ANZ Global Markets

Morgan Stanley Financials Forum

Steve Bellotti
Managing Director
ANZ Global Markets and Loans
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED

12 September 2013

Global Markets is integral to the ANZ super regional
strategy and supporting growth in cross border flows
Significantly grown and diversified businessby product, customer and geography

Global Markets is a significant contributor toANZ’s performance
Operating Income 1H13
ANZ Group
International &Institutional Banking (IIB)• Expanded product range, in particular FX
capabilities• Expanded Asia footprint and increased
connectivity across regionOtherANZ63%• Increased bench strength of Markets team• Grown and diversified client base

IIB
37%

GlobalMarkets 34%

Other IIB

Solid income growth achieved throughsuper regional strategy

Global Markets plays an important role
servicing clients across ANZAustralia

NewZealand

RetailRetailCommercial& Agri

Global Markets Operating Income

GlobalInstitutional

CAGR ‘08-’12$m
APEA
Aus / NZ

Global
Wealth

23% Transaction
Banking18%• Enhanced risk systems framework

Corporate &Commercial
BankingGlobalLoans

25%

1,118

GlobalMarkets

1,856

1310

1,908

22%

1134
10%

768IIBRetailCommercialBanking350
2008

APEA – Asia Pacific, Europe & America
2546

2010

774
2012

APEA

Aus / NZ

Global Markets operates across ANZ’s regional network,with a clear client focus and strategy in each region
Europe & America

A growing client base throughAsia Pacific, Europe & America

Niche market focused on Investor clients

Global Markets APEA Sales Income$mOffer access to Asian names via top tierregional credit platform with capability to„originate and distribute‟ into Asia

31% CAGR

485

302

Asia & Pacific168

Growth market serving a broad client base,competing against regional and global players

2008

Corporate/Institutional: Multi-currency flow
platform (FX, Rates, Credit) and Debt CapitalMarkets delivering liquidity and access toglobal capital markets

2010

2012

Europe& America

Commercial: Preferred bank for clients withcross-border needs

Asia &Pacific

Australia & New ZealandWell established and leading markets business
Australia& New
ZealandPredominately FX and Rates delivered by anefficient cost-to-serve model to Institutional,Corporate and Commercial clients3

ANZ has outperformed against more challenging globaland regional trends
The FICC global wallet has shrunk withRates the hardest hit

In Asia the FICC wallet has been
relatively flat

Global FICC Revenue
2009-2012, US$b

Asian FICC Revenue
2009-12, US$b137
143149190

30

71376

24

149252424

32277715

15152010

2011

2012

RatesCredit

9913221279

2009

-6%

29-13%

1746

4147

2010

2011

2012

G10 FXCommodities

G10 rates / otherCredit

2009

FX/EM Commodities

Source: Wholesale Banking Outlook, 2013, Oliver Wyman; „Day of Reckoning‟ McKinsey Quarterly, September 20114ANZ Global Markets structure
ANZ Global MarketsClient Franchise - providing liquidity, transactional and risk management
solutions to ANZ clients
InstitutionalCorporate &Commercial

Financial Institutions /Investors

Large multinational andregional clients thattypically require solutions
in multiple markets

Corporate andCommercial clientslocated in Australia, New
Zealand and Asia

Real Money funds, Centraland Regional banks,
Asia Wealth clients

Non-Client
FranchiseManageManagethe
ANZ GroupANZ
group
Balance Sheetbalancesheet.

Global Markets Functions
Relationship Sales

Liquidity &Transaction
Processing

Product Manufacture& Deal Structuring

Risk Management &Trading

Global Markets Products
ForeignExchangeRates

Credit1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

5Commodities

Equities1

The business model is built around supporting theneeds of ANZ clients
Global Markets income is generated throughthree principal sources

ANZ Global Markets Income
1H13• Direct client business on core products
Sales

such as Fixed Income, Foreign Exchange,
Commodities and Debt Capital Markets• Focussed on increasing the mix of sales

Total
product/client
incomeincome through greater penetration andclient acquisition• Trading represents management ofTrading

positions taken as part of direct client
sales flow and strategic positions• Trading in the rates and credit product, inline with balance sheet trading

Trading
25%
Sales
52%

Balance
Sheet23%• Management of interest rate risk for theBalanceSheetloan and deposit books• Management of the bank‟s liquidity
position

6

Non-Client
facing income

A suite of products core to the liquidity, transactionaland risk management needs of clients across ANZ
Foreign
Exchange

Rates• Foreign exchange risk management advice and products for clients• Global market execution with 24-hour capability through trading hubs in•

Singapore, Hong Kong, London, Sydney and Wellington
Onshore and offshore RMB trade and investment capabilities• Interest rate risk hedging for clients• Pricing and risk management of credit instruments• Principal market execution, risk transfer, information sourcing, idea generation,
product tailoring

Credit• Origination and distribution of credit products• Corporate and Financial Institutions sourced listed, unlisted bonds, syndicated•Commodities

loans & securitisation
Management of the bank‟s liquidity portfolios and trading of position risk• Commodity price risk advice and management• Commodity derivatives (e.g. gold, soft commodities and energy)• Products include: spots and forwards, swaps, options, collars and structured
deals• Offers products based on equity derivatives to our Private Bank, Wealth andEquities••

