Media Release
For release: 15 February 2013

ANZ Trading Update – 3 months to 31 December 2012
- performance in-line with expectations; continued progress with growth andproductivity priorities As part of a first quarter trading update today ANZ announced an unaudited Cash Profit for thethree months to 31 December 2012 of $1.53 billion up 6.2% on the same period in 2012
(First Quarter 2012 $1.44 billion). Unaudited Statutory Profit after tax was $1.36 billion1.
Commenting on the first quarter, Chief Executive Officer Mike Smith said: “ANZ has produced a solid
business performance consistent with expectations provided at the time of the 2012 Full Year results.
We are delivering against our strategic growth and productivity priorities. This has seen ANZ continue
to perform despite soft economic conditions in Australia and New Zealand, and cautious behaviour byconsumers and business.
“Our strategy has seen us benefit from volume growth in Asia and our exposure to these opportunities
is an increasingly important part of the Group’s earnings with Greater China our third largest source ofprofits after Australia and New Zealand. In Australia and in New Zealand we won share in a numberof priority markets including Retail Deposits and Mortgages.
“Further productivity gains were made across the Group. Productivity improvement is a key focus
ensuring that we can continue to invest in our super regional strategy while also maintaining ourfinancial performance.
“Initiatives to manage costs and margins helped to sustain a good performance in the Australia
Division. In New Zealand, although cost management has been a continued focus, margins have been
softer. In International and Institutional Banking, expenses were well controlled however margins
remain under pressure, albeit less so than in 2012, while favorable trading conditions and increased
customer volumes saw a strong performance in Global Markets. The environment for Wealth remains
subdued and we continue to manage costs while pacing investment in transforming the business.
“Provisions were in line with expectations and there have been no developments, including the recent
natural disasters in Australia, that would materially change our guidance for the year,” Mr Smith said.
Overview2•

Revenue growth reflected the constrained business environment. Reasonable volume growth,particularly in Asia, was offset by margin pressure in New Zealand and in the International &Institutional Banking Division.

•Momentum from productivity programs commenced last year has continued with expenses slightly
down and the Group is on track to deliver positive jaws for the half3.

•The Group Net Interest Margin was flat relative to the end of September; down slightly excluding
Global Markets4. A solid performance from Australia Retail was offset by lower returns on retained
capital due to the lower interest rate environment along with continued deposit mix impacts andasset pricing pressure elsewhere in the Group.

1Statutory profit is adjusted for non-core items to calculate Cash Profit, a measure of profitability for the ongoing business activities of the Group.
Comparisons are quarter to 31/12/2012 relative to quarter to 31/12/2011 (PCP) unless otherwise noted. A table containing quarter by quarter
cash profit for 2012 is available on the ANZ website in the shareholder centre within the Analysts Toolkit.
3
Jaws refers to the differential between income growth rates and cost growth rates.
4
Comparisons are relative to Group NIM at the end of September 2012 excluding Global Markets of 266 bps.
Australia and New Zealand Banking Group Limited ABN 11 005 357 5222

•Global Markets income grew 26% to $544 million. Customer sales income increased 4% on
quarterly average for 2012, with the Australian business performing well and the Asian businesshaving its strongest ever customer sales result.

•Credit quality trends are in line with expectations. The first quarter credit impairment charge was$311 million with the trend excluding Collective Provision Management overlay releases reasonably
flat. The first quarter of the year typically accounts for less than 25% of the annual provision
charge and as such there is no change to guidance provided at the Full Year5.

•The December quarter APS330 shows a decline in total impaired assets while new impaired assets
were also lower. Corporate Impaired assets have declined 4% quarter on quarter (QOQ) with theCorporate 90+ days past due balance declining 20% QOQ. Provision coverage remains strong withthe collective provision coverage ratio at 1.08%6.

•

Average customer deposits increased 12.3%; with average lending assets up 7.6%7.

•

ANZ’s APRA Basel III CET1 ratio at 31 December 2012 was 7.7% which equates to 9.7% on a fully
harmonised basis, unchanged from the Full Year 2012. Payment of the Final 2012 dividend had a30 basis point impact towards the end of the quarter. The Group had completed circa 50% of theFull Year 2013 term wholesale funding task by the end of December 2012.

BUSINESS COMMENTARY
AUSTRALIA DIVISION
Market share increased in key sectors including traditional and affluent banking and householdmortgages and deposits. Retail margins improved slightly with asset repricing largely offset by depositmix impacts. There was good momentum in Commercial lending and deposits. Productivity is an
ongoing focus and costs remain tightly controlled as we invest in the Banking on Australia program.
As a result of these factors the business delivered strong Profit Before Provisions growth and positivejaws. Credit quality across Retail and Commercial was sound and within expectations, albeit theprovision charge was higher due to the absence of collective provision overlay releases.
INTERNATIONAL & INSTITUTIONAL BANKING DIVISION
A strong Global Markets result was offset by weaker outcomes in Global Loans and Transaction
Banking in Australia. Margin pressure continued albeit at a lesser rate than in the second half offinancial year 2012. In line with our strategy the Asia Pacific Europe and America business continues
to deliver strong revenue growth to the division. Expenses are being well controlled. ANZ was recently
voted a top four corporate bank in Asia in the Greenwich Associates Survey, having been outside thetop 20 in 20078.
NEW ZEALAND DIVISION (in NZD)
The initial phase of the brand integration, including the move to one core banking system, has gonesmoothly. While the revenue environment remains subdued the simplification program is delivering
productivity benefits including reductions in technology operating costs. As expected, margins havedeclined from their 2012 peak impacted in part by a short term tactical campaign during December.
Credit quality trends remain benign.
GLOBAL WEALTH & PRIVATE BANKING DIVISION
The Division continues to improve penetration of the ANZ customer base and in November launched aSmart Choice Super product. In-force premiums and funds under management grew. Whileinvestment markets have improved, business conditions remain challenging and expenses are being
well managed.
For media enquiries contact:

For investor/analyst enquiries 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

5At the Full Year 2012 result ANZ advised it expected the total provision charge for FY 2013 to be circa 10% higher than for FY 2012.
Collective Provision ratio is the collective provision as a percentage of credit risk weighted assets.
Comparisons are quarter to 31/12/2012 relative to quarter to 31/12/2011 (PCP).
8
Greenwich Associates Survey 2013.
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