MEDIA RELEASEFor Release: 29 April 2009

ANZ 2009 Interim Results- Solid underlying performance momentum in challenging environment - Result impacted by provisions and derivatives charges Key points*▪

Solid underlying business performance in a challenging environment.
- Underlying profit* $1,908 million up 20% on the preceding half (up 4% on the prior comparable
period (‘pcp’)) with stronger revenue growth offsetting higher provisions.
- One-off items and losses on non-continuing businesses including credit intermediation trades reduced
headline earnings resulting in 4% growth in statutory profit to $1,417 million compared to thepreceding half (down 28% pcp).
- One-off items included charges related to the One ANZ restructuring program and ING NZ frozen
funds settlement and non-core income arising from the use of derivatives in economic hedges.

▪

Strong growth in deposits and underlying income.
- Total customer deposits up 11% or $22 billion on the preceding half (up 16% pcp).
- Underlying income up 11% on the preceding half (up 18% pcp) with a robust contribution from Global
Markets.
- Income growth was assisted by higher levels of recovery of funding cost increases for deposits andwholesale funding, particularly in Institutional.

▪

Underlying profit after tax for the Australian region grew 1% on the preceding half (excluding
Institutional and Group Centre down 6%) with strong net interest income and deposit growth and astrong Markets result impacted by an increased credit impairment charge. Good revenue growth trends
in both the Retail and the Commercial businesses.

▪

Strong progress being made with the Asia Pacific strategy with underlying profit after tax from theregion double the preceding half, up 115% (14% excluding Institutional).

▪

Underlying profit after tax from the New Zealand region was up 24% on the preceding half (1%excluding the Institutional contribution). Good revenue performances from the Markets and Rural
businesses, impacted by increased credit impairment charge.

▪

Institutional Division underlying profit was three times that of the preceding half at $668 million. Profit
growth received a significant boost from the Markets business with revenue up 66%. Profits were
however, significantly down on a statutory basis driven by non-continuing businesses and credit risk
charges on derivatives.

▪

Underlying expense growth of 7% compared to the preceding half (up 11% pcp) driven by growthinvestments in Asia Pacific, Europe & America and Institutional with Australian costs up 3% and New
Zealand down 2%.

▪

As anticipated, the total credit impairment charge of $1,435 million was modestly above the second half2008 ($1,364 million), although well up pcp ($726 million).
- Some Collective Provision for Economic Scenario and Concentration Risk has been utilised, however
the Collective Provision remains well positioned at over 1% of credit risk weighted assets.
- Gross impaired loan levels are at 1.03% of net advances. The total Provision charge is 0.80% of
average net advances.

* Adjusted to reflect result for the ongoing business activities of the Group. Refer pages 13 to 14 of the ANZ Consolidated Financial Report, Dividend Announcement
and Appendix 4D for the half year 31 March 2009.

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MEDIA RELEASE (continued)

Australia and New Zealand Banking Group Limited (ANZ) today announced an underlying profit for the first halfof 2009 of $1,908 million up 20% on the preceding half (up 4% pcp).
Including net impacts from one-offs and non-continuing businesses, statutory profit grew 4% to $1,417 million
compared to the preceding half (down 28% pcp).
As previously foreshadowed, the Interim Dividend of 46 cents per share fully franked is down 26% on the 2008
Interim Dividend.
ANZ Chief Executive Officer Mike Smith said: “In a deteriorating global banking environment this is a creditable
result, particularly given the effect of the economic slowdown on provisions in Australia and New Zealand andthe other remediation and change issues we are managing.
“In this environment, we have to step back and look through provisions and restructuring. What’s clear is wehave a diversified set of businesses that have continued to perform well, with strong revenue trends. On an
underlying basis Australia delivered acceptable results, while Asia Pacific, Europe & America produced an
outstanding performance doubling their profit. Our core Institutional businesses also performed well.
“At the same time, we have to take a realistic view of the impact of both the economic slowdown and financial
system issues on the Bank. The action we took last year to significantly increase provision coverage was theright one and we have to deal pragmatically with the effect of continued volatility in global markets on thecredit risk charge required for the credit intermediation trades.
“The expected slowdown in Australia and New Zealand is now playing out with the outlook for provisions in thesecond half likely to be somewhat more difficult than the first half and we expect that situation to continue
through to early 2010.
“Given the environment, we are continuing to focus on four key drivers for the bank: maintaining a strong
capital and liquidity position; anticipating the impacts of the economic environment by ensuring we haveadequate provisions; systematically completing the remediation in parts of the business; and driving ourstrategic growth agenda to become a super regional bank in the Asia Pacific region.
“When I announced our strategic direction in December 2007 we set out a number of steps which together
would deliver growth and out-performance and create a leading super regional bank. Despite the very difficult
economic conditions we are making good progress in delivering against those aspirations while facing up towhat have turned out to be significant legacy issues.
“Against the objectives we set for the first two years, we are on track with our scorecard.
“We are turning around Institutional, driving increased profit in Asia, and maintaining our high quality domestic
franchises in Australia and New Zealand. Across the Group, we have introduced a more cohesive ‘One ANZ’business model and established a strategic approach to cost management with revenue increasing faster thancosts at an underlying level, while still selectively investing in growth.
“Globally, banks are operating in an extraordinarily difficult environment. However, these results demonstrate
ANZ is making good progress with its strategy and is in a strong position to manage through the cycle, tocontinue to support our customers and has the capacity to take advantage of the opportunities now emerging,”
Mr Smith said.