Institutional Clients
The offering addresses market access, portfolio hedging, capital preservation,
income generation and asset allocation requirements
Products range from vanilla equity options to structured notes7

Achieved growth through a focused build out ofcapabilities and strong client acquisitionGlobal Markets Income$m

Global Markets Income by Type

1,856

Sales

$m
2,500

14% CAGR

1,908

Trading

Balance Sheet

2,000

1,118904

1,112

1,500
1,000
50002008

2010

2012

2H12

1H132008

Global Markets Income by Product
$m
2,500

FX

Fixed Income

Capital markets

$m
2,500

Other

2,000

1,500

1,500

1,000

1,000

500

500

0020102012

2H122012

2H12

1H13

Global Markets Income by Geography

2,000

2008

2010

1H13

8

APEA

Aus/NZ
CAGR‘08 - ‘1271%

59%

10%

68%
31%

29%

41%

2008

2010

2012

22%

59%

60%

41%

40%

2H12

1H13

A strong risk framework underpins the Global Markets
operating model and is central to our culture• A focus on servicing ANZ clients through an„originate to distribute‟ model

An improved risk profile
Income/$ VAR$m• Driven much greater diversification by income,product and geography within business

250• People & culture209

 An entrenched, continuous Risk Culture
Review process is in place200

 Risk management is a key criteria within
executive objectives

170• A clear execution framework in place whicharticulates what business we are prepared todo and not do – this is aligned to theperformance plans and risk processes

15091100• A strong focus on operational risk
 Using scalable platforms and consistentprocesses

4250

 Digital capabilities allow greater
standardisation of processes in addition
to improving cost to serve

171217202010

2011

2012

1H130

• The regulatory environment has evolved
significantly over the past few years and wecontinue to monitor requirements closely andmanage efficiently.

Global Markets Sales & Trading (Traded)
Balance Sheet (Non-Traded)

1 Represents annualised 1H13 Income/$Var91

Global Markets is integral to ANZ’s super regional
strategy and a key growth business

Recognised as aleading marketsbusiness

F
EUROMONEYFEUROMONEYFX POLL

FX POLL

FX POLL

BEST FOR OVERALLFX SERVICES
2013

BEST FOR ASIAN TIMEZONE
CLIENT SERVICE
2012 - 2013BEST FOR ASIAN
CURRENCIES2012

APLMA SYNDICATEDLOAN AWARDSASIA PACIFIC SYNDICATEDLOAN HOUSE OF THE YEAR
2012

Voted by Financial Institutions

Achieved growthand diversificationby product, clientand geography

Continued focus ongrowth anddiversification• Expanded product range, in particular FX capabilities• Expanded Asia footprint and increased connectivity across region• Increased bench strength of Markets team• Grown and diversified client base
• Enhanced risk systems framework• Continue to grow and diversify client base
• Deepen penetration of existing client relationships and win
greater share of wallet• Build out Investor/FIG franchise• Maintain strong risk management framework and culture
10ANZ Global Markets

Morgan Stanley Financials Forum

Steve Bellotti
Managing Director
ANZ Global Markets and Loans
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITEDAppendix

Global Markets Leadership Team
Steve BellottiManaging Director
Global Markets
Global Loans•

Over 25 years experience across all assetclasses•

Transformed and led large capital
markets operations for global banks•

Prior leadership roles with Merrill Lynchand Dresdner Kleinwort in London, NewYork, Sydney, Hong Kong and Singapore

Eddie Listorti

Richard Huston

Co-head of Fixed
Income, Currency,Commodities

Co-head of Fixed
Income, Currency,Commodities

Regional Head SEA& PacificRegional Head NEA,Europe & America•

Over 18 years experience managing arange of global businesses within Markets•International career with over 25 years
experience•Previously held senior roles at Dresdner
Kleinwort based in London for 6 years andin Asia for 9 years running the Dresdner
Asia and FX business for Bankers‟ Trust•Prior roles include Co Head of Macro Riskat Dresdner Kleinwort, Asia Pacific MD
roles with Merrill Lynch and has run hisown private equity and investment
ventures in London

12Richard Kimber
GM & COO Global
Markets & Loans•

Global career leading start up businesses,
companies in growth phases and largeorganisations•Former Global CEO of Friendster, Regional
MD Google, CEO FirstDirect Bank UK, andsenior international roles with HSBC andMacquarie BankThe material in this presentation is general background information about the Bank‟s activities current at thedate 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 theinvestment objectives, financial situation or needs of any 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 our intent, belief
or current expectations with respect to ANZ‟s business and operations, market conditions, results ofoperations and financial condition, capital adequacy, specific provisions and risk 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-lookingstatements, which speak only as of the date hereof. Such statements constitute “forward-looking statements”
for the purposes of the United States Private Securities Litigation Reform Act of 1995. ANZ does notundertake any obligation to publicly release the result of any revisions to these forward-looking statements toreflect events or circumstances 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