PROPOSED RESTRUCTURE OF THE ANZ GROUPTO ESTABLISH A NON-OPERATINGHOLDING COMPANY
EXPLANATORY MEMORANDUMVOTE IN FAVOURYour Directors unanimously recommend that you vote “Yes” in favourof the Scheme, which is one of the steps required to implement the
proposed Restructure.
You can vote at the Scheme Meeting to be held on 15 December 2022 –see section 1 for how you can vote, including voting online.
The Independent Expert has concluded that the Restructure(including the Scheme) is in the best interests of ANZ Shareholders.
This is an important document and requires your immediate attention.
You should read the whole document before you decide how to vote on the Scheme,
which is one of the steps required to implement the proposed Restructure.
If you are in any doubt about how to deal with this document, you should contact
your financial, taxation, legal or other professional adviser.

Legal
AdviserCONTENTS

LETTER FROM THE CHAIRMAN
OF THE ANZ BOARDANNEXURE 1

77

ANNEXURE 2

135

ANNEXURE 3

142

ANNEXURE 4

159

SECTION 2

ANNEXURE 5

167

KEY DATES IN THE
PROPOSED RESTRUCTURE9ANNEXURE 6

175

CORPORATE DIRECTORY179

4

SECTION 1

WHAT DO YOU NEED TO DO?7

SECTION 3

FREQUENTLY
ASKED QUESTIONS12SECTION 4

OVERVIEW OF THE
RESTRUCTURE AND EFFECT
ON THE ANZ GROUP

22

SECTION 5

RATIONALE, BENEFITS,
DISADVANTAGES AND RISKS

30

SECTION 6

FINANCIAL INFORMATION

34

SECTION 7

IMPLEMENTING
THE RESTRUCTURE40
SECTION 8

TAX IMPLICATIONS
OF THE SCHEME47

SECTION 9

ADDITIONAL INFORMATION

60

SECTION 10

GLOSSARY70

IMPORTANT NOTICESGeneralThis Explanatory Memorandum is important and requires
your immediate attention. You should read this Explanatory
Memorandum in full before making any decision as to how
to vote at the Scheme Meeting.

Nature of this Explanatory Memorandum
This Explanatory Memorandum includes the explanatory
statement for the Scheme required by subsection 412(1) of
the Corporations Act.
This Explanatory Memorandum does not constitute orcontain an offer to ANZ Shareholders, or a solicitation of an
offer from ANZ Shareholders, in any jurisdiction. This
Explanatory Memorandum is not a disclosure document
required by Chapter 6D of the Corporations Act. Subsection
708(17) of the Corporations Act provides that Chapter 6D of
the Corporations Act does not apply in relation toarrangements under Part 5.1 of the Corporations Act
approved at a meeting held as a result of an order undersubsection 411(1). Instead, ANZ Shareholders asked to voteon an arrangement at such a meeting must be provided
with an explanatory statement as referred to above.

ASIC, ASX and NZX
A copy of this Explanatory Memorandum has beenregistered by ASIC for the purposes of subsection 412(6) of
the Corporations Act. ASIC has been given the opportunity
to comment on this Explanatory Memorandum inaccordance with subsection 411(2) of the Corporations Act.
Neither ASIC, nor any of its officers, takes any responsibility
for the contents of this Explanatory Memorandum.
ASIC has been requested to provide a statement, in
accordance with paragraph 411(17)(b) of the Corporations
Act, that it has no objection to the Scheme. If ASIC provides
that statement, it will be produced to the Court at the timeof the Court hearings to approve the Scheme.
A copy of this Explanatory Memorandum has been
provided to the ASX and NZX. Neither the ASX , NZX, nor
any of their officers, takes any responsibility for the contentsof this Explanatory Memorandum.

Important notice associated with Court orderunder subsection 411(1) of the Corporations Act
The fact that, under subsection 411(1) of the Corporations
Act, the Court has ordered that a meeting be convened andhas approved the explanatory statement required toaccompany the Notice of Scheme Meeting does not meanthat the Court:• has formed any view as to the merits of the proposed
Scheme or as to how ANZ Shareholders should vote (onthis matter ANZ Shareholders must reach their own
conclusion); or• has prepared, or is responsible for the content of, theexplanatory statement.

APRA
A copy of this Explanatory Memorandum has been
provided to APRA. Neither APRA nor any of its officers takeany responsibility for the content of this Explanatory
Memorandum.

Notice of Scheme Meeting
The Notice of Scheme Meeting is set out in Annexure 5.

Notice of Second Court Hearing
At the Second Court Hearing, the Court will consider
whether to approve the Scheme following the vote at the
Scheme Meeting. Any ANZ Shareholder may appear at theSecond Court Hearing, currently expected to be held at
10.15am (Melbourne time) on 22 December 2022 at 305
William Street, Melbourne VIC. Any ANZ Shareholder who
wishes to oppose approval of the Scheme at the Second
Court Hearing may do so by filing with the Court andserving on ANZ a notice of appearance in the prescribed
form together with any affidavit that the ANZ Shareholder
proposes to rely on.

No investment advice
This Explanatory Memorandum has been prepared without
reference to the investment objectives, financial andtaxation situation or particular needs of any ANZ
Shareholder or any other person. The information andrecommendations contained in this Explanatory
Memorandum do not constitute, and should not be taken
as, financial product advice. The ANZ Directors encourage
you to seek financial, taxation, legal or other professional
advice before making any investment decision and any
decision as to whether or not to vote in favour of the
Scheme. This Explanatory Memorandum should be read infull before making a decision on whether or not to vote infavour of the Scheme. In particular, it is important that you
consider the potential risks if the Scheme does not proceed,
as set out in section 5.5, and the views of the Independent
Expert set out in the Independent Expert’s Reportcontained in Annexure 1. If you are in any doubt about how
to deal with this document, you should contact yourfinancial, taxation, legal or other professional adviser.

Forward looking statements
Some of the statements appearing in this Explanatory
Memorandum (including in the Independent Expert’s
Report) may be in the nature of forward looking statements.
Forward looking statements or statements of intent inrelation to future events in this Explanatory Memorandum(including in the Independent Expert’s Report) should not1

be taken to be forecasts or predictions that those events
will occur. Forward looking statements generally may be
identified by the use of forward looking words such as‘believe’, ‘aim’, ‘expect’, ‘anticipate’, ‘intending’, ‘foreseeing’,‘likely’, ‘should’, ‘planned’, ‘may’, ‘estimate’, ‘potential’, or othersimilar words. Similarly, statements that describe theobjectives, plans, goals, intentions or expectations of ANZ
are or may be forward looking statements. You should beaware that such statements are only opinions and are
subject to inherent risks and uncertainties. Those risks anduncertainties include factors and risks specific to ANZBGL,ANZ NOHC, the industries in which they operate or will
operate, as well as general economic conditions, prevailingexchange rates and interest rates and conditions in financial
markets. These risks and uncertainties also include factors
relating to the Restructure, such as the timing of satisfactionof the Conditions Precedent or the ability to realise theanticipated benefits of the Restructure. See section 5
for a discussion of the potential risks and disadvantages
associated with the Restructure for further information.
Actual events or results may differ materially from theevents or results expressed or implied in any forward
looking statement and deviations are both normal andto be expected. Neither ANZ nor its officers, directors,
employees or advisers or any person named in this
Explanatory Memorandum or any person involved in the
preparation of this Explanatory Memorandum makes any
representation or warranty (either express or implied) as tothe accuracy or likelihood of fulfilment of any forward looking
statement, or any events or results expressed or implied inany forward looking statement. Accordingly, you are
cautioned not to place undue reliance on those statements.
Any forward looking statements in this Explanatory
Memorandum reflect views held only at the date of this
Explanatory Memorandum. Subject to any continuing
obligations under the ASX Listing Rules or the Corporations
Act, ANZ and its officers, directors, employees and advisers
disclaim any obligation or undertaking to distribute after
the date of this Explanatory Memorandum any updates orrevisions to any forward looking statements to reflect (a)any change in expectations in relation to such statements;or (b) any change in events, conditions or circumstances on
which any such statement is based.

Responsibility statement
ANZ has prepared this Explanatory Memorandum asat the date of this Explanatory Memorandum and takes
responsibility for the content of this Explanatory
Memorandum.
Grant Samuel & Associates Pty Limited has prepared theIndependent Expert’s Report (as set out in Annexure 1)
and takes responsibility for that report.
KPMG Transaction Services (a division of KPMG Financial
Advisory Services (Australia) Pty Ltd) has prepared theInvestigating Accountant’s Report (as set out in Annexure 2)
and takes responsibility for that report.
Neither ANZ nor any of its subsidiaries, directors, officers,
employees or advisers assume any responsibility for theaccuracy or completeness of the information contained in
the Independent Expert’s Report or the Investigating

2

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Accountant’s Report, except in relation to the information
which it has provided to the Independent Expert and theInvestigating Accountant.
No consenting party has withdrawn their consent to be
named before the date of this Explanatory Memorandum.

Foreign jurisdictions
ANZ Shareholders who are Ineligible Foreign Shareholders
are not permitted to participate in the Scheme and will notreceive ANZ NOHC Shares. Instead, Ineligible Foreign
Shareholders will have their ANZ Shares automaticallytransferred to the Sale Agent (as nominee for the Ineligible
Foreign Shareholder) on the Implementation Date without
the need for any action by the Ineligible Foreign
Shareholder. The Sale Agent will participate in the Scheme
in respect of those ANZ Shares and will be issued ANZNOHC Shares on a one for one basis. The ANZ NOHC Sharesthat are issued to the Sale Agent will be sold, with theproceeds of such sale to be paid to Ineligible Foreign
Shareholders. Refer to Section 7.2(g) for further information.
This Explanatory Memorandum does not in any way
constitute an offer of securities in any place in which, or toany person to whom, it would be unlawful to make such anoffer. No action has been taken to register or qualify ANZNOHC Shares or otherwise permit a public offer of suchsecurities in any jurisdiction outside Australia or
New Zealand.
Based on the information available to ANZ, ANZ
Shareholders whose addresses are shown in the ANZ Share
Register on the Scheme Record Date as being in Australia(and its external territories), New Zealand or an Eligible
Foreign Jurisdiction, or any other jurisdiction in respect ofwhich ANZ reasonably believes that it is not prohibited andnot unduly onerous or impractical to issue ANZ NOHC
Shares to an ANZ Shareholder with a registered address insuch jurisdiction, will be entitled to have ANZ NOHC Sharesissued to them under the Scheme subject to any
qualifications set out in this Explanatory Memorandum.
Nominees, custodians and other ANZ Shareholders who
hold ANZ Shares on behalf of a beneficial owner resident
outside Australia may not forward this Explanatory
Memorandum (or any accompanying document) toanyone outside Australia without the consent of ANZ.

Notice to US Investors
The ANZ NOHC Shares to be issued pursuant to the
Scheme, including any ANZ NOHC Shares represented by
ANZ NOHC ADSs, have not been and will not be registeredunder the US Securities Act or the securities laws of any
state or other jurisdiction of the United States. The ANZNOHC Shares and ANZ NOHC ADSs will be issued in relianceon the exemption from the registration requirements of the
US Securities Act provided by Section 3(a)(10) thereof on
the basis of the approval of an Australian court, which willconsider, among other things, the fairness of the terms andconditions of the Scheme to ANZ NOHC Shareholders.
US investors should refer to section 9.9 for further
information concerning transfer restrictions disclosuresand other notices.

Financial amounts and effects of rounding

Privacy

All financial amounts in this Explanatory Memorandum areexpressed in Australian currency unless otherwise stated.
A number of figures, amounts, percentages, estimates,
calculations of value and fractions in the Explanatory
Memorandum are subject to the effect of rounding.
Accordingly, any discrepancies between totals in tables orfinancial statements, or in calculations, graphs or charts are
due to rounding. All financial and operational information
set out in this Explanatory Memorandum is current as atthe Last Practicable Date, unless otherwise stated.

ANZ may collect personal information in the process of
implementing the Scheme. The type of information that it
may collect about you includes your name, contact details
and information on your shareholding in ANZ and thenames of persons appointed by you to act as a proxy,attorney or corporate representative at the Scheme
Meeting as relevant to you. The collection of some of thisinformation is required or authorised by the Corporations
Act. The primary purpose of the collection of personal
information is to assist ANZ to conduct the Scheme
Meeting and implement the Scheme. Without thisinformation, ANZ may be hindered in its ability to issue this
Explanatory Memorandum and implement the Scheme.
Personal information of the type described above may bedisclosed to the ANZ Share Registry, third party service
providers (including print and mail service providers andparties otherwise involved in the conduct of the Scheme
Meeting), authorised securities brokers, professional
advisers, related bodies corporate of ANZ, Government
Agencies, and also where disclosure is otherwise required or
allowed by law. ANZ Shareholders who are individuals andthe other individuals in respect of whom personal
information is collected as outlined above have certain
rights to access the personal information collected inrelation to them. If you would like to obtain details of theinformation about you held by the ANZ Share Registry inconnection with ANZ Shares, please contact the ANZ Share
Registry. ANZ Shareholders who appoint an individual as
their proxy, corporate representative or attorney to vote at
the Scheme Meeting should ensure that they inform suchan individual of the matters outlined above. Further
information about how ANZ collects, uses and discloses
personal information is contained in ANZ’s Privacy Policy
located at anz.com.au/privacy/centre/.

Charts and diagrams
Any diagrams, charts, graphs or tables appearing in this
Explanatory Memorandum are illustrative only and may
not be drawn to scale. Unless stated otherwise, all datacontained in diagrams, charts, graphs and tables is basedon information available as at Last Practicable Date.

Timetable and dates
All times and dates referred to in this Explanatory
Memorandum are times and dates in Melbourne, Australia,
unless otherwise indicated. All times and dates relating to
the implementation of the Scheme referred to in this
Explanatory Memorandum may change and, among
other things, are subject to all necessary approvals from
Government Agencies.

External websites
Unless expressly stated otherwise, the content of thewebsites of ANZ does not form part of this Explanatory
Memorandum and ANZ Shareholders should not relyon any such content.

Date of Explanatory Memorandum
This Explanatory Memorandum is dated 27 October 2022

3

LETTER FROM THE CHAIRMAN
OF THE ANZ BOARD
Dear fellow ANZ shareholder

Why ANZ proposes to undertake the Restructure

On behalf of the ANZ Board, I am pleased to present you
with this Explanatory Memorandum which explains andprovides detailed information about ANZ’s proposed
Restructure.

The financial services industry in Australia ischanging rapidly:

The Restructure involves the establishment of a new
non-operating holding company as the listed parent of the
ANZ Group. This occurs through shareholders exchanging
their existing ANZ shares for shares in the new listed
holding company. It also involves the separation of ANZ’sbanking and certain non-banking businesses under the
new listed holding company. If the Restructure proceeds,
there will be no change to the level of your shareholding in
ANZ as this is an internal re-organisation.
The Restructure is about making our banking business more
efficient, providing us with greater strategic and operational
flexibility for growth, and importantly allowing us to create
opportunities for our customers to engage more closelywith their banking.

ANZ’s core business is strong and our strategic
focus remains consistent
Our core banking business is the heart of what ANZ does.
We are the pre-eminent bank in New Zealand, the lead
Institutional Bank in Australia and indeed a leader in Asia
Pacific and have a strong Australian Retail and Commercial
franchise. The Restructure aims to assist us to better deliver
ANZ’s strategy to strengthen and grow our corebusiness further.
An important part of our strategy is to improve the financial
wellbeing and sustainability of customers by providing
connected, relevant and efficient services, tools andinsights. We are already driving further capability in digitalbanking and are excited about the customer service
propositions currently being developed under the ANZ
Plus brand.
Your Board and Executive team remain highly focussed oncontinuing to develop our core business and to drive value
for you, our shareholders.
The Restructure is very much about adding to that strengthand if it goes ahead:• ANZ’s existing banking businesses and operations willremain the same.
• ANZ’s focus will remain banking and financial products.
• The people responsible for the overall governance andmanagement of the ANZ Group, including Shayne Elliottas CEO, will remain substantially the same.
• The ANZ strategy will remain the same (and execution ofthat strategy will be assisted by the Restructure).
• The ANZ Group’s strong financial position will not beaffected by the Restructure.
• Dividend returns to shareholders will not be affected.

4

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED• Traditional banking businesses like ANZ are facing
significant disruption, principally from non-banking
businesses that are launching competing financial service
products. These businesses are not regulated in the same
way as banks like ANZ.
• Bank customers are demanding better and more tailoredbanking products and services, including throughinterconnected services and products, digital solutions
and providers.
To take advantage of this changing environment,
ANZ aims to grow with its customers and meet theirchanging expectations.
The ANZ Board considers that the Restructure can help ANZ:
• through growth and expansion, acquisitions orpartnerships with third parties, develop a holistic ‘digitalbanking ecosystem’ including adjacent, non-banking
services, platforms and partnerships that complement
ANZ’s core banking business;• better meet customers’ needs in the digital age;• compete in banking-adjacent areas on a level playing
field with other non-banking businesses, to allow ANZ toprovide better products and services to its customers;• be an employer of choice in both banking and nonbanking areas; and• remain a great bank that strives to improve thefinancial wellbeing of its customers.
This is in line with ANZ’s existing strategy.

About the proposed RestructureThis Explanatory Memorandum provides the information
you need to help you decide on how to vote in relation to
our proposed Restructure.
If the Restructure goes ahead, then ANZ will:• establish a non-operating holding company, ANZ Group
Holdings Limited (ANZ NOHC), as the new listed parent
company of the ANZ Group; and• separate ANZ’s banking and certain non-banking
businesses into the ANZ Bank Group and ANZ NonBank Group.
For the proposed Restructure to go ahead, ANZ
shareholders need to approve the scheme of arrangement(Scheme), which is one of the steps required to implement
the proposed Restructure. ANZ shareholders are to vote on
the Scheme at the Scheme Meeting on 15 December 2022.
The proposed Restructure is important to ANZ’s future.
Each of your Directors recommend that you vote “Yes” infavour of the Scheme. Your vote is important. I encourage
you to vote.

Contents
Chairman’s letter
Chairman’s
letterSection 1

PAUL D O’SULLIVANCHAIRMAN

Section 2
Section 3
Section 4

The Restructure itself is not expected to:

Section 8• impact the ANZ Group’s ability to pay dividends;• affect the ANZ dividend payout ratio (being thepercentage of earnings paid to shareholders as adividend); or• affect the amount of franking credits available in respectof any dividend paid (nor is it expected to affect ANZ
NOHC’s ability to pass franking credits to shareholders).

After the Restructure, ANZ’s banking activities (including
Suncorp Bank, if that transaction goes ahead) will continue
to be subject to the same prudential regulation as they are
subject to now. However, the activities of certain nonbanking businesses will not be subject to the full suite of
APRA prudential and reporting standards for banking
activities. This will help enable a fit for purpose applicationof regulations, policies and procedures to these nonbanking businesses.

Section 7

ANZ NOHC shares will trade on the ASX and NZX with thefamiliar ‘ANZ’. They will have the same dividend rights andthe same voting rights as your current ANZ shares.

A NOHC or similar holding company structure is usedby many leading financial institutions and financial
conglomerates, including those with regulated banking
operations (for example, Macquarie Group and Suncorp
Group in Australia and Bank of America, J.P. Morgan, HSBC
and Barclays internationally).

Section 6

If the Restructure goes ahead, there will be no change tothe number of shares you hold in ANZ. You will receive thesame number of shares in ANZ NOHC as your existing ANZshares (unless you are an ineligible foreign shareholder).1
The total number of shares in ANZ will not increase as partof the Scheme or Restructure.

Benefits of the proposed Restructure

Section 5

Direct implications for ANZ shareholders and
ANZ dividends

Section 9
Section 10
Annexures

1. You are an Ineligible Foreign Shareholder if your address is shown in the ANZ Share Register as at the Scheme Record Date as being outside Australia (and its external
territories), New Zealand, or an Eligible Foreign Jurisdiction. See sections 4.5(c) and 7.2(g). for more details.

5Key benefits of the proposed Restructure are:• Transparency: The Restructure will separate ANZ’sbanking and certain non-banking businesses within the
ANZ Group. This separation will create transparency andclarity for employees, customers, regulators and investors.
• Flexibility: After the Restructure, the ANZ Group will
have a corporate structure that positions ANZ to havemore strategic and operational flexibility. That structure
can enable ANZ to be more innovative and responsive tothe changes occurring in the financial services industry.
• Stronger non-banking businesses: The Restructure
will better enable ANZ to develop its non-banking
businesses to enhance the provision of banking andfinance products and services to its customers. Although
the ANZ Non-Bank Group will initially be modest in scale,
the ANZ Board expects it to be used as a vehicle forinnovation and growth in certain non-banking businesses(including banking-adjacent businesses) that ANZ may
develop or acquire. This will help bring new technology
and non-bank products and services to ANZ customers inline with ANZ’s strategy to strengthen and grow ANZ’score banking business, and to improve the financial
wellbeing of its customers.
• Employer and partner of choice: The Restructure canassist ANZ to attract staff and partners with skills outside
traditional banking, who are more aligned with a broad
financial services group.

Each Director recommends that you vote “Yes” in favourof the Scheme.
Each ANZ Director intends to vote all the ANZ shares theyown or control in favour of the Scheme.

What should you do?
Your vote is important because the Restructure can goahead only if the Scheme is approved by ANZ shareholders
at the Scheme Meeting.
The Scheme Meeting will be held on 15 December 2022
immediately after ANZ’s 2022 Annual General Meeting but
not before 12.30pm. You may participate in the Scheme
Meeting by attending in person or online atmeetnow.global/ANZ2022.

How can you vote?
There are five ways ANZ shareholders can vote: in person,
online, by proxy, by attorney or by corporate representative.
See section 1 of this Explanatory Memorandum for more
information on how you can vote, including voting online.
If you are voting by proxy, your completed proxy form
must be received by 4.00pm on 13 December 2022.
There are two separate ANZ shareholder meetings on
15 December 2022 – the Scheme Meeting and the Annual
General Meeting. If you intend to vote by proxy, please
return a proxy form for each meeting.

Potential disadvantages of the
proposed Restructure

Further information

The most significant disadvantages of the Restructure are:You should carefully read this Explanatory Memorandum infull before you make any decision in relation to the Scheme.

• One off transaction costs of approximately $35 million(before tax).
• Additional ongoing incremental costs of less thanapproximately $5 million (before tax) per annum.
• One or more of the potential risks associated with
the Restructure occurring (these risks are described in
section 5.3).
ANZ considers that these disadvantages are not expected(or likely) to have a material impact on the ANZ Group.
The benefits, disadvantages and risks of the proposed
Restructure are described in more detail in section 5.
The Independent Expert has concluded that the
Restructure (including the Scheme) is in the best interestsof ANZ shareholders.

If you have any questions, please contact the ANZ
Shareholder Information Line on 1800 11 33 99 (within
Australia) or +61 3 9415 4010 (outside Australia). This line
is open between 8.30am and 5.00pm, Monday to Friday(excluding public holidays).
If you are in any doubt as to what you should do, you
should contact your financial, taxation, legal or otherprofessional adviser.
On behalf of the ANZ Board, thank you for your continued
support of ANZ.

Yours faithfully

ANZ Directors recommend you vote “Yes”
in favour of the Scheme to implement the
proposed RestructureYour Directors believe that the proposed Restructure(including the Scheme) is in the best interests of ANZshareholders. The Restructure can go ahead only if the
Scheme is approved by ANZ shareholders.

Paul D O’Sullivan
ChairmanAustralia and New Zealand Banking Group Limited

6

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Section 2

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

1

Section 1

WHAT DO YOU
NEED TO DO?

Chairman’s letter

SECTION

Section 9

Section 10

Annexures1.1 STEP 1: READ THISEXPLANATORY MEMORANDUM
You should carefully read this Explanatory Memorandumin full before deciding whether to vote in favour of
the Scheme.
If you have any questions, please contact the ANZ
Shareholder Information Line on 1800 11 33 99 (within
Australia) or +61 3 9415 4010 (outside Australia). This line
is open between 8.30am and 5.00pm, Monday to Friday(excluding public holidays).

As the Scheme Meeting is being held after ANZ’s 2022
Annual General Meeting, you may register for the Scheme
Meeting any time after registration for the Annual General
Meeting has opened. Registration for the Annual General
Meeting will open at 9.30am (Melbourne time) (being
1 hour before the start of the Annual General Meeting.

If you are in any doubt as to what you should do, you
should contact your financial, taxation, legal or otherprofessional adviser.

Proxyholders will need to contact the ANZ Share Registryon +61 3 9415 4024 no later than 1 hour before the Scheme
Meeting to obtain a unique email invitation link toparticipate online.

1.2 STEP 2: VOTE ON THE SCHEME

1.3 SCHEME MEETING RESULTS(a) Your vote is important

ANZ expects the results of the Scheme Meeting to beavailable shortly after the Scheme Meeting ends. ANZ will
announce the results to the ASX (asx.com.au) and NZX(nzx.com) once they are available.

Your vote is important because the Restructure can only goahead if the Scheme is approved by ANZ shareholders at
the Scheme Meeting.

(b) Are you entitled to vote?
If you are a registered ANZ Shareholder on the ANZ Share
Register at 7.00pm on 13 December 2022, you will beentitled to vote on the Scheme.
If you hold ANZ Regulatory Capital Securities (including
ANZ Capital Notes) only, you will not be entitled to vote.
If you hold ANZ ADSs only, you will not be solicited forvoting instructions.
You can read more about entitlements to vote in the
Notice of Scheme Meeting in Annexure 5.

(c) How may you vote?
You may vote:• in person, by attending the Scheme Meeting held at
The Adelaide Convention Centre, North Terrace, Adelaideon 15 December 2022 immediately after the Annual
General Meeting but not before 12.30pm;• online, by participating and voting online atmeetnow.global/ANZ2022;• by proxy, by completing a proxy form online atinvestorvote.com.au or by completing, signing andlodging a paper proxy form for the Scheme Meeting inaccordance with the instructions set out on the form.
To be valid, your proxy form (online or paper) must be
received by the ANZ Share Registry by 4.00pm on
13 December 2022;• by attorney, by appointing an attorney to attend
and vote at the Scheme Meeting on your behalf andproviding a duly executed power of attorney to the ANZ
Share Registry by 4.00pm on 13 December 2022; or• by corporate representative, if you are a body
corporate, by appointing a corporate representative toattend and vote at the Scheme Meeting on behalf of that
ANZ Shareholder. The representative needs to provide aduly executed certificate of appointment (in accordance
the Corporations Act) to be to admitted to the
Scheme Meeting.

8

You can read more about how to vote in the Notice of
Scheme Meeting in Annexure 5 and in the Online Meeting
Guide available on the ANZ website at anz.com/
schememeeting.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Section 2
Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

2

Section 1

KEY DATES IN THE
PROPOSED RESTRUCTURE

Chairman’s letter

SECTION

Section 9

Section 10

Annexures

EVENT

TIME AND DATE, MELBOURNE TIMEFirst Court Hearing

26 October 2022

The date the Court ordered the convening of the Scheme Meeting
Proxy deadline

4.00pm, 13 December 2022

Deadline by which proxy forms or powers of attorney must arrive at the
ANZ Share Registry for them to be counted
Voting eligibility

7.00pm, 13 December 2022

Time and date at which someone must own ANZ Shares to be able to voteat the Scheme Meeting
Annual General Meeting

10.30am (Melbourne time) / 10.00am(Adelaide time), 15 December 2022

Scheme Meeting

12.30pm (Melbourne time) / 12.00pm(Adelaide time), 15 December 2022

For more information about the Scheme Meeting, see the Notice of
Scheme Meeting in Annexure 5

However, if the Annual General Meeting
continues after 12.30pm (Melbourne time) /12.00pm (Adelaide time), then the Scheme
Meeting will start as soon as the Annual
General Meeting ends or has been adjourned

If ANZ Shareholders approve the Scheme at the Scheme Meeting, then the following process takes place
Second Court Hearing

22 December 2022

Court hearing for ANZ to seek approval of the Scheme
Effective Date – that is, the date on which the Scheme becomes Effective

23 December 2022

ANZ to lodge the Court order approving the Scheme with ASIC. ANZ toannounce that lodging to the ASX and NZXANZ Shares will be suspended from trading on the ASX and NZX fromclose of trading
ANZ Regulatory Capital Securities quoted for trading on the ASX will besuspended from trading on the ASX under their existing codes from closeof trading
ANZ NOHC listing
ASX listing of ANZ NOHC. First day of trading in ANZ NOHC Shares on the
ASX (on a deferred settlement basis)
NZX foreign exempt listing of ANZ NOHC. First day of trading in ANZNOHC Shares on NZX (on a deferred settlement basis)
First day of trading in ANZ Regulatory Capital Securities quoted for tradingon the ASX under their new ASX codes (on a deferred settlement basis)10

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

28 December 2022

Contents

7.00pm, 29 December 2022

The date for determining eligibility to receive ANZ NOHC Shares (or, in thecase of Ineligible Foreign Shareholders,2 the cash proceeds of the sale of
the ANZ NOHC Shares)
Implementation Date

6 January 2023

Commencement of normal trading

9 January 2023

Section 1

ANZ NOHC Shares are transferred to Eligible Shareholders

Chairman’s letter

Scheme Record Date

Holding statements for ANZ NOHC Shares sent to Eligible Shareholders
Section 2

Commencement of normal trading of ANZ NOHC Shares on the ASX (ASX:
ANZ) and NZX (NZX: ANZ)
Commencement of normal trading of ANZ Regulatory Capital Securities
quoted for trading on the ASX under their new ASX codes
The Business Restructure is undertaken
By no later than 1 month from the
Implementation Date

Section 6

Melbourne time. The times and dates in this Explanatory Memorandum refer to the time and date in Melbourne, Australia,
unless otherwise stated.

Section 5

Dates and times may change. Other than the First Court Hearing, the times and dates in this Explanatory Memorandum areindicative only. So ANZ may change any or all of the times and dates. If ANZ does so, it will announce the changes to the ASX
and NZX. In particular, the times and dates in this Explanatory Memorandum may change (including the date of the Second
Court Hearing) if the Condition Precedent relating to obtaining the Regulatory Approvals (see section 7.4 for more information)
has not been satisfied or waived.

Section 4

Dates and times depend on approval. Certain times and dates in this Explanatory Memorandum depend on ANZ
Shareholders and the Court approving the Scheme.

Section 3

Completion of sales of ANZ NOHC Shares by the Sale Agent and paymentof the cash proceeds of the sale of the ANZ NOHC Shares to be made toIneligible Foreign Shareholders

Section 7
Section 8
Section 9
Section 10
Annexures

2. An Ineligible Foreign Shareholder is an ANZ Shareholder whose address is shown in the ANZ Share Register as at the Scheme Record Date as being outside Australia (and its
external territories), New Zealand or an Eligible Foreign Jurisdiction. See sections 4.5(c) and 7.2(g) for more details.

11

SECTION

3

FREQUENTLY
ASKED QUESTIONSContents

ANSWER

MORE INFORMATIONYour ANZ Shares and your dividends
If the Restructure goes ahead, there will be no change to thenumber of shares you hold in ANZ.
You will receive the same number of ANZ NOHC Shares as yourexisting ANZ Shares (unless you are an Ineligible Foreign
Shareholder).

Letter from the Chairman of
the ANZ Board and sections
4.5(b) and 4.5(c)Section 3

After the Scheme, ANZ NOHC Shares will trade on the ASX andNZX with the familiar ‘ANZ’ code. They will have the same voting
rights as your current ANZ Shares.
The total number of shares in ANZ will not increase as part of the
proposed Restructure.

Letter from the Chairman of
the ANZ Board

Will ANZ’s dividend
payout ratio change
as a result of the
Restructure?

If the Restructure goes ahead, you will have the same dividend
rights as you do with your current ANZ Shares.

Section 4.11(c)Section 4

Will the numberof ANZ Shares on
issue increase?

The Restructure itself is not expected to:
Section 5
Section 6• impact the ANZ Group’s ability to pay dividends;• affect the ANZ dividend payout ratio (being the percentage of
earnings paid to shareholders as a divided); or• affect the amount of franking credits available in respect ofany dividend paid (nor is it expected to affect ANZ NOHC’s
ability to pass franking credits to shareholders).

Your vote and this Explanatory Memorandum

What do you
need to do?

You should carefully read this Explanatory Memorandum in full
before deciding whether to vote in favour of the Scheme.

This Explanatory Memorandum explains and provides detailed
information about ANZ’s proposed Restructure. It is intended tohelp you decide on how to vote on the Scheme, which is one of
the steps required to implement the proposed Restructure.

Section 4
A copy of the Scheme is in
Annexure 3

Letter from the Chairman of
the ANZ Board and section 1

If you are a registered ANZ Shareholder on the ANZ Share
Register at 7.00pm on 13 December 2022, you will be entitled tovote on the Scheme.

Section 10

If you hold ANZ Regulatory Capital Securities (including ANZ
Capital Notes) only, you will not be entitled to vote. If you hold
ANZ ADSs only, you will not be solicited for voting instructions.

Letter from the Chairman of
the ANZ Board and section 1

Section 9

The proposed Restructure will be implemented by the Scheme
and Business Restructure. ANZ Shareholders must approve the
Scheme for the Restructure to go ahead.

Section 8

You have received this Explanatory Memorandum because you
are an ANZ Shareholder.

Section 7

Why have you
received this
Explanatory
Memorandum?

Can you vote?

Section 2

What will happen to
your ANZ shares?

Section 1

QUESTION

Chairman’s letter

You should read these frequently asked questions and answers with the rest of this
Explanatory Memorandum. These questions and answers are not intended toaddress all relevant issues for ANZ Shareholders.

Annexures

13

QUESTIONANSWER

MORE INFORMATION

How may you vote?

You may vote by attending the Scheme Meeting in person or
online at meetnow.global/ANZ2022.

Section 1 and Annexure 5(Notice of Scheme Meeting)

Alternatively, you can vote by appointing:• a proxy (including by lodging your proxy form online atinvestorvote.com.au);• attorney; or• corporate representative.
What are the tax
implications of
the Scheme?

The tax implications of the Scheme will depend on yourparticular circumstances.

Section 8

Section 8 provides a general description of the taxationconsequences for eligible ANZ Shareholders in Australia, New
Zealand, the United Kingdom and the United States.
You should consult with your own independent tax adviser
regarding the tax implications of participating in the Scheme
based on your particular circumstances.

The Restructure
What is the
Restructure?

The Restructure is the proposed internal reorganisation of ANZ
under which:

Section 4.4• ANZ NOHC will become the new listed parent company of the
ANZ Group in place of ANZBGL;• ANZ’s banking and certain non-banking businesses will beseparated into two groups, the ANZ Bank Group and ANZ
Non-Bank Group; and• ANZ ServiceCo will become an internal service company.
If the proposed Restructure goes ahead, the ANZ Group will havea similar holding company structure to many leading financial
institutions and financial conglomerates (for example, Macquarie
Group and Suncorp Group in Australia and Bank of America, J.P.
Morgan, HSBC and Barclays internationally).
What is a NOHC?

A non-operating holding company (a “NOHC”) is a company thatowns or controls other companies but does not carry on an
operating business itself.

N/A

A NOHC or similar holding company structure is used by manyleading financial institutions and financial conglomerates
globally, including those with regulated banking operations (forexample, Macquarie Group and Suncorp Group in Australia andBank of America, J.P. Morgan, HSBC and Barclays internationally).
What is ANZ NOHC?

If the Scheme is approved and implemented, ANZ NOHC will
become the new listed parent company of the ANZ Group inplace of the current company, ANZBGL.
After the Restructure, ANZ NOHC will be a NOHC and will own all
ANZ Group businesses and assets.
ANZ NOHC will be an authorised NOHC under the Banking Act.

14

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Section 4.6(a)(1)Contents

ANSWER

MORE INFORMATION

Which of ANZ’sbusinesses will be in
the ANZ Bank Group?

The ANZ Bank Group will hold all of ANZ’s:

Section 4.6(a)(2)Section 1• banking businesses (including ANZBGL and ANZ NZ);
• international regulated bank operations; and• insurance businesses (including ANZ Lenders Mortgage
Insurance and ANZ Cover).
If the Suncorp Transaction and Restructure both go ahead,
Suncorp Bank will be held in the ANZ Bank Group.
The ANZ Non-Bank Group will hold certain non-banking
businesses, including ANZ’s:

Section 4.6(a)(3)Section 2

Which of ANZ’s
non-banking
businesses will
be in the ANZ
Non-Bank Group?

• beneficial interests in the 1835i trusts;• non-controlling interest in the Worldline merchant acquiring
joint venture; and• equity interests in Lygon, TIN and Pollination.

Section 3
Section 4

The ANZ Non-Bank Group will initially be modest in scale (relative
to the ANZ Bank Group). The ANZ Board expects it to be used asa vehicle for innovation and growth in certain non-banking
businesses (including banking-adjacent businesses) that ANZ
may develop or acquire. This will help bring new technology andnon-bank services to ANZ customers.

Section 5

It is currently expected that there will be no material changes tothe way ANZ operates its non-banking businesses after the
Restructure. However, ANZ may, in the future, change how it
operates certain non-banking businesses that are held in the
ANZ Non-Bank Group.

ANZ ServiceCo has been established to become an internal
service company to hold certain property interests and, in the
future, to potentially provide certain central shared service
functions across the ANZ Group.

Section 4.6(a)(4)Will ANZ’s banking
businesses change
as a result of the
Restructure?

The Restructure will not result in any change to ANZ’s existingbanking businesses or operations. ANZ’s focus will remainbanking and financial products.

Section 4.6(a)(2)What is the Suncorp
Transaction?

The Suncorp Transaction is ANZ’s proposed acquisition of
Suncorp Bank. This transaction remains subject to a number ofconditions.

Section 8

After the Restructure, ANZ will continue to provide banking
services in the ordinary course, including retail, commercial andinstitutional services to Australia, New Zealand, Asia, Europe
and the US.

Section 7

What is ANZ
ServiceCo?

Section 6

Immediately following the Restructure, neither ANZ NOHC nor
ANZ Non-Bank HoldCo will hold an AFSL or ACL. ANZ NOHC may
seek to obtain an AFSL following implementation of the
Restructure.

Section 4.3
Section 9
Section 10

The Suncorp Transaction does not relate to the Restructure.
Accordingly, this Explanatory Memorandum, including the
pro-forma financial information included in section 6, does notcontemplate or include the Suncorp Transaction.

Chairman’s letter

QUESTION

Annexures

15

QUESTIONANSWER

MORE INFORMATIONThe ANZ Directors’ recommendation and the Independent Expert
What do the
ANZ Directors
recommend?

The ANZ Directors consider that the Restructure is in the bestinterests of ANZ Shareholders. Each ANZ Director recommends
that you vote “Yes” in favour of the Scheme.

Letter from the Chairman of
the ANZ Board and section 5

The reasons for this recommendation are summarised in thequestion below titled “What are the potential benefits of the
Restructure?”.
If you are in any doubt as to what you should do, you should
contact your financial, taxation, legal or otherprofessional adviser.
How will the ANZ
Directors vote?

Each ANZ Director who holds ANZ Shares intends to vote infavour of the Scheme at the Scheme Meeting.

Letter from the Chairman of
the ANZ Board

What is the
Independent
Expert’s opinion?

The Independent Expert has concluded that the Restructure(including the Scheme) is in the best interests of ANZ
Shareholders.

A copy of the Independent
Expert is in Annexure 1

Rationale, benefits, disadvantages and risks of the Restructure
What is the rationaleof the Restructure?

The financial services industry is changing rapidly.
• Traditional banking businesses like ANZ are facing significant
disruption, principally from non-banking businesses that arelaunching competing financial service products. Thesebusinesses are not regulated in the same way asbanks like ANZ.
• Bank customers are demanding better and more tailoredbanking products and services, including throughinterconnected services and products, digital solutions
and providers.
To take advantage of this changing environment, ANZ aims togrow with its customers and meet their changing expectations.
The ANZ Board considers that the Restructure can help ANZ:
• through growth and expansion, acquisitions or partnerships
with third parties, develop a holistic ‘digital banking ecosystem’
including adjacent, non-banking services, platforms andpartnerships that complement ANZ’s core banking business;• better meet customers’ needs in the digital age;• compete in banking adjacent areas on a level playing fieldwith other non-banking businesses, to allow ANZ to provide
better products and services to its customers;• be an employer of choice in both banking and non-banking
areas; and• remain a great bank that strives to improve the financial
wellbeing of its customers.
This is in line with ANZ’s existing strategy.

16

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Letter from the Chairman of
the ANZ Board andsection 5.1

Contents

MORE INFORMATION

What are thepotential benefitsof the Restructure?

After the Restructure, ANZ’s banking activities (including Suncorp
Bank, if the Suncorp Transaction goes ahead) will continue to be
subject to the same prudential regulation as they are subject tonow. However, the activities of certain non-banking businesses
will not be subject to the full suite of APRA prudential andreporting standards for banking activities. This will help enable afit for purpose application of regulations, policies and proceduresto these non-banking businesses.

Letter from the Chairmanof the ANZ Board andsection 5.1

Section 1

ANSWER

Chairman’s letter

QUESTION

The benefits of the Restructure are set out in section 5.1. In
summary, the key benefits are:
Section 2

Letter from the Chairmanof the ANZ Board andsection 5.2

Section 7
Section 8
Section 9

ANZ considers that these disadvantages are not expected (orlikely) to have a material impact on the ANZ Group.

Section 6• one off transaction costs of approximately $35 million (beforetax) (of which approximately $25 million (before tax) is
expected to be incurred by ANZ if the Restructure does
not proceed);• additional ongoing incremental costs associated withcorporate and operating costs of less than approximately$5 million (before tax) per annum; and• one or more of the risks identified in section 5.3.

Section 5

The most significant disadvantages of the Restructure are:

Section 4

What are thepotential
disadvantages of
the Restructure?

Section 3• Transparency: The Restructure will separate ANZ’s banking
and certain non-banking businesses within the ANZ Group.
This separation will create transparency and clarity for
employees, customers, regulators and investors.
• Flexibility: After the Restructure, the ANZ Group will have a
corporate structure that positions ANZ to have more strategicand operational flexibility. That structure can enable ANZ to be
more innovative and responsive to the changes occurring in
the financial services industry.
• Stronger non-banking businesses: The Restructure will
better enable ANZ to develop its non-banking businesses.
Although the ANZ Non-Bank Group will initially be modest in
scale (relative to the ANZ Bank Group), the ANZ Board expects
it to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacentbusinesses) that ANZ may develop or acquire. This will help
bring new technology and non-bank products and services to
ANZ customers in line with ANZ’s strategy to strengthen andgrow ANZ’s core banking business, and to improve thefinancial wellbeing of its customers.
• Employer and partner of choice: The Restructure can assist
ANZ to attract staff and partners with skills outside traditionalbanking, who are more aligned with a broad financial
services group.

Section 10
Annexures

17

QUESTIONANSWER

MORE INFORMATION

What are thepotential risks of
the Restructure?

The following potential risks have been identified:

Letter from the Chairmanof the ANZ Board andsection 5.3• possible negative consequences as a result of unforeseenchanges in APRA’s final regulatory framework for NOHCs
of an ADI;
• the operating model of ANZ not functioning as expected as aresult of any unforeseen changes to business, market and/or
regulatory factors;• adverse impacts on ANZ as a result of unexpecteddevelopments to timing of implementation and/or the formand scope of the Restructure; and• unexpected liabilities caused by any delays in non-material
regulatory approvals or by regulatory relief not being granted.
The ANZ Board believes that the overall risk profile of the ANZGroup will not be adversely affected by the Restructure. This isdue to a number of reasons, including the following:• ANZ’s existing banking businesses and operations willremain the same;• ANZ’s focus will remain banking and financial products;• the people responsible for the overall governance andmanagement of the ANZ Group will remain
substantially the same;• the ANZ strategy will remain the same (and execution of thatstrategy will be assisted by the Restructure);• the ANZ Group’s consolidated financial position will not beaffected by the Restructure itself; and• ANZ’s dividend payout ratio (being the percentage of earnings
paid to shareholders as a divided) will not be affected.

What alternatives
did the ANZ
Board consider?

Before proposing the Restructure, the ANZ Board considered anumber of alternatives it believes are available to ANZ to ensurethat it can continue to pursue its strategy while meeting its
obligations to APRA and other regulators. These alternatives
include a dual listed company structure, stapled security
structure and minority investment structure.
The ANZ Board has decided to not pursue these alternatives
because, after due consideration, the ANZ Board believes that
the Restructure will provide the optimal structure for ANZ.
These alternatives are described in more detail in section 5.4.

18

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Section 5.4

Contents

ANSWER

MORE INFORMATION

Implementing the Restructure and treatment of ANZ Shareholders
How will the
Restructure be
implemented?

The Restructure will be implemented by the Scheme andBusiness Restructure.

Sections 4.4 and 7

Section 1

The Scheme will involve ANZ NOHC:

Section 2• acquiring all of the ANZ Shares;• issuing ANZ NOHC Shares to ANZ Shareholders (other than
Ineligible Foreign Shareholders) and the Sale Agent on a one
for one basis; and• remitting the cash proceeds of the sale of the relevant ANZNOHC Shares to Ineligible Foreign Shareholders.
The Business Restructure will be implemented immediately after
the Scheme. It involves:

Section 3• ANZ’s banking and certain non-banking businesses and assets
being separated into the ANZ Bank Group and ANZ Non-Bank
Group; and• certain property interests being transferred to ANZ ServiceCo.

