MACQUARIE AUSTRALIACONFERENCE 2014
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED

8 May 2014Mark Whelan
MD Corporate & Commercial Bank,Australia

Banking on Australia is transforming the business
Building our lead in mobile & digital• Expanding customer reach and deepening loyalty• New mobile & digital foundations• Rapid evolution of our market leading applications

Transforming our distribution channels
RetailCorporate & Commercial Banking• Transforming branches andcontact centres to focus on
more complex sales• Multi-channel connectivity• Migrating low valuetransactions to self service

Simplifying our products & process• Digitising and automating• Using our super regional
advantage to bring whole of ANZ• Providing market leading banker
tools & centralised service• Offering deep industry insightAccelerating through customer insights• New information platforms• Paperless processing• Single customer view
enabled• Simplifying product range• Insight driven offers

2

We have made significant progress over 18 months
since Banking on Australia’s inception…
Transforming our distribution channels

Building our lead in mobile & digital

Smart ATMs

>53% Customers that are digital users

85

New look sales focused branches

1.1m

9%

Over the Counter transactions

43% logins1600+

Branches offering simple wealthproducts$78b400+

iPads (with 8 apps) deployed to1,200 C&CB bankers

Building the capability of our people &systems
69%

Branch sales staff accredited tosell home loans
Branch staff accredited to sell

1,500+ Wealth products

Branch staff trained to sell small

1,600+ business products
32%

Frontline C&CB staff withexperience in key Asian markets

13% Wealth revenue via Retail4
C&CB Cross-border referrals

120% from Australia to Asia5

ANZ goMoneyTM active users
goMoneyTM and Internet Banking
Transactions processed on
goMoneyTM 2

43% ANZ FastPayTM transactions3
Simplifying our products & processes
Reduction in average monthly

24% customer complaints6

Net increase in customers across110k Retail and C&CB7
36k

Digital C&CB A-Z Reviews8
Increase in time frontline C&CB

20% Banker‟s spend with customers9
Business customers onboarded

28% via OneSwitch55Mins

Home loan refinance time
(reduced from 45 mins)10

Note: All figures have been measured since inception of the „Banking on Australia‟ Program (October 2012) unless otherwise stated ; 1. Average monthly logins for the 6 months to March2014 versus 12 months to September 2012; 2. Represents dollar value of transactions processed on ANZ goMoney TM since launch in September 2010; 3. Represents compound monthly
growth in the number of transactions processed on ANZ FastPay TM since launch in October 2012; 4. Represents the 6 months to March 2014 versus 6 months to March 2013; 5. Represents
the 5 months to February 2014 versus 5 months to February 2013; 6. Average monthly Customer Complaints for the 6 months to March 2014 versus 12 months to September 2012; 7. Net
increase in customers for the 12 months to February 2014; 8. Represents 6 months to March 2014; 9. Estimated time being freed up in the frontline by removing activities and streamlining
processes, compared to October 2012 baseline; 10. Applicable for non-credit critical renewals through ANZ channels;

3

Australia Division 1H14 Financial Result

AustraliaDivision

Income($m)

Expenses
($m)

PBP
($m)

NPAT($m)

Cost toIncome %

1H14

4,017

1,500

2,517

1,479

37.3%

v 1H13%+4%+2%+5%+5%-80bps

1H142,515

1,002

1,333

933

39.8%

v 1H13%+6%+2%+13%+13%-160bps

1H14

1,502498781

546

33.2%

v 1H13%0%+2%-6%-7%+60bps

RetailCorporate &CommercialBanking4

Australia Division 1H14 Financial Result
Australia Division 1H14 NPAT up 5% to $1.48 billion
RetailCorporate & Commercial Banking#1Strongest growth of the majordomestic banks in Home loans
growing at 1.2x system1

16%

Small Business lending

17

Consecutive quarters of above
system home loan growth toMarch 2014

8%Deposit Growth

Deposit Growth1

6%C&CB customers with 26k net newcustomers4

Total and Affluent Traditional
Banking market share2=#1

Main Financial Institution (MFI)
Customer Satisfaction in
Commercial Banking5

Revenue per FTE3

4%

Cross-sell revenue generated by
C&CB

90bps

Net Impaired Assets % of Gross
Lending Assets (improved from140bps in 1H13)

