1 MAY 2018

NEWS RELEASEANZ FIRST HALF 2018 RESULTANZ today announced a Statutory Profit after tax for the Half Year ended 31 March 2018 of$3.32 billion up 14% and a Cash Profit1 on a continuing basis of $3.49 billion up 4% on the priorcomparable period. ANZ’s Common Equity Tier 1 Capital Ratio was 11.0% up 91 basis points (bps).
Return on Equity increased 32 bps to 11.9% with Cash Earnings per Share up 4% to 119.4 cents.
The 2018 Half Year result demonstrates continued progress in ANZ’s transformation to build asimpler, better capitalised, better balanced bank.
An Interim Dividend of 80 cents per share will be paid, fully franked, reflecting a payout ratio of
66% of Cash Profit on a continuing basis and is broadly in line with ANZ’s target fully franked fullyear payout ratio of 60 to 65%.
Group Financial Information
Earnings ($M)

1H18

1H17

Movement

Statutory Profit After Tax

3,323

2,911

14.2%

Cash Profit (continuing basis)

3,493

3,355

4.1%

Profit before credit impairment & tax

5,397

5,489-1.7%

Earnings Per Share (cents)

119.4

114.8

4.0%

Return on Equity (%)

11.9%

11.6%

32bps

Net Interest Margin (%)

1.93%

2.00%

-7bps

Credit Quality

1H18

1H17

Total credit impairment charge as a % of average GLAs

0.14%

0.25%

Balance Sheet ($B)

1H18

1H17

Gross Loans and Advances (GLAs)

595.5

580.4

Total Risk Weighted Assets (RWAs)

395.8

397.0

Customer Deposits

472.8

468.2

Leverage Ratio (%)

5.4%

5.3%

Common Equity Tier 1 Ratio (%)

11.0%

10.1%

Common Equity Tier 1 Ratio Internationally Comparable Basel III 2(%)

16.3%

15.2%

Return on Net Tangible Assets (continuing basis)

13.2%

13.3%

Other

1H18

1H17

Full time equivalent staff - FTE (including discontinued operations)

41,58046,046

12

All financials on a Cash Profit Continuing Basis with Growth Rates compared to First Half 2017 unless otherwise stated.
CET1 Internationally Comparable Basel III aligns with APRA’s Information Paper: International Capital Comparison Study, 13 July 2015.

CEO COMMENTARYANZ Chief Executive Officer Shayne Elliott said: “This result demonstrates our strategy to build abetter balanced, better capitalised and simpler bank is delivering results for customers andshareholders despite continued headwinds for the sector.
“We have increased the allocation of capital to our higher performing businesses, delivered on oursimplification promise by divesting non-core assets, reduced product complexity and continued toreshape our workforce so we can better respond to changing market dynamics.
“We are now benefiting from a more focused organisation with sector-leading capital and improving
returns. While we expect this trend to continue, we have needed to manage additional regulatory
costs, softer industry revenue growth and the impact of the bank tax. We must also respondcomprehensively to the very real concerns that the Royal Commission identifies.
“Our business efficiency has improved, with expenses reducing in absolute terms for each of thepast four halves. This discipline allowed us to increase investment in our digital capability inAustralia, which is already delivering results in terms of better customer experience.
“Our retail markets of Australia and New Zealand performed well with solid growth in both lending
and deposits, increasing market share in our targeted segments, particularly owner-occupierprincipal and interest (P&I) home loans.
“Customers also continue to benefit from our focus on building a superior banking experience. We
extended our leadership in the mobile payments space with the addition of Fitbit Pay (Australia),
Garmin Pay and eftpos on Apple Pay and Android Pay. We also introduced a new mobile banking
app that is currently the top rated banking app in the Australian Apple store, with daily registrations
the highest on record for ANZ. The launch of our unique voice biometrics capability has contributedto five-fold growth in the value of payments using mobile devices from November 2017 to March2018.
“A highlight of the half was finalising the sale of our six Asian retail and wealth businesses. This wasa significant execution task involving hundreds of ANZ staff transferring around two million
customers, 40 branches, 69 systems and 2,700 employees on schedule and under budget. The sale
allows us to further strengthen our focus on Institutional, which continues to have a strong regional
footprint across 15 markets in Asia and was again named a top four corporate bank in Asia andnumber one for overall quality3.
“In a fast changing and unpredictable environment, ANZ’s experienced team is committed tobuilding a business that is both nimble and focused on execution. The progress of our multi-year
transformation demonstrates we have the right team in place to manage difficult conditions anddeliver for our customers and our shareholders.”