DIVISIONAL PERFORMANCE*
Australia
Underlying profit for the Australian region grew 1% on the preceding half (down 9% pcp).
Looking at ANZ’s largest business on a divisional basis, underlying profit before provisions grew 5% on thepreceding half (up 12% pcp) reflecting strong income and deposit growth, expanded margins and good costmanagement. Underlying profit for this division reduced 6% on the preceding half (down 4% pcp) impacted byincreased credit costs.
* ANZ manages its businesses on both a geographic (regional) and divisional basis. Australia and New Zealand divisions exclude Institutional and Corporate Centre
functions. Institutional is managed on a global basis. Asia Pacific includes the Institutional business.

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MEDIA RELEASE (continued)

Australia, cont’dMortgages, Cards and Unsecured Lending, Rural and Agribusiness and Business Banking all saw solid increases
in income. ING Australia’s contribution was significantly affected by the weaker equities market.
In the Retail business profit grew 5% on the preceding half on a pre-provisions basis (up 14% pcp), while also
growing both market share and customer satisfaction scores. The Commercial businesses continued todemonstrate resilience with underlying profitability up 15% on the preceding half on a pre-provisions basis
although credit impairment has seen flat statutory earnings across the last three halves.
While broadly the retail portfolio remains in good shape, benefiting from strong underwriting standards, there
has been an upward trend in delinquencies as expected in the current environment. Growth in the Australia
Division’s credit impairment charge to $445 million up 50% on the preceding period, has been driven both byvolume growth and increased delinquencies in the Retail and Commercial businesses. We are working closelywith our customers to support and assist them in dealing with changes in circumstances.
Asia Pacific, Europe & America
Underlying profit for the Asia Pacific, Europe & America region doubled compared to both the preceding half (up115%) and pcp (up 115%).
On a divisional basis our investment in the Asia Pacific, Europe & America business delivered a 75%
pre-provisions profit increase half on half (97% pcp), with income growth of 59% well ahead of cost growth at
41%. ANZ has repositioned its balance sheet in the region consistent with its super regional strategy, withdeposits growing in line with lending and a deposit-to-loan ratio of 130%.
Strong organic growth based both on our ANZ-branded business and partnerships is a highlight of the result.
We are benefiting from the investments made in the regional platform in particular in the Markets andRelationship Banking businesses. There are now 5,247 staff in the Asia Pacific, Europe & America Division up
from 4,090 a year ago, with much of this increase being in front line staff.
We have grown our branch networks in Vietnam and Indonesia, increased our presence in China and expanded
our regional hubs in Hong Kong and Singapore to provide the support services to drive our growth strategy.
Total credit impairment charges of $121 million reflected both increased volumes and changed global credit
conditions. The total credit impairment charge was in line with the preceding half.
New Zealand Businesses (in NZD)New Zealand regional profit performance, up 25% on a pre-provisions basis over the preceding half (up 16%pcp), was assisted by outperformance from the Institutional business which increased profit 67% over thepreceding half (82% pcp).
On a divisional basis New Zealand delivered a mixed performance in tough economic conditions with underlying
pre-provisions profit up 1% on the preceding half (down 6% pcp). The $116 million (post tax) charge for the
ING NZ settlement adversely impacted the headline result.
The effect of the economic slowdown has been felt most significantly in the Retail business where profit fell 6%
on the preceding half (down 17% pcp) on a pre-provision basis. Commercial achieved a reasonable result withprofit up 5% on the preceding half (up 9% pcp) on a pre-provisions basis with the main contribution comingfrom the Rural business where ANZ has a very significant market share.
Provisioning and margin compression impacted both the retail and commercial portfolios with higher wholesalefunding costs and deposit competition, as well as mortgage break costs seeing a decrease of 9 basis points inmargins (24 basis points pcp). Costs are being well managed.
Credit provisions rose to $247 million compared to $209 million for the preceding half. Provisions for the fullyear 2009 are expected to be more than double those of 2008. Individual provision increases have been
spread across the unsecured Retail portfolio and the Mortgage portfolio, although the number of mortgagee
sales remains low. The Commercial sector has seen increased provisioning on a relatively small number ofnames.