Sections 4.5(b) and 4.5(c)Section 5

If you are an Eligible Shareholder, then you will receive one ANZNOHC Share for each ANZ Share that you hold as at the Scheme
Record Date (currently expected to be 7.00pm on 29
December 2022).

Section 6

Eligible Shareholders are ANZ Shareholders whose addresses areshown in the ANZ Share Register as at the Scheme Record Dateas being in Australia (and its external territories), New Zealand or
an Eligible Foreign Jurisdiction.
Following implementation of the Scheme, ANZ NOHC Shares willtrade under the ASX and NZX code “ANZ”.
Ineligible Foreign Shareholders are ANZ Shareholders whose
addresses are shown in the ANZ Share Register as at the Scheme
Record Date as being outside Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.

Sections 4.5(c) and 7.2(g)Section 7

What will Ineligible
Foreign Shareholders
receive for their
ANZ Shares?

Section 8

If you are an Ineligible Foreign Shareholder, your ANZ Shares will
be automatically transferred to the Sale Agent (as nominee for
the Ineligible Foreign Shareholder) on the Implementation Date
without any action by you.

Section 9

Ineligible Foreign Shareholders are not permitted to participate
in the Scheme and will not be issued ANZ NOHC Shares. Insteadof receiving ANZ NOHC Shares, Ineligible Foreign Shareholders
will receive the cash proceeds of the sale of the ANZNOHC Shares.

Section 4.5(d)Annexures

ANZ Senior Notes and ANZ RMBS will not be affected by the
Restructure. Following implementation of the Scheme, the ANZ
Senior Notes and ANZ RMBS will remain on issue on the sameterms and, where applicable, will remain listed on the same
exchanges as at present.

Section 10

If any Ineligible Foreign Shareholder wishes to be an ANZ
Shareholder after the Restructure, they may purchase ANZ NOHC
Shares (subject to any legal requirements or restrictions) in theusual way.
How will ANZ SeniorNotes and ANZ RMBS
be affected?

Section 4

The Restructure can only be implemented if the Scheme isapproved by ANZ Shareholders.
What will Eligible
Shareholders receive
for their ANZ Shares?

Chairman’s letter

QUESTION

19QUESTIONANSWER

MORE INFORMATION

How will ANZ
Regulatory Capital
Securities
be affected?

Following implementation of the Scheme, ANZ Regulatory
Capital Securities (including ANZ Capital Notes) will remain on
issue and (where applicable) quoted for trading on the ASX byANZBGL under their new ASX codes until they are repaid,
converted or written off in accordance with their terms.

Sections 4.5(e) and 7.2(d)Section 7.2(d) identifies the current and new ASX codes of ANZ
Regulatory Capital Securities that are quoted for tradingon the ASX.
Following implementation of the Scheme, ANZBGL will remain
listed on the ASX as a debt listing with the ASX code ”AN3” (andANZ Shares will no longer be quoted for trading on the ASX).
How will ANZ NZ
security holders
be affected?

ANZ NZ security holders will not be affected by the Restructure.
Following implementation of the Scheme, ANZ NZ securities willremain on issue on the same terms.

Section 4.5(f )What is required for
the Scheme to be
implemented?

The Scheme will be implemented if:

Sections 7.2(b)(1) and 7.2(a)What is the ANZ
Shareholder approval
threshold for
the Scheme?

The Scheme can only be implemented if ANZ Shareholders
approve it by the following thresholds:• the Scheme is approved by ANZ Shareholders at the Scheme
Meeting on 15 December 2022;• the Court approves the Scheme at the Second Court
Hearing; and• all of the outstanding Conditions Precedent to the Scheme aresatisfied or waived (as applicable).
Section 7.2(b)(1)• unless the Court orders otherwise, a majority in number (morethan 50%) of ANZ Shareholders who vote on the Scheme
Resolution; and• at least 75% of the total number of votes cast on the Scheme
Resolution at the Scheme Meeting.
Even if the Scheme is approved by ANZ Shareholders at the
Scheme Meeting, the Scheme is still subject to the approval of
the Court at the Second Court Hearing.

What regulatory
approvals are
required to
implement the
Restructure?

As at the date of this Explanatory Memorandum, all Regulatory
Approvals (including those from APRA, the Treasurer and RBNZ
RBNZ in New Zealand) required for ANZ to implement the
Restructure have been obtained, other than the approval fromthe US Federal Reserve.
If the approval from the US Federal Reserve has not beenobtained prior to the currently scheduled date for the Second
Court Hearing, ANZ may:
• postpone or adjourn the Second Court Hearing; or• proceed with the Second Court Hearing (currently expected tobe held on 22 December 2022) on the basis that the Scheme
will not be implemented until the approval from the US
Federal Reserve is obtained.
ANZ will announce to the ASX and NZX any updates to the statusof the approval from the US Federal Reserve. ANZ will also
provide an update of this status at or before the Scheme Meeting
held on 15 December 2022.
More information about the Regulatory Approvals is in
section 7.4.

20

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Section 7.4

Contents

MORE INFORMATION

What happens to theelections that ANZ
Shareholders havegiven about theirshareholdings?

All instructions, notifications and elections relating to yourshareholding (for example, about dividend payment elections,participation in the ANZ DRP and/or BOP and about how you
receive notices and communications) will automatically betransferred to ANZ NOHC unless prohibited by law or
revoked by you.

Sections 9.3 and 8.2(f )(1)

Section 1

ANSWER

This transfer also includes TFNs, ABNs or any relevant exemption
from providing a TFN which was provided by ANZ Shareholders
to ANZ. If you do not want this to occur, then before the Effective
Date, please :Section 2• call the ANZ Shareholder Information Line on 1800 11 33 99(within Australia) or +61 3 9415 4010 (outside Australia); or• write to the ANZ Share Registry.
If the Restructure does not proceed, ANZ has the appropriate
strategy, governance framework and policies in place toeffectively manage the ANZ Group. However, the ANZ Board
believes that if the Restructure does not proceed, the structure of
the ANZ Group will be less optimal for the effective execution of
ANZ’s strategy.

Section 4

If the Restructure does not proceed, approximately $25 million(before tax) one off transaction costs is expected to be
incurred by ANZ.

Section 5.5
Section 3

What happens if the
Restructure does
not proceed?

Chairman’s letter

QUESTION

More implications are described in section 5.5.
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures

21

SECTION

4OVERVIEW OF THE
RESTRUCTURE AND EFFECT
ON THE ANZ GROUP

Contents

ANZ comprises banking and non-banking businesses andassets, and provides banking and financial products andservices, including:

ANZ Shareholders

ANZ will achieve its strategy through:(b) Business Restructure
After the Scheme, ANZ will undertake the BusinessRestructure. The Business Restructure will involve separating
certain businesses and assets of the ANZ Group into the
ANZ Bank Group and ANZ Non-Bank Group. The BusinessRestructure will also involve the transfer of certain property
interests to ANZ ServiceCo.
More details about the Business Restructure are set out insection 7.3.

Annexures• Propositions: Easy to use services that improve thefinancial wellbeing and sustainability of customers.
• Platforms: More agile and more resilient banking
infrastructure platforms provided to ANZ and
third parties.

More details about the Scheme are set out in section 7.2.

Section 10

The ANZ purpose is brought to life through the ANZ
strategy: to improve the financial wellbeing andsustainability of customers by providing connected,
relevant and efficient services, tools and insights, directly
and in partnership with others.

Under the Scheme, it is proposed that ANZ NOHC will
acquire all of the ANZ Shares and will issue ANZ NOHC
Shares to ANZ Shareholders (other than Ineligible Foreign
Shareholders) on a one for one basis.

Section 9

The ANZ purpose is to shape a world where people andcommunities thrive. It drives everything ANZ does, infuses
ANZ strategy and is fundamental to ANZshareholder returns.

If the Scheme is approved and implemented, ANZ NOHC
will become the new listed parent company of the
ANZ Group.

Section 8

4.2 ANZ PURPOSE AND STRATEGY(a) Scheme to establish ANZ NOHC as the newlisted parent company of the ANZ Group

Section 7

ANZ Group

The proposed Restructure will be implemented by
the Scheme and Business Restructure. The proposedcomposition of the ANZ Group after the Restructure isshown in the diagram below.4

Section 6

Banking and non-banking
businesses and assets

4.4 OVERVIEW OF THE
RESTRUCTURE

Section 5

ANZBGL

Section 4

Refer to the ANZ website for more details (anz.com.au).

As announced by ANZ to the ASX on 18 July 2022, ANZ
has entered into an agreement to acquire Suncorp Bank
from Suncorp Group Limited (Suncorp Transaction).
The Suncorp Transaction remains subject to a minimum
completion period of at least 12 months from the datethe Suncorp Transaction was announced and a numberof conditions precedent (including Federal Treasurer
approval, Australian Competition and Consumer
Commission authorisation or approval and repeal of /certain amendments to the State Financial Institutions andMetway Merger Act 1996 (Qld)). Accordingly, this Explanatory
Memorandum, including the pro-forma financial
information included in section 6, does not contemplate
or include the Suncorp Transaction on the basis that
this transaction is unrelated to the Restructure andremains conditional.

Section 3

All banking and non-banking businesses and assets in the
ANZ Group are owned by ANZBGL. The current compositionof the ANZ Group is shown in the diagram below.3

4.3 DEVELOPMENTS TO THE
ANZ GROUP

Section 2

Currently, ANZBGL is the listed parent company of the
ANZ Group. ANZBGL is an ADI and is regulated by various
prudential regulators, including APRA in Australia, RBNZ in
New Zealand and various international regulators.

The ANZ strategy can be viewed on the ANZ website(anz.com/shareholder/centre/about/our-purpose-andstrategy/), in the ANZ 2021 Annual Report and in ANZ’s
announcement to the ASX on 18 July 2022 regarding theSuncorp Transaction.

Section 1• retail and commercial and private bank services tocustomers in Australia;• institutional services in Australia, New Zealand, Asia,
Europe and the US;• personal and business services in New Zealand; and• products and services to retail and commercial customers
in the Pacific Islands.

• Partnerships: Integrated, data-enabled, home ownerand business owner ecosystems (that bringpropositions to life).
• People: A diverse team, who listen, learn and adapt todeliver outcomes that address financial and sustainability
challenges.

Chairman’s letter

4.1 OVERVIEW OF ANZ AND THE
ANZ GROUP

3. This diagram has been simplified and does not show all subsidiaries of the ANZ Group and interests of ANZ. Note that references to ANZ Shareholders includes holders of ANZ
ADSs representing ANZ Shares. 4. This diagram has been simplified and does not show all subsidiaries of the ANZ Group and interests of ANZ. Note that references to ANZ NOHC
Shareholders includes holders of ADSs representing ANZ NOHC Shares.

23

4.5 IMPLICATIONS OF THE
RESTRUCTURE FOR ANZSHAREHOLDERS AND OTHERSTAKEHOLDERS(c) Ineligible Foreign Shareholders
Ineligible Foreign Shareholders are ANZ Shareholders
whose addresses are shown in the ANZ Share Register at
the Scheme Record Date as being outside Australia (and its
external territories), New Zealand or an Eligible Foreign
Jurisdiction.

(a) ANZ Shareholders

Ineligible Foreign Shareholders are not permitted toparticipate in the Scheme and will not be issued ANZ NOHC
Shares. Instead, Ineligible Foreign Shareholders will receive
the cash proceeds of the sale of the ANZ NOHC Shares.

The way in which an individual ANZ Shareholder
participates in the Scheme will depend on whether
that shareholder is an:• Eligible Shareholder; or• Ineligible Foreign Shareholder.

If any Ineligible Foreign Shareholder wishes to be an ANZ
Shareholder after the Restructure, they may purchase ANZNOHC Shares (subject to any legal requirements or
restrictions) in the usual way.

(b) Eligible Shareholders
If the Scheme is approved and implemented, each ANZ
Shareholder who is an Eligible Shareholder will receive one
ANZ NOHC Share for each ANZ Share that they hold as at
the Scheme Record Date (currently expected to be 7.00pm
on 29 December 2022).
Eligible Shareholders are ANZ Shareholders whose
addresses are shown in the ANZ Share Register as at the
Scheme Record Date as being in Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.

More details about the impact of the Scheme for Ineligible
Foreign Shareholders are set out in section 7.2(g).

(d) ANZ Senior Notes and ANZ RMBSANZ Senior Notes and ANZ RMBS will not be affected by the
Restructure. Following implementation of the Scheme, the
ANZ Senior Notes and ANZ RMBS will remain on issue on
the same terms and, where applicable, will remain listed on
the same exchanges as at present.

ANZ NOHC Shareholders

ANZ Group
ANZ NOHCANZ Bank HoldCo

ANZ ServiceCo

ANZ Non-Bank HoldCo

ANZBGL

Certainproperty assets

1835i trusts,
Worldline JV,
Lygon TIN and
Pollination

Banking businessesincl. ANZ NZ

ANZ Bank Group24

Other potential
non-banking
businesses
ANZ Non-Bank Group

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

Following implementation of the Scheme, ANZBGL willremain listed on the ASX as a debt listing with the ASX code“AN3” (and ANZ Shares will no longer be quoted for tradingon the ASX). Following implementation of the Scheme, ANZ
Regulatory Capital Securities (including ANZ Capital Notes)
will remain on issue by ANZBGL and (where applicable)
quoted for trading on the ASX under their new ASX codes
until they are repaid, converted or written off in accordancewith their terms. Section 7.2(d) identifies the current andnew ASX codes of ANZ Regulatory Capital Securities thatare quoted for trading on the ASX.

ANZ NOHC has been established to become the newlisted parent company of the ANZ Group in place of
ANZBGL. ANZ NOHC will be a NOHC and will own all
ANZ Group businesses and assets.
ANZ NOHC will be an authorised NOHC for the purposesof the Banking Act.

(2) ANZ Bank Group and ANZBGLFollowing implementation of the Scheme, ANZBGL willcontinue to be listed on the ASX as a debt listing with the
ASX code “AN3”.

More details about the impact of the Scheme on ANZ ADSs
and the ADR program are set out in section 7.2(e).

(3) ANZ Non-Bank Group

4.6 EFFECT OF THE RESTRUCTURE
ON THE ANZ GROUP

Section 6(a) Outline of the ANZ Group after the
Restructure

ANZ Non-Bank HoldCo has been established to become
the non-operating holding company of the ANZ Non-Bank
Group. The ANZ Non-Bank Group will hold certain nonbanking businesses and assets. These businesses and assets
are set out in the table below.

Section 5

If the Scheme is approved and implemented, ANZ ADS
Holders will receive one ADS representing one ANZ NOHC
Share for each ANZ ADS that they hold as at the
Effective Date.

Section 4

If the Suncorp Transaction and Restructure both go ahead,
Suncorp Bank will be held in the ANZ Bank Group.

(f) ANZ NZ security holders

Section 3(g) ANZ ADS Holders

More details about the impact of the Scheme on ANZRegulatory Capital Securities are set out in section 7.2(d).

Section 2

ANZ NZ security holders will not be affected by the
Restructure. Following implementation of the Scheme, ANZ
NZ securities will remain on issue on the same terms.

ANZ Bank HoldCo has been established to become thenon-operating holding company of the ANZ Bank Group.
The ANZ Bank Group will hold ANZ’s banking businesses(including ANZBGL and ANZ NZ), all international regulatedbank operations and insurance businesses (including ANZ
Lenders Mortgage Insurance and ANZ Cover). After the
Restructure, ANZ will continue to provide banking services
in the ordinary course, including retail, commercial andinstitutional services to Australia, New Zealand, Asia, Europe
and the US.

Section 1(1) ANZ NOHC

Chairman’s letter(e) ANZ Regulatory Capital Securities

A description of ANZ NOHC, the ANZ Bank Group and
ANZ Non-Bank Group, and ANZ ServiceCo following the
proposed Restructure is set out below in this section 4.6(a).

100% economic interestin 1835i trusts

Worldline
merchant acquiring
joint venture

Minority stake in the merchant acquiring business ANZ Wordline
Payment Solutions.

49%

Pollination

Pollination provides advisory services, project investment, and asset
management for corporations accelerating their transition to net-zero.

~12%

Lygon

Lygon is a private blockchain platform which allows customers torequest, track and exchange bank guarantees all from the one portal.

25%

Trade Information
Network (TIN)

TIN is a trade data registry, which enables the collation and exchangeof original trade supply data between buyers, suppliers and financiersaround the globe.

16.7%

Section 10

Economic interest in start-up businesses which support or are involvedin the development of technology and related services in the financial
services industry. Interests of varying sizes in these businesses are heldby the 1835i trusts in which ANZ has a 100% beneficial interest.

Section 9

1835i trusts

Section 8

DESCRIPTION

Section 7

ANZ NON-BANK
GROUP INTEREST 5INVESTMENT

Annexures

5. Other than for 1835i trusts, the interests set out in this table are current as at the half year ended 31 March 2022.

25

The ANZ Non-Bank Group will initially be modest in scale(relative to the ANZ Bank Group). The ANZ Board expects it
to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacentbusinesses) that the ANZ Group may develop or acquire.
This will help bring new technology and non-bank services
to ANZ customers.

4.7 PROPOSED ANZ GROUP
GOVERNANCE FRAMEWORKAND POLICIESHaving regard to the nature of the interests to be initially heldby the ANZ Non-Bank Group, ANZ does not expect to makematerial changes to the way ANZ operates its non-banking
businesses immediately following the Restructure. The future
operation of non-banking businesses, including theappropriate application of ANZ Group policies, will be
determined at the time of developing or acquiring nonbanking businesses as part of the ANZ Non-Bank Group. ANZ
will monitor the appropriateness of these operating models
and policy applications having regard to the nature, size,
scale or complexity of the underlying entities and businesses
in the ANZ Non-Bank Group.

It is proposed that, from the Effective Date, the ANZ NOHC
Board will comprise the following individuals (subject to any
elections or retirements in relation to the ANZ Board at the
ANZ 2022 Annual General Meeting):

The ANZ NOHC Board is ultimately responsible foroverseeing all activities in the ANZ Group. It is possiblethat senior executive reporting and accountability may be
adjusted as non-banking businesses are developed or
acquired. As noted in section 5.1(b), the Restructure
provides ANZ with this flexibility.
Immediately following the Restructure, neither ANZ NOHC
nor ANZ Non-Bank HoldCo will hold an AFSL or ACL. ANZNOHC may seek to obtain an AFSL following
implementation of the Restructure.

(4) ANZ ServiceCo
ANZ ServiceCo has been established to become an internal
service company to hold certain property interests and, inthe future, to potentially provide certain central sharedservice functions across the ANZ Group.

(5) Interaction between ANZ Group members
It is intended that intragroup services and resourcing
agreements will be put in place to: set out the terms
on which:• ANZ ServiceCo can, in the future, potentially provide
certain central shared service functions across the ANZGroup; and• ANZ Group members can access certain resources(including employees and technology), materials or
assistance that are retained by ANZBGL.
These agreements will be on standard commercial terms
and have regard to applicable prudential standards and
ANZ Group policies.

(b) ANZ strategy
ANZ’s strategy to improve the financial wellbeing andsustainability of customers by providing connected,
relevant and efficient services, tools and insights will remain
the same. The Restructure can facilitate the execution of
ANZ’s strategy by providing ANZ with greater flexibility for
how it runs its businesses and partners with others, whilst
maintaining the appropriate protections for customers andother stakeholders.

26

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED(a) Proposed boards after the Restructure(1) ANZ NOHC

• Paul O'Sullivan (Chairman);• Shayne Elliott (CEO);• Ilana Atlas AO;• Jane Halton AO PSM;
• Rt Hon Sir John Key GNZM AC;• John Macfarlane;• Christine O'Reilly;• Jeff Smith; and• Graeme Liebelt.
The ANZ NOHC Board will be responsible for the oversightand strategic direction of the ANZ Group.

(2) ANZ Bank HoldCo and ANZBGLIt is proposed that the ANZ Bank HoldCo and ANZBGL
boards will comprise the following individuals (subject toany elections or retirements in relation to the ANZ Board at
the ANZ 2022 Annual General Meeting) Paul O’Sullivan(Chairman), Shayne Elliott (CEO), Ilana Atlas AO, Jane Halton
AO PSM, Rt Hon Sir John Key GNZM AC, Graeme Liebelt,
John Macfarlane, Christine O’Reilly, Jeff Smith and one
additional non-executive director who is independent of
ANZ NOHC (and ANZ Non-Bank Group).
The ANZ Bank HoldCo and ANZBGL boards will be
responsible for the oversight of the ANZ Group’s banking
businesses.

(3) ANZ Non-Bank HoldCo
It is proposed that the ANZ Non-Bank HoldCo board willcomprise the following individuals (subject to any elections
or retirements in relation to the ANZ Board at the ANZ 2022
Annual General Meeting) Paul O’Sullivan (Chairman), Shayne
Elliott, Ilana Atlas AO, Jane Halton AO PSM, Rt Hon Sir John
Key GNZM AC, Graeme Liebelt, John Macfarlane, Christine
O’Reilly and Jeff Smith.
The ANZ Non-Bank HoldCo board will be responsible forthe oversight of the ANZ Group’s non-bank businesses andassets that are owned by ANZ Non-Bank HoldCo.
Going forward, depending on the growth in size andcomplexity of the ANZ Non-Bank Group, consideration will
be given to the appointment of additional non-executive
director(s) to the ANZ Non-Bank HoldCo Board, notcurrently on the ANZ NOHC Board, to provide independent
thought leadership and challenge on non-banking
related matters.

Contents

The Restructure itself will not change the current
remuneration of ANZ Directors and the remuneration
policies after the Restructure will (including for the directorsof the ANZ Non-Bank Group entities) remain the same as
those currently applied to the ANZ Group (although, as
noted in section 9.6, certain non-material amendments will
be made to the ANZ Incentive Plans to reflect the corporate
structure of the ANZ Group after the Restructure).

The ANZ ServiceCo board will be responsible for overseeing
the property interests held by ANZ ServiceCo and thepotential services provided in the future by ANZ ServiceCo
to other ANZ Group members.

(b) Executive Committee(d) ANZBGL constitution

Annexures

Initially, ANZ's risk management framework will apply to the
ANZ Group following implementation of the Scheme insubstantially the same form as the current risk management
framework. However, over time, ANZ's risk management
framework and risk appetite statement may be adjusted as
the ANZ Non-Bank Group (including ANZ
ServiceCo) develops.

Section 10

The terms of the ANZ NOHC Group Board committee
charters and governance policies will be adopted in
substantially the same form and structure as the existing
ANZ Group’s Board committee charters and governancepolicies, subject to certain changes that will be made toreflect the structure of the ANZ Group after the Restructure.
Following implementation of the Scheme, certain ANZNOHC Group Board committee charters and governancepolicies will be available on the ANZ website (anz.com.au).

Section 9(e) Board committee charters andgovernance policies

Section 8

The ANZBGL constitution will remain in effect and will not
be amended as part of the Restructure. The ANZBGL
constitution may in the future be amended to reflect
ANZBGL’s status as a wholly owned subsidiary.

Section 7

A summary of the material differences between the existing
ANZBGL constitution and the ANZ NOHC constitution is set
out in section 9.4.

Section 6

The ANZ NOHC constitution will be the main document
governing the rights and obligations of ANZ NOHC
Shareholders. The terms of the ANZ NOHC constitution will
be substantially the same as the existing ANZBGL
constitution.

• ANZ NOHC: will be a non-operating holding company
that is authorised by APRA (an authorised NOHC). It will
be required to comply with the conditions of its
authorisation, which are summarised in section 4.8(c)and include the specific capital requirements. As an
authorised NOHC, it will also be subject to regulation
under the Banking Act and certain APRA prudential
standards. As the head of a Level 3 group, it will be
required to ensure certain APRA prudential standards
are applied appropriately throughout the ANZ Group(including the ANZ Bank Group and relevant membersof the ANZ Non-Bank Group).
• ANZ Bank Group: includes the ANZ Group’s entities that
conduct banking business (including ANZBGL and ANZ
NZ). The ANZ Bank Group will continue to be subject tothe full suite of APRA prudential and reporting standards
for ADIs, including standards in relation to capital
adequacy and liquidity.
• ANZ Non-Bank Group: will comprise the ANZ Group’s
entities that are not within the ANZ Bank Group. Subject
to those requirements relating to APRA’s authorisation(see sections 4.8(b) and 4.8(c) for more information),these entities will not be subject to ADI-specificregulation, such as bank capital adequacy and liquidity
requirements currently applied to ANZBGL. As noted
above, ANZ NOHC will be required to apply certain APRA
prudential standards appropriately throughout the ANZGroup, including to relevant members of the ANZ
Non-Bank Group being those where the ANZ NOHC has
considered it appropriate to do so to protect the ANZGroup or ANZ customers or where APRA has required
ANZ NOHC to do so.

Section 5(c) ANZ NOHC constitution

As part of the Restructure, ANZ’s prudential policy
framework will be adjusted to reflect APRA’s regulation of
the ANZ Group after the Restructure. A summary of APRA’s
regulation of the ANZ Group after the Restructure is set
out below.

Section 4• all key stakeholders;• ANZ’s culture and capabilities; and• prioritising efforts and allocating resources in line with
ANZ’s strategic objectives and pillars.

(a) APRA’s regulation after the Restructure

Section 3

The ANZ Group Executive Committee headed by the ANZGroup CEO is the ANZ Group’s leadership team whose role
is to support the ANZ Group CEO to deliver ANZ’s purpose,
which is summarised in section 4.2. It does this byfocusing on:

4.8 APRA REGULATORYREQUIREMENTS

Section 2

After the Restructure, it is proposed that the existing
ANZ Executive Committee will continue to operate on an
ANZ Group wide basis. It is proposed that the Executive
Committee will comprise the current members (subject toany appointments or resignations), being Shayne Elliott(CEO), Maile Carnegie, Kevin Corbally, Farhan Faruqui, Gerard
Florian, Kathryn van der Merwe, Antonia Watson, Mark
Whelan and Antony Strong (who is appointed to the ANZ
Executive Committee effective 1 November 2022).

Section 1(f) Director remuneration

It is proposed that the ANZ ServiceCo board will comprise
an independent non-executive director and appropriately
qualified senior management.

Chairman’s letter(4) ANZ ServiceCo27

(b) APRA capital requirements
After the Restructure, ANZ NOHC will be required to holdadequate capital to reflect the risks of the whole ANZGroup, including both the ANZ Bank Group and ANZ
Non-Bank Group.
The capital requirements of the ANZ Group will be the sumof the capital requirements of the ANZ Bank Group and the
ANZ Non-Bank Group. The ANZ Bank Group’s capitalrequirements will continue to be determined by existing
APRA requirements. The capital requirements of the ANZ
Non-Bank Group will be assessed using an independently
validated and ANZ NOHC Board approved economic capitalframework and model, which will be subject toindependent assurance.

(c) APRA conditions
ANZ NOHC will be an APRA-regulated entity, withobligations under the Banking Act and APRA prudential andreporting standards. APRA’s authorisation of ANZ NOHC as a
non-operating holding company under the Banking Act issubject to certain conditions, including the following:• ANZ Bank HoldCo and ANZBGL must have an
independent director who is not on the board of ANZNOHC or any ANZ Non-Bank Group entity;• ANZ NOHC itself must not undertake any activities otherthan for example, providing executive leadership acrossthe ANZ Group, holding investments in subsidiaries,
raising funds to invest in or support subsidiaries or to
conduct its own activities or other activities required toachieve compliance with its prudential obligations, orother activities approved by APRA;• ANZ NOHC must obtain APRA’s no-objection
confirmation prior to starting material activities in ANZ
Non-Bank Group;• ANZBGL must retain ownership of, or access to, allfunctions critical to its operations;• non-regulated businesses of the ANZ Group must be
financially and operationally separable from ANZBGL; and• ANZ NOHC must ensure that the ANZ Non-Bank Group
does not carry on any activities that pose excessive risk to
the ADI (and ensure that the ANZ Bank Group transfers to
the ANZ Non-Bank Group any activities that APRA notifies
in writing to constitute an undue risk to the ADI).
APRA has the ability to review and modify these conditionsat any time if it considers it appropriate to do so.
A copy of the APRA conditions imposed on ANZ NOHC
as an authorised non-operating holding company is in
Annexure 6.

4.9 RBNZ REGULATORYREQUIREMENTS
ANZ NOHC and ANZ Bank HoldCo will not be RBNZregulated entities. The Restructure is not expected to resultin any material change to the regulation of ANZBGL and
ANZ NZ (or ANZ NZ’s subsidiaries) by RBNZ.

28

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

4.10 OTHER REGULATORY IMPACTS
After the Restructure, a number of regulators will continue
to maintain oversight and regulation of the ANZ Group(including both the ANZ Bank Group and ANZ Non-Bank
Group). These regulators include:• ASIC – in relation to corporations and securities matters;• Australian Transaction Reports and Analysis Centre – inrelation to anti-money laundering and counter-terrorism
financing laws; and• the Office of the Australia Information Commissioner –in relation to privacy and freedom of information law.
As discussed in section 4.8, the ANZ Non-Bank Group will
not be subject to specific bank or ADI regulation. However,to the extent the activities of the ANZ Non-Bank Groupinvolve the provision of products or services to ANZ
customers, ANZ will be required to continue to comply witha range of laws and regulation (as is currently the case)including those relating to conflicts of interest andcustomer data protection.

4.11 FINANCIAL AND TAXATIONIMPACT OF THE RESTRUCTURE
ON THE ANZ GROUP(a) Financial impact
The Restructure itself is not expected to result in any
material change to the consolidated financial positionof the ANZ Group.
More details on the financial impact of the Restructureon the ANZ Group are set out in section 6.

(b) Funding arrangements
The Restructure itself is not expected to result in any
material change to the overall funding requirements ordebt issuance capacity of the ANZ Bank Group or the ANZGroup as a whole, nor is it expected to impact ANZ Bank
Group’s liquidity and stable funding requirements.
After the Restructure, ANZ NOHC will have the ability toraise debt to provide funding support to the ANZ Group as
needed including, potentially, to refinance (in whole or inpart) the short term loan from ANZBGL to ANZ ServiceCo
referred to in section 6.3. The interest costs associated withany debt raised by ANZ NOHC may exceed the interest
costs associated with any debt raised by ANZBGL because
the credit rating of ANZ NOHC will likely be lower thanANZBGL’s credit rating (see section 4.11(e)). However, thestructure of the ANZ Group after the Restructure provides
ANZ greater flexibility to raise debt at different levels and/or
groups (generally at the ANZ NOHC level or the ANZ Bank
Group level) within the ANZ Group, however, ANZ NOHC
may not raise debt finance in the short term.

Contents(f) Taxation implications on the ANZ GroupIf the Restructure goes ahead, ANZ NOHC Shareholders will
have the same dividend rights as their current ANZ Shares.

ANZBGL is currently the head company of the ANZ
consolidated tax group. After the Restructure, the ANZ
consolidated tax group will continue in existence with ANZNOHC as the new head company.

The Restructure itself is not expected to:

Following implementation of the Scheme, a full copy of
the ANZ NOHC DRP and BOP will be available on the ANZ
website (anz.com.au).

It is expected that:

Section 8

As is the case prior to the Restructure, any applicable credit
rating of any entity may be received, suspended, withdrawn
or downgraded.

Section 7• the credit rating of ANZBGL and ANZ NZ will not be
impacted by the Restructure itself; and• ANZ NOHC is likely to obtain an investment grade ratingfrom credit rating agencies (as noted in section 4.11(b),the credit rating for ANZ NOHC is expected to be lower
than the credit rating of ANZBGL).

Section 6(e) ANZ’s credit ratings

Section 5

Any positive residual balance held in a participant’s ANZ
DRP account on the Scheme Record Date will be transferredto the participant’s respective ANZ NOHC DRP on
implementation of the Scheme.

Section 4

If an ANZ Shareholder has an election in place to participate
in the ANZ DRP and/or the BOP, that election will on the
Implementation Date automatically apply to the ANZ NOHCDRP and/or BOP. If you do not wish to participate in the ANZNOHC DRP and/or BOP, please contact the ANZ
Share Registry.

The tax implications of the Scheme on ANZ Shareholders
are described in section 8.

Section 3

On implementation of the Scheme, ANZ NOHC will
establish its own DRP and BOP. These will be on
substantially same terms as the current ANZ DRP and BOP.

Section 2(d) ANZ DRP and BOP

The applicable stamp duties regimes Australia wide willcontinue to apply to the ANZ Group after the Restructure in
the same way as they did before the Restructure. If
corporate consolidation and reconstruction relief isobtained in relation to the Restructure such that certain
amounts of stamp duty that may otherwise have become
payable are not payable, conditions for relief may include
that certain entities remain within the ANZ Group for up to
3 years (failing which stamp duty may become payable atthe applicable future time).

Section 1• impact the ANZ Group’s ability to pay dividends;• affect the ANZ dividend payout ratio (being thepercentage of earnings paid to shareholders as adivided); or• affect the amount of franking credits available in respectof any dividend paid (nor is it expected to affect ANZ
NOHC’s ability to pass franking credits to shareholders).

Chairman’s letter(c) Dividends

Section 9
Section 10
Annexures

29

SECTION5RATIONALE, BENEFITS,
DISADVANTAGESAND RISKSContents

The ANZ Board considers that the Restructure can help ANZ:

Section 9
Section 10
Annexures

The Restructure will separate ANZ’s banking and certain
non-banking businesses within the ANZ Group. This
separation will create transparency and clarity for
employees, customers, regulators and investors. After the
Restructure, APRA will retain oversight of non-banking
businesses in the ANZ Non-Bank Group, without the addedcomplexity of applying the full suite of APRA prudential andreporting standards for ADIs (including standards in relation
to bank capital adequacy and liquidity).

The ANZ Non-Bank Group will initially be modest in scale(relative to the ANZ Bank Group). The ANZ Board expects it
to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacentbusinesses) that the ANZ Group may develop or acquire.
This will help bring new technology and non-bank services
to ANZ customers in line with ANZ’s strategy to strengthen
and grow ANZ’s core banking business, and to improve thefinancial wellbeing of its customers.

Section 8(a) Transparency

As described above, the Restructure will better enable ANZ
to develop its non-banking businesses by allowing a fit for
purpose application of regulations, policies and procedures.

Section 7

The key benefits of the Restructure are summarised below
in this section 5.1.

(c) Stronger non-banking business

Section 6

After the Restructure, ANZ’s banking activities (including
Suncorp Bank, if that transaction goes ahead) will continue
to be subject to the same prudential regulation as they are
subject to now. However, the activities of certain nonbanking businesses will not be subject to the full suite of
APRA prudential and reporting standards for banking
activities. This will help enable a fit for purpose applicationof regulations, policies and procedures to these nonbanking businesses.

As part of the Restructure, ANZ will adjust its current
prudential policy framework to take account of its NOHC
structure and the separation of ANZ’s banking and certain
non-banking businesses. Over time, ANZ expects that therevised prudential policy framework can provide the ANZGroup with additional flexibility to appropriately apply its
policies to its underlying businesses in a way that takes
account of the nature of those underlying businesses. In
particular, ANZ expects that the framework can be appliedin a way that allows the ANZ Non-Bank Group to pursue
ANZ’s strategy.

Section 5

A NOHC or similar holding company structure is used bymany leading financial institutions and financial
conglomerates (including those with regulated banking
operations) (for example, Macquarie Group and Suncorp
Group in Australia and Bank of America, J.P. Morgan, HSBC
and Barclays internationally).

The Restructure will allow a fit for purpose application ofregulations, policies and procedures suitable to certain
non-banking businesses. This fit for purpose application canallow ANZ to adapt more readily to changes occurring in
the financial services industry. It can ensure ANZ is better
able to pursue its purpose and strategy, while ensuring theappropriate application of regulatory requirements to ANZ’sbanking and certain non-banking businesses.

Section 4

This is in line with ANZ’s existing strategy.

Under ANZ’s current corporate structure, ANZBGL is thelisted parent company of the ANZ Group and is an ADI.
Accordingly, all of the ANZ consolidated group’s activities
are subject to the full suite of APRA prudential andreporting standards for ADIs, including standards in relation
to bank capital adequacy and liquidity.

Section 3• through growth and expansion, acquisitions orpartnerships with third parties, develop a holistic ‘digitalbanking ecosystem’ including adjacent, non-banking
services, platforms and partnerships that complement
ANZ’s core banking business;• better meet customers’ needs in the digital age;• compete in banking adjacent areas on a level playing
field with other non-banking businesses, to allow ANZ toprovide better products and services to its customers;• be an employer of choice in both banking and nonbanking areas; and• remain a great bank that strives to improve the financial
wellbeing of its customers.

After the Restructure, the ANZ Group will have a corporate
structure that positions ANZ to have more strategic andoperational flexibility. That structure can enable ANZ to be
more innovative and responsive to the changes occurringin the financial services industry. The NOHC structure
proposed by the Restructure can allow ANZ to deliver afuller suite of products and services to customers, while
maintaining appropriate protections for customers andother stakeholders.

Section 2

To take advantage of this changing environment, ANZ aims
to grow with its customers and meet their changing
expectations.

(b) Flexibility

Section 1

The financial services industry in Australia is changing
rapidly. Traditional banking businesses like ANZ are facing
significant disruption, principally from non-banking
businesses that are launching competing financial andservice products. These businesses are not regulated in thesame way as banks like ANZ. In addition, bank customers
are demanding better and more tailored banking products
and services, including through interconnected services
and products, digital solutions and providers.

This separation also places ANZ in a stronger and clearer
position in the event recovery actions are required or
recovery progresses to resolution. The ANZ Group structure
after the Restructure will allow certain assets, liabilities andrisks to be quarantined (or “legally separated”) from those of
the other members of the ANZ Group, providing additional
protection and minimising contagion risk.

Chairman’s letter

5.1 RATIONALE AND POTENTIAL
BENEFITS OF THE RESTRUCTURE

31

(d) Employer and partner of choice
The Restructure can assist ANZ to attract staff and partners
with skills outside traditional banking, who are more alignedwith a broad financial services group.
The ANZ Non-Bank Group will aim to create a workforce
that will diverge from traditional banking skillsets, creating
space to grow, attract, motivate and remunerate new talentdifferently, and to incubate its own fit for purpose
innovative, fast-paced, high performance culture.

5.2 POTENTIAL DISADVANTAGESOF THE RESTRUCTURE
The most significant disadvantages of the Restructure are:• the one off cash transaction and implementation costs
associated with the Restructure are estimated to be inaggregate approximately $35 million (before tax) andlargely relate to stamp duty, advisor fees, and costs
associated with ANZ’s internal project team (of whichapproximately $25 million is expected to be incurred by
ANZ if the Restructure does not proceed);• there will be additional ongoing incremental costs
associated with corporate and operating costs of the ANZGroup. These are estimated to be less than approximately$5 million (before tax) per annum and largely relate to theincremental resources required to support the new
NOHC structure and the separate ANZ Bank Group and
ANZ Non-Bank Group, as well as additional costs
associated with ASX listing compliance, governance,
reporting, share registry and maintaining additionalboards; and• one or more of the risks identified in section 5.3
might occur.
ANZ considers that these disadvantages are not expected(or likely) to have a material impact on the ANZ Group.

5.3 POTENTIAL RISKS ASSOCIATED
WITH THE RESTRUCTURE
The following potential risks have been identified:• APRA has not yet finalised its prudential framework forAustralian NOHCs of ADIs. ANZ has undertaken extensive
discussion with APRA as part of the Restructure, and theauthorisation of ANZ NOHC has been approved by APRA.
However, there is a risk that APRA’s final regulatory
framework for Australian NOHCs of ADIs and theregulation of ANZ NOHC over time will differ from
ANZ’s current expectations. This may have negative
consequences for the ANZ Group and/or may require
further changes to its structure;• the Restructure will result in certain changes to
ANZ’s existing operating model. ANZ considers thatthese changes can be implemented and managed
appropriately after the Restructure. However, it is possiblethat unexpected business, market and/or regulatory
factors may result in these operating model changes not
functioning as expected and further changes may
be required;32

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED• implementation of the Restructure will involve a numberof steps, and unexpected developments may arise which
can affect the timing of implementation and/or the formand scope of the Restructure; and• unexpected liabilities caused by any delays in nonmaterial regulatory approvals or by regulatory relief not
being granted.
The ANZ Board believes that the overall risk profile of the
ANZ Group will not be adversely affected by the Restructure
itself. This is due to a number of reasons, including thefollowing:• ANZ’s existing banking businesses and operations willremain the same;• ANZ’s focus will remain banking and financial products;• the people responsible for the overall governance andmanagement of the ANZ Group will remain substantiallythe same;• the ANZ strategy will remain the same (and execution ofthat strategy will be assisted by the Restructure);• the ANZ Group’s consolidated financial position will not
be affected by the Restructure itself; and• ANZ’s dividend payout ratio (being the percentage of
earnings paid to shareholders as a divided) will not
be affected.

5.4 ALTERNATIVES CONSIDERED
BY THE ANZ BOARD
Before proposing the Restructure, the ANZ Board considered
a number of alternatives it believes are available to ANZ toensure that it can continue to pursue its strategies while
meeting its obligations to APRA and other regulators.
The primary alternatives to the proposed Restructure, andthe potential disadvantages relevant to the ANZ Group, aresummarised below.
• Dual listed company structure− A dual listed company structure is a corporate structurein which 2 companies retain separate primary stock
exchange listings with separate shareholder bases, but
operate as a single unified business.
− The characteristics that usually drive a dual listedcompany structure are not present in ANZ’s case.
− A dual listed company structure is typically expensive
and complex to establish and operate due to initialand ongoing costs associated with establishing andmaintaining two separate entities, each with theirown primary stock exchange listings.
• Stapled security structure− A stapled security structure is a corporate structure inwhich 2 or more securities issued by different entities
are contractually bound together, meaning thosesecurities cannot be bought or sold separately.
− A stapled security structure typically makes it moredifficult to raise capital in a targeted manner due tolack of a single holding company, and is typically more
expensive than a single holding company due tomaintaining two separate entities.

Contents

5.5 IMPLICATIONS OF THE
RESTRUCTURE NOT PROCEEDING

Section 5
Section 6
Section 7
Section 8• ANZBGL will remain the listed parent company of
the ANZ Group;• ANZ Shareholders will retain their existing holding
in ANZ Shares;• Eligible Shareholders will not receive ANZ NOHC Sharesand Ineligible Foreign Shareholders will not receive the
cash proceeds of the sale of the ANZ NOHC Shares;• the amendments to the ANZ Regulatory Capital
Securities to substitute ANZ NOHC as the issuer ofordinary shares on conversion will not take effect;• ANZ ADS Holders will retain their existing holding in ANZ
ADSs and the ANZ ADS Deposit Agreement will not beterminated;• approximately $25 million (before tax) one off transaction
costs is expected to be incurred by ANZ;
• the benefits of the Restructure described in section 5.1
will not be realised; and• the disadvantages and risks of the Restructure describedin sections 5.2 and 5.3 will not arise.

Section 4

If the Restructure does not proceed:

Section 3

If the Restructure does not proceed, ANZ has theappropriate strategy, governance framework and policies
in place to effectively manage the ANZ Group. However,the ANZ Board believes that if the Restructure does notproceed, the structure of ANZ will be less optimal forthe effective execution of ANZ’s strategy.

Section 2

The ANZ Board has decided to not pursue these alternatives
because, after due consideration, the ANZ Board believes
that the Restructure will provide the optimal
structure for ANZ.

Section 1− A minority investment structure is a corporate structurein which a minority investment (being a noncontrolling interest) is acquired in an asset or retainedin an asset that has been divested.
− A minority investment structure is not appropriate in allcases for certain non-banking businesses of ANZ as it
results in a loss of control of any divested assets andmay give rise to a risk of brand dilution.

Chairman’s letter• Minority investment structure

Section 9
Section 10
Annexures

33

SECTION

6

FINANCIALINFORMATION

Contents(a) Overview
The financial information of ANZ contained in this section
comprises the:The ANZ NOHC Pro-forma Financial Information has been
derived from the Historical Financial Information adjusted toillustrate the effects of the Restructure on ANZ described in
section 4 of this Explanatory Memorandum.
It is assumed that the accounting policies adopted byentities within the ANZ NOHC Group are unchanged fromthose policies adopted by the ANZ Group prior to the
Restructure as reported in Note 1 to the Financial
Statements of the ANZ 2021 Annual Report.
The ANZ NOHC Group’s accounting policies specific to the
proposed Restructure include:

Section 8
Section 9

The ANZ NOHC Pro-forma Financial Information ispresented in Australian dollars, rounded to the nearest
million dollars ($m), unless otherwise stated.

Section 7• investments in controlled entities – ANZ NOHC accounts
for its investment in ANZBGL as an acquisition in
exchange for issuing new ANZ NOHC Shares. ANZ NOHC
initially recognises its investment in controlled entities at
an amount equal to the carrying value of total equity of
the ANZBGL parent company outstanding at the
Implementation Date;• after the Restructure, ANZ NOHC’s investment incontrolled entities continues to be carried at cost; and• reverse acquisition – the Restructure is accounted for
as a reverse acquisition in the ANZ NOHC Group’s
consolidated financial statements, with ANZBGL
identified as the acquirer applying the principles of
AASB 3: Business Combinations. While ANZ NOHC reflects
investments in controlled entities at carrying value atthe date of acquisition in its parent entity financial
statements, the ANZ NOHC Group consolidated financial
statements are presented as a continuation of the ANZGroup that includes ANZ Bank HoldCo, ANZ Non-Bank
HoldCo and ANZ ServiceCo.

