Media Release
For release: 19 August 2011

ANZ Market Update - Nine Months to 30 June 2011
- continued business momentum and progress with regional strategy In a market update today ANZ reported an unaudited underlying profit after tax1 for the nine months
to 30 June 2011 of $4.2 billion, 16.1% above the prior corresponding period (PCP). Unaudited
underlying profit for the third quarter of $1.4 billion increased 1.3% on the second quarter (QOQ).
ANZ Chief Executive Officer Mike Smith said: “Our key customer franchises in Australia, New Zealandand Asia Pacific, Europe & America (APEA) continue to perform well reflecting carefully paced
investment in building the business to diversify our earnings and to take advantage of opportunities
in the region.
“Our broader Institutional Division has strengthened its strategic positioning. However, as withdomestic and global peers, the Global Markets business, after a solid start to the year, has faced
particularly difficult conditions during the quarter with lower trading income only partially offset bycontinued growth in customer driven revenue.
“Despite the market turmoil which has continued in July and August, there is good reason for
optimism in our key domestic markets in Australia and New Zealand. Both countries are benefitingfrom growing demand for hard and soft commodities, and from the broader trade and investment
linkages with Asia, which continues to be the best performing region in the global economy.
“The turbulence in the global economy confirms our long-held view that there is a changed reality
post-GFC and we have worked hard to actively position ANZ ahead of this by refocussing the Groupon the growth economies in the Asia Pacific region and by building a very strong balance sheet. Thereis no question the global environment is difficult but we believe there are still significant opportunities
across our business.
“We are continuing to develop stronger customer propositions in all our businesses and ourinvestment in operational hubs is allowing us to drive further productivity gains. We will continue tomanage our balance sheet conservatively and cut our cloth to suit our circumstances given thesoftening economic outlook.
“The bottom line is we have the right strategy, we are in the right markets and we have steady
momentum in our customer franchises which allows us to be cautiously optimistic about ourprospects despite the market volatility,” Mr Smith said.
Third Quarter Highlights (comparisons are underlying and QOQ unless otherwise specified)• ANZ has continued to execute consistently against its Super Regional Strategy with all divisions
maintaining good momentum in earnings, although Institutional has been impacted by theperformance of the Global Markets trading business.
…./2.
1All figures are on an underlying basis, which refers to the ongoing operations of the Group, unless otherwise stated. Reportedprofit is adjusted to exclude non-cash and significant items to arrive at underlying profit.

Australia and New Zealand Banking Group Limited

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2• ANZ’s balance sheet remains very strong. For the financial year to end of June, deposit growth
exceeded loan growth by $14 billion. Customer funding now represents 61% of ANZ’s funding
base, up from 50% in 2008. This structural improvement has reduced ANZ’s reliance on both
short-term and term wholesale funding. The wholesale funding task for 2011 is complete. The
Group's Tier 1 capital level at the end of the quarter was 10.6% (or 13.9% on an FSA basis) while
Core Tier 1 was 8.6% (or ~9.3% on a fully harmonised Basel III basis).
• Group profit after tax increased 1.3% with revenue slightly positive, profit before provisions
broadly flat and a 10.3% decrease in the provision charge. Group revenue growth was impacted
by challenging conditions in Global Markets with lower trading income leading to a 14% reduction
in total Global Markets income compared to the first half average2. Adjusted for Global Markets
income, Group profit was up approximately 6% QOQ.
• Group customer deposits increased 6.6% (6.2% FX adjusted) while Group lending grew 2.2%
(1.4% FX adjusted).
• Group margins (excluding Global Markets) increased around 2 bps from the end of the first half;
including Global Markets margins were broadly flat. The flow through benefits of repricing andproduct mix impacts were offset by higher average funding costs, particularly for deposits inAustralia and New Zealand, and increased asset pricing competition in Institutional.
• The provision charge was $328 million, bringing the total provision charge for the nine months toend of June to $989 million, 31% lower than PCP. Provision coverage remains high with the total
provision coverage ratio at 2.06%3. In the June quarter APS330 released today ANZ advised total
impaired assets have declined $260 million reflecting asset realisations in Institutional and NewZealand. New impaired assets were also lower than the preceding quarter.
Business Update (comparisons QOQ unless otherwise specified)• In Australia, the third quarter saw a continuation of strong deposit growth trends across retail,regional commercial, business banking and small business with deposits up 2.3% (10.1% year todate, retail deposits 1.8x system). Lending grew 1.5%. Signs of growth are emerging in theCommercial loan book with growth in the third quarter of 2.4%. Mortgage lending volumes are
improving after a period of softness in the second quarter. Ninety-day delinquency trends in themortgage book peaked in May and while they have since improved they remain higher than at theend of the prior half. Thirty-day delinquencies fell 12 bps across the quarter with delinquencies
continuing to be tightly managed.
• The APEA business is focused on improving the quality and diversity of its earnings streams. The
contribution from the Retail and Wealth businesses has increased as the benefits of the RBS
transaction continue to emerge and further improvements are made in product offerings andsystems support. APEA lending and customer deposits increased $3.2 billion and $3.9 billion
respectively (FX adjusted).
• The New Zealand economy has withstood the impacts of the Christchurch earthquakes relativelywell and while the market remains challenging, it has stabilised which is impacting positively on
credit quality. Lending volumes declined 1.0% (in NZD), while deposit volumes declined 1.9% (inNZD) and margins continued to improve. ANZ’s New Zealand business simplification program iswell underway with a focus on improved cost management and simpler processes for staff andcustomers.
• The Institutional business has continued to acquire customers and diversify its revenue sources
both by product and geography with particularly strong growth in trade finance, lending and thedebt capital markets business in Asia.
…./3.
2
3

Global Markets income appears on page 19 Other Operating Income section of the March 2011 Results Announcement.
Total Provision Coverage Ratio – collective provision balance plus individual provision balance as a proportion of Credit Risk
Weighted Assets. The ratio is as at 30 June 2011.

3
Global Markets trading income reduced 39% (compared to first half average) with this trend
continuing into the fourth quarter. This was partially offset by Global Markets’ customer driven
revenues, primarily in foreign exchange and commodities, growing to record levels (+10% QOQ
and +9% PCP).
Customer deposit volumes increased 14%4 on the back of strong customer acquisition andmigration to the trans-Tasman cash management platform. Lending volumes were up 3% withgrowth in APEA offsetting some contraction in Australia and New Zealand.
“In summary, we are still positive on Australia. There are some short-term challenges to manage but
Australia is in a strong fiscal position with a AAA-rating, and we are on the door-step of Asia which is
now the engine for global economic growth.
“ANZ’s Super Regional Strategy is perfectly aligned with the opportunities flowing from Asia to ourkey domestic business in Australia and New Zealand, and to our growing international network.
While we need to manage deliberately in the current environment, we are confident about theregion’s long-term growth prospects and we continue to believe that the environment will also throw
off growth opportunities for us,” Mr Smith said.
For media inquiries contact:

For investor inquiries contact:

Paul Edwards
Group GM Corporate Communications
Tel: +61-3-8654 9999 or +61-434-070101
Email: paul.edwards@anz.com

Jill Craig
Group GM Investor Relations
Tel: +61-3-8654 7749 or +61-412-047448
Email: jill.craig@anz.com

4Deposit and lending numbers and percentage comparators are all on an FX adjusted basis