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MEDIA RELEASE (continued)

Institutional
Underlying profit in Institutional grew substantially with income in Transaction Banking and Specialised Lending
and Global Markets up strongly. Growth in Global Markets during the first four months of the year was
exceptionally strong driven by market volatility however this has slowed to more normal levels since February.
The Institutional headline result was heavily impacted by both increased individual provision charges and afurther increase in the credit risk charge required for the credit intermediation trades. The post tax impact of
the credit risk charge on derivatives was $664 million compared to $213 million in the preceding period($158 million pcp).
Volatility in global credit markets, downgrades to corporate ratings and declines in value of the Australian
Dollar all impacted the charge during the half. This is a mark-to-market calculation and given the level ofsubordination in these trades, actual cash losses are expected to be substantially less. It is expected thecharge will remain volatile.
Provisions for credit impairment decreased 18% to $626 million compared to the preceding period although up
substantially on the prior corresponding period (up 72% from $365 million). Individual provisions occurred
primarily in Australia including a large exposure to a securities firm along and a handful of exposures spread
across the property, financial institutions and service industry sectors. Institutional recognised additional risks
inherent in its portfolio which could not then be specifically identified in 2008, as these have now given rise to
specific provisions we have released amounts from the collective provision of $265 million.
Net interest margins (excluding derivatives) grew 13 basis points in the half in response to widening credit
spreads and repricing for risk. Revenue grew strongly up 34% (49% pcp) with cost growth of 16% (24% pcp),
largely driven by investment in the key strategic growth areas of Asia, Global Markets and in frontline
relationship staff. An 11% increase in staff numbers over the past 12 months has accounted for much of thedivision’s cost growth.
The remediation program in this Division is continuing. There are encouraging early signs emerging across
many facets of the business including improved cross sell levels. Our refocus on our global client segment
propositions has been rewarded in the form of revenue growth in areas of core client demand such astransaction banking, markets sales and deposits.
As foreshadowed at the February trading update, a $114 million after tax charge has been taken in relation tosome businesses which are being exited as part of the restructure, including Private Equity and Alternative
Assets.

CREDIT ENVIRONMENTThe underlying credit provision charge for the half of $1,435 million or 0.80% of average net advances rose
only slightly compared to that for the preceding half.
ANZ advised in its February trading update that it expected increased credit provision levels in 2009 with thepattern of provisions expected to be more evenly distributed than last year. There was however, an uptick inprovision levels in March, driven largely by stress being experienced by middle market customers. Accordingly
ANZ now expects that full year provision levels will be somewhat higher than originally anticipated at the time
guidance was provided in February.
ANZ has released $306 million from its Collective Provision allowance made last year for economic scenario andconcentration risk however the Collective Provision continues to be strongly positioned at over 1% of credit risk
weighted assets.
As expected, gross impaired loans are significantly higher than in 2008 at $3,691 million or 1.03% of net
advances. This trend is being experienced broadly across the business but predominantly in Institutional. The
increase in gross impaired loans reflects tighter liquidity, higher leverage and earnings pressure in the current
environment being reflected in changes to credit gradings.

4MEDIA RELEASE (continued)

CAPITAL AND FUNDING
ANZ’s capital planning has reflected a view that the global economic slowdown would be significant andprotracted in many parts of the world. From the end of 2007, the Group moved to boost provisioning, liquidity
and Tier 1 capital to levels appropriate for the new economic and market circumstances.
The Group’s Tier 1 capital ratio was 8.2% at the end of March 2009 compared to 6.9% a year ago. This issubstantially above the regulatory minimum and in excess of ANZ’s internal target range of 7.5% to 8.0% andcompares favourably against both local and international peers.
ANZ has continued its prudent approach to capital planning, reducing the half year dividend by 26%. As
discussed in the February 2009 trading update, if the final dividend were to be reduced by a similar percentage,
this would generate additional capital of around $0.5 billion for the year.
Deposit growth during the half has been strong, now comprising 54% of total funding. This has reduced ANZ’sreliance on short term wholesale funding. Year to date the Group has raised 87% of its 2009 term funding
requirement. The prime liquidity portfolio has increased to $60 billion which represents cover for over
12 months of total offshore funding maturities.