Section 6
Section 10

The ANZ NOHC Pro-forma Financial Information has beenreviewed by the Investigating Accountant in accordancewith the Australian Standard on Assurance Engagements
ASAE 3450 Assurance Engagements involving Fundraising
and/or Prospective Information, as stated in its Investigating
Accountant’s Report in Annexure 2.

The ANZ NOHC Pro-forma Financial Information

Section 5

The Financial Information is presented in an abbreviatedform insofar as it does not include all the disclosures,statements or comparative information as required by
the AAS applicable to annual financial reports preparedin accordance with the Corporations Act. ANZ’s key
accounting policies have been consistently applied with
ANZ’s half year financial statements. For further details of
the significant accounting policies refer to the Historical
Financial Information.

The Historical Financial Information has been extracted
from the ANZBGL Consolidated Financial Report for the Half
Year 31 March 2022, which were reviewed by KPMG inaccordance with Australian Auditing Standards. KPMG
issued an unqualified review opinion on these consolidated
financial statements.

Section 4

The Financial Information has been prepared and presented
in accordance with the recognition and measurement
principles prescribed in the Australian AccountingStandards (AAS) issued by the Australian AccountingStandards Board (AASB), which are consistent with theInternational Financial Reporting Standards (IFRS).

Historical Financial Information

Section 3

The ANZ NOHC Pro-forma Financial Information is provided
for illustrative purposes only. It does not represent what
ANZ’s financial results would have been if the ANZ NOHC
Group had in fact been in place on the dates mentioned
above. It is not intended to be representative of thefinancial results for any future period.

The Financial Information is prepared for the purposesof this Explanatory Memorandum.

Section 2(together, the Financial Information).

(b) Basis of preparation

Section 1• the historical consolidated statement of financial positionof ANZBGL as at 31 March 2022;• the historical consolidated income statement for thehalf year ended 31 March 2022 of ANZBGL;(together the Historical Financial Information);• pro-forma statement of financial position for ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo as at
31 March 2022 assuming the ANZ NOHC Group was inplace on that date (Pro-forma Balance Sheet);• pro-forma income statement for ANZ Bank HoldCo,
ANZ Non-Bank HoldCo and ANZ ServiceCo for the halfyear ended 31 March 2022 assuming that the ANZ NOHC
Group was in place during the period (Pro-forma
Income Statement);(together the ANZ NOHC Pro Forma Financial
Information)• assumptions and notes on the adjustments relevantto the above; and• reconciliation of the ANZ NOHC Pro Forma Financial
Information to the Historical Financial Information

This section 6 should be read with the information outlinedin this Explanatory Memorandum.

Chairman’s letter

6.1 INTRODUCTION

Annexures35

6.2 APPROACH USED TO
DETERMINE THE ANZ NOHC PROFORMA FINANCIAL INFORMATIONAs described throughout this Explanatory Memorandum,
ANZ is proposing to implement the Restructure underwhich ANZ NOHC will become the new listed parent
company of the ANZ Group.
The Financial Information included in this section 6
incorporates the various internal share and asset transfers
amongst the ANZ NOHC Group as described in section
7.3(a), and all associated revenue, expense and taxation
information being transferred from ANZBGL to ANZ
Non-Bank HoldCo and ANZ ServiceCo. In summary, the ANZNOHC will be established as the new listed parent companyof the ANZ Group comprising the following:• ANZ Bank HoldCo which will hold all of ANZ’s banking
businesses (including ANZBGL and ANZ NZ), international
regulated bank operations and insurance businesses(including ANZ Lenders Mortgage Insurance and ANZ
Cover). If the Suncorp Transaction and Restructure bothgo ahead, Suncorp Bank will be held by the ANZBank HoldCo.
• ANZ Non-Bank HoldCo which will hold certain
non-banking businesses including ANZ’s beneficial
interests in the 1835 trusts, non-controlling interest in theWorldline merchant acquiring joint venture6 and equity
interest in Lygon, TIN and Pollination. ANZ Non-Bank
HoldCo will initially be modest in scale relative to ANZBank HoldCo. The ANZ Board expects it to be used as avehicle for innovation and growth in certain non-banking
businesses (including banking adjacent businesses) that
ANZ may develop or acquire. Given the nature of the typeof investments to be held by ANZ Non-Bank HoldCo are
early stage, some of those investments are expected to
be loss making in the near term as these investments
continue to mature.
• ANZ ServiceCo has been established to become aninternal service company to initially hold certain property
interests and, in the future, to potentially provide certain
central shared services function across the ANZ Group.

6.3 PRO-FORMA BALANCE SHEETAS AT 31 MARCH 2022
The Pro-forma Balance Sheet has been prepared to illustrate
the Restructure, disclosing separately the assets, liabilities
and equity of ANZ NOHC, ANZ Bank HoldCo, ANZ Non-Bank
HoldCo, ANZ ServiceCo and the consolidated ANZ NOHC
Group as at 31 March 2022 assuming the Restructure had
occurred on that date.

The Pro-forma Balance Sheet has been prepared as follows:• the consolidated balance sheet for ANZBGL as at
31 March 2022 has been disaggregated into ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo inaccordance with the Restructure as if it had occurred
such that the relevant structure was in place as at
31 March 2022;• equity transactions occurring after 31 March 2022 havenot been included in the Pro-forma Balance Sheet on thebasis that they are not connected with the Restructure.
This includes the declaration and subsequent payment of
the ANZ Group’s 2022 Interim Dividend of $1,973 million,
the announcement of a pro-rata accelerated
renounceable share entitlement offer to raiseapproximately $3.5 billion and the raising of perpetual
preferences shares by ANZ NZ of NZ$550 million;• the equity of ANZBGL has been split between ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo. Thishas been reflected as a transfer of capital in ANZ Bank
HoldCo to ANZ NOHC, which has subsequently injected
the appropriate amount of capital into ANZ Non-Bank
HoldCo and ANZ ServiceCo as a capital contribution;• surplus capital in ANZ Bank HoldCo has been repaid
to ANZ NOHC via a dividend payment of approximately$1.9 billion;7 and• the assets transferred into ANZ ServiceCo are part funded
by a short term intra-group loan. All intra-group funding
is assumed to be provided on an arm’s length basis.
The pro-forma ANZ NOHC standalone balance sheet has
been prepared as follows:• ANZ NOHC has recognised the issue of ANZ NOHC Shares
to ANZ Shareholders under the Scheme at the carrying
value of the equity in ANZBGL’s parent entity accounts as
at 31 March 2022; and• recognition of ANZ NOHC’s investment in the ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo are atcarrying value in the parent entity balance sheet and will
be eliminated on consolidation.
The pro forma impact of the one-off costs of implementing
the Restructure has been excluded from the pro-forma
consolidated income statement. These costs are estimatedto be $25 million before income tax comprising advisor
fees, personnel and transaction costs. It is estimated afurther $10 million before tax will be incurred on stamp
duty as part of the Restructure.
The information in the table below has been extracted fromthe financial information of the ANZ Group contained
within the ANZ Consolidated Financial Report Dividend
Announcement and Appendix 4D for the half year ended
31 March 2022.

6. Earnings attributable to the Worldline merchant acquiring assets and operations pre-joint venture are accounted in ANZ Bank HoldCo within the Pro Forma Income Statement
outlined in section 6.4. 7. Note that this is illustrative only. Any future return of capital is subject to regulatory approvals and will depend on the circumstances and levels ofcapital at the time.

36

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

ANZ NOHC
Group

1,870

–

168,054

Settlement balances owed to ANZ

7,141

7,141

–

–

–

–

7,141

Collateral paid

10,764

10,764––––

10,764

Trading securities

39,43339,433––––39,433

Derivative financial instruments

45,23845,238––––45,238Investment securities

79,757

79,411

–

346

–

–

79,757Net loans and advances651,436

651,436

–

–

–

–

651,436

661

661

–

–

–

–

661

Due from controlled entities

–

843

254

–

–

(1,097)–

Shares in controlled entities

–

–

–

–

54,901(54,901)

–

2,018

1,933

–

85

–

–

2,018

Current tax assets

227

227

–

–

–

–

227

Deferred tax assets

2,903

2,887

31

1

–

(16)

2,903

Goodwill and other intangible assets

4,068

3,968

–

9

–

91

4,068

Premises and equipment

2,702

3,069

400

–

–

(767)

2,702

Other assets

2,959

2,942

296

17

–

(296)

2,959

1,017,361 1,016,128

981

467

56,771

Regulatory deposits

Investments in associates

Total assets(56,986) 1,017,361

LIABILITIES–––

19,752

Collateral received

6,716

6,716

–

–

–

–

6,716

Deposits and other borrowings

780,288780,288

–

–

–

–

780,288

Derivative financial instruments

47,79547,795––––47,795

–

254

843

–

–

(1,097)–

Current tax liabilities

320

320

–

–

–

–

320

Deferred tax liabilities

82

46

23

13

–

–

82

10,57911,670–26–(1,117)

10,579

585

583

–

2

–

–

585

Other provisions

2,262

2,262

–

–

–

–

2,262

Debt issuances

87,22687,226––––87,226

Total liabilities

955,605

956,912

866

41

–

(2,214)

955,605

Net assets

61,75659,216115

426

56,771(54,772)

61,756

Ordinary share capital

25,091

24,416147

528

54,901(54,910)

25,091

Reserves(1,422)(1,433)

–

80

–

91

(1,422)Retained earnings

38,07836,224

(32)

(22)

1,870

38

38,078

Share capital and reserves
attributable to shareholders of
the Company

61,74759,207115

426

56,771(54,772)

61,747

9

9

–

–

–

–

9

61,75659,216115

426

56,771(54,772)

61,756

Due to controlled entities

Payables and other liabilities
Employee entitlements

Section 9–

Section 8

19,752

Section 7

19,752

Section 6

Settlement balances owed by ANZ

Section 5

9

Section 4–

Section 3

166,175

Cash and cash equivalents

Section 2

168,054ASSETS

Section 1

ANZBGL

ANZ
ServiceCo

Chairman’s letter

ANZ
Non-Bank
Consolidation
HoldCo ANZ NOHC Adjustments

ANZ Bank
HoldCoSHAREHOLDERS' EQUITY

Annexures

Total shareholders' equity

Section 10

Non–controlling interests376.4 PRO-FORMA INCOME
STATEMENT FOR THE HALF YEARENDED 31 MARCH 2022

The pro-forma ANZ NOHC standalone income statement
has been prepared as follows:• Surplus capital in ANZ Bank HoldCo has been repaid to
ANZ NOHC subsequent to the Restructure via a dividend
payment of $1.9 billion.8 The dividend income iseliminated on consolidation.

The Pro-forma Income Statement has been prepared toillustrate the financial performance of the ANZ Bank HoldCo,
ANZ Non-Bank HoldCo. ANZ ServiceCo, ANZ NOHC, and theconsolidated ANZ NOHC Group for the half year ended
31 March 2022, assuming that the Restructure had occurred
such that the relevant structure was in place duringthat period.

The pro forma impact of the one-off costs of implementing
the Restructure has been excluded from the pro -forma
consolidated income statement (see section 6.3 for more
information).
The pro forma impact of additional ongoing incremental
costs associated with corporate and operating costs has
been excluded from the pro forma consolidated income
statement. These costs are estimated to be less thanapproximately $5 million (before tax) per annum.

The Pro-forma Income Statement has been prepared
as follows:• The consolidated income statement for ANZBGL for thehalf year ended 31 March 2022 has been disaggregatedinto ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZServiceCo in accordance with the Restructure as if it had
occurred such that the relevant structure was in place
during that period.
• Intragroup arrangements between ANZ Bank HoldCo and
ANZ ServiceCo for the utilisation of property assets heldby ANZ ServiceCo as well as interest payments on
intragroup loan (as described in section 6.3).

The information in the table below has been extracted fromthe financial information of the ANZ Group contained
within the ANZ Consolidated Financial Report Dividend
Announcement and Appendix 4D for the half year ended
31 March 2022.

ANZBGLANZBank HoldCo

ANZ
ServiceCo

ANZ
NonBank HoldCo

ANZ
NOHC

Consolidation
Adjustments

ANZ NOHC
Group

Interest income

9,707

9,723

6

–

–

(22)

9,707

Interest expense(2,607)(2,623)

(15)

–

–

31

(2,607)

Net interest income

7,100

7,100

(9)

–

–

9

7,100

Other operating income

2,313

2,315

24

(2)

1,870

(1,894)

2,313

Net income frominsurance business

55

55

–

–

–

–

55

Share of associates' profit/(loss)

74

75

–

(1)

–

–

74

Operating income

9,542

9,545

15

(3)

1,870

(1,885)

9,542

Operating expenses(4,791)(4,792)

(9)

(14)

–

24

(4,791)

Profit before credit impairment
and income tax

4,751

4,753

6

(17)

1,870

(1,861)

4,751

284

284

–

–

–

–

284

Profit before income tax

5,035

5,037

6

(17)

1,870

(1,861)

5,035

Income tax expense(1,500)(1,496)

(1)

–

–

(3)

(1,500)

Profit after tax from continuing
operations

3,535

3,541

5

(17)

1,870

(1,864)

3,535

(5)

(5)

–

–

–

–

(5)

3,530

3,536

5

(17)

1,870

(1,864)

3,530

3,530

3,536

5

(17)

1,870

(1,864)

3,530

–

–

–

–

–

–

–

Credit impairment (charge)/release

Profit/(Loss) after tax fromdiscontinued operations
Profit for the period
Comprising:
Profit attributable to shareholdersof the Company
Profit attributable to non–controlling interests

8. Note that this is illustrative only. Any future return of capital is subject to regulatory approvals and will depend on the circumstances and levels of capital at the time).

38

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents(b) Release of FY22 financial statements(a) Material changes

Section 3

Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, to the knowledge of the
ANZ Directors, there have been no material changes to thefinancial position of ANZBGL and the ANZ Group since
31 March 2022.

Section 2

Following the release of the full year ending 30 September
2022 financial statements, the Independent Expert will be
asked to confirm whether there is anything in thesefinancial statements that would cause the Independent
Expert to alter its opinion that the Restructure (including
the Scheme) is in the best interests of ANZ Shareholders.
This will be announced by ANZ to the ASX and NZX.

Section 1

Since 31 March 2022, and as previously announced to theASX, ANZBGL has entered into an agreement in relation to
the proposed Suncorp Transaction (as described in section4.3) and has raised approximately $3.5 billion in equity
funding through a fully underwritten 1 for 15 pro rata
accelerated renounceable entitlement offer. The
entitlement offer proceeds will be retained by ANZBGL andused to partly fund ANZ’s acquisition of Suncorp Bank. Thisadditional equity is to be retained by ANZBGL to fund future
investments in banking businesses such as the proposed
Suncorp Transaction. In addition, ANZ NZ has completed
the raising of perpetual preference shares of NZ$550 million.

The financial statements of ANZ for the full year ending
30 September 2022 have not been used in the preparationof this Explanatory Memorandum. These financial
statements will be included in the 2022 ANZ Annual Report,
which is intended to be announced by ANZ to the ASX andNZX on 3 November 2022. If required to do so, ANZ will
announce to the ASX and NZX any material updates to this
Explanatory Memorandum following the release of the fullyear ending 30 September 2022 financial statements.

Chairman’s letter

6.5 MATERIAL CHANGESIN FINANCIAL POSITION(SINCE 31 MARCH 2022)

Section 4

6.6 CAPITAL STRUCTURE
As at Last Practicable Date, the equity capital structure of ANZ was:NUMBER ON ISSUEANZ Shares

2,989,923,751

ANZ options and rights

6,207,962

Section 5

TYPE OF SECURITY

As extracted from filings released on the ASX on or before Last Practicable Date, the following persons were substantial holders
of ANZ Shares:
VOTING POWER IN ANZBlackrock Group

172,225,527

6.07%

State Street Corporation

142,312,309

5.08%

The Vanguard Group, Inc.

139,745,231

5.001%

Section 8

NUMBER OF ANZ SHARES

Section 7

SUBSTANTIAL HOLDER

Section 6

6.7 SUBSTANTIAL HOLDERS IN ANZ SHARES

6.8 PUBLICLY AVAILABLE INFORMATION ABOUT ANZ

As a NZX foreign exempt listed company, ANZ does not need to separately comply with the NZX Listing Rules (subject to certain
exceptions). It is however required to comply with rule 1.7.2 which provides that all announcements by a foreign exempt issuer
on the issuer’s home exchange must be released simultaneously, or promptly without delay afterwards, to NZX.

ANZ’s prior ASX and NZX announcements, along with its annual reports and other financial information, can be found on ANZ’s
website at anz.com/shareholder/centre/.

Annexures

NZX maintains files containing publicly disclosed information about all entities listed on NZX (including foreign exempt entities).
Information disclosed to NZX by ANZ is available on NZX’s website at nzx.com.

Section 10

ASX maintains files containing publicly disclosed information about all entities listed on ASX. Information disclosed to ASX by
ANZ (including financial information regarding ANZ) is available on ASX’s website at asx.com.au.

Section 9

ANZ is a listed disclosing entity for the purpose of the Corporations Act and as such is subject to regular reporting anddisclosure obligations. Specifically, as a company listed on ASX, ANZ is subject to the ASX Listing Rules which require (subject tosome exceptions) continuous disclosure of any information that ANZ has that a reasonable person would expect to have amaterial effect on the price or value of ANZ Shares.

39

SECTION

7IMPLEMENTING
THE RESTRUCTURE

Contents

The Restructure will be implemented by the:• Scheme; and• Business Restructure.

If the Scheme is approved and implemented, ANZ NOHC
will become the new listed parent company of the ANZGroup in place of ANZBGL. This process will involve thefollowing key steps:

The Scheme will only be implemented if:• it is approved by the Requisite Majorities of ANZ
Shareholders at the Scheme Meeting to be held on
15 December 2022;• it is approved by the Court at the Second Court
Hearing; and• the other Conditions Precedent to the Scheme outlined
in section 7.2(a) are satisfied or waived (as applicable).
The Requisite Majorities of ANZ Shareholders to approve
the Scheme are:Annexures

The results of the Scheme Meeting are expected to beavailable shortly after the Scheme Meeting ends. ANZ will
announce the results to the ASX (asx.com.au) and NZX(nzx.com) once they are available.

Section 10

You should be aware that even if you do not vote, or voteagainst the Scheme, the Scheme will still be implemented
if it is approved by the Requisite Majorities of ANZ
Shareholders and the Court.

Section 9

Voting is not compulsory. However, the ANZ Directors
believe that the Restructure (including the Scheme) is in
the best interests of ANZ Shareholders. Each ANZ Director
recommends that ANZ Shareholders vote “Yes” in favour of
the Scheme. The Independent Expert has concluded that
the Restructure (including the Scheme) is in the bestinterests of ANZ shareholders.

Section 8

The entitlement of ANZ Shareholders to vote at the Scheme
Meeting is set out in the Notice of Scheme Meeting in
Annexure 5.

Section 7• unless the Court orders otherwise, a majority in number(more than 50%) of ANZ Shareholders present and voting
at the Scheme Meeting (either in person or by proxy,attorney or body corporate representative); and• at least 75% of the total number of votes cast on the
Scheme Resolution at the Scheme Meeting by ANZ
Shareholders present and voting (either in person orby proxy, attorney or body corporate representative).

Section 6

The Scheme will not be implemented unless all of theConditions Precedent described above are satisfied or
waived (as applicable).

The terms of the Scheme Resolution to be considered by
ANZ Shareholders at the Scheme Meeting are in the Noticeof Scheme Meeting in Annexure 5.

Section 5• Shareholder approval: the Requisite Majorities of ANZ
Shareholders approve the Scheme at the
Scheme Meeting;• ANZ NOHC ASX listing: ASX approves the admission of
ANZ NOHC to the official list of the ASX and the official
quotation of the ANZ NOHC Shares on the ASX;
• ANZ NOHC NZX listing: ANZ NOHC being admitted asa foreign exempt listed company on NZX;• Regulatory Approvals: the Regulatory Approvals
being obtained;• Court approval: the Court approves the Scheme inaccordance with section 411(4)(b) of the
Corporations Act; and• No restraining order: no temporary restraining order,
preliminary or permanent injunction or other order being
issued by any court of competent jurisdiction and noother legal restraint or prohibition preventing the
Restructure being implemented.

At the First Court Hearing, the Court ordered ANZ toconvene the Scheme Meeting at which ANZ Shareholders
will be asked to approve the Scheme.

Section 4

The Scheme is subject to a number of Conditions Precedent
set out in clause 3.1 of the Restructure Implementation
Deed, including the following:

1. Scheme Meeting and Scheme approvalrequirements

Section 3(a) Conditions of the Scheme(b) Key steps in the Scheme
Section 2• ANZ Shares held by Ineligible Foreign Shareholders
will be automatically transferred to the Sale Agent(as nominee for the Ineligible Foreign Shareholder)on the Implementation Date without the need for any
action by the Ineligible Foreign Shareholder;• ANZ NOHC will issue ANZ NOHC Shares on a one for one
basis to Eligible Shareholders who hold ANZ Shares on
the Scheme Record Date (currently expected to be
7.00pm on 29 December 2022);• ANZ NOHC will issue ANZ NOHC Shares on a one for one
basis attributable to Ineligible Foreign Shareholders to
the Sale Agent and the cash proceeds of the sale of those
ANZ NOHC Shares will be remitted to those Ineligible
Foreign Shareholders; and• all ANZ Shares will be acquired from ANZ Shareholders(or, in the case of ANZ Shares held by Ineligible Foreign
Shareholders, from the Sale Agent) by ANZ NOHC under
the terms of the Scheme.

As at the date of this Explanatory Memorandum, none of
the ANZ Directors are aware of any circumstances which
would cause any Condition Precedent to be breached, or
not to be satisfied or waived (as applicable).

Section 1

7.2 SCHEME

As at the date of this Explanatory Memorandum, theCondition Precedent relating to Regulatory Approvals
remains outstanding as the Regulatory Approval from the
US Federal Reserve remains outstanding. More details about
this Regulatory Approval is set out in in section 7.4.

Chairman’s letter

7.1 OVERVIEW

41

2. Court approval of the Scheme

For the purposes of determining entitlements under the
Scheme, ANZ will not accept for registration, or recognise
any transfer or transmission applications, in respect of ANZ
Shares received after the Scheme Record Date.

ANZ will apply to the Court for orders approving the
Scheme at the Second Court Hearing, if the Scheme isapproved by the Requisite Majorities of ANZ Shareholders
at the Scheme Meeting.

(d) ANZ Regulatory Capital Securities

Each ANZ Shareholder has the right to appear at theSecond Court Hearing.

3. Effective Date
If the Court approves the Scheme at the Second Court
Hearing, the Scheme will become Effective on the Effective
Date, being the date an office copy of the Court order fromthe Second Court Hearing approving the Scheme is lodged
with ASIC. ANZ will, on the Scheme becoming Effective,
give notice of that event to the ASX and NZX.
ANZ intends to apply to the ASX and NZX for ANZ Shares tobe suspended from trading on the ASX and NZX from closeof trading on the Effective Date.

(c) Dealings in ANZ Shares
For the purposes of determining which ANZ Shareholders
are eligible to participate in the Scheme, dealings in ANZ
Shares will be recognised only if:• in the case of dealings of the type to be effected using
CHESS, the transferee is registered on the ANZ Share
Register as the holder of the relevant ANZ Shares before
the Scheme Record Date; and• in all other cases, registrable transfer or transmission
applications in respect of those dealings, or valid requests
in respect of other alterations, are received by the ANZ
Share Registry before the Scheme Record Date (and thetransferee remains registered as at the Scheme
Record Date).

Following implementation of the Scheme, ANZ Regulatory
Capital Securities will remain on issue by ANZBGL until they
are repaid, converted or written off in accordance with
their terms.
ANZ Capital Notes will continue to be quoted for trading on
the ASX until they are repaid, converted or written off inaccordance with their terms. Following implementation of
the Scheme, ANZBGL will remain listed on the ASX as a debt
listing with the ASX code “AN3” (and ANZ Shares will nolonger be quoted for trading on the ASX).
Trading in ANZ Regulatory Capital Securities that are quoted
for trading on the ASX under their existing ASX codes will
be suspended from close of trading on the Effective Date.
These ANZ Regulatory Capital Securities will commence
trading under their new ASX codes (on a deferred
settlement basis) on the Business Day after the Effective
Date (currently expected to be 28 December 2022) andnormal trading will commence on 9 January 2023. The tablebelow identifies the current and new ASX codes for these
ANZ Regulatory Capital Securities.

ANZ REGULATORY CAPITAL SECURITY

CURRENT ASX CODESNEW ASX CODESANZ Capital Notes 3

ANZPF

AN3PF

ANZ Capital Notes 4

ANZPG

AN3PG

ANZ Capital Notes 5

ANZPH

AN3PH

ANZ Capital Notes 6

ANZPI

AN3PI

ANZ Capital Notes 7

ANZPJ

AN3PJ

As ANZ Shares will no longer be quoted for trading after the Scheme, in the circumstances where an ANZ Regulatory Capital
Security is required to convert, the conversion will be into ANZ NOHC Shares. ANZBGL will amend the terms of each of the ANZ
Regulatory Capital Securities to give effect to the substitution of ANZ NOHC as the issuer of ordinary shares on conversion. These
amendments will be made pursuant to the terms of the ANZ Regulatory Capital Securities (as approved by APRA) and do not
require the approval of holders. ANZ will separately be providing notice of these amendments to the holders of the ANZ
Regulatory Capital Securities. There are no other amendments to the rights of holders of the ANZ Regulatory Capital Securities.
Following these amendments, an ANZ Regulatory Capital Security will continue to be eligible for inclusion in the same tier ofregulatory capital as it is before the Scheme.

42

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

1. ANZ ADS Holders will receive ANZ NOHC
ADSs in connection with the Scheme

Any ANZ ADS Holder may appear at the Second Court
Hearing, currently expected to be held at 10.15am(Melbourne time) on 22 December 2022 at 305 William
Street, Melbourne VIC.
It is expected that ANZ ADSs Holders will not be permitted
to cancel their ANZ ADSs from the close of business (NewYork time) on the Effective Date and that the last time for
dealings in ANZ ADS Holders will be close of business(New York time) on the Implementation Date.

On the Implementation Date, Eligible Shareholders will
receive ANZ NOHC Shares.

ANZ ADS Holders will not be requested to submit voting
instructions in respect of their ADSs. Any ANZ ADS Holder
who wishes to vote as an ANZ Shareholder must become
an ANZ Shareholder by the applicable date and vote inthat capacity.

Section 10
AnnexuresIf you are an ANZ ADS Holder and you wish to vote or
attend the Scheme Meeting as an ANZ Shareholder or
receive ANZ NOHC Shares instead of ANZ NOHC ADSs
under the Scheme, you must take steps to present yourANZ ADSs (and, to the extent that such ANZ ADSs are
certificated, the certificates evidencing such ANZ ADSs) to
the ANZ ADS Depositary for cancellation (subject to any
restrictions on cancellation or withdrawal, or on the receipt

Section 9• Ineligible Foreign Shareholders will automatically transfer
their ANZ Shares to the Sale Agent (as nominee for the
Ineligible Foreign Shareholder) on the Implementation
Date without the need for any action by the Ineligible
Foreign Shareholder.
• The Sale Agent will participate in the Scheme in respectof those ANZ Shares and will be issued ANZ NOHC Shareson a one for one basis.
• The ANZ NOHC Shares that are issued to the Sale Agent
will be sold, as soon as reasonably practicable on or after
the Implementation Date, on the ASX.
• Ineligible Foreign Shareholders will receive the cash
proceeds of the sale of those ANZ NOHC Shares(calculated on an average basis as described in
section 7.2(h)).

Ineligible Foreign Shareholders are not permitted toparticipate in the Scheme and will not receive or be issued
ANZ NOHC Shares. Instead:

Section 8

3. ANZ ADS Holders wishing to vote and/or receive
ANZ NOHC Shares rather than ANZ NOHC ADSs

Restrictions in certain foreign jurisdictions make it unlawful
or unduly onerous or impracticable to offer or receive ANZNOHC Shares in those countries. Ineligible Foreign
Shareholders are ANZ Shareholders whose addresses areshown in the ANZ Share Register at the Scheme Record
Date as being outside Australia (and its external territories),
New Zealand or an Eligible Foreign Jurisdiction.

Section 7(g) Ineligible Foreign Shareholders
and Sale Agent

Section 6

The terms of the ANZ ADSs and ANZ NOHC ADSs are set
out in the ANZ ADS Deposit Agreement and ANZ NOHCADS Deposit Agreement (respectively) each filed with the
US Securities and Exchange Commission (SEC). Please referto the Form F-6 filed with the SEC for further details
regarding the ANZ ADSs and ANZ NOHC ADSs and for thefees that ANZ ADS Holders and ANZ NOHC ADS Holders
must pay in connection with the provision of generaldepositary services by the applicable ADS Depositary.
The SEC maintains a website that contains registration
statements and other information, including the ANZForm F-6 and the ANZ NOHC Form F-6, at sec.gov.

Section 5(f) Implementation Date

Section 4

Aside from the underlying ordinary shares represented by
the applicable ADSs, the terms of the ANZ NOHC ADR
program are expected to be substantially similar to theterms of the existing ANZ ADR program. For instance, the
ANZ NOHC ADSs will not be listed on any exchange in the
United States. Instead, the ANZ NOHC ADSs will be eligible
for trading on the United States over-the-counter market.
Settlement of ANZ NOHC ADSs traded on the over-thecounter market will take place through the facilities of the
Depository Trust Company. If a person wishes to trade the
ANZ NOHC ADSs, they should consult their broker or othersecurities intermediary to determine how the ANZ NOHC
ADSs may be traded and how such trades may be settled
in the United States.

Section 3

2. The terms of the ANZ NOHC ADSs are
expected to be substantially similar to thoseof the ANZ ADSs

If you are an ANZ ADS Holder and you hold your ANZ ADSs
in a brokerage, bank, custodian or other nominee account,
you should promptly contact your broker, bank, custodian
or other nominee account to find out what actions are
required to instruct your broker, bank or other nominee tocancel the ANZ ADSs on your behalf. ANZ ADS Holders who
present their ANZ ADSs to the ANZ ADS Depositary forcancellation prior to implementation of the Scheme will be
responsible for the payment of the ANZ ADS Depositary’s
fees associated with such cancellation.

Section 2

ANZ NOHC will establish an ADR program on substantiallythe same terms as ANZ’s existing ADR program. The ANZNOHC ADSs will be governed by the terms of the ANZNOHC Deposit Agreement. Following implementationof the Scheme, the ANZ ADS Deposit Agreement, whichgoverns the ANZ ADSs, will be terminated.

Section 1

In connection with the implementation of the Scheme,
ANZ ADS Holders will receive one ADS representing one
ANZ NOHC Share for each ANZ ADS that they hold as at the
Implementation Date.

of ANZ Shares, which the ANZ ADS Depositary may impose
from time to time), together with delivery instructions for
the ANZ Shares represented by such ANZ ADSs (including,if applicable, the name and address of the person who willbe the registered holder of such ANZ Shares), with sufficient
time to be registered as a holder of ANZ Shares on theregister at the applicable record date.

Chairman’s letter(e) ANZ ADS Holders

43

(h) Sale Facility
Under the Sale Facility, the Sale Agent will arrange for thesale the ANZ NOHC Shares it receives under the Scheme
during the Sale Period (which is expected to be from the
Implementation Date and ending no later than 1 monthfollowing the Implementation Date).

Holders of ANZ ADSs will not participate in the Sale Facility.

The Sale Agent will arrange for the sale of the ANZ NOHC
Shares at the price it determines in good faith, in its
absolute discretion, with the objective of seeking to achieve
the best price reasonably obtainable, having regard to anumber of factors such as prevailing market conditions.

(i) Deed Poll

The amount of money received by each Ineligible Foreign
Shareholder will be calculated on an averaged basis so that
all Ineligible Foreign Shareholders will receive the same
price per ANZ NOHC Share, subject to rounding down to
the nearest whole cent. Consequently, the amount received
by Ineligible Foreign Shareholders for each ANZ NOHC
Share may be more or less than the actual price that isreceived by the Sale Agent for that the sale of any particular
ANZ NOHC Share.

• provide, or procure the provision of, the aggregate
number of ANZ NOHC Shares to all Eligible Shareholders
under the Scheme; and• undertake all other actions attributed to ANZ NOHC
under the Scheme.

As the market price of ANZ NOHC Shares will be subject tochange from time to time, the sale price of those ANZNOHC Shares, and the proceeds of those sales, cannot be
guaranteed. Ineligible Foreign Shareholders will be able toobtain information on the market price of ANZ NOHC
Shares on the ASX’s website (asx.com.au) and NZX's
website (nzx.com).
The cash proceeds of the sale of the ANZ NOHC Shares
will be paid to each Ineligible Foreign Shareholder by:• direct credit to the nominated bank account of theIneligible Foreign Shareholder as noted on the ANZ
Share Register on the Scheme Record Date; or• if an Ineligible Foreign Shareholder has not provided
an account, the Sale Proceeds will be remitted by sending
a cheque in Australian dollars by mail to the Ineligible
Foreign Shareholder’s Registered Address as at the
Scheme Record Date.
Payment by direct credit will be in the currency set out in
the Ineligible Foreign Shareholder’s dividend election. If theIneligible Foreign Shareholder has elected to be paid in acurrency other than Australian dollars, the cash proceeds ofthe sale of the ANZ NOHC Shares attributable to thatshareholder will be converted from Australian dollars to therelevant currency at the prevailing market exchange rateduring the Sale Period. Payment by cheque will be inAustralian dollars.
Under the Scheme, each Ineligible Foreign Shareholder istaken to appoint ANZBGL as its agent to receive on its
behalf any financial services guide or other notices that theSale Agent is required to provide to that Ineligible Foreign
Shareholder.
In providing services to ANZBGL in connection with theSale Facility, the Sale Agent is not acting as agent or sub
agent of any Ineligible Foreign Shareholder, does not haveany duties or obligations (fiduciary or otherwise) toIneligible Foreign Shareholders and does not underwrite
the sale of any ANZ NOHC Shares. The Sale Agent, together

44

with its affiliates, is a full service financial institution
engaged in various activities, which may include trading,financing, financial advisory, investment management,
investment research, principal investment, hedging, market
making, brokerage and other financial and non-financial
activities and services.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDAs at the date of this Explanatory Memorandum, a Deed
Poll has been entered into by ANZ NOHC to undertake infavour of the Scheme Shareholders (subject to the Scheme
becoming Effective), to:A copy of the Deed Poll is in Annexure 4.

(j) Warranties by Scheme Shareholders
Under the terms of the Scheme, each Scheme Shareholder
is taken to have warranted to ANZBGL and ANZ NOHC,and each Ineligible Foreign Shareholder is taken to havewarranted to the Sale Agent, on the Implementation
Date, that:• all their ANZ Shares (including any rights andentitlements attaching to those shares) which aretransferred under the Scheme will, at the date of transfer,be fully paid and free from all mortgages, charges, liens,
encumbrances, pledges, security interests (including any‘security interests’ within the meaning of section 12 of the
Personal Property Securities Act 2009 (Cth)) and interests ofthird parties of any kind, whether legal or otherwise, andrestrictions on transfer of any kind; and• they have full power and capacity to transfer their
Scheme Shares to ANZ NOHC or the Sale Agent (asapplicable) together with any rights and entitlements
attaching to those shares.

(k) ASX and NZX trading dates for
ANZ NOHC Shares
If the Scheme is implemented, then:• the Scheme will become Effective on the Effective Date(currently expected to be 23 December 2022) and this is
the date that ANZ will be suspended from trading on the
ASX and NZX from close of trading;• on the first Business Day after the Effective Date (currently
expected to be 28 December 2022), trading in ANZNOHC Shares on the ASX and NZX commences on adeferred settlement basis; and• on 9 January 2023, ANZ NOHC Shares will commence
normal trading on the ASX and NZX.
Following implementation of the Scheme, ANZ NOHC
Shares will trade under the ASX and NZX code “ANZ”.

Contents(a) Key steps
After the Scheme is implemented, the ANZ Group proposes
to undertake the Business Restructure to separate certain
businesses and assets to be effected by various internal
share and asset transfers and other corporate actions.

Section 10
Annexures• postpone or adjourn the Second Court Hearing; or• proceed with the Second Court Hearing (currently
expected to be held on 22 December 2022) on the basisthat the Scheme will not be implemented until theapproval from the US Federal Reserve is obtained.

ANZ NOHC will have the ability to undertake an on-market
share buy-back following implementation of the Scheme inthe same way as ANZBGL before the Implementation Date.
To enable ANZ NOHC to do this, before the Implementation
Date, ANZBGL will (when ANZBGL is ANZ NOHC’s only
shareholder) authorise ANZ NOHC to undertake anon-market share buy-back in the 12 months following the
Implementation Date. The aggregate number of ANZ NOHC
Shares that could ultimately be bought back under any
such buy-back would not exceed more than 10% of theordinary shares ANZ NOHC has on issue when the Scheme
is implemented (which will be the same number of shares
ANZBGL currently has on issue). As a result, in assessing ANZ
NOHC’s “10/12 limit” for the first 12 months following theSection 9

If there is any delay in obtaining the approval from the US
Federal Reserve prior to the currently scheduled date for theSecond Court Hearing, ANZ may:

An on-market share buy-back requires shareholder approval
if it exceeds the “10/12 limit” set out in the Corporations Act.
The “10/12 limit” restricts the number of ordinary shares
ANZ can buy-back in any rolling 12-month period to 10% of
the smallest number of ordinary shares ANZ had on issueduring that 12-month period.

Section 8

As at the date of this Explanatory Memorandum, only
Regulatory Approval from the US Federal Reserve remains
outstanding.

7.7 ANZ NOHC’S ABILITY TO
CONDUCT AN ON-MARKET
SHARE BUY-BACK FOLLOWINGIMPLEMENTATION OF THE SCHEME

Section 7• APRA;• the Treasurer;• RBNZ in New Zealand;• MAS in Singapore; and• OIO in New Zealand.

As further noted at section 6.8, ANZ NOHC will still be
required to comply with NZX Listing Rule 1.7.2 which
provides that all announcements by a foreign exempt issuer
on the issuer’s home exchange must be released
simultaneously, or promptly without delay
afterwards, to NZX.

Section 6

In order for the Restructure to be implemented, certain
Regulatory Approvals are required from certain prudential
and other regulators or agencies in jurisdictions where ANZ
does business. As at the date of this Explanatory
Memorandum, Regulatory Approvals from the following
have been obtained:

As an NZX foreign exempt issuer, ANZ NOHC can list on NZX
by meeting ASX obligations without having to separately
comply with the NZX Listing Rules (subject to limited
exceptions).

Section 5

7.4 REGULATORY APPROVALSREQUIRED FOR THE
RESTRUCTURE

An application will be made to NZX for permission to list
the ANZ NOHC as an NZX foreign exempt listing and for
official quotation of the ANZ NOHC Shares to be issued
under the Scheme prior to the Scheme Meeting.

Section 4

The material steps of the Business Restructure described inthis section 7.3(a) will be governed by the Restructure Deed.
Under the Restructure Deed, the Business Restructure isconditional on implementation of the Scheme.

7.6 APPLICATION FOR ADMISSION
OF ANZ NOHC TO THE OFFICIAL
LIST OF NZX AS A FOREIGNEXEMPT LISTING

Section 3(b) Restructure Deed

ANZ NOHC will apply for admission to the official list of theASX, for official quotation of the ANZ NOHC Shares to beissued under the Scheme prior to the Scheme Meeting.

Section 2• ANZBGL transferring its beneficial interests in the 1835i
trusts, its non-controlling interest in the Worldline
merchant acquiring joint venture with Worldline, and its
equity interests in Lygon, TIN and Pollination to ANZ
Non-Bank HoldCo;• ANZBGL transferring its interest in ANZ Centre Trust, ANZ
Centre Chattels Trust, certain fixtures and fittings(including leasehold improvement assets) and ANZCentre to ANZ ServiceCo;• ANZBGL transferring all the shares in ANZ Bank HoldCo,
ANZ Non-Bank HoldCo and ANZ ServiceCo to
ANZ NOHC; and• ANZ NOHC transferring all the shares in ANZBGL to ANZBank HoldCo.

7.5 APPLICATION FOR ADMISSION
OF ANZ NOHC TO THE OFFICIAL
LIST OF THE ASX

Section 1

The key steps to be undertaken in the BusinessRestructure are:

ANZ will announce to the ASX any updates to the status of
the US Guam Approval. ANZ will also provide an update ofthis status at or before the Scheme Meeting held on 15
December 2022.

Chairman’s letter

7.3 BUSINESS RESTRUCTURE

45

Implementation Date, ANZ NOHC and ANZBGL’s equity
capital structure would effectively be regarded as the same.
ANZBGL’s approval (as ANZ NOHC’s sole shareholder) is
technically required because ANZ NOHC is a recently
incorporated entity that was established to facilitate the
Restructure and upon incorporation, as is usual, only had anominal share capital.
These arrangements do not mean ANZ has decided tolaunch any buy-back in the first 12 months post the
Implementation Date. ANZ has no current intention to
conduct an on-market share buy-back during this period.
These arrangements have been put in place simply toensure that ANZ NOHC continues to have the same
flexibility as ANZBGL to conduct any such buy-back post
the Implementation Date should it decide to do so. Any
decision by ANZ NOHC to conduct a buy-back would beannounced to the ASX and NZX in the normal course.

46

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Section 2

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

8

Section 1

TAX IMPLICATIONS
OF THE SCHEME

Chairman’s letter

SECTION

Section 9

Section 10

Annexures8.1 SUMMARY OF TAX OUTCOMES
A high-level summary of the tax outcomes for certain ANZ Shareholders that are resident in Australia, New Zealand, the United
Kingdom and the United States is outlined below and should be read in the context of the full disclosure below and, inparticular, the section referenced in this summary.
This summary is necessarily general in nature and is not a complete analysis of all taxation laws that may apply in relation to the
Scheme for ANZ Shareholders. ANZ Shareholders should consult with their own independent tax adviser regarding the tax
implications of participating in the Scheme based on their particular circumstances. The tax summary provided in this section
8.1 does not constitute tax advice.
This summary does not take into account or anticipate changes in the law (by legislation or judicial decision) or practice (byruling or otherwise) after the Last Practicable Date.
TAX RESIDENT AND
TAXING JURISDICTIONTAX CONSEQUENCES

MORE
INFORMATION

Disposal of ANZ Shares
Australia

Any capital gain or loss made by ANZ Shareholders under the
Scheme should be disregarded.

Section 8.2(c)New Zealand

You should not be treated as deriving income from the disposalof the ANZ Shares under the Scheme except in limited
circumstances, for example if you hold the ANZ Shares for the
purpose of disposal or you are in the business of dealing
in shares.

Section 8.3(a)If you are an ANZ Shareholder that is a PIE other than a life fundPIE and that is not assured under an arrangement with anotherperson of having a gain on the disposal of the ANZ Shares, any
income arising from the disposal will be treated as excluded
income and therefore will not be taxable.
United Kingdom

The issue of ANZ NOHC Shares to ANZ Shareholders inconsideration for the transfer of ANZ Shares is expected to betreated as a reorganisation of share capital for UK tax purposes.

Section 8.4(b)Accordingly, ANZ Shareholders are not expected to be treated as
making a disposal of their holding of ANZ Shares, such that no
liability to UK capital gains tax or corporation tax on chargeable
gains is expected to arise.
United States

The Scheme is intended to constitute a tax-free exchange
governed by Section 351 of the U.S. Internal Revenue Code.
Provided that this treatment is respected, you should notrecognise a gain or loss.

Section 8.5(b)(1)

Dividends received from ANZ NOHC should be included in theassessable income of an Australian tax resident ANZ NOHC
Shareholder.

Section 8.2(d)Holding ANZ NOHC Shares
Australia

Dividends may be franked to the extent determined by
ANZ NOHC.
If a dividend is franked, the ANZ NOHC Shareholder will generally
be entitled to a tax offset if they meet the holding period andrelated payment rules. Certain shareholders may be entitled to a
tax refund.

48

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

New Zealand

TAX CONSEQUENCES
The holding of ANZ NOHC Shares and any dividends paid by
ANZ NOHC should have the same New Zealand tax treatment as
the holding of ANZ Shares and dividends paid by ANZBGL.

MOREINFORMATION
Section 8.3(b)Section 1

The New Zealand foreign investment fund rules will not apply toyour shareholding in ANZ NOHC.
Any dividends you receive will generally be taxable to you. To theextent franking credits are attached to the dividends, no tax
credit will arise for such franking credits.

Section 2

To the extent New Zealand imputation credits are attached tothe dividends, you should be entitled to a credit which can beapplied against your taxable income.

Section 8.4(c)Section 4

For individual shareholders, dividend income that does not fallwithin the dividend allowance of £2,000 will generally be subject
to tax (at the applicable dividend rate) as the highest part of theshareholder’s income.

