commercial
division ($27 million) with lower write-backs in the Home Loans, Business Banking and Small Business Banking portfolios, and the New Zealanddivision ($6 million) substantially driven by a single name exposure. This was partially offset by a decrease in the Institutional division (-$23 million)
with lower transition to impairment over the period.

30

GROUP RESULTS
Allowance for expected credit losses1
As at

Movement

Collectively assessed

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Australia Retail and Commercial

1,891

2,225

2,331

-15%

-19%

Institutional

1,280

1,346

1,364

-5%

-6%

New Zealand

495

526

513

-6%

-4%

Pacific

89

95

77

-6%

16%

Group Centre

2

3

-

-33%

n/a

3,757

4,195

4,285

-10%

-12%

Australia Retail and Commercial

364

406

520

-10%

-30%

Institutional

185

195

191

-5%

-3%

New Zealand

62

63

79

-2%

-22%

Pacific

25

23

19

9%

32%

-

-

-

n/a

n/a

636

687

809

-7%

-21%

Total collectively assessed

Individually assessedGroup Centre
Total individually assessed

Allowance for ECL
Australia Retail and Commercial

2,255

2,631

2,851

-14%

-21%

Institutional

1,465

1,541

1,555

-5%

-6%

New Zealand

557

589

592

-5%

-6%

Pacific

114

118

96

-3%

19%

2

3

-

-33%

n/a

4,393

4,882

5,094

-10%

-14%

Group Centre
Total allowance for ECL

Individuallyassessed

Collectively assessedStage 1
$M
477

Stage 2
$M
1,074

Stage 3
$M
340

Total
$M
1,891

Stage 3
$M
364

Total
$M
2,255

Institutional

973

292

15

1,280

185

1,465

New Zealand

154

286

55

495

62

557

Pacific

12

47

30

89

25

114

Group Centre

1

1

-

2

-

2

1,617

1,700

440

3,757

636

4,393

As at September 2021
Australia Retail and Commercial

430

1,467

328

2,225

406

2,631

Institutional

949

373

24

1,346

195

1,541

New Zealand

154

317

55

526

63

589

Pacific

18

48

29

95

23

118

As at March 2022
Australia Retail and Commercial

TotalGroup Centre

3

-

-

3

-

3

1,554

2,205

436

4,195

687

4,882

As at March 2021
Australia Retail and Commercial

462

1,530

339

2,331

520

2,851

Institutional

940

407

17

1,364

191

1,555

New Zealand

141

313

59

513

79

592

Pacific

18

42

17

77

19

96

-

-

-

-

-

-

1,561

2,292

432

4,285

809

5,094

Total

Group Centre
Total
1.

Includes allowance for expected credit losses for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments undrawn and contingent facilities. For Investment securities – debt securities at FVOCI, the allowance for ECL is recognised in Other comprehensive income with a corresponding charge to
profit or loss.

31

GROUP RESULTS
Long-Run Loss Rates
Management believes that disclosure of modelled long-run historical loss rates for individually assessed provisions assists in assessing the longer term
expected loss rates of the lending portfolio by removing the volatility of reported earnings created by the use of accounting losses. The long-run loss
methodology used for economic profit is an internal measure and is not based on the credit loss recognition principles of AASB 9 Financial Instruments.
As at
Long-run loss as a % of gross lending assets by division

Mar 22

Sep 21Mar 21

Australia Retail and Commercial

0.20%

0.22%

0.24%

New Zealand

0.12%

0.13%

0.15%

Institutional

0.21%

0.25%

0.25%

Total Group

0.20%

0.22%

0.23%

Non-Performing Credit Exposures
As at

Movement

Mar 22$M
1,286

Sep 21$M
1,549

Mar 21$M
1,941

Restructured items2

375

355

300

6%

25%

Non-performing commitments, contingencies and derivatives1

48

61

232

-21%

-79%

Gross impaired assets

1,709

1,965

2,473

-13%

-31%

Non-performing credit exposures not impaired

3,365

3,538

3,998

-5%

-16%

Total non-performing credit exposures3

5,074

5,503

6,471

-8%

-22%

Gross impaired assets by division
Australia Retail and Commercial

857

1,041

1,228

-18%

-30%

Institutional

641

704

892

-9%

-28%

New Zealand

155

164

310

-5%

-50%

Pacific

56

56

43

0%

30%

Gross impaired assets

1,709

1,965

2,473

-13%

-31%

Gross impaired assets by size of exposure
Less than $10 million

1,054

1,289

1,474

-18%

-28%

221

222

267

0%

-17%

Impaired loans1$10 million to $100 million

Mar 22
v. Sep 21-17%

Mar 22v. Mar 21-34%

Greater than $100 million

434

454

732

-4%

-41%

Gross impaired assets

1,709

1,965

2,473

-13%

-31%

Impaired loans

(619)

(666)

(778)

-7%

-20%

Non-performing commitments and contingencies and derivatives

(17)

(21)

(31)

-19%

-45%

1,073

1,278

1,664

-16%

-36%

Individually assessed provisions

Net impaired assets
1.

Impaired loans and non-performing commitments, contingencies and derivatives do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail
exposures of 90+ days past due and defaulted but well secured exposures.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed forStage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities
with similar risk.
3. Non-performing credit exposures are aligned with the definition in APS220 Credit Risk Management.
2.

March 2022 v March 2021
Gross impaired assets decreased $764 million (-31%) driven by decreases across the Australia Retail and Commercial division (-$371 million) with
underlying delinquency flows remaining subdued due to government and bank COVID-19 support packages, the Institutional division (-$251 million)
driven by the upgrade and repayments of several single name exposures, and the New Zealand division (-$155 million) with the upgrade of a large
Agribusiness customer and a number of Agribusiness asset sales in the September 2021 half.

March 2022 v September 2021
Gross impaired assets decreased $256 million (-13%) driven by decreases across the Australia Retail and Commercial division (-$184 million) with
underlying delinquency flows remaining subdued post government and bank COVID-19 support packages, and the Institutional division (-$63 million)
due to the repayments of several single name exposures.
The Group’s individually assessed provision coverage ratio on impaired assets was 37.2% at 31 March 2022 (Sep 21: 35.0%; Mar 21: 32.7%).

32

GROUP RESULTS
New Impaired Assets
Half Year
Mar 22$M
478

Impaired loans1

Movement

Sep 21$M
508

Mar 21$M
798

Mar 22
v. Sep 21-6%

Mar 22v. Mar 21-40%

Restructured items2

138

70

239

97%

-42%

Non-performing commitments and contingencies1

23

33

84

-30%

-73%

Total new impaired assets

639

611

1,121

5%

-43%

New impaired assets by division
Australia Retail and Commercial

393

461

421

-15%

-7%

Institutional

137

62

602

large

-77%

New Zealand

99

75

69

32%

43%

Pacific

10

13

29

-23%

-66%

Total new impaired assets

639

611

1,121

5%

-43%

1.

2.



Impaired loans and non-performing commitments and contingencies do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail exposures of90+ days past due and defaulted but well secured exposures.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed forStage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities
with similar risk.

March 2022 v March 2021
New impaired assets decreased $482 million (-43%) driven by the Institutional division (-$465 million) by a small number of well secured single nameexposures taken in March 2021 half, and the Australia Retail and Commercial division (-$28 million) with underlying delinquency flows remaining
subdued post government and bank COVID-19 support packages. This was partially offset by an increase in the New Zealand division ($30 million)
driven by the impairment of a single name exposure.

March 2022 v September 2021
New impaired assets increased by $28 million (5%) driven by the Institutional division ($75 million) with the impairment of a small number of wellsecured single name exposures, and the New Zealand division ($24 million) driven by the impairment of a single name exposure. This was partially
offset by a decrease in the Australia Retail and Commercial division (-$68 million) with underlying delinquency flows remaining subdued post
government and bank COVID-19 support packages.

Ageing analysis of net loans and advances that are past due but not impaired1
As at

Movement

1-29 days

Mar 22$M
4,676

Sep 21$M
4,757

Mar 21$M
5,657

Mar 22
v. Sep 21-2%

Mar 22v. Mar 21-17%

30-59 days

1,368

1,751

1,732

-22%

-21%

60-89 days

635

860

691

-26%

-8%

90+ days

2,823

3,065

3,290

-8%

-14%

Total

9,502

10,433

11,370

-9%

-16%

1.



Excludes eligible customers impacted by COVID-19 who applied for and were granted 6 month repayment deferral packages for the duration of the deferral. Customers who were 30 days
past due or greater were not eligible for the 6 month repayment deferral packages.

March 2022 v March 2021
Net loans and advances past due but not impaired decreased $1,868 million (-16%) across all segments. The decrease was driven by home loans inAustralia and commercial portfolios in Australia and New Zealand due to the underlying delinquency flows remaining subdued reflecting the impact ofgovernment and bank COVID-19 support packages.

March 2022 v September 2021
Net loans and advances past due but not impaired decreased $931 million (-9%) across all segments. The decrease was driven by home loans inAustralia and commercial portfolios in Australia and New Zealand due to the underlying delinquency flows remaining subdued reflecting the impact ofgovernment and bank COVID-19 support packages.

33

GROUP RESULTS
Cash Income Tax Expense - continuing operations
Half Year

Movement

Income tax expense from cash profit

Mar 22$M
1,328

Sep 21$M
1,322

Mar 21$M
1,442

Effective tax rate

29.9%

29.2%

32.5%



Mar 22
v. Sep 21
0%

Mar 22v. Mar 21-8%

March 2022 v March 2021
The effective tax rate decreased from 32.5% to 29.9%. The decrease of 262 bps was driven by the net non-tax assessable gain fromdivestments/closures in the March 2022 half (-186 bps), the non-tax deductible impacts of the reclassification of ANZ Share Investing to held for salein the March 2021 half (-169 bps) and lower equity accounted earnings (-212 bps). This was partially offset by higher withholding tax expense mainly
due to the dividend payment from ANZ Papua New Guinea (+254 bps).

March 2022 v September 2021
The effective tax rate increased from 29.2% to 29.9%. The increase of 72 bps was driven by higher withholding tax expense mainly due to thedividend payment from ANZ Papua New Guinea (+289 bps), partially offset by the net non-tax assessable gain from divestments/closures in the
March 2022 half (-195 bps).

34

GROUP RESULTS
Impact of Foreign Currency Translation - continuing operations
The following tables present the Group’s cash profit results, net loans and advances and customer deposits neutralised for the impact of foreign currencytranslation movements. Comparative data has been adjusted to remove the translation impact of foreign currency movements by retranslating priorperiod comparatives at current period foreign exchange rates.
March 2022 Half Year v March 2021 Half Year
Half Year

Movement

ActualFX
unadjusted

FX
impactFX
adjusted

FX
unadjusted

FX
adjusted

Net interest income

Mar 22$M
7,100

Mar 21$M
6,986

Mar 21$M
29

Mar 21$M
7,015

Mar 22v. Mar 21
2%

Mar 22v. Mar 21
1%

Other operating income

1,848

1,437

(12)

1,425

29%

30%

Operating income

8,948

8,423

17

8,440

6%

6%

Operating expenses(4,791)(4,482)(25)(4,507)

7%

6%

Profit before credit impairment and income tax

4,157

3,941

(8)

3,933

5%

6%

284

491

(1)

490

-42%

-42%

Credit impairment (charge)/release
Profit before income tax

4,441

4,432

(9)

4,423

0%

0%

Income tax expense and non-controlling interests(1,328)(1,442)

3(1,439)-8%-8%

Cash profit from continuing operations

3,113

2,990

(6)

2,984

4%

4%

Cash profit/(loss) from continuing operations by division
Australia Retail and Commercial

1,986

1,782

-

1,782

11%

11%

Institutional

730

948

3

951

-23%

-23%

New Zealand

787

771

8

779

2%

1%

(6)

7

-

7

large

large

Pacific
Group Centre

(384)

(518)

(17)

(535)

-26%

-28%

Cash profit from continuing operations

3,113

2,990

(6)

2,984

4%

4%

Australia Retail and Commercial

342,173344,269-

344,269-1%-1%

Institutional

174,986

147,446558

148,004

19%

18%

New Zealand

Net loans and advances by division

129,594

120,482

1,498

121,980

8%

6%

Pacific

1,664

1,713

15

1,728

-3%

-4%

Group Centre

3,019

449

-

449

large

large

651,436

614,359

2,071

616,4306%

6%Australia Retail and Commercial

263,420

241,315-

241,3159%

9%Institutional

243,836

223,666

941

224,607

9%

9%

New Zealand

100,10293,201

1,158

94,359

7%

6%

3,763

3,394

30

3,424

11%

10%

(67)

(53)

-

(53)

26%

26%

611,054561,5232,129

563,652

9%

8%

Net loans and advances

Customer deposits by division

Pacific
Group Centre
Customer deposits

35

GROUP RESULTS
March 2022 Half Year v September 2021 Half Year
Half Year
FX
FX
unadjusted
impactSep 21
Sep 21
$M
$M
7,175
22

FX
adjusted
Sep 21$M
7,197

Movement
FX
FX
unadjusted
adjustedMar 22
Mar 22
v. Sep 21
v. Sep 21-1%-1%

Net interest income

ActualMar 22$M
7,100

Other operating income

1,848

1,849

(19)

1,830

0%

1%

Operating income

8,948

9,024

3

9,027

-1%

-1%

Operating expenses(4,791)(4,569)(22)(4,591)

5%

4%

Profit before credit impairment and income tax

4,157

4,455

(19)

4,436

-7%

-6%

Credit impairment (charge)/release

284

76

2

78

large

large

Profit before income tax

4,441

4,531

(17)

4,514

-2%

-2%

Income tax expense and non-controlling interests(1,328)(1,323)

4(1,319)0%

1%Cash profit from continuing operations

3,113

3,208

(13)

3,195

-3%

-3%

Cash profit/(loss) from continuing operations by division
Australia Retail and Commercial

1,986

1,835

-

1,835

8%

8%

Institutional

730

939

3

942

-22%

-23%

New Zealand

787

737

2

739

7%

6%

Pacific

(6)

(10)

-

(10)

-40%

-40%

Group Centre

(384)

(293)

(18)

(311)

31%

23%

Cash profit from continuing operations

3,113

3,208

(13)

3,195

-3%

-3%

Australia Retail and Commercial

342,173

341,233-

341,2330%0%Institutional

174,986

158,231(2,827)

155,404

11%

13%

New Zealand

Net loans and advances by division

129,594

128,466(3,432)125,034

1%

4%

Pacific

1,664

1,771

(46)

1,725

-6%

-4%

Group Centre

3,019

18

-

18

large

large

651,436

629,719(6,305)

623,4143%

4%

Australia Retail and Commercial

263,420

252,504-

252,5044%

4%

Institutional

243,836

239,628(6,304)

233,324

2%

5%

New Zealand

100,10297,719(2,611)

95,108

2%

5%

3,763

3,767

(95)

3,672

0%

2%

(67)

(35)

-

(35)

91%

91%

611,054593,583(9,010)584,5733%

5%

Net loans and advances

Customer deposits by division

Pacific
Group Centre
Customer deposits

36

GROUP RESULTS
Earnings Related Hedges - continuing operations
Where it is considered appropriate, the Group takes out economic hedges against larger foreign exchange denominated revenue streams (primarily New
Zealand Dollar and US Dollar). New Zealand Dollar exposure relates to the New Zealand geography and USD exposures relate to Asia, Pacific, Europe &America geography. Details of these hedges are set out below.
Half Year
Mar 22$M
2,630

Sep 21$M
2,652

Mar 21$M
2,444

Amount taken to income (pre-tax statutory basis)2

63

(91)

26

Amount taken to income (pre-tax cash basis)3

7

2

18

USD Economic hedges
Net open USD position (notional principal)1

529

528

463

Amount taken to income (pre-tax statutory basis)2

21

(26)

26

Amount taken to income (pre-tax cash basis)3

6

38

16

NZD Economic hedges
Net open NZD position (notional principal)1

1.
2.
3.

Value in AUD at contracted rate.
Unrealised valuation movement plus realised revenue from matured or closed out hedges.
Realised revenue from closed out hedges.

As at 31 March 2022, the following hedges were in place to partially hedge future earnings against adverse movements in exchange rates:

NZD 2.8 billion at a forward rate of approximately NZD 1.07/AUD.



USD 0.4 billion at a forward rate of approximately USD 0.75/AUD.

During the March 2022 half:

NZD 1.1 billion of economic hedges matured and a realised gain of $7 million (pre-tax) was recorded in cash profit.



USD 0.2 billion of economic hedges matured and a realised gain of $6 million (pre-tax) was recorded in cash profit.

An unrealised gain of $71 million (pre-tax) on the outstanding NZD and USD economic hedges was recorded in the statutory profit during the half.
This unrealised gain has been treated as an adjustment to statutory profit in calculating cash profit as these are hedges of future NZD and USD
revenues.

Cash Earnings Per Share - continuing operations
Half Year

Movement

Mar 22

Sep 21Mar 21Mar 22
v. Sep 21

Mar 22v. Mar 21

Basic

110.8

113.0

105.3

-2%

5%

Diluted

104.2

106.4

99.9

-2%

4%

Basic

2,808.7

2,838.4

2,838.7-1%-1%

Diluted

3,077.2

3,105.5

3,084.4-1%0%Cash profit from continuing operations ($M)

3,113

3,208

2,990

-3%

4%

Cash profit from continuing operations used in calculating diluted
cash earnings per share ($M)

3,205

3,303

3,082

-3%

4%

Cash earnings per share (cents) from continuing operations

Cash weighted average number of ordinary shares (M)37

GROUP RESULTS
Dividends - continuing operations
Half Year
Dividend per ordinary share (cents) - continuing operations1InterimMar 2272

Sep 21-

Movement
Mar 21
70

Final

-

72

-

Total

72

72

70

Ordinary share dividends used in payout ratio ($M)2,3

2,012

2,030

1,992

Cash profit from continuing operations ($M)

3,113

3,208

2,990

Ordinary share dividend payout ratio (cash continuing basis)3

64.6%

63.3%

66.6%

1.

2.

3.

Mar 22
v. Sep 21

Mar 22v. Mar 21

0%

3%

-3%

4%

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2022 interim dividend (2021 final dividend: NZD 8 cents;
2021 interim dividend: NZD 8 cents).
Dividend paid to ordinary equity holders of the Company. Excludes dividends paid by subsidiaries to the Group’s non-controlling equity holders of $2 million (Sep 21 half: nil;
Mar 21 half: nil).
Dividend payout ratio for the March 2022 half is calculated using the proposed 2022 interim dividend, based on the forecast number of ordinary shares on issue at the dividend record date.
Dividend payout ratios for the September 2021 half and March 2021 half were calculated using actual dividends.

The Directors propose an interim dividend of 72 cents be paid on each eligible fully paid ANZ ordinary share on 1 July 2022. The proposed 2022 interim
dividend will be fully franked for Australian tax purposes. New Zealand imputation credits of NZD 9 cents per ordinary share will also be attached.

Economic Profit - continuing operations
Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Statutory profit attributable to shareholders of the Company fromcontinuing operations

3,535

3,228

2,951

10%

20%

Adjustments between statutory profit and cash profit from continuing operations

(422)

(20)

39

large

large

Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

Economic credit cost adjustment

(675)

(561)

(895)

20%

-25%

405

560

549

-28%

-26%

Economic return from continuing operations

2,843

3,207

2,644

-11%

8%

Cost of capital(2,406)(2,438)(2,390)

-1%

1%

437

769

254

-43%

72%

Imputation credits

Economic profit from continuing operations

Economic profit is a risk adjusted profit measure used to evaluate business unit performance. This is used for internal management purposes and is not
subject to review by the external auditor.
At a business unit level, capital is allocated based on Regulatory Capital, whereby higher risk businesses attract higher levels of capital. This method isdesigned to help drive appropriate risk management and ensure business returns align with the level of risk. Key risks covered include credit risk,
operational risk, market risk and other risks.
Economic profit is calculated via a series of adjustments to cash profit:The economic credit cost adjustment replaces the accounting credit loss charge with internal expected loss based on the average long-run loss rate
per annum on the portfolio over an economic cycle.

The benefit of imputation credits is recognised, measured at 70% of Australian tax.

The cost of capital is a major component of economic profit. At an ANZ Group level, this is calculated using average ordinary shareholders’ equity(excluding non-controlling interests), multiplied by the cost of capital rate (currently at 7.75% with comparative periods restated accordingly).

Economic profit increased by $183 million (+72%) against the March 2021 half driven by higher cash profit and favourable economic credit costadjustment, partially offset by lower imputation credits and higher cost of capital.
Economic profit decreased by $332 million (-43%) against the September 2021 half year driven by lower cash profit, unfavourable economic credit costadjustment and lower imputation credits, partially offset by lower cost of capital.

38

GROUP RESULTS
Condensed Balance Sheet - including discontinued operations
As at

Movement

AssetsCash / Settlement balances owed to ANZ / Collateral paid

Mar 22$B
186.0

Sep 21$B
168.0

Trading and investment securities

119.2

127.8

Derivative financial instruments

45.2

38.7

Net loans and advances

651.4

629.7

Mar 21$B
146.3

Mar 22
v. Sep 21
11%

Mar 22v. Mar 21
27%

138.3

-7%

-14%

104.7

17%

-57%

614.4

3%

6%

15.6

14.7

14.6

6%

7%

1,017.4

978.9

1,018.3

4%0%Settlement balances owed by ANZ / Collateral received

26.5

23.1

26.7

15%

-1%

Other
Total assets
Liabilities
Deposits and other borrowings

780.3

743.1

706.6

5%

10%

Derivative financial instruments

47.8

36.0

102.9

33%

-54%

Debt issuances

87.2

101.1

107.6

-14%

-19%

Other

13.8

11.9

11.9

16%

16%

Total liabilities

955.6

915.2

955.7

4%

0%

Total equity

61.8

63.7

62.6

-3%

-1%





March 2022 v March 2021
Cash / Settlement balances owed to ANZ / Collateral paid increased $39.7 billion (+27%) driven by increases in balances with central banks andreverse repurchase agreements, partially offset by the impact of foreign currency translation movements.

Trading and investment securities decreased $19.1 billion (-14%) primarily driven by lower liquid assets in Markets due to portfolio rebalancing
activities in the September 2021 half.

Derivative financial assets and liabilities decreased $59.5 billion (-57%) and $55.1 billion (-54%) respectively driven by a reduction following achange made in the September 2021 half in legal arrangements for the settlement of derivative transactions with a central clearing counterparty(reduction of $55.1 billion in derivative assets and $55.2 billion in derivative liabilities at the date of the change).

Net loans and advances increased $37.0 billion (+6%) driven by higher lending volumes in the Institutional division (+$27.0 billion), an increasein the New Zealand division (+$7.6 billion) reflecting home loan growth, an increase in long-dated reverse repurchase agreements (+$2.6 billion)
in Group Treasury and the impact of foreign currency translation movements. This was partially offset by a decrease in the Australia Retail andCommercial division (-$2.1 billion) driven by home loan contraction.

Deposits and other borrowings increased $73.7 billion (+10%) driven by increases in customer deposits across the Australia Retail andCommercial (+$22.1 billion), Institutional (+$19.2 billion) and New Zealand (+$5.7 billion) divisions, increases in deposits from banks andrepurchase agreements (+$11.4 billion), drawdowns of the RBA Term Funding Facility (TFF) and the RBNZ’s Funding for Lending Programme(FLP) and Term Lending Facility (TLF) (+9.8 billion) and commercial paper (+$5.7 billion), and the impact of foreign currency translation
movements. This was partially offset by decreases in certificates of deposit (-$3.1 billion).



Debt issuances decreased $20.4 billion (-19%) driven by the redemption of ANZ CN1 and ANZ CN2. This was partially offset by the issuance of
ANZ CN6 and ANZ CN7 and the drawdown of the TFF, classified in Deposits and other borrowings.

March 2022 v September 2021
Cash / Settlement balances owed to ANZ / Collateral paid increased $18.0 billion (+11%) driven by increases in balances with central banks andovernight inter-bank deposits, partially offset by the impact of foreign currency translation movements.

Trading and investment securities decreased $8.6 billion (-7%) primarily driven by lower liquid assets in Markets and the impact of foreign
currency translation movements.



Derivative financial assets and liabilities increased $6.5 billion (+17%) and $11.8 billion (+33%) driven by the impact of market rate movements.

Net loans and advances increased $21.7 billion (+3%) driven by higher lending volumes in the Institutional division (+$19.6 billion), an increasein the New Zealand division (+$4.6 billion) reflecting home loan growth, an increase in long-dated reverse repurchase agreements (+$3.0 billion)
in Group Treasury, and loan growth in the Australia Retail and Commercial division (+0.9 billion), partially offset by the impact of foreign currencytranslation movements.



Deposits and other borrowings increased $37.2 billion (+5%) driven by increases in customer deposits across the Australia Retail andCommercial (+$10.9 billion), Institutional (+$10.5 billion) and New Zealand (+$5.0 billion) divisions, increases in deposits from banks andrepurchase agreements (+$15.9 billion) and commercial paper (+$6.3 billion), partially offset by the impact of foreign currency translation
movements.

Debt issuances decreased $13.9 billion (-14%) driven by the redemption of ANZ CN2 partially replaced by the issuance of ANZ CN7 and thedrawdown of the TFF, classified in Deposits and other borrowings.

39

GROUP RESULTS
Liquidity Risk - including discontinued operations
Liquidity risk is the risk that the Group is unable to meet its payment obligations as they fall due, including repaying depositors or maturing wholesaledebt, or that the Group has insufficient capacity to fund increases in assets. The timing mismatch of cash flows and the related liquidity risk is inherent inall banking operations and is closely monitored by the Group and managed in accordance with the risk appetite set by the Board.
The Group’s approach to liquidity risk management incorporates two key components:


Scenario modelling of funding sources
ANZ’s liquidity risk appetite is defined by the ability to meet a range of regulatory requirements and internal liquidity metrics mandated by the Board.
The metrics cover a range of scenarios of varying duration and level of severity. The objective of this framework is to:Provide protection against shorter term extreme market dislocation and stress.



Maintain structural strength in the balance sheet by ensuring that an appropriate amount of longer-term assets are funded with longer-term
funding.

Ensure that no undue timing concentrations exist in the Group’s funding profile.

A key component of this framework is the Liquidity Coverage Ratio (LCR), which is a severe short term liquidity stress scenario mandated by banking
regulators globally, including APRA. As part of meeting LCR requirements, ANZ has a Committed Liquidity Facility (CLF) with the Reserve Bank ofAustralia (RBA). The CLF was established to offset the shortage of available High Quality Liquid Assets (HQLA) in Australia and provides analternative form of contingent liquidity. The CLF is collateralised by assets, including internal residential mortgage backed securities, that are eligible
to be pledged as security with the RBA. The total amount of the CLF available to a qualifying Authorised Deposit-taking Institution (ADI) is set
annually by APRA. In September 2021, APRA wrote to ADIs to advise that APRA and the RBA consider there to be sufficient HQLA for ADIs to meettheir LCR requirements, and therefore the use of the CLF should no longer be required beyond 2022.
From 1 January 2022, ANZ’s CLF is $8.0 billion (2021 calendar year end: $10.7 billion). Consistent with APRA’s requirement, ANZ’s CLF will reduceby $2.7 billion on 1 May 2022, 1 September 2022 and 1 January 2023. This reduction will be managed as part of ANZ’s funding plans over thisperiod.
Liquid assets
The Group holds a portfolio of high quality unencumbered liquid assets in order to protect the Group’s liquidity position in a severely stressed
environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions consistent with
Basel 3 LCR:Highest-quality liquid assets (HQLA1): Cash, highest credit quality government, central bank or public sector securities eligible for repurchasewith central banks to provide same-day liquidity.

High-quality liquid assets (HQLA2): High credit quality government, central bank or public sector securities, high quality corporate debt securities
and high quality covered bonds eligible for repurchase with central banks to provide same-day liquidity.



Alternative liquid assets (ALA): Assets qualifying as collateral for the CLF and other eligible securities listed by the RBNZ.

In March 2020, in response to the economic impact of COVID-19, the RBA established a Term Funding Facility (TFF). Under the TFF, the RBA has
offered three-year funding to ADIs secured by RBA eligible collateral. ADIs can include the undrawn but available TFF as a liquid asset for the LCR,
representing a committed central bank facility that can be drawn at the ADI’s discretion. As at 1 July 2021, ANZ’s available TFF has been fully drawn.
Prior to the drawdown, the undrawn but available TFF was represented below by the assets that are eligible to be pledged as security with the RBA.
In November 2020, in response to the economic impact of COVID-19, the RBNZ implemented a Funding for Lending Programme (FLP). Under the
FLP the RBNZ offered three-year funding to eligible counterparties secured by approved eligible collateral. APRA has advised that the undrawn but
available FLP can be included as a cash inflow for the LCR, which reduces net cash outflows. As the Level 2 LCR excludes liquid assets held above
the NZ dollar LCR of 100%, the impact of the undrawn but available FLP reduces net cash outflows and Level 2 liquid assets by the same amount.
The Group monitors and manages the size and composition of its liquid assets portfolio on an ongoing basis in line with regulatory requirements andthe risk appetite set by the Board.
Movement

Half Year Average
Mar 22$B

Sep 21$B

Mar 21$B

Mar 22
v. Sep 21

Mar 22v. Mar 21

HQLA1

224.1

211.5

186.2

6%

20%

HQLA2

7.6

8.5

10.4

-11%

-27%

3.2

3.3

18.5

-3%

-83%

Market Values Post Discount1

Internal Residential Mortgage Backed Securities2
2

Other ALA

Total liquid assets

6.2

5.5

7.9

13%

-22%

241.1

228.8

223.0

5%

8%

230.3

208.1

203.2

11%

13%

Cash flows modelled under stress scenario
Cash outflows
Cash inflows

47.2

39.3

41.3

20%

14%

Net cash outflows

183.1

168.8

161.9

8%

13%

Liquidity Coverage Ratio3

132%

136%

138%

-4%

-6%

1.
2.

3.

Half year average basis, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.
Comprised of assets qualifying as collateral for the CLF and TFF up to approved facility limit; and any liquid assets as defined in the RBNZ's Liquidity Policy - Annex: Liquidity Assets Prudential Supervision Department Document BS13A12.
All currency Level 2 LCR.

40

GROUP RESULTS
Funding - including discontinued operations
ANZ targets a diversified funding base, avoiding undue concentrations by investor type, maturity, market source and currency.
$6.0 billion of term wholesale funding (excluding Additional Tier 1 Capital) with a remaining term greater than one year as at 31 March 2022 was issued
during the half. In addition, the Group issued $1.3 billion of Additional Tier 1 Capital during the half year.
The following table shows the Group’s total funding composition:
As at

Movement

Mar 22$B

Sep 21$B

Mar 21$B

Mar 22
v. Sep 21

Mar 22v. Mar 21

Customer deposits and other liabilities
Australia Retail and Commercial

263.4

252.5

241.3

4%

9%

Institutional

243.8

239.6

223.6

2%

9%

New Zealand

100.1

97.7

93.2

2%

7%
12%

Pacific

3.8

3.8

3.4

0%

611.1

593.6

561.5

3%

9%

9.6

8.1

8.9

19%

8%

Total customer liabilities (funding)

620.7

601.7

570.4

3%

9%

Wholesale funding
Unsubordinated debt and central bank term funding3

86.4

97.1

96.0

-11%

-10%

Subordinated debt4,5

22.6

25.3

23.7

-11%

-5%

Certificates of deposit

36.9

37.7

40.0

-2%

-8%

Commercial paper

31.9

25.7

26.1

24%

22%

Other wholesale borrowings6,7

111.3

88.5

87.9

26%

27%

Total wholesale funding

289.1

274.3

273.7

5%

6%

Shareholders' equity

61.8

63.7

62.6

-3%

-1%

Total funding

971.6

939.7

906.7

3%

7%

Customer deposits
Other funding liabilities1,2

1.
2.
3.