3

According to the 2017 Greenwich Associates Large Corporate Banking study

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STRATEGIC PRIORITIESCreate a simpler, better capitalised, better balanced and more agile bank
Aim - Reduce operating costs and risks by removing complexity and exiting low return and noncore businesses.
4 Completed sale of six retail and wealth businesses in Asia , ANZ’s stake in Shanghai Rural

Commercial Bank (SRCB) and the first tranche of Metrobank Card Corporation (MCC). 5
 Announced the sale of the Australian Life Insurance business, following the announcementof the sale of the Australian Pensions & Investments and Aligned Dealer Group (ADG)
businesses in October 2017.
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 The Group CET1 ratio up 91bps year on year to 11.0%, pro-forma 11.8%.
 60% of Group Capital allocated to Retail and Commercial businesses in Australia and New
Zealand, up from 44% in 2015. Total Institutional RWA reduced $42 billion (-20%) sinceFY15.
 Completed $1.1 billion of the $1.5 billion share buyback announced in December 2017, andneutralised the impact of the Dividend Reinvestment Program for the third consecutive half.

Focus our efforts on areas where we can carve out a winning position
Aim - Make buying and owning a home or starting, running and growing a small business inAustralia and New Zealand easy. Be the best bank in the world for customers driven by themovement of goods and capital in our region.
 Helped start more than 2000 businesses in the half through our ‘Business Ready’collaboration with Honcho in Australia.
 Grew home lending in Australia by 6% with strategic focus on owner-occupier (P&I);
customer deposits up 3%. In New Zealand home lending increased 5% and deposits 4%.
 Introduced First Home Coaches in New Zealand following the success of the program inAustralia.
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 Maintained position as No. 4 Corporate Bank in Asia for sixth consecutive year and No. 1
8Institutional Lead Bank penetration in Australia and New Zealand.

Drive a purpose and values-led transformation of the Bank
Aim - Create a stronger sense of core purpose, ethics and fairness, investing in leaders who canhelp sense and navigate a rapidly changing environment.
 Increased low carbon finance commitment from $10 billion to $15 billion by 2020, with morethan $8 billion financed since 2015.
 Signed the FX Global Code of Conduct, which provides a single set of principles governing
good practice in the FX market.
 Increased women in leadership to 31.9% (from 31.1% end-FY17); Employer of the Year for
LGBTI Inclusion9; top private sector organisation for access and inclusion for people withdisability.10
 Released report on the Financial Wellbeing of adults in Australia and New Zealand, thefindings of which will inform future development of products and services.
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Includes the sale of Retail & Wealth businesses in Singapore, China, Hong Kong, Taiwan and Indonesia to DBS and retail business in Vietnam to Shinhan Financial Group.
ANZ finalised the sale of its 20% stake in SRCB in December 2017 and half of its 40% stake in MCC in January 2018. ANZ also entered into a put option to sell its
remaining 20% stake in MCC to Metrobank, which is exercisable in the fourth quarter of FY18.
6
Proforma incorporates the expected capital benefit from the Wealth Australia divestments (P&I, ADG and Life Insurance) and the second tranche of MCC, which remainsubject to regulatory approval, less 10 bps impact from the completion of the $1.5b share buyback.
7
Greenwich Associates 2017 Asian Large Corporate Banking Study; ANZ ranked equal No.4 in 2016 & 2017.
8Peter Lee Associates 2017 Large Corporate & Institutional Relationship Banking surveys, Australia & New Zealand.
92017 Australian Workplace Equality Index.
102018 Access & Inclusion Index.
53Build a superior everyday experience for our customers and our people tocompete in the digital age
Aim - Build more convenient, engaging banking solutions to simplify the lives of customers andour people.
 New ANZ banking app currently most highly rated in Australian Apple Store. 937,000 active