Section 3

If Australian withholding tax is deducted from dividends paid by
ANZ NOHC to you, such withholding tax may be able to beclaimed as a credit against New Zealand tax otherwise payable inrelation to such dividends. The dividends should not be subject
to New Zealand withholding tax.
United Kingdom

Section 8.5(c)(1)(A)Section 6

Under US federal income tax laws, if you are a US holder,
dividends paid by ANZ NOHC will be subject to United Statesfederal income taxation.

Section 5

ANZ NOHC Shareholders who are within the charge to UK
corporation tax will generally not be subject to UK corporation
tax on the gross amount of any dividends paid by ANZ NOHC solong as certain conditions are met.
United States

Chairman’s letter

TAX RESIDENT AND
TAXING JURISDICTION

Section 7

Subject to the passive foreign investment company rules (PFIC)
rules discussed in the full tax disclosure below, if you are a
non-corporate US holder, dividends that constitute qualified
dividend income will be taxable to you at the preferential rates
applicable to long-term capital gains provided that you hold the
ANZ NOHC Shares or ANZ NOHC ADSs for more than 60 days
during the 121-day period beginning 60 days before theex-dividend date and meet other holding period requirements.

New Zealand

The future disposal of the ANZ NOHC Shares should not give rise
to taxable income for you, provided that you hold the ANZNOHC Shares on capital account.

Section 8.3(a)United Kingdom

ANZ NOHC Shareholders may, depending on their circumstances(including the availability of exemptions or reliefs), be liable to UK
capital gains tax or corporation tax on chargeable gains, asapplicable, in respect of gains arising from a sale or otherdisposal of any ANZ NOHC Shares.

Section 8.4(d)Annexures

Section 8.2(d)Section 10

An Australian tax resident ANZ NOHC Shareholder who disposesof their ANZ NOHC Shares may make a capital gain or loss.
Certain shareholders may be entitled to a discount on any capitalgain if they have held their ANZ NOHC Shares for at least
12 months.

Section 9

Australia

Section 8

Disposal of ANZ NOHC Shares

49

TAX RESIDENT AND
TAXING JURISDICTION
United States

MORE
INFORMATIONTAX CONSEQUENCES
Provided that as intended, the Scheme is a tax-free exchange,
your aggregate tax basis in ANZ NOHC Shares or ANZ NOHC
ADSs that you receive will equal your carryover tax basis(generally the price you paid for your ANZ Shares or ANZ ADSs
prior to implementation of the Scheme).

Section 8.5(c)(1)(B)

Subject to the PFIC rules discussed in section 8.5, if you are a US
holder, you will generally recognise a capital gain or loss forUnited States federal income tax purposes equal to thedifference between the amount that you receive and your tax
basis, determined in respect of the disposal of your ANZ NOHC
Shares or ANC NOHC ADSs.

8.2 AUSTRALIA(a) Introduction
This section 8.2 provides a general summary of theAustralian income tax implications arising for certain ANZ
Shareholders under the Scheme. This summary isnecessarily general in nature and is not a complete analysisof all taxation laws that may apply in relation to the Scheme
for ANZ Shareholders. ANZ Shareholders should consult
with their own independent tax adviser regarding the tax
implications of participating in the Scheme based on their
particular circumstances. The tax summary provided in thissection 8.2 does not constitute tax advice.
This tax summary only addresses the position of ANZ
Shareholders who:
• were registered on the ANZ Share Register as the holders
of ANZ Shares at the Scheme Record Date;• hold their ANZ Shares on capital account (and not onrevenue account or as trading stock) for income
tax purposes;• are treated for Australian income tax purposes as having
acquired their ANZ Shares after 19 September 1985;• have not elected for the TOFA provisions in Division 230
of the ITAA to apply in respect of their ANZ Shares; and• are not subject to the Investment Manager Regime, nottemporary residents of Australia for income tax purposes,
not exempt from Australian income tax or subject to alegal disability, not holding their ANZ Shares as partners
in a partnership and not a bank or insurance company.
This tax summary does not address any tax consequences
arising under the laws of jurisdictions other than Australia.
This tax summary is based on Australian tax laws andregulations, interpretations of such laws and regulations,and administrative practice as at the date of this
Explanatory Memorandum. These laws, regulations andinterpretations can change, and it is important that ANZ
Shareholders monitor for such changes after the date of this
Explanatory Memorandum.

50

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED(b) ATO Class Ruling
ANZ has applied to the Commissioner of Taxation(Commissioner) for a class ruling confirming certain
income tax implications of the Scheme for ANZ
Shareholders (Class Ruling).
Consistent with standard ATO practice in relation totransactions of this nature, the final Class Ruling will bereceived from the Commissioner after the Implementation
Date for the Scheme and will be published on the ATO
website (ato.gov.au).
The information below addresses the implications for ANZ
Shareholders where tax relief is available and is consistent
with the submissions made in the Class Ruling application.

(c) Rollover tax relief
Australian tax resident ANZ Shareholders
Ordinarily, the disposal of ANZ Shares by ANZ Shareholders
who are tax resident in Australia and whose ANZ Shares areheld on capital account would result in a capital gain or loss
being realised. Under the Scheme, any capital gain or loss
made by ANZ Shareholders on the exchange of their ANZ
Shares for ANZ NOHC Shares should be disregarded.
Roll-over relief under Division 615 of the ITAA should apply
to defer recognition of any taxable gains or losses until the
ANZ NOHC Shareholder subsequently disposes of their ANZ
NOHC Shares.
Following implementation of the Scheme, the first elementof the cost base (or reduced cost base, if applicable) for the
ANZ NOHC Shares received under the Scheme by an ANZ
Shareholder who is tax resident in Australia should equal
the initial purchase price paid for the ANZ Shares.
For the purposes of determining whether the capital gains
tax discount concession is available on a subsequentdisposal of ANZ NOHC Shares, ANZ Shareholders who are
tax residents in Australia should be taken to have acquired
their ANZ NOHC Shares at the time their ANZ Shares were
initially acquired.

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ANZ Shareholders who are non-Australian tax residents
should consider both the Australian tax implications of
the Scheme, as well as the tax implications in their countryof residence.

Tax treatment of future distributions – Australian tax
resident ANZ NOHC Shareholders

ANZ NOHC Shareholders who are individuals, trustees orcomplying superannuation entities and who have held their
ANZ NOHC Shares for at least 12 months should be entitledto discount the amount of the capital gain (after theapplication of any current year or carry forward
capital losses).
The amount of the discount is:• in the case of individuals and trustees – 50%; and• for complying superannuation funds – 33.33%.
No discount on a capital gain is available for ANZ NOHC
Shareholders that are companies.

Annexures

ANZ NOHC Shareholders should seek their own tax advice
prior to utilising capital losses to confirm the availability of
the losses.

Section 10

A capital loss may be used to offset any capital gains
derived by relevant ANZ NOHC Shareholders for the
relevant income year or may be carried forward to offset
capital gains in future income years. Specific capital loss
recoupment rules apply to companies to restrict their ability
to utilise capital losses in future income years.

Section 9

Where the ANZ NOHC Shareholder is an Australian tax
resident individual, complying superannuation entity, or
registered charity (in certain circumstances) and satisfies• a capital gain if the capital proceeds for the disposal of
ANZ NOHC Shares exceed the cost base of the relevant
ANZ NOHC Shares; or• a capital loss if the capital proceeds for the disposal of
ANZ NOHC Shares are less than the reduced cost base of
the relevant ANZ NOHC Shares.

Section 8

Under the related payment rule, a different testing period
applies where the ANZ NOHC Shareholder has made, or isunder an obligation to make, a related payment in relation
to a dividend. A related payment is one where the ANZNOHC Shareholder or their associate passes on the benefitof the dividend to another person. The related payment rule
requires the ANZ NOHC Shareholder to have held ANZNOHC Shares at risk for a period commencing on the 45th
day before, and ending on the 45th day after the day the
ANZ NOHC Shares become ex-dividend. This should notaffect any ANZ NOHC Shareholder who does not pass on
the benefit of the dividend to another person.

Following the implementation of the Scheme, ANZ NOHC
Shareholders who dispose of their ANZ NOHC Shares
will make:

Section 7

The holding period rule will not apply to an ANZ NOHC
Shareholder who is an individual whose tax offset
entitlement (for all franked distributions received in theincome year) does not exceed $5,000 for the income year inwhich the franked dividend from ANZ NOHC is received.

Tax treatment of future disposals of ANZ NOHC Shares– Australian tax resident ANZ NOHC Shareholders

Section 6

The holding period rule requires ANZ NOHC Shareholders
to have held ANZ NOHC Shares at risk for a period of at least
45 days (not including the date of acquisition or the date ofdisposal) and free of any related payment obligations. An
ANZ NOHC Shareholder will not be taken to have held ANZNOHC Shares at risk where the ANZ NOHC Shareholder oran associate holds a position (such as an option or otherhedging arrangement) which materially diminishes the risksof loss or opportunity for gain in respect of those ANZNOHC Shares.

ANZ NOHC Shareholders are advised to obtain their own
tax advice to confirm their entitlement to the benefit of any
franking credit gross-up and tax offset in respect of franked
dividends paid by ANZ NOHC.

Section 5

To be eligible for the franking credit and tax offset, ANZNOHC Shareholders must satisfy the holding period rule
including, if necessary, the related payment rule.

Unfranked dividends will be subject to dividend
withholding tax. The withholding tax rate is 30% but isgenerally reduced to 15% (or less, pursuant to some tax
treaties) on dividends which are paid to residents ofcountries which have entered into tax treaties with
Australia.

Section 4

Generally, dividends received from ANZ NOHC should be
included in an ANZ NOHC Shareholder’s assessable income
together with any franking credit attached to the dividend.
Where the franking credit is included in the ANZ NOHC
Shareholder’s assessable income, the ANZ NOHC
Shareholder will generally be entitled to a corresponding
tax offset.

Franked dividends received by ANZ NOHC Shareholders
who are non-Australian tax residents should not generally
be subject to dividend withholding tax.

Section 3(d) Holding ANZ NOHC Shares after the
Implementation Date

Tax treatment of future distributions – non-Australian
tax resident ANZ NOHC Shareholders

Section 2

Following implementation of the Scheme, the first elementof the cost base (or reduced cost base, if applicable) for
ANZ NOHC Shares received by an ANZ Shareholder who is a
non-Australian tax resident should equal the initial purchaseprice paid for the ANZ Shares.

Where the ANZ NOHC Shareholder is an Australian tax
resident company, franked dividends received by the ANZNOHC Shareholder will generally give rise to a franking
credit in the ANZ NOHC Shareholder’s franking account.
No refund of tax is available for companies for excess
franking credits.

Section 1

If a capital gain or loss arises for a non-Australian tax
resident as a result of the exchange of their ANZ Shares for
ANZ NOHC Shares under the Scheme, any capital gain orloss should be disregarded due to the availability ofroll-over relief.

the above requirements, the ANZ NOHC Shareholder will
generally be entitled to a refund of tax to the extent thatthe franking credit attached to the ANZ NOHC Shareholder’s
dividends exceed the ANZ NOHC Shareholder’s income tax
liability for the relevant income year.

Chairman’s letter

Non-Australian tax resident ANZ Shareholders

51

Tax treatment of future disposals of ANZ NOHC Shares– non-Australian tax resident ANZ NOHC Shareholders
ANZ NOHC Shareholders who are a non-Australian tax
resident need to consider both the Australian income tax
implications of any future disposal of ANZ NOHC Shares andthe tax implications of such a disposal in their own
jurisdiction.
Broadly, a capital gain or loss may arise to non-Australian tax
resident ANZ NOHC Shareholders from the disposal of their
ANZ NOHC Shares if they hold their shares on capital
account, and:• they held more than 10% of the issued capital of ANZNOHC at the date of the disposal of the ANZ NOHC
Shares or through a 12-month period that began no
earlier than 24 months before the date of disposal andended no later than the date of disposal; and• more than 50% of the market value of ANZ NOHC
consists of taxable Australian real property (direct andindirect interests in Australian real property, including
leases of Australian land).
A capital gain may also arise for ANZ NOHC Shareholders
who have held their ANZ NOHC Shares in the course ofcarrying on a business through an Australian permanentestablishment.
If the non-Australian tax resident ANZ NOHC Shareholder
is a tax resident of a country which has entered a tax treaty
with Australia, relief from taxation may be available under
the relevant treaty. ANZ NOHC Shareholders who are a
non-Australian tax resident should seek their own advice
concerning the availability of treaty relief.
No discount capital gain is available for non-Australian
tax resident ANZ NOHC Shareholders.

(e) Sale Facility
A small number of ANZ Shares are held by ANZ
Shareholders whose addresses are shown in the ANZ
Share Register as being outside Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.
These Ineligible Foreign Shareholders and are not permitted
to participate in the Scheme and will not receive ANZNOHC Shares. Instead, Ineligible Foreign Shareholders will
receive the cash proceeds of the sale of the ANZ NOHC
Shares. More information about Ineligible Foreign
Shareholders is set out in section 7.2(g).
Ineligible Foreign Shareholders need to consider both
Australian income tax implications and the tax implicationsin their own jurisdiction.
A capital gain or loss should not arise to Ineligible Foreign
Shareholders from the disposal of their ANZ Shares unlessthey have held their ANZ Shares in the course of carrying ona business through an Australian permanent establishment.
If an Ineligible Foreign Shareholder does derive a capitalgain and is a tax resident of a country in which a tax treaty
exists with Australia, relief may be available under the
relevant treaty.
No discount capital gain is available for Ineligible Foreign
Shareholders.

52

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED(f) Other matters
1. Provision of tax file numbers
Under Australian tax law, a company is entitled to ask its
shareholders to disclose their TFN to the company. A
shareholder can choose whether or not to disclose their
TFN. A shareholder may be entitled to provide their ABN(in circumstances) or tell the company that they have an
exemption from providing a TFN.
Many ANZ Shareholders have previously quoted their TFN
or ABN to ANZ, or told ANZ that they have an exemption
from providing a TFN.
When we refer to TFNs being transferred to ANZ NOHC,
we also refer to ABNs and information about exemptions
from providing a TFN being transferred.
As part of the Scheme, ANZ (or the ANZ Share Registry)
intends to transfer the TFNs provided to ANZ by ANZ
Shareholders to ANZ NOHC (or the ANZ NOHC Share
Registry) on behalf of those ANZ Shareholders. If the ANZNOHC Shareholder’s TFN is transferred, ANZ NOHC does nothave to withhold any tax from any dividends paid to theshareholder.
However, an ANZ Shareholder may direct ANZ to nottransfer that ANZ Shareholder’s TFN to ANZ NOHC
(or the ANZ NOHC Share Registry).
If the ANZ Shareholder makes such a direction, and does
not separately quote their TFN to ANZ NOHC, then ANZNOHC may be required to deduct TFN withholding fromany dividends paid by ANZ NOHC at the highest marginal
rate plus the Medicare levy (currently 47%), unless those
dividends are fully franked. If the tax withheld by ANZ NOHC
is more than the ANZ NOHC Shareholder would have paidin tax, the ANZ NOHC Shareholder must wait until he or she
lodges an income tax return before being entitled to an
income tax offset or refund (as applicable) of any excess tax
withheld from the dividend payment.
If you do not want ANZ to transfer your TFN to ANZ NOHC
(or the ANZ NOHC Share Registry) (and therefore you
accept that ANZ NOHC may be required to withhold tax
at the top marginal tax rate plus Medicare levy on
dividends payable to you), please call the ANZ Shareholder
Information Line on 1800 11 33 99 (within Australia) or+61 3 9415 4010 (outside Australia) or write to the ANZ
Share Registry before the Effective Date.
If an ANZ Shareholder does not specify that they do notwish their TFN to be disclosed and collected in accordancewith the process discussed above, they are deemed under
the terms of the Scheme to agree to such disclosure andcollection of their TFN.

2. GST
No GST should be payable by ANZ Shareholders in relation
to their participation in the Scheme. The eligibility for ANZ
Shareholders to claim full or partial input tax credits inrelation to GST incurred on adviser fees and other costs
relating to their participation in the Scheme will depend on
the individual circumstances of each shareholder.

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No stamp duty should be payable in any Australian State or
Territory by ANZ Shareholders in relation to their
participation in the Scheme.

general in nature and is not a complete analysis of all
taxation laws that may apply in relation to the Scheme for
NZ ANZ Shareholders. The tax summary provided in thissection 8.3 does not constitute tax advice.

(g) ANZ Incentive Plans(a) Disposal of ANZ Shares

Annexures

As ANZ NOHC is an Australian incorporated tax resident
company and listed on the ASX, the New Zealand tax
treatment of dividends paid by ANZ NOHC will be the sameas the tax treatment of dividends paid by ANZBGL.

Section 10

This section 8.3 provides a general summary of the New
Zealand income tax implications under the Scheme arising
for ANZ Shareholders who are tax resident in New Zealand(NZ ANZ Shareholders). This summary is necessarily(b) Holding ANZ NOHC Shares

Section 9

8.3 NEW ZEALAND

Section 8

If the rights granted to a participating employee under the
ESOP are ultimately settled in cash, those amounts will betaxed in that participating employee’s hands as salaryand wages.

An NZ ANZ Shareholder that does not hold their ANZ
Shares on capital account for New Zealand income tax
purposes and is not a portfolio investment entity, as
described above, should seek tax advice regarding the tax
implications of participating in the Scheme based on their
particular circumstances.

Section 7

If the rights granted to a participating employee under the
ESOP are ultimately settled with shares, the amountincluded in that participating employee’s assessable income
will be determined by reference to the market value of the
ANZ NOHC shares.

The Binding Ruling also provides that for an ANZ
Shareholder that is a "portfolio investment entity" (as thatterm is defined in the Income Tax Act 2007 (NZ)) other thana life fund PIE and that is not assured under an arrangementwith another person of having a gain on the disposal of the
ANZ Shares, where the receipt of ANZ NOHC Shares under
the Scheme gives rise to income that income will be treatedas excluded income under section CX 55 of the Income Tax
Act 2007 (NZ).

Section 6

In relation to the ESOP, the rules of the ESOP will beamended to allow ANZBGL to replace ANZBGL deferredshare rights and performance rights with ANZ NOHC
deferred share rights performance rights on the same
condition of grant. The existing rights will therefore lapse
and participating employees will be granted
replacement rights.

Section 5

To the extent that the Restructure results in a participating
employee becoming employed by a subsidiary of ANZ
NOHC, their employment will be treated as a continuationof their employment with ANZBGL for the purposes of the
ANZ Incentive Plans.

• does not derive the ANZ NOHC Shares from a business, orif the ANZ NOHC Shares are derived from a business, arereceived on capital account;• does not hold their ANZ Shares as trading stock;• did not acquire their ANZ Shares for the purposeof disposal;• is not in the business of dealing in shares;• is not a company that is for that income year part of awholly-owned group of companies and had the group ofcompanies been a single company, the ANZ NOHC
Shares derived by the company would have been incomeof that single company; and• is not a company that is part of a consolidated group,
where the ANZ NOHC Shares derived by the company
would be income of the group if the group were
one company.

Section 4

In relation to the ESAP, all deferred shares held by thetrustee of the ANZ employee incentive plan trust will berolled over and exchanged for ANZ NOHC Shares on a one
for one basis.

As provided in the Binding Ruling, the receipt of ANZ NOHC
Shares by an NZ ANZ Shareholder under the Scheme will not
be treated as income under part C of the Income Tax Act
2007 (NZ), and therefore will not be subject to New Zealand
income tax, provided that the relevant NZ ANZ Shareholder:

Section 3

For Australian resident participants in the ANZ Incentive
Plans, the Restructure should not trigger an ESS deferredtaxing point in relation to any Equity Awards issued underthe ANZ Incentive Plans, nor should it give rise to any
realised capital gains or capital losses for participating
employees.

A binding ruling has been issued by the Commissioner ofInland Revenue in relation to the Scheme (BR Prd 22/11,
referred to in this section as Binding Ruling) which has
been published on Inland Revenue's website (taxtechnical.
ird.govt.nz).

Section 2

The Equity Awards are held by the trustee of the ANZ
employee incentive plan trust and vest on specific dates inaccordance with the terms of the ESAP and ESOP.
Participating employees are not subject to taxation ondeferred shares until they vest and on performance rights,
restricted shares, restricted rights and deferred share rights
until they are exercised, which triggers an employee sharescheme (ESS) deferred taxing point.

For New Zealand income tax purposes, the transaction
under the Scheme will be treated as a disposal of ANZ
Shares by NZ ANZ Shareholders in consideration for themonetary equivalent of the market value of the ANZ NOHC
Shares received, which will be equal to the value of the ANZ
Shares as they will carry the same rights.

Section 1

ANZBGL operates two ANZ Incentive Plans known as the
Employee Share Acquisition Plan (ESAP) and the Employee
Share Option Plan (ESOP). Under the ESAP, participating
employees are granted deferred shares in ANZBGL. Under
the ESOP, participating employees are granted deferredshare rights and performance rights which may be settledwith either shares or cash payments in lieu of shares at thediscretion of ANZ at the time of vesting.

Chairman’s letter

3. Stamp duty

53

While ANZ NOHC is a foreign company for New Zealand
income tax purposes, New Zealand's foreign investment
fund rules will not apply to a shareholding in ANZ NOHC assuch a shareholding should qualify for exemption fromthose rules applicable to certain ASX listed companies.
Generally, dividends received from ANZ NOHC will beincome for ANZ NOHC Shareholders who are tax resident in
New Zealand (NZ ANZ NOHC Shareholders). Where such
dividends have franking credits attached, no tax credit willarise for such franking credits. To the extent New Zealand
imputation credits, if any, are attached to such dividends,
NZ ANZ NOHC Shareholders should be entitled to a tax
credit for such imputation credits which can be applied
against their taxable income.
If Australian withholding tax is deducted from dividends
paid by ANZ NOHC to NZ ANZ NOHC Shareholders, suchwithholding tax may be able to be claimed as a credit
against New Zealand tax otherwise payable in relation tosuch dividends. Dividends paid by ANZ NOHC to NZ ANZNOHC Shareholders should not be subject to New Zealandwithholding tax.
Provided that the ANZ NOHC Shares are held on capital
account, the future disposal of ANZ NOHC Shares by NZ
ANZ NOHC Shareholders should not give rise to any taxable
income. Taxable income may arise, for example, where a NZ
ANZ NOHC Shareholder is in the business of dealing
in shares.

8.4 UNITED KINGDOM(a) Introduction
This section 8.4 provides a general summary of certain
United Kingdom (UK) tax implications arising for certain
ANZ Shareholders under the Scheme. This summary isnecessarily general in nature and is not a complete analysisof all taxation laws that may apply in relation to the Scheme
for ANZ Shareholders.
This UK tax summary only addresses the position of ANZ
Shareholders who are resident and, in the case ofindividuals domiciled, for tax purposes solely in the UK (andto whom split-year treatment does not apply) and who holdtheir ANZ Shares (and will hold their ANZ NOHC Shares) as
an investment for UK tax purposes and who are treated as
being the underlying absolute beneficial owners thereof. In
particular, ANZ Shareholders (or as the case may be ANZNOHC Shareholders) who hold their shares via a depositary
receipt system or clearance service should note that they
may not always be the absolute beneficial owners thereof.
Furthermore, for UK tax purposes, where a depositary
receipt is issued outside the UK, the question of whether
the holder of the depositary receipt is the beneficial ownerof the underlying shares will generally be determined byreference to the law of the territory in which the relevant
depositary receipt is issued.
This summary does not apply to certain categories ofshareholders to whom special rules apply, including
pension funds, charities, dealers in securities, those who
hold their shares through an individual savings account or apension arrangement, those who are subject to specific tax
regimes or who benefit from certain reliefs or exemptions,those who are connected with ANZBGL or ANZ NOHC or

54

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

those for whom the shares are employment related
securities.
The tax summary provided in this section 8.4 does
not constitute tax advice and does not address any tax
consequences arising under the laws of jurisdictions otherthan the UK. The tax summary in this section 8.4 is basedon UK tax law and published practice of HM Revenue &Customs (HMRC) as at the date of this Explanatory
Memorandum (which may not be binding on HMRC),
both of which are subject to change, possibly withretrospective effect.
ANZ Shareholders should consult with their own
independent tax adviser regarding the tax implications ofparticipating in the Scheme or holding ANZ NOHC Sharesbased on their particular circumstances.

(b) Implementation of the Scheme
For the purposes of UK capital gains tax (CGT) andcorporate tax on chargeable gains, the issue of ANZ NOHC
Shares to ANZ Shareholders in consideration for the transferof their ANZ Shares to ANZ NOHC is expected to be treatedas a reorganisation of share capital for UK tax purposes.
Accordingly, ANZ Shareholders should not be treated as
making a disposal of all or part of their holding of ANZ
Shares and no liability to CGT or corporation tax on
chargeable gains should arise. Instead, the ANZ NOHC
Shares acquired and the ANZ Shares transferred should, for
CGT and corporation tax on chargeable gains purposes, betreated as the same asset and the ANZ NOHC Shares shouldbe treated as having been acquired at the same time andfor the same consideration as the ANZ Shares.
In the case of a person who holds (either alone or together
with persons connected with them) more than 5% of, or of
any class of, shares or debentures in ANZBGL, the treatmentin the preceding paragraph is subject to the issue of ANZNOHC Shares to them and the transfer of their ANZ Shares
to ANZ NOHC being carried out for bona fide commercial
reasons and not forming part of a scheme or arrangementsof which the main purpose, or one of the main purposes, isavoidance of the liability to CGT or corporation tax. Provided
that this is the case (although it should be noted that noclearance has been sought from HMRC in this regard), anysuch shareholder is expected to be treated in the manner
described in the preceding paragraph.

(c) Taxation of dividends
ANZ NOHC will not be required to withhold amounts on
account of UK tax at source when paying a dividend.
For the tax year beginning 6 April 2022, ANZ NOHC
Shareholders that are individuals should not be subject toincome tax on dividends they receive from ANZ NOHC if
the total amount of all dividend income received by theindividual in the tax year (including when aggregated withany dividends received from ANZ NOHC) does not exceed adividend allowance of £2,000, which will be taxed at a nil
rate (the Dividend Allowance).
In determining the income tax rate or rates applicable to anindividual ANZ NOHC Shareholder’s taxable income,dividend income is treated as the highest part of suchindividual shareholder’s income. Dividend income that falls

Contents
Section 10
AnnexuresThis section 8.5 is based on the Internal Revenue Codeof 1986, as amended, its legislative history, existing andproposed regulations, published rulings and court
decisions, all as currently in effect (Code). These authorities
are subject to change, possibly on a retroactive basis.

Section 9

No SDRT should be payable on the issue or transfer of the
ANZ NOHC Shares, provided that the ANZ NOHC Sharesare not registered in any register kept in the UK.

Section 8

No UK stamp duty should be required to be paid on thetransfer of any ANZ NOHC Shares provided that no
instrument of transfer is executed in the UK and provided
that no such instrument relates to any property situate, orto any matter or thing done or to be done, in the UK.

Section 7

No UK stamp duty or stamp duty reserve tax (“SDRT”)
should generally be payable on the issue of the ANZNOHC Shares.

Section 6(e) Stamp duty and stamp duty reserve tax

Section 5

ANZ NOHC Shareholders may depending on theircircumstances (including the availability of exemptions orreliefs) be liable to UK CGT or corporation tax on chargeable
gains, as applicable, in respect of gains arising from a sale orother disposal of any ANZ NOHC Shares.

• a dealer in securities;• a trader in securities that elects to use a mark-to-market
method of accounting for securities holdings;• a tax-exempt organisation;• a life insurance company;• a person who holds ANZ Shares or ANZ ADSs, or will hold
ANZ NOHC Shares or ANZ NOHC ADSs, as the case may
be, as part of a straddle or a hedging or conversion
transaction;• a person who purchases or sells ANZ NOHC Shares or
ANZ NOHC ADSs as part of a wash sale for tax purposes;• a US holder whose functional currency is not the
US dollar;• a person that actually or constructively will own 5% ormore of either the combined voting power of ANZ NOHC
or of the total value of ANZ NOHC immediately after
implementation of the Scheme;• a person who holds ANZ Shares or ANZ ADSs, or will hold
ANZ NOHC Shares or ANZ NOHC ADSs, as the case may
be, in an individual retirement or other tax-deferred
account; or• a person who received ANZ Shares or ANZ ADSs, or who
acquires ANZ NOHC Shares or ANZ NOHC ADSs, as thecase may be, pursuant to the exercise of employee stock
options or otherwise as compensation or in connection
with the performance of services.

Section 4(d) Disposal of shares in ANZ NOHC

This summary does not apply to an ANZ Shareholder or an
ANZ ADS Holder subject to special rules, including because
the ANZ Shareholder or the ANZ ADS Holder is:

Section 3

If Australian dividend withholding tax is payable on
dividends from ANZ NOHC, UK resident shareholders
should seek their own tax advice to determine any relevant
taxation implications (including the availability of any relief
or credit in respect of any such withholding tax).

This section 8.5 provides a general summary of certain
material United States federal income tax consequences of
the Scheme, and ownership and disposition of ANZ NOHC
Shares or ANZ NOHC ADSs following implementation of the
Scheme. This summary assumes that the Scheme will be
implemented as contemplated by this Explanatory
Memorandum, and applies only to ANZ Shareholders that
hold their ANZ Shares and that will hold their ANZ NOHC
Shares received under the Scheme, or to ANZ ADS Holders
that will hold their ANZ NOHC ADSs received under the
Scheme, as “capital assets” for tax purposes. This summary
addresses only United States federal income taxation anddoes not discuss all of the tax consequences that may be
relevant in light of the ANZ Shareholder’s or ANZ ADS
Holder’s individual circumstances, including foreign, state or
local tax consequences, estate and gift tax consequences,and tax consequences arising under the Medicare
contribution tax on net investment income or thealternative minimum tax. ANZ Shareholders and ANZ ADS
Holders should consult with their own independent tax
adviser regarding the tax implications of participating in the
Scheme based on their particular circumstances.

Section 2

ANZ NOHC Shareholders who are within the charge to
UK corporation tax in respect of ANZ NOHC Shares will
generally not be subject to UK corporation tax on the grossamount of any dividends paid by ANZ NOHC unless so longas certain conditions are met. In the case of ANZ NOHC
Shareholders that are not small companies, one of theconditions is that the dividends fall within an exempt class.
It is generally expected that most dividends paid by ANZNOHC should fall within an exempt class (subject to theapplication of anti-avoidance rules). Each shareholder’sposition will depend on their own particular circumstances.

(a) Introduction

Section 1

To the extent that an individual ANZ NOHC Shareholder’s
dividend income for the tax year exceeds the Dividend
Allowance and, when treated as the top slice of suchindividual shareholder’s income, falls above such individual
shareholder’s personal allowance (if available) but below
the basic rate limit, such an individual shareholder should
be subject to tax on that dividend income at the dividend
basic rate of 8.75%. To the extent that such dividend income
falls above the basic rate limit but below the higher rate
limit, such an individual shareholder should be subject to
tax on that dividend income at the dividend higher rate of
33.75 per cent. To the extent that such dividend income falls
above the higher rate limit, such an individual shareholder
will be subject to tax on that dividend income at thedividend additional rate of 39.35 per cent.

8.5 UNITED STATES

Chairman’s letter

within the Dividend Allowance will count towards the basic
or higher rate limits (as applicable) which may affect therate of tax due on any dividend income in excess of the
Dividend Allowance.

55

If an entity or arrangement that is treated as a partnershipfor United States federal income tax purposes holds ANZ
Shares or ANZ ADSs, the United States federal income tax
treatment of a partner will generally depend on the statusof the partner and the tax treatment of the partnership. A
partner in a partnership holding ANZ Shares or ANZ ADSs
should consult its own independent tax adviser regarding
the United States federal income tax treatment with respect
to the Scheme.
As noted above, this summary does not address the tax
consequences to an ANZ Shareholder who holds ANZ
Shares, or to an ANZ ADS Holder who holds ANZBY ADSs,
and who will own directly, indirectly or constructively
through attribution rules, at least 5% of either the combined
voting power of ANZ NOHC or of the total value of ANZNOHC immediately after implementation of the Scheme
pursuant to the applicable Treasury Regulations under
section 367 of the Code (five-percent transferee
shareholder). ANZ Shareholders and ANZ ADS Holders
who believe they are or could become five-percent
transferee shareholders of ANZ NOHC should consult with
their own independent tax adviser regarding the special
rules and time-sensitive tax procedures, including therequirement to file a gain recognition agreement with theInternal Revenue Service (IRS), which might apply regarding
their ability to obtain tax-free treatment under the Scheme.
For the purposes of this summary, a US holder is abeneficial owner of ANZ Shares or ANZ ADSs and, after
implementation of the Scheme, ANZ NOHC Shares or ANZ
NOHC ADSs who is:• a citizen or resident of the United States;• a domestic corporation;• an estate whose income is subject to United Statesfederal income tax regardless of its source; or• a trust if a United States court can exercise primarysupervision over the trust’s administration and one ormore United States persons are authorized to control all
substantial decisions of the trust.
A non-US holder is a beneficial owner of ANZ Shares or ANZ
ADSs that is not a United States person and is not apartnership for United States federal income tax purposes. A
non-US holder should consult with its own independent tax
adviser regarding the tax implications of participating in the
Scheme based on its particular circumstances.

(b) Material United States federal income tax
consequences of the Scheme, including theexchange of ANZ Shares or ANZ ADSs for ANZ
NOHC Shares or ANZ NOHC ADSs, respectively
The exchange of ANZ Shares or ANZ ADSs for ANZ NOHC
Shares or ANZ NOHC ADSs, respectively, under the Scheme
is intended to be treated as a transfer to which section 351
of the Code applies. This summary assumes that theexchange of ANZ Shares or ANZ ADSs for ANZ NOHC Sharesor ANZ NOHC ADSs, respectively, under the Scheme will betreated as a transfer to which section 351 of theCode applies.

56

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

1. US holders
Unless the PFIC provisions described in section 8.5(c)(1)(C)apply, a US holder will generally not recognise any gain orloss on the exchange of ANZ Shares or ANZ ADSs for ANZ
NOHC Shares or ANZ NOHC ADSs, respectively, under the
Scheme. If a US holder has differing bases or holding
periods in respect of its ANZ Shares or ANZ ADSs, the US
holder must determine the bases and holding periods in
the ANZ NOHC Shares or ANZ NOHC ADSs received under
the Scheme separately for each identifiable block (ie, stockof the same class acquired at the same time for the same
price) of ANZ Shares or ANZ ADSs that the US holder
receives. US holders will have an aggregate adjusted US
federal tax basis in ANZ NOHC Shares or ANZ NOHC ADSs
received under the Scheme equal to their aggregate
adjusted US federal tax basis in the ANZ Shares or ANZ ADSs
transferred under the Scheme. Thus, to the extent a US
holder had a loss in its ANZ Shares or ANZ ADSs, such loss
generally will be preserved. The holding period for ANZ
NOHC Shares or ANZ NOHC ADSs received under the
Scheme will generally include the holding period of the
ANZ Shares or ANZ ADSs transferred under the Scheme.
Until after the implementation of the Scheme, the parties
cannot determine the tax treatment of the Scheme. In
addition, no assurance can be given that the IRS will not
assert, or that a court would not sustain, that the Scheme
does not qualify as an exchange within the meaning ofsection 351 of the Code.
If the IRS were to successfully challenge the qualification of
the Scheme as an exchange within the meaning of section
351 of the Code, a US holder would generally be required torecognise a gain or loss equal to the difference between its
adjusted tax basis in the ANZ Shares or ANZ ADSs
transferred under the Scheme and an amount equal to thefair market value, as at the Implementation Date, of any ANZNOHC Shares or ANZ NOHC ADSs, respectively, received
under the Scheme. Any gain or loss so recognised would belong-term capital gain if the US holder has held the ANZ
Shares or ANZ ADSs for more than one year as at the
Implementation Date. Generally, in such event, the tax basis
in the ANZ NOHC Shares or ANZ NOHC ADSs received by
the US holder under the Scheme would equal the fairmarket value of such ANZ NOHC Shares or ANZ NOHC ADSs
as at the Implementation Date, and the US holder’s holding
period for the ANZ NOHC Shares or ANZ NOHC ADSs would
begin on the day after the Implementation Date.

2. Non-US holders
Non-US holders are not expected to recognise any gain orloss as a result of the Scheme unless the Scheme fails toqualify as an exchange to which section 351 of the Codeapplies, as discussed above. In addition, even if the Scheme
were to fail to qualify as an exchange to which section 351
of the Code applies, non-US holders of ANZ Shares or ANZ
ADSs would generally not be subject to United Statesfederal income tax on any gain that may be recognised
unless they are within a class of non-US holders that would
be subject to United States federal income tax on the saleor disposition of ANZ NOHC Shares or ANZ NOHC ADSs, as
discussed in section 8.5(c)(2)(B).

Contents

1. US holders(a) Distributions

Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures

A US holder must include any Australian tax withheld
from the dividend payment in the gross amount of the
distribution even though the US holder does not in fact

Subject to the discussion in section 8.5(c)(1)(C), a US
holder will generally recognise capital gain or loss upon
the sale or other disposition of the US holder’s ANZNOHC Shares or ANZ NOHC ADSs in an amount equal
to the difference between the amount the US holder
receives at such time and the US holder’s tax basis in
the ANZ NOHC Shares or ANZ NOHC ADSs. In general,
the US holder’s tax basis in their ANZ NOHC Shares or
ANZ NOHC ADSs will be equal to the carryover tax basis
as described above (generally the price the US holder
paid for them prior to implementation of the Scheme).
Such capital gain or loss will be long-term capital gainor loss if the US holder held their ANZ NOHC Shares or
ANZ NOHC ADSs for more than one year. Capital gainof a non-corporate US holder is generally taxed at
preferential rates where the property is held for morethan one year. The deductibility of capital losses issubject to limitations. Such gain or loss will generally
be income or loss from sources within the United States
for foreign tax credit limitation purposes.

Section 3

If a US holder receives a distribution on ANZ NOHC
Shares or ANZ NOHC ADSs that is denominated in, or
determined by reference to, a non-US dollar currency,
the US holder must recognise income equal to the US
dollar value of the distribution, based on the exchange
rate in effect on the date of distribution, regardless ofwhether the US holder actually converts the payment
into US dollars. Generally, any gain or loss resulting fromcurrency exchange fluctuations during the period fromthe date the dividend is distributed to the date the US
holder converts the payment into US dollars will betreated as ordinary income or loss and will not be
eligible for the special tax rate applicable to qualified
dividend income. The gain or loss generally will beincome or loss from sources within the United States
for foreign tax credit limitation purposes.

(b) Sale or other disposition of ANZ NOHC Shares or
ANZ NOHC ADSs

Section 2

Subject to the discussion in section 8.5(c)(1)(C), for a
non-corporate US holder, distributions that are treatedas dividends for United States federal income tax
purposes may be qualified dividend income taxable to
the US holder at the preferential rates applicable tolong-term capital gains provided that the US holder
holds ANZ NOHC Shares or ANZ NOHC ADSs for morethan 60 days during the 121-day period beginning 60
days before the ex-dividend date and meets otherholding period requirements. US holders should consult
with their own independent tax adviser regarding theholding period in ANZ NOHC Shares or ANZ NOHC
ADSs based on their particular circumstances. Amounts
ANZ NOHC pays with respect to ANZ NOHC Shares or
ANZ NOHC ADSs will not be eligible for the dividendsreceived deduction generally allowed to United States
corporations in respect of dividends received fromother United States corporations.

Dividends will generally be income from sources
outside the United States and will generally be “passive”
income for purposes of computing the foreign tax
credit allowable to the US holder. However, if (a) ANZNOHC is 50% or more owned, by vote or value, by
United States persons and (b) at least 10% of ANZ
NOHC’s earnings and profits are attributable to sources
within the United States, then for foreign tax credit
purposes, a portion of the dividends would be treatedas derived from sources within the United States. With
respect to any dividend paid for any taxable year, theUnited States source ratio of the dividends for foreign
tax credit purposes would be equal to the portion of
ANZ NOHC’s earnings and profits from sources within
the United States for such taxable year, divided by the
total amount of ANZ NOHC’s earnings and profits forsuch taxable year.

Section 1

In general, the distributions in respect of ANZ NOHC
Shares or ANZ NOHC ADSs will be treated as dividends
to the extent of ANZ NOHC’s current or accumulated
earnings and profits as determined for United Statesfederal income tax purposes. Subject to the discussion
in section 8.5(c)(1)(C), any portion of a distribution inexcess of ANZ NOHC’s current and accumulated
earnings and profits would be treated first as anontaxable return of capital that would reduce the US
holder’s tax basis in the ANZ NOHC Shares or ANZ
NOHC ADSs, and would thereafter be treated as capitalgain, the tax treatment of which is discussed in section
8.5(c)(1)(B). Because it is not expected that ANZ NOHC
will maintain calculations of its earnings and profits
under United States federal income tax principles, it isexpected that all distributions will generally be reported
to US holders as dividends.

receive it. The dividend is taxable to the US holder when
the US holder, in the case of ANZ NOHC Shares, or the
Depositary, in the case of ANZ NOHC ADSs, receives thedividend, actually or constructively. Subject to certain
limitations and the following sentence, some of whichvary depending upon the US holder’s circumstances,
the Australian tax withheld and paid over to Australia
that is not eligible for an exemption from Australian
withholding tax (under the US-Australia tax treaty orotherwise) will be creditable or deductible against the
US holder’s federal income tax liability. However, underrecently finalized Treasury Regulations, it is possible thatsuch withholding taxes may not be creditable unless
the US holder is eligible to claim the benefits of the
US-Australia income tax treaty and elects to apply suchtreaty. Special rules apply in determining the foreign tax
credit limitation with respect to dividends that are
subject to the preferential tax rates. The rules governing
foreign tax credits are complex, and the US holder
should consult with their own independent tax adviser
regarding the creditability of foreign taxes based on
their particular circumstances.

Chairman’s letter(c) United States federal income tax
consequences of holding or disposing of ANZNOHC Shares or ANZ NOHC ADSs following
implementation of the Scheme

57

(c) PFIC considerations
ANZ NOHC does not expect to be a passive foreign
investment company (PFIC) for United States federal
income tax purposes, and therefore believes that ANZNOHC Shares or ANZ NOHC ADSs should not be treatedas stock of a PFIC, but this conclusion is a factual
determination made annually and thus may be subject
to change. In general, ANZ NOHC will be a PFIC withrespect to a US holder if, for any taxable year in which
the US holder holds ANZ NOHC Shares or ANZ NOHC
ADSs, either (i) at least 75% of the gross income of ANZNOHC for the taxable year is passive income or (ii) atleast 50% of the value, determined on the basis of aquarterly average, of ANZ NOHC’s assets is attributable
to assets that produce or are held for the production ofpassive income (including cash). If ANZ NOHC were to
be treated as a PFIC, gain realised on the sale or otherdisposition of ANZ NOHC Shares or ANZ NOHC ADSs
would in general not be treated as capital gain. Instead,the US holder would be treated as if the US holder had
realized such gain ratably over the US holder’s holding
period for the ANZ NOHC Shares or ANZ NOHC ADSs.
Amounts allocated to the year of disposition and toyears before ANZ NOHC became a PFIC would be taxed
as ordinary income and amounts allocated to eachother taxable year would be taxed at the highest tax
rate applicable to individuals or corporations, as
appropriate, in effect for each such year to which thegain was allocated, together with an interest charge inrespect of the tax attributable to each such year. Further,to the extent that a distribution received by a US holder
on their ANZ NOHC Shares or ANZ NOHC ADSs during asingle taxable year, other than the taxable year in which
the US holder’s holding period in their ANZ NOHC
Shares or ANZ NOHC ADSs began, exceeded 125% of
the average of the annual distributions on the ANZNOHC Shares or ANZ NOHC ADSs received during thepreceding three years or the US holder’s holding periodthat preceded the taxable year of the distribution,
whichever is shorter, the distribution would be subject
to taxation in the same manner as gain, described
immediately above. With certain exceptions, a US
holder’s ANZ NOHC Shares or ANZ NOHC ADSs will betreated as stock in a PFIC if ANZ NOHC was a PFIC at any
time during the US holder’s holding period for the ANZNOHC Shares or ANZ NOHC ADSs. In addition, dividends
that a US holder receives from ANZ NOHC would notconstitute qualified dividend income to such holder if
ANZ NOHC were a PFIC (or were treated as a PFIC withrespect to such holder) either in the taxable year of the
distribution or the preceding taxable year.
(d) Information with respect to foreign financial assets
A US holder that owns “specified foreign financial assets”
with an aggregate value in excess of US$50,000 (and insome circumstances, a higher threshold) may berequired to file an information report with respect tosuch assets with their tax returns. “Specified foreign
financial assets” may include any financial accounts
maintained by foreign financial institutions, as well as
the following, but only if they are held for investment
and not held in accounts maintained by financial
institutions: (i) stocks and securities issued by nonUnited States persons, (ii) financial instruments and58

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

contracts that have non-United States issuers or
counterparties, and (iii) interests in foreign entities.
Significant penalties may apply for failing to satisfy thisfiling requirement. ANZ NOHC Shares should qualify as
specified foreign financial assets unless held in accounts
maintained by financial institutions. US holders should
consult with their own independent tax advisers
regarding the application of this filing requirement totheir ownership of ANZ NOHC Shares or ANZ NOHC
ADSs based on their particular circumstances.