4.
5.
6.
7.

Includes interest accruals, payables and other liabilities, provisions and net tax provisions.
Excludes liability for acceptances as they do not provide net funding.
Includes RBA TFF of $20.1 billion (Sep 21: $20.1 billion; Mar 21: $12.0 billion), RBNZ FLP of $1.4 billion (Sep 21: $0.9 billion; Mar 21: nil) and TLF of $0.3 billion (Sep 22: $0.3 billion;
Mar 21: nil).
Includes subordinated debt issued by ANZ New Zealand which constitutes Tier 2 capital under RBNZ requirements but does not meet the APRA Tier 2 requirements.
Includes USD 300 million perpetual subordinated notes which ceased to be treated as Basel 3 transitional Tier 2 capital under APRA’s capital framework from 1 January 2022.
Includes borrowings from banks, securities sold under repurchase agreements, net derivative balances, special purpose vehicles and other borrowings.
Includes RBA open repurchase arrangement netted down by the corresponding exchange settlement account cash balance.

Net Stable Funding Ratio
The following table shows the Level 2 Net Stable Funding Ratio (NSFR) composition:
As at

Movement

Mar 22$B

Sep 21$B

Mar 21$B

Mar 22
v. Sep 21

Mar 22v. Mar 21

Required Stable Funding1
Retail & small and medium enterprises, corporate loans <35% risk weight2

202.2

198.7

196.0

2%

3%

Retail & small and medium enterprises, corporate loans >35% risk weight2

190.7

182.0

179.0

5%

7%

Other lending3

32.6

31.9

29.7

2%

10%

Liquid assets

11.5

11.6

12.1

-1%

-5%

Other assets4

36.5

38.3

37.2

-5%

-2%

473.5

462.5

454.0

2%

4%

Retail & small and medium enterprise customer deposits

301.5

287.8

275.7

5%

9%

Corporate, public sector entities & operational deposits

118.4

115.5

105.9

3%

12%
-15%

Total Required Stable Funding
1

Available Stable Funding

Central bank & other financial institution deposits

4.0

4.5

4.7

-11%

Term funding5

69.7

74.2

70.7

-6%

-1%

Short term funding & other liabilities

5.0

2.4

5.6

large

-11%

Capital

84.2

88.3

85.0

-5%

-1%

Total Available Stable Funding

582.8

572.7

547.6

2%

6%

Net Stable Funding Ratio

123%

124%

121%

-1%

2%

1.
2.
3.
4.
5.

NSFR factored balance as per APRA Prudential Regulatory Standard APS 210 Liquidity.
Risk weighting as per APRA Prudential Regulatory Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk.
Includes financial institution, central bank and non-performing loans.
Includes off-balance sheet items, net derivatives and other assets.
Includes balances from the drawdown of the RBA TFF and RBNZ FLP and TLF funding facilities.

41

GROUP RESULTS
Capital Management - including discontinued operations
As at
Internationally Comparable Basel 31

APRA Basel 3
Mar 22

Sep 21Mar 21Mar 22

Sep 21Mar 21

Common Equity Tier 1

11.5%

12.3%

12.4%

18.0%

18.3%

18.1%

Tier 1

13.2%

14.3%

14.3%

20.3%

20.9%

20.5%

Total capital

16.6%

18.4%

18.3%

24.9%

26.3%

25.7%

Risk weighted assets ($B)

437.9

416.1

408.2

324.6

319.0

317.5

Capital Ratios (Level 2)

1.

Internationally Comparable methodology aligns with APRA’s information paper entitled ‘International Capital Comparison Study’ (13 July 2015).

APRA Basel 3 Common Equity Tier 1 (CET1) - March 2022 v September 2021

1.

Excludes large/notable items which are included in Other.

March 2022 v September 2021
ANZ’s CET1 ratio decreased -81 bps to 11.53% during the March 2022 half. Key drivers of the movement in the CET1 ratio were:

Cash profit excluding large/notable items increased the CET1 ratio by +76 bps.

Higher underlying CRWA usage (excluding foreign currency translation movements, regulatory changes and other one-offs) decreased the CET1
ratio by -33 bps primarily driven by lending growth in the Institutional division.

Higher underlying non-CRWA usage (excluding foreign currency translation movements) decreased the CET1 ratio by -42 bps primarily fromincreases in Interest Rate Risk in the Banking Book (IRRBB) RWA due to increases in embedded losses.



Capital deductions of -2 bps mainly from equity accounted increase from share in associates.

Payment of the 2021 Final Dividend (net of BOP issuance, DRP neutralised) reduced the CET1 ratio by -48 bps.

Completion of $791 million of the announced $1.5 billion share buy-back reduced the CET1 ratio by -19 bps.



Other impacts totalling -13 bps primarily reflecting movements in net deferred tax assets (-13 bps), merger and acquisition transactions (+5 bps)
and net RWA imposts (-3 bps).
As at

Total Risk Weighted Assets (RWA)
Credit RWA

Movement

Mar 22$B
348.8

Sep 21$B
342.5

Mar 21$B
341.9

Mar 22
v. Sep 21
2%

Mar 22v. Mar 21
2%

Market risk and IRRBB RWA

41.1

25.2

19.1

63%

large

Operational RWA

48.0

48.4

47.2

-1%

2%

Total RWA

437.9

416.1

408.2

5%

7%

42

GROUP RESULTS
Total Risk Weighted Assets - March 2022 v September 2021

March 2022 v September 2021
Total RWA increased $21.8 billion. Excluding the impact of foreign currency translation movements and other non-recurring CRWA changes,
underlying CRWA (divisional lending net of risk migration) increased $11.9 billion, mainly from underlying lending growth in the Institutional division.
The increase in non-CRWA of $15.5 billion was driven by the $15.4 billion increase in IRRBB RWA due to increases in embedded losses.

APRA to Internationally Comparable1 Common Equity Tier 1 (CET1) as at 31 March 2022

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

The above provides a reconciliation of the CET1 ratio under APRA’s Basel 3 prudential capital standards to Internationally Comparable Basel 3
standards. APRA views the Basel 3 reforms as a minimum requirement and hence has not incorporated some of the concessions proposed in the Basel3 rules and has also set higher requirements in other areas. As a result, Australian banks’ Basel 3 reported capital ratios will not be directly comparablewith international peers. The International Comparable Basel 3 CET1 ratio incorporates differences between APRA and both the Basel Committee Basel
3 framework (including differences identified in the March 2014 Basel Committee’s Regulatory Consistency Assessment Programme (RCAP) on Basel 3
implementation in Australia) and its application in major offshore jurisdictions.
The material differences between APRA Basel 3 and Internationally Comparable Basel 3 ratios include:
Deductions

Investments in insurance and banking associates - APRA requires a full deduction against CET1. On an Internationally Comparable basis, theseinvestments are subject to a concessional threshold before a deduction is required.



Deferred tax assets - APRA requires a full deduction from CET1 for DTA relating to temporary differences. On an Internationally Comparable basis,
this is first subject to a concessional threshold before the deduction is required.

Risk Weighted Assets (RWA)Mortgages RWA - APRA imposes a floor of 20% on the downturn Loss Given Default (LGD) used in credit RWA calculations for residential
mortgages. The Internationally Comparable Basel 3 framework requires a downturn LGD floor of 10%. Additionally, APRA requires a higher
correlation factor than the Basel framework.



IRRBB RWA - APRA requires inclusion of IRRBB within the RWA base for the CET1 ratio calculation. This is not required on an Internationally
Comparable basis.

Specialised lending - APRA requires the supervisory slotting approach to be used in determining credit RWA for specialised lending exposures. The
Internationally Comparable basis allows for the advanced internal ratings based approach to be used when calculating RWA for these exposures.



Unsecured Corporate Lending LGD - an adjustment to align ANZ’s unsecured corporate lending LGD to 45% to be consistent with banks in otherjurisdictions. The 45% LGD rate is also used in the Foundation Internal Ratings-Based approach (FIRB).



Undrawn Corporate Lending Exposure at Default (EAD) - an adjustment to ANZ’s credit conversion factors (CCF) for undrawn corporate loan
commitments to 75% (used in FIRB approach) to align with banks in other jurisdictions.

43

GROUP RESULTS
Leverage Ratio - including discontinued operations
At 31 March 2022, the Group’s APRA Leverage Ratio was 5.2% which is above the 3.5% APRA minimum for internal ratings-based approach ADIs (IRB
ADIs) which includes ANZ. The following table summarises the Group’s Leverage Ratio calculation:
As at

Movement

Mar 22$M
58,001

Sep 21$M
59,473

Mar 21$M
58,431Mar 22
v. Sep 21-2%

Mar 22v. Mar 21-1%

On-balance sheet exposures (excluding derivatives and securities financing transaction
exposures)

928,686

901,969

878,1873%

6%

Derivative exposures

36,47437,76933,933-3%

7%

Securities financing transaction exposures

34,22330,48426,947

12%

27%

Tier 1 Capital (net of capital deductions)

Other off-balance sheet exposures

117,904

117,848

114,1250%

3%

1,117,287

1,088,070

1,053,192

3%

6%

APRA Leverage Ratio

5.2%

5.5%

5.5%

Internationally Comparable Leverage Ratio

5.9%

6.1%

6.2%

Total exposure measureMarch 2022 v September 2021
APRA leverage ratio decreased -28 bps during the March 2022 half. Key drivers of the movement were:

Net organic capital generation (largely from cash profit excluding large/notable items and movements in capital deductions), less dividends paid(+12 bps).

Net decrease from CN2 and ANZ New Zealand CN redemptions partially offset by AT1 issuance of CN7 (-7 bps).

Growth in exposures (excluding the impacts of foreign exchange) predominantly from on-balance sheet exposures reduced the leverage ratio by-22 bps. The on-balance sheet exposure growth was mainly in liquid assets and lending growth within the Institutional division.



Share buy-backs reduced leverage ratio by -7 bps.

Net other impacts (including large/notable items) of -4 bps.

44

GROUP RESULTS
Capital Management - Other Developments


Capital Requirements - Unquestionably Strong
APRA’s key initiatives in relation to Unquestionably Strong capital requirements are as follows:

In July 2017, APRA released an information paper outlining its assessment on the additional capital required for the Australian banking sector tobe considered ‘unquestionably strong’ as originally outlined in the Financial System Inquiry final report in December 2014. APRA indicated that ‘inthe case of the four major Australian banks, this equated to a benchmark CET1 capital ratio, under the current capital adequacy framework, of atleast 10.5 percent from 1 January 2020’.



In November 2021, APRA released their final requirements in relation to capital adequacy and credit risk capital requirements for ADIs with an
implementation date of 1 January 2023. The key aspects of APRA’s final requirements are:
- Increased alignment with internationally agreed Basel standards for non-residential mortgages exposures;- Implementing more risk-sensitive risk weights for residential mortgage lending;- Introduction of the Basel II capital floor that limits the RWA outcome for IRB ADIs to no less than 72.5% of the RWA outcome under the
standardised approach;- Improving the flexibility of the capital framework through the introduction of a default level of the countercyclical capital buffer and increasing
the capital conservation buffer for IRB ADIs;- Improving the transparency and comparability of ADIs’ capital ratios, including by requiring IRB ADIs to also publish their capital ratios under
the standardised approach; and- Implementing a Minimum Leverage Ratio for IRB ADIs at 3.5%.

APRA has indicated in their proposals a decrease in RWA, but this would be offset by the increased capital allocation to regulatory buffers. APRA
has also indicated that since ADIs are currently meeting the ‘unquestionably strong’ benchmarks, it is not APRA’s intention to require ADIs to raise
additional capital. Accordingly, APRA is expected to calibrate the capital requirements for ADIs, measured in dollar terms, to be consistent at anindustry level with the existing ‘unquestionably strong’ capital benchmarks for ADIs under the current capital framework. The impact of these
proposed changes on individual ADIs (including ANZBGL), will vary depending on the final form of requirements implemented by APRA.
Additionally, APRA is currently still consulting on revisions to a number of prudential standards, being Interest Rate Risk in the Banking Book
(IRRBB), Market Risk and Counterparty Credit Risk. Given the number of items that are yet to be finalised by APRA, the aggregate final outcome
from all changes to APRA's prudential standards relating to their review of ADIs ‘unquestionably strong’ capital framework remains uncertain.


APRA Total Loss Absorbing Capacity Requirements
In July 2019, APRA announced its decision on loss-absorbing capacity requiring Australian domestic systematically important banks (D-SIBs),
including ANZBGL, to increase their total capital by 3% of RWA by January 2024. On 2 December 2021, APRA announced that it has finalised its
loss-absorbing capacity requirements and stated that it will require Australian D-SIBs to increase their total capital by a further 1.5% of RWA by
January 2026. Inclusive of the previously announced interim increase of 3%, this will result in a total increase to the minimum total capitalrequirement of 4.5% of RWA. APRA expects the requirement to be satisfied predominantly with additional Tier 2 capital with an equivalent decreasein other senior funding. The amount of the additional total capital requirement will be based on the Group’s actual RWA as at January 2026, including
the final impact of the revisions to APRA’s capital framework announced on 29 November 2021. APRA noted ‘Given changes to RWA from the ADI
capital reforms, the lower end of the range in dollar terms broadly equates to a requirement of 4.5 percentage points of RWA under the new capitalframework, in place from 2023’.



The Reserve Bank of New Zealand review of capital requirements
The RBNZ’s new capital adequacy requirements for New Zealand banks, which are set out in the Banking Prudential Requirements (BPR)
documents are being implemented in stages during a transition period from October 2021 to July 2028. The key requirements for ANZ Bank New
Zealand Limited (ANZ New Zealand) are as follows:

ANZ New Zealand’s Tier 1 capital requirement will increase to 16% of RWA, of which up to 2.5% could be in the form of Additional Tier 1 (AT1)
Capital. ANZ New Zealand’s Total Capital requirement will increase to 18% of RWA, of which up to 2% can be Tier 2 Capital.



AT1 capital must consist of perpetual preference shares, which may be redeemable. It is anticipated that ANZ New Zealand will be able torefinance existing internal AT1 securities to external counterparties. Tier 2 capital must consist of long-term subordinated debt.

As an IRB approach accredited bank, ANZ New Zealand’s RWA outcomes will be increased to approximately 90% of what would be calculated underthe Basel Standardised Measurement Approach (standardised approach). This will be achieved by applying an 85% output floor for CRWA andincreasing the CRWA scalar from 1.06 to 1.20. The net impact on the Group is an increase in CET1 capital of approximately $1 to $1.5 billion
between 31 March 2022 and the end of the transition period in 2028 (based on the Group’s 31 March 2022 balance sheet). This amount could varyover time subject to changes to the capital position in ANZ New Zealand (e.g. from RWA growth, management buffer requirements, and potential
dividend payments).

45

GROUP RESULTS
This page has been left blank intentionally46

DIVISIONAL RESULTSCONTENTS

Page

Divisional Performance - continuing operations

48

Australia Retail and Commercial - continuing operations

53

Institutional - continuing operations

57

New Zealand - continuing operations

64

Pacific - continuing operations

69

Group Centre - continuing operations

69

47

DIVISIONAL RESULTS
Divisional Performance - continuing operations
On 1 March 2022, the Group announced a structural change to the existing Australia Retail and Commercial division, and the digital businesses in theGroup Centre division (formerly known as the Technology, Services & Operations (TSO) and Group Centre division). This involves the integration of theAustralian retail and digital businesses, and the separation of the Australian commercial business into a new division. The new reporting segments will bereflected in the September 2022 half to align with the implementation of the changes from 1 April 2022. The segment disclosures below remainunchanged from those reported at 30 September 2021 and are consistent with internal reporting provided to the chief operating decision maker, being the
Chief Executive Officer, during the March 2022 half.
During the March 2022 half, the Group operated on a divisional structure with five continuing divisions: Australia Retail and Commercial, Institutional,
New Zealand, Pacific, and Group Centre. For further information on the composition of divisions, refer to the Definitions on page 133.
The presentation of divisional results has been impacted by the following structural changes during the period. Prior period comparatives have been
restated:Australia Retail and Commercial division - re-segmentation of customers from Business Banking to Small Business Banking within the division;Institutional division - a number of small operations were transferred from Markets to Central Functions within the division;the completion of the transfer of Banking Services operations from the Group Centre division to the Institutional division. As the associated costs
were previously recharged, there is no change to the previously reported divisional cash profits, however divisional balance sheets and full-time
equivalent employees (FTEs) have been restated to reflect this change.

The Divisional Results section is reported on a cash profit basis for continuing operations. For information on discontinued operations pleaserefer to the Guide to Half Year Results on page 8.

48

DIVISIONAL RESULTS
Divisional Performance - continuing operations
Cash profit by division - March 2022 Half Year v March 2021 Half Year

March 2022 Half YearNet interest income

Australia
Retail andCommercial
$M
3,864

Institutional
$M
1,621

New Zealand
$M
1,505

Pacific$M
46

Group Centre
$M
64

Group
$M
7,100

Other operating income

746

782

245

34

41

1,848

Operating income

4,610

2,403

1,750

80

105

8,948

Operating expenses(2,155)(1,241)

(678)

(80)

(637)

(4,791)

Profit/(Loss) before credit impairment and income tax

2,455

1,162

1,072

-

(532)

4,157

235

35

21

(3)

(4)

284

Credit impairment (charge)/release
Profit/(Loss) before income tax

2,690

1,197

1,093

(3)

(536)

4,441

Income tax expense and non-controlling interests

(704)

(467)

(306)

(3)

152

(1,328)Cash profit/(loss) from continuing operations

1,986

730

787

(6)

(384)

3,113

Australia
Retail andCommercial$M

Institutional$M

New Zealand$M

Pacific$M

Group Centre
$M

Group
$M

3,974

1,519

1,393

49

51

6,986

302

1,014

238

33

(150)

1,437

Operating income

4,276

2,533

1,631

82

(99)

8,423

Operating expenses(2,000)(1,274)

(623)

(71)

(514)

(4,482)

Profit/(Loss) before credit impairment and income tax

2,276

1,259

1,008

11

(613)

3,941

381

55

58

(3)

-

491

2,657

1,314

1,066

8

(613)

4,432

Income tax expense and non-controlling interests

(875)

(366)

(295)

(1)

95

(1,442)

Cash profit/(loss) from continuing operations

1,782

948

771

7

(518)

2,990

Australia
Retail andCommercial

Institutional

New ZealandPacific

Group CentreGroup

Net interest income

-3%

7%

8%

-6%

25%

2%

Other operating income

large

-23%

3%

3%

large

29%

March 2021 Half YearNet interest income
Other operating income

Credit impairment (charge)/release
Profit/(Loss) before income tax

March 2022 Half Year v March 2021 Half Year

Operating income

8%

-5%

7%

-2%

large

6%

Operating expenses

8%

-3%

9%

13%

24%

7%

Profit/(Loss) before credit impairment and income tax

8%

-8%

6%

-100%

-13%

5%

-38%

-36%

-64%

0%

n/a

-42%

Credit impairment charge/(release)
Profit/(Loss) before income tax

1%

-9%

3%

large

-13%

0%

Income tax expense and non-controlling interests

-20%

28%

4%

large

60%

-8%

Cash profit/(loss) from continuing operations

11%

-23%

2%

large

-26%

4%

49

DIVISIONAL RESULTS
Divisional Performance - continuing operations
Cash profit by division - March 2022 Half Year v September 2021 Half Year

March 2022 Half YearNet interest income

Australia
Retail andCommercial
$M
3,864

Institutional
$M
1,621

New Zealand
$M
1,505

Pacific$M
46

Group Centre
$M
64

Group
$M
7,100

Other operating income

746

782

245

34

41

1,848

Operating income

4,610

2,403

1,750

80

105

8,948

Operating expenses(2,155)(1,241)

(678)

(80)

(637)

(4,791)

Profit/(Loss) before credit impairment and income tax

2,455

1,162

1,072

-

(532)

4,157

235

35

21

(3)

(4)

284

Credit impairment (charge)/release
Profit/(Loss) before income tax

2,690

1,197

1,093

(3)

(536)

4,441

Income tax expense and non-controlling interests

(704)

(467)

(306)

(3)

152

(1,328)Cash profit/(loss) from continuing operations

1,986

730

787

(6)

(384)

3,113

Australia
Retail andCommercial$M

Institutional$M

New Zealand$M

Pacific$M

Group Centre
$M

Group
$M

4,015

1,586

1,477

47

50

7,175

587

864

231

32

135

1,849

Operating income

4,602

2,450

1,708

79

185

9,024

Operating expenses(2,024)(1,173)

(702)

(73)

(597)

(4,569)Profit/(Loss) before credit impairment and income tax

2,578

1,277

1,006

6

(412)

4,455

45

34

18

(18)

(3)

76

2,623

1,311

1,024

(12)

(415)

4,531

Income tax expense and non-controlling interests

(788)

(372)

(287)

2

122

(1,323)

Cash profit/(loss) from continuing operations

1,835

939

737

(10)

(293)

3,208

Australia
Retail andCommercial

Institutional

New ZealandPacific

Group CentreGroup

Net interest income

-4%

2%

2%

-2%

28%

-1%

Other operating income

27%

-9%

6%

6%

-70%

0%

Operating income

0%

-2%

2%

1%

-43%

-1%

Operating expenses

6%

6%

-3%

10%

7%

5%

Profit/(Loss) before credit impairment and income tax

-5%

-9%

7%

-100%

29%

-7%

Credit impairment (charge)/release

large

3%

17%

-83%

33%

large
-2%

September 2021 Half YearNet interest income
Other operating income

Credit impairment (charge)/release
Profit/(Loss) before income tax

March 2022 Half Year v September 2021 Half Year

Profit/(Loss) before income tax

3%

-9%

7%

-75%

29%

Income tax expense and non-controlling interests

-11%

26%

7%

large

25%

0%

Cash profit/(loss) from continuing operations

8%

-22%

7%

-40%

31%

-3%

50

DIVISIONAL RESULTS
Divisional Performance - continuing operations
Cash profit by division (excluding large/notable items) - March 2022 Half Year v March 2021 Half Year
The Group cash profit results include a number of items collectively referred to as large/notable items. While these items form part of cash profit, they
have been excluded from the tables below given their nature and significance. Refer to pages 12 to 16 for a description of large/notable items.

March 2022 Half YearNet interest income

Australia
Retail andCommercial
$M
3,867

Institutional
$M
1,621

New Zealand
$M
1,505

Pacific$M
46

Group Centre
$M
64

Group
$M
7,103
1,590

452

766

245

34

93

Operating income

4,319

2,387

1,750

80

157

8,693

Operating expenses(1,974)(1,210)

(672)

(68)

(631)

(4,555)

Profit/(Loss) before credit impairment and income tax

2,345

1,177

1,078

12

(474)

4,138

235

33

21

3

(4)

288

2,580

1,210

1,099

15

(478)

4,426

Income tax expense and non-controlling interests

(775)

(340)

(308)

(3)

156

(1,270)Cash profit/(loss) from continuing operations

1,805

870

791

12

(322)

3,156

Australia
Retail andCommercial$M

Institutional$M

New Zealand$M

Pacific$M

Group Centre
$M

Group
$M

4,031

1,518

1,393

49

51

7,042

522

960

225

33

197

1,937

Operating income

4,553

2,478

1,618

82

248

8,979

Operating expenses(1,857)(1,171)

(613)

(70)

(476)

(4,187)

Profit/(Loss) before credit impairment and income tax

2,696

1,307

1,005

12

(228)

4,792

384

49

58

(3)

-

488

3,080

1,356

1,063

9

(228)

5,280

Income tax expense and non-controlling interests

(925)

(387)

(298)

(1)

84

(1,527)

Cash profit/(loss) from continuing operations

2,155

969

765

8

(144)

3,753

Australia
Retail andCommercial

Institutional

New ZealandPacific

Group CentreGroup

Net interest income

-4%

7%

8%

-6%

25%

1%

Other operating income

-13%

-20%

9%

3%

-53%

-18%

Operating income

-5%

-4%

8%

-2%

-37%

-3%

Operating expenses

6%

3%

10%

-3%

33%

9%

Profit/(Loss) before credit impairment and income tax

-13%

-10%

7%

0%

large

-14%

Credit impairment (charge)/release

-39%

-33%

-64%

large

n/a

-41%

Profit/(Loss) before income tax

-16%

-11%

3%

67%

large

-16%

Income tax expense and non-controlling interests

-16%

-12%

3%

large

86%

-17%

Cash profit/(loss) from continuing operations

-16%

-10%

3%

50%

large

-16%

Other operating income

Credit impairment (charge)/release
Profit/(Loss) before income tax

March 2021 Half YearNet interest income
Other operating income

Credit impairment (charge)/release
Profit/(Loss) before income tax

March 2022 Half Year v March 2021 Half Year

51

DIVISIONAL RESULTS
Divisional Performance - continuing operations
Cash profit by division (excluding large/notable items) - March 2022 Half Year v September 2021 Half Year
The Group cash profit results include a number of items collectively referred to as large/notable items. While these items form part of cash profit, they
have been excluded from the tables below given their nature and significance. Refer to pages 12 to 16 for a description of large/notable items.

March 2022 Half YearNet interest income
Other operating income

Australia
Retail andCommercial
$M
3,867

Institutional
$M
1,621

New Zealand
$M
1,505

Pacific$M
46

Group Centre
$M
64

Group
$M
7,103
1,590

452

766

245

34

93

Operating income

4,319

2,387

1,750

80

157

8,693

Operating expenses(1,974)(1,210)

(672)

(68)

(631)

(4,555)

Profit/(Loss) before credit impairment and income tax

2,345

1,177

1,078

12

(474)

4,138

Credit impairment (charge)/release

235

33

21

3

(4)

288

2,580

1,210

1,099

15

(478)

4,426

Income tax expense and non-controlling interests

(775)

(340)

(308)

(3)

156

(1,270)Cash profit/(loss) from continuing operations

1,805

870

791

12

(322)

3,156

Australia
Retail andCommercial
$M
4,041

Institutional
$M
1,586

New Zealand
$M
1,481

Pacific$M
47

Group Centre
$M
50

Group
$M
7,205
1,810

Profit/(Loss) before income tax

September 2021 Half YearNet interest income
Other operating income

566

846

231

32

135

Operating income

4,607

2,432

1,712

79

185

9,015

Operating expenses(1,918)(1,149)

(691)

(71)

(594)

(4,423)

Profit/(Loss) before credit impairment and income tax

2,689

1,283

1,021

8

(409)

4,592

44

35

18

(18)

(3)

76

2,733

1,318

1,039

(10)

(412)

4,668

Income tax expense and non-controlling interests

(822)

(373)

(291)

1

122

(1,363)

Cash profit/(loss) from continuing operations

1,911

945

748

(9)

(290)

3,305

Australia
Retail andCommercial-4%

Institutional
2%

New Zealand2%

Pacific-2%Group Centre
28%

Group
-1%

Credit impairment (charge)/release
Profit/(Loss) before income tax

March 2022 Half Year v September 2021 Half YearNet interest income
Other operating income

-20%

-9%

6%

6%

-31%

-12%

Operating income

-6%

-2%

2%

1%

-15%

-4%

Operating expenses

3%

5%

-3%

-4%

6%

3%

Profit/(Loss) before credit impairment and income tax

-13%

-8%

6%

50%

16%

-10%

Credit impairment (charge)/release

large

-6%

17%

large

33%

large

Profit/(Loss) before income tax

-6%

-8%

6%

large

16%

-5%

Income tax expense and non-controlling interests

-6%

-9%

6%

large

28%

-7%

Cash profit/(loss) from continuing operations

-6%

-8%

6%

large

11%

-5%

52

DIVISIONAL RESULTS
Australia Retail and Commercial - continuing operations
Maile Carnegie and Shayne Elliott
Divisional performance was impacted by a number of large/notable items. Refer to pages 12 to 16 and pages 51 to 52 for details.
Half Year
Mar 22$M
3,864

Net interest income

Sep 21$M
4,015

Movement
Mar 21$M
3,974

Mar 22
v. Sep 21-4%

Mar 22v. Mar 21
-3%

746

587

302

27%

large

Operating income

4,610

4,602

4,276

0%

8%

Operating expenses(2,155)(2,024)(2,000)

6%

8%

Profit before credit impairment and income tax

2,455

2,578

2,276

-5%

8%
-38%

Other operating income

Credit impairment (charge)/release

235

45

381

large

Profit before income tax

2,690

2,623

2,657

3%

1%

Income tax expense and non-controlling interests

(704)

(788)

(875)

-11%

-20%

Cash profit

1,986

1,835

1,782

8%

11%

342,173

341,233

344,269

0%-1%

Balance Sheet
Net loans and advances
Other external assets

2,908

2,778

3,510

5%

-17%

External assets

345,081

344,011347,779

0%-1%

Customer deposits

263,420

252,504

241,315

4%

9%

Other external liabilities

10,173

8,978

9,328

13%

9%

External liabilities

273,593

261,482

250,643

5%

9%

Risk weighted assets

170,383

163,793

163,006

4%

5%

Average gross loans and advances

343,867

345,741

346,168-1%-1%

Average deposits and other borrowings

258,812245,089

240,094

6%

8%

RatiosReturn on average assets

1.16%

1.06%

1.03%

Net interest margin

2.55%

2.59%

2.56%

Operating expenses to operating income

46.7%

44.0%

46.8%

Operating expenses to average assets

1.26%

1.17%

1.16%
44%

-34%

large

-37%

-18%

-30%

0%

3%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA1
Gross impaired assets

88

61

134

0.05%

0.04%

0.08%

(323)

(106)

(515)

(0.19%)(0.06%)(0.30%)

857

1,041

1,228

Gross impaired assets as a % of GLA

0.25%

0.30%

0.35%

Total full time equivalent staff (FTE)

14,505

14,480

14,1181.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Performance March 2022 v March 2021

Cash Profit March 2022 v March 2021

Lending volumes decreased driven by home loan contraction and lower
unsecured lending, partially offset by an increase in commercial lending.
 Net interest margin decreased driven by unfavourable lending mix fromstronger growth in lower margin fixed rate home loans, continued
competitive pressures and deposit margin compression. This was partially
offset by further deposit repricing benefits, stronger deposit volume growthand favourable deposit mix.
 Other operating income increased driven by the gain on sale relating to the
ANZ Worldline partnership and the loss on reclassification of ANZ ShareInvesting to held for sale in the March 2021 half. This was partially offset by
Breakfree package fee changes and the loss on sale of the financial
planning and advice business.
 Operating expenses increased driven by higher investment spend andhigher customer remediation, partially offset by productivity benefits andlower restructuring expenses.
 Credit impairment release decreased driven by a lower collectively
assessed credit impairment release, partially offset by lower individuallyassessed credit impairment charge with underlying delinquency andimpairment flows remaining subdued post government and bank COVID-19
support packages.