1.1x
System

#2
8%

13%

Wealth revenue via Retail

Note: All figures PCP unless otherwise stated; 1. Source: APRA Monthly Banking Statistics, 12 months to February 2014. System adjusted for new ADI incorporations; 2. Source: RoyMorgan Research, Australia Pop‟n aged 14+, 12 months to March 2014; Traditional banking includes FUM for total deposits, mortgages, personal/other loans, and credit cards. Affluent
defined as customers with All Financial Services FUM between $400k and $1m (in all financial institutions) or income greater than $150k/year; Peers: CBA (excl Bankwest), NAB, Westpac(excl Bank of Melbourne & St George); 3. Represents average Retail FTE for the 6 months to March 2013 and March 2014; 4. Net new customers (excluding Esanda) for the 12 months toFebruary 2014; 5. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, Commercial banking includes majority of businesses with turnover <$100m, data sourced
in the six months to March 2014

5Corporate & Commercial Bank Overview
Corporate & Commercial BankBusinesses
Corporate
Banking

Large private, small listed andmulti-national corporations

Small to medium companies
Business Bankingwith turnover $5m-$125m
Regional Business Non-metropolitan and Agri
Bankingcustomers
Small BusinessBanking
Esanda18%

C&CB Revenue
C&CB has achieved strong sales despite subdued
demand for credit$m1,501

1,445

1,5181,502

1,459

Small businesses with turnover<$5m and lending <$1m
Motor vehicle & equipment
finance

1H12

2H12

1H13

2H13

1H14

Diversified by customers…

… by industry sector…

Net Lending Assets

Exposure at Default by industry sector (%)(as at Mar 14)

Corporate Banking

14%

Esanda$65b25%25%

Regional Business Banking
Business Banking

18%

29%

34%

Small Business Banking

13%

11%
13%

ANZ has the lowest
origination LVR on
Commercial Real Estateof all the major banks
Property & Construction
Agriculture
RetailConsumer Lending
Other6Banking on Australia is delivering a better business inC&CB

To be the leading Corporate and Commercial bankin Australia
Banking on Australia is the vehicle through which we will:• Transform distribution by reshaping banker roles to increase
capacity and the amount of time bankers spend withcustomers• Build on our lead in mobile and digital to provide easy
access to industry leading products• Develop our people’s capabilities and knowledge• Simplify our products and processes to improve thecustomer experience and drive productivity• Leverage ANZ‟s connectivity and footprint to provide
seamless access to super regional opportunities7C&CB – 2014 versus 2010
Deposits

Net Loans and Advances$b$b17%45%6556

Mar 1014%

Corporate Banking

17%

Small Business Banking

18%

Regional Business Banking

25%

Esanda25%

Business Banking

32

Mar 14

Mar 1013%

78%

13%

78%

13%

78%

9%

9%

9%

Mar-13
Mar13

Sep-13
Sep
13

Mar-14
Mar
14

7-10

4-60-3

Stronger

Regional Business Banking

28%

Business Banking

61%

Small Business Banking

Mar 14Net Impaired Assets and Gross Lending
Assets

EAD by Customer Credit Rating (CCR)
Weaker4711%

Gross Lending Assets (RHS)$b

Net Impaired Assets as % GLA (LHS)

70

2.30%651.80%

60

1.30%

55

0.80%

500.30%Mar 10Mar 11

Mar 12Mar 13Mar 148C&CB – increasing sales capability and capacity to drive
outperformance
Improved sales capability…

35k

Training hours completed with specificfocus on credit, sales & Super Regional 1… and investments in improving capacity …
Increase in the amount of time frontline

20% C&CB Banker‟s spend with customers6

Relationship Frontline staff with hands-on

32% experience in key Asian markets

47

1,200 iPads deployed to frontline bankers
36k

Digital C&CB A-Z Reviews conducted via
iPads1Processes moved from frontline toBusiness Response Team (BRT)
Servicing availability via BRT with 56k

24/7 service requests actioned1… are translating to improved performance=#1

Main Financial Institution (MFI) Customer
Satisfaction in Commercial Banking2#1

Can service my business needs inAustralia, NZ & Asia3

Net Loans & Advances ($b)