2. Non-US holders(a) Distributions
Dividends paid to a non-US holder in respect of ANZNOHC Shares or ANZ NOHC ADSs will not be subject toUnited States federal income tax unless the dividends
are “effectively connected” with the non-US holder’s
conduct of a trade or business within the United States,
and the dividends are attributable to a permanentestablishment that the non-US holder maintains in the
United States if that is required by an applicable income
tax treaty as a condition for subjecting the non-US
holder to United States taxation on a net income basis.
In such cases the non-US holder generally will be taxed
in the same manner as a US holder. For a corporate
non-US holder, “effectively connected” dividends may,under certain circumstances, be subject to an additional“branch profits tax” at a 30% rate or at a lower rate if thecorporate non-US holder is eligible for the benefits of an
income tax treat that provides for a lower rate.
(b) Sale or other disposition of ANZ NOHC Shares or
ANZ NOHC ADSs
A non-US holder will not be subject to United Statesfederal income tax on gain recognized on the sale orother disposition of their ANZ NOHC Shares or ANZ
NOHC ADSs unless:• the gain is “effectively connected” with the non-US
holder’s conduct of a trade or business in the UnitedStates, and the gain is attributable to a permanentestablishment that the non-US holder maintains in
the United States if that is required by an applicable
income tax treaty as a condition for subjecting thenon-US holder to United States taxation on a net
income basis, or• the non-US holder is an individual, is present in the
United States for 183 or more days in the taxable yearof the sale and certain other conditions exist.
For a non-US holder, “effectively connected” gains thatthe non-US holder recognises may also, under certain
circumstances, be subject to an additional “branch
profits tax” at a 30% rate or at a lower rate if the non-US
holder is eligible for the benefits of an income tax treaty
that provides for a lower rate.
(c) FATCA withholding
30% withholding may be imposed on certain payments
to certain non-United States financial institutions thatfail to comply with information collection and reporting
requirements, certification requirements, or any otherrelevant requirements in respect of their accountholders
that are tax resident in the United States (including

Contents
Section 4
Section 5
Section 6

ANZ NOHC Shareholders generally may obtaina refund of any amounts withheld under the backup
withholding rules that exceed their income tax liability
by filing a refund claim with the IRS.

Section 3
Section 7

In general, for a noncorporate US holder, ANZ NOHC
and other payors are required to report to the IRS all
payments of dividend payments or other taxable
distributions on the ANZ NOHC Shares or ANZ NOHC
ADSs within the United States, and any payment ofproceeds of the sale of the ANZ NOHC Shares or ANZ
NOHC ADSs effected at a United States office of abroker. Additionally, backup withholding would apply
to such payments if the US holder fails to provide an
accurate taxpayer identification number, or (in the caseof dividend payments) the US holder is notified by the
IRS that the US holder has failed to report all interestand dividends required to be shown on their UnitedStates federal income tax returns.

Section 2(d) Backup withholding and information reporting

In general, payment of the proceeds from the saleof ANZ NOHC Shares or ANZ NOHC ADSs effected
at a foreign office of a broker will not be subject toinformation reporting or backup withholding. However,a sale effected at a foreign office of a broker could be
subject to information reporting in the same manneras a sale within the United States (and in certain cases
may be subject to backup withholding as well) if (i) the
broker has certain connections to the United States,(ii) the proceeds or confirmation are sent to the UnitedStates or (iii) the sale has certain other specified
connections with the United States.

Section 1

Non-US holders should consult their own independenttax advisers and their banks or brokers regarding thepossibility of this withholding based on their particular
circumstances.

Non-US holders are generally exempt from backup
withholding and information reporting requirementswith respect to dividend payments made to non-US
holders outside the United States by ANZ NOHC oranother non-United States payor. Non-US holders arealso generally exempt from backup withholding andinformation reporting requirements in respect ofdividend payments made within the United States andthe payment of the proceeds from the sale of ANZNOHC Shares or ANZ NOHC ADSs effected at a UnitedStates office of a broker, as long as either (i) the payor or
broker does not have actual knowledge or reason toknow that the non-US holder is a United States person
and the non-US holder has furnished a valid IRS Form
W-8 or other documentation upon which the payor or
broker may rely to treat the payments as made to a
non-United States person, or (ii) the non-US holder
otherwise establishes an exemption.

Chairman’s letter

certain non-United States entities that are controlled byUnited States tax residents). Accountholders subject tosuch information collection/reporting or certification
requirements may include certain holders of ANZ NOHC
Shares or ANZ NOHC ADSs, and ANZ NOHC may berequired to withhold on a portion of any distribution
made under the ANZ NOHC Shares or ANZ NOHC ADSs.
In addition, ANZ NOHC may be required to withhold on
a portion of any distribution that is made to a non-US
financial institution that has not agreed to comply withthese information reporting requirements or has beenfound to be non-compliant in its execution of theobligations by the IRS. Such withholding may be
imposed at any point in a chain of payments if a payee
fails to comply with United States information collection,
reporting, certification and related requirements.
Accordingly, ANZ NOHC Shares or ANZ NOHC ADSs held
through a non-compliant institution may be subject towithholding even if the non-US holder otherwise would
not be subject to withholding. However, under proposed
US Treasury regulations, such withholding will not apply
to payments made before the date that is two years after
the date on which final regulations defining the term
“foreign passthru payment” are enacted.

Section 8
Section 9
Section 10
Annexures

59

SECTION

9ADDITIONAL
INFORMATION

Contents

As at the Last Practicable Date, the ANZ Directors have the following Relevant Interests in ANZ Shares and interests inother ANZ securities:
OTHER ANZ SECURITIESPaul O'Sullivan (Chairman)

4,350

9,250 ANZ Capital Notes 7

Shayne Elliott (CEO)522,083

453,727 performance rights

Ilana Atlas AO

15,318

Nil

Jane Halton AO PSM

9,653

Nil

Rt Hon Sir John Key GNZM AC

10,500

Nil

Graeme Liebelt

21,6712,500 ANZ Capital Notes 6

Section 2

NUMBER OF ANZ SHARES

Section 1

ANZ DIRECTOR

Chairman’s letter

9.1 INTERESTS HELD BY ANZ DIRECTORS

2,500 ANZ Capital Notes 7
19,0425,000 ANZ Capital Notes 3
2,140 ANZ Capital Notes 6

Section 3

John Macfarlane

2,000 ANZ Capital Notes 7
6,400

Nil

Jeff Smith

2,779

Nil

Unless prohibited by law, all instructions, notifications
and elections by a Scheme Shareholder to ANZ that arebinding between the Scheme Shareholder will be deemedfrom the Implementation Date to be made by the Scheme
Shareholder to ANZ NOHC in respect of the NOHC Sharesissued until that instruction, notification or election isrevoked or amended in writing addressed to ANZ NOHC at
the ANZ NOHC Share Registry. This includes instructions,notifications and elections relating to:• to continue the business and operations of the
ANZ Group;• to not make any major changes to the businessesof the ANZ Group, except as contemplated within this
Explanatory Memorandum; and• to continue the employment of employees of the
ANZ Group.

Section 9

ANZ Shareholders’ TFNs, ABNs any relevant exemption fromproviding a TFN will automatically transfer from ANZBGL to
ANZ NOHC unless an ANZ Shareholder notifies ANZ or the
ANZ Share Registry as described in section 8.2(f )(1).

Section 8• whether dividends are to be paid by cheque or intoa specific bank account;• payments of dividends on ANZ Shares, including
the currency in which dividends are to be paid;• participation in the ANZ DRP and BOP; and• personal details including for receipt of notices or othercommunications from ANZ (including by email).

Section 7

Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, the ANZ NOHC Directors
have indicated that it is their present intention following
the Restructure:

Section 6

9.3 ANZ SHAREHOLDER
ELECTIONS

Section 5

9.2 INTENTIONS OF ANZNOHC DIRECTORS

Section 4

Christine O'Reilly

Section 10
Annexures61

9.4 ANZ NOHC CONSTITUTION
This section 9.4 summarises the material differences between the existing ANZBGL constitution and the ANZNOHC constitution.
RELEVANT PROVISION IN THE
EXISTING ANZBGL CONSTITUTIONPROPOSED CHANGE IN THE
NEW ANZ NOHC CONSTITUTION

Terminology

Several amendments have been made in the ANZ NOHC
constitution to clarify terminology and definitions as well as
to adopt gender-neutral and modernised terminology.
For example, ‘chairman’ has been replaced by ‘chairperson’ andreferences to telegrams and facsimile have been removed.
Provisions have also been included to clarify processes forelectronic signing.

62

Definition of ‘Register’The definition of ‘Register’ has been amended to reflect the
Corporations Act definition of a register, removing references
to computerised or electronic sub-registers.

Definition of ‘Remuneration’The definition of ‘Remuneration’ has been amended to reflect
the ASX Listing Rules requirements that a non-executive
directors’ aggregate fee pool includes fees for acting as adirector of any subsidiary of the ANZ NOHC but excludes
securities issued to a director under the ASX Listing Rules(where approved by members).

Termination of appointment of Managing Director

The current ANZBGL constitution provides that a Managing
Director’s appointment will automatically end if they cease to
be a director. The ANZ NOHC constitution embeds additional
flexibility, providing the ability for the Board to decide that it
wishes to allow the Managing Director to continue
employment in an executive role even after they cease
to be a director.

Chairman's powers at a meeting of members

A new provision has been inserted to provide the chairpersonof a general meeting with the power to withdraw certain
resolutions that are not legally required to be put tothe meeting.

Admission to general meetings

Under the current ANZBGL constitution, the chairperson of ageneral meeting has the power to refuse to admit a person who
behaves or threatens to behave in a dangerous, offensive or
disruptive way. The ANZ NOHC constitution clarifies that thispower extends to a person who the chairperson has reasonablegrounds to believe may behave in such a way.

Member present at meeting

A new provision has been included to clarify that a person who
has lodged a Direct Vote is taken to be present at the meeting(ie, counts towards a quorum).

Deposit of proxy forms and powers of attorney

The current ANZBGL constitution requires proxy forms toprovide at least 48 hours before the meeting. The ANZ NOHC
constitution has embedded new flexibility to allow the Board
to determine that proxies may be lodged closer to the meeting
if appropriate.

Evidence of proxy forms, powers of attorney andother appointments

A new provision has been included which provides ANZ NOHC
with the power to clarify proxy instructions from a member, or
to ask a member to rectify errors in a proxy form.

Method of voting (poll or show of hands)

A new provision has been included so that any resolution
set out in the notice of meeting must be decided by poll
(in accordance with section 250JA of the Corporations Act).

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

Verification of instrument authenticity

A new clause has been inserted to enable ANZ NOHC to put inplace reasonable processes and procedures to determine theauthenticity of an instrument of transfer.

Restricted securities

The restricted securities provisions have been updated to reflect
amendments to the ASX Listing Rules, setting out conditions
that must be included in a constitution for restricted shares tobe issued (such as the use of a holding lock).

Non-marketable parcels

A new provision has been included to clarify that the Board
may, in certain circumstances, revoke a notice given in relation
to an unmarketable parcel.

Capitalization of profits

A new provision has been included to give the Board theexpress power to apply all or any part of a capitalised amount inany manner permitted by law, giving ANZ NOHC greater
flexibility.

Conversion to Australian dollars

The ANZBGL constitution currently provides that the Board
must set a time for determining the relevant exchange rate
before payment. The ANZ NOHC constitution now provides theBoard with additional flexibility for the relevant exchange rate to
be set at the time of payment (rather than having to fix an
exchange rate in advance).

A full copy of the ANZ NOHC constitution will be available on the ANZ website (anz.com.au).

Section 9

The ANZBGL constitution currently provides that the company
must not charge any fee on transfer of a share. This prohibition
has been qualified in the ANZ NOHC constitution, whereby afee may be charged if the company is not listed on the ASX, or
the fee is permitted by the ASX Listing Rules.

Section 8

Mode of transfer (of shares)

Section 7

A new provision has been included to allow ANZ NOHC toreinvest unclaimed dividends into shares in the company on
the member’s behalf (so that they do not become
unclaimed money).

Section 6

Reinvestment of unclaimed dividends

Section 5

New provisions have been included to clarify that dividends
may be paid by electronic payment. The new provisions providethat if an electronic transfer is rejected or refunded (or themember doesn’t have a registered address) ANZ NOHC may
credit the amount to a company account, to be held for theshareholder, and can be used for the benefit of the company
until claimed, reinvested for the shareholder, or otherwise
disposed of in accordance with the laws relating to
unclaimed money.

Section 4

Methods of payment (of dividends)

Section 3

A new provision has been included to clarify the record date inrespect of the payment of dividends will be the date fixed for
payment if not otherwise set by the Board.

Section 2

Payment of dividends

Section 1

PROPOSED CHANGE IN THE
NEW ANZ NOHC CONSTITUTION

Chairman’s letter

RELEVANT PROVISION IN THE
EXISTING ANZBGL CONSTITUTION

Section 10
Annexures639.5 ASX CORPORATE
GOVERNANCE COUNSEL’SCORPORATE GOVERNANCE
PRINCIPLES AND
RECOMMENDATIONSANZ NOHC is seeking a listing on the ASX. The ASX Corporate
Governance Council has developed the fourth edition of the
Corporate Governance Principles and Recommendations(ASX Recommendations) for entities listed on the ASX inorder to promote investor confidence and to assist
companies in meeting shareholder expectations.
Under the ASX Listing Rules, ANZ NOHC will be required
to provide a corporate governance statement in its annual
report disclosing the extent to which it has followed the
ASX Recommendations during the reporting period. Where
ANZ NOHC does not follow the ASX Recommendations,
it must identify the recommendation that has not been
followed and provide reasons for not following it.
ANZ NOHC intends to comply with all of the ASX
Recommendations from the time of its listing on the ASX.

9.6 IMPACT OF RESTRUCTURE
ON ANZ INCENTIVE PLANS
Under the ANZ Incentive Plans ANZ deferred shares,
deferred share rights, restricted shares, restricted rights andperformance rights (together, Equity Awards) may be
granted to select employees, including the Chief Executive
Officer, Group Executive Committee, other Banking
Executive Accountability Regime Accountable Executives
and other employees who receive variable remuneration
outcomes above a certain threshold or who receive Equity
Awards as part of an offer made to a specific employee,such as through a retention award or oncommencement with ANZ.
Deferred shares are offered and granted under the
ESAP (including broad based employee share offers andexecutive deferred short term incentive offers). Deferredshare rights and performance rights are offered andgranted under the ESOP.
Equity Awards granted to ANZ employees are subject totime-based deferral periods of generally between 1-5 years
after which time they vest (become available to trade).
Vesting of performance rights are subject to meeting
additional performance-based conditions.
The Equity Awards will vest if employees are employed by
the ANZ Group on the vesting date, subject to the specificconditions of grant under the ANZ Incentives Plans and
ANZ’s downward adjustment discretion. Where the Equity
Awards do not vest, they are forfeited and/or lapse.
The ANZ Equity Awards held by employees on the Scheme
Record Date will be replaced on implementation of the
Scheme with ANZ NOHC Equity Awards on a one for one
basis, and will continue to be governed by the relevant
plan rules and same offer terms.

64

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDThe Equity Awards and the ANZ Incentive Plans willcontinue to operate and apply after implementation of the
Scheme on substantially the same terms and conditions,
except that the incentive plans will be operated by ANZNOHC and provide interests in ANZ NOHC Shares.
Details on the tax treatment of the Equity Awards forAustralian eligible employees under the Restructure arein section 8.2(g).

9.7 PAYMENTS AND OTHER
BENEFITS AND AGREEMENTS
RELATING TO THE RESTRUCTURE
It is not proposed that any payment or other benefit will bemade or given to any ANZ Director, secretary or executive
office of ANZ or any body corporate related to ANZ as aconsequence of or in connection with the Restructure,including as compensation for loss of, or as considerationfor or in connection with, their retirement from office as
director, secretary or executive officer of ANZ or a body
corporate connected with ANZ as a consequence of or inconnection with the Restructure.

9.8 OTHER REGULATORY
WAIVERS, CONSENTS AND
EXEMPTIONS, INCLUDING IN
RELATION TO ANZ NOHC SHARES(a) ASIC
ASIC has granted relief from the disclosure requirementsthat would otherwise apply to this Explanatory
Memorandum under the Corporations Act with respect
to payments and benefits to directors and officers in
relation to their loss of office or retirement.
ASIC has granted relief from paragraph 8302(h) of Part 3 of
Schedule 8 of the Corporations Regulations, which requires
an explanatory statement to set out whether, within theknowledge of the ANZ Directors, the financial position of
ANZ has materially changed since the date of the lastbalance sheet laid before ANZ Shareholders in accordancewith section 314 or 317 of the Corporations Act, being
30 September 2021.
ASIC has also granted ANZ relief from this requirement sothat this Explanatory Memorandum only needs to set out
whether, within the knowledge of the ANZ Directors, thefinancial position of ANZ has materially changed since
31 March 2022 (being the last date of the period to which
the financial statements for the half year ended 31 March2022 relate) and, if so, full particulars of any change.

Contents(c) New Zealand
The FMA has provided a discretionary exemption to ANZNOHC under section 556 of the Financial Markets Conduct
Act 2013 (New Zealand) (FMCA). This exempts ANZ NOHC
from the provisions in Part 3 of the FMCA in respect of the
ANZ NOHC Shares to be issued under the Scheme.

Cook Islands

Fiji

Section 10
Annexures• to persons who are "qualified investors" (as defined in
Article 2(e) of the Prospectus Regulation);• to fewer than 150 other natural or legal persons; and• in any other circumstance falling within Article 1(4) of
the Prospectus Regulation.

Section 9

In accordance with Article 1(4) of the Prospectus
Regulation, an offer of ANZ NOHC Shares in eachmember state of the European Union is limited:

Section 8

This Explanatory Memorandum is not a prospectus under
Regulation (EU) 2017/1129 of the European Parliament
and the Council of the European Union (the "Prospectus
Regulation"). Therefore, the Explanatory Memorandum has
not been, and will not be, registered with or approved by any
securities regulator or supervisory authority in the European
Union. Accordingly, this Explanatory Memorandum may not
be made available, nor may ANZ NOHC Shares be offered
for sale or exchange, in the European Union except incircumstances that do not require the obligation to publish
a prospectus under the Prospectus Regulation.

Section 7

European Union

Section 6

This Explanatory Memorandum is not, and will not be,registered as a prospectus or offer document under theCompanies Act of Fiji. No action has been taken in Fiji toauthorise or register this Explanatory Memorandum or topermit the distribution of this Explanatory Memorandum
or any documents issued in connection with it. This
Explanatory Memorandum does not constitute a public
offer of “securities” as determined by reference to Fiji’sCompanies Act 2015.

Section 5

ASX has confirmed, based solely on the information provided
by ANZ, that ASX would likely do each of the following:

Section 4(b) ASXThe contents of this Explanatory Memorandum have notbeen reviewed by any Cook Islands regulatory authority.
You should exercise caution in relation to the offer. If you
are in doubt about any of the contents of this Explanatory
Memorandum or your regulatory obligations, you should
obtain independent professional advice.

• grant a waiver from Listing Rule 1.1 conditions 9, and
20 to permit ANZ NOHC to be admitted to the official list
without having to meet certain requirements (subject tocertain conditions);• accept that ANZ NOHC may use an information
memorandum instead of a prospectus for the purposesof satisfying Listing Rule 1.1 condition 3 (on condition
that the information memorandum complies with therequirements of Listing Rule 1.4.1);• grant a waiver from Listing Rule 1.4.1 to the extent
necessary to permit the ANZ NOHC information
memorandum not to state that it contains all theinformation required under section 710 of the
Corporations Act (subject to certain conditions);• confirm that the ANZ NOHC constitution complies
with the requirements of Listing Rule 1.1 condition 2;• confirm that items 12 to 18, 22, 23, 34, 35, 36, 44 and 45of the Information Form and Checklist (Appendix 1A) are
not required as part of the admission of ANZ NOHC;• confirm that Listing Rules 7.1 and 10.11, 11.1, 10.1 and11.4 do not apply to the Restructure;• grant certain waivers in respect of certain matters relating
to ANZ equity incentives;• confirm that ANZBGL’s listing may continue as a debt
listing following implementation of the Scheme andconfirm the change in listing status of ANZBGL to a debt
listing does not affect the status of the existing waivers
and confirmations granted to ANZBGL in connection
with previous issues of ANZ Capital Notes and thosewaivers and confirmations will be replicatedto ANZ NOHC;• confirm that the amendments to ANZ Capital Notes
are appropriate and equitable for the purposes of
Listing Rule 6.1.

Section 3

This Explanatory Memorandum does not constitute an offer
of ANZ NOHC Shares in any jurisdiction in which it would be
unlawful. In particular, this Explanatory Memorandum may
not be distributed to any person, and the ANZ NOHC Shares
may not be offered or sold, in any country outside Australia
except to the extent provided below.

Section 2

9.9 FOREIGN DISCLAIMERS

Section 1• relief from section 710 of the Corporations Act to allow
ANZ NOHC to rely on an alternative disclosure test on thebasis that references to “continuously quoted securities” in
Chapter 6D are taken to permit the continuous disclosureof ANZ Shares to be included in the calculation of the
3 month period for the purposes of section 713(1) of
the Corporations Act;• relief from section 707(3) of the Corporations Act toallow ANZ NOHC Shareholders to offer any or all of their
ANZ NOHC Shares for sale without disclosure to investorsin accordance with Chapter 6D.2 of the Corporations Act,
where that sale will occur within 12 months after the
Implementation Date;• a modification of section 708(13)(a) so that this section
will apply to the ANZ NOHC DRP in circumstances where
there has been a transfer of any residual balances in theaccounts of participants in the ANZ DRP to thoseparticipants’ respective accounts under the
ANZ NOHC DRP;
• an indication that certain relief will be provided inrelation to the treatment and issue of securities underthe ANZ Incentive Plans; and• an indication that certain existing relief granted to
ANZ by ASIC (that is required by ANZ NOHC) will be
replicated to ANZ NOHC.

• confirm that a concessional list fee will apply to
ANZ NOHC’s admission to the official list; and• confirm that ASX has no objection the Scheme
timetable .

Chairman’s letter

In addition, ASIC has provided:

65

Hong Kong

Indonesia

WARNING: The contents of this Explanatory Memorandum
have not been reviewed or approved by any regulatory
authority in Hong Kong. You are advised to exercise caution
in relation to the Scheme. If you are in any doubt about anyof the contents of this Explanatory Memorandum, you
should obtain independent professional advice.

A registration statement with respect to the NOHC Shares
has not been, and will not be, filed with Otoritas Jasa
Keuangan in the Republic of Indonesia. Therefore, theNOHC Shares may not be offered or sold to the public in
Indonesia. Neither this Explanatory Memorandum nor any
other document relating to the Scheme may be circulated
or distributed, whether directly or indirectly, in the Republicof Indonesia or to Indonesian citizens, corporations orresidents, except in a manner that will not be considered
as a “public offer” under the law and regulations of the
Republic of Indonesia.

This Explanatory Memorandum does not constitute anoffer or invitation to the public in Hong Kong to acquire or
subscribe for or dispose of any securities. This Explanatory
Memorandum also does not constitute a prospectus (asdefined in section 2(1) of the Companies (Winding Up andMiscellaneous Provisions) Ordinance (Cap. 32 of the Laws ofHong Kong)) or notice, circular, brochure or advertisement
offering any securities to the public for subscription orpurchase or calculated to invite such offers by the public
to subscribe for or purchase any securities, nor is it anadvertisement, invitation or document containing anadvertisement or invitation falling within the meaningof section 103 of the Securities and Futures Ordinance(Cap. 571 of the Laws of Hong Kong).
Accordingly, unless permitted by the securities laws ofHong Kong, no person may issue or cause to be issued this
Explanatory Memorandum in Hong Kong, other than topersons who are “professional investors” (as defined in the
Securities and Futures Ordinance and any rules madethereunder) or in other circumstances that do not constitutean offer to the public within the meaning of the Companies(Winding Up and Miscellaneous Provisions) Ordinance.
No person may issue or have in its possession for the
purposes of issue, this Explanatory Memorandum or any
advertisement, invitation or document relating to thesesecurities, whether in Hong Kong or elsewhere, which is
directed at, or the contents of which are likely to beaccessed or read by, the public in Hong Kong (except if
permitted to do so under the securities laws of Hong Kong)other than any such advertisement, invitation or document
relating to securities that are or are intended to be disposedof only to persons outside Hong Kong or only to
professional investors.
Copies of this Explanatory Memorandum may be issued toa limited number of persons in Hong Kong in a manner that
does not constitute any issue, circulation or distribution ofthis Explanatory Memorandum, or any offer or an invitationin respect of these securities, to the public in Hong Kong.
This Explanatory Memorandum is for the exclusive use of
ANZ Shareholders in connection with the Scheme. No steps
have been taken to register or seek authorisation for theissue of this Explanatory Memorandum in Hong Kong.
This Explanatory Memorandum is confidential to theperson to whom it is addressed and no person to whom acopy of this Explanatory Memorandum is issued may issue,
circulate, distribute, publish, reproduce or disclose (in whole
or in part) this Explanatory Memorandum to any otherperson in Hong Kong or use for any purpose in Hong Kongother than in connection with consideration of the Schemeby ANZ Shareholders.

66

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDJapan
The NOHC Shares have not been, and will not be, registeredunder Article 4, paragraph 1 of the Financial Instruments andExchange Law of Japan (Law No. 25 of 1948), as amended(the “FIEL”) pursuant to an exemption from the registration
requirements applicable to a private placement of securities
to small number investors. This Explanatory Memorandum isfor the exclusive use of employee shareholders of ANZBGL inconnection with the Scheme. This document is confidential
to the person to whom it is addressed and must not be
distributed, published, reproduced or disclosed (in whole orin part) to any other person in Japan or resident of Japanother than in connection with consideration by ANZBGL’sshareholders of the Scheme.

Korea
Neither ANZBGL nor ANZ NOHC are making any
representation with respect to the eligibility of any
recipients of this Explanatory Memorandum to acquire
ANZ NOHC Shares under the laws of the Republic of Korea,
including the Foreign Exchange Transaction Act andregulations thereunder. ANZ NOHC Shares have not been,
and will not be, registered under the Financial Investment
Services and Capital Markets Act of Korea (“FSCMA”) andtherefore may not be offered or sold in Korea or to any
resident of Korea or to any persons for re-offering or resalein Korea or to any resident of Korea (as defined under theForeign Exchange Transaction Act of Korea and its
enforcement decree), except as permitted under theapplicable laws and regulations of Korea.
Accordingly, ANZ NOHC Shares may not be offered or soldin Korea other than (i) to “accredited investors” (as definedin the FSCMA) or (ii) in other circumstances that do notconstitute an offer to the public within the meaning of
the FSCMA.

Malaysia
No approval from, or recognition by, the Securities
Commission of Malaysia has been, or will be, obtained inrelation to any offer of ANZ NOHC Shares. ANZ NOHC
Shares may not be issued or transferred in Malaysia except
to persons who are shareholders of ANZBGL in compliancewith the Scheme.

Contents

Samoa

Section 10
AnnexuresThis Explanatory Memorandum is being furnished to you on
a confidential basis and solely for your information and may

In the United Kingdom, this Explanatory Memorandum isbeing distributed only to, and is directed at, persons (i) who
fall within Article 43 (members of certain bodies corporate)of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2005, or (ii) to whom it may otherwise be
lawfully communicated (together “relevant persons”). The
investments to which this Explanatory Memorandum
relates are available only to, and any invitation, offer oragreement to purchase will be engaged in only with,
relevant persons. Any person who is not a relevant person
should not act or rely on this Explanatory Memorandum.

Section 9

Any offer is not made to you with a view to ANZ NOHC
Shares being subsequently offered for sale to any otherparty in Singapore. You are advised to acquaint yourself
with the SFA provisions relating to on-sale restrictions in
Singapore and comply accordingly.

Any invitation or inducement to engage in investment
activity (within the meaning of section 21 FSMA) received inconnection with the issue or sale of the ANZ NOHC Shares
has only been communicated or caused to becommunicated and will only be communicated or caused tobe communicated in the United Kingdom in circumstancesin which section 21(1) FSMA does not apply to ANZBGL.

Section 8

This Explanatory Memorandum and any other document
relating to the Scheme may not be made the subject of aninvitation for subscription, purchase or receipt, whether
directly or indirectly, to persons in Singapore except
pursuant to exemptions in Subdivision (4) Division 1, Part 13of the SFA, including the exemption under section 273(1)(c)of the SFA, or otherwise pursuant to, and in accordancewith the conditions of, any other applicable provisionsof the SFA.

This Explanatory Memorandum does not constitute an offer
of transferable securities to the public within the meaningof the UK Prospectus Regulation or the FSMA. Accordingly,
this Explanatory Memorandum does not constitute a
prospectus for the purposes of the Prospectus Regulationor the FSMA.

Section 7

This Explanatory Memorandum and any other document
relating to the Scheme have not been, and will not be,registered as a prospectus with the Monetary Authority ofSingapore and the Scheme is not regulated by any financial
supervisory authority in Singapore. Accordingly, statutory
liabilities in connection with the contents of prospectuses
under the Securities and Futures Act 2001 (the "SFA") will
not apply.

Neither Explanatory Memorandum nor any other document
relating to the Scheme has been delivered for approval to
the Financial Conduct Authority in the United Kingdom andno prospectus (within the meaning of section 85 of the
Financial Services and Markets Act 2000, as amended(“FSMA”)) has been published or is intended to be publishedin respect of the ANZ NOHC Shares.

Section 6

Singapore

United Kingdom

Section 5

An offer of ANZ NOHC Shares in Samoa does not constitutean offer of securities to the public in Samoa. In accordancewith section 8(3)(b)(ii) of the Securities Act 2006, an offer of
ANZ NOHC Shares in Samoa is limited to persons in Samoa
who in all the circumstances can properly be regarded ashaving been selected otherwise than as members of
the public.

Section 4

ANZ NOHC Shares may be issued only to existing
shareholders of ANZBGL in an exempt transaction.

The Scheme does not constitute a public offering of
securities under the Taiwan Securities and Exchange Act.
This Explanatory Memorandum has not been, and will not
be, registered or filed with, or approved by, the Financial
Supervisory Commission of Taiwan or other regulatory
institution under the securities laws of Taiwan. ANZ NOHC
Shares may not be offered or sold in Taiwan in any
circumstance that would constitute an offer to the public
under the Securities and Exchange Act. This Explanatory
Memorandum may be distributed in Taiwan only to existing
ANZBGL shareholders. No person or entity in Taiwan has
been authorized to offer, market or sell or ANZ NOHC Sharesin Taiwan.

Section 3

The securities being offered or sold have not been registeredwith the Philippine securities and exchange commission("sec") under the philippine securities regulation code(the "code"). Any future offer or sale thereof is subject toregistration requirements under the code unless suchoffer or sale qualifies as an exempt transaction.

TaiwanSection 2

Philippines

Neither ANZBGL nor ANZ NOHC is in the business ofdealing in securities or holds itself out, or purports to holditself out, to be doing so. As such, ANZBGL and ANZ NOHC
are neither licensed nor exempted from dealing in securities
or carrying out any other regulated activities under the SFA
or any other applicable legislation in Singapore.

Section 1

This Explanatory Memorandum is not a New Zealanddisclosure document and has not been registered, filedwith or approved by any New Zealand regulatory authority
under or in accordance with the FMCA or any other
New Zealand law. The offer of ANZ NOHC Shares under the
Scheme is being made to existing shareholders of ANZBGLin reliance upon an exemption under section 556 of the
FMCA which exempts ANZ NOHC from the disclosure
requirements in Part 3 of the FMCA. Accordingly, this
Explanatory Memorandum may not contain all theinformation that a disclosure document is required tocontain under New Zealand law.

not be reproduced, disclosed, or distributed to any otherperson. Any investment referred to in this Explanatory
Memorandum may not be suitable for you and it isrecommended that you consult an independent investment
advisor if you are in doubt about such investment.

Chairman’s letter

New Zealand67

United States
No registration
The ANZ NOHC Shares to be issued pursuant to the
Scheme, including any ANZ NOHC Shares represented by
ANZ NOHC ADSs, have not been and will not be registeredunder the US Securities Act or the securities laws of any
state or other jurisdiction of the United States. The ANZNOHC Shares and ANZ NOHC Shares ADSs will be issued inreliance on the exemption from the registration
requirements of the US Securities Act provided by Section
3(a)(10) thereof on the basis of the approval of an Australian
court, which will consider, among other things, the fairnessof the terms and conditions of the Scheme to ANZ
Shareholders. For the purposes of qualifying for the
exemption from the registration requirements of the US
Securities Act afforded by Section 3(a)(10) of the US
Securities Act, the Australian court will be advised that its
approval of the Scheme will be relied upon by ANZBGL and
ANZ NOHC as an approval of the Scheme following ahearing on the fairness of the terms and conditions of the
Scheme to ANZ Shareholders at which hearing all ANZ
Shareholders are entitled to attend in person or throughtheir duly appointed proxies or through counsel to support
or oppose the approval of the Scheme and with respect towhich notification has been given to all ANZ Shareholders.
None of the United States securities and exchangecommission nor any state securities commission in theunited states or any other us regulatory authority has
approved or disapproved of the securities issuable pursuant
to the scheme, or passed upon the accuracy or adequacy ofthis explanatory memorandum. Any representation to thecontrary is a criminal offence.

Transfer restrictions
The ANZ NOHC Shares, including any ANZ NOHC Shares
represented by ANZ NOHC ADSs, to be issued pursuant to
Section 3(a)(10) of the US Securities Act generally should not
be treated as ‘restricted securities’ within the meaning of Rule144(a)(3) under the US Securities Act and persons who
receive ANZ NOHC Shares under the Scheme (including ANZNOHC Shares represented by ANZ NOHC ADSs) may resell
them without restriction under the US Securities Act, otherthan any holder of ANZ NOHC Shares who may be deemedan ‘affiliate’ of ANZ NOHC post completion of the Restructure
for purposes of Rule 144 under the US Securities Act.
Under US securities laws, persons who are or will bedeemed to be affiliates (as defined under the US Securities
Act) of ANZBGL prior to or after the Implementation Date
may be subject to timing, manner of sale and volume
restrictions on the resale in the United States of ANZ NOHC
Shares (including ANZ NOHC Shares represented by ANZNOHC ADSs) received in connection with the Scheme.
Whether a person is an ‘affiliate’ of a company for such
purposes depends upon the circumstances, but an affiliate
of a company is any person that directly or indirectly
controls, or is controlled by, or is under common control
with, the issuer, which is generally interpreted to include
the directors and senior officers of the issuer. The US
Securities Act would not generally restrict sale of ANZ

68

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDNOHC Shares (including ANZ NOHC Shares represented by
ANZ NOHC ADSs) on the ASX provided that the sale has notbeen pre-arranged with a buyer in the United States. ANZ
Shareholders (including those persons who become ANZNOHC Shareholders pursuant to the Scheme) who believe
they may be affiliates of ANZBGL for the purposes of the US
Securities Act should consult their own legal advisers.

Disclosure considerations
The Scheme is expected to be effected by means of ascheme of arrangement pursuant to laws of Australia
and is not subject to the tender offer rules or other proxyrequirements of section 14(a) under the US Exchange Act .
This Explanatory Memorandum has been prepared inaccordance with disclosure requirements under applicablelaws of Australia. Shareholders in the United States should
be aware that these requirements may be different fromthose of the United States.
You should be aware that ANZ NOHC may purchasesecurities otherwise than under the Scheme, such as inopen market or privately negotiated purchases.
Any financial statements or other financial information
included or referenced in this Explanatory Memorandum
have been prepared and presented in accordance with therecognition and measurement principles prescribed in theAustralian Accounting Standards (AAS) issued by theAustralian Accounting Standards Board (AASB), which
are consistent with the International Financial ReportingStandards (IFRS), and thus may not be comparable to thefinancial statements and information of US companies orcompanies whose financial statements are prepared inaccordance with generally accepted accounting principles
in the US. The pro-forma financial information included inthis document does not purport to be in compliance with
Article 11 of Regulation S-X of the rules and regulationsof the SEC.

Enforcement of civil liabilities
It may be difficult for you to enforce your rights and any
claim you may have arising under US federal securities laws
since ANZBGL and ANZ NOHC are located in Australia andmost of their respective officers and directors reside outside
the United States. You may not be able to sue ANZBGL, ANZNOHC or their respective officers or directors in Australia forviolations of the US securities laws. It may be difficult tocompel ANZBGL and its affiliates to subject themselves
to a US court's judgment.

VanuatuThis Explanatory Memorandum is not, and will not be,registered as a prospectus or offer document under theCompanies Act No. 25 of 2012 (the “Act”). No action has
been taken in Vanuatu to authorise or register this
Explanatory Memorandum or to permit the distribution ofthis Explanatory Memorandum or any documents issued inconnection with it. This Explanatory Memorandum does notconstitute a public offer of “securities” as determined byreference to the Act.

Contents

The ANZ Directors believe that the Scheme does not
involve any circumstances in relation to the affairs of ANZ
that could reasonably be characterised as constituting‘unacceptable circumstances’ for the purposes of section
657A of the Corporations Act.

This Explanatory Memorandum contains statements madeby, or statements said to be based on statements made by:

9.11 NO OTHER MATERIAL
INFORMATION

which has not previously been disclosed to ANZ
Shareholders.

• has not authorised or caused the issue of this
Explanatory Memorandum;• does not make, or purport to make, any statement inthis Explanatory Memorandum or any statement on
which a statement in this Explanatory Memorandum isbased, other than:− Grant Samuel & Associates Pty Limited in relation
to its Independent Expert’s Report; and− KPMG Transaction Services (a division of KPMG
Financial Advisory Services (Australia) Pty Ltd) in
relation to its Investigating Accountant’s Report.

Section 9• to the maximum extent permitted by law, expressly
disclaims all liability in respect of, makes norepresentation regarding, and takes no responsibility for,any part of this Explanatory Memorandum other than areference to its name and the statement (if any) includedin this Explanatory Memorandum with the consent ofthat party as specified in this section 9.13(b).

Section 8• making an announcement to the ASX and NZX;
• placing an advertisement in a prominently publishednewspaper which is circulated generally throughout
Australia;• posting the supplementary document to ANZ
Shareholders at their address shown on the ANZ Share
Register; and/or• posting a statement on ANZ’s website at anz.com.au,

Each person named in section 9.13(a):Section 7

Depending on the nature and timing of the changed
circumstances, and subject to obtaining any relevant
approvals, ANZ may circulate and publish any
supplementary document by:(b) Disclosures and responsibility
Section 6• a material statement in this Explanatory Memorandum
is false or misleading in a material respect;• a material omission from this Explanatory Memorandum;• a significant change affecting a matter included in this
Explanatory Memorandum; or• a significant new matter has arisen and it would havebeen required to be included in this Explanatory
Memorandum if it had arisen before the date of this
Explanatory Memorandum.

• Herbert Smith Freehills as legal adviser to the ANZ Group;• Computershare Investor Services Pty Limited as the ANZ
Share Registry; and• King & Wood Mallesons as Australian taxation adviser.

Section 5

ANZ will issue a supplementary document to this
Explanatory Memorandum if it becomes aware of anyof the following between the date of this Explanatory
Memorandum and the Second Court Date:

The following parties have given and have not, before thetime of registration of this Explanatory Memorandum with
ASIC, withdrawn their consent to be named in this
Explanatory Memorandum in the form and context inwhich they are named:

Section 4

9.12 SUPPLEMENTARYDISCLOSURE

Each of those persons named above has consented to theinclusion of each statement it has made in the form andcontext in which the statements appear and has notwithdrawn that consent at the date of this Explanatory
Memorandum.

Section 3• material to the making of a decision by an ANZ
Shareholder whether or not to vote in favour of the
Scheme Resolution; and• known to any ANZ Director at the Last Practicable Date,• Grant Samuel & Associates Pty Limited as the
Independent Expert;• KPMG Transaction Services (a division of KPMG Financial
Advisory Services (Australia) Pty Ltd) as the Investigating
Accountant; and• KPMG, an Australian partnership and a member firm of
the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private
English company limited by guarantee, as auditor to ANZ.

Section 2

Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, so far as the ANZ Directors
are aware, there is no other information that is:(a) Consents

Section 1

9.13 CONSENTS AND DISCLOSURES

Chairman’s letter

9.10 NO UNACCEPTABLECIRCUMSTANCES

as ANZ, in its absolute discretion, considers appropriate.
Section 10
Annexures

69

SECTION10GLOSSARYContents

In this Explanatory Memorandum, unless the context otherwise appears, the following terms have the meanings shown below:

Australian Credit Licence.

ADI

an authorised deposit-taking institution licensed under the Banking Act.

ADR

American Depositary Receipts.

ADS Holders

holders of ADSs.

ADSs

American Depositary Shares, including the ANZ ADSs and the ANZ NOHC ADSs,
as applicable, and ADS means any one of them.

AFSL

Australian Financial Services Licence.

ANZ

ANZBGL or the ANZ NOHC, as the context requires.

ANZ ADS
Deposit Agreement

the amended and restated deposit agreement dated 11 December 2018, by and among
ANZBGL, the ANZ ADS Depositary, and the ANZ ADS Holders.

ANZ ADS Depositary

The Bank of New York Mellon, the depositary under ANZ’s ADR program.

ANZ ADS Holders

owners and holders of ADSs representing ANZBGL Shares.

ANZ ADSs

ADSs representing ANZBGL Shares (each an ANZ ADS), each ANZ ADS representing one ANZ
Share. The terms and conditions of the ANZ ADSs are set forth in the ANZ ADS Deposit
Agreement.

ANZ Bank HoldCo

ANZ BH Pty Ltd ACN 658 939 952, a non-operating intermediate holding company to beowned by ANZ NOHC and which will own the ANZ Bank Group subsidiaries (including
ANZBGL and ANZ NZ).

ANZ Bank Group

all businesses and entities owned by ANZ Bank HoldCo, including ANZBGL and ANZ NZ.

ANZBGL

Australia and New Zealand Banking Group Limited ACN 005 357 522.

ANZBGL GroupANZBGL and each of its subsidiaries.

ANZ Boardthe board of directors of ANZBGL.

ANZ Capital Notes

ANZ Capital Notes 3, ANZ Capital Notes 4, ANZ Capital Notes 5, ANZ Capital Notes 6 and
ANZ Capital Notes 7.

ANZ Capital Notes 3

the fully paid convertible notes issued by ANZBGL acting through its New Zealand branch undera prospectus dated 5 February 2015 (which replaced a prospectus dated 23 January 2015).

ANZ Capital Notes 4

the fully paid convertible notes issued by ANZBGL under a prospectus dated 24 August 2016
(which replaced a prospectus dated 16 August 2016).

ANZ Capital Notes 5

the fully paid convertible notes issued by ANZBGL under a prospectus dated 24 August 2017
(which replaced a prospectus dated 16 August 2017).

ANZ Capital Notes 6

the fully paid convertible notes issued by ANZBGL under a prospectus dated 9 June 2021
(which replaced a prospectus dated 1 June 2021).

ANZ Capital Notes 7

the fully paid convertible notes issued by ANZBGL under a prospectus dated 23 February
2022 (which replaced a prospectus dated 15 February 2022).

Annexures

ACL

Section 10

Australian Business Number.

Section 9

ABN

Section 8

Australian Accounting Standards issued by the Australian Accounting Standards Board.

Section 7

AAS

Section 6

The Wallis Report on the Australian Financial System: Summary and Critique dated
23 June 1997.

Section 5

1997 Wallis Review

Section 4

1835i Creation Fund 1 Trust, 1835i Ventures Trust I, 1835i Ventures I Trust II and
1835i Ventures Trust III.

Section 3

1835i

Section 2

MEANING

Section 1

TERM

Chairman’s letter10.1 DEFINITIONS

71

72

TERM

MEANINGANZ Centre

ANZ Centre Pty Ltd ACN 158 546 528.

ANZ Centre Chattels Trust

the ANZ Centre Chattels Trust, which owns the leasehold improvements, furniture andequipment for 833 Collins Street, Docklands VIC 3008.

ANZ Centre Trust

the ANZ Centre Trust, which owns 833 Collins Street, Docklands VIC 3008.

ANZ Cover

ANZcover Insurance Private Ltd.

ANZ Director

a member of the ANZ Board.

ANZ DRP

the ANZBGL dividend reinvestment plan.

ANZ Group

the ANZBGL Group or the ANZ NOHC Group as a whole (including all businesses), as thecontext requires.

ANZ Incentive Plans

ANZ employee incentive plans under which employees are offered Equity Awards, including
the ESAP and ESOP.

ANZ Lenders Mortgage

ANZ Lenders Mortgage Insurance Pty. Limited ACN 008 680 055.

ANZ NOHCANZ Group Holdings Limited ACN 659 510 791.

ANZ NOHC
Deposit Agreement

the deposit agreement to be entered into by and among ANZ NOHC, the ANZ ADS
Depositary, and the ANZ ADS Holders, governing the terms of the ANZ NOHC ADSs.

ANZ NOHC ADS
Depositary

The Bank of New York Mellon, the depositary under ANZ NOHC’s ADR program.