53

DIVISIONAL RESULTS
Australia Retail and Commercial - continuing operations
Maile Carnegie and Shayne Elliott
Individually assessed credit impairment charge/(release)
Half Year
Mar 22$M
45

RetailMovement

Sep 21$M
47

Mar 21$M
75

Mar 22
v. Sep 21-4%

Mar 22v. Mar 21
-40%
-89%

Home Loans

5

(2)

46

large

Cards and Personal Loans

39

47

26

-17%

50%

Deposits and Payments1

1

2

3

-50%

-67%

Commercial and Private Bank

43

14

59

large

-27%

-

(25)

(9)

-100%

-100%

Small Business Banking

44

40

68

10%

-35%

Private Bank and Advice

(1)

(1)

-

0%

n/a

88

61

134

44%

-34%

Business Banking

Individually assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release)

Half Year
Mar 22$M(158)

RetailMovement

Sep 21$M(43)

Mar 21$M(306)

Mar 22
v. Sep 21
large

Mar 22v. Mar 21-48%

Home Loans

(122)

8

(259)

large

-53%

Cards and Personal Loans

(37)

(49)

(43)

-24%

-14%

Deposits and Payments1

1

(2)

(4)

large

large

Commercial and Private Bank

(165)

(63)

(209)

large

-21%

Business Banking

(124)

(41)

(101)

large

23%

Small Business Banking

(41)

(21)

(108)

95%

-62%

Private Bank and Advice

-

(1)

-

-100%

n/a

(323)

(106)

(515)

large

-37%

Mar 22
v. Sep 21
0%

Mar 22v. Mar 21-1%-1%

Collectively assessed credit impairment charge/(release)

Net loans and advances

As at

RetailMovement

Mar 22$M
284,548

Sep 21$M
283,988

Mar 21$M
287,475

278,443

277,959

280,747

0%

Cards and Personal Loans

6,070

5,974

6,682

2%

-9%

Deposits and Payments1

35

55

46

-36%

-24%
1%

Home Loans

Commercial and Private Bank

57,62557,24556,794

1%

Business Banking

42,23341,857

41,148

1%

3%

Small Business Banking

11,85812,027

12,389-1%-4%

Private Bank and Advice
Net loans and advances

3,534

3,361

3,257

5%

9%

342,173

341,233

344,269

0%-1%

Customer deposits

As at

RetailHome Loans2

Movement

Mar 22$M
147,000

Sep 21$M
141,404

Mar 21$M
134,655

Mar 22
v. Sep 21
4%

Mar 22v. Mar 21
9%41,34638,75335,901

7%

15%

196

198

181

-1%

8%

Deposits and Payments

105,458

102,453

98,573

3%

7%

Commercial and Private Bank

Cards and Personal Loans

116,420

111,100

106,660

5%

9%Business Banking

26,24623,981

23,461

9%

12%

Small Business Banking

60,251

58,12855,275

4%

9%

Private Bank and Advice
Customer deposits
1.
2.

Net loans and advances for the deposits and payments business represent amounts in overdraft.
Customer deposit amounts for the home loans business represent balances in offset accounts.

54

29,92328,991

27,9243%

7%263,420

252,504

241,315

4%

9%

DIVISIONAL RESULTS
Australia Retail and Commercial - continuing operations
Maile Carnegie and Shayne Elliott

Retail$M
2,706

March 2022 Half YearNet interest income
Other operating income

Commercial andPrivate Bank
$M
1,158

Total
$M
3,864

269

477

746

Operating income

2,975

1,635

4,610

Operating expenses(1,482)(673)(2,155)

Profit before credit impairment and income tax

1,493

962

2,455

113

122

235

1,606

1,084

2,690

Income tax expense and non-controlling interests

(487)

(217)

(704)

Cash profit

1,119

867

1,986

Credit impairment (charge)/release
Profit before income tax

Individually assessed credit impairment charge/(release)

45

43

88

Collectively assessed credit impairment charge/(release)

(158)

(165)

(323)

Net loans and advances

284,548

57,625342,173

Customer deposits

147,000

116,420

263,420

Risk weighted assets

118,778

51,605

170,383

March 2021 Half YearNet interest income

2,874

1,100

3,974

Other operating income

75

227

302

Operating income

2,949

1,327

4,276

Operating expenses(1,327)(673)(2,000)

Profit before credit impairment and income tax

1,622

654

2,276

231

150

381

1,853

804

2,657

Income tax expense and non-controlling interests

(633)

(242)

(875)

Cash profit

1,220

562

1,782

75

59

134

Credit impairment (charge)/release
Profit before income tax

Individually assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release)

(306)

(209)

(515)

Net loans and advances

287,475

56,794344,269

Customer deposits

134,655

106,660

241,315

Risk weighted assets

110,672

52,334

163,006

March 2022 Half Year v March 2021 Half YearNet interest income

-6%

5%

-3%

Other operating income

large

large

large

Operating income

1%

23%

8%

Operating expenses

12%

0%

8%

Profit before credit impairment and income tax

-8%

47%

8%

Credit impairment (charge)/release

-51%

-19%

-38%

Profit before income tax

-13%

35%

1%

Income tax expense and non-controlling interests

-23%

-10%

-20%

Cash profit

-8%

54%

11%

Individually assessed credit impairment charge/(release)

-40%

-27%

-34%

Collectively assessed credit impairment charge/(release)

-48%

-21%

-37%

Net loans and advances

-1%

1%

-1%

Customer deposits

9%

9%

9%

Risk weighted assets

7%

-1%

5%

55

DIVISIONAL RESULTS
Australia Retail and Commercial - continuing operations
Maile Carnegie and Shayne Elliott

Retail$M
2,706

March 2022 Half YearNet interest income

Commercial andPrivate Bank
$M
1,158

Total
$M
3,864

269

477

746

Operating income

2,975

1,635

4,610

Operating expenses(1,482)(673)(2,155)

Profit before credit impairment and income tax

1,493

962

2,455

113

122

235
2,690

Other operating income

Credit impairment (charge)/release
Profit before income tax

1,606

1,084

Income tax expense and non-controlling interests

(487)

(217)

(704)

Cash profit

1,119

867

1,986

Individually assessed credit impairment charge/(release)

45

43

88

Collectively assessed credit impairment charge/(release)

(158)

(165)

(323)

Net loans and advances

284,548

57,625342,173

Customer deposits

147,000

116,420

263,420

Risk weighted assets

118,778

51,605

170,383

2,834

1,181

4,015

358

229

587

Operating income

3,192

1,410

4,602

Operating expenses(1,344)(680)(2,024)

Profit before credit impairment and income tax

1,848

730

2,578

(4)

49

45

Profit before income tax

1,844

779

2,623

Income tax expense and non-controlling interests

(554)

(234)

(788)

Cash profit

1,290

545

1,835

September 2021 Half YearNet interest income
Other operating income

Credit impairment (charge)/release

Individually assessed credit impairment charge/(release)

47

14

61

Collectively assessed credit impairment charge/(release)

(43)

(63)

(106)
341,233

Net loans and advances

283,988

57,245

Customer deposits

141,404

111,100

252,504

Risk weighted assets

112,156

51,637

163,793

March 2022 Half Year v September 2021 Half YearNet interest income

-5%

-2%

-4%

Other operating income

-25%

large

27%

Operating income

-7%

16%

0%

Operating expenses

10%

-1%

6%

Profit before credit impairment and income tax

-19%

32%

-5%

Credit impairment (charge)/release

large

large

large

Profit before income tax

-13%

39%

3%

Income tax expense and non-controlling interests

-12%

-7%

-11%

Cash profit

-13%

59%

8%

Individually assessed credit impairment charge/(release)

-4%

large

44%

Collectively assessed credit impairment charge/(release)

large

large

large

Net loans and advances

0%

1%

0%

Customer deposits

4%

5%

4%

Risk weighted assets

6%

0%

4%

56

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan
Divisional performance was impacted by a number of large/notable items. Refer to pages 12 to 16 and pages 51 to 52 for details.
Half YearNet interest income
Other operating income

Movement

Mar 22$M
1,621

Sep 21$M
1,586

Mar 21$M
1,519

Mar 22
v. Sep 21
2%

Mar 22v. Mar 21
7%

782

864

1,014

-9%

-23%
-5%

Operating income

2,403

2,450

2,533

-2%

Operating expenses(1,241)(1,173)(1,274)

6%-3%

Profit before credit impairment and income tax

1,162

1,277

1,259

-9%

-8%
-36%

Credit impairment (charge)/release

35

34

55

3%

Profit before income tax

1,197

1,311

1,314

-9%

-9%

Income tax expense and non-controlling interests

(467)

(372)

(366)

26%

28%

Cash profit

730

939

948

-22%

-23%

Balance Sheet
Net loans and advances

174,986

158,231

147,446

11%

19%

Other external assets

281,520

271,131345,315

4%

-18%
-7%

External assets

456,506

429,362

492,761

6%

Customer deposits

243,836

239,628

223,666

2%

9%

Other deposits and borrowings

84,84570,03365,67521%

29%

Deposits and other borrowings

328,681309,661

289,341

6%

14%
-39%

Other external liabilities

88,19874,445144,045

18%

External liabilities

416,879

384,106

433,386

9%-4%

Risk weighted assets

186,619

172,065

169,984

8%

10%

Average gross loans and advances

170,891

151,298

151,897

13%

13%

Average deposits and other borrowings

323,662

302,551

292,475

7%

11%

RatiosReturn on average assets

0.32%

0.38%

0.35%

Net interest margin

0.83%

0.85%

0.77%

Net interest margin (excluding Markets)

1.77%

1.86%

1.85%

Operating expenses to operating income

51.6%

47.9%

50.3%

Operating expenses to average assets

0.55%

0.48%

0.47%

(8)

15

55

large

large

(0.01%)

0.02%

0.07%
-45%

-75%

-9%

-28%

1%

3%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA1
Gross impaired assets

(27)

(49)

(110)

(0.03%)(0.06%)(0.15%)

641

704

892

Gross impaired assets as a % of GLA

0.36%

0.44%

0.60%

Total full time equivalent staff (FTE)

6,236

6,196

6,061

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Performance March 2022 v March 2021

Cash Profit March 2022 v March 2021

Lending volumes increased across Corporate Finance, Markets andTransaction Banking following strong core lending and customer flows during
the period. Customer deposits increased predominantly in Transaction
Banking.
 Net interest margin ex-Markets decreased primarily driven by deposit margincompression.
 Other operating income decreased driven by Markets reflecting volatileinterest rate movements and valuation adjustments during the period.
 Operating expenses decreased driven by lower litigation settlements,
restructuring expenses and divested business results, partially offset byhigher investment spend.
 Credit impairment release decreased driven by a lower collectively assessed
credit impairment release, partially offset by lower individually assessed
credit impairment charges driven by higher impairments taken in the March
2021 half.
 Income tax expense increased driven by the dividend withholding tax on thedividend payment from ANZ PNG to ANZBGL.

57

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan

Institutional by Geography
Half Year
Mar 22$M
947

Australia
Net interest income

Sep 21$M
992

Movement
Mar 21$M884

Mar 22
v. Sep 21-5%

Mar 22v. Mar 21
7%

276

432

491

-36%

-44%

Operating income

1,223

1,424

1,375

-14%

-11%

Operating expenses

(601)

(586)

(654)

3%

-8%

Profit before credit impairment and income tax

622

838

721

-26%

-14%

Credit impairment (charge)/release

39

6

68

large

-43%

Other operating income

Profit before income tax

661

844

789

-22%

-16%

Income tax expense and non-controlling interests

(201)

(255)

(228)

-21%

-12%

Cash profit

460

589

561

-22%

-18%

Individually assessed credit impairment charge/(release)

(2)

16

34

large

large

Collectively assessed credit impairment charge/(release)

(37)

(22)

(102)

68%

-64%

Net loans and advances

98,552

91,08489,755

8%

10%

Customer deposits

91,791

91,352

88,8240%

3%

Risk weighted assets

101,970

91,346

93,47612%

9%

Net interest income

525

438

478

20%

10%

Other operating income

401

314

419

28%

-4%

Operating income

926

752

897

23%

3%

Operating expenses

(549)

(501)

(532)

10%

3%

Profit before credit impairment and income tax

377

251

365

50%

3%

(2)

4

(20)

large

-90%

Profit before income tax

375

255

345

47%

9%

Income tax expense and non-controlling interests

(221)

(58)

(87)

large

large

Cash profit

154

197

258

-22%

-40%

Asia, Pacific, Europe, and America

Credit impairment (charge)/release

Individually assessed credit impairment charge/(release)

(6)

-

24

n/a

large

Collectively assessed credit impairment charge/(release)

8

(4)

(4)

large

large

Net loans and advances

69,97160,907

51,694

15%

35%

Customer deposits

131,914

126,512

115,331

4%

14%

Risk weighted assets

71,296

68,29363,922

4%

12%

Net interest income

149

156

157

-4%

-5%

Other operating income

105

118

104

-11%

1%

Operating income

254

274

261

-7%

-3%

New ZealandOperating expenses

(91)

(86)

(88)

6%

3%

Profit before credit impairment and income tax

163

188

173

-13%

-6%

(2)

24

7

large

large

Profit before income tax

161

212

180

-24%

-11%

Income tax expense and non-controlling interests

(45)

(59)

(51)

-24%

-12%

Cash profit

116

153

129

-24%

-10%

-

(1)

(3)

-100%

-100%
large

Credit impairment (charge)/release

Individually assessed credit impairment charge/(release)

2

(23)

(4)

large

Net loans and advances

6,463

6,240

5,997

4%

8%

Customer deposits

20,131

21,764

19,511-8%

3%

Risk weighted assets

13,353

12,426

12,5867%

6%

Collectively assessed credit impairment charge/(release)58

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan
Half Year

Individually assessed credit impairment charge/(release)

Movement

Mar 22$M(8)

Sep 21$M(7)

Mar 21$M
5

Mar 22
v. Sep 21
14%

Corporate Finance

-

22

51

-100%

-100%

Markets

-

-

(1)

n/a

-100%

Individually assessed credit impairment charge/(release)

(8)

15

55

large

large

Transaction Banking

Half Year

Collectively assessed credit impairment charge/(release)

Mar 22v. Mar 21
large

Movement

Mar 22$M(21)

Sep 21$M
14

Mar 21$M(8)

Mar 22
v. Sep 21
large

Corporate Finance

(1)

(70)

(95)

-99%

-99%

Markets

(5)

7

(7)

large

-29%

Collectively assessed credit impairment charge/(release)

(27)

(49)

(110)

-45%

-75%

Transaction Banking

As at

Net loans and advances

Mar 22v. Mar 21
large

Movement

Transaction Banking

Mar 22$M
18,530

Sep 21$M
17,348Mar 21$M
14,295

Corporate Finance

122,787

113,720

105,026

8%

17%

Markets

33,65527,021

28,097

25%

20%

14

142

28

-90%

-50%

174,986

158,231

147,446

11%

19%

Central Functions
Net loans and advances

As at

Customer deposits
Mar 22$M
138,876

Transaction Banking
Corporate FinanceSep 21$M
133,202Mar 22
v. Sep 21
7%

Mar 22v. Mar 21
30%

Movement
Mar 21$M
120,775

Mar 22
v. Sep 21
4%

Mar 22v. Mar 21
15%
-29%

1,296

981

1,817

32%

102,006

103,470

99,272-1%

3%

Central Functions

1,658

1,975

1,802

-16%

-8%

Customer deposits

243,836

239,628

223,6662%9%Markets

59

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan

March 2022 Half YearNet interest income

Transaction
Banking$M314

Corporate
Finance$M
885

Markets$M
416

Central
Functions
$M
6

Total
$M
1,621

Other operating income

335

42

396

9

782

Operating income

649

927

812

15

2,403

Operating expenses

(342)

(302)

(569)

(28)

(1,241)

Profit/(Loss) before credit impairment and income tax

307

625

243

(13)

1,162

Credit impairment (charge)/release

29

1

5

-

35

Profit/(Loss) before income tax

336

626

248

(13)

1,197

Income tax expense and non-controlling interests

(96)

(174)

(65)

(132)

(467)

Cash profit/(loss)

240

452

183

(145)

730

Individually assessed credit impairment charge/(release)

(8)

-

-

-

(8)

Collectively assessed credit impairment charge/(release)

(21)

(1)

(5)

-

(27)

Net loans and advances

18,530122,787

33,65514

174,986

Customer deposits

138,876

1,296

102,006

1,658

243,836

Risk weighted assets

25,425

107,609

52,138

1,447

186,619

March 2021 Half YearNet interest income

326

783

402

8

1,519

Other operating income

320

45

638

11

1,014

Operating income

646

828

1,040

19

2,533

Operating expenses

(368)

(300)

(585)

(21)

(1,274)

Profit/(Loss) before credit impairment and income tax

278

528

455

(2)

1,259

3

44

8

-

55

Profit/(Loss) before income tax

281

572

463

(2)

1,314

Income tax expense and non-controlling interests

(82)

(163)

(105)

(16)

(366)

Cash profit/(loss)

199

409

358

(18)

948

Credit impairment (charge)/release

Individually assessed credit impairment charge/(release)

5

51

(1)

-

55

Collectively assessed credit impairment charge/(release)

(8)

(95)

(7)

-

(110)

Net loans and advances

14,295

105,026

28,097

28

147,446

Customer deposits

120,775

1,817

99,272

1,802

223,666

Risk weighted assets

25,64892,90550,135

1,296

169,984

March 2022 Half Year v March 2021 Half YearNet interest income

-4%

13%

3%

-25%

7%

Other operating income

5%

-7%

-38%

-18%

-23%

Operating income

0%

12%

-22%

-21%

-5%
-3%

Operating expenses

-7%

1%

-3%

33%

Profit/(Loss) before credit impairment and income tax

10%

18%

-47%

large

-8%

Credit impairment (charge)/release

large

-98%

-38%

n/a

-36%

Profit/(Loss) before income tax

20%

9%

-46%

large

-9%

Income tax expense and non-controlling interests

17%

7%

-38%

large

28%

Cash profit/(loss)

21%

11%

-49%

large

-23%

Individually assessed credit impairment charge/(release)

large

-100%

-100%

n/a

large

Collectively assessed credit impairment charge/(release)

large

-99%

-29%

n/a

-75%

Net loans and advances

30%

17%

20%

-50%

19%

Customer deposits

15%

-29%

3%

-8%

9%

Risk weighted assets

-1%

16%

4%

12%

10%

60

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan

March 2022 Half YearNet interest income

Transaction
Banking$M314

Corporate
Finance$M
885

Markets$M
416

Central
Functions
$M
6

Total
$M
1,621

Other operating income

335

42

396

9

782

Operating income

649

927

812

15

2,403

Operating expenses

(342)

(302)

(569)

(28)

(1,241)

Profit/(Loss) before credit impairment and income tax

307

625

243

(13)

1,162

Credit impairment (charge)/release

29

1

5

-

35

Profit/(Loss) before income tax

336

626

248

(13)

1,197

Income tax expense and non-controlling interests

(96)

(174)

(65)

(132)

(467)

Cash profit/(loss)

240

452

183

(145)

730

Individually assessed credit impairment charge/(release)

(8)

-

-

-

(8)

Collectively assessed credit impairment charge/(release)

(21)

(1)

(5)

-

(27)

Net loans and advances

18,530122,787

33,65514

174,986

Customer deposits

138,876

1,296

102,006

1,658

243,836

Risk weighted assets

25,425

107,609

52,138

1,447

186,619

September 2021 Half YearNet interest income

335

808

439

4

1,586

Other operating income

314

49

492

9

864

Operating income

649

857

931

13

2,450

Operating expenses

(309)

(300)

(523)

(41)

(1,173)

Profit/(Loss) before credit impairment and income tax

340

557

408

(28)

1,277

(7)

48

(7)

-

34

333

605

401

(28)

1,311

Income tax expense and non-controlling interests

(96)

(171)

(119)

14

(372)

Cash profit/(loss)

237

434

282

(14)

939

Credit impairment (charge)/release
Profit/(Loss) before income tax

Individually assessed credit impairment charge/(release)

(7)

22

-

-

15

Collectively assessed credit impairment charge/(release)

14

(70)

7

-

(49)

Net loans and advances

17,348

113,720

27,021

142

158,231

Customer deposits

133,202981

103,470

1,975

239,628

Risk weighted assets

26,061

95,994

48,642

1,368

172,065

March 2022 Half Year v September 2021 Half YearNet interest income

-6%

10%

-5%

50%

2%

Other operating income

7%

-14%

-20%

0%

-9%
-2%

Operating income

0%

8%

-13%

15%

Operating expenses

11%

1%

9%

-32%

6%

Profit/(Loss) before credit impairment and income tax

-10%

12%

-40%

-54%

-9%

Credit impairment (charge)/release

large

-98%

large

n/a

3%

Profit/(Loss) before income tax

1%

3%

-38%

-54%

-9%

Income tax expense and non-controlling interests

0%

2%

-45%

large

26%

Cash profit/(loss)

1%

4%

-35%

large

-22%

Individually assessed credit impairment charge/(release)

14%

-100%

n/a

n/a

large

Collectively assessed credit impairment charge/(release)

large

-99%

large

n/a

-45%
11%

Net loans and advances

7%

8%

25%

-90%

Customer deposits

4%

32%

-1%

-16%

2%

Risk weighted assets

-2%

12%

7%

6%

8%

61

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan
Analysis of Markets operating income1

Half Year

Movement

Mar 22$M
324

Sep 21$M
262

Mar 21
$M
307

Rates

181

124

128

46%

41%

Credit and Capital Markets

32

61

139

-48%

-77%

Composition of Markets operating income by productForeign Exchange

Mar 22
v. Sep 21
24%

Mar 22v. Mar 21
6%

Commodities

53

32

43

66%

23%

Franchise Revenue

590

479

617

23%

-4%

223

445

402

-50%

-45%

(1)

7

21

large

large

812

931

1,040

-13%

-22%

Balance Sheet2

Derivative valuation adjustments3
Markets operating income
1.
2.
3.

Markets operating income includes Net interest income and Other operating income.
Balance Sheet represents hedging of interest rate risk on the Group’s loan and deposit books and the management of the Group’s liquidity portfolio.
Includes funding and credit valuation adjustments.

Half Year
Composition of Markets operating income by geography
Australia
Asia, Pacific, Europe & America

Movement

Mar 22$M
237

Sep 21$M
438

Mar 21$M
402

Mar 22
v. Sep 21-46%

Mar 22v. Mar 21
-41%

479

370

517

29%

-7%

New Zealand

96

123

121

-22%

-21%

Markets operating income

812

931

1,040

-13%

-22%

62

DIVISIONAL RESULTS
Institutional - continuing operations
Mark Whelan
Market risk
Traded market risk
Below are aggregate Value at Risk (VaR) exposures at a 99% confidence level covering both physical and derivative trading positions for the Bank’s
principal trading centres.
99% confidence level (1 day holding period)
As atHigh for
periodLow forperiodAvg forperiodAs at

High foryear

Low foryear

Avg foryear

Mar 22$M

Mar 22$M

Mar 22$M

Mar 22$M

Sep 21$M

Sep 21$M

Sep 21$M

Sep 21$M
3.9

Value at Risk at 99% confidence
Foreign exchange

2.5

4.8

1.7

2.9

3.8

10.0

1.3

Interest rate

6.1

22.7

5.7

11.7

9.6

19.6

4.3

8.8

Credit

2.3

11.8

2.3

7.5

6.3

22.2

5.3

13.7

Commodities

3.0

7.0

2.3

3.5

3.1

5.0

1.3

2.8

-

-

-

-

-

-

-

-

(4.4)

n/a

n/a

(8.7)

(9.4)

n/a

n/a

(9.7)

9.5

26.9

8.3

16.9

13.4

30.0

8.7

19.5

EquityDiversification benefit
Total VaR

Non-traded interest rate risk
Non-traded interest rate risk is managed by Markets and relates to the potential adverse impact of changes in market interest rates on future net interest
income for the Group. Interest rate risk is reported using various techniques including VaR and scenario analysis based on a 1% rate shock.
99% confidence level (1 day holding period)
As atHigh for
periodLow forperiodAvg forperiodAs at

High foryear

Low foryear

Avg foryear

Mar 22$M

Mar 22$M

Mar 22$M

Mar 22$M

Sep 21$M

Sep 21$M

Sep 21$M

Sep 21$M

Value at Risk at 99% confidence
Australia

63.2

75.1

63.0

69.7

67.0

81.8

61.9

69.8

New Zealand

23.8

24.3

20.2

22.7

21.6

32.8

21.6

26.7

Asia, Pacific, Europe & America

16.8

38.0

16.8

32.0

31.5

34.9

29.0

32.0

Diversification benefit(37.0)

n/a

n/a(33.5)(32.9)

n/a

n/a(53.7)

66.8

102.8

66.8

90.9

87.2

87.2

59.3

74.8

Total VaR

Impact of 1% rate shock on the next 12 months’ net interest income
As at
As at period end

Mar 22
1.47%

Sep 21
2.43%

Maximum exposure

2.18%

2.43%

Minimum exposure

1.47%

0.98%

Average exposure (in absolute terms)

1.87%

1.55%

63

DIVISIONAL RESULTS
New Zealand - continuing operations
Antonia Watson
Divisional performance was impacted by a number of large/notable items. Refer to pages 12 to 16 and pages 51 to 52 for details (in AUD).
Table reflects NZD for New Zealand (AUD results shown on page 68)
Half Year

Movement

Mar 22
NZD M
1,594

Sep 21
NZD M
1,570

Mar 21
NZD M
1,490

Mar 22
v. Sep 21
2%

Mar 22v. Mar 21
7%

260

244

255

7%

2%

Operating income

1,854

1,814

1,745

2%

6%

Operating expenses

(718)

(745)

(668)

-4%

7%

Profit before credit impairment and income tax

1,136

1,069

1,077

6%

5%

22

18

63

22%

-65%

Profit before income tax

1,158

1,087

1,140

7%

2%

Income tax expense and non-controlling interests

(324)

(305)

(315)

6%

3%

Cash profit

834

782

825

7%

1%

Balance Sheet
Net loans and advances

139,443

134,537

131,250

4%

6%

Other external assets

3,582

3,944

4,153

-9%

-14%

External assets

143,025

138,481

135,403

3%

6%

Customer deposits

107,710

102,336

101,530

5%

6%

Other deposits and borrowings

6,692

5,734

3,543

17%

89%

Deposits and other borrowings

114,402108,070

105,073

6%

9%

Other external liabilities

17,978

19,694

19,526-9%-8%

External liabilities

132,380

127,764

124,599

4%

6%

Risk weighted assets

77,32274,524

71,220

4%

9%

Average gross loans and advances

137,455

133,666

129,047

3%

7%

Average deposits and other borrowings

111,389

106,744

102,546

4%

9%

101

116

109

-13%

-7%

Net interest income
Other operating income

Credit impairment (charge)/releaseNet funds management income
Funds under management

37,35839,04336,489-4%

2%

Average funds under management

38,41537,87835,4681%

8%

RatiosReturn on average assets

1.19%

1.14%

1.25%

Net interest margin

2.33%

2.34%

2.32%

Operating expenses to operating income

38.7%

41.1%

38.3%

Operating expenses to average assets

1.02%

1.08%

1.01%

(4)

(11)

(6)

-64%

-33%

(0.01%)(0.02%)(0.01%)
large

-68%

-3%

-51%

0%

5%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA1
Gross impaired assets

(18)

(7)

(57)

(0.03%)(0.01%)(0.09%)

167

173

338

Gross impaired assets as a % of GLA

0.12%

0.13%

0.26%

Total full time equivalent staff (FTE)

7,026

7,060

6,691

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Performance March 2022 v March 2021

Cash Profit March 2022 v March 2021

Lending volumes increased driven by home loan growth.
 Net interest margin increased driven by favourable deposit mix, lower
funding costs and deposit repricing, partially offset by lower home loan
margins due to competition, and a higher mix of fixed rate home loans.
 Other operating income increased driven by gains on sale of government
securities, partially offset by lower fees from the removal or reduction offunds under management fees, and a gain on sale of New Zealand legacy
insurance portfolio in the March 2021 half.
 Operating expenses increased driven by higher investment spend, and
FTE increases, partially offset by lower discretionary spend and productivity
gains.
 Credit impairment releases decreased driven by a lower collectively
assessed credit impairment release.

64

DIVISIONAL RESULTS
New Zealand - continuing operations
Antonia Watson

Individually assessed credit impairment charge/(release)

Half Year

Personal1

Movement

Mar 22
NZD M

Sep 21
NZD M

Mar 21
NZD M

Mar 22
v. Sep 21

Mar 22v. Mar 21
-22%

7

4

9

75%

Home Loans

1

1

-

0%

n/a

Other

6

3

9

100%

-33%

Business1

(11)

(15)

(15)

-27%

-27%

Individually assessed credit impairment charge/(release)

(4)

(11)

(6)

-64%

-33%

Collectively assessed credit impairment charge/(release)

Movement

Half Year

Personal1

Mar 22
NZD M

Sep 21
NZD M

Mar 21
NZD M

Mar 22
v. Sep 21

Mar 22v. Mar 21

19

9

(41)

large

large

Home Loans

21

20

(36)

5%

large

Other

(2)

(11)

(5)

-82%

-60%

Business1

(37)

(16)

(16)

large

large

Collectively assessed credit impairment charge/(release)

(18)

(7)

(57)

large

-68%

As at

Net loans and advances

Personal1
Home Loans
Other

Movement

Mar 22
NZD M
101,646

Sep 21
NZD M
95,379Mar 21
NZD M
92,418Mar 22
v. Sep 21
7%

Mar 22v. Mar 21
10%100,159

93,78590,060

7%

11%

1,487

1,594

2,358

-7%

-37%

Business1

37,79739,15838,832-3%-3%

Net loans and advances

139,443

134,537

131,250

4%

6%

As at

Customer deposits

Movement

Personal1

Mar 22
NZD M
84,039Sep 21
NZD M
78,592

Mar 21
NZD M
81,358Mar 22
v. Sep 21
7%

Mar 22v. Mar 21
3%

Business1

23,671

23,744

20,1720%

17%

Customer deposits

107,710

102,336

101,530

5%

6%

1.

During the September 2021 half and continued into the March 2022 half, the New Zealand division reorganised its business units from Retail and Commercial to Personal and Business
which resulted in some customer re-segmentation to better meet the needs of our customers. These changes were applied on a prospective basis as implemented.

