CHAIRMAN’SREPORT
1H20
COVID-19 has changed all our lives in ways
we would have never imagined just a few
short months ago and has already had
a significant impact on company profits.
ANZ was no exception with Statutory
Profit after tax for the Half Year ended
31 March 2020 of $1.55 billion, down
51% on the prior comparable period.
Cash profit from continuing operations
was down 60% to $1.41 billion.

This financial performance was primarily driven by credit
impairment charges of $1.674 billion. This included credit reservesof $1.031 billion being set aside to help manage the impactsof COVID-19, taking our total collective provision to $4.5 billion.
While not impacting our overall capital position, there was also
an $815 million impairment of our investments in two Asian
associate banks related to COVID-19 impacts in those markets.
Cash Earnings per Share decreased 60% to 50 cents with Returnon Equity also decreasing to 4.7% on a cash continuing basis.
While the pandemic is impacting the entire economy, the work
we have done over recent years under the leadership of ourChief Executive Shayne Elliott to simplify and strengthen ourbusiness has us well placed to support all our stakeholders
during this health crisis.
Our core businesses continued to perform well with targetedbalance sheet growth in our preferred segments. We maintained
a strong capital position with a Common Equity Tier 1 Capital
Ratio of 10.8% at 31 March 2020, even after bolstering credit
reserves to record levels. Liquidity also remained strong.
We continued our focus on running the business as efficiently
as possible with business as usual costs falling again.
Critically, we took decisive action in response to COVID-19
with the implementation of a four-pronged plan focused onprotecting the essential fabric of our bank, including keeping
our staff and customers safe; adapting in a new world; engaging
with key stakeholders; and preparing for the future.

DAVID GONSKI, ACDIVIDENDThe Board announced last month that we will wait until there
is greater certainty around the economic impacts of COVID-19
before determining a final position on an interim dividendfor 2020.
While this may be disappointing given the importance manyof our shareholders place on a regular franked distribution, it
prudently balanced our primary responsibility to shareholders
to ensure our balance sheet is sufficiently robust
for the long term.
This decision was not about our current financial position andI can also confirm we have not received any concerns from theAustralian Prudential Regulation Authority (APRA) regarding
our level of capital.
Given we are in the eye of a global pandemic not seen for ahundred years, the Board believed it was prudent to wait until
we had more information about the full impact of COVID-19.
This decision was also in-line with APRA guidance that all
authorised deposit taking institutions and insurers should
seriously consider deferring decisions on dividends until theoutlook is clearer.
Directors will continue to carefully consider all factors overthe coming months, including the severity and duration ofcommunity lock-downs, before determining a final positionon the interim dividend. Shareholders will receive more
information as part of a trading update in August.

SUPPORTING CUSTOMERSPREPARING FOR THE FUTURE

COVID-19 has caused significant financial difficulty for manyand I’m proud of the way our team has stepped forward to
support more than 180,000 customers across Australia andNew Zealand with various financial support measures.

The coming months will be difficult. The speed at which
COVID-19 has already evolved makes it difficult to predict
how deep the economic crisis will be or how long therecovery will take.

This support includes the six-month deferral of interest
and principal repayments on home and business loans.

What I do know however is that we have the team, the financialstrength and the strategy to help cushion our customers andthe broader community through these terrible times as wellas to position us for the benefit of shareholders.

In Australia, we had around 105,000 requests for assistanceon $36 billion worth of home loans, representing 14% of ANZ’s
home loan portfolio. In New Zealand, we have provided financial
support to more than 30,000 personal, home and businessloan customers through loan deferrals or adjustments withlending of around NZ$12 billion.
We provided financial assistance to around 15% of ourcommercial and small business lending customers in Australia,
as well as providing temporary overdraft increases for ~5,500
business customers. More than $4 billion in lending was
pre-approved to 35,000 small business customers withexisting transactional accounts.
To support those companies which employ a large numberof people through COVID-19, we also provided $16 billion in
additional lending mainly to our long-term investment-grade
institutional customers.
While we recognise this support comes at a cost to shareholders,
it is ultimately in everybody’s interest we support as manyhome owners and businesses as we responsibly can to theother side of this crisis. This is what we are here for and yourbank has demonstrated its commitment in this time of needfor our customers.

PRODUCTIVITY
Given the impact COVID-19 is having on the broader economy,
our business and, of course, our shareholders, we are taking
the necessary steps to ensure our business is run as efficiently
as possible. I particularly note 95% of our staff have beenworking productively from home. This is a credit to themand the work of our technology teams.
There will also rightly be an expectation that the variable
remuneration of our staff, particularly senior executives,
will be materially reduced given the impact COVID-19 has
had on shareholders.
While the Board will make its final assessments as part of theFull Year results, budgets for variable remuneration and salary
increases have already been significantly reduced and will befocused primarily on rewarding those who have been working
extremely hard to provide essential services to our customers.

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

We are preparing ANZ for ‘COVID-normal’ with urgency so we
can continue to deliver long term benefits to our shareholders.
We know the time will come when the crisis will pass. ANZ
will be there to help customers build and invest for future
growth and opportunities, as well as providing returns toour shareholders.
Finally, as mentioned earlier, I’m proud of how ANZ has
stepped forward and would like to acknowledge the workof the ANZ team who have worked so hard in very difficultcircumstances to support our customers through thesemost challenging of times.

David Gonski, AC CHAIRMAN