ANZ NOHC ADS Holders

owners and holders of ADSs representing ANZ NOHC Shares.

ANZ NOHC ADSs

ADSs representing ANZ NOHC Shares (each an ANZ NOHC ADS), each ANZ NOHC ADS
representing one ANZ NOHC Share. The terms and conditions of the ANZ NOHC ADSs areset forth in the ANZ NOHC ADS Deposit Agreement.

ANZ NOHC DRP

the ANZ NOHC dividend reinvestment plan.

ANZ NOHC Group

all businesses owned or controlled by the ANZ NOHC after the Restructure(including ANZ Bank HoldCo, ANZBGL, ANZ ServiceCo and ANZ Non-Bank HoldCo).

ANZ NOHC Sharea fully paid ordinary share in the capital of ANZ NOHC.

ANZ NOHC Share Registry

Computershare Investor Services Pty Limited ACN 078 279 277.

ANZ Non-Bank GroupANZ ServiceCo and all businesses and entities owned by ANZ Non-Bank HoldCo, including
ANZ’s beneficial interests in the 1835i trusts, non-controlling interest in the Worldline
merchant acquiring joint venture, and equity interests in Lygon, TIN and Pollination.

ANZ Non-Bank HoldCo

ANZ NBH Pty Ltd ACN 658 941 096, a non-operating intermediate holding company to beowned by ANZ NOHC and which will own certain non-banking subsidiaries.

ANZ NZANZ Bank New Zealand Limited.

ANZ Perpetual
Subordinated Contingent
Convertible Securities

the 6.75% fixed rate resetting perpetual subordinated contingent convertible securities
issued by ANZBGL’s London Branch on 15 June 2016.

ANZ Regulatory Capital
Securities

ANZ Capital Notes, ANZ Perpetual Subordinated Contingent Convertible Securities and theTier 2 debt securities issued by ANZBGL to wholesale investors under its debt programmes.

ANZ RMBS

residential mortgage backed securities issued by the trustee of a securitisation trust
established under ANZBGL's Kingfisher programme.

ANZ Senior Notes

the debt securities issued by ANZBGL (other than ANZ Regulatory Capital Securities),
including covered bonds and senior bonds.

ANZ ServiceCo

ANZ Group Services Pty Ltd ACN 658 940 900.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

each person who is registered as the holder of an ANZ Share in the ANZ Share Register.

APRA

the Australian Prudential Regulation Authority.

ASIC

the Australian Securities and Investments Commission.

ASX

ASX Limited ABN 98 008 624 691 and, where the context requires, the financial market
that it operates.

ASX Listing Rules

the official Listing Rules of the ASX.

ATO

the Australian Taxation Office.

Banking Act

the Banking Act 1959 (Cth).

BOP

Bonus Option Plan.

Business Day

a day that is not a Saturday, Sunday, public holiday or bank holiday in Melbourne, Australia.

Business Restructure

the restructure to be undertaken following implementation of the Scheme, as described in
section 4.4(b).

CHESS

the Clearing House Electronic Subregister System operated by ASX Settlement Pty Ltd and
ASX Clear Pty Limited.

Class Rulinghas the meaning given in section 8.2(b).

Conditions Precedenteach of the conditions to the Scheme set out in clause 3.1 of the Restructure
Implementation Deed.

Corporations Act

the Corporations Act 2001 (Cth).

Corporations Regulations

the Corporations Regulations 2001 (Cth).

Court

the Federal Court of Australia, Victoria Registry, or such other court of competent jurisdiction
under the Corporations Act determined by ANZ.

Effective

when used in relation to the Scheme, the coming into effect, under subsection 411(10) of the
Corporations Act, of the Court order made under paragraph 411(4)(b) of the Corporations Act
in relation to the Scheme.

Effective Datethe date on which the Scheme becomes Effective, currently expected to be
23 December 2022.

Eligible Foreign
Jurisdiction

is expected to include:a Scheme Shareholder who is not an Ineligible Foreign Shareholder and, for the avoidanceof doubt, the Sale Agent.

Equity Awards

has the meaning given in section 9.6.

ESAP

the ANZ Employee Share Acquisition Plan.

Annexures

Eligible Shareholder

Section 10

2. in the case of Scheme Shareholders who are an ANZ employee as at the Scheme Record
Date, those jurisdictions listed in 1 above and Indonesia and Japan, noting that ANZ maychange these jurisdictions on the basis that ANZ determines that it is not lawful or unduly
onerous or impracticable to issue ANZ NOHC Shares in a particular jurisdiction when the
Scheme becomes Effective.

Section 9

1. China, Cook Islands, Fiji, France, Germany, Hong Kong, India, Korea, Malaysia, Papua
New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, the United States(including American Samoa and Guam) and Vanuatu; andSection 8

ANZ Shareholder

Section 7

Computershare Investor Services Pty Limited ACN 078 279 277.

Section 6

ANZ Share Registry

Section 5

the register of members of ANZBGL maintained in accordance with the Corporations Act.

Section 4

ANZ Share Register

Section 3

a fully paid ordinary share in the capital of ANZBGL.

Section 2

ANZ Share

Section 1

MEANING

Chairman’s letter

TERM

73

74

TERM

MEANING

ESOP

the ANZ Employee Share Option Plan.

Explanatory
Memorandum

this document being the explanatory statement in respect of the Scheme, which has been
prepared by ANZBGL in accordance with section 412 of the Corporations Act.

First Court Hearing

the first day on which an application made to the Court for an order under section 411(1)of the Corporations Act convening the Scheme Meeting is heard.

FMA

the Financial Markets Authority (New Zealand).

FSSA

the Financial Sector (Shareholdings) Act 1998 (Cth).

Government Agency

any foreign or Australian government or governmental, semi-governmental, administrative,
fiscal or judicial body, department, commission, authority, tribunal, agency or entity(including any stock or other securities exchange), or any minister of the Crown in right of theCommonwealth of Australia or any state, or any other federal, state, provincial, local or othergovernment, whether foreign or Australian.

GST

goods and services tax or similar value added tax levied or imposed in Australia under the
GST Law or otherwise on a supply.

GST Act

the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

GST Law

has the same meaning as in the GST Act.

Implementation Datethe fifth Business Day after the Scheme Record Date as determined by ANZBGL, or such otherdate after the Scheme Record Date, currently expected to be 6 January 2023.

Independent Expert

Grant Samuel & Associates Pty Limited ABN 28 050 036 372, the independent expert inrespect of the Scheme appointed by ANZ.

Independent
Expert’s Report

the report issued by the Independent Expert in connection with the Scheme, as set out inAnnexure 1.

Ineligible Foreign
Shareholder

an ANZ Shareholder whose address is shown in the ANZ Share Register on the Scheme
Record Date as being outside Australia (and its external territories), New Zealand or an
Eligible Foreign Jurisdiction, unless ANZ NOHC determines that it is lawful and not unduly
onerous or impracticable to issue that Scheme Shareholder with ANZ NOHC Shares when
this Scheme becomes Effective.

Inland Revenue

Inland Revenue Department, New Zealand.

Investigating Accountant

KPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd
ABN 43 007 363 215), the investigating accountant appointed by ANZ.

Investigating
Accountant’s Report

the Limited Assurance Investigating Account’s Report issued by the Investigating
Accountant, as set out in Annexure 2.

Last Practicable Date

23 October 2022.

Lygon

Lygon 1B Pty Ltd ACN 633 568 411.

MAS

Monetary Authority of Singapore.

NZX

means NZX Limited and, where the context requires, the main board financial market
that it operates.

OIO

the Overseas Investment Office (New Zealand).

Pollination

Pollination Global Holdings Limited Company No. 11892654, a company incorporated
under the laws of England and Wales.

RBNZ

Reserve Bank of New Zealand.

Regulatory Approvals

all approvals, consents, confirmations, waivers or other acts from or by Regulatory
Authorities as are necessary or, in the reasonable opinion of ANZBGL and ANZ NOHC,
desirable to implement the Restructure.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

MEANING

Regulatory Authority

includes:1. ASX and ASIC;
2. APRA and the Federal Treasurer (acting pursuant to the FSSA);

Chairman’s letter

TERM

3. RBNZ

5. US Federal Reserve;

Section 1

4. OIO;

6. the ATO;

8. a minister, department, office, commission, delegate, instrumentality, agency, board,
authority or organisation of any government; andSection 2

7. a Government Agency;

9. any regulatory organisation established under statute.
has the meaning given in sections 608 and 609 of the Corporations Act.

Requisite Majorities

in relation to the Scheme Resolution, a resolution passed by:

2. at least 75% of the total number of votes cast on the Scheme Resolution at the Scheme
Meeting by ANZ Shareholders present and voting (either in person or by proxy, attorney or,in the case of corporate ANZ Shareholders, body corporate representative).
the restructure of the ANZ Group to be implemented by the:1. Scheme; andSection 5

Restructure

Section 4

1. unless the Court orders otherwise, a majority in number (more than 50%) of ANZ
Shareholders present and voting at the Scheme Meeting (either in person or by proxy,attorney or, in the case of corporate ANZ Shareholders, body corporate representative); andSection 3

Relevant Interest

2. Business Restructure.

Sale Facility

the facility established by ANZBGL under which ANZ NOHC Shares may be sold, as describedin section 7.2(h).

Sale Period

the period the Sale Agent will sell the ANZ NOHC Shares it received under the Scheme, beingfrom the Implementation Date and ending no later than 1 month following the
Implementation Date.

Schemethe scheme of arrangement under Part 5.1 of the Corporations Act between ANZBGL and the
Scheme Shareholders, the form of which is attached as Annexure 3, subject to any alterations
or conditions made or required by the Court under subsection 411(6) of the Corporations
and agreed to in writing by ANZBGL and ANZ NOHC.

Scheme Meetingthe meeting of ANZ Shareholders ordered by the Court to be convened under subsection
411(1) of the Corporations Act to consider and vote on the Scheme and includes any
meeting convened following any adjournment or postponement of that meeting.

Scheme Record Date

7.00pm on the second Business Day after the Effective Date, currently expected to be
7.00pm on 29 December 2022.

Scheme Resolution

the resolution to the terms of the Scheme, as set out in the Notice of Scheme Meeting in
Annexure 5.

Scheme Shareholder

a holder of ANZ Shares recorded in the ANZ Share Register as at the Scheme Record Date.

Scheme Shares

all ANZ Shares held by the Scheme Shareholders as at the Scheme Record Date.

Annexures

the nominee appointed by ANZBGL to sell or facilitate the transfer of ANZ NOHC Shares inaccordance with the Sale Facility.

Section 10

Sale Agent

Section 9

the Restructure Implementation Deed between ANZBGL and ANZ NOHC.

Section 8

Restructure
Implementation Deed

Section 7

the Restructure Deed between ANZBGL and ANZ NOHC.

Section 6

Restructure Deed

75

TERM

MEANING

Second Court Datethe first day on which an application made to the Court for an order under paragraph 411(4)(b) of the Corporations Act approving the Scheme is heard, currently expected to be 22
December 2022, or, if the application is adjourned or subject to appeal for any reason, theday on which the adjourned application or appeal is heard.

Second Court Hearing

the hearing of the application made to the Court for an order pursuant to section 411(4)(b)of the Corporations Act approving the Scheme.

TFN

Australian tax file number.

Tier 2Tier 2 Capital as defined in Prudential Standard APS 111 Capital Adequacy: Measurementof Capital.

TIN

Trade Information Network Limited Company No. 12210032, a company incorporated under
the laws of England and Wales.

Treasurer

the Treasurer under the FSSA.

United States or US

the United States of America, its territories and possessions, any state of the United States ofAmerica, the District of Columbia, and all other areas subject to its jurisdiction.

US Exchange Act

the United States Securities Exchange Act of 1934, as amended from time to time.

US Securities Act

the United States Securities Act of 1933, as amended from time to time.

Worldline

Worldline Australia Pty Ltd ACN 645 073 034.

10.2 INTERPRETATIONIn this Explanatory Memorandum, unless expressly stated or
the context otherwise appears:(a) words and phrases have the same meaning (if any)
given to them in the Corporations Act;(b) words importing a gender include any gender;(c) words importing the singular include the plural andvice versa;(d) an expression importing a natural person includes
any company, partnership, joint venture, association,
corporation or other body corporate and vice versa;(e) a reference to a section or annexure is a reference
to a section of and an annexure to this Explanatory
Memorandum as relevant;76

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED(f ) a reference to any statute, regulation, proclamation,
ordinance or by law includes all statutes, regulations,proclamations, ordinances, or by laws amending,varying, consolidating or replacing it and a reference
to a statute includes all regulations, proclamations,ordinances and by laws issued under that statute;(g) headings and bold type are for convenience only anddo not affect the interpretation of this Explanatory
Memorandum;(h) a reference to time is a reference to time in Melbourne,
Australia;(i) a reference to writing includes facsimiletransmissions; and(j) a reference to dollars, $, cents, ¢ and currency is areference to the lawful currency of the Commonwealthof Australia.

Contents
Chairman’s letter

ANNEXURE 1
INDEPENDENT EXPERT’S REPORT

Section 1

26 October 2022
Section 2

The Directors
Australia and New Zealand Banking Group Limited
833 Collins Street
Docklands VIC 3008

Section 3

Dear Directors

Proposed Restructure of the ANZ Group
Introduction
On 4 May 2022, Australia and New Zealand Banking Group Limited (“ANZ”), the parent entity of the ANZGroup, announced the intention to implement a non-operating holding company (“NOHC”) structure for
the ANZ Group (“Restructure”). The Restructure involves:various internal share and asset transfers and other corporate actions (the “Business Restructure”)
that will result in the:•-ANZ Bank Group, which will own all of the ANZ Group’s core banking businesses (including
ANZ and ANZ Bank New Zealand Limited), all international banking businesses and all
insurance businesses (including the ANZ Group’s mortgage insurance and captive insurance
businesses); and-

ANZ Non-Bank Group, which will own certain ANZ banking-adjacent interests andinvestments; andThe Business Restructure is conditional on implementation of the Scheme. The ANZ Group after
implementation of the Restructure is referred to in this letter, where necessary, as the ANZ NOHC Group.
ANZ ServiceCo can, in the future, potentially provide certain central shared service functions acrossthe ANZ Group; and

ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.

These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.

ABN 28 050 036 372
Level 19 Governor Macquarie Tower, 1 Farrer Place Sydney NSW 2000

AFS Licence No 240985
GPO BOX 4301 SYDNEY NSW 2001 T +61 2 9324 4211 F +61 2 9324 4301

GRANTSAMUEL.COM.AU

Annexures

GRANT SAMUEL & ASSOCIATES PTY LIMITED

Section 10

Section 9

It is also intended that intragroup resourcing agreements will be put in place to set out the terms on which:

Section 8

establishment of an internal service company, ANZ Group Services Pty Ltd (“ANZ ServiceCo”),
which will be part of the ANZ Non-Bank Group, to hold certain property interests.

Section 7•

separation of certain businesses and assets into:

Section 6

the establishment of a new parent entity for the ANZ Group, ANZ Group Holdings Limited (“ANZ
NOHC”) which is a public company that will be listed on the Australian Securities Exchange (“ASX”) andon the New Zealand Stock Exchange. The NOHC structure will be implemented by way of a scheme ofarrangement under Section 411 of the Corporations Act 2001 (Cth) (“Corporations Act”) (the“Scheme”); andSection 5Section 4

177

If the Scheme is implemented, ANZ shareholders (other than ineligible foreign shareholders1) will be issued
one new share in ANZ NOHC in exchange for each share held in ANZ on the record date for the Scheme.
There will be no change in the proportionate ownership interests of shareholders (other than ineligible
foreign shareholders) as a result of the Scheme.
Ineligible foreign shareholders will not receive ANZ NOHC shares under the Scheme. They will transfer their
ANZ shares to a sale agent which will arrange for the sale of the ANZ NOHC shares received under the
Scheme on the ASX through a sale facility. Ineligible foreign shareholders will receive the cash proceedsfrom the sale of those ANZ NOHC shares.
The Scheme is subject to a number of conditions that are set out in full in the Explanatory Memorandum inrelation to the Scheme sent to shareholders by ANZ.
The ANZ directors unanimously recommend that shareholders vote in favour of the Scheme. Each ANZ
director intends to vote, or procure the voting of, any ANZ shares they hold or control in favour of the
Scheme.
The directors of ANZ have engaged Grant Samuel & Associates Pty Limited (“Grant Samuel”) to prepare an
independent expert’s report setting out whether, in its opinion, the Scheme is in the best interests of ANZshareholders. A copy of the report (including this letter) will accompany the Explanatory Memorandum tobe sent to shareholders by ANZ. This letter contains a summary of Grant Samuel’s opinion and main
conclusions.

2

OpinionIn Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best interests of ANZshareholders.

3

Summary of Conclusions
The Australian banking industry has changed significantly over the last decade, with traditional banking
facing headwinds from a number of sources as well as transformational digital and technological change
required to meet constantly evolving customer expectations. Over the past six years, the ANZ Group has
also undergone a period of substantial simplification and, with this process largely complete, has entered a
new phase focused on growth and areas where it can deliver better outcomes for customers and provide
returns for shareholders. To address these challenges and opportunities, the ANZ Group has adopted astrategy which envisages complementing its core banking business with a range of non-banking businesses
focused on infrastructure “platforms” and digital “ecosystems” of businesses and partnerships that provide
relevant, efficient and connected services, tools and insights for customers.
The combination of having an authorised deposit-taking institution (“ADI”), ANZ, as the parent entity of the
ANZ Group and the highly regulated nature of ADIs has presented challenges for the ANZ Group in theexecution of this strategy. Non-banking businesses are not intended by the Australian Prudential
Regulation Authority (“APRA”) to be subject to banking regulation and the “one-size-fits-all” regulatory
requirements that an ADI must comply with do not fit well with the agile operating environments that are
critical to the success of start-up or early stage non-banking businesses. These factors have put the ANZGroup at a competitive disadvantage (at least relative to non-ADIs) and constrained the growth of its nonbanking businesses. Owning and effectively operating a non-banking business within an ADI structure was________________________________________________________________________________________________________________________________________________________
1

ANZ shareholders with a registered address outside Australia (and its external territories), New Zealand or an Eligible Foreign Jurisdiction
unless ANZ reasonably believes that it is not prohibited and not unduly onerous or impracticable to issue that ANZ shareholder with ANZNOHC shares when the Scheme becomes effective. Eligible Foreign Jurisdiction is expected to include China, Cook Islands, Fiji, France,
Germany, Hong Kong, India, Korea, Malaysia, Papua New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, theUnited States (including American Samoa and Guam) and Vanuatu and, in the case of an ANZ shareholder who is an ANZ employee at
the Scheme record date, those jurisdictions listed above and Indonesia and Japan.

2

78

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter
Annexures

3

Section 10

Other than ineligible foreign shareholders.

Section 9

4

Section 8

One of the conditions of APRA’s NOHC authorisation is that ANZ Bank HoldCo and ANZ must have an independent director who is not on
the Board of ANZ NOHC or any ANZ Non-Bank Group entity to safeguard the interests of depositors.

Section 7

1835i comprises 1835i Creation Fund I Trust, 1835i Ventures I Trust, 1835i Ventures II Trust and 1835i Ventures III Trust.

3

Section 6________________________________________________________________________________________________________________________________________________________
2

Section 5

The Restructure is not a “must do” transaction. The status quo would continue to offer ANZ shareholders afinancially sound exposure to one of Australia’s largest banks and the ANZ Group could continue to execute
its strategy as it has been doing for the past three years. However, the ability to successfully grow its nonbanking businesses should be enhanced by these businesses being owned by a legal entity, ANZ Non-Bank
HoldCo, which is structurally separate from the ANZ Group’s banking businesses. The ANZ Board believes
that, of the alternatives considered, the Restructure will provide the optimal structure for the ANZ Group toachieve its objectives to grow its non-banking activities while meeting its obligations to APRA and its
depositors. If the Scheme is not approved and the Restructure is not implemented, the ANZ Group will bein a sub-optimal position in executing its strategy to grow its non-banking businesses and deliver a broad
range of non-banking products and services to customers.

Section 4

ANZ shareholders4 will have the same number of shares in ANZ NOHC as they currently hold in ANZ and
ANZ NOHC shares will have the same dividend and voting rights as ANZ shares. ANZ NOHC will continue tohave the ability to pay fully franked dividends and the Restructure will have no impact on the accumulated
franking credit balance or the extent to which the ANZ NOHC Group generates franking credits in the
future. The Restructure is not expected to have any adverse tax consequences for relevant Australianresident shareholders. In short, there is no impact on the economic interest of ANZ shareholders4. There
will be no impact on ANZ NOHC’s ability to undertake future on-market share buybacks. The Restructure
will also have no direct impact on customers and no material impact on the ANZ Group’s employees.

Section 3

The Restructure will have no immediate impact on the underlying businesses and strategy, group
regulatory capital requirements or, for the most part3, Board or management of the ANZ Group. There will
be no change to the ANZ Group’s indebtedness, its overall funding requirements or its debt issuancecapacity as a result of the Restructure and there is not expected to be any change to ANZ’s credit ratings.
While ANZ NOHC is expected to have an investment grade credit rating below that of ANZ, the Restructure
is not expected to have any immediate impact on funding costs for the ANZ Group as there is no intention
for ANZ NOHC to raise debt finance in the short term.

Section 2

The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and maximise the returns from those opportunities for shareholders. In particular,
the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital structure andoperating environment with a “fit-for-purpose” risk management and governance framework (including
decision making/approval processes and remuneration structures). Furthermore, the Restructure more
appropriately aligns the ANZ Group’s corporate structure with APRA’s regulatory framework as APRA andother regulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions
with the broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank
Group should also put ANZ in a clearer position in the event recovery actions are required or recovery
progresses to resolution as contagion risk should be lower. In short, the Restructure should facilitate thedelivery of a broad range of non-banking products and services to customers while maintaining, if notenhancing, appropriate protections for ANZ depositors.

Section 1

so challenging for its venture capital business, ANZi, that the decision was made to separate the businessfrom ANZ and create 1835i2 as a standalone entity. However, relinquishing direct ownership andoperational control is not an ideal solution and it is in the interests of ANZ and its shareholders for ANZ tobest position itself to achieve its strategic objectives in a constantly changing environment.

79

The potential benefits of the Restructure are not quantifiable and will not deliver any significant
incremental short term value to shareholders. The real value of the Restructure will only be realised overtime if the ANZ NOHC Group can materially increase the scale of its non-banking activities. On the other
hand, the Restructure has few disadvantages and risks, other than one-off cash transaction costs andadditional ongoing operating and corporate costs that will be incurred if the Restructure proceeds, both ofwhich are immaterial in the context of the ANZ Group as a whole, and certain implementation risks. The
key risk is the lack of a formal regulatory framework for Australian NOHCs of ADIs and the potential for any
formal Level 3 regulatory framework subsequently put in place by APRA to differ significantly from theconditions set out in APRA’s NOHC authorisation. While the risks associated with the Restructure cannot
be disregarded, they are, for the most part, not beyond the normal risks of any corporate restructuringtransaction and most have mitigating factors that should minimise their impact.
The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guaranteethat the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile ofthe non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However, growing its non-banking businesses is a key component of the ANZ Group’s current
strategy which has been publicly stated and pursued for some time. Furthermore, shareholders are notbeing asked to vote on the appropriate strategy for the ANZ Group. This is a separate question to whether
the Restructure is in the best interests of shareholders.
The critical question is whether ANZ shareholders are likely to be better off if the Restructure is
implemented than if the ANZ Group’s current corporate structure is maintained. The evaluation isessentially subjective. However, on balance, in Grant Samuel’s view, the potential advantages of the
Restructure, while uncertain, outweigh the disadvantages and risks, which are minimal, and shareholders
are ultimately likely to be better off if the Restructure is implemented.
The Restructure comprises the Scheme and the Business Restructure. The Scheme is subject to theapproval of ANZ shareholders. The Business Restructure does not require the approval of ANZshareholders but is conditional on, and is expected to be undertaken immediately after, implementation of
the Scheme. Consequently, in Grant Samuel’s opinion, the Restructure (including the Scheme) is in the bestinterests of ANZ shareholders.

4

Other Matters
This letter (and the report to which it is attached) is general financial product advice only and has been
prepared without taking into account the objectives, financial situation or needs of individual ANZ
shareholders. Accordingly, before acting in relation to their investment, shareholders should consider theappropriateness of the advice having regard to their own objectives, financial situation or needs.
Shareholders should read the Explanatory Memorandum issued by ANZ in relation to the Scheme.
Grant Samuel has not been engaged to provide a recommendation to shareholders in relation to the
Scheme, the responsibility for which lies with the directors of ANZ. In any event, the decision whether tovote for or against the Scheme is a matter for individual shareholders, based on their own views as to value
and business strategy, their expectations about future economic and market conditions and their particular
circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax
position. Shareholders who are in doubt as to the action they should take in relation to the Scheme should
consult their own professional adviser.

4

80

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

This letter is a summary of Grant Samuel’s opinion. The full report from which this summary has been
extracted is attached and should be read in conjunction with this summary.

Section 2

Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The Financial
Services Guide is included at the beginning of the full report.

Section 1

Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell shares in ANZ or ANZ
NOHC. This is an investment decision upon which Grant Samuel does not offer an opinion and isindependent of a decision on whether to vote for or against the Scheme. Shareholders should consult theirown professional adviser in this regard.

The opinion is made as at the date of this letter and reflects circumstances and conditions as at that date.
Section 3

Yours faithfully
GRANT SAMUEL & ASSOCIATES PTY LIMITED

Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures

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82

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8

FINANCIAL SERVICES GUIDEANDINDEPENDENT EXPERT’S REPORTIN RELATION TO THE PROPOSED RESTRUCTURE OF
THE AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Section 9

GRANT SAMUEL & ASSOCIATES PTY LIMITED

26 OCTOBER 2022

Section 10

ABN 28 050 036 372

Annexures

83

FINANCIAL SERVICES GUIDE
Grant Samuel & Associates Pty Limited (“Grant Samuel”) holds Australian Financial Services Licence No. 240985 authorising it toprovide financial product advice on securities and interests in managed investments schemes to wholesale and retail clients.
The Corporations Act, 2001 (Cth) (“Corporations Act”) requires Grant Samuel to provide this Financial Services Guide (“FSG”) in
connection with its provision of an independent expert’s report (“Report”) which is included in a document (“Disclosure Document”)
provided to members by the company or other entity (“Entity”) for which Grant Samuel prepares the Report.
Grant Samuel does not accept instructions from retail clients. Grant Samuel provides no financial services directly to retail clientsand receives no remuneration from retail clients for financial services. Grant Samuel does not provide any personal retail financial
product advice to retail investors nor does it provide market-related advice to retail investors.
When providing Reports, Grant Samuel’s client is the Entity to which it provides the Report. Grant Samuel receives its remunerationfrom the Entity. In respect of the Report for The Australia and New Zealand Banking Group Limited (“ANZ”) in relation to the
proposed scheme of arrangement (“Scheme”) between ANZ and its shareholders (“the ANZ Report”), Grant Samuel will receive a
fixed fee of $625,000 plus reimbursement of out-of-pocket expenses (as stated in Section 7.3 of the ANZ Report).
No related body corporate of Grant Samuel, or any of the directors or employees of Grant Samuel or of any of those related bodies
or any associate receives any remuneration or other benefit attributable to the preparation and provision of the ANZ Report.
Grant Samuel is required to be independent of the Entity to provide a Report. The guidelines for independence in the preparationof Reports are set out in Regulatory Guide 112 issued by the Australian Securities & Investments Commission on 30 March 2011.
The following information in relation to the independence of Grant Samuel is stated in Section 7.3 of the ANZ Report:“Grant Samuel and its related entities do not have at the date of this report, and have not had within theprevious two years, any business or professional relationship with the ANZ Group or any financial or otherinterest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in
relation to the Scheme.
Grant Samuel had no part in the formulation of the Restructure (including the Scheme). Its only role has been
the preparation of this report.
Grant Samuel will receive a fixed fee of $625,000 for the preparation of this report. This fee is not contingent on
the conclusions reached or the outcome of the Scheme. Grant Samuel’s out of pocket expenses in relation to the
preparation of the report will be reimbursed. Grant Samuel will receive no other benefit for the preparation ofthis report.
Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30 March
2011.”
Grant Samuel has internal complaints-handling mechanisms and is a member of the Australian Financial Complaints Authority,
No. 11929. If you have any concerns regarding the ANZ Report, please contact the Compliance Officer in writing at Level 19,
Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000. If you are not satisfied with how we respond, you may contact theAustralian Financial Complaints Authority at GPO Box 3 Melbourne VIC 3001 or 1800 931 678. This service is provided free of charge.
Grant Samuel holds professional indemnity insurance which satisfies the compensation requirements of the Corporations Act.
Grant Samuel is only responsible for the ANZ Report and this FSG. Complaints or questions about the Disclosure Document should
not be directed to Grant Samuel which is not responsible for that document. Grant Samuel will not respond in any way that might
involve any provision of financial product advice to any retail investor.

GRANT SAMUEL & ASSOCIATES PTY LIMITEDABN 28 050 036 372
Level 19 Governor Macquarie Tower, 1 Farrer Place Sydney NSW 2000

AFS Licence No 240985
GPO BOX 4301 SYDNEY NSW 2001 T +61 2 9324 4211 F +61 2 9324 4301

GRANTSAMUEL.COM.AU

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
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Overview of the Restructure (including the Scheme)____________________________________________ 1

2

Scope of the Report _____________________________________________________________________ 3

3Profile of the ANZ Group __________________________________________________________________ 7

Background to Financial NOHCs ___________________________________________________________ 18
4.1
4.2
4.3

Impact of the Restructure (including the Scheme) _____________________________________________ 23

6

Evaluation of the Restructure (including the Scheme) __________________________________________ 34

Qualifications, Declarations and Consents ___________________________________________________ 47

Section 8

Summary _______________________________________________________________________ 34
Background _____________________________________________________________________ 36
Advantages and Benefits ___________________________________________________________ 37
Disadvantages and Risks ___________________________________________________________ 39
Alternatives _____________________________________________________________________ 40
Other Matters ___________________________________________________________________ 41
Shareholder Decision______________________________________________________________ 46

Section 7

6.1
6.2
6.3
6.4
6.5
6.6
6.7
7

Process _________________________________________________________________________ 23
Corporate Structure_______________________________________________________________ 24
Corporate Governance ____________________________________________________________ 25
Regulatory Framework ____________________________________________________________ 27
Pro Forma Historical Financial Information and Regulatory Capital__________________________ 28

Section 6

5.1
5.2
5.3
5.4
5.5

Section 5

5

Overview _______________________________________________________________________ 18
Regulatory Environment for Financial NOHCs in Australia _________________________________ 18
Rationale for Financial NOHC Restructures ____________________________________________ 19

Section 4

4

Background ______________________________________________________________________ 7
Corporate Structure and Business Operations __________________________________________ 11
Strategy ________________________________________________________________________ 13
Key Historical Financial Information and Regulatory Capital _______________________________ 14
Taxation Position _________________________________________________________________ 15
Capital Structure and Ownership ____________________________________________________ 16

Section 3

3.1
3.2
3.3
3.4
3.5
3.6

Section 2

1

Section 1

TABLE OF CONTENTS

Section 9
Section 10
Annexures

85

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
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Overview of the Restructure (including the Scheme)

the establishment of a new parent entity for the ANZ Group, ANZ Group Holdings Limited (“ANZ
NOHC”) which is a public company that will be listed on the Australian Securities Exchange (“ASX”) andthe New Zealand Stock Exchange (“NZX”). The NOHC structure will be implemented by way of ascheme of arrangement under Section 411 of the Corporations Act 2001 (Cth) (“Corporations Act”)(the “Scheme”); andvarious internal share and asset transfers and other corporate actions (the “Business Restructure”)
that will result in the:•separation of certain businesses and assets into:
ANZ Bank Group, which will own all of the ANZ Group’s core banking businesses (including
ANZ and ANZ Bank New Zealand Limited (“ANZ NZ”)), all international banking businesses
and all insurance businesses (including the ANZ Group’s mortgage insurance and captive
insurance businesses2); and-

ANZ Non-Bank Group, which will own certain ANZ banking-adjacent interests andinvestments (see Section 5.2 for details); andestablishment of an internal service company, ANZ Group Services Pty Ltd (“ANZ ServiceCo”),
which will be part of the ANZ Non-Bank Group, to hold certain property interests.

Section 6

The Business Restructure is conditional on implementation of the Scheme. The ANZ Group after
implementation of the Restructure is referred to in this report, where necessary, as the ANZ NOHC
Group.

Section 5-

Section 4•

Section 3

Section 2

On 4 May 2022, in conjunction with the release of its 1HY221 results, Australia and New Zealand Banking
Group Limited (“ANZ”), the parent entity of the ANZ Group, announced the intention to implement a nonoperating holding company (“NOHC”) structure for the ANZ Group (“Restructure”). The Restructure
involves:

Section 1

1

It is also intended that intragroup resourcing agreements will be put in place to set out the terms on which:
ANZ ServiceCo can, in the future, potentially provide certain central shared service functions acrossthe ANZ Group; and

ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.

If the Scheme is implemented, ANZ shareholders (other than ineligible foreign shareholders3) will be issued
one new share in ANZ NOHC in exchange for each share held in ANZ on the record date for the Scheme.

The ANZ Group’s mortgage insurance business is carried out by ANZ Lenders Mortgage Insurance Pty Limited, a direct subsidiary of ANZ
and its captive insurance business is carried out by ANZcover Insurance Pte. Ltd, a direct subsidiary of ANZ Funds Pty. Ltd, which in turnis a direct subsidiary of ANZ.

3

ANZ shareholders with a registered address outside Australia (and its external territories), New Zealand or an Eligible Foreign Jurisdiction
unless ANZ reasonably believes that it is not prohibited and not unduly onerous or impracticable to issue that ANZ shareholder with ANZNOHC shares when the Scheme becomes effective. Eligible Foreign Jurisdiction is expected to include China, Cook Islands, Fiji, France,
Germany, Hong Kong, India, Korea, Malaysia, Papua New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, theUnited States (including American Samoa and Guam) and Vanuatu and, in the case of an ANZ shareholder who is an ANZ employee at
the Scheme record date, those jurisdictions listed above and Indonesia and Japan.

Annexures

1

Section 10

1HY22 is the six months ended 31 March 2022.

2

Section 9________________________________________________________________________________________________________________________________________________________
1

Section 8

These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.

Section 7

87

There will be no change in the proportionate ownership interests of shareholders (other than ineligible
foreign shareholders) as a result of the Scheme.
Ineligible foreign shareholders will not receive ANZ NOHC shares under the Scheme. They will transfer their
ANZ shares to a sale agent which will arrange for the sale of the ANZ NOHC shares received under the
Scheme on the ASX through a sale facility. Ineligible foreign shareholders will receive the cash proceedsfrom the sale of those ANZ NOHC shares.
The Scheme requires approval by a majority in number (i.e. more than 50%) of ANZ shareholders present
and voting (either in person or by proxy) on the Scheme resolution at the Scheme meeting, representing atleast 75% of the votes cast on the resolution. If approved by ANZ shareholders, the Scheme will then be
subject to approval by the Federal Court of Australia (“Court”).
The Scheme is subject to a number of conditions that are set out in full in the Explanatory Memorandum
sent to shareholders by ANZ and include:

the ASX approves the admission of ANZ NOHC to the official list of the ASX and the official quotationof the ANZ NOHC shares on the ASX;ANZ NOHC being admitted as a foreign exempt listed company on the NZX; and

all approvals, consents, confirmations, exemptions, waivers or other acts from or by regulatory
authorities (including from the ASX and the Australian Securities & Investments Commission (“ASIC”),
the Australian Prudential Regulation Authority (“APRA”) and the Federal Treasurer (acting pursuant to
the Financial Sector (Shareholdings) Act 1998 (Cth)), the Reserve Bank of New Zealand (“RBNZ”), theOverseas Investment Office (New Zealand), the United States Federal Reserve (“US Federal Reserve”)
and the Australian Taxation Office (“ATO”), as are necessary or, in the reasonable opinion of ANZ and
ANZ NOHC, desirable to implement the Restructure (“Regulatory Approvals”).

At the date of this report, all Regulatory Approvals have been obtained other than regulatory approval fromthe US Federal Reserve. If this approval has not been obtained prior to the Second Court Hearing (where
the Court makes the order to approve the Scheme and which is scheduled to be held on 22 December2022), ANZ may:

postpone or adjourn the Second Court Hearing; orproceed with the Second Court Hearing on the basis that the Scheme will not be implemented until
the approval from the US Federal Reserve is obtained.

The ANZ directors unanimously recommend that shareholders vote in favour of the Scheme. Each ANZ
director intends to vote, or procure the voting of, any ANZ shares they hold or control in favour of the
Scheme.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
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Scope of the Report
Purpose of the Report

The Scheme is subject to the approval of ANZ shareholders in accordance with Section 411 of the
Corporations Act (“Section 411”), which governs schemes of arrangement.

Basis of Evaluation

Annexures

3

Section 10

The Scheme is not a control transaction and does not change the underlying economic interests ofshareholders. Accordingly, Grant Samuel has evaluated the Scheme by assessing the overall impact on theshareholders of ANZ and formed a judgement as to whether the expected benefits outweigh any

Section 9

For most other transactions, the expert is to weigh up the advantages and disadvantages of the proposal
for shareholders. This involves a judgement on the part of the expert as to the overall commercial effect ofthe proposal, the circumstances that have led to the proposal and the alternatives available. If theadvantages outweigh the disadvantages, the proposal would be in the best interests of shareholders.

Section 8

There is no legal definition of the expression “in the best interests”. However, ASIC has issued Regulatory
Guide 111 (“RG111”) which establishes guidelines in respect of independent expert’s reports. RG111
differentiates between the analysis required for control transactions and other transactions. In the context
of control transactions (whether by takeover bid, by scheme of arrangement, by the issue of securities orby selective capital reduction or buyback), the expert is required to distinguish between “fair” and“reasonable”. A proposal that was “fair and reasonable” or “not fair but reasonable” would be in the bestinterests of shareholders (being the opinion required under Part 3 of Schedule 8).

Section 7

2.2

Section 6

Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell securities in ANZ or
ANZ NOHC. This is an investment decision upon which Grant Samuel does not offer an opinion and isindependent of a decision on whether to vote for or against the Scheme. Shareholders should consult theirown professional adviser in this regard.

Section 5

Voting for or against the Scheme is a matter for individual shareholders based on their views as to value
and business strategy, their expectations about future economic and market conditions and their particular
circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax
position. Shareholders who are in doubt as to the action they should take in relation to the Scheme should
consult their own professional adviser.

Section 4

This report is general financial product advice only and has been prepared without taking into account theobjectives, financial situation or needs of individual ANZ shareholders. Accordingly, before acting in
relation to their investment, shareholders should consider the appropriateness of the advice having regard
to their own objectives, financial situation or needs. Shareholders should read the Explanatory
Memorandum issued by ANZ in relation to the Scheme.

Section 3

The directors of ANZ have engaged Grant Samuel & Associates Pty Limited (“Grant Samuel”) to prepare an
independent expert’s report setting out whether, in its opinion, the Scheme is in the best interests of ANZshareholders and to state reasons for that opinion. A copy of the report will accompany the Explanatory
Memorandum sent to shareholders by ANZ.

Section 2

Part 3 of Schedule 8 to the Corporations Regulations prescribes the information to be sent to shareholders
in relation to schemes of arrangement pursuant to Section 411. Part 3 of Schedule 8 requires an
independent expert’s report in relation to a scheme of arrangement to be prepared when a party to ascheme of arrangement has a prescribed shareholding in the company subject to the scheme, or where anyof its directors are also directors of the company subject to the scheme. In those circumstances, theindependent expert’s report must state whether the scheme of arrangement is in the best interests ofshareholders subject to the scheme and must state reasons for that opinion.

Section 1

2.1

89

disadvantages and risks that might result. By definition, if the advantages outweigh the disadvantages,
shareholders are likely to be better off if the Scheme is implemented than if it is not.
The Scheme is only part of the Restructure, which also includes the Business Restructure. The BusinessRestructure does not require the approval of ANZ shareholders but is conditional on, and is expected to beundertaken immediately after, implementation of the Scheme. RG111 paragraph 5 states that, in deciding
on the appropriate form of analysis for a report, an expert should “focus on the purpose and outcome of
the transaction, rather than the legal mechanism used to effect the transaction". Consequently, in forming
its opinion as to whether the Scheme is in the best interests of ANZ shareholders, Grant Samuel has
considered, where appropriate, the broader Restructure (including the Scheme and the BusinessRestructure) and has had regard to the following:

the impact of the Restructure on the:•business activities, strategy and governance of the ANZ Group;•

earnings and dividends attributable to existing ANZ shareholders;•financial position and financial risk profile of the ANZ Group;•

capital requirements and risk management activities of the ANZ Group; and•credit rating of ANZ and the ANZ Group;

potential taxation consequences of the Restructure for the ANZ Group and the ANZ NOHC Group as
well as for existing ANZ shareholders;advantages and benefits arising from the Restructure; and

costs, disadvantages and risks of the Restructure.

2.3

Sources of Information

The following information was utilised and relied upon, without independent verification, in preparing thisreport:Publicly Available Informationthe Explanatory Memorandum (including earlier drafts and pro forma financial information for the
ANZ Group for 1HY22);half year report of the ANZ Group for 1HY22;

press releases, public announcements, media and analyst presentation material and other public
filings by ANZ including information available on its website; and

brokers’ reports and recent press articles on ANZ.

Non Public Information provided by ANZapplication to APRA for approval to establish a NOHC and the related Business Restructure;various papers and presentations prepared for the purpose of regulatory approvals;various rating agency background papers and presentations;submissions to the ATO for class rulings in relation to the taxation implications for shareholders fromthe proposed interposition of ANZ NOHC between ANZ and ANZ shareholders;

other confidential documents, board papers, presentations and working papers relating to the
Restructure.

4

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

2.4

Limitations and Reliance on Information

Section 10
Annexures

5

Section 9

The information provided to Grant Samuel included pro forma financial information for 1HY22. ANZ is
responsible for this pro forma financial information. The pro forma financial information was subject toreview by KPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd)(“KPMG Transaction Services”). The Limited Assurance Investigating Accountant’s Report is set out inAnnexure 2 to the Explanatory Memorandum. On this basis, Grant Samuel considers that there arereasonable grounds to believe that the pro forma financial information has been prepared on a reasonablebasis.

Section 8

Preparation of this report does not imply that Grant Samuel has audited in any way the management
accounts or other records of the ANZ Group. It is understood that the accounting information that wasprovided was prepared in accordance with generally accepted accounting principles and in a mannerconsistent with the method of accounting in previous years (except where noted).

Section 7

An important part of the information used in forming an opinion of the kind expressed in this reportcomprises the opinions and judgement of management. This type of information was also evaluatedthrough analysis, inquiry and review to the extent practical. However, such information is often notcapable of external verification or validation.

Section 6

Accordingly, this report and the opinions expressed in it should be considered more in the nature of an
overall review of the anticipated commercial and financial implications rather than a comprehensive audit
or investigation of detailed matters.

Section 5

The information provided to Grant Samuel has been evaluated through analysis, inquiry and review to theextent that it considers necessary or appropriate for the purposes of forming an opinion as to whether the
Scheme is in the best interests of ANZ shareholders. However, Grant Samuel does not warrant that its
inquiries have identified or verified all of the matters that an audit, extensive examination or “duediligence” investigation might disclose. While Grant Samuel has made what it considers to be appropriate
inquiries for the purposes of forming its opinion, “due diligence” of the type undertaken by companies andtheir advisers in relation to, for example, prospectuses or profit forecasts, is beyond the scope of an
independent expert.

Section 4

This report is also based upon financial and other information provided by ANZ and its advisers. Grant
Samuel has considered and relied upon this information. ANZ has represented in writing to Grant Samuelthat to its knowledge the information provided by it was then, and is now, complete and not incorrect ormisleading in any material respect. Grant Samuel has no reason to believe that any material facts havebeen withheld.

Section 3

Grant Samuel’s opinion is based on economic, sharemarket, business trading, financial and other conditions
and expectations prevailing at the date of this report. These conditions can change significantly overrelatively short periods of time. If they did change materially, subsequent to the date of this report, theopinion could be different in these changed circumstances.

Section 2

Grant Samuel believes that its opinion must be considered as a whole and that selecting portions of theanalysis or factors considered by it, without considering all factors and analyses together, could create amisleading view of the process employed and the conclusions reached. Any attempt to do so could lead toundue emphasis on a particular factor or analysis. The preparation of an opinion is a complex process and is
not necessarily susceptible to partial analysis or summary.

Section 1

In preparing this report, representatives of Grant Samuel have also held discussions with, and obtained
information from, senior management of ANZ and its advisers.

91

In forming its opinion, Grant Samuel has also assumed that:

matters such as title, compliance with laws and regulations and contracts in place are in good standing
and will remain so and that there are no material legal proceedings, other than publicly disclosed;

the assessments by ANZ and its advisers with regard to legal, regulatory, tax and accounting mattersrelating to the Restructure are accurate and complete;

the information set out in the Explanatory Memorandum sent by ANZ to its shareholders is complete,accurate and fairly presented in all material respects;the publicly available information relied on by Grant Samuel in its analysis was accurate and not
misleading;

the Scheme and the Business Restructure will be implemented in accordance with their terms; andthe legal mechanisms to implement the Scheme and the Business Restructure are correct and will beeffective.

