5 October 2016

ANZ APPEARANCESUPPORTING MATERIALS
Prepared for House of Representatives
Standing Committee on Economics

PublicSTATUTORY RETURNS ON EQUITY (ROE)
Annual Statutory ROE (%)

Adjusted Proforma Cash
ROE1

ANZ 10 Year average ROE: 15.6%
20.7

20.9

14.5

15.3

14.6

15.0

15.8

14.5

13.9

12.2

10.3

2.7

9.5

2006

2007

2008

2009

2010
ROE (%)

Notes:

Sources:

2011

2012

2013

2014

2015

1H16

10 year average ROE

ROE is on Statutory Basis except where noted
1. Adjusted Proforma refers to Cash ROE adjusted to remove the impact of Specified Items: the impacts of capitalised software changes, restructuring
expenses and sale of Esanda Dealer Finance portfolio. Further detail provided in the ANZ 1H16 Consolidated Financial Report page 14.
Cash ROE 1H16 = 9.7%
ROE: Company filings, Statutory basis

ANZ TOTAL SHAREHOLDER RETURNS (TSR)TSR COMBINES SHARE PRICE APPRECIATION AND DIVIDENDS PAID TO SHOW THE TOTALANNUAL RETURN TO SHAREHOLDERS OF ANZAnnual TSR (%)
ANZ 10 Year average TSR: 9.2%
35.5

17.1

34.2

31.0

15.6

6.2

2.3

-6.6
-11.7
-19.7

-32.320062007

2008

2009

2010
TSR (%)

Notes:
Sources:2011

2012

2013

10 year average TSR

TSR is on a Simple Annualised Average basis pre tax based on ANZ’s Financial Year
TSR: Bloomberg, ANZ

2014

2015

1H16

DYNAMICS AFFECTING AUSTRALIAN BANK INDUSTRYRETURNS ON EQUITY

18.5

5.1

14.7
1.2

8.0

8.4

0.3

2005 ROE

Notes:
Sources:

Better pricing
for customers

Cost of holding
more capital

Bad Debts
impactCostmanagement

ChangedTax Rates2015 ROE

ROE based on cash earnings (Statutory ROE FY15 = 14.5% as per previous chart)
Note that the absolute contribution of individual drivers varies depending on the order of changes, but the relative contributions are comparable.
Further, productivity has been aided by increased asset prices (i.e. a larger denominator)
Company filings, Cash basis

STATUTORY RETURNS ON EQUITY – AUSTRALIAN BANKS,
AUSTRALIAN INDUSTRY AND OFFSHORE PEERS
1 Year ROE

5 Year Average ROE

10 Year Average ROE
24.0%

21.2%
18.6%
15.5%
15.6%

17.3%

16.5%
16.8%

15.5%

12.2%

14.1%
11.6%

10.9%
9.7%

8.5%

5.4%
1.8%

0.1%

Notes:Sources:Big 4 Australian Banks

Major Canadian banks

Major Scandanavian Banks

Comparable Commerial US Banks

Comparable Commercial UK Banks

ASX Industry Champions

Simple arithmetic average of latest full year data. Canadian banks: Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank ofCommerce, Toronto-Dominion Bank and Bank of Nova Scotia. Scandinavian banks: Danske Bank, DNB, SEB, Nordea and Swedbank. US banks:
US Bank and Wells Fargo. UK banks: HSBC, Lloyds Bank and Royal Bank of Scotland. ASX Industry Champions: Telstra, BHP, RIO, CSL andWesfarmers
ROE: Company fillings, Statutory basis, ANZ analysis

TOTAL SHAREHOLDER RETURNS – AUSTRALIAN BANKS,AUSTRALIAN INDUSTRY AND OFFSHORE PEERS
1 Year TSR

5 Year Average TSR

10 Year Average TSR

16.8%
13.6%

15.8%

14.3%

10.0%

14.1%
10.1%

7.3%
4.8%

10.9%
10.0%

8.6%

3.6%

0.4%

-2.2%

Notes:

Sources:-0.1%-0.5%-0.9%

Big 4 Australian Banks

Major Canadian banks

Major Scandanavian Banks

Comparable Commerial US Banks

Comparable Commercial UK Banks

ASX Industry Champions

Simple arithmetic average of latest full year data. Canadian banks: Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank ofCommerce, Toronto-Dominion Bank and Bank of Nova Scotia. Scandinavian banks: Danske Bank, DNB, SEB, Nordea and Swedbank. US banks:
US Bank and Wells Fargo. UK banks: HSBC, Lloyds Bank and Royal Bank of Scotland. ASX Industy Champions: Telstra, BHP, RIO, CSL andWesfarmers
TSR: Bloomberg, ANZ, simple annualised average

UNDERLYING RETURNS OF GLOBAL PEERS SIMILAR TO
BIG 4 AUSTRALIAN BANKS
RETURNS ADJUSTED FOR BUSINESS MODEL, CONDUCT COSTS AND LEVIESReturn on average ordinary equity (FY15, %)191816151410151414

1312112-4CBAWBC

ANZ

NAB

LloydsRBS

Shading is adjusted for
asset sales, simplification
costs, UK bank tax andconduct provisions

Notes:
Sources:

US Bancorp

Wells Fargo

RBC

17- 19% if adjusted forbusiness model (higherCTI) and lower interest
rates

Australian banks based on cash earnings
UK banks based on both statutory and underlying earnings (adjusted for regulatory taxes and significant conduct fines)
Canadian banks are as reported (with the exception of Toronto Dominion which also reports an adjusted return on equity)
Company filings, ANZ analysis

BNS

TorontoDominion

Shading is adjusted for
restructuring charges
and acquisition costs

ANZ – ALLOCATION OF OPERATING INCOME
FY15 Operating Income $20.5bn ($12.9bn in Australia)
Tax paid
Includes $2.1bn inAustralia

Retained earnings
Contribution tostrengthening
capital ratio &supporting growth

Expenses>$2.5 bn on local
contractors andsuppliers$3bn$3.9bn$2.6bn$5.5bnDividends paid
To ~550,000
shareholders~540,000 of whom
are retail holders inAustralia (42% ofissued capital)$4.9bn$1.2bn

Loan impairment

Staff salaries~21,100 FTE inAustralia~50,100 globally$331m paid insuperannuation
contributions

Further Information
DISCLAIMER & IMPORTANT NOTICE: The material in this presentation is general backgroundinformation 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 uponas advice to investors or potential investors and does not take into account the investment
objectives, financial situation or needs of any particular investor. These should be considered,with or without professional advice when deciding if an investment is appropriate

Our Shareholder information
shareholder.anz.com

This 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 to
publicly release the result of any revisions to these forward-looking statements to reflect eventsor circumstances after the date hereof to reflect the occurrence of unanticipated events.

Equity Investor

Jill Campbell

Cameron Davis

Retail Investors

Debt Investors

Michelle Weerakoon

Donna ChowGroup General Manager Investor Relations+61 3 8654 7749
+61 412 047 448
jill.campbell@anz.com

Manager Shareholder Services & Events+61 3 8654 7682
+61 411 143 090
michelle.weerakoon@anz.com

Executive Manager Investor Relations+61 3 8654 7716
+61 421 613 819
cameron.davis@anz.com

Associate Director,
Debt Investor Relations+61 3 8655 1402
donna.chow@anz.com

Katherine Hird

Senior Manager Investor Relations+61 3 8655 3261
+61 435 965 899
katherine.hird@anz.com