Deposits ($b)

3%63658%

C&CB customers with 26k net new6% customers4

4737% Growth in leads sent to the frontline

44Growth in Cross Border Referrals from120% Australia to Asia5

Mar 13Mar 14

Mar 13Mar 14

1. Six months to March 2014; 2. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks, Commercial banking includes majority ofbusinesses with turnover <$100m, data sourced in the six months to March 2014; 3. DBM Business Financial Services Monitor, ranked against other „Big 4‟ banks,data sourced from majority of businesses with turnover of $1-40m in the three months to February 2014; 4. Net new customers (excluding Esanda) for the 12months to February 2014; 5. Five months to February 2014 vs. PCP; 6. Estimated time being freed up in the frontline by removing activities and streamlining
processes, compared to October 2012 baseline;

9C&CB is seeing strong lending sales despite subdued
demand for credit
Business confidence has
improved recently…

… however this is yet totranslate into demand forbusiness credit.

Despite this we haveincreased our customer
numbers…

System Lending Growth2 &System Undrawn Limits3# Customers

Business Confidence1
Average%

125

5120

3
2110

10105
Mar12

Sep
12Mar13

Sep
13Mar14

Sep Dec Mar
121213… achieved strong sales in a challengingenvironment…
Net Loans and Advances$b63.2

1H13SalesJun13

Sep Dec
1313Feb 13

Feb 14… and grown in our target segments
Net Loans and Advances$b22.81.
2.
3.

52504846444240

System Undrawn Limits (RHS)

4115

26k$b

System Lending Growth (LHS)

12.9

7.7

0.2

PartialPaydowns

Full
Paydowns

InstoUp-Tier

65.2

63.2

1H14

Mar 13

1.6

0.1

0.6

65.2
0.2

0.1

SmallBus.
Reg.
Corp. Esanda Mar 14
Bus. Banking Bus. Banking
BankingBankingRoy Morgan Business Single Source, Business Confidence, average for the preceding 12 months
RBA Financial Aggregates, Total Business Credit, Seasonally Adjusted, September 2012 to February 2014
ABS Lending Finance, Australia, 5671.0, Commercial Finance Commitments not drawn at end of month, September 2012 to January
201410Small Business Banking is a strong performer$1.2b

Lent to new Australian small
business as part of our $2 billion
pledge

SBB lending book composition by sector
Exposure at Default by industry sector (%)(as at Mar 14)
Retail16%

19%

Small Business lending

Property & Construction

30%

Agriculture

18%

10%

7%

Small Business customer deposits

7%8%Hospitality
Manufacturing
Other

Net loans and advances & deposits
SBB a key driver of cross sell
$b

7%

11%

Business Services

Small Business deposit sales
through the branch

SBB a key source of liquidity –Funding ratio1 (Mar 14) of 267%

30

Net loans and advances incl. acceptances (LHS)
Customer deposits (LHS)
Loan to deposit ratio (RHS)
40%
38%

2036%
34%

1032%
-30%
Sep 12

Sep 13

Mar 14

Note: All figures PCP unless otherwise stated
1. Funding ratio is the ratio of customer deposits to loans
11The material in this presentation is general background information about the Bank‟s activities
current at the date of the presentation. It is information given in summary form and does not
purport to be complete. It is not intended to be relied upon as advice to investors or potential
investors and does not take into account the investment objectives, financial situation or needs ofany particular investor. These should be considered, with or without professional advice when
deciding if an investment is appropriateThis presentation may contain forward-looking statements including statements regarding ourintent, belief or current expectations with respect to ANZ‟s business and operations, marketconditions, results of operations and financial condition, capital adequacy, specific provisions andrisk management practices. When used in this presentation, the words “estimate”, “project”,“intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ
and its management, are intended to identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the datehereof. Such statements constitute “forward-looking statements” for the purposes of the UnitedStates Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation topublicly release the result of any revisions to these forward-looking statements to reflect events orcircumstances after the date hereof to reflect the occurrence of unanticipated events.
For further information visit

www.anz.com
or contact
Jill Craig
Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 9977

e-mail: jill.craig@anz.com