65

DIVISIONAL RESULTS
New Zealand - continuing operations
Antonia Watson

Personal1
NZD M
1,024

March 2022 Half YearNet interest income

Business1
NZD M
575

Central
Functions
NZD M
(5)

Total
NZD M
1,594

202

25

33

260

Operating income

1,226

600

28

1,854

Operating expenses

(585)

(131)

(2)

(718)
1,136

Other operating income

Profit before credit impairment and income tax

641

469

26

Credit impairment (charge)/release

(26)

48

-

22

Profit before income tax

615

517

26

1,158

Income tax expense and non-controlling interests

(173)

(145)

(6)

(324)

Cash profit

442

372

20

834

Individually assessed credit impairment charge/(release)

7

(11)

-

(4)

Collectively assessed credit impairment charge/(release)

19

(37)

-

(18)

Net loans and advances

101,646

37,797-

139,443

Customer deposits

84,03923,671-

107,710

Risk weighted assets

41,57133,9301,821

77,322

March 2021 Half YearNet interest income

986

503

1

1,490

Other operating income

248

5

2

255

Operating income

1,234

508

3

1,745

Operating expenses

(547)

(118)

(3)

(668)

Profit before credit impairment and income tax

687

390

-

1,077

Credit impairment (charge)/release

32

31

-

63

Profit before income tax

719

421

-

1,140

Income tax expense and non-controlling interests

(198)

(118)

1

(315)

Cash profit

521

303

1

825

Individually assessed credit impairment charge/(release)

9

(15)

-

(6)

Collectively assessed credit impairment charge/(release)

(41)

(16)

-

(57)

Net loans and advances

92,41838,832-

131,250

Customer deposits

81,35820,172-

101,530

Risk weighted assets

39,19029,9242,106

71,220March 2022 Half Year v March 2021 Half YearNet interest income

4%

14%

large

7%

Other operating income

-19%

large

large

2%

Operating income

-1%

18%

large

6%

Operating expenses

7%

11%

-33%

7%

Profit before credit impairment and income tax

-7%

20%

n/a

5%

Credit impairment (charge)/release

large

55%

n/a

-65%

Profit before income tax

-14%

23%

n/a

2%

Income tax expense and non-controlling interests

-13%

23%

large

3%

Cash profit

-15%

23%

large

1%

Individually assessed credit impairment charge/(release)

-22%

-27%

n/a

-33%

Collectively assessed credit impairment charge/(release)

large

large

n/a

-68%

Net loans and advances

10%

-3%

n/a

6%

Customer deposits

3%

17%

n/a

6%

Risk weighted assets

6%

13%

-14%

9%

1.

During the September 2021 half and continued into the March 2022 half, the New Zealand division reorganised its business units from Retail and Commercial to Personal and Business
which resulted in some customer re-segmentation to better meet the needs of our customers. These changes were applied on a prospective basis as implemented.

66

DIVISIONAL RESULTS
New Zealand - continuing operations
Antonia Watson

Personal1
NZD M
1,024

March 2022 Half YearNet interest income

Business1
NZD M
575

Central
Functions
NZD M
(5)

Total
NZD M
1,594

202

25

33

260

Operating income

1,226

600

28

1,854

Operating expenses

(585)

(131)

(2)

(718)

Profit before credit impairment and income tax

641

469

26

1,136

Credit impairment (charge)/release

(26)

48

-

22

Other operating income

Profit before income tax

615

517

26

1,158

Income tax expense and non-controlling interests

(173)

(145)

(6)

(324)

Cash profit

442

372

20

834

Individually assessed credit impairment charge/(release)

7

(11)

-

(4)

Collectively assessed credit impairment charge/(release)

19

(37)

-

(18)

Net loans and advances

101,646

37,797-

139,443

Customer deposits

84,03923,671-

107,710

Risk weighted assets

41,57133,9301,821

77,322September 2021 Half YearNet interest income

1,009

561

-

1,570

238

8

(2)

244

Operating income

1,247

569

(2)

1,814

Operating expenses

(600)

(144)

(1)

(745)

Profit before credit impairment and income tax

647

425

(3)

1,069

Other operating income

Credit impairment (charge)/release

(13)

31

-

18

Profit before income tax

634

456

(3)

1,087

Income tax expense and non-controlling interests

(177)

(128)

-

(305)

Cash profit

457

328

(3)

782

Individually assessed credit impairment charge/(release)

4

(15)

-

(11)

Collectively assessed credit impairment charge/(release)

9

(16)

-

(7)

Net loans and advances

95,37939,158-

134,537

Customer deposits

78,592

23,744-102,336

Risk weighted assets

39,78732,5962,141

74,524

March 2022 Half Year v September 2021 Half YearNet interest income

1%

2%

n/a

2%

Other operating income

-15%

large

large

7%

Operating income

-2%

5%

large

2%

Operating expenses

-3%

-9%

100%

-4%

-1%

10%

large

6%

100%

55%

n/a

22%

Profit before credit impairment and income tax
Credit impairment (charge)/release
Profit before income tax

-3%

13%

large

7%

Income tax expense and non-controlling interests

-2%

13%

n/a

6%

Cash profit

-3%

13%

large

7%

Individually assessed credit impairment charge/(release)

75%

-27%

n/a

-64%

Collectively assessed credit impairment charge/(release)

large

large

n/a

large

Net loans and advances

7%

-3%

n/a

4%

Customer deposits

7%

0%

n/a

5%

Risk weighted assets

4%

4%

-15%

4%

1.

During the September 2021 half and continued into the March 2022 half, the New Zealand division reorganised its business units from Retail and Commercial to Personal and Business
which resulted in some customer re-segmentation to better meet the needs of our customers. These changes were applied on a prospective basis as implemented.

67

DIVISIONAL RESULTS
New Zealand - continuing operations
Antonia Watson
Table reflects AUD for New Zealand
NZD results shown on page 64
Half Year

Movement

Mar 22$M
1,505

Sep 21$M
1,477

Mar 21$M
1,393

Mar 22
v. Sep 21
2%

Mar 22v. Mar 21
8%

245

231

238

6%

3%

Operating income

1,750

1,708

1,631

2%

7%

Operating expenses

(678)

(702)

(623)

-3%

9%

Profit before credit impairment and income tax

1,072

1,006

1,008

7%

6%

21

18

58

17%

-64%

Profit before income tax

1,093

1,024

1,066

7%

3%

Net interest income
Other operating income

Credit impairment (charge)/release

Income tax expense and non-controlling interests

(306)

(287)

(295)

7%

4%

Cash profit

787

737

771

7%

2%

Consisting of:
Personal1

418

431

486

-3%

-14%

Business1

352

307

284

15%

24%

Central Functions

17

(1)

1

large

large

787

737

771

7%

2%

129,594

128,466

120,482

1%8%

Cash profit
Balance Sheet
Net loans and advances

3,329

3,766

3,812

-12%

-13%

External assets

132,923

132,232

124,294

1%

7%

Customer deposits

100,10297,71993,201

2%

7%

Other deposits and borrowings

6,219

5,474

3,252

14%

91%

Deposits and other borrowings

106,321103,193

96,453

3%

10%

Other external liabilities

16,70918,806

17,923-11%-7%

Other external assets

External liabilities

123,030

121,999

114,376

1%

8%

Risk weighted assets

71,861

71,161

65,376

1%

10%

Average gross loans and advances

129,793

125,780

120,639

3%

8%

Average deposits and other borrowings

105,179

100,444

95,864

5%

10%

96

109

102

-12%

-6%

Net funds management income
Funds under management

34,71937,28033,495-7%

4%

Average funds under management

36,27535,64333,1572%

9%

RatiosReturn on average assets

1.19%

1.14%

1.25%

Net interest margin

2.33%

2.34%

2.32%

Operating expenses to operating income

38.7%

41.1%

38.3%

Operating expenses to average assets

1.02%

1.08%

1.01%
-60%

-20%

large

-68%

-5%

-50%

0%

5%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA2
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA2
Gross impaired assets

(4)

(10)

(5)

(0.01%)(0.02%)(0.01%)

(17)

(8)

(53)

(0.03%)(0.01%)(0.09%)

155

164

310

Gross impaired assets as a % of GLA

0.12%

0.13%

0.26%

Total full time equivalent staff (FTE)

7,026

7,060

6,691

1.

During the September 2021 half and continued into the March 2022 half, the New Zealand division reorganised its business units from Retail and Commercial to Personal and Business
which resulted in some customer re-segmentation to better meet the needs of our customers. These changes were applied on a prospective basis as implemented.
2. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

68

DIVISIONAL RESULTS
Pacific - continuing operations
Antonia Watson
Divisional performance was impacted by a number of large/notable items. Refer to pages 12 to 16 and pages 51 to 52 for details of these items.

Half YearNet interest income

Movement

Mar 22$M
46

Sep 21$M
47

Mar 21$M
49

Mar 22
v. Sep 21-2%

Mar 22v. Mar 21-6%

Other operating income

34

32

33

6%

3%

Operating income

80

79

82

1%

-2%

Operating expenses

(80)

(73)

(71)

10%

13%

Profit/(Loss) before credit impairment and income tax

-

6

11

-100%

-100%

Credit impairment (charge)/release

(3)

(18)

(3)

-83%

0%

Profit/(Loss) before income tax

(3)

(12)

8

-75%

large

Income tax (expense)/benefit and non-controlling interests

(3)

2

(1)

large

large

Cash profit/(loss)

7

-40%

large

(6)

(10)

Balance Sheet
Net loans and advances

1,664

1,771

1,713

-6%

-3%

Customer deposits

3,763

3,767

3,394

0%

11%

Risk weighted assets

3,604

3,682

3,176

-2%

13%

Total full time equivalent staff (FTE)

1,092

1,089

1,101

0%

-1%

Group Centre - continuing operations
Divisional performance was impacted by a number of large/notable items. Refer to pages 12 to 16 and pages 51 to 52 for details of these items.
Movement

Half Year
Mar 22$M
74

Share of associates' profit/(loss)

Sep 21$M
66

Mar 21$M(242)

Mar 22
v. Sep 21
12%

Mar 22v. Mar 21
large

Operating income (other)

31

119

143

-74%

-78%

Operating income1

105

185

(99)

-43%

large

Operating expenses2

(637)

(597)

(514)

7%

24%

Profit/(Loss) before credit impairment and income tax

(532)

(412)

(613)

29%

-13%

(4)

(3)

-

33%

n/a

Profit/(Loss) before income tax

(536)

(415)

(613)

29%

-13%

Income tax benefit and non-controlling interests

152

122

95

25%

60%

Cash profit/(loss)

(384)

(293)

(518)

31%

-26%

Credit impairment (charge)/release

Risk weighted assets

5,443

5,222

6,295

4%

-14%

Total full time equivalent staff (FTE)3

10,67010,859

9,873

-2%

8%

1.

The March 2022 half Includes -$52 million comprising loss from recycling of foreign currency translation reserves from Other comprehensive income to profit or loss on dissolution of Minerva
and ANZ Asia (-$65 million), and release of excess provision originally raised as part of the gain on sale estimate for the UDC Finance and Paymark Limited divestments completed in prioryears ($13 million). The March 2021 half includes the Group’s share of the AmBank 1MDB settlement and goodwill write-off (-$347 million). Refer to pages 12 to 16 for further details onlarge/notable items.
2. Includes restructuring expense of $6 million in the March 2022 half (Sep 21 half: $3 million; Mar 21 half: $38 million). Refer to pages 12 to 16 for further details on large/notable items.
3. Excludes FTE of the consolidated investments managed by 1835i.

69

DIVISIONAL RESULTS
This page has been left blank intentionally70

PROFIT RECONCILIATIONCONTENTS

Page

Adjustments between statutory profit and cash profit

72

Explanation of adjustments between statutory profit and cash profit - continuing operations

72

Reconciliation of statutory profit to cash profit

73

71

PROFIT RECONCILIATION
Non-IFRS information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report &Dividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in ASIC Regulatory
Guide 230 has been followed when presenting this information.

Adjustments between statutory profit and cash profit
Cash profit represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group andDivisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory
profit (refer to Definitions on pages 131 to 132 for further details). The adjustments made in arriving at cash profit are included in statutory profit which is
subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash profit is not subject toreview by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on a consistentbasis across each period presented.
Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

3,535

3,228

2,951

10%

20%

Economic hedges

(373)

(128)

51

large

large

Revenue and expense hedges

(49)

108

(12)

large

large

Total adjustments between statutory profit and cash profit from continuing
operations

(422)

(20)

39

large

large

Cash profit from continuing operations

3,113

3,208

2,990

-3%

4%

(5)

(9)

(8)

-44%

-38%

3,108

3,199

2,982

-3%

4%

Statutory profit attributable to shareholders of the Company fromcontinuing operations
Adjustments between statutory profit and cash profit from continuing
operations

Statutory profit/(loss) attributable to shareholders of the Company fromdiscontinued operations
Cash profit

Explanation of adjustments between statutory profit and cash profit - continuing operations


Economic hedges
The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in accordance with accounting standards, resultin fair value gains and losses being recognised in the Income Statement. This includes gains and losses arising from approved classes of derivatives
not designated in accounting hedge relationships but which are considered to be economic hedges, as well as ineffectiveness from designatedaccounting hedges.
Economic hedges comprise:

Derivatives (primarily cross currency interest rate swaps) used to convert the proceeds of foreign currency debt issuances into floating rate
Australian dollar and New Zealand dollar debt that do not qualify for hedge accounting. The main drivers of these fair value movements are
currency basis spreads and Australian dollar and New Zealand dollar fluctuations against other major funding currencies.



Economic hedges of select structured finance and specialised leasing transactions that do not qualify for hedge accounting. The main drivers ofthese fair value adjustments are movements in the Australian and New Zealand term structure of interest rates.



Ineffectiveness arising from differences in certain factors between the hedged items and the hedging instruments.

The Group removes the fair value adjustments from cash profit since the profit or loss will reverse over time to match with the profit or loss from theunderlying hedged item.
In the March 2022 half, the majority of the gain on economic hedges relates to funding related swaps, principally from widening AUD/USD and
NZD/USD currency basis spreads and interest rate movements, and the impact of rising yield curves on the economic hedges of select structured
finance and specialised leasing transactions.


Revenue and expense hedges
The Group enters into economic hedges to manage hedges of larger foreign exchange denominated revenue and expense streams, primarily NZD
and USD (and USD correlated). The gain on revenue and expense hedges in the March 2022 half was mainly due to the appreciation of AUD against
the NZD.

72

PROFIT RECONCILIATION
Reconciliation of statutory profit to cash profit
Adjustments to statutory profit

Statutory profit

Economic
hedges

Revenue andexpensehedgesTotal
adjustments tostatutory profit

Cash profit

$M

$M

$M

$M

$M

March 2022 Half YearNet interest income

7,100

-

-

-

7,100

Other operating income

2,442

(524)

(70)

(594)

1,848

Operating income

9,542

(524)

(70)

(594)

8,948

Operating expenses(4,791)---(4,791)

Profit before credit impairment and tax

4,751

(524)

(70)

(594)

4,157

284

-

-

-

284

Profit before income tax

5,035

(524)

(70)

(594)

4,441

Income tax expense and non-controlling interests(1,500)

151

21

172

(1,328)

Profit after tax from continuing operations

3,535

(373)

(49)

(422)

3,113

Credit impairment (charge)/release

(5)

-

-

-

(5)

Profit after tax

Profit/(Loss) after tax from discontinued operations

3,530

(373)

(49)

(422)

3,108

September 2021 Half YearNet interest income

7,175

-

-

-

7,175

Other operating income

1,878

(183)

154

(29)

1,849

Operating income

9,053

(183)

154

(29)

9,024

Operating expenses(4,569)---(4,569)Profit before credit impairment and tax

4,484

(183)

154

(29)

4,455

76

-

-

-

76

Profit before income tax

4,560

(183)

154

(29)

4,531

Income tax expense and non-controlling interests(1,332)

55

(46)

9

(1,323)

Profit after tax from continuing operations

3,228

(128)

108

(20)

3,208

(9)

-

-

-

(9)

Profit after tax

3,219

(128)

108

(20)

3,199

March 2021 Half YearNet interest income

6,986

-

-

-

6,986

Other operating income

1,381

73

(17)

56

1,437

Operating income

8,367

73

(17)

56

8,423

Operating expenses(4,482)---(4,482)

Profit before credit impairment and tax

3,885

73

(17)

56

3,941

491

-

-

-

491

Profit before income tax

4,376

73

(17)

56

4,432

Income tax expense and non-controlling interests(1,425)

(22)

5

(17)

(1,442)

Profit after tax from continuing operations

2,951

51

(12)

39

2,990

(8)

-

-

-

(8)

2,943

51

(12)

39

2,982

Credit impairment (charge)/release

Profit/(Loss) after tax from discontinued operations

Credit impairment (charge)/release

Profit/(Loss) after tax from discontinued operations
Profit after tax

73

PROFIT RECONCILIATIONThis page has been left blank intentionally74

CONDENSED CONSOLIDATED FINANCIAL STATEMENTSCONTENTS

Page

Directors’ Report76

Condensed Consolidated Income Statement

77

Condensed Consolidated Statement of Comprehensive Income

78

Condensed Consolidated Balance Sheet79

Condensed Consolidated Cash Flow Statement80

Condensed Consolidated Statement of Changes in Equity

81

Notes to Condensed Consolidated Financial Statements

82

Directors’ Declaration

117

Auditor’s Review Report and Independence Declaration

118

75

DIRECTORS’ REPORTThe Directors present their report on the Condensed Consolidated Financial Statements for the half year ended 31 March 2022.
Directors
The names of the Directors of the Company who held office during and since the end of the half year are:
Mr PD O’Sullivan

Chairman

Mr SC Elliott

Director and Chief Executive Officer

Ms IR Atlas, AO

Director

Ms PJ Dwyer

Director, retired on 16 December 2021

Ms SJ Halton, AO PSM

Director

Mr GR Liebelt

Director

Rt Hon Sir JP Key, GNZM AC

Director

Mr JT Macfarlane

Director

Ms CE O’Reilly

Director, appointed 1 November 2021

Result
The consolidated profit attributable to shareholders of the Company was $3,530 million, and consolidated profit attributable to shareholders of theCompany from continuing operations was $3,535 million. Further details are contained in Group Results on pages 19 to 45 which forms part of this report,
and in the Condensed Consolidated Financial Statements.
Review of operations
A review of the operations of the Group during the half year and the results of those operations are contained in the Group Results on pages 19 to 45
which forms part of this report.
Lead auditor’s independence declaration
The lead auditor’s independence declaration given under section 307C of the Corporations Act 2001 (as amended) is set out on page 119 which forms
part of this report.
Rounding of amounts
The amounts contained in these Condensed Consolidated Financial Statements have been rounded to the nearest million dollars, except whereotherwise indicated, as permitted by ASIC Corporations Instrument 2016/191.
Significant events since balance date
The Group intends to lodge a formal application with APRA, the Federal Treasurer and other applicable regulators to establish a non-operating holding
company and create distinct banking and non-banking groups within the organisation. Following preliminary discussions, APRA has advised they have no
in-principle objection to the proposed restructure. The Group has also consulted other key Australian and New Zealand regulators and to date has notreceived any objections. Consultation and engagement remains ongoing. Further information about the proposal can be found at
http://shareholder.anz.com.
There have been no other significant events from 31 March 2022 to the date of signing this report that have not been adjusted or disclosed.
Signed in accordance with a resolution of the Directors.

Paul D O’Sullivan
ChairmanShayne C ElliottManaging Director

3 May 2022

76

CONDENSED CONSOLIDATED INCOME STATEMENT

Australia and New Zealand Banking Group Limited
Half Year
Note
Interest income
Interest expense

Movement

Mar 22$M
9,707

Sep 21$M
9,650

Mar 21$M
9,879

Mar 22
v. Sep 21
1%

Mar 22v. Mar 21-2%-10%(2,607)(2,475)(2,893)

5%

Net interest income

2

7,100

7,175

6,986

-1%

2%

Other operating income

2

2,313

1,754

1,571

32%

47%

2

55

58

52

-5%

6%

2, 18

74

66

(242)

12%

large
14%

Net income from insurance business
Share of associates' profit/(loss)
Operating income
Operating expenses

3

Profit before credit impairment and income tax
Credit impairment (charge)/release

10

Profit before income tax
Income tax expense

4

Profit after tax from continuing operations
Profit/(Loss) after tax from discontinued operations
Profit for the period

9,542

9,053

8,367

5%

(4,791)(4,569)(4,482)

5%

7%

4,751

4,484

3,885

6%

22%

284

76

491

large

-42%

5,035

4,560

4,376

10%

15%

(1,500)(1,331)(1,425)

13%

5%

3,535

3,229

2,951

9%

20%

(5)

(9)

(8)

-44%

-38%

3,530

3,220

2,943

10%

20%

3,530

3,219

2,943

10%

20%

-

1

-

-100%

n/a

Comprising:
Profit attributable to shareholders of the Company
Profit attributable to non-controlling interests
Earnings per ordinary share (cents) including discontinued
operations
Basic

6

125.7

113.4

103.7

11%

21%

Diluted

6

117.7

106.7

98.4

10%

20%

Basic

6

125.9

113.7

104.0

11%

21%

Diluted

6

117.9

107.0

98.7

10%

19%

5

72

72

70

n/a

n/a

Earnings per ordinary share (cents) from continuing operations

Dividend per ordinary share (cents)

The notes appearing on pages 82 to 116 form an integral part of the Condensed Consolidated Financial Statements.

77

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Australia and New Zealand Banking Group Limited
Half Year

Movement

Mar 22$M
3,535

Sep 21$M
3,229

Mar 21$M
2,951

Investment securities - equity securities at FVOCI

11

(44)

Other reserve movements

99

(21)

Profit for the period from continuing operations

Mar 22
v. Sep 21
9%

Mar 22v. Mar 21
20%

124

large

-91%

(20)

large

large

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss
Foreign currency translation reserve

(775)

1,114

(658)

large

18%

(2,631)

(733)

(319)

large

large

Income tax attributable to the above items

743

219

82

large

large

Share of associates' other comprehensive income1

10

(89)

41

large

-76%

(2,543)

446

(750)

large

large

(5)

(9)

(8)

-44%

-38%

Other reserve movements

Other comprehensive income after tax from continuing operations
Profit/(Loss) after tax from discontinued operations
Other comprehensive income after tax from discontinued operations
Total comprehensive income for the period

-

-

-

n/a

n/a

987

3,666

2,193

-73%

-55%

987

3,665

2,193

-73%

-55%

-

1

-

-100%

n/a

Comprising total comprehensive income attributable to:Shareholders of the Company
Non-controlling interests
1.

Share of associates’ other comprehensive income includes:
Mar 22 half$M

Sep 21 half$M

Mar 21 half
$M

FVOCI reserve gain/(loss)

(5)

(89)

47

Defined benefits gain/(loss)

15

-

(5)

Cash flow hedge reserve gain/(loss)

-

-

1

Foreign currency translation reserve gain/(loss)

-

-

(2)

Total

10

(89)

41

The notes appearing on pages 82 to 116 form an integral part of the Condensed Consolidated Financial Statements.

78

CONDENSED CONSOLIDATED BALANCE SHEET

Australia and New Zealand Banking Group Limited

As At
Mar 22$M
168,054

Sep 21$M
151,260

Settlement balances owed to ANZ

7,141

7,530

Collateral paid

10,764

9,166

Trading securities

39,43344,68845,23879,757

AssetsCash and cash equivalents1

Note

Derivative financial instruments

8

Investment securities
Net loans and advances

9

Mar 22
v. Sep 21
11%

Mar 22v. Mar 21
35%

9,778

-5%

-27%

12,05917%-11%46,331-12%-15%

38,736

104,666

17%-57%

83,12691,990-4%-13%651,436

629,719614,359

3%

6%

661

671

859

-1%

-23%

Regulatory deposits
Investments in associates

Movement
Mar 21$M
124,460

2,018

1,972

1,854

2%

9%

Current tax assets

227

57

170

large

34%
38%

Deferred tax assets

2,903

2,339

2,105

24%

Goodwill and other intangible assets

4,068

4,124

4,024

-1%

1%

Premises and equipment

2,702

2,734

2,792

-1%

-3%

Other assets

2,959

2,735

2,892

8%

2%

Total assets

1,017,361

978,857

1,018,339

4%0%Settlement balances owed by ANZ

19,752

17,427

19,18813%

3%

Collateral received

6,716

5,657

7,552

19%

-11%

5%

10%

Liabilities

Deposits and other borrowings

11780,288743,056

706,623

Derivative financial instruments

8

47,79536,035102,926

33%-54%

Current tax liabilities

320

419

203

-24%

58%

Deferred tax liabilities

82

70

73

17%

12%

10,579

8,647

8,558

22%

24%

Payables and other liabilities
Employee entitlements
Other provisions

12

Debt issuances

13

585

602

600

-3%

-3%

2,262

2,214

2,417

2%

-6%
-19%

87,226

101,054

107,623-14%

Total liabilities

955,605

915,181955,763

4%0%

Net assets

61,756

63,676

62,576-3%-1%

Shareholders' equity
Ordinary share capital

16

25,091

25,984

26,615-3%-6%

Reserves

16(1,422)

1,228

741

large

large

Retained earnings

16

38,07836,45335,2104%

8%61,747

63,66562,566

-3%

-1%

9

11

10

-18%

-10%

61,756

63,676

62,576-3%-1%

Share capital and reserves attributable to shareholders of the Company
Non-controlling interests

16

Total shareholders' equity
1.

Includes settlement balances owed to ANZ that meet the definition of cash and cash equivalents.

The notes appearing on pages 82 to 116 form an integral part of the Condensed Consolidated Financial Statements.

79

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Australia and New Zealand Banking Group Limited
Half Year

Profit after income tax

Mar 22$M

Sep 21$M

Mar 21
$M

3,530

3,220

2,943

(284)
509

(76)
524

(491)
563

Adjustments to reconcile to net cash flow from operating activities:
Credit impairment charge/(release)
Depreciation and amortisation(Profit)/loss on sale of premises and equipment

-

-

(11)

Net derivatives/foreign exchange adjustment1

(379)

625

(6,975)(Gain)/loss on sale from divestments

(259)

-

238

Other non-cash movements

(175)

(311)

74

Net (increase)/decrease in operating assets:
Collateral paid

(1,934)

3,265

1,730

Trading securities

3,463

3,670

(3,660)Loans and advances(28,305)(6,887)(1,372)

111

96

47

Deposits and other borrowings

48,911

14,532

34,364

Settlement balances owed by ANZ

2,525(1,999)(2,929)Collateral received

1,263(2,153)(1,313)

Other liabilities1

3,665

725

5,383

Total adjustments

29,111

12,01125,648Net cash (used in)/provided by operating activities2

32,641

15,231

28,591

Purchases(17,209)(39,776)(12,863)

Proceeds from sale or maturity

18,492

51,122

12,323

Other assets
Net increase/(decrease) in operating liabilities:

Cash flows from investing activities
Investment securities:

Controlled entities and associates
Purchased, net of cash acquired

(65)

-

-

Proceeds from divestments, net of cash disposed

394

-

13

Net investments in other assets

(519)

(195)

(366)

Net cash (used in)/provided by investing activities

1,093

11,151

(893)

432

8,080

1,230

Cash flows from financing activities
Deposits and other borrowings drawn down
Debt issuances:3
Issue proceeds

7,467

7,976

4,648

Redemptions(16,876)(16,343)(11,366)

Dividends paid4(879)(1,994)(1,955)On market purchase of treasury shares

(117)

-

(79)

Repayment of lease liabilities

(158)

(172)

(158)

Share buy-back
Net cash (used in)/provided by financing activities

(846)

(654)

-

(12,092)(3,068)(6,604)

Net increase/(decrease) in cash and cash equivalents

21,642

23,31421,094

Cash and cash equivalents at beginning of period

151,260

124,460

107,923

Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
1.

(4,848)3,486(4,557)

168,054

151,260

124,460

Certain non-cash adjustments were reclassified from Other liabilities to Net derivatives/foreign exchange adjustments within Net cash (used in)/provided by operating activities to betterreflect the nature of the item. Comparatives have been restated (Sep 21 half: $88 million; Mar 21 half: $419 million).
Net cash (used in)/provided by operating activities includes interest received of $9,619 million (Sep 21 half: $9,742 million; Mar 21 half: $9,907 million), interest paid of $2,634 million(Sep 21 half: $2,567 million; Mar 21 half: $3,226 million) and income taxes paid of $1,422 million (Sep 21 half: $1,003 million; Mar 21 half: $1,424 million).
3. Non-cash changes in debt issuances includes fair value hedging gain of $2,140 million (Sep 21 half: $2,799 million gain; Mar 21 half: $1,311 million loss) and foreign exchange gains of$1,754 million (Sep 21 half: $2,552 million loss; Mar 21 half: $4,077 million gain).
4. Cash outflow for shares purchased to satisfy the Dividend Reinvestment Plan are classified in dividends paid.
2.

The notes appearing on pages 82 to 116 form an integral part of the Condensed Consolidated Financial Statements.

80CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Australia and New Zealand Banking Group Limited

As at 1 October 2020

Ordinary
share
capital$M

Reserves$M

Retainedearnings$M

Share capitaland reserves
attributable toshareholders of
the Company$M

Noncontrollinginterests$M

Total
shareholders'equity$M

26,531

1,501

33,25561,287

10

61,297

Profit or loss from continuing operations

-

-

2,951

2,951

-

2,951

Profit or loss from discontinued operations

-

-

(8)

(8)

-

(8)

Other comprehensive income for the period from continuing operations

-

(731)

(19)

(750)

-

(750)

Other comprehensive income for the period from discontinued operations
Total comprehensive income for the period

-

-

-

-

-

-

-

(731)

2,924

2,193

-

2,193

-

-

(973)

(973)

-

(973)

94

-

-

94

-

94

Transactions with equity holders in their capacity as equity holders:
Dividends paid
Dividend Reinvestment Plan1
Other equity movements:
Group employee share acquisition scheme
Other items
As at 31 March 2021

(10)

-

-

(10)

-

(10)

-

(29)

4

(25)

-

(25)

26,615741

35,21062,566

10

62,576

Profit or loss from continuing operations

-

-

3,228

3,228

1

3,229

Profit or loss from discontinued operations

-

-

(9)

(9)

-

(9)

Other comprehensive income for the period from continuing operations

-

467

(21)

446

-

446

Other comprehensive income for the period from discontinued operations

-

-

-

-

-

-

-

467

3,198

3,665

1

3,666

-

-

(1,955)(1,955)-(1,955)

(654)

-

-

(654)

-

(654)

23

-

-

23

-

23

-

20

-

20

-

20

25,984

1,228

36,453

63,665

11

63,676

Profit or loss from continuing operations

-

-

3,535

3,535

-

3,535

Profit or loss from discontinued operations

-

-

(5)

(5)

-

(5)

Other comprehensive income for the period from continuing operations-(2,628)85(2,543)-(2,543)

Other comprehensive income for the period from discontinued operations

-

-

-

-

-

-

-

(2,628)

3,615

987

-

987

-

-

(1,992)(1,992)(2)(1,994)

(846)

-

-

(846)

-

(846)

(47)

Total comprehensive income for the period
Transactions with equity holders in their capacity as equity holders:
Dividends paid
Group share buy-back2
Other equity movements:
Group employee share acquisition scheme
Other items
As at 30 September 2021

Total comprehensive income for the period
Transactions with equity holders in their capacity as equity holders:
Dividends paid
Group share buy-back2
Other equity movements:
Group employee share acquisition scheme

(47)

-

-

(47)

-

-

(22)

2

(20)

-

(20)

25,091(1,422)

38,07861,747

961,756

Other items
As at 31 March 2022
1.
2.

4.2 million shares were issued under the Dividend Reinvestment Plan (DRP) for the 2020 final dividend.
The Company completed its $1.5 billion on-market share buy-back of ANZ ordinary shares purchasing $846 million worth of shares in the March 2022 half (Sep 21 half: $654 million;
Mar 21 half: nil) resulting in 31 million shares being cancelled in the March 2022 half (Sep 21 half: 23 million; Mar 21 half: nil).

The notes appearing on pages 82 to 116 form an integral part of the Condensed Consolidated Financial Statements.