To the extent that there are legal issues relating to assets, properties or business interests or issues relating
to compliance with applicable laws, regulations and policies, Grant Samuel assumes no responsibility andoffers no legal opinion or interpretation on any issue.

6

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
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3

Profile of the ANZ Group
Section 1

3.1

Background

Overview

Section 6
Section 7

Today, ANZ is one of the ten largest companies listed on the ASX with a market capitalisation of
approximately $75 billion and at 31 March 2022 had total assets of $1,017 billion.

Section 5

In July 2022, ANZ announced the proposed acquisition of Suncorp Group Limited’s (“Suncorp Group”)
banking business (“Suncorp Bank”)6. The proposed acquisition of Suncorp Bank is subject to a minimum
completion period of 12 months and certain conditions including Federal Treasurer approval, AustralianCompetition and Consumer Commission (“ACCC”) authorisation or approval and repeal of/certain
amendments to Queensland State Government legislation. If completed, the acquisition will broaden the
ANZ Group’s scale and penetration in the Queensland retail and commercial banking market.

Section 4

In recent years, the rise of digital banking and financial technology solutions has accelerated ANZ’sinvestment in expanding its technology platform to better serve its customers. This investment has ranged
from improving core banking activities (e.g. the ANZx internal transformation program) to partnering withadjacent non-banking services that complement its core banking offering (e.g. the establishment of its
venture capital business, ANZi, in 2018 and its subsequent separation as 1835i5.

Section 3

The antecedents of the ANZ Group can be traced back to The Bank of Australasia which was founded in
1835. In 1951, The Bank of Australasia merged with Union Bank of Australia to form the Australia and New
Zealand Bank, which in turn merged with the English, Scottish and Australian Bank in 1970 to form the ANZGroup. ANZ, the parent entity of the ANZ Group, was incorporated in Australia in 1977 (having beentransferred from the United Kingdom). Over the following decades, ANZ consolidated its position in theAustralian financial services sector and expanded globally (particularly in New Zealand and the Asia Pacificregion). However, factors including slower growth in non-core markets, increased regulatory scrutiny andgrowing capital requirements resulted in ANZ exiting most of its non-core businesses (e.g. wealthmanagement and advice and Asia Pacific retail and commercial businesses) as it refocused primarily on its
core retail banking businesses in Australia and New Zealand and its institutional banking business.

Section 2

The ANZ Group is one of the four largest banks4 in Australia and provides banking and financial products toover 9.2 million retail, commercial and institutional customers. It operates across 32 markets in Australia,
New Zealand, Asia, Europe and the Americas.

Industry Environment

regulatory or policy-driven changes such as Open Banking (improved and secure access to customer
banking data) and the New Payments Platform (open access infrastructure for real time payments);broadening of the digital banking platform, which has traditionally focused on providing core banking
services (e.g. bill payment and account transfers). Customers increasingly expect a broader suite offinancial services from digital banking (e.g. online lending and personalised money management);

Section 9Section 8

The Australian banking industry faces constant and rapid technological change to keep up with the digitaltransformation required to meet customer preferences. Recent developments have included:________________________________________________________________________________________________________________________________________________________

Also referred to as the major banks. This group comprises ANZ, Commonwealth Bank of Australia Limited (“CBA”), National Australia
Bank Limited (“NAB”) and Westpac Banking Corporation (“Westpac”).

5

1835i comprises 1835i Creation Fund I Trust, 1835i Ventures I Trust, 1835i Ventures II Trust and 1835i Ventures III Trust.

6

Unless stated otherwise, information in this report (including the pro forma financial information set out in Section 5.5) does not reflect
the proposed acquisition of Suncorp Bank as this transaction is unrelated to the Restructure and remains conditional.

Annexures

7

Section 10

4

93



process automation and integration of artificial intelligence solutions targeting back-office banking
processes such as payments, fraud detection and cybersecurity systems; andthe emergence of new product markets such as buy-now pay-later (as a financing alternative forcustomers) and cryptocurrency (as an investment class).

The investment required to meet evolving customer expectations is substantial. Moreover, the risks
associated with investing in new technologies and entering new markets are different from (if not higherthan) the risks faced by traditional banking operations. The recent closures of Xinja Bank and Volt Bank
illustrate the nature of these risks and the importance of scale (and access to capital) to navigate thesechanges. As the largest participants in the sector, the major banks have invested significant capital andresources to ensure their banking platforms remain fit-for-purpose to meet the evolving technology needsof the market.
Regulation
REGULATORY BODIESThe authorised deposit-taking institution (“ADI”) sector of the Australian banking industry is heavily
regulated. The primary prudential regulator is APRA and the primary conduct regulator is ASIC.
Under the Banking Act 1959 (Cth) (“Banking Act”), APRA is responsible for overseeing the prudential
framework under which ADIs must operate including, in particular:licensing ADIs to operate and supervising them to ensure that the interests of depositors areprotected;

establishing prudential standards that ADIs must comply with, including requirements in relation to:•financial soundness (e.g. minimum regulatory capital requirements, capital adequacy, liquidity
and credit quality). The regulatory capital requirements that apply to ADIs are discussed in moredetail below;•

risk management (e.g. the requirement to have systems for identifying, measuring, evaluating,monitoring, reporting and controlling or mitigating material risks that may affect an ADIs ability
to meet its obligations to depositors); and•governance (e.g. culture, accountability and remuneration). Remuneration governance includes:-

administration of the Banking Executive Accountability Regime (“BEAR”), which establishes
accountability obligations for ADIs and their senior executives and directors. BEAR alsoestablishes, among other things, deferred remuneration, key personnel and notification
obligations for ADIs; and-APRA’s Prudential Standard CPS 511 Remuneration (“CPS 511”), which requires an APRAregulated entity’s variable remuneration arrangements to incorporate adjustment tools thatcan reduce variable remuneration, potentially to zero, for adverse risk and conduct
outcomes. CPS 511 comes into effect for significant financial institutions (which include the
ANZ Group) from 1 January 2023.

Prudential standards are legally binding;

ongoing supervision of ADIs to ensure compliance with APRA’s prudential requirements; andthe ability to take enforcement actions against ADIs (or individuals associated with an ADI) if
necessary to protect the interests of depositors.

In addition to APRA, the ANZ Group’s branch operations and major banking subsidiary operations areoverseen by local regulators such as the Reserve Bank of New Zealand, the US Federal Reserve, the United

8

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

CAPITAL ADEQUACY REQUIREMENTSTier 1 capital, which consists of CET1 capital plus certain securities with complying loss absorbing
characteristics (“Additional Tier 1 capital”) (e.g. non-cumulative preference shares, hybrid capitalsecurities not redeemable at the holder’s option and minority interests); andTier 2 capital, which comprises other hybrid capital instruments and subordinated debt instruments
which have a minimum term of five years.

These measures form the total capital for regulatory purposes. As a domestic systemically important bank(“D-SIB”)7, ANZ is currently required to meet the following minimum prudential capital ratios (calculated on
the basis of risk weighted assets8)9:Tier 1 capital of at least 9.5%; and

total capital (being Tier 1 capital plus Tier 2 capital) of at least 11.5%.

From January 2023, APRA’s revised minimum prudential capital requirements for D-SIBs (calculated on thebasis of risk weighted assets) will include:
CET1 capital comprising a minimum prudential capital ratio of 4.5% plus a capital conservation bufferof 4.75% plus a countercyclical capital buffer of 1.0% (applicable to Australian exposures);

Additional Tier 1 capital of 1.5% (the same as the current requirement); andTier 2 capital of 2.0% (the same as the current requirement), increasing by 3% (to 5%) by January 2024
and a further 1.5% (to 6.5%) by January 2026.

________________________________________________________________________________________________________________________________________________________

Domestic systematically important banks in Australia as determined by APRA are the four major banks (including ANZ).

8

Risk weighed assets are the loans and other assets of an ADI, weighted (i.e. multiplied by a percentage factor) to reflect their respective
level of risk or loss to the ADI. For example, mortgages secured by residential property are generally considered to be lower risk thanunsecured credit card lending. The greater the amount of higher risk loans and other assets that an ADI has, the higher its risk weighted
assets and the higher the amount of capital the ADI must hold to meet APRA’s minimum prudential capital ratios.

9

Notwithstanding these requirements, APRA can also impose higher minimum capital requirements for individual ADIs and may change
an ADI’s capital requirements at any time.

Annexures

9

Section 10

7

Section 9

The above changes would impact the capital management plans (and consequently, the availability ofcapital for non-banking activities) for D-SIBs.

Section 8

The increase in minimum prudential capital ratios is primarily due to finalisation of APRA’s “Unquestionably
Strong Framework for Bank Capital” and the new total loss absorbing capital buffer requirement for D-SIBs.
The higher CET1 minimum requirements are expected to be offset by a decrease in risk weighted assets
from January 2023, with APRA indicating that it is not its intention to require banks to raise additional
capital as a result of the changes.

Section 7

Section 6

CET1 capital of at least 8.0%, comprising a minimum prudential capital ratio of 4.5% plus a capitalconservation buffer of 3.5%;

Section 5Section 4

Common Equity Tier 1 (“CET1”) capital, which broadly comprises ordinary shares, general reserves andretained earnings less intangible assets, capitalised expenses, certain investments and otherregulatory deductions;

Section 3

Section 2

APRA’s prudential standards aim to ensure that ADIs maintain adequate eligible capital to act as a buffer
against the risks of unexpected losses associated with their activities. APRA classifies regulatory capital into
three tiers:

Section 1

Kingdom Prudential Regulation Authority, the Monetary Authority of Singapore, the Hong Kong Monetary
Authority and the China Banking and Insurance Regulatory Commission. These regulators may impose
regulatory requirements, including minimum capital levels, on operations in their individual jurisdictions.

95

Other measures such as the leverage ratio (to cap debt levels in the funding structure) and liquidity ratios(to promote the resilience of a bank’s liquidity and funding profile) have recently been implemented by
APRA to better regulate the capital and funding resilience of ADIs.
In addition, APRA sets specific capital adequacy reporting levels for ADIs:



Level 1, which is the ADI on a standalone basis (in the case of the ANZ Group, comprising ANZ and
specified subsidiaries that are consolidated to form the ADI’s Extended Licensed Entity (“ELE”)10);



Level 2, which is the ADI and all of its subsidiary entities (i.e. the ANZ Group) less certain subsidiaries
and associates that are excluded under the prudential standards (broadly, insurers, funds
management entities, non-financial (commercial) subsidiaries and qualifying securitisation vehicles);and

Level 3, which is a conglomerate group at the widest level (including, for example, subsidiaries
excluded from Level 2).

The ANZ Group reports to APRA on a Level 1 (ANZ and ELE subsidiaries) and Level 2 (Level 1 entities plus
international ADIs (including ANZ NZ) and other subsidiaries undertaking financial activities) basis, andmeasures capital adequacy monthly on a Level 1 and Level 2 basis. APRA does not currently regulate thecapital adequacy of conglomerate groups (Level 3), which would include operations such as 1835i,
securitisation special purpose vehicles and entities acting as manager or trustee (see below for further
discussion). Investments in these Level 3 entities are currently fully deducted for the purposes ofcalculating Level 2 capital ratios.
NON-BANKING EXPOSURES
ADIs are subject to prudential standards that ensure risks from non-banking operations are managed andcontained.
The regulatory framework for ADIs that have non-banking entities (or controlling shareholder or parent
entities) is well established. These measures complement the prudential capital adequacy ratios and aredesigned to protect the ADI’s deposit holders from the ADI’s non-banking activities, which may expose thedeposit holders to a different set of risks than traditional banking activities. Under the prudential
standards, ADIs are required to maintain robust Board and internal governance systems to monitor these
activities and must operate under a regulatory cap (measured as non-banking capital a percentage of total
Tier 1 capital) that limits the ADI’s exposure to non-banking activities.
In contrast, the regulatory framework for diversified groups (Level 3 group entities, e.g. for ADIs in a NOHC
structure, or “financial” NOHCs) is yet to be finalised by APRA. APRA has developed a Level 3 supervisionframework which includes standards governing risk management, governance and outsourcing and aprudential framework for Level 3 parent entities which includes standards relating to aggregate risk
exposures, intragroup transactions and exposures and audit and related matters. APRA has not finalised an
overall framework for the capital requirements that would apply to Level 3 conglomerate groups but hashistorically imposed capital (and other prudential) requirements on financial NOHCs through conditions
attaching to NOHC authorisations.
In summary, APRA expects financial NOHCs to adopt a holistic approach to group risks and have clear
systems in place to supervise intragroup transactions between banking and non-banking groups and ensurethat adequate capital buffers are maintained across the entire group, including the non-banking group (seeSection 4.2 for details).

________________________________________________________________________________________________________________________________________________________
10

An ELE is an ADI and each subsidiary of an ADI which APRA allows to be treated as part of the ADI itself for the purpose of measuring
capital adequacy and exposures to related entities.

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3.2

Corporate Structure and Business Operations

The current corporate structure of the ANZ Group11 is summarised below:

Section 1

Corporate Structure

ANZ GROUP – CURRENT CORPORATE STRUCTURE (SIMPLIFIED)
Section 2

Shareholders

100%

Under its current corporate structure, ANZ has:

ANZ Funds Pty. Ltd., a holding company which owns the ANZ Group’s banking subsidiaries
operating in New Zealand (including ANZ Holdings (New Zealand) Limited, the holding companyof ANZ NZ), Vanuatu, Samoa and Kiribati;•

other subsidiaries which operate the ANZ Group’s banking businesses in China, Vietnam, Papua
New Guinea and Guam; and•a majority owned subsidiary which operates the ANZ Group’s banking businesses in Indonesia;

non-controlling interests in certain:banking businesses (such as interests in PT Bank Pan Indonesia in Indonesia, AMMB Holdings
Berhad in Malaysia and Bank of Tianjin Co Ltd in China); and•non-banking businesses (see below for details of key non-banking businesses); andinterests in non-subsidiaries and trusts (such as 1835i).

All of the Australian banking business is conducted through the parent entity, ANZ.

The ANZ Group primarily operates retail, commercial and institutional banking businesses. Its operations
are segmented by geography (i.e. Australia Retail and Commercial, New Zealand and Pacific) or function(i.e. Institutional and Group Centre).

________________________________________________________________________________________________________________________________________________________
11

Section 10

The Australia Retail and Commercial segment represents the largest share of the ANZ Group’s balance
sheet lending activities (measured as net loans and advances) and operating income:Section 9

Business Operations

Section 8•

Section 7

•Section 6

controlling interests in certain entities, including:Section 5

ANZ Group

Section 4

Non-banking interestsand investments

Banking subsidiaries(Including ANZ NZ)

Section 3

ANZ(shares listed on ASX
and NZX)

The corporate structure diagram is simplified and does not show all ANZ subsidiaries and interests.

Annexures

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97

ANZ GROUP – CONTRIBUTION BY SEGMENT
NET LOANS & ADVANCESAT 31 MARCH 2022

OPERATING INCOME
1HY22
Pacific
0.9%

Pacific Group Centre
0.3%
0.5%

Group Centre
1.2%

New Zealand
19.6%

New Zealand
19.9%

Australia RetailandCommercial
51.5%

Australia RetailandCommercial
52.5%

Institutional
26.9%

Institutional
26.9%

ANZ GroupAt 31 March 2022, the ANZ Group’s various non-banking businesses were spread across Australian Retailand Commercial, Institutional and the Group Centre segments and include:

beneficial interests in the 1835i trusts, the ANZ Group’s venture capital business which operates
through two segments:•

1835i Ventures, which invests in businesses focused on digital and financial technology solutions
including Cashrewards (a leading cashback company in Australia), Airwallex (an online payments
company) and Lendi (an online home loans platform); and•1835i Creation Fund, which is an incubator that facilitates the creation of new businesses.

1835i was structurally separated from ANZ in July 2021. Following a strategic review of the business,
the ANZ Group elected to relinquish direct ownership and operational control over 1835i to betteralign existing risk and governance frameworks with 1835i’s business operations and facilitate
investment decisions and speed to market activities;

a 49% interest in ANZ Worldline Payment Solutions, a joint venture between the ANZ Group andWorldline SA that provides small business, commercial and institutional customers with merchantacquiring services;

a ~12% interest in Pollination Group (“Pollination”), a global climate change investment and advisory
firm;



a 25% interest in Lygon 1B Pty Limited (“Lygon”), a private blockchain platform which allows
customers to request, check, track and exchange bank guarantees from a single portal; and

a 16.7% interest in Trade Information Network (“TIN”), a trade data registry which enables thecollation and exchange of original trade supply data between buyers, suppliers and financiers globally.

From 1 April 2022, the ANZ Group implemented a structural change to its divisions involving the integrationof the Australian retail and digital businesses and the separation of the Australian commercial business into
a new division. The new reporting segments will be reflected in the ANZ Group’s FY2212 results.

________________________________________________________________________________________________________________________________________________________
12

FY22 is the year ending 30 September 2022.

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3.3

Strategy•

augment core banking services, such as developing a new seamless platform that allows
customers to integrate their systems to automate payments and reconciliation processes; and•open new market opportunities for non-banking offerings including in accounting and financial
solutions, credit processes, clearing services, trade services and agency services; andSection 7

Underpinning this strategy is simplicity and the organisational flexibility to respond quickly to the changing
environment, including through breaking down technology barriers, reducing rigidity and improving
decision making processes.

Section 6

invest in digital “ecosystems”, particularly by partnering with banking-aligned and financial
technology organisations that offer innovative solutions to improve the financial wellbeing ofcustomers. An example of an ecosystem is the Australian cashback company, Cashrewards.

Section 5develop infrastructure “platforms”, which can be readily scaled and made accessible to otherfinancial institutions and non-bank users. Successful rollouts of new platforms are expected toencourage greater use of the ANZ Group’s systems and products. These platforms are intended to:

Section 4

Section 3

The ANZ Group aims to achieve its strategy through investing in technology and developing a culture built
around delivering better outcomes for customers, offering them a broader range of banking and bankingadjacent services. The strategy recognises the shifting source of competitive advantage in the Australianbanking industry, particularly the importance (and to some extent, urgency) of accelerating thedevelopment of digital banking “platforms” and “ecosystems”. In this context, the ANZ Group’s strategic
priorities are to:

Section 2

The ANZ Group’s strategy is to improve the financial wellbeing and sustainability of its customers byproviding connected, relevant and efficient services, tools and insights, directly and in partnership withothers. The strategy is centred on the ANZ Group’s core banking offering that is tailored to the financial
goals of its retail customers (e.g. to save for, buy and own a home), small-to-medium enterprise customers(e.g. to start or buy and sustainably grow their business) and institutional customers (e.g. to facilitate themovement of capital and goods and secure funding for growth).

Section 1

The ANZ Group has undergone a period of significant simplification over the past six years. While thisprocess is ongoing, the ANZ Group has entered a new phase focused on growth and areas where it candeliver better outcomes for customers and provide returns for shareholders.

Section 8
Section 9
Section 10
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99

3.4

Key Historical Financial Information and Regulatory Capital

Income Statement
The 1HY22 consolidated income statement of the ANZ Group is summarised below:
ANZ GROUP – SUMMARISED CONSOLIDATED INCOME STATEMENT ($ MILLIONS)1HY22ACTUALOperating income

9,542

Operating expenses(4,791)

Cash profit from continuing operations excluding large and notable items13

3,156

NPAT14 attributable to ANZ shareholders

3,530

STATISTICS
Operating expenses to operating income

50.5%

Return on equity15

11.3%

Basic earnings per share

125.7cDividends per share

72c

Dividend payout ratio16

64%

Amount of dividend franked

100%

ANZ Group and Grant Samuel analysis

The ANZ Group’s 1HY22 consolidated income statement reflects improving economic conditions in its key
markets, although its performance was partly constrained by tightening interest margins, declining feesfrom capital markets activities (hedging and trading) and a growing cost base as well as the scale of the ANZGroup’s investment spend (which is predominantly expensed as incurred and has escalated in recent years
with the ramp up of the ANZx internal transformation program). Overall, while there has been a recovery
in the ANZ Group’s cash profit from continuing operations and NPAT attributable to ANZ shareholders,these parameters remain below pre-COVID-19 pandemic levels.
ANZ currently has dividend guidance of between 60% and 65% of cash profit from continuing operations
excluding large and notable items. It paid fully franked dividends towards the top end of its target range in
1HY22.
Balance Sheet
The consolidated balance sheet of the ANZ Group at 31 March 2022 is summarised below:
ANZ GROUP – SUMMARISED CONSOLIDATED BALANCE SHEET ($ MILLIONS)AT 31 MARCH 2022
ACTUAL
Total assets

1,017,361

Total liabilities(955,605)

Net assets attributable to ANZ shareholders

61,747

Net tangible assets attributable to ANZ shareholders

57,679STATISTICS
Net tangible assets per share$20.64

ANZ Group and Grant Samuel analysis________________________________________________________________________________________________________________________________________________________
13

In 1HY22, large and notable items primarily comprised one-off payment of withholding tax, customer remediation costs, legal entity
rationalisation costs and impact of divestment of One Path and was largely offset by the accounting impact of the ANZ Worldline
Partnership.

14

NPAT is net profit after tax.

15

Return on equity is based on annualised 1HY22 NPAT attributable to ANZ shareholders and average ordinary shareholders’ equity.

16

Dividend payout ratio is dividends paid divided by cash profit from continuing operations excluding large and notable items.

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ANZ has an AA-, Aa3 and A+ investment grade rating from Standard & Poor’s (“S&P”), Moody’s Investor
Service (“Moody’s”) and Fitch Ratings (“Fitch”), respectively.

Section 2

Investments in non-banking businesses are relatively small, with a carrying value of less than $500 million
at 31 March 2022.

Section 1

The ANZ Group has over $1 trillion in assets on its balance sheet which are backed by a diversified funding
portfolio. The majority of the ANZ Group’s assets comprise a portfolio of high quality liquid assets andloans and advances. Funding sources are primarily deposits, supplemented by domestic and international
wholesale funding and convertible subordinated notes.

Regulatory Capital

ANZ – LEVEL 2 CAPITAL RATIOS

Section 3

The following table summarises the consolidated (i.e. Level 2) capital position of ANZ at 31 March 2022:

AT 31 MARCH 2022
ACTUAL
50,511

Tier 1 capital ($ millions)

58,001

Tier 2 capital ($ millions)

14,780Total capital (Tier 1 + Tier 2) ($ millions)

72,781

Risk weighted assets ($ millions)

437,910

CET1 capital ratio

11.5%

Tier 1 capital ratio

13.2%

Total capital ratio

16.6%
5.2%

Liquidity coverage ratio132%

Net stable funding ratio

123%

ANZ Group and Grant Samuel analysis

ANZ’s leverage ratio, liquidity coverage ratio and net stable funding ratio are also in excess of theregulatory levels (of 3.5%, 100% and 100% respectively).

Taxation Position

Under the Australian tax consolidation regime, ANZ and its Australian resident wholly owned entities haveelected to be taxed as a single entity. Members of the group have entered into tax sharing and tax funding
agreements with ANZ (as the head entity of the consolidated tax group), which govern certain aspects of
the operation of the group.

no carried forward income tax losses and no on-balance sheet carried forward capital losses; andCarried forward income tax losses, carried forward on-balance sheet capital losses and franking credits are shown at 30 September 2021
(and not at 31 March 2022) as they are only calculated definitively at each financial year end.

Annexures

15

Section 10________________________________________________________________________________________________________________________________________________________
17

Section 9

At 30 September 202117, ANZ had:

Section 8

3.5

Section 7

At 31 March 2022, ANZ’s CET1, Tier 1, Tier 2 and total capital ratios were well in excess of APRA’s minimum
requirements (even allowing for a buffer above the minimum prudential requirements). ANZ’s CET1 capitaland Tier 1 capital ratios are also above APRA’s increased requirements that will apply by January 2023.

Section 6

Leverage ratio

Section 5

CAPITAL ADEQUACY RATIOS

Section 4

CET1 capital ($ millions)101

$772 million of accumulated Australian franking credits (tax effected) and NZ$5 billion of accumulated
New Zealand franking credits which can be attached to ANZ’s Australian dividends but may only be
used by New Zealand resident shareholders18.



3.6

Capital Structure and Ownership

Capital Structure
ANZ has the following equity securities on issue:2,989,923,751 ordinary shares; and

6,207,962 options and rights.

In July 2021, ANZ announced its intention to buy back up to $1.5 billion of ordinary shares as part of its
capital management plan. This buy back was completed in March 2022 with ANZ buying back 54,139,675
ordinary shares.
In July 2022, ANZ announced a $3.5 billion fully underwritten pro rata accelerated renounceable
entitlement offer (“entitlement offer”) to help fund the acquisition of Suncorp Bank. The entitlement offer
was completed in August 2022, resulting in the issue of 187,105,950 ordinary shares. These ANZ shares areincluded in the number of issued ordinary shares shown above.
ANZ operates an American Depository Receipts (“ADR”) Programme. ADRs are traded in the United States
over-the-counter market with each ADR representing one ordinary share.
Under the ANZ Incentive Plan, certain employees and executives are offered part of their variable
remuneration as deferred equity awards as follows:

deferred shares, offered under the Employee Share Acquisition Plan (“ESAP”), are held on trust
generally for between one and four years, and are subject to certain conditions being satisfied.
Deferred shares are not subject to performance hurdles;

deferred share rights, offered under the Employee Share Option Plan (“ESOP”), are generally deferred
for between one and four years, and entitle the participant to one ANZ ordinary share (or cash
equivalent amount) for each share right awarded, subject to certain conditions being satisfied.
Deferred share rights are not subject to performance hurdles; and

restricted rights and performance rights, offered under the ESOP, are generally deferred for four orfive years, and entitle the participant to acquire ANZ ordinary shares (or at ANZ’s discretion, a cash
amount equal to the value of an ANZ share) for nil consideration, subject to certain conditions being
satisfied, including total shareholder return performance hurdles (for performance rights) and a fouryear performance period.

ANZ has a dividend reinvestment plan (“DRP”) and a bonus option plan that allow shareholders to forgo or
reinvest all or part of their dividend payments into additional fully paid ordinary shares. Shares allocatedunder these plans can be sourced either through on-market purchase or through new share issuances.
ANZ also has on issue capital notes (“ANZ capital notes”)19, which are mandatorily convertible subordinatedperpetual securities. ANZ issues ANZ capital notes as Additional Tier 1 capital to support its Tier 1 capitalrequirements. These capital notes are denominated in Australian dollars and are quoted for trading on the________________________________________________________________________________________________________________________________________________________
18

19

The franking account balances at 30 September 2021 have been adjusted for:

franking credits that will arise from the payment of income tax payable at the end of the 30 September 2021 financial year; and

franking credits/debits from the receipt/payment of dividends that have been recognised as tax receivable/payable at 30
September 2021.

ANZ currently has five capital note issues quoted for trading on the ASX, Capital Notes 3, Capital Notes 4, Capital Notes 5, Capital Notes 6
and Capital Notes 7.

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Ownership

Section 1

ASX. They do not confer voting rights but provide ANZ with early redemption or conversion options undercertain circumstances (subject to the approval of APRA).

ANZ has more than 500,000 registered ordinary shareholders. The top ten registered shareholders
represent more than 55% of the ordinary shares on issue.

Section 3

ANZ has received substantial shareholder notices from BlackRock Group (6.07%20), State Street Corporation(5.08%21) and The Vanguard Group, Inc. (5.00%22).

Section 2

The top ten registered ordinary shareholders are principally institutional nominee companies or investmentcompanies. ANZ registered shareholders are predominantly Australian based investors (approximately 94%
of registered shareholders and approximately 97% of issued shares).

Section 4
Section 5
Section 6
Section 7
Section 8
Section 9

Based on issued shares on 2 December 2019.

21

Based on issued shares on 20 July 2022.

22

Based on issued shares on 22 April 2022.

Annexures

17

Section 10________________________________________________________________________________________________________________________________________________________
20

103

4

Background to Financial NOHCs
4.1

Overview

A NOHC is a holding company that does not conduct its own business and has subsidiaries that are the main
operating entities that carry out the day-to-day activities of the group. Under this structure, the NOHC sits
at the top of the corporate structure as the parent entity and its scope of standalone activities are generally
limited to:receiving upstream dividends from its subsidiaries;

providing financial support to its subsidiaries; andraising external capital (i.e. debt or equity).

In the banking sector, a NOHC structure can be used to structurally separate the banking group (which
includes ADI-type entities) from the non-banking group which can cover a wider range of activities such as
insurance, securitisation, investment banking and venture capital. The parent entity in this structure iscommonly referred to as a “financial” NOHC23.
The structural separation of banking and non-banking activities within a group is not mandatory inAustralia. However, it does have implications for the regulatory framework that applies to the entities
within the group. APRA regulations (including capital adequacy requirements) for an ADI continue to apply
to the banking entities in the group, whereas a different capital adequacy regime applies to the financial
NOHC itself and there is flexibility to apply APRA’s prudential standards differently to the non-banking
entities in the group given the nature of their activities. This approach is intended to facilitate regulatory
oversight and, ultimately, mitigate contagion risks between the two sets of entities within the group.
In Australia, financial NOHCs can be authorised by APRA under the Banking Act, the Insurance Act 1973
(Cth) or the Life Insurance Act 1995 (Cth), depending on whether the APRA regulated business within thegroup is predominantly involved in banking, general insurance or life insurance activities, respectively.
There are currently 19 authorised financial NOHCs in Australia, including Macquarie Group Limited,
Suncorp Group and AMP Limited (“AMP”).

4.2

Regulatory Environment for Financial NOHCs in Australia

The origin of the NOHC structure in the Australian banking sector can be traced back to the 1997 Financial
Systems Inquiry (the “Wallis Inquiry”). The Wallis Inquiry was launched to evaluate the impact of financial
deregulation over prior decades, which had resulted in the rise of financial conglomerates with diversifiedbanking and non-banking operations across the financial sector.
Up to this point, the head entity of a financial conglomerate group was typically the regulated ADI entity,
which, in addition to its banking activities, was a holding company for the conglomerate’s diversified
operations. Following its review of the structures of financial conglomerates in 1997, the Wallis Inquiry
recommended the NOHC structure as a superior structural option to support prudential supervision. In
particular, the NOHC structure was found to be a more efficient structure to promote financial disclosure
and information transparency and provide greater flexibility to manage and monitor the risks arising fromdiversified businesses.
However, implementation of a NOHC structure must also satisfy APRA’s requirements in relation to capital
adequacy, suitability of firewalls (i.e. to minimise contagion risk), reporting of intragroup activities andindependence of board representation for the subsidiary entities. Defining the appropriate prudential
framework for these requirements was the subject of regulatory and industry debate and consultation overthe following two decades:________________________________________________________________________________________________________________________________________________________
23

In contrast, a “bank” NOHC (common in the United States) is limited to only owning interests in separate banking entities.

18

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
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between 2010 and 2016, APRA released a number of discussion papers relating to the supervision offinancial NOHCs. These papers included the release of draft Level 3 prudential standards in 2014 thatoutlined the recommended governance framework and proposed limits on intra group capitaltransactions that were due to come into effect from July 2017; and

in March 2016, APRA elected to defer the implementation of capital standards for financial NOHCs but
agreed to release the governance framework for the non-capital components of the supervision of
conglomerate groups. APRA published these non-capital prudential standards in July 2017,
emphasising the importance of managing (and limiting) aggregate group risk exposure and intragrouptransactions and exposures within conglomerates.

4.3

Rationale for Financial NOHC Restructures

For example, APRA specified an aggregate capital requirement for the Macquarie Bank NOHC (Macquarie Group Limited) that was thesum of the capital requirements of each regulated entity in the NOHC group (determined by APRA) and each non-regulated entity in the
NOHC group (based on a Board approved economic capital model which required agreement with APRA in relation to its elements andinclusion).

Annexures

19

Section 10________________________________________________________________________________________________________________________________________________________

Section 9

The benefits typically cited for financial NOHCs largely revolve around simplification of the business andalignment of the regulatory and governance regime over the banking and non-banking businesses.
However, at the same time, there are some disadvantages, potential risks and costs associated with NOHC
restructures. The primary issues raised are listed below:

Section 8

Benefits and Disadvantages of Financial NOHCs

24

Section 7

The approach adopted by APRA is not inconsistent with that of other international financial centres whichhave adopted similar holding company structure requirements to manage risks between banking and nonbanking businesses. In 2015, the United States introduced a new “intermediate holding company”
requirement to manage the banking and non-banking exposures of foreign banking organisations.
Similarly, the United Kingdom introduced a new holding company requirement in 2019 to facilitate the“ring-fencing” of retail and commercial banking from investment banking activities.

Section 6

APRA’s prudential framework for financial NOHCs continues to evolve. At this stage, APRA has not finalised
its recommendations on specific minimum capital requirements and the approach to measuring capital
adequacy. However, the industry and regulatory engagement over the past two decades demonstrates
that APRA continues to actively evaluate the merits of a NOHC structure in overseeing a conglomerate’sbanking and non-banking activities.

Section 5Section 4

in June 2007, the Federal Government resolved these issues by passing the Financial Sector Legislation
Amendment (Restructures) Act 2007 to provide relief for NOHC restructures under the Corporations Act
and amending Australian tax legislation to minimise income tax consequences and provide rollover relief
for NOHC restructures. Both Macquarie Bank Limited (“Macquarie Bank”) and Suncorp-Metway Limited(“Suncorp-Metway”) implemented financial NOHC structures shortly after introduction of the newlegislation, with APRA specifying the Level 3 capital requirements for these financial NOHCs under theconditions of their respective NOHC authorisations24;

Section 3

Section 2

in April 2000, APRA published a comprehensive framework for the prudential supervision of financial
NOHCs. The framework covered requirements for ownership and structure, board composition,
permitted activities and risk governance. However, few banking groups elected to implement a NOHC
structure due to regulatory and tax impediments;

Section 1

105

ISSUES ASSOCIATED WITH FINANCIAL NOHCSADVANTAGES/BENEFITS

•
•
•
•
•
•

DISADVANTAGES/RISKS/COSTS•••

simplified corporate structuretransparency and regulatory oversightisolation of risk (i.e. minimise contagion risk)“fit-for-purpose” governance and risk management

additional ongoing costs
one-off transaction costs (including stamp duty)
potentially lower credit rating and therefore increased
financing costs for the NOHC

capital flexibility and clarity in capital allocation
better targeted incentives and management/board focus
Grant Samuel analysis

Precedent Financial NOHC Restructures
The NOHC structure has limited precedent in the Australian banking sector (particularly for large domestic
banks) but has been widely used internationally. Over the past three decades, there have been a numberof NOHC restructures in the banking sector:
SELECTED NOHC RESTRUCTURES IN THE BANKING SECTOR
PARENT COMPANYDATEPURPOSE/OBSERVATIONSAUSTRALIAHBOS Australia Pty Ltd(“Bankwest Australia”)

early 2000s• one of the first financial NOHCs in Australia• structurally separate the wealth management and life insurance businesses

Members Equity Bank

2007

• facilitate the merger with Industry Funds Services (“IFS”)• structurally separate IFS’s funds management and funds services businesses

Macquarie Bank

2007

• promote greater strategic and operating flexibility to pursue international anddiversified growth while complying with APRA’s regulatory framework• structurally separate investment banking and corporate finance businesses• NOHC restructure was required by APRA

Suncorp-Metway

2010• simplify corporate structure and business model• promote capital flexibility to transfer surplus funds within the group• structurally separate banking, general insurance and life insurance businesses

AMP

2022

• no public information available but the NOHC registration of AMP Limited
followed the announcement of a series of divestments and the demerger of
its private markets division (which required the transfer of the asset
management business to AMP)
• structurally separate the banking business from the remainder of its financial
services businesses (e.g. wealth management)

Bank of America Corporation

1968• initially established as a bank holding company to facilitate interstate
expansion and compete with other banking peers• registered as a financial holding company following the Gramm Leach Bliley
Act of 1999 which allowed banks to engage in a broader range of financial
activities (e.g. securities underwriting, insurance, etc.) under a NOHC structure

JPMorgan Chase & Co.

1969• initially established as a bank holding company to facilitate interstate
expansion and compete with other banking peers• registered as a financial holding company following the Gramm Leach Bliley
Act of 1999 (see above)

HSBC Holdings plc (“HSBC”)

1991• strategic flexibility to align with increasingly global structure, particularly inHong Kong and the broader Asia Pacific region• structurally separate Asia Pacific and European businesses

Citigroup Inc. (“Citigroup”)

1998• facilitate the acquisition of Travelers Group• structurally separate the newly acquired insurance and investments business• NOHC restructure was required by the Federal Reserve

INTERNATIONAL

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SELECTED NOHC RESTRUCTURES IN THE BANKING SECTOR (CONT)• secure access to liquidity during the financial crisis, which was available only
to bank NOHCs and financial NOHCs• structurally separate investment banking and capital markets businesses

The Goldman Sachs Group, Inc.
(“Goldman Sachs”)

2008• secure access to liquidity during the financial crisis, which was available only
to bank NOHCs and financial NOHCs• structurally separate investment banking and capital markets businesses

Mitsubishi UFJ Financial Group,
Inc. (“MUFG”)

2008• facilitate the acquisition of a 21% interest in Morgan Stanley• structurally separate investment banking and capital markets business (i.e. theMorgan Stanley business)• NOHC restructure was required by the Federal Reserve

Large Swiss banks(including UBS AG and Credit
Suisse AG)2014• regulatory requirement in Switzerland to enhance resolvability (i.e. loss
absorption capabilities of the NOHC to facilitate “bail-ins” and recapitalise thegroup companies if required) of systemically important banks• resulted in the creation of financial NOHCs as part of the “single point ofentry” resolution strategy

INTERNATIONAL – LOCAL OPERATIONS ONLY
2014 -2018

Large United Kingdom banks(including Barclays plc, HSBC,
Lloyds Banking Group and The
Royal Bank of Scotland Group
plc)

2018

• internal restructure impacted United States operations only
• regulatory requirement for foreign banks with more than US$50 billion in total
non-bank assets in the United States to put in place an “intermediate holding
company” which had the same effect as a NOHC but impacted only thedomestic operations• internal restructure impacted United Kingdom operations only
• regulatory requirement in the United Kingdom to “ring-fence” retail andcommercial banking activities from investment banking activities

Most financial NOHC restructures were completed to address immediate constraints such as:regulatory requirements, which often carry implementation deadlines and are typically driven by:•reforms, such as for large banks in the United Kingdom (which required the “ring fencing” ofretail banking operations), large banks in Switzerland (which required enhanced loss absorption
capabilities to facilitate resolvability) and foreign bank organisations in the United States (which
required a local intermediate holding company if their non-banking assets exceeded US$50
billion); and•mergers and acquisitions, such as for Citigroup and MUFG which both implemented financial
NOHCs to separately hold their banking and non-banking interests following major acquisitions;andAnnexures

21

Section 10

access to liquidity. In 2008, Morgan Stanley and Goldman Sachs transitioned to a bank holding
company structure and implemented financial NOHCs under arguably more pressing circumstances.
The collapse of Bear Stearns and Lehman Brothers resulted in significant losses and uncertainty for theinvestment banking industry. The transition to a NOHC structure enabled both banks to bolster theirfinancial positions by enhancing their ability to access (through banking subsidiaries) low-costfederally insured deposits and through the NOHC becoming subject to regulation by, and having the
support of, the Federal Reserve.

Section 9

temporary regulatory relief. For example, Macquarie Bank committed to APRA that it would seeka solution (including via a NOHC structure) to ensure the non-banking exposure of its ADI
business operated within the allowable capital thresholds of authorised activities;

Section 8•

Section 7

Section 6

Grant Samuel analysis

Section 5

United States foreign banking
organisations(including BNP Paribas, Credit
Suisse, Deutsche Bank, UBS and
Barclays)

Section 4

2008

Section 3

Morgan Stanley

Section 2

PURPOSE/OBSERVATIONSINTERNATIONAL (CONT)

Section 1

DATE

PARENT COMPANY107

On the other hand, some financial NOHC restructures did not involve an immediate catalyst but wereprimarily designed to position the business for the future. The rationale for these NOHC restructures
included:enhanced capital flexibility and delineation of capital, such as for Suncorp Group, which sought toalign the group’s corporate structure with the different regulatory capital requirements of its threeoperating businesses (i.e. banking, general insurance and life insurance). The NOHC structure enabled
Suncorp Group to stream surplus capital to the group NOHC and inject it into any of the three groups
as required; and

increased strategic flexibility and focus, such as for HSBC which required greater board andmanagement focus (as well as more targeted management incentives) to deliver the different growthrequirements for its Asia Pacific and European businesses.

The major banks in Australia also evaluated the merits of implementing a NOHC structure around the mid2000s. At the time, each of the major banks held diversified non-banking interests across the financial
sector including insurance, funds management and wealth management and retail financial advice. Whileno action was ultimately taken, the major banks recognised the potential benefits of a NOHC structure,
citing advantages such as simplified regulatory oversight and improved delineation between (andmanagement of) the banking and non-banking activities.

22

108

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

5Impact of the Restructure (including the Scheme)
Section 1

5.1

Process

If the Scheme is approved and implemented:



ANZ NOHC will issue ANZ NOHC shares on a one-for-one basis attributable to ineligible foreign
shareholders to a sale agent. These ANZ NOHC shares will be sold on the ASX through a sale facility
and ineligible foreign shareholders will receive the cash proceeds from the sale of those ANZ NOHC
shares; and

all ANZ shares will be acquired from ANZ shareholders (or, in the case of ANZ shares held by ineligible
foreign shareholders, from the sale agent) by ANZ NOHC.

In addition:
existing ANZ capital notes issued by ANZ will remain on issue by ANZ under ANZ’s debt listing on the
ASX until they are repaid, converted or written off and will be on substantially the same terms. The
terms of the ANZ capital notes will be amended so that:
distribution restrictions will apply to ANZ (i.e. there will be restrictions on the payment of
distributions by ANZ to ANZ NOHC) if a scheduled dividend on the ANZ capital notes is not paid;
and•on conversion, holders of ANZ capital notes will be issued ANZ NOHC shares instead of shares in
ANZ.

ANZ NOHC intends to continue to operate an ADR programme on substantially the same terms as
ANZ’s current ADR programme; and

the ANZ Incentive Plans will continue to operate and apply on substantially the same terms andconditions except that the incentive plans will be operated by ANZ NOHC and provide interests in ANZNOHC shares:
ANZ deferred shares will be transferred to ANZ NOHC and exchanged for ANZ NOHC shares on a
one-for-one basis. These new employee share scheme interests in ANZ NOHC will be deemed to
be a continuation of the old interests in ANZ and will continue to be held on trust for the relevant
employee; and•ANZ deferred share rights, restricted rights and performance rights held by employees will lapse
and will be replaced with ANZ NOHC deferred share rights and performance rights on a one-forone basis and on the same terms.

Annexures

23

Section 10

After implementation of the Scheme, the ANZ Group will undertake the Business Restructure. Nonoperating intermediate holdings companies for the ANZ Bank Group (ANZ BH Pty Ltd (“ANZ Bank HoldCo”)),
the ANZ Non-Bank Group (ANZ NBH Pty Ltd (“ANZ Non-Bank HoldCo”) and ANZ ServiceCo) have alreadybeen incorporated by ANZ. The key steps to be undertaken in the Business Restructure are:

Section 9•

Section 8Section 7

The hybrid securities issued by ANZ NZ will not be affected by the Scheme (and will remain on issue
under ANZ NZ’s debt listing on the New Zealand Stock Exchange);

Section 6•

Section 5Section 4

After implementation of the Scheme, ANZ NOHC will become the new listed parent entity of the ANZ Group.
Shareholders (other than ineligible foreign shareholders) will hold the same number of ANZ NOHC shares as
the number of ANZ shares held prior to implementation of the Scheme. The Scheme will not change theeconomic interest of shareholders (other than ineligible foreign shareholders) in the ANZ Group.

Section 3

ANZ NOHC will issue ANZ NOHC shares on a one-for-one basis to shareholders (other than ineligible
foreign shareholders) who hold ANZ shares on the record date for the Scheme;

Section 2



109



ANZ transferring the beneficial interest in 1835i25 managed trusts, its non-controlling interest in the
ANZ Worldline Payment Solutions joint venture and its equity interests in Pollination, Lygon and TIN to
ANZ Non-Bank HoldCo;

ANZ transferring its interest in land and buildings at 833 Collins Street, Docklands (in Victoria)26 andleasehold improvements associated with Australian leased properties to ANZ ServiceCo;

ANZ transferring all the shares in ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo to ANZNOHC; and

ANZ NOHC transferring all the shares in ANZ to ANZ Bank HoldCo.

5.2

Corporate Structure

Corporate Structure
The corporate structure of the ANZ NOHC Group11 after implementation of the Restructure is illustrated
below:ANZ NOHC GROUP – CORPORATE STRUCTURE AFTER THE RESTRUCTURE (SIMPLIFIED)
Shareholders
ANZ NOHC Group100%

ANZ NOHC(new company)(shares listed on ASX
and NZX)

100%

ANZ Bank HoldCo(new company)

100%

100%

ANZ ServiceCo(new company)

ANZ Non-Bank
HoldCo(new company)

100%

Specific non-banking
interests andinvestments

ANZ

ANZ Non-Bank Group

Banking subsidiaries(including ANZ NZ)ANZ Bank GroupANZ Group________________________________________________________________________________________________________________________________________________________
25

Excluding 1853i’s interest in OneTwo Finance Pty Ltd, which will remain indirectly owned by ANZ by way of a separate restructure of
1835i.