users since its February launch, growing at 15,000 per day.
 Extended mobile payment leadership with the launch of Fitbit Pay (Australia), Garmin Pay
and eftpos on Apple Pay and Android Pay. More than 18.5m mobile payment transactions
completed (increase of 156% PCP); with total spend up more than 100% to $594m.
 Preparing for Open Banking through a strategic partnership with Australia’s leading datacompany, Data Republic, allowing the sharing and analysis of data with trusted third parties
in a secure environment.
 Introduced agile working practices to the Australia and Technology Divisions to increase
speed-to-market for key customer initiatives.
CAPITAL AND DIVIDENDThe APRA CET1 capital ratio at 31 March 2018 was 11.0% or 16.3% on an Internationally Comparable
basis. This places ANZ above the APRA prescribed ‘unquestionably strong’ threshold well ahead of
the 2020 deadline.
Completed asset sales during the half increased the CET1 position by ~55bps providing the capacity
for ANZ to commence a $1.5 billion on market share buyback in January 2018. As at 31 March $1.1
billion of this had been completed allowing the cancellation of ~40 million shares.
The completion of further asset sales and associated re-insurance arrangements for One Path Lifeshould provide ANZ with flexibility to consider further capital management initiatives in the future.
These will only be undertaken if capital is available to support growth and subject to businessconditions and regulatory approval after the receipt of the relevant proceeds.
As with the 1H17 and 2H17 Dividend Reinvestment Program (DRP), we intend to neutralise theimpact of shares allocated under the DRP by acquiring an equivalent number of shares on-market.
CONTINUING BUSINESS AND LARGE ITEMSANZ announced two separate Wealth business transactions in 2017. In 1H18 the results of thesebusinesses have been classified as ‘discontinued operations’ in accordance with accounting
standards, and shown separately from the ‘continuing operations’. Prior period comparative results
have been restated to reflect this.
Consistent with the Group’s practice in FY17, ANZ has also disclosed a summary of large and notable
items, which are included within the cash profit of its continuing operations. These items relate to
the impact of divestments on the continuing operations, including any gains or losses on sale andthe underlying results of the businesses that will no longer form part of future cash profits.

4CREDIT QUALITY
The total provision charge for the half was $408 million which equates to a loss rate of 14 bps, downfrom 21 bps at the end of FY17. New Impaired asset declined 32% over the half with gross impaired
assets down 15% over the same period.
The corporate credit environment remains benign with demand muted. The change in the loss rate
for ANZ reflects both the benign macro environment together with strategic changes to both thesize and composition of the asset book. This includes a 13 % reduction in Institutional CRWA sinceMarch 2016, as well as the exit of the Asia Retail and Wealth portfolio in six countries and the exit ofsmall business lending in Asia.
ROYAL COMMISSION
A Royal Commission into Misconduct in the Banking, Superannuation and Financial Services
Industry was established in December 2017, with Commissioner Hayne expected to submit a final
report by 1 February 2019.
It is expected that ANZ’s external legal costs for the Royal Commission will be around $50 million forthe 2018 financial year. ANZ remains committed to engaging with the Inquiry in an open,constructive and transparent manner. ANZ is unable to predict the outcome of the Inquiry or its
impact on either the bank or the broader industry.
OUTLOOK
Commenting on the outlook Mr Elliott said: “We expect revenue growth for the second half of2018 to continue to be constrained by intense competition as well as the impact of increased
regulation. Australia’s economic growth is expected to pick up in the coming year, led by abroad lift in the business sector and additional stimulus from public spending. However,historically high levels of household debt and low wage growth will offset some of the positive
impact of recent strong employment data, so consumers are likely to remain cautious.
“The difficult trading conditions we originally forecast in 2016 are expected to continue for theforeseeable future. This reinforces the decision we took to focus our business on areas where
we can deliver exceptional customer outcomes, solve real customer needs and generate adecent return for shareholders. Our focused strategy of simplification and digitaltransformation remains appropriate.
“The Royal Commission into Financial Services in Australia will also continue to have an impacton the sector. ANZ will learn from this Inquiry and continue to take real action to restore trust
within the community. We’re committed to playing our part and will continue to engage withthe Commission in an open, constructive and transparent manner.”
Video interviews with Chief Executive Officer Shayne Elliott and Chief Financial Officer
Michelle Jablko are available at bluenotes.anz.com
For media enquiries contact:
Liz Rudall, +61 403 130 207
Nick Higginbottom, +61 403 936 262

For investor enquiries contact:
Jill Campbell, +61 412 047 448
Cameron Davis, +61 421 613 819
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