81

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation

These Condensed Consolidated Financial Statements:

have been prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards (AASs);

should be read in conjunction with ANZ’s Annual Financial Report for the year ended 30 September 2021 and any public announcements made by
the Parent Entity and its controlled entities (the Group) for the half year ended 31 March 2022 in accordance with the continuous disclosure
obligations under the Corporations Act 2001 and the ASX Listing Rules;

do not include all notes of the type normally included in ANZ’s Annual Financial Report;

are presented in Australian dollars unless otherwise stated; andwere approved by the Board of Directors on 3 May 2022.

i)Statement of Compliance

These Condensed Consolidated Financial Statements have been prepared in accordance with the Corporations Act 2001 and AASB 134 Interim
Financial Reporting which ensures compliance with IAS 34 Interim Financial Reporting.
ii) Rounding of amounts
The amounts contained in these Condensed Consolidated Financial Statements have been rounded to the nearest million dollars, except whereotherwise indicated, as permitted by Australian Securities and Investments Commission Corporations Instrument 2016/191.
iii) Basis of measurement
The financial information has been prepared in accordance with the historical cost basis except the following assets and liabilities that are stated at theirfair value:

derivative financial instruments as well as, in the case of fair value hedges, the fair value adjustment on the underlying hedged exposure;financial assets and liabilities held for trading;financial assets and liabilities designated at fair value through profit and loss;financial assets at fair value through other comprehensive income; and

assets and liabilities held for sale (except those at carrying value).

In accordance with AASB 119 Employee Benefits, defined benefit obligations are measured using the Projected Unit Credit method.
iv) Accounting policies
These Condensed Consolidated Financial Statements have been prepared on the basis of accounting policies and using methods of computationconsistent with those applied in the 2021 ANZ Annual Report.
Discontinued operations are separately presented from the results of the continuing operations as a single line item ‘Profit/(Loss) after tax fromdiscontinued operations’ in the Condensed Consolidated Income Statement. Notes to the Condensed Consolidated Income Statement have beenpresented on a continuing basis.
v) Use of estimates, assumptions and judgements
The preparation of these Condensed Consolidated Financial Statements requires the use of management judgement, estimates and assumptions that
affect reported amounts and the application of accounting policies. Discussion of the critical accounting estimates and judgements, which include
complex or subjective decisions or assessments are provided in the 2021 ANZ Annual Financial Report. Such estimates and judgements are reviewed on
an ongoing basis.
Whilst the course of the COVID-19 pandemic is moderating and its impact on economic activity and our customers is better understood, the responses ofconsumers, business and governments remain uncertain. New external risks are also emerging, including mounting geopolitical tensions, global supply
chain disruptions, the conflict in Ukraine, and commodity price pressures. Thus there remains an elevated level of estimation uncertainty involved in the
preparation of these financial statements.
The Group has made various accounting estimates in these Condensed Consolidated Financial Statements based on forecasts of economic conditions
which reflect expectations and assumptions at 31 March 2022 about future events considered reasonable in the circumstances. There is a considerable
degree of judgement involved in preparing these estimates. Actual economic conditions are likely to be different from those forecast since anticipated
events frequently do not occur as expected, and the effect of these differences may significantly impact accounting estimates included in these financial
statements. The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit
losses and recoverable amounts of non-financial assets.
The impact of these uncertainties on each of these accounting estimates is discussed further below and/or in the relevant notes in the 2021 ANZ Annual
Report. Readers should consider these disclosures in light of the inherent uncertainties described above.

82

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’d

Allowance for expected credit losses
The Group measures the allowance for expected credit losses (ECL) using an expected credit loss impairment model as required by AASB 9 Financial
Instruments.
COVID-19 risks are moderating however the economy continues to transition to a setting with less government stimulus and some uncertainty as to how
customers will respond to expected interest rate rises and inflationary pressure, heightened geopolitical tensions across the globe, the conflict in Ukraine
and global supply chain issues, commodity price pressures, and how governments, businesses and consumers respond also remains uncertain. This
uncertainty is reflected in the Group’s assessment of expected credit losses, which are subject to a number of management judgements and estimates.
The Group’s allowance for expected credit losses is included in the table below (refer to Note 10 for further information).
As at
Mar 22$M

Sep 21$M

Mar 21$M

Collectively assessed

3,757

4,195

4,285

Individually assessed

636

687

809

4,393

4,882

5,094

1

Total
1.

Includes allowance for expected credit losses for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments undrawn and contingent facilities.

Individually assessed allowance for expected credit losses
During the March 2022 half, the individually assessed allowance for expected credit losses decreased by $51 million.
In estimating individually assessed ECL, the Group makes judgements and assumptions in relation to expected repayments, the realisable value ofcollateral, business prospects for the customer, competing claims and the likely cost and duration of the work-out process. Judgements and assumptions
in respect of these matters have been updated to reflect amongst other things, the continuing uncertainties described above.
Collectively assessed allowance for expected credit losses
During the March 2022 half, the collectively assessed allowance for expected credit losses decreased by $438 million attributable to: reductions of$172 million from improvements in credit risk, $98 million from changes in portfolio composition, $138 million in lower management adjustments, and$67 million from foreign currency translation and other impacts; offset by an increase of $37 million for downside risks associated with the economic
outlook.
In estimating collectively assessed ECL, the Group makes judgements and assumptions in relation to:

the selection of an estimation technique or modelling methodology; andthe selection of inputs for those models, and the interdependencies between those inputs.

The following table summarises the key judgements and assumptions in relation to the model inputs and the interdependencies between those inputs,
and highlights significant changes during the current period.
The judgements and associated assumptions have been made in the context of the uncertainty of how various factors might impact the global economy,
and reflect historical experience and other factors that are considered to be relevant, including expectations of future events that are believed to bereasonable under the circumstances. The Group’s ECL estimates are inherently uncertain and, as a result, actual results may differ from these estimates.
Judgement/Assumption

Description

Considerations for the half year ended 31 March 2022

Determining when a

In the measurement of ECL, judgement is involved in setting the

The Group released a portion of ECL originally provided forsignificant increase inrules and trigger points to determine whether there has been a

expected delinquencies that may have not flowed through due

credit risk (SICR) has

SICR since initial recognition of a loan, which would result in theto COVID-19 support measures. Although these measuresoccurredfinancial asset moving from Stage 1 to Stage 2. This is a key

have ceased, uncertainty remains on their ongoing impact onarea of judgement since transition from Stage 1 to Stage 2

portfolio delinquency.

increases the ECL from an allowance based on the probabilityof default in the next 12 months, to an allowance for lifetime
expected credit losses. Subsequent decreases in credit risk
resulting in transition from Stage 2 to Stage 1 may similarly
result in significant changes in the ECL allowance.
The setting of precise trigger points requires judgement which
may have a material impact upon the size of the ECL
allowance. The Group monitors the effectiveness of SICR
criteria on an ongoing basis.

83

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dJudgement/Assumption

Description

Considerations for the half year ended 31 March 2022

Measuring both 12-month

The probability of default (PD), loss given default (LGD) and

The PD, LGD and EAD models are subject to the Group’s modeland lifetime credit losses

exposure at default (EAD) credit risk parameters used inrisk policy that stipulates periodic model monitoring and re-determining ECL are point-in-time measures reflecting thevalidation, and defines approval procedures and authorities

relevant forward-looking information determined byaccording to model materiality.

management. Judgement is involved in determining which
forward-looking information variables are relevant for particularlending portfolios and for determining each portfolio’s point-in-

The modelled outcome includes an amount to recognise
increased model uncertainties as a result of COVID-19.

time sensitivity.
In addition, judgement is required where behavioural

There were no material changes to the policies during the halfcharacteristics are applied in estimating the lifetime of a facility

year ended 31 March 2022.

to be used in measuring ECL.
Base case economic

The Group derives a forward-looking ‘base case’ economic

There have been no changes to the types of forward-looking

forecast

scenario which reflects ANZ Research - Economics’ (ANZ

variables (key economic drivers) used as model inputs in the

Economics) view of future macro-economic conditions.

current period.
As at 31 March 2022, the base case assumptions have been
updated to reflect the economic impacts of the Omicron variant,
supply chain pressures, and increasing inflation and expectedinterest rate rises globally. In determining the expected path ofthe economy, assessments of the impact of central bankpolicies, government actions, and the response of businesses
and consumers were considered.
The expected outcomes of key economic drivers for the basecase scenario at 31 March 2022 are described below under theheading ‘Base case economic forecast assumptions’.

Probability weighting of

Probability weighting of each economic scenario is determined

The key considerations for probability weightings in the current

each economic scenario

by management considering the risks and uncertainties

period include the ongoing but increasingly known impacts of(base case, upside,surrounding the base case economic scenario at each

COVID-19, uncertainty as to how customers will respond todownside and severe

measurement date.

expected interest rate rises and inflationary pressures, thedownside scenarios)1,2

conflict in Ukraine, commodity price pressures and global supply
chain issues.
Weightings for current and prior periods are as detailed in thesection on ‘Probability weightings’ below.
The assigned probability weightings in Australia, New Zealandand Rest of world are subject to a high degree of inherent
uncertainty and therefore the actual outcomes may besignificantly different to those projected.

1.

2.

The upside and downside scenarios are fixed by reference to average economic cycle conditions (that is, they are not based on the economic conditions prevailing at balance date) and are
based on a combination of more optimistic (in the case of the upside) and pessimistic (in the case of the downside) economic conditions.
The severe downside scenario is fixed by reference to average economic cycle conditions and accounts for the potentially severe downside impact of less likely extremely adverse
economic conditions.

84

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dJudgement/Assumption

Description

Considerations for the half year ended 31 March 2022

Management temporary

Management temporary adjustments to the ECL allowance areManagement have continued to apply a number of adjustments

adjustments

used in circumstances where it is judged that our existing

to the modelled ECL primarily due to the uncertainty associatedinputs, assumptions and model techniques do not capture allwith continuing but moderating COVID-19 impacts. Additional

the risk factors relevant to our lending portfolios. Emerging

adjustments have been made in the March 2022 half year to

local or global macroeconomic, microeconomic or politicalaccommodate the potential impact of recent floods in NSW andevents, and natural disasters that are not incorporated into our

Queensland.

current parameters, risk ratings, or forward-looking information
are examples of such circumstances. The use of management
temporary adjustments may impact the amount of ECL
recognised.

Management overlays (including COVID-19 overlays) which add
to the modelled ECL provision have been made for risks
particular to retail, including home loans, small business andcommercial banking in Australia, for personal and business

The uncertainty associated with the ongoing but moderatingbanking in New Zealand, and for tourism in the Pacific.

COVID-19 pandemic, and the recent floods in NSW andQueensland, and the extent to which the actions ofgovernments, businesses and consumers influence credit
outcomes are not fully incorporated into existing ECL models
which are based on historical underlying data. Accordingly,
management overlays have been applied to ensure credit
provisions are appropriate.

Base case economic forecast assumptions
Continuing uncertainties described above increase the risk of the economic forecast resulting in an understatement or overstatement of the ECL balance.
The economic drivers of the base case economic forecasts, reflective of ANZ Economics’ view of future macro-economic conditions, used at 31 March2022 are set out below. For years beyond the near-term forecasts below, the ECL models project future year economic conditions which include anassumption of eventual reversion to mid-cycle economic conditions.
Actual calendar year

Forecast calendar year

2021

2022

2023

4.5%

4.6%

2.7%

Unemployment rate

5.1%

3.6%

3.3%

Residential property prices (annual % change)

21.0%

8.0%

-5.8%

Consumer price index (annual % change)

2.9%

4.0%

3.1%

5.5%

2.4%

2.8%
3.0%

Australia
GDP (annual % change)

New Zealand
GDP (annual % change)
Unemployment rate

3.8%

3.0%

Residential property prices (annual % change)

26.5%

-6.0%

3.3%

Consumer price index (annual % change)

3.9%

5.3%

3.2%

GDP (annual % change)

5.7%

4.5%

2.5%

Consumer price index (annual % change)

4.7%

5.9%

2.8%

Rest of world

The base case economic forecasts above indicate an improvement in current economic conditions in Australia and rest of world as the COVID-19
pandemic passes its peak. Economic conditions are forecast to moderate slightly over the forecast period. The base case economic forecast for New
Zealand on the other hand reflects a weakening in current economic conditions adding to inflation pressure for a time and weighing on economic activity.
Probability weightings
Probability weightings for each scenario are determined by management considering the risks and uncertainties surrounding the base case economic
scenario including the uncertainties described above.
The base case scenario represents an improvement in the forecasts since September 2021 for Australia and Rest of World, but a deterioration is forecast
for New Zealand. Given the uncertainties associated with a potential ongoing recovery in the economy and external factors, the average base caseweighting across geographies has been reduced to 40.0% (Sep 21: 41.3%) and the severe downside scenario increased to 10.0% (Sep 21: 5.8%).

85

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’d

The assigned probability weightings in Australia, New Zealand and rest of the world are subject to a high degree of inherent uncertainty and therefore theactual outcomes may be significantly different to those projected. The Group considers these weightings in each geography to provide estimates of thepossible loss outcomes and taking into account short and long term inter-relationships within the Group’s credit portfolios. The average weightings
applied across the Group are set out below:
Mar 22

Sep 21Mar 21

Group
Base

40.0%

41.3%

41.4%

Upside

5.0%

5.2%

5.5%

Downside

45.0%

47.7%

46.7%

Severe downside

10.0%

5.8%

6.4%

ECL - Sensitivity analysis
Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future periods,
expected credit losses reported by the Group should be considered as a best estimate within a range of possible estimates. The table below illustrates
the sensitivity of the Group’s allowance for collectively assessed ECL to key factors used in determining it at 31 March 2022:
Balance$M

Profit and Loss
Impact$M

If 1% of stage 1 facilities were included in stage 2

3,819

62

If 1% of stage 2 facilities were included in stage 1

3,752

(5)

100% upside scenario

1,643(2,114)

100% base scenario

2,046(1,711)

100% downside scenario

3,896

139

100% severe downside scenario

4,859

1,102

Fair value measurement of financial instruments
The majority of valuation models the Group uses to value financial instruments employ only observable market data as inputs.
For certain financial instruments, we may use data that is not readily observable in current markets where it is necessary to exercise more management
judgement to determine fair value depending on the significance of the unobservable input to the overall valuation. Generally, we derive unobservable
inputs from other relevant market data and compare them to observed transaction prices where available.
At 31 March 2022, the Group had $1,580 million of assets and $23 million of liabilities where the valuation was primarily derived using unobservable
inputs (Sep 21: $1,497 million assets and $30 million liabilities; Mar 21: $1,224 million assets and $25 million liabilities). The financial instruments which
are valued using unobservable inputs are predominantly equity securities where quoted prices in active markets are not available.
The Group has an investment in the Bank of Tianjin (BoT), which at 31 March 2022 has a carrying value of $956 million (Sep 21: $991 million; Mar 21:$1,019 million). The listed shares are illiquid, consequently the Group determines the fair value based on a valuation model using comparable bankpricing multiples as determined by management. Judgement is required in both the selection of the model and inputs used. Although the comparatorgroup entities operate in the same industry, the nature of their business and local economic conditions may be different from the Group’s investment.
Thus where local conditions change, which impact the price-to-book ratio of the comparator group, the fair value of the asset will change proportionately.
That is, if the price-to-book ratio changed by 10%, the fair value would change by 10%. Since the asset is classified as fair value through othercomprehensive income, changes in the fair value are recorded directly in equity.
Investments in associates
The Group assesses the carrying value of its associate investments for impairment indicators semi-annually.
At 31 March 2022, the impairment assessment of non-lending assets identified that one of the Group’s associate investments, PT Bank Pan Indonesia(PT Panin) had indicators of impairment. No impairment was recognised as its carrying value was supported by a value-in-use (VIU) calculation.
Significant management judgement is required in determining the key assumptions underpinning the VIU calculation for PT Panin. Factors may change insubsequent periods and lead to potential future impairment or a reversal of prior period impairment. These include forecast earnings levels in the nearterm and/or changes in the long term growth forecasts, required levels of regulatory capital and the post-tax discount rate. The key assumptions used inthe VIU calculation are outlined below:
Mar 22PT Panin
Sep 21Mar 21

Carrying Value ($m)

1,203

1,210

1,140

Post-tax discount rate

14.8%

14.4%

14.1%

Terminal growth rate

5.2%

5.1%

5.1%

Expected earnings growth (compound annual growth rate - 5 years)

19.8%

6.4%

6.9%

Common Equity Tier 1 ratio (5 year average)

12.8%

12.8%

12.8%

86

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’d

The VIU calculation is sensitive to changes in the underlying assumptions with reasonably possible changes in key assumptions having a positive or
negative impact on the VIU outcome, and as such the recoverable amount of the investment.


A change in the March 2022 post-tax discount rate by +/- 50 bps would impact the VIU outcome for PT Panin by ($51 million)/$57 million;

A change in the March 2022 terminal growth rate by +/- 25 bps would impact the VIU outcome for PT Panin by $15 million/($14 million).

The investment in PT Panin would not be impaired if the terminal growth rate reduced by the reasonably possible changes above. Holding all other inputs
constant, the post-tax discount rate will need to increase by more than 20 bps before an impairment would be recognised.
Goodwill
The Group’s goodwill balance as at 31 March 2022 is $3,062 million. During the March 2022 half, the following changes to goodwill attributable to theAustralian Retail and Commercial division occurred:A reduction of $40 million goodwill in relation to the exit of the financial planning and advice business servicing the affluent customer segment;

An increase of $91 million goodwill in relation to the acquisition of the Cashrewards business. This goodwill is provisionally recognised under AASB 3
Business Combinations until a final purchase price allocation is completed.

The Group conducted an assessment as to whether the carrying value of goodwill was impaired. For the purpose of impairment testing, goodwill acquired
in a business combination is allocated at the date of acquisition to the cash generating units (CGUs) that are expected to benefit from the synergies of therelated business combination. These CGUs are the Group’s reportable segments. CGUs with goodwill as at 31 March 2022 were the Australia Retail andCommercial division ($191 million), the New Zealand division ($1,800 million) and the Institutional division ($1,072 million).
Goodwill is considered impaired if the carrying amount of the relevant CGU exceeds its recoverable amount. We estimate the recoverable amount ofeach CGU to which goodwill is allocated using a fair value less costs of disposal (FVLCOD) approach, with a VIU assessment performed where the
FVLCOD approach indicates an impairment.
Management’s approach used to determine the FVLCOD of each CGU was consistent with the prior periods. The assessment of the recoverable amountof each CGU has been made considering the impacts of COVID-19 and subsequent economic recovery and reflects expectations of future events thatare believed to be reasonable under the circumstances. The key inputs used to determine FVLCOD of each CGU containing goodwill are noted below:

Future maintainable earnings for each CGU has been estimated based on the Group’s financial year 2022 forecast for each CGU plus an allocationof the central costs recorded outside of the CGUs to which goodwill is allocated;Price/Earnings (P/E) multiples applied (including 30% control premium) for each CGU are derived from the valuations of comparator entities:
Price/Earnings Multiples
Division

Mar 22 Half YearSep 21 Full Year

Australia Retail and Commercial

20.5

18.9

New Zealand

17.8

16.4

Institutional

16.6

15.5

Based on the FVLCOD assessment, no impairment was identified.
Customer remediation provisions
At 31 March 2022, the Group has recognised customer remediation provisions of $853 million (Sep 21: $886 million; Mar 21: $1,003 million) which
includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims, penalties and litigation
costs and outcomes.
Determining the amount of the provisions, which represent management’s best estimate of the cost of settling the identified matters, requires the exerciseof significant judgement. It will often be necessary to form a view on a number of different assumptions, including the number of impacted customers, theaverage refund per customer, associated remediation project costs, and the implications of regulatory exposures and customer claims having regard totheir specific facts and circumstances.
Consequently, the appropriateness of the underlying assumptions is reviewed on a regular basis against actual experience and other relevant evidence,
including expert legal advice, and adjustments are made to the provisions where appropriate.
Other provisions
The Group holds provisions for various obligations including restructuring costs, non-lending losses, fraud and forgeries and litigation related claims.
These provisions involve judgements regarding the timing and outcome of future events, including estimates of expenditure required to satisfy suchobligations. The appropriateness of the underlying assumptions is reviewed on a regular basis against actual experience and other relevant evidence,
including expert legal advice, and adjustments are made to the provisions where appropriate.

87

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dvi) Interest rate benchmark reform
Interbank offered rates (IBORs), such as the London Interbank Offered Rate (LIBOR), have played a critical role in global financial markets, serving as
reference rates for derivatives, loans and securities, and in the valuation of financial instruments. The IBOR reforms have a wide-ranging impact for theGroup and our customers given the fundamental differences between IBORs and risk-free rates (RFRs). RFRs are available both as backward-looking inarrears rates and, for some currencies, as forward-looking term rates. The key difference between IBORs and RFRs is that IBOR rates include a term
and bank credit risk premium, whereas RFRs do not. As a result of these differences, adjustments are required to an RFR to ensure contracts referencing
an IBOR rate transition on an economically comparable basis.
Update on the Group’s approach to interest rate benchmark reform
In line with the regulatory announcements made in 2021, the majority of IBOR rates, including Pound Sterling (GBP), Euro (EUR), Swiss Franc (CHF)
and Japanese Yen (JPY), and the US Dollar (USD) 1-week and 2-month LIBOR rate settings ceased on 31 December 2021 and have been replaced byalternative RFRs.
With the exception of a limited number of contracts currently being published under an amended methodology, commonly known as ‘synthetic’ GBP and
JPY LIBOR rates, the Group transitioned all its loan and derivative contracts with customers referencing IBOR rates subject to 31 December 2021
cessation to contracts referencing RFRs on or before the cessation date. This transition had an immaterial impact to the Group’s profit and loss. Throughits loan and derivative transactions with customers, issuance of debt and its asset and liability management activities the Group continues to have
exposure to the remaining USD LIBOR settings and other IBOR-related benchmarks that are due to cease by 30 June 2023 and limited exposure tosynthetic GBP and JPY LIBOR benchmarks that are due to cease by 31 December 2022.
The Group continues to manage the transition from the remaining USD LIBOR tenors and other remaining IBOR settings to RFR’s through its enterprisewide Benchmark Transition Program (the Program). The program is responsible for managing the risks associated with the transition including
operational, market, legal, conduct and financial reporting risks that may arise.
Exposures subject to benchmark reform as at 31 March 2022
The table below shows the Group’s exposure to interest rate benchmarks subject to IBOR reform. These are financial instruments that contractuallyreference an IBOR benchmark planned to transition to an RFR, and have a contractual maturity date beyond the planned IBOR cessation date.
USD Libor

Others1

As at 31 March 2022

$M

$M

Loan and advances2

13,125

330

1,004

-

Non-derivative financial assets2
3

587

47

Derivative asset (notional value)1

497,933

13,948Derivative liability (notional value)4

508,361

13,435

Loan commitments2,5

20,270971

Non-derivative financial liabilities

1.

Comprises financial instruments referencing other significant benchmark rates yet to transition to alternative benchmarks, including instruments subject to 31 December 2021 cessation
currently referencing synthetic GBP and JPY LIBOR rates.

2.

Excludes Expected Credit Losses (ECL).

3.

Comprises floating rate debt issuances by the Group.

4.

For cross-currency swaps, where both the receive and pay legs are in currencies subject to reform, the Group discloses the Australian dollar-equivalent notional amounts for both. Where
one leg of a swap is subject to reform, the Group discloses the notional amount of the receive leg.

5.

For multi-currency IBOR referenced facilities, the undrawn balance has been allocated to the pricing currency of the facility. In the event there are multiple pricing currencies that are
impacted by cessation, the allocation is based on most likely currency of drawdown.

Hedge accounting exposures subject to IBOR reform
The Group has hedge-accounted relationships referencing USD LIBOR, primarily due to fixed rate investment securities and the Group’s fixed rate debt
issuances denominated in USD that are designated in fair value hedge accounting relationships. The table below details the carrying values of theGroup's USD exposures designated in hedge accounting relationships referencing LIBOR that will be impacted by reform. The nominal value of theassociated hedging instruments is also included:
As at 31 March 2022
Hedged items$M

Investment securities at FVOCI

8,916

Net loans and advances

236

Deposits and other borrowings

208

Debt issuances

19,428
Notional designated up to
30 June 2023

Notional designated beyond
30 June 2023

Total notional amount

$M

$M

$M

Fair value hedges

9,452

18,91028,362

Cash flow hedges

107

248

355

Hedging instruments

88

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2.

IncomeHalf Year

Movement

Interest income

Mar 22$M
9,707

Sep 21$M
9,650

Mar 21$M
9,879

Mar 22
v. Sep 21
1%

Mar 22v. Mar 21-2%

Interest expense(2,442)(2,318)(2,704)5%-10%Major bank levy

(165)

(157)

(189)

5%

-13%

Net interest income

7,100

7,175

6,986

-1%

2%

Other operating incomei) Fee and commission income
Lending fees1

188

230

244

-18%

-23%

1,274

1,286

1,266

-1%

1%

Commissions

50

51

46

-2%

9%

Funds management income

137

147

140

-7%

-2%

Fee and commission income

1,649

1,714

1,696

-4%

-3%

Fee and commission expense

(666)

(621)

(646)

7%

3%

Net fee and commission income

983

1,093

1,050

-10%

-6%

54%

Non-lending feesii) Other income
Net foreign exchange earnings and other financial instruments income2

1,123

642

729

75%

Gain on completion of ANZ Worldline partnership

307

-

-

n/a

n/a

Sale of New Zealand legacy insurance portfolio

-

-

13

n/a

-100%

Reclassification of ANZ Share Investing to held for sale3

-

-

(251)

n/a

-100%

Dissolution of Minerva and ANZ Asia

(65)

-

-

n/a

n/a

Sale of financial planning and advice business

(62)

-

-

n/a

n/a

Dividend income on equity securities
Other4

-

1

-

-100%

n/a

27

18

30

50%

-10%

Other income

1,330

661

521

large

large

Other operating income

2,313

1,754

1,571

32%

47%

55

58

52

-5%

6%

Net income from insurance business
Share of associates' profit/(loss)
Operating income5
1.

74

66

(242)

12%

large

9,542

9,053

8,367

5%

14%

Lending fees exclude fees treated as part of the effective yield calculation in interest income.
Includes fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges entered into to manage interest rate and foreign exchange risk,
ineffective portions of cash flow hedges, and fair value movements in financial assets and liabilities designated at fair value through profit or loss.
3. The loss on reclassification of ANZ Share Investing to held for sale is included within Other operating income to align with the classification of loss on sale that would have applied if thedisposal had completed in the March 2021 half.
4. The March 2022 half includes the release of $13 million excess provision originally raised as part of the gain on sale estimate for the UDC Finance and Paymark Limited divestmentscompleted in prior years.
5. Includes charges associated with customer remediation of -$25 million for the March 2022 half (Sep 21 half: -$68 million; Mar 21 half: -$74 million).
2.

89

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3.

Operating expenses
Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

2,378

2,229

2,196

7%

8%

Superannuation costs

188

173

164

9%

15%

Other

88

95

89

-7%

-1%

2,654

2,497

2,449

6%

8%

Rent

40

43

42

-7%

-5%

Depreciation

212

221

225

-4%

-6%

Other

89

91

83

-2%

7%

Premises

341

355

350

-4%

-3%

Depreciation and amortisation

293

304

334

-4%

-12%

Subscription licences and outsourced services

444

414

372

7%

19%

i) Personnel
Salaries and related costs

Personnel1ii) Premisesiii) Technology

Other

78

85

79

-8%

-1%

Technology1

815

803

785

1%

4%

iv) Restructuring

49

22

105

large

-53%

v) OtherAdvertising and public relations

77

107

71

-28%

8%

Professional fees

464

440

329

5%

41%
-8%

Freight, stationery, postage and communication

87

90

95

-3%

Other2

304

255

298

19%

2%

Other1,2

932

892

793

4%

18%

4,791

4,569

4,482

5%

7%

Operating expenses1,2
1.

Includes customer remediation expenses of $148 million for the March 2022 half (Sep 21 half: $93 million; Mar 21 half: $92 million) allocated across Personnel, Technology and Other
expenses.
2. Includes litigation settlement expenses of $10 million for the March 2022 half (Sep 21 half: nil; Mar 21 half: $69 million).

90

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4.

Income tax expense

Reconciliation of the prima facie income tax expense on pre-tax profit with the income tax expense recognised in the profit and loss.
Half Year

Movement

Profit before income tax from continuing operations

Mar 22$M
5,035

Sep 21$M
4,560

Mar 21$M
4,376

Mar 22
v. Sep 21
10%

Mar 22v. Mar 21
15%

Prima facie income tax expense at 30%

1,511

1,368

1,313

10%

15%

large

Tax effect of permanent differences:
Net gain from divestments/closures

(87)

-

(4)

n/a

Share of associates' (profit)/loss

(22)

(19)

72

16%

large

-

-

75

n/a

-100%

21

22

22

-5%

-5%

Overseas tax rate differential

(61)

(38)

(50)

61%

22%

Provision for foreign tax on dividend repatriation1

139

11

26

large

large
large

Reclassification of ANZ Share Investing to held for saleInterest on convertible instruments

Other

11

(6)

(20)

large

Subtotal

1,512

1,338

1,434

13%

5%

(12)

(7)

(9)

71%

33%

Income tax (over)/under provided in previous years

1,500

1,331

1,425

13%

5%

Australia

960

884

1,013

9%

-5%

Overseas

540

447

412

21%

31%

13%

5%

Income tax expense

Income tax expense

1,500

1,331

1,425

Effective tax rate

29.8%

29.2%

32.6%

1.

Includes the $126 million withholding tax paid in the March 2022 half on the dividend payment made by ANZ Papua New Guinea to ANZBGL.

91

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5.

Dividends
Half Year

Dividend per ordinary share (cents)1

Movement

Mar 2272

Sep 21-Mar 21
70

Final

-

72

-

Total

72

72

70

-

1,992

-

2,030

-

994

InterimOrdinary share dividend ($M)2
Interim dividend
Final dividend
Bonus option plan adjustment

Mar 22
v. Sep 21

Mar 22v. Mar 21

0%

3%

(38)

(37)

(21)

3%

81%

Total

1,992

1,955

973

2%

large

Ordinary share dividend payout ratio (%)3

57.0%

63.1%

67.7%

1.

2.

3.

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2022 interim dividend (2021 final dividend: NZD 8 cents;
2021 interim dividend: NZD 8 cents).
Dividends paid to ordinary equity holders of the Company. Excludes dividends paid by subsidiaries of the Group to non-controlling equity holders of $2 million (Sep 21 half: nil;
Mar 21 half: nil).
The dividend payout ratio for the March 2022 half is calculated using the proposed 2022 interim dividend of $2,012 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2021 half and March 2021 half were calculated using actual dividends of $2,030 million and $1,992 million respectively.

Ordinary Shares
The Directors propose an interim dividend of 72 cents be paid on each eligible fully paid ANZ ordinary share on 1 July 2022. The proposed 2022 interim
dividend will be fully franked for Australian tax purposes. New Zealand imputation credits of NZD 9 cents per ordinary share will also be attached.
ANZ has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2022 interim dividend.

92

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6.