OUTLOOKMr Smith added: “It is now very clear that the global slowdown will be significant and protracted in many partsof the world. In Australia and New Zealand this is playing out as we expected and we anticipate the situation
to continue in the second half of this year and early 2010.
“Banks are also managing the added complexity of the volatility in financial markets which is continuing to
impact the availability and cost of funding.
“The Australian and New Zealand banking system is strong which provides both countries with a financial
foundation that is not the position for many OECD nations. In Australia, the actions taken by the
Commonwealth Government and the Reserve Bank through fiscal and monetary stimulus are helping to
mitigate the impact of the slowdown. Our starting position and this action give us reason for some optimismthat Australia’s economic slow-down will not be as deep or as long as many other OECD economies.
“At the same time it is now very obvious that Asia will remain an engine for global growth albeit at lower levels
than the very high rates of the previous decades.
“ANZ remains well positioned. Our traditional core business in Australia continues to generate good results
while our Asia Pacific growth strategy is now delivering materially to our bottom line.
“We remain focused on servicing our customers, engaging closely with the communities we serve and providing
sustainable long term growth for our shareholders,” Mr Smith said.

For media enquiries, contact:

For analyst enquiries, contact:

Paul Edwards
GGM Corporate Communications
Tel: 03-9273 6955
Email: paul.edwards@anz.com

Jill Craig
GGM Investor Relations
Tel: 03-9273 4185 or 0434 736 879
Email: jill.craig@anz.com

5-

New Zealand tax rate change

6

1,373

1,417

19

461

-

(17)

-

(778)

-

-

(97)

(79)

1,908

5,980

Revenue

6,021

(23)

252

-

-

-

(295)

(117)

(111)

-

-

6,315

Revenue

Profit attributable to shareholders of the Company

6,138

(14)

Revenue and investment hedges - mark-to-market

96

New Zealand tax rate change

Economic hedging - fair value gains/losses-

353

Impairment of intangible - Origin Australia

Gains on Visa shares

(10)
(222)

Structured transaction

Non-continuing businesses (including Credit intermediation
trades)(45)

Credit risk on impaired derivatives

-

3,477

27

-

-

-

-

30

-

(92)

-

-

1,435

NPAT

ANZ share of ING New Zealand investor settlement

3,090

-

656

-

(24)

-

(935)

-

(92)

(138)

(113)

4,096

Credit

-

6,567

27

-

-

24

9

-

-

-

113

2,944

PBP

Half Year Mar 2009
Expenses

One ANZ restructuring costs

Underlying business performance

Profit attributable to shareholders of the Company

Revenue and investment hedges - mark-to-market

656-

Economic hedging - fair value gains/losses-

Organisational transformation costs

(926)

-

(92)

(138)

-

7,040

Gains on Visa shares

Non-continuing businesses (including Credit intermediation
trades)

Structured transaction

Credit risk on impaired derivatives

ANZ share of ING New Zealand investor settlement

One ANZ restructuring costs

Underlying business performance

Revenue

Reconciliation of underlying business performance

3,026

(23)

252

-

(218)

-

(321)

(117)

(111)

-

-

3,564

2,701

-

-

-

34

-

12

-

-

-

-

2,655

Expenses

3,437

(14)

96

-

(34)

353

(234)

(10)

(45)

-

-

3,325

PBP

Credit

681

-

-

-

-

-

-

-

(45)

-

-

726

Credit

1,267

-

-

-

-

-

14

-

(111)

-

-

1,364

Half Year Mar 2008

2,995

-

-

-

218

-

26

-

-

-

-

2,751

PBP

Half Year Sep 2008
Expenses

1,963

(10)

67

8

(24)

248

(163)

-

-

-

-

1,837

NPAT

1,356

(16)

176

(7)

(152)

-

(234)

-

-

-

-

1,589

NPAT

7%

18%

Revenue

9%

11%

Revenue

15%

15%

14%

11%

Expenses

1%

23%

PBP

Growth Rate

3%

7%

PBP

Growth Rate
Expenses

102%

98%

Credit8%

5%Credit

NPAT

-28%

4%

NPAT

4%

20%

MEDIA RELEASE (continued)