Earnings per share

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding
during the period (after eliminating ANZ shares held within the Group referred to as treasury shares). Diluted EPS is calculated by adjusting the profit orloss attributable to ordinary shareholders and the weighted average number of ordinary shares used in the basic EPS calculation for the effect of dilutive
potential ordinary shares.
Half Year

Movement

Mar 22

Sep 21Mar 21Mar 22
v. Sep 21

Mar 22v. Mar 21

Earnings Per Share (EPS) - Basic
Earnings Per Share (cents)

125.7

113.4

103.7

11%

21%

Earnings Per Share (cents) from continuing operations

125.9

113.7

104.0

11%

21%

Earnings Per Share (cents) from discontinued operations

(0.2)

(0.3)

(0.3)

-33%

-33%

Earnings Per Share (cents)

117.7

106.7

98.4

10%

20%

Earnings Per Share (cents) from continuing operations

117.9

107.0

98.7

10%

19%

Earnings Per Share (cents) from discontinued operations

(0.2)

(0.3)

(0.3)

-33%

-33%

Mar 22v. Mar 21

20%

Earnings Per Share (EPS) - Diluted

Half Year

Movement

Mar 22

Sep 21Mar 21Mar 22
v. Sep 21

3,530

3,220

2,943

10%

Reconciliation of earnings used in earnings per share calculations
Basic:
Profit for the period ($M)
Less: Profit attributable to non-controlling interests ($M)

-

1

-

-100%

n/a

Earnings used in calculating basic earnings per share ($M)

3,530

3,219

2,943

10%

20%

Less: Profit/(Loss) after tax from discontinued operations ($M)

(5)

(9)

(8)

-44%

-38%

3,535

3,228

2,951

10%

20%

3,530

3,219

2,943

10%

20%

92

95

92

-3%

0%

3,622

3,314

3,035

9%

19%

(5)

(9)

(8)

-44%

-38%

3,627

3,323

3,043

9%

19%

2,808.7

2,838.4

2,838.7

-1%

-1%

261.7

255.8

238.7

2%

10%

6.8

11.3

7.0

-40%

-3%

3,077.2

3,105.5

3,084.4-1%0%Earnings used in calculating basic earnings per share from continuing
operations ($M)
Diluted:Earnings used in calculating basic earnings per share ($M)
Add: Interest on convertible subordinated debt ($M)
Earnings used in calculating diluted earnings per share ($M)
Less: Profit/(Loss) after tax from discontinued operations ($M)
Earnings used in calculating diluted earnings per share fromcontinuing operations ($M)

Reconciliation of weighted average number of ordinary shares(WANOS) used in earnings per share calculations1
WANOS used in calculating basic earnings per share (M)Add: Weighted average dilutive potential ordinary shares (M)Convertible subordinated debt (M)Share based payments (options, rights and deferred shares) (M)
WANOS used in calculating diluted earnings per share (M)

1. Weighted average number of ordinary shares for the March 2022 half excludes 4.5 million weighted average number of treasury shares held in ANZEST Pty Ltd (Sep 21 half: 4.4 million;
Mar 21 half: 4.7 million).

93

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7.

Segment analysisi) Description of segments
On 1 March 2022, the Group announced a structural change to the existing Australia Retail and Commercial division, and the digital businesses in theGroup Centre division (formerly known as the Technology, Services & Operations (TSO) and Group Centre division). This involves the integration of theAustralian retail and digital businesses, and the separation of the Australian commercial business into a new division. The new reporting segments will bereflected in the September 2022 half to align with the implementation of the changes from 1 April 2022. The segment disclosures below remainunchanged from those reported at 30 September 2021 and are consistent with internal reporting provided to the chief operating decision maker, being the
Chief Executive Officer, during the March 2022 half.
During the March 2022 half, the Group operated on a divisional structure with five continuing divisions: Australia Retail and Commercial, Institutional,
New Zealand, Pacific, and Group Centre. For further information on the composition of divisions refer to the Definitions on page 133.
ii) Operating segments
ANZ measures the performance of continuing segments on a cash profit basis. To calculate cash profit, certain non-core items are removed fromstatutory profit. Details of these items are included in the ‘Other items’ section of this note.
Transactions between divisions across segments within ANZ are conducted on an arm’s-length basis and disclosed as part of the income and expensesof these segments.

Australia
Retail andCommercial$M

Institutional$M

New
Zealand$M

Pacific$M

Group
Centre$M

Otheritems1
$M

Group
Total
$M

3,864

1,621

1,505

46

64

-

7,100

- Lending fees

50

131

4

3

-

-

188

- Non-lending fees

652

311

301

11

(1)

-

1,274

- Commissions

35

1

14

-

-

-

50

- Funds management income

13

1

123

-

-

-

137
(666)

March 2022 Half YearNet interest income
Net fee and commission income- Fee and commission expense

(303)

(132)

(229)

(2)

-

-

Net income from insurance business

55

-

-

-

-

-

55

Other income

244

470

32

22

(32)

594

1,330

-

-

-

-

74

-

74

Operating income

4,610

2,403

1,750

80

105

594

9,542

Profit/(Loss) after tax from continuing operations

1,986

730

787

(6)

(384)

422

3,535

Share of associates’ profit/(loss)

Profit/(Loss) after tax from discontinued operations

(5)
3,530

Profit after tax attributable to shareholders
1.

In evaluating the performance of the operating segments, certain items are removed from statutory profit where they are not considered integral to the ongoing performance of the segment.
These items are presented in section (iii) below.

94

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7.

Segment analysis, cont’dAustralia
Retail andCommercial
$M
4,015

Institutional
$M
1,586

- Lending fees

105

118

4

- Non-lending fees

650

335

292

- Commissions

35

-

16

-

September 2021 Half YearNet interest income

New
Zealand
$M
1,477

Group
Centre$M
50

Otheritems1
$M
-

3

-

-

230

10

(1)

-

1,286

-

-

51

Pacific
$M
47

Group
Total
$M
7,175

Net fee and commission income- Funds management income

15

-

132

-

-

-

147

- Fee and commission expense

(274)

(130)

(215)

(1)

(1)

-

(621)

Net income from insurance business

58

-

-

-

-

-

58

Other income

(2)

542

2

20

70

29

661

Share of associates’ profit/(loss)

-

(1)

-

-

67

-

66

Operating income

4,602

2,450

1,708

79

185

29

9,053

Profit/(Loss) after tax from continuing operations

1,835

939

737

(10)

(293)

20

3,228

Profit/(Loss) after tax from discontinued operations(9)

Profit after tax attributable to shareholders

3,219

March 2021 Half YearNet interest income

3,974

1,519

1,393

- Lending fees

111

123

6

- Non-lending fees

618

348

293

- Commissions

29

1

16

- Funds management income

17

1

122

- Fee and commission expense

(286)

(144)

(215)

49

51

-

6,986

4

-

-

244

10

(3)

-

1,266

-

-

-

46

-

-

-

140

(1)

-

-

(646)

Net fee and commission income

Net income from insurance business
Other income
Share of associates’ profit/(loss)

52

-

-

-

-

-

52

(240)

685

16

20

96

(56)

521

1

-

-

-

(243)

-

(242)

Operating income

4,276

2,533

1,631

82

(99)

(56)

8,367

Profit/(Loss) after tax from continuing operations

1,782

948

771

7

(518)

(39)

2,951

Profit/(Loss) after tax from discontinued operations(8)

Profit after tax attributable to shareholders
1.

2,943

In evaluating the performance of the operating segments, certain items are removed from statutory profit where they are not considered integral to the ongoing performance of the segment.
These items are presented in section (iii) below.

iii) Other items
The table below sets out the profit after tax impact of other items which are removed from statutory profit to reflect the cash profit of each segment.
Half Year
Item gains/(losses)

Mar 22$M

Related segment

Movement

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Economic hedges

Institutional, New Zealand, Group Centre

373

128

(51)

large

large

Revenue and expense hedges

Group Centre

49

(108)

12

large

large

422

20

(39)

large

large

Total from continuing operations

95

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8.

Derivative financial instruments

Derivative financial instruments are contracts whose value is derived from one or more underlying variables or indices defined in the contract, require little
or no initial net investment and are settled at a future date. Derivatives include contracts traded on registered exchanges and contracts agreed between
counterparties. The use of derivatives and their sale to customers as risk management products is an integral part of the Group’s trading and sales
activities. Derivatives are also used to manage the Group’s own exposure to fluctuations in foreign exchange and interest rates as part of its asset andliability management activities (balance sheet risk management).
The following table includes all trading and balance sheet risk management contracts. The derivative instruments become favourable (assets) or
unfavourable (liabilities) as a result of fluctuations in market rates relative to the terms of the derivative.

Fair Values

AssetsLiabilities

Assets1

Liabilities1

AssetsLiabilities

Mar 22$M

Mar 22$M

Sep 21$M

Sep 21$M

Mar 21$M

Mar 21$M

Interest rate contracts
Forward rate agreements

-

(1)

2

(23)

10

(12)

Futures contracts

760

(142)

296

(26)

45

(74)

Swap agreements

8,741(10,511)

10,664(8,206)

73,125(71,523)

Options purchased

1,355

-

971

-

1,192

-

-

(1,558)-(1,207)-(1,162)

10,856(12,212)

11,933(9,462)

74,372(72,771)

Options sold
Total
Foreign exchange contracts
Spot and forward contracts

17,443(16,805)

13,915(11,521)15,858(14,389)

Swap agreements

14,417(16,123)

11,131(12,425)

12,683(13,833)

Options purchased

340

-

277

-

311

-

-

(586)

-

(577)

-

(587)

Total

32,200(33,514)

25,323(24,523)

28,852(28,809)

Commodity contracts

2,181(2,068)1,445(2,017)

1,439(1,345)Credit derivatives purchased

1

(1)

-

(33)

1

(1)

Credit derivatives sold

-

-

35

-

2

-

1

(1)

35

(33)

3

(1)

45,238(47,795)

38,736(36,035)

104,666(102,926)

Options sold

Credit default swaps

Total
Derivative financial instruments
1.

During the September 2021 half, a change was made to the legal arrangements for the settlement of derivative transactions with a central clearing counterparty which resulted in the
reduction of derivative financial instrument assets by $55.1 billion, derivative financial instrument liabilities by $55.2 billion and net collateral paid by $0.1 billion at the date of the change.

96

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.

Net loans and advances
As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21-14%

Australia
Overdrafts

3,491

4,190

4,070

-17%

Credit cards outstanding

5,707

5,488

6,119

4%

-7%

Commercial bills outstanding

5,632

6,000

6,152

-6%

-8%

Term loans - housing

277,894

277,720

280,545

0%-1%

Term loans - non-housing

151,718

139,885

138,771

8%

9%

1,113

1,319

1,297

-16%

-14%

445,555434,602436,954

3%

2%

668

407

516

64%

29%

6

5

5

20%

20%

464

482

472

-4%

-2%

Term loans - non-housing

69,731

60,69351,867

15%

34%

Other

1,332

1,666

1,123

-20%

19%

Total Asia, Pacific, Europe & America

72,201

63,25353,983

14%

34%

Other
Total Australia
Asia, Pacific, Europe & America
Overdrafts
Credit cards outstanding
Term loans - housing

New Zealand
Overdrafts

824

763

599

8%

38%

Credit cards outstanding

1,087

1,077

1,181

1%

-8%

Term loans - housing

95,794

94,37087,561

2%

9%

Term loans - non-housing

38,512

38,69937,3900%3%Total New Zealand

136,217

134,909126,7311%

7%

Subtotal

653,973

632,764

617,668

3%

6%

(460)

(434)

(437)

6%

5%

Unearned income1
1

Capitalised brokerage and other origination costs
Gross loans and advances

Allowance for expected credit losses (refer to Note 10)
Net loans and advances
1.

Amortised over the expected life of the loan.

97

1,482

1,434

1,378

3%

8%

654,995

633,764

618,6093%

6%(3,559)(4,045)(4,250)

-12%

-16%

651,436

629,719614,359

3%

6%

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10.

Allowance for expected credit losses
As at
Collectively
assessed$M

Mar 22
Individuallyassessed$M

2,940

Net loans and advances atamortised cost
Off-balance sheet commitments
Investment securities - debt securities
at amortised cost
Total

Total
$M

Collectively
assessed$M

Sep 21
Individuallyassessed
$M

619

3,559

3,379

788

17

805

29

-

29

3,757

636

10

-

Other Comprehensive Income
Investment securities - debt securities
at FVOCI1
1.

Total
$M

Collectively
assessed$M

Mar 21
Individuallyassessed
$M

Total
$M

666

4,045

3,472

778

4,250

785

21

806

795

31

826

31

-

31

18

-

18

4,393

4,195

687

4,882

4,285

809

5,094

10

11

-

11

11

-

11

For FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in Other comprehensive income with acorresponding charge to profit or loss.

The following tables present the movement in the allowance for ECL.
Net loans and advances at amortised cost
Allowance for ECL is included in Net loans and advances.

Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

1,204

2,465

461

851

4,981

Transfer between stages

345

(369)

(98)

122

-

New and increased provisions (net of releases)

(563)

3

52

333

(175)

As at 1 October 2020

Write-backs

-

-

-

(171)

(171)

Bad debts written off (excluding recoveries)

-

-

-

(340)

(340)

Foreign currency translation and other movements1

(11)

(14)

(3)

(17)

(45)

As at 31 March 2021

975

2,085

412

778

4,250

Transfer between stages

200

(233)

(50)

83

-

New and increased provisions (net of releases)

(222)

124

50

284

236

Write-backs

-

-

-

(194)

(194)

Bad debts written off (excluding recoveries)

-

-

-

(286)

(286)

Foreign currency translation and other movements1

15

18

5

1

39

As at 30 September 2021

968

1,994

417

666

4,045

Transfer between stages

130

(152)

(58)

80

-

New and increased provisions (net of releases)

(73)

(301)

46

221

(107)

Write-backs

-

-

-

(111)

(111)

Bad debts written off (excluding recoveries)

-

-

-

(222)

(222)

(14)

(14)

(3)

(15)

(46)

1,011

1,527

402

619

3,559

Foreign currency translation and other movements1
As at 31 March 2022
1.

Other movements include the impact of discount unwind on individually assessed allowances for ECL during the period.

98

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10.

Allowance for expected credit losses, cont’d

Off-balance sheet commitments - undrawn and contingent facilities
Allowance for ECL is included in Other provisions.
Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 1 October 2020

596

239

23

40

898

Transfer between stages

36

(34)

(3)

1

-

New and increased provisions (net of releases)

(52)

4

-

(1)

(49)

Write-backs

-

-

-

(9)

(9)

Foreign currency translation

(12)

(2)

-

-

(14)

As at 31 March 2021

568

207

20

31

826

Transfer between stages

32

(30)

(2)

-

-

New and increased provisions (net of releases)

(57)

31

1

2

(23)

-

-

-

(12)

(12)

Write-backs
Foreign currency translation and other movements1

12

3

-

-

15

As at 30 September 2021

555

211

19

21

806

Transfer between stages

28

(27)

(2)

1

-

New and increased provisions (net of releases)

24

(5)

21

(1)

39

Write-backs

-

-

-

(4)

(4)

Foreign currency translation and other movements1

(30)

(6)

-

-

(36)

As at 31 March 2022

577

173

38

17

805

1.

Other movements include the impact of divestments completed during the period.

Investment securities - debt securities at amortised cost
Allowance for ECL is included in Investment securities.

Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 31 March 2021

18

-

-

-

18

As at 30 September 2021

31

-

-

-

31

As at 31 March 2022

29

-

-

-

29

Investment securities - debt securities at FVOCIFor FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in
Other comprehensive income with a corresponding charge to profit or loss.
Stage 3
Stage 1
$M

Collectively
Stage 2
assessed$M$M

Individuallyassessed
$M

Total
$M

As at 31 March 2021

11

-

-

-

11

As at 30 September 2021

11

-

-

-

11

As at 31 March 2022

10

-

-

-

10

99

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10.

Allowance for expected credit losses, cont’dCredit impairment charge/(release) analysis
Half Year

Movement

Mar 22$M

Sep 21$M

Mar 21$M- Collectively assessed

(371)

(145)

- Individually assessed

301

369

Write-backs3(115)

Recoveries of amounts previously written off
Total credit impairment charge/(release)

Mar 22
v. Sep 21

Mar 22v. Mar 21

(678)

large

-45%

455

-18%

-34%

(206)

(180)

-44%

-36%

(99)

(94)

(88)

5%

13%

(284)

(76)

(491)

large

-42%

New and increased provisions (net of releases)1,2

1.

Includes the impact of transfers between collectively assessed and individually assessed.
2. New and increased provisions (net of releases) includes:
Mar 22 half3.

Sep 21 half

Mar 21 half

Collectively
assessed$M

Individuallyassessed$M

Collectively
assessed$M

Individuallyassessed$M

Collectively
assessed$M

Individuallyassessed$M

Net loans and advances at amortised cost

(408)

301

(131)

367

(630)

455

Off-balance sheet commitments

39

-

(25)

2

(49)

-

Investment securities - debt securities atamortised cost

(1)

-

11

-

-

-

Investment securities - debt securities at FVOCI

(1)

-

-

-

1

-

Total

(371)

301

(145)

369

(678)

455

Consists of write-backs in Net loans and advances at amortised cost of $111 million (Sep 21 half: $194 million; Mar 21 half: $171 million), and Off-balance sheet commitment of $4 million(Sep 21 half: $12 million; Mar 21 half: $9 million).

100

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
11.

Deposits and other borrowings
As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Certificates of deposit

29,914

31,915

Term deposits

44,16549,767

34,176-6%-12%61,503-11%

On demand and short term deposits

286,191-28%

270,839

247,730

6%Deposits not bearing interest

16%

24,78523,20920,8507%19%

Deposits from banks and securities sold under repurchase agreements1

50,39849,34042,651

2%

18%

Commercial paper

27,30921,451

22,82927%

20%

Total Australia

462,762446,521429,7394%

8%

Australia

Asia, Pacific, Europe & America
Certificates of deposit

5,013

4,003

4,532

25%

11%

Term deposits

97,52588,481

84,95010%

15%

On demand and short term deposits

30,84136,09427,332-15%

13%

Deposits not bearing interest

7,314

5,709

6,448

28%

13%

Deposits from banks and securities sold under repurchase agreements

47,96735,22535,45636%

35%

Total Asia, Pacific, Europe & America

188,660

169,512

158,718

11%

19%

56%

New ZealandCertificates of deposit

2,018

1,790

1,292

13%

Term deposits

38,931

38,83339,7150%-2%

On demand and short term deposits

59,59059,822

54,3790%

10%Deposits not bearing interest

21,712

20,82818,6184%

17%

Deposits from banks and securities sold under repurchase agreements2

2,069

1,517

910

36%

large

4,546

4,233

3,252

7%

40%

Total New Zealand

128,866

127,023

118,1661%

9%

Total deposits and other borrowings

780,288743,056

706,623

5%

10%

Commercial paper and other borrowings

1.
2.

Includes $20.1 billion (Sep 21: $20.1 billion; Mar 21: $12.0 billion) of funds drawn under the RBA TFF.
Includes $1.7 billion (Sep 21: $1.2 billion; Mar 21: nil) of funds drawn under the RBNZ FLP and TLF.

101

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Other provisions
As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Allowance for ECL on undrawn and contingent facilities (refer to Note 10)

805

806

826

0%

-3%

Customer remediation

853

886

1,003

-4%

-15%

Restructuring costs

88

99

122

-11%

-28%

Non-lending losses, frauds and forgeries1

118

133

144

-11%

-18%

Other1
Total other provisions
1.

398

290

322

37%

24%

2,262

2,214

2,417

2%

-6%

Certain provisions have been reclassified from Other to Non-lending losses, frauds and forgeries during the March 2022 half to better reflect their nature. Comparatives have been restatedaccordingly (Sep 21: $72 million; Mar 21: $67 million).

Customer remediation
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation costs and outcomes.
Restructuring costs
Provisions for restructuring costs arise from activities related to material changes in the scope of business undertaken by the Group or the manner inwhich that business is undertaken and include employee termination benefits. Costs relating to on-going activities are not provided for and are expensed
as incurred.
Non-lending losses, frauds and forgeries
Non-lending losses include losses arising from certain legal actions not directly related to amounts of principal outstanding for loans and advances andlosses arising from forgeries, frauds and the correction of operational issues. The amounts recognised are the best estimate of the consideration required
to settle the present obligation at the reporting date, taking into account the risks and uncertainties that surround the events and circumstances that affectthe provision.
Other
Other comprise various other provisions including workers compensation, make-good provisions associated with leased premises, warranties andindemnities provided in connection with various disposals of businesses and assets, and contingent liabilities recognised as part of a businesscombination.

102

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Debt issuances
As at
Mar 22$M
64,645

Total unsubordinated debt

Movement

Sep 21$M
75,775

Mar 21$M
83,963

Mar 22
v. Sep 21-15%

Mar 22v. Mar 21-23%

Additional Tier 1 Capital (perpetual subordinated securities)1
ANZ Capital Notes (ANZ CN)2
ANZ CN1

-

-

1,120

n/a

-100%

ANZ CN2

-

1,609

1,609

-100%

-100%

ANZ CN3

969

968

968

0%

0%

ANZ CN4

1,618

1,617

1,615

0%

0%
0%

ANZ CN5

928

927

927

0%

ANZ CN6

1,487

1,486

-

0%

n/a

ANZ CN7

1,298

-

-

n/a

n/a

1,282

1,422

1,347

-10%

-5%

-

477

459

-100%

-100%

ANZ Capital Securities3
ANZ New Zealand Capital Notes4

Tier 2 Capital
Perpetual subordinated notes5
Term subordinated notes6
Other subordinated debt securities7

-

417

395

-100%

-100%

14,047

15,79015,220

-11%

-8%

952

566

-

68%

n/a

Total subordinated debt

22,581

25,27923,660-11%-5%

Total debt issuances

87,226

101,054

107,623

-14%

-19%

1.
2.

ANZ Capital Notes, ANZ Capital Securities and the ANZ New Zealand Capital Notes are Basel 3 compliant instruments.
Each of the ANZ Capital Notes will convert into a variable number of ANZ ordinary shares on a specified mandatory conversion date at a 1% discount (subject to certain conditions being
satisfied). If ANZ’s Common Equity Tier 1 capital ratio is equal to or less than 5.125%, or ANZ receives a notice of non-viability from APRA, then the notes will immediately convert into avariable number of ANZ ordinary shares at a 1% discount subject to a maximum conversion number. Subject to certain conditions, the notes are redeemable or convertible into ANZ ordinary
shares (on similar terms to mandatory conversion) by ANZ at its discretion on an early redemption or conversion date.
IssuerIssue dateIssue amount$M

Early redemption orconversion date

Mandatory
conversion date
n/a

CN1

ANZ

7 Aug 2013

1,120

n/a

CN2

ANZ

31 Mar 2014

1,610

n/a

n/a

CN3

ANZ, acting through its New Zealand branch

5 Mar 2015

970

24 Mar 2023

24 Mar 2025

CN4

ANZ

27 Sep 2016

1,622

20 Mar 2024

20 Mar 2026

CN5

ANZ

28 Sep 2017931

20 Mar 2025

20 Mar 2027

CN6

ANZ

8 Jul 2021

1,500

20 Mar 2028

20 Sep 2030

CN7

ANZ

24 Mar 2022

1,310

20 Mar 2029

20 Sep 2031

Approximately $750 million of ANZ Capital Notes 1 were reinvested into ANZ Capital Notes 6 on 8 July 2021 with the remaining $370 million being redeemed on 1 September 2021. All the
ANZ Capital Notes 2 were redeemed on 24 March 2022 with approximately $860 million of the proceeds from redemption reinvested into ANZ Capital Notes 7 on the same date.
3.

On 15 June 2016, ANZ acting through its London branch issued US$1 billion fully-paid perpetual subordinated contingent convertible securities (ANZ Capital Securities). If ANZ’s Common
Equity Tier 1 capital ratio is equal to or less than 5.125%, or ANZ receives a notice of non-viability from APRA, then the securities will immediately convert into a variable number of ANZ
ordinary shares at a 1% discount subject to a maximum conversion number. Subject to certain conditions, on the First Reset Date (15 June 2026) and on each 5 year anniversary, ANZ has
the right to redeem all of the securities at its discretion.
4. On 31 March 2015, ANZ Bank New Zealand Limited (ANZ New Zealand) issued NZ$500 million convertible notes (ANZ New Zealand Capital Notes). The ANZ New Zealand Capital Notes
were redeemed on 31 December 2021.
5. The USD 300 million perpetual subordinated notes ceased to be treated as Basel 3 transitional Tier 2 capital under APRA’s capital framework from 1 January 2022.
6. All the term subordinated notes are convertible and are Basel 3 compliant instruments. If ANZ receives a notice of non-viability from APRA, then the convertible subordinated notes will
immediately convert into a variable number of ANZ ordinary shares at a 1% discount subject to a maximum conversion number.
7. A subsidiary of the Group, ANZ Bank New Zealand Limited, issued NZ$600 million of unsecured subordinated notes in September 2021. Whilst these notes constitute Tier 2 capital under
RBNZ requirements, the notes do not contain a Non-Viability Trigger Event and therefore do not meet APRA's requirements for Tier 2 capital instruments in order to qualify as regulatory
capital for the Group. Other subordinated debt securities also includes ANZ’s USD 300 million perpetual subordinated notes from 1 January 2022 (refer to footnote 5).

103

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Credit risk

Maximum exposure to credit risk
For financial assets recognised on the balance sheet, the maximum exposure to credit risk is the carrying amount. In certain circumstances there may bedifferences between the carrying amounts reported on the balance sheet and the amounts reported in the tables below. Principally, these differences
arise in respect of financial assets that are subject to risks other than credit risk, such as equity instruments which are primarily subject to market risk, orbank notes and coins.
For undrawn facilities, this maximum exposure to credit risk is the full amount of the committed facilities. For contingent exposures, the maximum
exposure to credit risk is the maximum amount the group would have to pay if the instrument is called upon.
The table below shows the maximum exposure to credit risk of on-balance sheet, and off-balance sheet positions before taking account of any collateral
held or other credit enhancements:

On-balance sheet positions
Net loans and advances

Mar 22$M
651,436

Reported

Excluded1

Maximum Exposure to Credit Risk

As at

As at

As at

Sep 21$M
629,719

Mar 21$M
614,359

Mar 22$M-

Sep 21$M-

Mar 21$M-

Mar 22$M
651,436

Sep 21$M
629,719

Mar 21$M
614,359

Investment securities- debt securities at amortised cost

8,505

7,031

7,028

-

-

-

8,505

7,031

7,028

- debt securities at FVOCI

69,82474,74383,715---69,82474,74383,715- equity securities at FVOCI

1,390

1,310

1,184

1,390

1,310

1,184

-

-

-

- debt securities at FVTPL

38

42

63

-

-

-

38

42

63

273,507

254,105

300,339

13,117

13,653

15,829260,390

240,452

284,510

1,004,700

966,950

1,006,688

14,507

14,96317,013

990,193

951,987

989,675

Other financial assets
Total on-balance sheet positions
Off-balance sheet commitments
Undrawn and contingent facilities2
Total
1.
2.

264,137

259,789

252,392---

264,137

259,789

252,392

1,268,837

1,226,739

1,259,080

14,507

14,96317,013

1,254,330

1,211,776

1,242,067

Excluded comprises bank notes and coins and cash at bank within liquid assets, and investment securities - equity securities at FVOCI as they do not have credit exposure.
Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed allowance for expected credit losses.

Credit Quality
The Group’s internal Customer Credit Rating (CCR) is used to manage the credit quality of financial assets. To enable wider comparisons, the Group’s
CCRs are mapped to external rating agency scales as follows:
Moody'sRatingStandard &Poor'sRatingDemonstrated superior stability in their operating and financial performance over the
long-term, and whose earnings capacity is not significantly vulnerable to foreseeable
events.

Aaa - Baa3

AAA - BBB-CCR 5+ to 6-

Demonstrated sound operational and financial stability over the medium to long termeven though some may be susceptible to cyclical trends or variability in earnings.

Ba1 - B1

BB+ - B+Weak

CCR 7+ to 8=

Demonstrated some operational and financial instability, with variability anduncertainty in profitability and liquidity projected to continue over the short andpossibly medium term.

B2 - Caa

B - CCC

Defaulted

CCR8- to 10

When doubt arises as to the collectability of a credit facility, the financial instrument(or ‘the facility’) is classified as defaulted.

N/A

N/A

Credit Quality
Description

Internal CCR

ANZ Customer Requirement

Strong

CCR 0+ to 4-

Satisfactory104

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Credit risk, cont’d

Net loans and advances
Stage 3
Collectively
Individuallyassessedassessed$M$M

As at March 2022

Stage 1
$M

Stage 2
$M

Strong431,582

13,744--445,326

Satisfactory

145,404

30,144--

175,548

Weak

11,70910,721--

22,430

-

-

3,628

1,286

4,914

588,695

54,609

3,628

1,286

648,218(1,011)(1,527)

(402)

(619)

(3,559)587,684

53,082

3,226

667

644,659

0.17%

2.80%

11.08%

48.13%

0.55%

Defaulted
Gross loans and advances at amortised cost
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio

Total
$M

Loans and advances at fair value through profit or loss

5,755

Unearned income(460)

Capitalised brokerage and other origination costs

1,482

Net carrying amount

651,436

As at September 2021
Strong412,821

12,596--425,417

Satisfactory

146,368

31,228--

177,596

7,921

12,907--

20,828

-

-

3,754

1,549

5,303

567,11056,731

3,754

1,549

629,144(968)(1,994)

(417)

(666)

(4,045)566,142

54,7373,337

883

625,099

0.17%

3.51%

11.11%

43.00%

0.64%

Weak
Defaulted
Gross loans and advances at amortised cost
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio
Loans and advances at fair value through profit or loss

3,620

Unearned income(434)

Capitalised brokerage and other origination costs

1,434

Net carrying amount

629,719

As at March 2021
Strong390,928

12,204--403,132

Satisfactory

149,462

33,317--

182,779

8,493

14,150--22,643

-

-

4,160

1,941

6,101

548,883

59,671

4,160

1,941

614,655(975)(2,085)

(412)

(778)

(4,250)547,908

57,586

3,748

1,163

610,405

0.18%

3.49%

9.90%

40.08%

0.69%

Weak
Defaulted
Gross loans and advances at amortised cost
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio
Loans and advances at fair value through profit or loss

3,013

Unearned income(437)

Capitalised brokerage and other origination costs

1,378

Net carrying amount

614,359

105

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Credit risk, cont’d

Off-balance sheet commitments - undrawn and contingent facilities
Stage 3
Collectively
Individuallyassessedassessed$M$M

As at March 2022

Stage 1
$M

Stage 2
$M

Strong

175,462

1,244

-

-

176,706

Satisfactory

23,219

3,637

-

-

26,856

Weak

1,728

782

-

-

2,510

-

-

112

37

149

200,409

5,663

112

37

206,221

Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

Total
$M

(577)

(173)

(38)

(17)

(805)

199,832

5,490

74

20

205,416

0.29%

3.05%

33.93%

45.95%

0.39%

Undrawn and contingent facilities not subject to ECL1

58,721

Net undrawn and contingent facilities

264,137

As at September 2021
Strong174,808

1,754

-

-

176,562

Satisfactory

23,799

3,564

-

-

27,363

Weak

1,030

1,185

-

-

2,215

Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

-

-

138

50

188

199,637

6,503

138

50

206,328

(555)

(211)

(19)

(21)

(806)

199,082

6,292

119

29

205,522

0.28%

3.24%

13.77%

42.00%

0.39%

Undrawn and contingent facilities not subject to ECL1

54,267Net undrawn and contingent facilities

259,789

As at March 2021
Strong168,628

1,829

-

-

170,457

Satisfactory

23,398

4,148

-

-

27,546

950

938

-

-

1,888

-

-

135

232

367

192,976

6,915

135

232

200,258

Weak
Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

(568)

(207)

(20)

(31)

(826)

192,408

6,708

115

201

199,432

0.29%

2.99%

14.81%

13.36%

0.41%

Undrawn and contingent facilities not subject to ECL1

52,960Net undrawn and contingent facilities

252,392

1.

Commitments that can be unconditionally cancelled at any time without notice.

106

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Credit risk, cont’d

Investment securities - debt securities at amortised cost
Stage 3
Collectively
Individuallyassessedassessed$M$M

Stage 1
$M

Stage 2
$M

6,978

-

-

-

6,978

120

-

-

-

120

Weak

1,436

-

-

-

1,436

Gross investment securities - debt securities at amortised cost

8,534

-

-

-

8,534

(29)

-

-

-

(29)

Net investment securities - debt securities at amortised cost

8,505

-

-

-

8,505

Coverage ratio

0.34%

-

-

-

0.34%

5,574

-

-

-

5,574

121

-

-

-

121

Weak

1,367

-

-

-

1,367

Gross investment securities - debt securities at amortised cost

7,062

-

-

-

7,062

(31)

-

-

-

(31)

Net investment securities - debt securities at amortised cost

7,031

-

-

-

7,031

Coverage ratio

0.44%

-

-

-

0.44%

Strong

5,657

-

-

-

5,657

Satisfactory

1,389

-

-

-

1,389

Gross investment securities - debt securities at amortised cost

7,046

-

-

-

7,046

As at March 2022
StrongSatisfactory

Allowance for ECL

Total
$M

As at September 2021
StrongSatisfactory

Allowance for ECL

As at March 2021

Allowance for ECL

(18)

-

-

-

(18)

Net investment securities - debt securities at amortised cost

7,028

-

-

-

7,028

Coverage ratio

0.26%

-

-

-

0.26%

Stage 3
Collectively
Individuallyassessedassessed
$M
$M

Total
$M

Investment securities - debt securities at FVOCI

As at March 2022

Stage 1
$M

Stage 2
$M

Strong69,656---

Satisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

69,656

168

-

-

-

168

69,824---

69,824

(10)

-

-

-

(10)

0.01%

-

-

-

0.01%

74,541---

74,541

202

-

-

-

202
74,743As at September 2021
StrongSatisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

74,743

-

-

-

(11)

-

-

-

(11)

0.01%

-

-

-

0.01%

83,494---

83,494

221

-

-

-

221

83,715---83,715As at March 2021
StrongSatisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

107

(11)

-

-

-

(11)

0.01%

-

-

-

0.01%

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Credit risk, cont’d

Other financial assets
As at

Strong1

Mar 22$M

Sep 21$M

Mar 21$M

257,543

235,847

280,105

2,483

3,513

3,909

Weak

391

1,122

556

Defaulted

11

12

3

260,428

240,494

284,573

Satisfactory

1

Other financial assets
1.

Includes Investment securities - debt securities at FVTPL of $38 million (Sep 21: $42 million; Mar 21: $63 million).

108

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15.

Fair value measurement

The Group carries a significant number of financial instruments on the balance sheet at fair value. Fair value is the best estimate of the price that would
be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.
i) Assets and liabilities measured at fair value on the balance sheeta)Valuation

The Group has an established control framework, including appropriate segregation of duties, to ensure that fair values are accurately determined,
reported and controlled. The framework includes the following features:

products are approved for transacting with external customers and counterparties only where fair values can be appropriately determined;

when using quoted prices to value an instrument, these are independently verified from external pricing providers;

fair value methodologies and inputs are evaluated and approved by a function independent of the party that undertakes the transaction;



movements in fair values are independently monitored and explained by reference to underlying factors relevant to the fair value; andvaluation adjustments (such as funding valuation adjustments, credit valuation adjustments and bid-offer adjustments) are independently validated
and monitored.

If the Group holds offsetting risk positions, then the Group uses the portfolio exception in AASB 13 Fair Value Measurement (AASB 13) to measure thefair value of such groups of financial assets and financial liabilities. We measure the portfolio based on the price that would be received to sell a net longposition (an asset) for a particular risk exposure, or to transfer a net short position (a liability) for a particular risk exposure.
b)

Fair value approach and valuation techniques

We use valuation techniques to estimate the fair value of assets and liabilities for recognition, measurement and disclosure purposes where no quoted
price in an active market for that asset or liability exists. This includes the following:
Asset or Liability

Fair Value Approach

Financial instruments classified as:- trading securities- securities sold short- derivative financial assets and liabilities- investment securities- other assets

Valuation techniques are used that incorporate observable market inputs for securities
with similar credit risk, maturity and yield characteristics. Equity instruments that are nottraded in active markets may be measured using comparable company valuation
multiples.

Financial instruments classified as:- net loans and advances- deposits and other borrowings- debt issuances

Discounted cash flow techniques are used whereby contractual future cash flows of the
instrument are discounted using discount rates incorporating wholesale market interest
rates, or market borrowing rates for debt with similar maturities or with a yield curve
appropriate for the remaining term to maturity.

There were no significant changes to valuation approaches during the current or prior halves.
c)

Fair value hierarchy

The Group categorises financial assets and liabilities carried at fair value into a fair value hierarchy as required by AASB 13 based on the observability of
inputs used to measure the fair value:

Level 1 - valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or
indirectly; andLevel 3 - valuations where significant unobservable inputs are used to measure the fair value of the asset or liability.

There were no significant changes to levelling approaches during the current or prior halves.

109

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15.

Fair value measurement, cont’dd)Fair value hierarchy disclosure

The following table presents assets and liabilities carried at fair value:
Fair value measurements
Level 1$M

As at March 2022
AssetsLevel 2
$M

Level 3
$M

Total
$M

Trading securities1

31,901

7,532-

39,433

Derivative financial instruments

1,302

43,88947

45,238Investment securities1

59,312

10,5201,420

71,252

-

5,642

113

5,755

92,51567,583

1,580

161,678

Net loans and advances (measured at fair value)
Total
Liabilities

-

4,589

-

4,589

Derivative financial instruments

Deposits and other borrowings (designated at fair value)

655

47,11723

47,795

Payables and other liabilities2

4,226

408

-

4,634

-

1,864

-

1,864

4,881

53,97823

58,882

Debt issuances (designated at fair value)
Total
As at September 2021
AssetsTrading securities
Derivative financial instruments
Investment securities
Net loans and advances (measured at fair value)
Total

36,025

8,663-

44,688494

38,18755

38,73668,007

6,756

1,332

76,095

-

3,510

110

3,620

104,526

57,116

1,497

163,139

Liabilities
Deposits and other borrowings (designated at fair value)

-

4,284

-

4,284

Derivative financial instruments

1,131

34,87430

36,035

Payables and other liabilities2

3,690

223

-

3,913

Debt issuances (designated at fair value)
Total

-

1,962

-

1,962

4,821

41,34330

46,194As at March 2021
AssetsTrading securities

41,424

4,907-

46,331

648

103,98434

104,666

83,573

209

1,180

84,962

-

3,003

10

3,013

125,645

112,103

1,224

238,972

-

3,598

-

3,598

Derivative financial instruments

947

101,95425

102,926

Payables and other liabilities2

3,925

12

-

3,937

-

1,926

-

1,926

4,872

107,49025

112,387

Derivative financial instruments
Available-for-sale assets
Net loans and advances (measured at fair value)
Total
Liabilities
Deposits and other borrowings (designated at fair value)

Debt issuances (designated at fair value)
Total
1.

2.

During the half year, $3,949 million of assets were transferred from Level 1 to Level 2, and $1,181 million of assets were transferred from Level 2 to Level 1 due to a change of theobservability of bond valuation inputs. There were no other material transfers during the period. Transfers into and out of levels are measured at the beginning of the reporting period inwhich the transfer occurred.
Payables and other liabilities relates to securities sold short which are classified as held for trading and measured at fair value through profit or loss.

110

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15.

Fair value measurement, cont’dii) Details of fair value measurements that incorporate unobservable market dataa)Level 3 fair value measurements

The net balance of Level 3 financial instruments is an asset of $1,557 million (Sep 21: $1,467 million; Mar 21: $1,199 million). The assets and liabilities
which incorporate significant unobservable inputs primarily include:

equities for which there is no active market or traded prices cannot be observed;



net loans and advances that are required to be measured at fair value for which there is no observable market data; and

derivatives referencing market rates that cannot be observed, primarily due to lack of market activity.

The material Level 3 financial instruments as at March 2022 are summarised below:
Bank of Tianjin (BoT)The investment is valued based on comparative price-to-book (P/B) multiples (a P/B multiple is the ratio of the market value of equity to the book value ofequity). The extent of judgement applied in determining the appropriate multiple and comparator group from which the multiple is derived are nonobservable inputs which have resulted in the Level 3 classification. As at March 2022, the BoT equity holding balance was $956 million. Movements in
the BoT balance of -$35 million in the March 2022 half was mainly due to the decrease of the P/B multiple for valuation.
1835i Ventures Trust - Equity Holding
The Group holds a number of unlisted equities in its 1835i Ventures Trust business units managed by 1835i, for which there are no active markets ortraded prices available resulting in Level 3 classification. As at March 2022, the total FVOCI unlisted equities holding in 1835i business unit was $280
million. Movements in the 1835i equity holding balances of $39 million in the March 2022 half was mainly due to new purchase.
Institutional division - Equity Holding
The Group also holds a number of unlisted equities in the Institutional division, for which there are no active markets or traded prices available resulting inLevel 3 classification. As at March 2022, the total FVOCI unlisted equities holding in this business unit was $126 million. Movements in the Institutional
division equity holding balances of $83 million in the March 2022 half was mainly due to new purchase.
Syndication Loan Held for Sale
The Group holds a number of syndication loans for sale which are measured at FVTPL. These loans are classified as Level 3 when there is noobservable market data available for valuation. As at March 2022, the syndication loan Level 3 balance was $112 million. During the March 2022 half, theGroup transferred $28 million of syndication loans measured at fair value from Level 2 to Level 3, when valuation parameters for these financial
instruments became unobservable.
b) Sensitivity to Level 3 data inputs
When we make assumptions due to significant inputs not being directly observable in the market place (Level 3 inputs), then changing these assumptions
changes the Group’s estimate of the instrument’s fair value. Favourable and unfavourable changes are determined by changing the primary
unobservable parameter used in deriving the valuation.
Bank of Tianjin (BoT)The valuation of the BoT investment is sensitive to the selected unobservable input, being the P/B multiple. If the P/B multiple was increased or
decreased by 10% it would result in a $96 million increase or decrease to the fair value of the investment (Sep 21: $99 million; Mar 21: $102 million),
which would be recognised in Other comprehensive income.
Other
The remaining Level 3 balance is immaterial and changes in the Level 3 inputs would have a minimal impact on net profit and net assets of the Group.
c)

Deferred fair value gains and losses

When fair values are determined using unobservable inputs significant to the fair value of a financial instrument, the Group does not immediately
recognise the difference between the transaction price and the amount we determine based on the valuation technique (referred to as the day one gain orloss) in profit or loss. After initial recognition, we recognise the deferred amount in profit or loss over the life of the transaction on a straight line basis orwhen all inputs become observable.
The day one gains and losses deferred are immaterial.

111

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15.

Fair value measurement, cont’diii) Financial assets and liabilities not measured at fair value
The classes of financial assets and liabilities listed in the table below are predominately carried at amortised cost on the Group’s balance sheet. Whilst
this is the value at which we expect the assets will be realised and the liabilities settled, the Group provides an estimate of the fair value of these financial
assets and liabilities at balance date in the table below for the entire class of financial assets and financial liabilities.
Carrying amount in the balance sheet

As at March 2022
Financial assets
Net loans and advances
Investment securities

Fair value

At amortisedcost$M

At fair
value
$M

Total
$M

$M

645,6815,755

651,436

649,142

8,505

71,25279,757

79,678654,186

77,007731,193

728,820

Deposits and other borrowings

775,699

4,589

780,288780,104

Debt issuances

85,362

1,864

87,22687,727

Total

861,061

6,453

867,514

867,831630,067

Total
Financial liabilities

As at September 2021
Financial assets
Net loans and advances

626,099

3,620

629,719

Investment securities

7,031

76,095

83,126

83,138633,130

79,715

712,845713,205

Total
Financial liabilities
Deposits and other borrowings

738,772

4,284

743,056

743,124

Debt issuances

99,092

1,962

101,054

103,079

Total

837,864

6,246

844,110846,203611,346

3,013

614,359

615,139

As at March 2021
Financial assets
Net loans and advances
Investment securities
Total

7,028

84,962

91,99091,945618,374

87,975706,349

707,084

Financial liabilities
Deposits and other borrowings

703,025

3,598

706,623

706,813

Debt issuances

105,697

1,926

107,623

109,580Total

808,7225,524

814,246

816,393112

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
16.

Shareholders’ equity
As at

Issued and quoted securities
Ordinary shares
Opening balance
Share buy-back1
2

Bonus Option Plan

Mar 22No.
2,823,563,652

Sep 21No.
2,845,541,800

Mar 21No.
2,840,370,225(30,831,227)(23,308,448)-

1,371,749

1,330,300

929,207--4,242,368

2,794,104,174

2,823,563,652

2,845,541,800(4,391,572)(4,401,593)(4,484,712)

2,789,712,602

2,819,162,059

2,841,057,088(29,459,478)(21,978,148)

5,171,575

Dividend Reinvestment Plan issues3
Closing balanceLess: Treasury Shares
Closing balanceIssued/(Repurchased) during the period
1.

2.
3.

The Company completed its $1.5 billion on-market share buy-back of ANZ ordinary shares purchasing $846 million worth of shares in the March 2022 half (Sep 21 half: $654 million;
Mar 21 half: nil) resulting in 31 million shares being cancelled in the March 2022 half (Sep 21 half: 23 million; Mar 21 half: nil).
The Company issued 1.4 million shares under the Bonus Option Plan (BOP) for the 2021 final dividend (1.3 million shares for the 2021 interim dividend).
The DRP in respect to the 2021 final dividend was satisfied in full through the on-market purchase and transfer of 7,364,132 shares at $27.68 to participating shareholders. The DRP in
respect to the 2021 interim dividend was satisfied in full through the on-market purchase and transfer of 7,103,024 shares at $27.91 to participating shareholders.

As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

25,091

25,984

Share option reserve

(164)
54

FVOCI reserve

Shareholders' equity
Ordinary share capital
Reserves
Foreign currency translation reserve

Cash flow hedge reserve
Transactions with non-controlling interests reserve

26,615

Mar 22
v. Sep 21-3%

Mar 22v. Mar 21
-6%

611
76

(503)
56

large

-67%

-29%

-4%

(43)

170

567

large

large

(1,247)

393

643

large

large

(22)

(22)

(22)

0%

0%

Total reserves(1,422)

1,228

741

large

large

Retained earnings

38,07836,45335,210

4%

8%

Share capital and reserves attributable to shareholders of the Company

61,747

63,66562,566

-3%

-1%

9

11

10

-18%

-10%

61,756

63,676

62,576-3%-1%

Non-controlling interests
Total shareholders' equity

17.

Changes in composition of the GroupThe Group held 19% of Cashrewards Limited (Cashrewards) prior to obtaining control on 24 December 2021, and completing the acquisition of 100% of
its ordinary shares on 23 February 2022. The Group’s initial 19% holding had a fair value of $17 million when control was obtained, with consideration of$80 million paid or payable in acquiring the remaining 81% of the company. On completion, the Group provisionally accounted for $6 million of net
tangible asset and $91 million of goodwill while the Group completes its purchase price allocation.
On 15 December 2020, the Group announced the sale of its merchant acquiring business and entered into an alliance with the acquirer Worldline. On
completion on 31 March 2022, the Group recognised a gain on sale after tax of $335 million and recognised its 49% interest in the new Worldline
partnership at a fair value of $57 million.
The contribution of these entities to the Group’s profit from ordinary activities during the half year ended 31 March 2022 was not material to the Group.

113

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
18.

Investments in Associates
Half Year
Mar 22$M
74

Share of associates' profit/(loss)

Contributions to profit

Movement

Sep 21$M
66

Mar 21$M(242)

Mar 22
v. Sep 21
12%

Mar 22v. Mar 21
large

Contribution toGroup profit after tax

Ownership interest
held by Group

Half Year

As at

Associates

P.T. Bank Pan Indonesia (PT Panin)

Mar 22$M
24

Sep 21$M
49

Mar 21$M
65

Mar 22%39

Sep 21%
39

Mar 21%
39

AMMB Holdings Berhad (AmBank)1,2

51

18

(307)

22

22

24

-

-

-

49

-

-

n/a

n/a

n/a

Worldline SA3
Other associates

(1)

(1)

-

Share of associates' profit/(loss)

74

66

(242)

1.

2.

3.

Following AmBank’s agreement with the Malaysian Ministry of Finance to resolve potential claims relating to its involvement with 1Malaysia Development Berhad, the Group recognised a$212 million reduction in equity accounted earnings reflecting its share of the settlement provision during the March 2021 half, with a corresponding decrease in the carrying value of theinvestment.
During the March 2021 half, AmBank partially impaired goodwill carried on its balance sheet and the Group recognised a $135 million reduction in equity accounted earnings reflecting its
share of the impairment recognised by AmBank, with a corresponding decrease in the carrying value of the investment.
The Group entered into a partnership with the European-based payments company Worldline in March 2022. The partnership arrangement involves ANZ and Worldline forming a newly
created merchant acquiring group, with ANZ and Worldline holding a 49% and 51% interest respectively.

19.

Related party disclosure

There have been no transactions with related parties that are significant to understanding the changes in financial position and performance of the Groupsince 30 September 2021.

20.

Contingent liabilities and contingent assets

There are outstanding court proceedings, claims and possible claims for and against the Group. Where relevant, expert legal advice has been obtained
and, in the light of such advice, provisions (refer to Note 12) and/or disclosures as deemed appropriate have been made. In some instances, we have notdisclosed the estimated financial impact of the individual items either because it is not practicable to do so or because such disclosure may prejudice theinterests of the Group.
Refer to Note 33 of the 2021 ANZ Annual Financial Report for a description of contingent liabilities and contingent assets as at 30 September 2021. A
summary of those contingent liabilities, and new contingent liabilities that have arisen in the current reporting period, is set out below.
Regulatory and customer exposures
In recent years there has been an increase in the number of matters on which the Group engages with its regulators. There have also beensignificant increases in the nature and scale of regulatory investigations, surveillance and reviews, civil and criminal enforcement actions (whether bycourt action or otherwise), formal and informal inquiries, regulatory supervisory activities and the quantum of fines issued by regulators, particularly
against financial institutions both in Australia and globally. The Group has received various notices and requests for information from its regulators aspart of both industry-wide and Group-specific reviews and has also made disclosures to its regulators at its own instigation. The nature of theseinteractions can be wide ranging and, for example, include or have included a range of matters including responsible lending practices, regulated
lending requirements, product suitability and distribution, interest and fees and the entitlement to charge them, customer remediation, wealth advice,
insurance distribution, pricing, competition, conduct in financial markets and financial transactions, capital market transactions, anti-money launderingand counter-terrorism financing obligations, reporting and disclosure obligations and product disclosure documentation. There may be exposures tocustomers which are additional to any regulatory exposures. These could include class actions, individual claims or customer remediation orcompensation activities. The outcomes and total costs associated with such reviews and possible exposures remain uncertain.

Benchmark/rate actions
In July and August 2016, class action complaints were brought in the United States District Court against local and international banks, including theCompany. The class actions are expressed to apply to persons and entities that engaged in US-based transactions in financial instruments that werepriced, benchmarked, and/or settled based on certain benchmark rates. The claimants sought damages or compensation in amounts not specified,and alleged that the defendant banks, including the Company, violated US anti-trust laws, antiracketeering laws, and (in one case only), theCommodity Exchange Act and unjust enrichment principles. As at 31 March 2022, ANZ has reached an agreement to settle one of these matters,
and an in-principle agreement to settle the other. The financial impact is not material. The settlements are without admission of liability and remainsubject to finalisation and court approval.
In February 2017, the South African Competition Commission commenced proceedings against local and international banks including the Company
alleging breaches of the cartel provisions of the South African Competition Act in respect of trading in the South African rand. The potential civil
penalty or other financial impact is uncertain.

114

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
20.


Contingent liabilities and contingent assets, cont’dCapital raising action
In September 2018, the Australian Securities and Investments Commission (ASIC) commenced civil penalty proceedings against the Company
alleging failure to comply with continuous disclosure obligations in connection with the Company’s August 2015 underwritten institutional equity
placement. ASIC alleges the Company should have advised the market that the joint lead managers took up approximately 25.5 million ordinary
shares of the placement. The Company is defending the allegations.

Consumer credit insurance litigation
In February 2020, a class action was brought against the Company alleging breaches of financial advice obligations, misleading or deceptive conduct
and unconscionable conduct in relation to the distribution of consumer credit insurance products. The issuers of the insurance products, QBE and
OnePath Life, are also defendants to the claim. The Company is defending the allegations.

Esanda dealer car loan litigation
In August 2020, a class action was brought against the Company alleging unfair conduct, misleading or deceptive conduct and equitable mistake inrelation to the use of flex commissions in dealer arranged Esanda car loans. The Company is defending the allegations.



OnePath superannuation litigation
In December 2020, a class action was brought against OnePath Custodians, OnePath Life and the Company alleging that OnePath Custodiansbreached its obligations under superannuation legislation, and its duties as trustee, in respect of superannuation investments and fees. The claim
also alleges that the Company was involved in some of OnePath Custodians’ investment breaches. The Company is defending the allegations.



New Zealand loan information litigation
In September 2021, a representative proceeding was brought against ANZ Bank New Zealand Limited, alleging breaches of disclosure requirements
under consumer credit legislation in respect of variation letters sent to certain loan customers. ANZ Bank New Zealand Limited is defending theallegations.



Credit cards litigation
In November 2021, a class action was brought against the Company alleging that certain interest terms in credit card contracts were unfair contract
terms and that it was unconscionable for the Company to rely on them. The Company is defending the allegations.



Unlicensed third parties action
In November 2021, ASIC commenced civil penalty proceedings against the Company alleging that three unlicensed third parties provided home loan
application documents to the Company’s lenders, including in connection with the Company’s home loan introducer program. ASIC alleges that theCompany contravened its obligations under credit legislation. The Company is defending the allegations.



Breakfree/offset action
In December 2021, ASIC commenced civil penalty proceedings against the Company in relation to benefits including fee waivers and discounts not
being applied under the ANZ Breakfree package, as well as system errors impacting offset account calculations. ASIC seeks civil penalties in respectof alleged false or misleading representations and unconscionable conduct. ASIC also alleges that the Company engaged in misleading or deceptive
conduct and breached certain statutory obligations as a financial services licensee. The Company is not contesting the claim and will join ASIC to
submit a proposed penalty of $25 million to the Court.

Royal Commission
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released its final report on 4 February 2019.
Following the Royal Commission there have been, and continue to be, additional costs and further exposures, including exposures associated withfurther regulator activity or potential customer exposures such as class actions, individual claims or customer remediation or compensation activities.
The outcomes and total costs associated with these possible exposures remain uncertain.

Security recovery actions
Various claims have been made or are anticipated, arising from security recovery actions taken to resolve impaired assets. These claims will bedefended.



Warranties, indemnities and performance management fees
The Group has provided warranties, indemnities and other commitments in favour of the purchaser and other persons in connection with various
disposals of businesses and assets and other transactions, covering a range of matters and risks. It is exposed to claims under those warranties,
indemnities and commitments, some of which are currently active. The outcomes and total costs associated with these exposures remain uncertain.
The Group has entered an arrangement to pay performance management fees to external fund managers in the event predetermined performance
criteria are satisfied in relation to certain Group investments. The satisfaction of the performance criteria and associated management fee remains
uncertain.

115

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
20.


Contingent liabilities and contingent assets, cont’d
Clearing and settlement obligations
Certain group companies have a commitment to comply with rules governing various clearing and settlement arrangements which could result in a
credit risk exposure and loss if another member institution fails to settle its payment clearing activities. The Group’s potential exposure arising fromthese arrangements is unquantifiable in advance.
Certain group companies hold memberships of central clearing houses, including ASX Clear (Futures), London Clearing House (LCH) SwapClear
and RepoClear, Korea Exchange (KRX), Hong Kong Exchange (HKEX), Clearing Corporation of India and the Shanghai Clearing House. These
memberships allow the relevant group company to centrally clear derivative instruments in line with cross-border regulatory requirements. Common
to all of these memberships is the requirement for the relevant group company to make default fund contributions. In the event of a default by anothermember, the relevant group company could potentially be required to commit additional default fund contributions which are unquantifiable inadvance.

Parent entity guarantees
The Company has issued letters of comfort and guarantees in respect of certain subsidiaries in the normal course of business. Under these lettersand guarantees, the Company undertakes to ensure that those subsidiaries continue to meet their financial obligations, subject to certain conditions
including that the entity remains a controlled entity of the Company.

Sale of Grindlays businessOn 31 July 2000, the Company completed the sale to Standard Chartered Bank (SCB) of ANZ Grindlays Bank Limited (Grindlays) and certain otherbusinesses. The Company provided warranties and indemnities relating to those businesses. The indemnified matters include civil penalty
proceedings and criminal prosecutions brought by Indian authorities against Grindlays and certain of its officers, in relation to certain transactions
conducted in 1991 that are alleged to have breached the Foreign Exchange Regulation Act, 1973. Civil penalties were imposed in 2007 which are
the subject of appeals. The criminal prosecutions are being defended.

21.

Significant events since balance date

The Group intends to lodge a formal application with APRA, the Federal Treasurer and other applicable regulators to establish a non-operating holding
company and create distinct banking and non-banking groups within the organisation. Following preliminary discussions, APRA has advised they have no
in-principle objection to the proposed restructure. The Group has also consulted other key Australian and New Zealand regulators and to date has notreceived any objections. Consultation and engagement remains ongoing. Further information about the proposal can be found at
http://shareholder.anz.com.
There have been no other significant events from 31 March 2022 to the date of signing this report.

116

DIRECTORS’ DECLARATION

Directors’ Declaration
The Directors of Australia and New Zealand Banking Group Limited declare that:1.

2.

in the Directors’ opinion the Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements are inaccordance with the Corporations Act 2001, including:

section 304, that they comply with the Australian Accounting Standards and any further requirements in the Corporations Regulations 2001;and

section 305, that they give a true and fair view of the financial position of the Group as at 31 March 2022 and of its performance for the halfyear ended on that date; andin the Directors’ opinion as at the date of this declaration there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Paul D O’Sullivan
ChairmanShayne C ElliottManaging Director

3 May 2022

117

AUDITOR’S REVIEW REPORT AND INDEPENDENCE DECLARATION

Independent Auditor’s Review Report to the shareholders of Australia and New Zealand Banking Group Limited
Report on the Condensed Consolidated Financial Statements
Conclusion
We have reviewed the accompanying Condensed Consolidated Financial Statements of Australia and New Zealand Banking Group Limited (the Group).
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the Condensed Consolidated Financial
Statements of Australia and New Zealand Banking Group Limited are not in accordance with the Corporations Act 2001, including:i)giving a true and fair view of the Group’s financial position as at 31 March 2022 and of its performance for the half year ended on that date; andii)
complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
The Condensed Consolidated Financial Statements comprise:
The condensed consolidated balance sheet as at 31 March 2022;
The condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statementof changes in equity, and condensed consolidated cash flow statement for the half year ended on that date;
Notes 1 to 21 comprising a summary of significant accounting policies and other explanatory information; and
The Directors’ Declaration.
The Group comprises Australia and New Zealand Banking Group Limited (the Company) and the entities it controlled at the half year’s end or from time
to time during the half year.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our
responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirementsof the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including IndependenceStandards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities inaccordance with these requirements.
Responsibilities of the Directors for the Condensed Consolidated Financial Statements
The Directors of the Company are responsible for:
the preparation of the Condensed Consolidated Financial Statements that give a true and fair view in accordance with Australian AccountingStandards and the Corporations Act 2001; andsuch internal control as the Directors determine is necessary to enable the preparation of the Condensed Consolidated Financial Statements thatgive a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility for the review of the Condensed Consolidated Financial Statements
Our responsibility is to express a conclusion on the Condensed Consolidated Financial Statements based on our review. ASRE 2410 requires us toconclude whether we have become aware of any matter that makes us believe that the Condensed Consolidated Financial Statements do not comply
with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 March 2022 and its performance for the halfyear ended on that date, and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations
2001.
A review of Condensed Consolidated Financial Statements consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit opinion.

KPMG

Martin McGrath
Partner
Sydney3 May 2022

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company
limited by guarantee. All right reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by ascheme approved under Professional Standards Legislation.

118

AUDITOR’S REVIEW REPORT AND INDEPENDENCE DECLARATION

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To the Directors of Australia and New Zealand Banking Group Limited
I declare that, to the best of my knowledge and belief, in relation to the review of Australia and New Zealand Banking Group Limited for the half year
ended 31 March 2022, there have been:(i)no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and(ii)

no contraventions of any applicable code of professional conduct in relation to the review.

KPMG

Martin McGrath
Partner
Sydney3 May 2022

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company
limited by guarantee. All right reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by ascheme approved under Professional Standards Legislation.

119

AUDITOR’S REVIEW REPORT AND INDEPENDENCE DECLARATIONThis page has been left blank intentionally

120

SUPPLEMENTARY INFORMATIONCONTENTS

Page

Capital management - including discontinued operations

122

Average balance sheet and related interest

126

Select geographical disclosures - including discontinued operations

129

Exchange rates

130

121

SUPPLEMENTARY INFORMATION
Capital management - including discontinued operations

ANZ provides information as required under APRA’s prudential standard APS 330: Public Disclosure. This information is located in the Regulatory
Disclosures section of ANZ’s website: anz.com/shareholder/centre/reporting/regulatory-disclosure.
As at
Qualifying Capital
Tier 1
Shareholders' equity and non-controlling interests
Prudential adjustments to shareholders' equity

Table 1Gross Common Equity Tier 1 capital
Deductions

Table 2

Common Equity Tier 1 capital
Additional Tier 1 capital

Table 3Tier 1 capital
Tier 2 capital

Table 4

Total qualifying capital

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

61,756

63,676

62,576

-3%

-1%

180

3

110

large

64%

61,936

63,67962,686-3%-1%(11,425)(12,320)(11,900)-7%-4%50,511

51,35950,786

-2%

-1%
-2%

7,490

8,114

7,645

-8%

58,001

59,47358,431-2%-1%

14,78017,125

16,464-14%-10%

72,781

76,59874,895

-5%

-3%

5%

7%

Capital adequacy ratios (Level 2)
Common Equity Tier 1

11.5%

12.3%

12.4%

Tier 1

13.2%

14.3%

14.3%

Tier 2

3.4%

4.1%

4.0%

Total capital ratio

16.6%

18.4%

18.3%

437,910416,086

408,166

Risk weighted assets

Table 5122

SUPPLEMENTARY INFORMATION
Capital management - including discontinued operations, cont’d
As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Shareholders' equity attributable to deconsolidated entities

(150)

(216)

(181)

-31%

-17%

Deferred fee revenue including fees deferred as part of loan yields

386

356

351

8%

10%

Other

(56)

(137)

(60)

-59%

-7%

Total

180

3

110

large

64%

(3,073)(3,091)(2,992)-1%

3%

Table 1: Prudential adjustments to shareholders' equity

Table 2: Deductions from Common Equity Tier 1 capital
Unamortised goodwill & other intangibles (excluding ANZ New ZealandInvestments)1
Intangible component of investments in ANZ New Zealand Investments1

(71)

(73)

(70)

-3%

1%

(924)

(960)

(961)

-4%

-4%

Capitalised expenses (including loan and lease origination fees)(1,548)(1,495)(1,431)

4%

8%

Applicable deferred net tax assets(2,908)(2,357)(2,109)23%

38%

Capitalised software

Expected losses in excess of eligible provisions

Table 8

(32)

(36)

(42)

-11%

-24%

Investment in other insurance and funds management subsidiaries

(347)

(356)

(336)

-3%

3%

Investment in ANZ New Zealand Investments1

(45)

(47)

(45)

-4%

0%

Investment in associates(2,018)(1,972)(1,854)

2%

9%

Other equity investments(1,432)(1,360)(1,254)

5%

14%

973

(573)

(806)

large

large

(11,425)(12,320)(11,900)

-7%

-4%

-

-

1,120

n/a

-100%

ANZ Capital Notes 2

-

1,609

1,609

-100%

-100%

ANZ Capital Notes 3

969

968

968

0%

0%

ANZ Capital Notes 4

1,618

1,617

1,615

0%

0%
0%

Other deductions
Total

Table 3: Additional Tier 1 capital
ANZ Capital Notes 1

ANZ Capital Notes 5

928

927

927

0%

ANZ Capital Notes 6

1,487

1,486

-

0%

n/a

ANZ Capital Notes 7

1,298

-

-

n/a

n/a
-100%

ANZ New Zealand Capital Notes
ANZ Capital Securities
Regulatory adjustments and deductions
Total

-

477

459

-100%

1,282

1,422

1,347

-10%

-5%

(92)

(392)

(400)

-77%

-77%

7,490

8,114

7,645

-8%

-2%

Table 4: Tier 2 capital
General reserve for impairment of financial assets

1,082

1,412

1,417

-23%

-24%

Perpetual subordinated notes2

-

417

395

-100%

-100%

Term subordinated debt notes

14,047

15,79015,220

-11%

-8%

(349)

(494)

(568)

-29%

-39%

14,78017,125

16,464-14%-10%

Regulatory adjustments and deductions
Total
1.

ANZ Wealth New Zealand has been renamed to ANZ New Zealand Investments Ltd during the March 2022 half.
2. The USD 300 million perpetual subordinated notes ceased to be treated as Basel 3 transitional Tier 2 capital under APRA’s capital framework from 1 January 2022.

123

SUPPLEMENTARY INFORMATION
Capital management - including discontinued operations, cont’d
As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

On balance sheet

262,774

258,531

254,448

2%

3%

Commitments

58,57856,25655,796

4%

5%

Contingents

11,646

11,974

13,074-3%-11%

Derivatives

15,81915,737

18,544

1%-15%

Table 5: Risk weighted assets

Total credit risk weighted assets

Table 6

348,817342,498

341,8622%2%

Market risk - Traded

7,705

7,127

8,955

8%

-14%

Market risk - IRRBB

33,402

18,036

10,15085%

largeOperational risk

47,98648,42547,199-1%

2%

Total risk weighted assets

437,910416,086

408,166

5%

7%

As at

Movement

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

Corporate141,243

136,298

135,713

4%

4%

Sovereign

9,781

9,893

7,750

-1%

26%

Table 6: Credit risk weighted assets by Basel asset class
Subject to Advanced IRB approachBank10,742

9,118

10,092

18%

6%

Residential mortgage

111,355

110,622

110,206

1%

1%

Qualifying revolving retail (credit cards)

3,418

3,723

3,678

-8%

-7%

Other retail

18,20019,66020,693-7%-12%

Credit risk weighted assets subject to Advanced IRB approach

294,739

289,314

288,1322%2%Credit risk specialised lending exposures subject to slotting criteria

38,432

36,97736,476

4%

5%

Subject to Standardised approach
Corporate

6,149

6,632

6,388

-7%

-4%

Sovereign

36

27

76

33%

-53%

Residential mortgage

194

203

203

-4%

-4%

Other retail (includes credit cards)

12

17

23

-29%

-48%

Credit risk weighted assets subject to Standardised approach

6,391

6,879

6,690

-7%

-4%

Credit Valuation Adjustment and Qualifying Central Counterparties

3,154

3,270

4,281

-4%

-26%

Credit risk weighted assets relating to securitisation exposures

2,090

2,056

2,220

2%

-6%

Other assets

4,011

4,002

4,063

0%

-1%

348,817342,498

341,8622%

2%

Total credit risk weighted assets

124

SUPPLEMENTARY INFORMATION
Capital management - including discontinued operations, cont’dCollectively and Individually
Assessed Provision

Table 7: Total provision for credit impairment and Basel expected
loss by division

Basel Expected Loss1

Australia Retail and Commercial

Mar 22$M
2,255

Sep 21$M
2,631

Mar 21$M
2,851

Mar 22$M
1,918

Sep 21$M
2,045

Mar 21$M
2,278

Institutional

1,465

1,541

1,555

959

978

969

New Zealand

557

589

592

572

580

606

Pacific

114

118

96

14

12

8

2

3

-

3

3

-

4,393

4,882

5,094

3,466

3,618

3,861

Group Centre
Total provision for credit impairment and expected loss
1.

Only applicable to Advanced Internal Ratings based portfolios.

As at

Movement

Table 8: APRA Expected loss in excess of eligible provisions

Mar 22$M

Sep 21$M

Mar 21$M

Mar 22
v. Sep 21

Mar 22v. Mar 21

APRA Basel 3 expected loss: non-defaulted

2,235

2,346

2,436

-5%

-8%

-12%

Less: Qualifying collectively assessed provisionCollectively assessed provision(3,757)(4,195)(4,285)-10%

Non-qualifying collectively assessed provision

440

436

432

1%

2%

Standardised collectively assessed provision

142

172

173

-17%

-18%

-

-

-

n/a

n/a

1,231

1,272

1,425

-3%

-14%

Individually assessed provision

(636)

(687)

(809)

-7%

-21%

Additional individually assessed provision for partial write offs

(206)

(204)

(213)

1%

-3%

43

51

44

-16%

-2%

(400)

(396)

(405)

1%

-1%

32

36

42

-11%

-24%

-

-

-

n/a

n/a

Defaulted excess included in deduction

32

36

42

-11%

-24%

Gross deduction

32

36

42

-11%

-24%

Non-defaulted excess included in deduction
APRA Basel 3 expected loss: defaulted
Less: Qualifying individually assessed provision

Standardised individually assessed provisionCollectively assessed provision on advanced defaulted

Shortfall in expected loss not included in deduction

125

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest1
Mar 22 Half YearSep 21 Half Year

Mar 21 Half YearAvg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

334,774

4,941

3.0%

335,999

5,082

3.0%

332,291

5,343

3.2%

Loans and advancesHome loans
Consumer finance

12,286490

8.0%

12,821499

7.8%

13,413553

8.3%

Business lending

260,680

3,502

2.7%

239,224

3,289

2.7%

241,552

3,241

2.7%

(653)

-

n/a

(727)

-

n/a

(802)

-

n/a

607,087

8,933

3.0%

587,317

8,870

3.0%

586,454

9,137

3.1%

Individual provisions for credit impairment
Total
Non-lending interest earning assets
Cash and other liquid assets

170,61989

0.1%

150,34757

0.1%

125,06238

0.1%

Trading and investment securities

121,366

678

1.1%

131,581695

1.1%

145,458

655

0.9%

Other assets

606

7

n/a

580

28

n/a

550

49

n/a

Total

292,591774

0.5%

282,508780

0.6%

271,070742

0.5%

Total interest earning assets2

899,678

9,707

2.2%

869,825

9,650

2.2%

857,524

9,879

2.3%

Non-interest earning assets
Total average assets

110,098

156,958

188,044

1,009,776

1,026,783

1,045,568

Interest bearing deposits and other borrowings
Certificates of deposit

38,14840

0.2%

40,27825

0.1%

37,29430

0.2%

Term deposits

176,866440

0.5%

182,917423

0.5%

194,655659

0.7%

On demand and short term deposits

339,419858

0.5%

312,464812

0.5%

289,633859

0.6%

Deposits from banks and securities sold under agreement torepurchase

91,070103

0.2%

84,13989

0.2%

79,787128

0.3%

Commercial paper and other borrowings

29,43155

0.4%

25,01031

0.2%

16,203

26

0.3%

Total

674,934

1,496

0.4%

644,808

1,380

0.4%

617,572

1,702

0.6%

Non-deposit interest bearing liabilities
Collateral received and settlement balances owed by ANZ

14,50713

0.2%

12,53810

0.2%

13,57113

0.2%

Debt issuances & subordinated debt

94,683799

1.7%

102,612825

1.6%

112,071

887

1.6%

8,776

299

n/a

7,975

260

n/a

8,263

291

n/a

Total

117,966

1,111

1.9%

123,125

1,095

1.8%

133,905

1,191

1.8%

Total interest bearing liabilities2

792,900

2,607

0.7%

767,933

2,475

0.6%

751,477

2,893

0.8%

Non-interest bearing liabilities

154,332

196,039

232,192

Total average liabilities

947,232

963,972

983,669

Total average shareholders' equity

62,54462,811

61,899Other liabilities

1.

Averages used are predominantly daily averages.
2. Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.

126

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest1 - cont’dMar 22 Half YearSep 21 Half Year

Mar 21 Half YearAvg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

402,017

6,097

3.0%

397,361

6,340

3.2%

406,222

6,555

3.2%

Loans and advances
Australia
Asia, Pacific, Europe & America

69,003689

2.0%

58,103557

1.9%

53,422581

2.2%

New Zealand

136,067

2,147

3.2%

131,853

1,973

3.0%

126,810

2,001

3.2%

607,087

8,933

3.0%

587,317

8,870

3.0%

586,454

9,137

3.1%

Australia

61,595272

0.9%

68,193287

0.8%80,224243

0.6%

Asia, Pacific, Europe & America

40,857276

1.4%

43,246292

1.3%

44,203298

1.4%

New Zealand

18,914130

1.4%

20,142116

1.1%

21,031114

1.1%

121,366

678

1.1%

131,581695

1.1%

145,458655

0.9%Australia

548,966

6,368

2.3%

539,068

6,630

2.5%

536,043

6,785

2.5%

Asia, Pacific, Europe & America

184,992

1,018

1.1%

170,119883

1.0%

165,582909

1.1%

New Zealand

165,720

2,321

2.8%

160,638

2,137

2.7%

155,899

2,185

2.8%

899,678

9,707

2.2%

869,825

9,650

2.2%

857,524

9,879

2.3%

Total
Trading and investment securities

Total
Total interest earning assets2

Total
Total average assets
Australia

617,384

652,539

674,095

Asia, Pacific, Europe & America

212,617

198,164

199,650

New Zealand

179,775

176,080

171,823

Total average assets

1,009,776

1,026,783

1,045,568

Interest bearing deposits and other borrowings
Australia

391,882869

0.4%

379,804920

0.5%

364,253

1,083

0.6%

Asia, Pacific, Europe & America

174,536235

0.3%

159,964

194

0.2%

152,396

231

0.3%

New Zealand

108,516392

0.7%

105,040266

0.5%

100,923388

0.8%

674,934

1,496

0.4%

644,808

1,380

0.4%

617,572

1,702

0.6%

Australia

472,317

1,556

0.7%

463,606

1,614

0.7%

453,975

1,855

0.8%

Asia, Pacific, Europe & America

190,269434

0.5%

177,135405

0.5%

172,836448

0.5%

New Zealand

130,314617

0.9%

127,192456

0.7%

124,666590

0.9%

792,900

2,607

0.7%

767,933

2,475

0.6%

751,477

2,893

0.8%

Total
Total interest bearing liabilities2

Total
Total average liabilities
Australia

564,609597,847

618,979

Asia, Pacific, Europe & America

220,531207,404

209,442New Zealand

162,092

158,721155,248947,232

963,972

983,669

Ordinary share capital, reserves, retained earnings andnon-controlling interests

62,54462,811

61,899Total average shareholders' equity

62,54462,811

61,8991,009,776

1,026,783

1,045,568

Total average liabilities
Total average shareholders' equity

Total average liabilities and shareholders' equity
1.

Averages used are predominantly daily averages.
2. Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.

127

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest - cont’d
Half Year
Mar 22%

Sep 21%Mar 21%

Australia

2.39

2.53

2.62

Asia, Pacific, Europe & America

1.06

1.00

1.11

New Zealand

2.81

2.65

2.81

Group

2.16

2.21

2.31

1

Gross earnings rate

Net interest spread and net interest margin analysis as follows:
Half Year
Australia1
Net interest spread

Mar 22%

Sep 21%Mar 21
%

1.73

1.82

1.77

Interest attributable to net non-interest bearing items

0.08

0.08

0.11

Net interest margin - Australia

1.81

1.90

1.88

Net interest spread

0.60

0.55

0.58

Interest attributable to net non-interest bearing items

0.03

0.03

0.04

Net interest margin - Asia, Pacific, Europe & America

0.63

0.58

0.62

Net interest spread

1.82

1.90

1.82

Interest attributable to net non-interest bearing items

0.19

0.14

0.18

Net interest margin - New Zealand

2.01

2.04

2.00

Net interest spread

1.50

1.57

1.54

Interest attributable to net non-interest bearing items

0.08

0.08

0.09

Net interest margin

1.58

1.65

1.63

Net interest margin (excluding Markets)

2.08

2.17

2.27

Asia, Pacific, Europe & America1

New Zealand1

Group

1.

Geographic gross earnings rate, net interest spread and net interest margin are calculated gross of intra-group items (Intra-group interest earning assets and associated interest income andintra-group interest bearing liabilities and associated interest expense).

128

SUPPLEMENTARY INFORMATION
Select geographical disclosures - including discontinued operations
The following divisions operate across the geographic locations illustrated below: Australia Retail and Commercial division - Australia
 Institutional division - Australia, New Zealand and International Pacific division - International New Zealand division - New Zealand Group Centre division - Australia, New Zealand and International
 Discontinued operations - Australia

The International geography includes Asia, Pacific, Europe & America
Australia$M

New Zealand$M

International
$M

Total
$M

March 2022 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

2,229

1,035

266

3,530

Cash profit/(loss)

1,928

914

266

3,108

Net loans and advances

443,739

136,057

71,640651,436

Customer deposits

355,141

120,233

135,680

611,054

Risk weighted assets

277,646

85,22075,044437,910

September 2021 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

2,082

931

206

3,219

Cash profit/(loss)

2,099

889

211

3,199

Net loans and advances

432,328

134,707

62,684

629,719

Customer deposits

343,818

119,483

130,282593,583

Risk weighted assets

260,397

83,57872,111

416,086

March 2021 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

2,071

869

3

2,943

Cash profit/(loss)

2,085

899

(2)

2,982

Net loans and advances

434,465

126,482

53,412

614,359

Customer deposits

330,082

112,712

118,729

561,523

Risk weighted assets

262,988

77,96067,218408,166

New Zealand geography (in NZD)
Half Year
Mar 22
NZD M
1,761

Net interest income
Other operating income
Operating income

Sep 21
NZD M
1,743

Movement
Mar 21
NZD M
1,661

Mar 22
v. Sep 21
1%

Mar 22v. Mar 21
6%

383

364

364

5%

5%

2,144

2,107

2,025

2%

6%
8%

Operating expenses

(824)

(843)

(764)

-2%

Profit before credit impairment and income tax

1,320

1,264

1,261

4%

5%

20

45

70

-56%

-71%

Credit impairment (charge)/release
Profit before income tax

1,340

1,309

1,331

2%

1%

Income tax expense and non-controlling interests

(372)

(364)

(369)

2%

1%

Cash profit

968

945

962

2%

1%

Adjustments between statutory profit and cash profit

128

44

(32)

large

large

1,096

989

930

11%

18%

Statutory profit
Individually assessed credit impairment charge/(release)

(4)

(12)

(10)

-67%

-60%

Collectively assessed credit impairment charge/(release)

(16)

(33)

(60)

-52%

-73%

Net loans and advances

146,397

141,074

137,786

4%

6%

Customer deposits

129,371

125,129

122,786

3%

5%

Risk weighted assets

91,69787,52884,9285%

8%

Total full time equivalent staff (FTE)

7,431

7,473

7,213

-1%

3%

129

SUPPLEMENTARY INFORMATION
Exchange rates
Major exchange rates used in the translation of foreign subsidiaries, branches, investments in associates and issued debt are as follows:
Balance Sheet

Profit & Loss Average

As atHalf Year

Chinese Renminbi

Mar 224.7505

Sep 214.6568Mar 21
4.9879Mar 224.6261

Sep 214.8602

Mar 214.9209Euro

0.67030.62090.64900.6406

0.63100.6263Pound Sterling

0.57040.53570.55380.53980.54180.5568

Indian Rupee

56.66353.48155.88354.50055.57755.046

Indonesian Rupiah

10,743

10,314

11,073

10,387

10,821

10,711

Japanese Yen

91.43280.61684.22983.39982.53978.911

Malaysian Ringgit

3.14603.0162

3.15853.04133.12973.0684

New Taiwan Dollar

21.41220.06021.662

20.26420.98821.245

New Zealand Dollar

1.07601.04731.08941.05901.0626

1.0697

Papua New Guinean Kina

2.63472.52702.66652.54922.63782.6315

United States Dollar

0.74830.72020.76000.72600.75180.7507130

DEFINITIONSAASB - Australian Accounting Standards Board. The term ‘AASB’ is commonly used when identifying Australian Accounting Standards issued by the
AASB.
ADI - Authorised Deposit-taking Institution as defined by APRA.
ANZEST - ANZ Employee Share Trust.
ANZ Research - Economics, a business unit within ANZ, which conducts analysis of key economic inputs and developments and assessment of thepotential impacts on the local, regional and global economies.
APRA - Australian Prudential Regulation Authority.
APS - ADI Prudential Standard.
AT1 - Additional Tier 1 capital.
Cash and cash equivalents comprise coins, notes, money at call, balances held with central banks, liquid settlement balances (readily convertible to
known amounts of cash which are subject to insignificant risk of changes in value) and securities purchased under agreements to resell (reverse
repurchase agreements) in less than three months.
Cash profit is an additional measure of profit which is prepared on a basis other than in accordance with accounting standards. Cash profit represents
ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group and Divisional performance against
prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory profit as noted below. These items
are calculated consistently period on period so as not to discriminate between positive and negative adjustments.
Gains and losses are adjusted where they are significant, or have the potential to be significant in any one period, and fall into one of three categories:
1.

gains or losses included in earnings arising from changes in tax, legal or accounting legislation or other non-core items not associated with thecore operations of the Group;2.

economic hedging impacts and similar accounting items that represent timing differences that will reverse through earnings in the future; and3.

accounting reclassifications between individual line items that do not impact reported results, such as credit risk on impaired derivatives.

Cash profit is not a measure of cash flow or profit determined on a cash accounting basis.
Collectively assessed allowance for expected credit loss represents the Expected Credit Loss (ECL), which incorporates forward-looking informationand does not require an actual loss event to have occurred for a credit loss provision to be recognised.
Coronavirus (COVID-19) is a respiratory illness which was declared a Public Health Emergency of International Concern. COVID-19 was characterised
as a pandemic by the World Health Organisation on 11 March 2020.
Covered bonds are bonds issued by an ADI to external investors secured against a pool of the ADI’s assets (the cover pool) assigned to a bankruptcy
remote special purpose entity. The primary assets forming the cover pool are mortgage loans. The mortgages remain on the issuer’s balance sheet. The
covered bond holders have dual recourse to the issuer and the cover pool assets. The mortgages included in the cover pool cannot be otherwise pledged
or disposed of but may be repurchased and substituted in order to maintain the credit quality of the pool. The Group issues covered bonds as part of its
funding activities.
Credit risk is the risk of financial loss resulting from the failure of ANZ’s customers and counterparties to honour or perform fully the terms of a loan orcontract.
Credit risk weighted assets (CRWA) represent assets which are weighted for credit risk according to a set formula as prescribed in APS 112/113.
Customer deposits represent term deposits, other deposits bearing interest, deposits not bearing interest and borrowing corporations’ debt excluding
securitisation deposits.
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation outcomes.
Derivative credit valuation adjustment (CVA) - Over the life of a derivative instrument, ANZ uses a model to adjust fair value to take into account the
impact of counterparty credit quality. The methodology calculates the present value of expected losses over the life of the financial instrument as afunction of probability of default, loss given default, expected credit risk exposure and an asset correlation factor. Impaired derivatives are also subject toa CVA.
Dividend payout ratio is the total ordinary dividend payment divided by profit attributable to shareholders of the Company.
Embedded losses - In relation to interest rate risk in the banking book, APRA requires ADIs to give consideration to embedded gains or losses inbanking book items that are not accounted for on a marked-to-market basis when determining regulatory capital. The embedded loss or gain measuresthe difference between the book value and the economic value of banking book activities at a point in time.
Fair value is an amount at which an asset or liability could be exchanged between knowledgeable and willing parties in an arm’s length transaction.
Funding for Lending Programme (FLP) refers to three-year funding announced by the RBNZ in November 2020 and offered to New Zealand banks,
which aimed to lower the cost of borrowing for New Zealand businesses and households.
Gross loans and advances (GLA) is made up of loans and advances, capitalised brokerage and other origination costs less unearned income.
Impaired assets are those financial assets where doubt exists as to whether the full contractual amount will be received in a timely manner, or whereconcessional terms have been provided because of the financial difficulties of the customer.
Impaired loans comprise drawn facilities where the customer’s status is defined as impaired.
Individually assessed allowance for expected credit losses is assessed on a case-by-case basis for all individually managed impaired assets taking
into consideration factors such as the realisable value of security (or other credit mitigants), the likely return available upon liquidation or bankruptcy, legal
uncertainties, estimated costs involved in recovery, the market price of the exposure in secondary markets and the amount and timing of expected
receipts and recoveries.

131

DEFINITIONSInterest rate risk in the banking book (IRRBB) relates to the potential adverse impact of changes in market interest rates on ANZ’s future net interest
income. The risk generally arises from:1.

Repricing and yield curve risk - the risk to earnings or market value as a result of changes in the overall level of interest rates and/or the
relativity of these rates across the yield curve;

2.

Basis risk - the risk to earnings or market value arising from volatility in the interest margin applicable to banking book items; and3.

Optionality risk - the risk to earnings or market value arising from the existence of stand-alone or embedded options in banking book items.

Internationally comparable ratios are ANZ’s interpretation of the regulations documented in the Basel Committee publications: ‘Basel 3: A global
regulatory framework for more resilient banks and banking systems’ (June 2011) and ‘International Convergence of Capital Measurement and CapitalStandards’ (June 2006). They also include differences identified in APRA’s information paper entitled International Capital Comparison Study (13 July2015).
Level 1 in the context of APRA supervision, Australia and New Zealand Banking Group Limited consolidated with certain approved subsidiaries.
Level 2 in the context of APRA supervision, the consolidated ANZ Group excluding associates, insurance and funds management entities, commercial
non-financial entities and certain securitisation vehicles.
Net interest margin is net interest income as a percentage of average interest earning assets.
Net loans and advances represent gross loans and advances less allowance for expected credit losses.
Net Stable Funding Ratio (NSFR) is the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF) defined by
APRA. The amount of ASF is the portion of an ADI capital and liabilities expected to be a reliable source of funds over a one year time horizon. The
amount of RSF is a function of the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs must maintainan NSFR of at least 100%.
Net tangible assets equal share capital and reserves attributable to shareholders of the Company less unamortised intangible assets (including goodwill
and software).
RBA - Reserve Bank of Australia, Australia’s central bank.
RBNZ - Reserve Bank of New Zealand, New Zealand’s central bank.
Regulatory deposits are mandatory reserve deposits lodged with local central banks in accordance with statutory requirements.
Restructured items comprise facilities in which the original contractual terms have been modified for reasons related to the financial difficulties of thecustomer. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond thosetypically offered to new facilities with similar risk.
Return on average assets is the profit attributable to shareholders of the Company, divided by average total assets.
Return on average ordinary shareholders’ equity is the profit attributable to shareholders of the Company, divided by average ordinary shareholders’equity.
Risk weighted assets (RWA) are risk weighted according to each asset’s inherent potential for default and what the likely losses would be in the case ofdefault. In the case of non-asset backed risks (i.e. market and operational risk), RWA is determined by multiplying the capital requirements for those risks
by 12.5.
Settlement balances owed to/by ANZ represent financial assets and/or liabilities which are in the course of being settled. These may include trade
dated assets and liabilities, vostro accounts and securities settlement accounts.
Term Funding Facility (TFF) refers to three-year funding announced by the RBA on 19 March 2020 and offered to ADIs in order to support lending toAustralian businesses at low cost.
Term Lending Facility (TLF) refers to three to five-year funding offered by the RBNZ between May 2020 and July 2021 to promote lending to New
Zealand businesses.

132

DEFINITIONS
Description of divisions
On 1 March 2022, the Group announced a structural change to the existing Australia Retail and Commercial division, and the digital businesses in theGroup Centre division (formerly known as the Technology, Services & Operations (TSO) and Group Centre division). This involves the integration of theAustralian retail and digital businesses, and the separation of the Australian commercial business into a new division. The new reporting segments will bereflected in the September 2022 half to align with the implementation of the changes from 1 April 2022. The segment disclosures below remainunchanged from those reported at 30 September 2021 and are consistent with internal reporting provided to the chief operating decision maker, being the
Chief Executive Officer, during the March 2022 half.
During the March 2022 half, the Group operated on a divisional structure with five continuing divisions: Australia Retail and Commercial, Institutional,
New Zealand, Pacific, and Group Centre.

Australia Retail and Commercial
The Australia Retail and Commercial division comprises the following business units:Retail provides products and services to consumer customers in Australia via the branch network, mortgage specialists, contact centres, a variety ofself-service channels (digital and internet banking, website, ATMs and phone banking) and third party brokers.

Commercial and Private Bank provides a full range of banking products and financial services, including asset financing, across the following
customer segments: medium to large commercial customers, small business owners and high net worth individuals and family groups, in addition tofinancial planning services provided by salaried financial planners and investment lending secured by approved securities.

Institutional
The Institutional division services governments, global institutional and corporate customers across Australia, New Zealand and International via thefollowing business units:Transaction Banking provides customers with working capital and liquidity solutions including documentary trade, supply chain financing, commodity
financing as well as cash management solutions, deposits, payments and clearing.

Corporate Finance provides customers with loan products, loan syndication, specialised loan structuring and execution, project and export finance,
debt structuring and acquisition finance and corporate advisory services.



Markets provides customers with risk management services in foreign exchange, interest rates, credit, commodities and debt capital markets inaddition to managing the Group's interest rate exposure and liquidity position.

New Zealand
The New Zealand division comprises the following business units:Personal provides a full range of banking and wealth management services to consumer and private banking customers. We deliver our services via
our internet and app-based digital solutions and network of branches, mortgage specialists, relationship managers and contact centres.

Business provides a full range of banking services including small business banking, through our digital, branch and contact centre channels, andtraditional relationship banking and sophisticated financial solutions through dedicated managers. These cover privately owned small, medium andlarge enterprises, the agricultural business segment, government and government-related entities.

Pacific
The Pacific division provides products and services to retail customers, small to medium-sized enterprises, institutional customers and governments
located in the Pacific Islands. Products and services include retail products provided to consumers, traditional relationship banking and sophisticatedfinancial solutions provided to business customers through dedicated managers.

Group Centre
Group Centre division provides support to the operating divisions, including technology, property, risk management, financial management, strategy,
marketing, human resources and corporate affairs. It also includes residual components of Group divestments, Group Treasury, Shareholder Functions,minority investments in Asia, and digital businesses.

133

ASX APPENDIX 4D - CROSS REFERENCE INDEX

Page
Details of the reporting period (4D Item 1) ............................................................................................................................................................................. 2
Results for Announcement to the Market (4D Item 2) ............................................................................................................................................................ 2
Net Tangible Assets per security (4D Item 3) ....................................................................................................................................................................... 11
Details of entities over which control has been gained or lost (4D Item 4) ......................................................................................................................... 113
Dividends and dividend dates (4D Item 5) ............................................................................................................................................................................. 2
Dividend Reinvestment Plan (4D Item 6) ............................................................................................................................................................................... 2
Details of associates and joint venture entities (4D Item 7) ................................................................................................................................................ 114

134

ALPHABETICAL INDEX

Page
Allowance for Expected Credit Losses ................................................................................................................................................................................. 98
Appendix 4D Cross Reference Index ................................................................................................................................................................................. 134
Appendix 4D Statement ......................................................................................................................................................................................................... 2
Auditor’s Review Report and Independence Declaration ................................................................................................................................................... 118
Average Balance Sheet and Related Interest .................................................................................................................................................................... 126
Basis of Preparation ............................................................................................................................................................................................................. 82
Capital Management .......................................................................................................................................................................................................... 122
Changes in Composition of the Group ............................................................................................................................................................................... 113
Condensed Consolidated Balance Sheet ............................................................................................................................................................................. 79
Condensed Consolidated Cash Flow Statement .................................................................................................................................................................. 80
Condensed Consolidated Income Statement ....................................................................................................................................................................... 77
Condensed Consolidated Statement of Changes in Equity .................................................................................................................................................. 81
Condensed Consolidated Statement of Comprehensive Income ......................................................................................................................................... 78
Contingent Liabilities and Contingent Assets ..................................................................................................................................................................... 114
Credit Risk.......................................................................................................................................................................................................................... 104
Debt Issuances .................................................................................................................................................................................................................. 103
Definitions .......................................................................................................................................................................................................................... 131
Deposits and Other Borrowings ......................................................................................................................................................................................... 101
Derivative Financial Instruments .......................................................................................................................................................................................... 96
Directors’ Declaration ......................................................................................................................................................................................................... 117
Directors’ Report .................................................................................................................................................................................................................. 76
Dividends ............................................................................................................................................................................................................................. 92
Divisional Results ................................................................................................................................................................................................................. 47
Earnings Per Share .............................................................................................................................................................................................................. 93
Exchange Rates ................................................................................................................................................................................................................. 130
Fair Value Measurement .................................................................................................................................................................................................... 109
Full Time Equivalent Staff .................................................................................................................................................................................................... 17Group Results ...................................................................................................................................................................................................................... 19
Income ................................................................................................................................................................................................................................. 89
Income Tax Expense ........................................................................................................................................................................................................... 91
Investments In Associates.................................................................................................................................................................................................. 114
Net Loans and Advances ..................................................................................................................................................................................................... 97
Operating Expenses............................................................................................................................................................................................................. 90
Other Provisions................................................................................................................................................................................................................. 102
Profit Reconciliation ............................................................................................................................................................................................................. 71
Related Party Disclosure .................................................................................................................................................................................................... 114
Segment Analysis ................................................................................................................................................................................................................ 94
Select Geographical Disclosures ....................................................................................................................................................................................... 129
Shareholders’ Equity .......................................................................................................................................................................................................... 113
Significant Events Since Balance Date .............................................................................................................................................................................. 116
Summary ................................................................................................................................................................................................................................ 7135