26

ANZ’s interest in land and buildings at 833 Collins Street, Docklands comprises ANZ Centre Trust, which owns 833 Collins Street,
Docklands, ANZ Centre Chattels Trust which owns the leasehold improvements, furniture and equipment for 833 Collins Street,
Docklands and ANZ Centre Pty Ltd, which is the trustee of these trusts.

24

110

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

Legal Entities

ANZ Non-Bank HoldCo, which will be the new non-operating holding company for certain of ANZNOHC Group’s non-banking subsidiaries and equity investments in banking-adjacent businesses,
including the beneficial interests in the 1835i trusts, the non-controlling interest in the ANZ Worldline
Payment Solutions joint venture and equity interests in Pollination, Lygon and TIN; and

ANZ ServiceCo, which will be established to become an internal service company. ANZ ServiceCo will
initially own certain property interests.

As part of the Restructure, it is intended that intragroup services and resourcing agreements will be put inplace to set out the terms on which:

ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.

These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.

Corporate Governance

Section 8

5.3

Section 7

ANZ ServiceCo can, in the future, potentially provide certain central shared services across the ANZGroup. These services could include corporate functions such as group property, group mergers andacquisitions and strategy, investor relations, procurement and company secretarial services. APRA
has required that business functions that are critical to the businesses and service delivery of the ANZBank Group will remain with their respective groups and will not be transferred to ANZ ServiceCo; andSection 6

Section 5

ANZ Non-Bank HoldCo and its subsidiaries and ANZ ServiceCo comprise the ANZ Non-Bank Group. The ANZ
Non-Bank Group will initially be modest in scale and is expected to be primarily used as a vehicle fordeveloping or acquiring non-banking businesses (including banking-adjacent businesses).

Section 4

Section 3

ANZ Bank HoldCo, which will be the new non-operating holding company of the ANZ Bank Group.
ANZ, as the regulated ADI entity, will be wholly owned by ANZ Bank HoldCo and will continue to be
the parent entity of the ANZ NOHC Group’s offshore regulated banking subsidiaries (e.g. ANZ NZ andother international banking businesses) and insurance businesses (including mortgage insurance andcaptive insurance);

Section 2

Section 1

After implementation of the Scheme, ANZ NOHC will be the parent entity of the ANZ NOHC Group andreplace ANZ as the listed holding company of the ANZ Group. It will generally function as a non-operatingholding company and will not carry on its own business or operations. ANZ NOHC will be an authorised
NOHC under the Banking Act. After implementation of the Business Restructure, ANZ NOHC will have threesubsidiaries:

Constitution
The rights, roles and responsibilities of ANZ NOHC shareholders and directors and the rules governing theinternal management of ANZ NOHC are set out in the ANZ NOHC Constitution.

The terms of ANZ NOHC Group Board committee charters and governance policies after implementation of
the Restructure will be in substantially the same form and structure as the existing ANZ Group’s Board

Annexures

25

Section 10

Board Committee Charters and Governance Policies

Section 9

ANZ NOHC will continue to have substantially the same corporate governance framework andarrangements as ANZ, apart from certain changes that relate to procedural and administrative matters (seeSection 9.4 of the Explanatory Memorandum).

111

committee charters and governance policies, subject to certain changes that will be made to reflect thestructure of the ANZ Group after implementation of the Restructure.
Company Boards and Senior Management
If the Restructure is implemented, there will be a Board of ANZ NOHC and of each of ANZ Bank HoldCo,
ANZ, ANZ Non-Bank HoldCo and ANZ ServiceCo. The composition of each Board will reflect the business
operations, market risks and regulatory considerations for each entity27:
ANZ NOHC GROUP – BOARDS OF DIRECTORSBOARD REPRESENTATION
ANZ
NOHC

ANZ
BANK
HOLDCOANZANZNONBANKHOLDCOPaul O’Sullivan









Shayne Elliot









Chief Executive Officer, Executive Director

Ilana Atlas AO









Independent Non-Executive Director

DIRECTOR

ROLE

Chairman, Independent Non-Executive Director

Jane Halton AO PSM









Independent Non-Executive Director

Sir John Key GNZM AC









Independent Non-Executive Director

Graeme Liebelt









Independent Non-Executive Director

John Macfarlane









Independent Non-Executive Director

Christine O’Reilly









Independent Non-Executive Director

Jeff Smith









Independent Non-Executive Director

VacantIndependent Non-Executive Director

ANZ

In this regard, it is proposed that the membership of the:

ANZ NOHC Board will be identical to the current membership of the ANZ Board. After implementationof the Restructure, the ANZ NOHC Board will be responsible for the oversight and strategic directionof the ANZ NOHC Group;

ANZ Bank HoldCo and ANZ Boards will mirror the ANZ NOHC Board but will also include one nonexecutive director who is not on the Board of ANZ NOHC and ANZ Non-Bank Group. The ANZ Bank
HoldCo and ANZ Boards will be responsible for the oversight of the ANZ NOHC Group’s banking
businesses; and

ANZ Non-Bank HoldCo Board will mirror the ANZ NOHC Board. The ANZ Non-Bank HoldCo Board will
be able to appoint additional independent non-executive directors (who are not on the ANZ NOHC,ANZ Bank HoldCo and ANZ Boards) as the non-banking business grows in the future. The ANZ NonBank HoldCo Board will be responsible for the oversight of the ANZ NOHC Group’s non-banking
businesses and assets that are owned by ANZ Non-Bank HoldCo.

The Board of ANZ ServiceCo will have a different structure, reflecting the nature of its operations. It willcomprise an independent non-executive director and appropriately qualified senior management from the
ANZ NOHC Group.
The Restructure will not have any impact on the ANZ Group’s executive committee, which will continue tooperate on a groupwide basis. It is proposed that the executive committee will continue to comprise28:________________________________________________________________________________________________________________________________________________________
27

Subject to any changes to the Board prior to implementation of the Restructure as part of the normal Board renewal process (andunrelated to the Restructure).

28

Subject to any appointments or resignations prior to implementation of the Restructure (and unrelated to the Restructure).

26

112

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

ANZ NOHC GROUP – EXECUTIVE COMMITTEE
ROLE

Shayne Elliot

Chief Executive Officer

Farhan Faruqui

Chief Financial Officer

Kevin Corbally

Group Chief Risk Officer
Group Executive Australia Retail

Antonia Watson

CEO of New ZealandMark Whelan

Group Executive, Institutional

Gerard FlorianGroup Executive Technology & Group Services

Kathryn van der Merwe

Group Executive Talent & Culture and Service Centres

Antony Strong

Group Executive Strategy & Transformation (effective 1 November 2022)

5.4

Section 3

ANZ

Section 2

Maile Carnegie

Section 1

EXECUTIVE COMMITTEE MEMBER

Regulatory Framework

ANZ Bank Group (comprising ANZ Bank HoldCo, ANZ and ANZ’s banking subsidiaries including ANZ NZ)
will own the ANZ NOHC Group’s core banking businesses and ADIs and will continue to be subject tothe full range of APRA’s prudential and reporting regulations for ADIs (including standards in relation
to capital adequacy and liquidity); and

ANZ Non-Bank Group (comprising ANZ Non-Bank HoldCo and ANZ ServiceCo) will own certain of the
ANZ NOHC Group’s banking-adjacent businesses and will not be subject to ADI-specific regulation. As
noted above, ANZ NOHC will be required to apply certain APRA prudential and reporting standards
appropriately throughout the ANZ NOHC Group and therefore may require entities in the ANZ NonBank Group to comply with certain prudential requirements where it considers it appropriate to do soto protect the ANZ NOHC Group or its customers or where APRA has required ANZ NOHC to do so.



ANZ NOHC must not undertake any activities other than those approved by APRA (e.g. providing ANZNOHC Group executive leadership, holding investments in subsidiaries, raising funds to invest in or
support subsidiaries or to conduct its own activities or other activities required to comply with its
prudential obligations);

ANZ NOHC must obtain a no-objection confirmation from APRA prior to commencing material
activities in the ANZ Non-Bank Group;

ANZ must retain ownership of, or access to, all functions critical to its operations;the ANZ NOHC Group’s non-banking businesses must be financially and operationally separable from
ANZ; andAnnexures

27

Section 10

ANZ Bank HoldCo and ANZ must have an independent director who is not on the Board of ANZ NOHC
or any ANZ Non-Bank Group entity;

Section 9Section 8

APRA’s authorisation of ANZ NOHC as a non-operating holding company under the Banking Act is subject toa number of conditions, including:Section 7

Section 6

ANZ NOHC will be a non-operating holding company that is authorised by APRA (i.e. an authorised
NOHC). It will be subject to regulation under the Banking Act and under certain APRA prudential
standards. It will be required to comply with the conditions of APRA’s NOHC authorisation (which aresummarised below) and as the head of a Level 3 group, will be required to ensure that a range of
APRA prudential standards are applied appropriately throughout the ANZ NOHC Group. On a
standalone basis, as it is not an ADI and will have limited activities, it will not be subject to ADI-specificregulation by APRA;

Section 5Section 4

After implementation of the Restructure, APRA’s primary supervision focus will be on ANZ NOHC, ANZ and
ANZ’s subsidiaries:

113



ANZ NOHC must ensure that the ANZ Non-Bank Group does not carry on any activities that expose the
ADI to excessive risk (and ensure that the ANZ Bank Group transfers to the ANZ Non-Bank Group any
activities that APRA notifies in writing to constitute an undue risk to the ADI).

APRA has the ability to review and modify these conditions at any time if it considers it appropriate to doso.
There will be no change to the ANZ Group’s risk management framework after implementation of the
Restructure. However, the ANZ NOHC Group’s risk management framework and risk appetite statement
may change over time as the ANZ Non-Bank Group develops.

5.5

Pro Forma Historical Financial Information and Regulatory Capital

Basis of Preparation
The Explanatory Memorandum pro forma 1HY22 financial information has been prepared by the ANZGroup and was subject to review by KPMG Transaction Services. KPMG Transaction Services’ Limited
Assurance Investigating Accountant’s Report is set out in Annexure 2 to the Explanatory Memorandum.
The Explanatory Memorandum pro forma historical financial information:focuses on the disaggregation of the ANZ NOHC Group’s consolidated financial information to show
the ANZ NOHC, ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo on a standalone basis
and reflects the intended legal structure of the ANZ NOHC Group after implementation of the
Restructure; and

has not been adjusted for one off cash transaction and implementation costs associated with the
Restructure (estimated at $35 million before tax, including stamp duty of $10 million) or additional
ongoing costs that will be incurred if the Restructure is implemented (estimated at less thanapproximately $5 million per annum before tax).

Consequently, the pro forma consolidated 1HY22 financial information for the ANZ NOHC Group is identicalto the ANZ Group’s reported consolidated 1HY22 financial information.
Grant Samuel has made adjustments to the Explanatory Memorandum pro forma consolidated 1HY22
financial information to show the pro forma impact of these one-off costs and additional ongoing costs on
the ANZ Group’s 1HY22 financial information as if the Restructure had been implemented in the historicalperiod.
The movement between the Explanatory Memorandum pro forma 1HY22 financial information and theGrant Samuel pro forma 1HY22 financial information is indicative of the impact of the Restructure on the
ANZ Group.
Pro Forma Income Statement
The Explanatory Memorandum pro forma 1HY22 consolidated income statement of the ANZ NOHC Groupset out in Section 6.4 of the Explanatory Memorandum illustrates the 1HY22 income statement of the ANZBank HoldCo, ANZ Non-Bank HoldCo, ANZ ServiceCo, ANZ NOHC and the ANZ NOHC Group assuming that
the Restructure was in place during the period. The pro forma ANZ NOHC standalone income statement
assumes that surplus capital in ANZ Bank HoldCo is repaid to ANZ NOHC by way of a dividend payment of$1.9 billion29. The dividend income is eliminated on consolidation.
The proportion of pro forma 1HY22 operating income and NPAT represented by each of these entities in
the ANZ NOHC Group (before intercompany dividends and other consolidation adjustments) aresummarised below:________________________________________________________________________________________________________________________________________________________
29

The surplus capital amount of $1.9 billion is illustrative only. Any return of capital is subject to regulatory approvals and will depend on
the circumstances and levels of capital at the time that the Restructure is implemented.

28

114

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

ANZ NOHC GROUP – PRO FORMA DECONSOLIDATED 1HY22 OPERATING INCOME AND NPAT ($ MILLIONS)

100.3%

0.0%

Section 2

ANZ
Non-Bank
HoldCo99.9%

Section 1

ANZ
Bank
HoldCo-0.5%

ANZServiceCo

0.2%

ANZ
NOHC

0.0%

0.1%

Section 3

0.0%
Pro Forma NPAT

intragroup arrangements between ANZ Bank HoldCo and ANZ ServiceCo for the utilisation of property
assets held by ANZ ServiceCo as well as interest payments on the short term intragroup loan provided
by ANZ to ANZ ServiceCo to fund the acquisition of those property assets ($15 million of pro forma
operating income and $5 million of pro forma NPAT).

The pro forma 1HY22 consolidated income statement of the ANZ NOHC Group is summarised below:
SUMMARISED ACTUAL AND PRO FORMA 1HY22 CONSOLIDATED INCOME STATEMENT ($ MILLIONS)ANZ NOHC GROUPEXPLANATORYMEMORANDUM

GRANT SAMUEL

9,542

9,542

(4,791)(4,791)(4,794)

Cash profit from continuing operations excluding large
and notable items

3,156

3,156

3,154

NPAT attributable to ANZ shareholders

3,530

3,530

3,528

Operating expenses to operating income

50.5%

50.5%

50.5%

Return on equity15

11.3%

11.3%

11.3%

Basic earnings per share

125.7c125.7c125.6cSTATISTICS

Dividends per share

72c

72c

72c

Dividend payout ratio16

64%

64%

64%

Amount of dividend franked

100%

100%

100%

Section 10

9,542

Operating expenses

Section 9

Operating income

Section 8

ANZ GROUPACTUAL

Section 7

small losses incurred by the non-banking businesses owned by ANZ Non-Bank HoldCo ($(3) million of
pro forma operating income and a $17 million pro forma loss after tax); andSection 6

Section 5

The pro forma 1HY22 deconsolidated income statement (excluding intercompany dividends) shows that
almost 100% of the ANZ NOHC Group’s pro forma operating income and more than 100% of its pro forma
NPAT is attributable to ANZ Bank HoldCo. ANZ NOHC does not carry on its own business or operations andtherefore has no pro forma operating income or pro forma NPAT (excluding intercompany dividends thatare eliminated on consolidation). The ANZ Non-Bank Group (comprising ANZ Non-Bank HoldCo and ANZServiceCo) has nominal pro forma operating income and a pro forma net loss after tax on a standalone
basis, reflecting:

Section 4

Pro Forma Operating income
Explanatory Memorandum and Grant Samuel analysis

Explanatory Memorandum and Grant Samuel analysis

Annexures

29

115

Using the Explanatory Memorandum pro forma 1HY22 consolidated income statement as a starting point,
the Grant Samuel pro forma 1HY22 consolidated income statement assumes $5 million per annum ofadditional ongoing costs (i.e. $2.5 million of additional ongoing costs for 1HY22) and a corporate tax rate of30%.
The Grant Samuel pro forma 1HY22 consolidated income statement indicates that the Restructure has nomaterial impact on the ANZ Group’s income statement or its key statistics. There is a $2 million reductionin pro forma cash profit from continuing operations excluding large and notable items and pro forma NPAT
attributable to ANZ shareholders. In particular, there is no impact on the ANZ Group’s dividend payout
ratio or the extent of franking. ANZ has also stated in the Explanatory Memorandum that the Restructure
will not affect the dividend payout ratio.
Pro Forma Balance Sheet
The Explanatory Memorandum pro forma balance sheet of the ANZ NOHC Group set out in Section 6.3 ofthe Explanatory Memorandum illustrates the balance sheet of ANZ Bank HoldCo, ANZ Non-Bank HoldCo,
ANZ ServiceCo, ANZ NOHC and the ANZ NOHC Group at 31 March 2022 1HY22 assuming that the
Restructure was in place on that date. The pro forma balance sheet of the ANZ NOHC Group assumes thatthe equity of ANZ is split between ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo by way of:a transfer of capital in ANZ Bank HoldCo to ANZ NOHC, which subsequently injects capital into ANZ
Non-Bank HoldCo and ANZ ServiceCo as a capital contribution;

surplus capital in ANZ Bank HoldCo has been repaid to ANZ NOHC by way of a dividend payment of$1.9 billion29; andthe assets transferred to ANZ ServiceCo are part funded by a short term intragroup loan provided by
ANZ to ANZ ServiceCo on an arms’ length basis.

The proportion of pro forma total assets and net assets represented by each of these entities at 31 March2022 (before investments in subsidiaries and other consolidation adjustments) are summarised below:
ANZ NOHC GROUP – PRO FORMA DECONSOLIDATED 31 MARCH 2022 TOTAL ASSETS AND NET ASSETS ($ MILLIONS)ANZBank
HoldCo

99.7%
96.1%

ANZ
Non-Bank
HoldCo0.0%

ANZServiceCo

0.1%

ANZ
NOHC

0.2%

0.7%

0.2%

3.0%
Total assets

Net assets

Explanatory Memorandum and Grant Samuel analysis

The pro forma deconsolidated balance sheet of the ANZ NOHC Group at 31 March 2022 (excluding
investments in subsidiaries) shows that the vast majority of the ANZ NOHC Group’s total assets and net
assets are attributable to the ANZ Bank HoldCo. Excluding investments in subsidiaries (which are
eliminated on consolidation), ANZ NOHC’s only asset is surplus capital (i.e. capital that is surplus to the

30

116

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

ANZ ServiceCo’s ownership of the land and buildings comprising 833 Collins Street, Docklands andleasehold improvements associated with Australian leased properties along with amounts due fromother ANZ NOHC Group entities for the provision of office space (pro forma total assets of $981
million and pro forma net assets of $115 million).

The pro forma consolidated balance sheet of the ANZ NOHC Group at 31 March 2022 is summarised below:

Section 3

ANZ Non-Bank HoldCo’s investments in banking-adjacent businesses at their carrying value, along withassociated cash, working capital and tax balances (pro forma total assets of $467 million and pro
forma net assets of $426 million); andSection 2

Section 1

regulatory requirements of the ANZ Bank Group that has been paid as a dividend to ANZ NOHC net of theamount of capital provided by ANZ NOHC to ANZ Non-Bank HoldCo to enable the acquisition of the nonbanking businesses from ANZ), reflecting its nature as a non-operating holding company. The ANZ NonBank Group (comprising ANZ Non-Bank HoldCo and ANZ ServiceCo) has relatively small pro forma total
assets ($1.4 billion) and pro forma net assets ($541 million) on a standalone basis, reflecting:

SUMMARISED ACTUAL AND PRO FORMA CONSOLIDATED BALANCE SHEET ($ MILLIONS)ANZ NOHC GROUPEXPLANATORYMEMORANDUM

GRANT SAMUEL

1,017,361

1,017,361

1,017,326

Total liabilities(955,605)(955,605)(955,599)

Net assets attributable to ANZ shareholders

61,747

61,74761,718Net tangible assets attributable to ANZ shareholders

57,67957,67957,650$20.64$20.64$20.63

STATISTICS
Net tangible assets per share

Section 5

Total assets

Section 4

ANZ GROUPACTUAL

Explanatory Memorandum and Grant Samuel analysis

Only 83% of the $25 million in one off cash transaction and implementation costs (excluding stamp duty) are tax deductible. The after
tax costs have been calculated as $25 million x 83% x (1-30%) + $25 million x 17% + $10 million (stamp duty) = $29 million.

Annexures

31

Section 10________________________________________________________________________________________________________________________________________________________
30

Section 9

The short and long term credit ratings of ANZ and its wholly owned banking subsidiaries are expected toremain unchanged after implementation of the Restructure. ANZ NOHC is expected to have an investment
grade credit rating below that of ANZ, reflecting the structural subordination of ANZ NOHC’s obligations
which depend on upstream dividends from ANZ Bank Group and ANZ Non-Bank Group or external capitalraisings to support its cash flow requirements.

Section 8

The Restructure will have no impact on the overall funding requirements or debt issuance capacity of the
ANZ Group. However, ANZ NOHC will have the ability to raise debt (or raise equity as a listed entity) toprovide funding support to the ANZ NOHC Group (both the ANZ Bank Group and the ANZ Non-Bank Group)
as needed including, potentially, to refinance (in whole or in part) the short term intragroup loan from ANZ
to ANZ ServiceCo. ANZ NOHC’s funding program will be separate from, and in addition to, the ANZ Group’s
existing ADI funding programs. ANZ Non-Bank Group will not have its own separate funding program (asfunding from ANZ NOHC should be cheaper than individual non-bank businesses could achieve).

Section 7

The Grant Samuel pro forma consolidated balance sheet at 31 March 2022 indicates that the Restructure
has no material impact on the ANZ Group’s balance sheet or its key statistics. There is a $29 million30
reduction in pro forma net assets and pro forma net tangible assets attributable to ANZ shareholders and a
1 cent reduction in pro forma net tangible assets per share.

Section 6

Using the Explanatory Memorandum pro forma balance sheet at 31 March 2022 as a starting point, theGrant Samuel pro forma consolidated balance sheet at 31 March 2022 assumes $35 million of one off cashtransaction and implementation costs associated with the Restructure (including $10 million of stamp duty
that is not tax deductible) and a corporate tax rate of 30%30.

117Pro Forma Regulatory Capital
After implementation of the Restructure, ANZ NOHC will be required to hold adequate capital to reflect therisks of the entire group. The capital requirements of ANZ NOHC will be the sum of:

the ANZ Bank Group’s capital requirements, which will continue to be determined by existing APRA
requirements; and

the ANZ Non-Bank Group’s capital requirements, which will be assessed using an independently
validated and ANZ NOHC Board approved economic capital framework and model developed by ANZ.

The ANZ Bank Group’s Level 2 pro forma capital requirements at 31 March 2022 are summarised below:
ACTUAL AND PRO FORMA LEVEL 2 CAPITAL RATIOS AT 31 MARCH 2022
ANZ
ACTUALANZ BANK GROUP
PRO FORMA31

CET1 capital ($ millions)50,51150,396Tier 1 capital ($ millions)

58,001

57,886Tier 2 capital ($ millions)

14,78014,780Total capital (Tier 1 + Tier 2) ($ millions)

72,781

72,666

Risk weighted assets ($ millions)

437,910

437,910

CET1 capital ratio

11.5%

11.5%

Tier 1 capital ratio

13.2%

13.2%

Total capital ratio

16.6%

16.6%

CAPITAL ADEQUACY RATIOS

Leverage ratio

5.2%

5.2%

Liquidity coverage ratio

132%

132%

Net stable funding ratio

123%

123%

ANZ Group and Grant Samuel analysis

ANZ has not provided pro forma regulatory capital or capital ratios in the Explanatory Memorandum. Grant
Samuel has calculated pro forma Level 2 capital ratios for ANZ Bank Group at 31 March 2022 by:

adding back to CET 1 capital ANZ’s CET1 deduction for non-banking net assets of $455 million32; and

deducting from CET 1 capital:•$541 million of capital paid as a dividend to ANZ NOHC and provided by ANZ NOHC to the ANZ
Non-Bank Group as capital to enable the acquisition of the property/lease net assets ($115
million) and the non-banking businesses net assets ($426 million) from ANZ; and•one off cash transaction and implementation costs associated with the Restructure of $29 million
after tax30 (which would result in a reduction in retained earnings).

No net adjustment has been made to risk weighted assets. While the carrying value of ANZ’s property
assets of $981 million (which were previously included in risk weighted assets with a 100% weighting)would be deduced from risk weighted assets, the right of use assets created by ServiceCo leasing theproperty assets back to ANZ would be included in risk weighted assets (and would also be risk weighted to100%). For the purposes of this analysis, it has been assumed that there is no net impact on risk weighted
assets.

________________________________________________________________________________________________________________________________________________________
31

The ANZ Bank Group’s Level 2 pro forma capital ratios at 31 March 2022 have been calculated prior to any return of surplus capital fromthe ANZ Bank Group to ANZ NOHC to enable a like-for-like comparison with ANZ’s Level 2 actual capital ratios at 31 March 2022.

32

The CET1 deduction added back differs from the non-banking net assets of $426 million as not all non-banking liabilities are eligible tooffset capital deductions under APRA rules.

32

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

Level 3 capital requirements are yet to be finalised by APRA. However, ANZ does not expect any materialchange in its overall capital position as a result of the Restructure.

Section 1

Grant Samuel’s analysis indicates that the Restructure does not have any material impact on ANZ’s Level 2
pro forma capital adequacy ratios. The Restructure also has no impact on ANZ’s Level 2 pro forma leverage
ratio, pro forma liquidity ratio and pro forma net stable funding ratio.

Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures

33

119

6

Evaluation of the Restructure (including the Scheme)
6.1

Summary

In Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best interests of ANZshareholders.
The Australian banking industry has changed significantly over the last decade, with traditional banking
facing headwinds from a number of sources as well as transformational digital and technological change
required to meet constantly evolving customer expectations. Over the past six years, the ANZ Group has
also undergone a period of substantial simplification and, with this process largely complete, has entered a
new phase focused on growth and areas where it can deliver better outcomes for customers and provide
returns for shareholders. To address these challenges and opportunities, the ANZ Group has adopted astrategy which envisages complementing its core banking business with a range of non-banking businesses
focused on infrastructure “platforms” and digital “ecosystems” of businesses and partnerships that provide
relevant, efficient and connected services, tools and insights for customers.
The combination of having an ADI, ANZ, as the parent entity of the ANZ Group and the highly regulated
nature of ADIs has presented challenges for the ANZ Group in the execution of this strategy. Non-banking
businesses are not intended by APRA to be subject to banking regulation and the “one-size-fits-all”
regulatory requirements that an ADI must comply with do not fit well with the agile operating
environments that are critical to the success of start-up or early stage non-banking businesses. These
factors have put the ANZ Group at a competitive disadvantage (at least relative to non-ADIs) andconstrained the growth of its non-banking businesses. Owning and effectively operating a non-banking
business within an ADI structure was so challenging for ANZi that the decision was made to separate thebusiness from ANZ and create 1835i as a standalone entity. However, relinquishing direct ownership andoperational control is not an ideal solution and it is in the interests of ANZ and its shareholders for ANZ tobest position itself to achieve its strategic objectives in a constantly changing environment.
The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and maximise the returns from those opportunities for shareholders. In particular,
the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital structure andoperating environment with a “fit-for-purpose” risk management and governance framework (including
decision making/approval processes and remuneration structures). Furthermore, the Restructure more
appropriately aligns the ANZ Group’s corporate structure with APRA’s regulatory framework as APRA andother regulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions
with the broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank
Group should also put ANZ in a clearer position in the event recovery actions are required or recovery
progresses to resolution as contagion risk should be lower. In short, the Restructure should facilitate thedelivery of a broad range of non-banking products and services to customers while maintaining, if notenhancing, appropriate protections for ANZ depositors.
The Restructure will have no immediate impact on the underlying businesses and strategy, group
regulatory capital requirements or, for the most part33, Board or management of the ANZ Group. There will
be no change to the ANZ Group’s indebtedness, its overall funding requirements or its debt issuancecapacity as a result of the Restructure and there is not expected to be any change to ANZ’s credit ratings.
While ANZ NOHC is expected to have an investment grade credit rating below that of ANZ, the Restructure
is not expected to have any immediate impact on funding costs for the ANZ Group as there is no intention
for ANZ NOHC to raise debt finance in the short term.
________________________________________________________________________________________________________________________________________________________
33

One of the conditions of APRA’s NOHC authorisation is that ANZ Bank HoldCo and ANZ must have an independent director who is not on
the Board of ANZ NOHC or any ANZ Non-Bank Group entity to safeguard the interests of depositors.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter
Section 7
Section 8
Section 9
Section 10________________________________________________________________________________________________________________________________________________________
34

Section 6

The Restructure comprises the Scheme and the Business Restructure. The Scheme is subject to theapproval of ANZ shareholders. The Business Restructure does not require the approval of ANZshareholders but is conditional on, and is expected to be undertaken immediately after, implementation ofSection 5

The critical question is whether ANZ shareholders are likely to be better off if the Restructure is
implemented than if the ANZ Group’s current corporate structure is maintained. The evaluation isessentially subjective. However, on balance, in Grant Samuel’s view, the potential advantages of the
Restructure, while uncertain, outweigh the disadvantages and risks, which are minimal, and shareholders
are ultimately likely to be better off if the Restructure is implemented.

Section 4

The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guaranteethat the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile ofthe non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However, growing its non-banking businesses is a key component of the ANZ Group’s current
strategy which has been publicly stated and pursued for some time. Furthermore, shareholders are notbeing asked to vote on the appropriate strategy for the ANZ Group. This is a separate question to whether
the Restructure is in the best interests of shareholders.

Section 3

The potential benefits of the Restructure are not quantifiable and will not deliver any significant
incremental short term value to shareholders. The real value of the Restructure will only be realised overtime if the ANZ NOHC Group can materially increase the scale of its non-banking activities. On the other
hand, the Restructure has few disadvantages and risks, other than one-off cash transaction costs andadditional ongoing operating and corporate costs that will be incurred if the Restructure proceeds, both ofwhich are immaterial in the context of the ANZ Group as a whole, and certain implementation risks. The
key risk is the lack of a formal regulatory framework for Australian NOHCs of ADIs and the potential for any
formal Level 3 regulatory framework subsequently put in place by APRA to differ significantly from theconditions set out in APRA’s NOHC authorisation. While the risks associated with the Restructure cannot
be disregarded, they are, for the most part, not beyond the normal risks of any corporate restructuringtransaction and most have mitigating factors that should minimise their impact.

Section 2

The Restructure is not a “must do” transaction. The status quo would continue to offer ANZ shareholders afinancially sound exposure to one of Australia’s largest banks and the ANZ Group could continue to execute
its strategy as it has been doing for the past three years. However, the ability to successfully grow its nonbanking businesses should be enhanced by these businesses being owned by a legal entity, ANZ Non-Bank
HoldCo, which is structurally separate from the ANZ Group’s banking businesses. The ANZ Board believes
that, of the alternatives considered, the Restructure will provide the optimal structure for the ANZ Group toachieve its objectives to grow its non-banking activities while meeting its obligations to APRA and its
depositors. If the Scheme is not approved and the Restructure is not implemented, the ANZ Group will bein a sub-optimal position in executing its strategy to grow its non-banking businesses and deliver a broad
range of non-banking products and services to customers.

Section 1

ANZ shareholders34 will have the same number of shares in ANZ NOHC as they currently hold in ANZ and
ANZ NOHC shares will have the same dividend and voting rights as ANZ shares. ANZ NOHC will continue tohave the ability to pay fully franked dividends and the Restructure will have no impact on the accumulated
franking credit balance or the extent to which the ANZ NOHC Group generates franking credits in the
future. The Restructure is not expected to have any adverse tax consequences for relevant Australianresident shareholders. In short, there is no impact on the economic interest of ANZ shareholders34. There
will be no impact on ANZ NOHC’s ability to undertake future on-market share buybacks. The Restructure
will also have no direct impact on customers and no material impact on the ANZ Group’s employees.

Other than ineligible foreign shareholders.

Annexures

35

121

the Scheme. Consequently, in Grant Samuel’s opinion, the Restructure (including the Scheme) is in the bestinterests of ANZ shareholders.

6.2

Background

The Australian banking industry has changed significantly over the last decade. Traditional banking is facing
headwinds from long term low growth and declining returns, greater competitive intensity (particularly
from non-bank competitors such as non-bank lenders, buy-now pay-later and other emerging financial
technology companies) and substantial regulatory scrutiny.
In addition, the pace and scope of digital and technological change required to meet constantly evolving
customer expectations has been transformational. Retail banking customers are increasingly digitallyconnected and expect a fully integrated financial services digital solution that combines traditional banking(e.g. deposit-taking and lending) with adjacent non-banking offerings (e.g. cashback awards programs andpersonalised money management services). Commercial and institutional banking customers are
increasingly seeking business banking solutions that are digital, automated, reliable and easily integrated
with their existing systems. The investment required to meet evolving customer expectations is substantial
and the risks associated with investing in new technologies and entering new markets are fundamentallydifferent from the risks associated with traditional banking activities.
Coupled with these industry-wide developments have been changes within the ANZ Group. Over the past
six years, the ANZ Group has undergone a period of substantial simplification involving the sale of 29 noncore businesses and the release of over $13 billion of capital. With this process largely complete, the ANZGroup has entered a new phase focused on growth and areas where it can deliver better outcomes forcustomers and provide returns for shareholders.
To address these challenges and opportunities, the ANZ Group has adopted a strategy that envisages
complementing its core banking business with a range of non-banking businesses focused on infrastructure“platforms” and digital “ecosystems” of businesses and partnerships that provide services, tools andinsights for customers that are relevant, efficient and connected. Some of these non-banking businesses
will be developed and/or owned by the ANZ Group while others will be provided through partnerships withthird parties. Underpinning this strategy is simplicity and the organisational flexibility to respond quickly tothe changing environment.
The ANZ Group is able to execute its strategy under its current corporate structure as it has been doing forthe past three years. However, the combination of having an ADI as the parent entity of the ANZ Groupand the highly regulated nature of ADIs makes the current structure sub-optimal as the:

non-banking businesses are not intended by APRA to be subject to banking regulation; andrisk management and governance frameworks (including approval processes and remuneration
structures) and regulatory capital requirements that an ADI is required to comply with under APRA’s
prudential standards do not fit well with the competitiveness (e.g. the ability to move quickly andeasily), operational and capital efficiency and innovation that are critical to the success of start-up,
non-banking businesses.

Owning and effectively operating a non-banking business within an ADI structure was so challenging for
ANZi that the decision was made by the ANZ Group to separate the business from ANZ and create 1835i as
a standalone entity in July 2021 to help accelerate growth and deliver digital solutions to ANZ customers.
Separation from ANZ allows 1835i to operate more like a start-up business and act quickly as it develops its
pipeline of investments. However, the structure is not ideal. While ANZ continues to fund 1835i
investments, it has had to relinquish direct ownership and operational control over 1835i (although it
retains the beneficial interest in the trusts). The structure also exposes the ANZ Group to increased risk as
it has less control over management, less ability to ensure 1835i’s activities are aligned to the ANZ Group’s

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letterIn this context, it is in the interests of ANZ and its shareholders for ANZ to best position itself to achieve its
strategic objectives in a constantly changing environment.

6.3

Section 2

ANZ has a pipeline of platforms and partnerships at various stages of assessment. Under its current
corporate structure, the ANZ Group is likely to face similar compromises as it seeks to execute its strategy
and grow its non-banking businesses. In short, the existing corporate structure puts the ANZ Group at acompetitive disadvantage (at least compared to non-ADIs) and is a constraint on its future growth.

Section 1

strategy and its involvement is less transparent (as APRA requires that the 1835i brand is not associatedwith ANZ).

Advantages and Benefits

make decisions without the requirement to consider or manage the impact of APRA’s ADI prudential
standards (in particular, approval processes), which should enable the ANZ Non-Bank Group to
increase the speed at which it is able to:react to market conditions and their impact on existing non-banking businesses;•

introduce new initiatives to market (i.e. test, launch and scale up new products and services); and•respond to new third party partnership and other strategic opportunities;

Annexures

37

Section 10•

Section 9Section 8

operate the non-banking businesses without having to comply with the prescriptive and extensive
regulatory capital requirements and risk management and governance policies and procedures that
apply to ADIs under APRA’s prudential standards, reducing the financial and operational regulatoryburden on the ANZ Non-Bank Group. As outlined above, the ANZ Non-Bank Group will no longer be
subject to the full extent of APRA regulation (i.e. Level 1 or Level 2 regulation relating to financial
soundness, risk management and governance) under which the non-banking businesses currently
operate but will instead be subject to Level 3 regulation. Level 3 regulation is primarily focused onprotecting the banking entities from the intragroup contagion risks associated with the ANZ Non-Bank
Group;

Section 7

Section 6

In particular, the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital
structure and operating environment with a “fit-for-purpose” risk management and governance frameworkthat should enhance its ability to:

Section 5

APRA will continue to have oversight of the ANZ NOHC Group. ANZ and its ELE subsidiaries will remainsubject to Level 1 APRA regulation and the ANZ Bank Group (including ANZ, international ADIs (including
ANZ NZ) and other subsidiaries undertaking financial activities) will be subject to Level 2 APRA regulation.
ANZ NOHC and the ANZ Non-Bank Group will not be subject to the full range of APRA’s prudential andreporting standards that apply to banking activities but will be subject to the different financial andoperational compliance requirements of Level 3 APRA regulation.

Section 4

Under its current corporate structure, ANZ is the parent entity of the ANZ Group. All of the Australianbanking business is conducted through ANZ and all banking and non-banking subsidiaries and investments
are owned by ANZ. As ANZ is also the APRA regulated ADI, the entire corporate structure is subject to full“one-size fits all” regulation by APRA (i.e. the full range of APRA prudential and reporting standards for ADIs
including standards in relation to capital adequacy and liquidity). After implementation of the Restructure,
the ANZ Group’s non-banking businesses will be owned by a legal entity, ANZ Non-Bank HoldCo, which is
structurally separate from ANZ. ANZ will continue to own the ANZ Group’s banking businesses in Australia
and internationally.

Section 3

The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and to maximise the returns from those opportunities for shareholders.

123



attract and retain appropriately skilled talent as it will be able to:•adopt remuneration structures that are more heavily weighted to “at risk” incentives, consistent
with the remuneration structures adopted by its competitors (e.g. other start-up or venture
capital businesses) and will not be required to comply with requirements which prescribe
remuneration requirements for senior executives, directors and other employees of ADIs,
including restrictions around “at risk” incentives such as BEAR or any aspects of CPS 511 that are
not appropriate for its business (see Section 3.1 for details); and•provide a more attractive working environment where employees will not be subject to thecompliance requirements that apply to ADIs (e.g. risk management and governance frameworks,
multiple layers of internal approvals, other regulatory hurdles, reporting requirements etc);



tailor funding structures to meet the risk-return requirements of potential investments (e.g. utilise anappropriate mix of debt, equity or other instruments). An economic capital model will be adopted toassess the capital requirements of the ANZ Non-Bank Group, which is expected to result in a more risk
based assessment of potential losses (with the key risks being business, equity investment,
operational and fixed asset risk) rather than the 100% equity funding/deduction from CET 1 capitalthat applies under APRA’s Level 2 ADI capital adequacy requirements; and

attract new funding and strategic partners that may be deterred from investing in non-banking
businesses in partnership with an APRA regulated ADI.

The Restructure removes the competitive disadvantages that the ANZ Group has faced in executing its
strategy to grow its non-bank businesses and will essentially “level the playing field” relative to non-ADI
competitors.
Furthermore, the Restructure enables the ANZ Group to achieve these benefits while continuing to meet its
obligations to APRA and protect the interests of depositors. The Restructure more appropriately aligns the
ANZ Group’s corporate structure with APRA’s “one-size-fits-all” regulatory framework. APRA and otherregulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions withthe broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank Groupshould also put ANZ in a clearer position in the event recovery actions are required or recovery progresses
to resolution as contagion risk should be lower (risks to depositors from the ANZ Group’s non-banking
businesses will be ringfenced or isolated in the ANZ Non-Bank Group).
In short, the Restructure should facilitate the delivery of a broad range of non-banking products andservices to customers while maintaining, if not enhancing, appropriate protections for ANZ depositors.
The benefits of the Restructure should not be overstated. They will not deliver any significant incremental
short term value to shareholders given the relatively small quantum of the net assets being transferred to
the ANZ Non-Banking Group ($426 million of non-banking net assets in ANZ Non-Bank HoldCo and $115
million of property and lease net assets in ANZ ServiceCo). Even in the long term, the benefits of the
Restructure will only be realised if the ANZ NOHC Group successfully executes its strategy and materiallygrows its non-banking businesses (e.g. through a substantial non-banking transaction). The Restructure
does not provide any guarantee that the ANZ NOHC Group will be successful in executing its strategy to
grow its non-banking businesses or that any material non-banking acquisition will be made. Suchcircumstances may never eventuate. While the ANZ Group has a pipeline of platforms and partnerships at
various stages of assessment, no material non-banking acquisition is currently planned by the ANZ Group.
Nonetheless, there is, at a minimum, the potential for the existing non-banking businesses to grow andbecome a greater proportion of the ANZ Group and there is the expectation that change will continue andthat more investment in non-banking businesses will be required to meet changing customer expectations.
The ANZ Group anticipates other benefits in terms of creating transparency and clarity for employees,
customers and investors (in addition to regulators which is discussed above). In theory, this transparency
and clarity for employees, customers and investors should be able to occur under the current structure.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

Disadvantages and Risks

The disadvantages of the Restructure are not material. They primarily relate to the costs associated with
implementation of the Restructure.



the ANZ Group will incur additional ongoing costs as a result of the Restructure. There will be
incremental operating and corporate costs of less than approximately $5 million per annum (beforetax). These costs largely relate to the incremental resources required to support the new NOHC
structure and the separate ANZ Bank Group and ANZ Non-Bank Group as well as additional costs
associated with ASX listing compliance, governance, reporting and maintaining additional boards.

Section 7

In the context of the scale of the ANZ Group, the costs associated with implementation of the Restructure(both one-off and ongoing) are immaterial and have no measurable adverse effect on shareholder returns,
even if the ANZ Group fails to grow its non-banking businesses.

Section 6

ANZ has estimated one-off cash transaction and implementation costs associated with the Restructureof $35 million before tax (including stamp duty which is expected to be $10 million). These costs
largely relate to adviser fees and costs associated with ANZ’s internal project team. ANZ has advisedthat approximately $19 million of these one-off cash transaction and implementation costs will havebeen incurred by the ANZ Group by the time of the Scheme meeting and so are not relevant toshareholders’ consideration of the Scheme. Accordingly, approval of the Scheme will result inincremental one-off costs of around $16 million (including stamp duty); andSection 5Section 4

The Restructure will result in the ANZ Group incurring costs that it would not otherwise incur. These costs
include one-off cash transaction and implementation costs and additional ongoing costs:

Section 3

6.4

Section 2

Overall, in Grant Samuel’s view, the individual advantages of the Restructure are not overwhelminglycompelling. However, the Restructure does better position the ANZ Group to take advantage of nonbanking opportunities to achieve its strategic objectives and deliver better outcomes for customers. The
advantages of the Restructure, while not quantifiable, are real and have the potential to create value forshareholders over time.

Section 1

There is no impediment to the ANZ Group separately reporting the financial performance of, and otherinformation on, its non-banking businesses under its current corporate structure, although the relatively
immaterial size and contribution from these non-banking businesses means that this has probably not been
warranted. However, the structural separation should, at least, enable the performance of the ANZGroup’s banking businesses and non-banking businesses to be more easily monitored and benchmarked byinvestors.

There are also a number of risks associated with the Restructure.

the lack of an existing formal regulatory framework for Australian NOHCs of ADIs. While ANZ has
received APRA’s authorisation of ANZ NOHC as a non-operating holding company under the Banking
Act (subject to the ANZ NOHC Group complying with certain conditions, see Section 5.4), there is a riskthat if/when APRA does formalise its Level 3 regulatory framework for Australian NOHCs of ADIs, theAnnexures

39

Section 10

Section 9

If the Restructure is implemented, the key risks include:

Section 8

There is a risk that implementation of the Restructure will be delayed, or the Restructure will not be
implemented, even if the Scheme is approved by ANZ shareholders, as there is a regulatory approvalcondition precedent to implementation of the Scheme that remains outstanding at the date of this report.
The details of this condition precedent are set out in Section 7.4 of the Explanatory Memorandum (andsummarised in Section 1 of this report). However, in ANZ’s view, this is a non-material regulatory approvaland is a timing risk only. There is no expectation that the regulatory approval will not ultimately beobtained.

125regulation of ANZ NOHC will differ from the conditions set out in APRA’s NOHC authorisation. Thisoutcome may have negative consequences for the ANZ NOHC Group. However,•

ANZ has engaged extensively with APRA as part of the authorisation process and has addressed
all issues raised by APRA. It would be unusual if APRA subsequently adopted a framework that
represented a material shift from the position it has adopted to date; and•the ANZ NOHC Group would expect to be involved (i.e. consulted or given the opportunity torespond to discussion papers) in any process undertaken by APRA to formalise the regulatory
framework for Australian NOHC ADIs; andtransition and implementation risks. Any corporate restructure is susceptible to complications at an
operational level. There are inevitable risks relating to implementation of the Restructure, including:•the ability to expand the scope of services currently provided by third parties to ANZ to cover the
ANZ NOHC Group entities (i.e. ANZ NOHC, ANZ Bank HoldCo, ANZ ServiceCo and ANZ Non-Bank
HoldCo) without incurring greater cost or on adverse terms compared to the existingarrangements;•

ANZ has received rulings to confirm the availability of stamp duty relief in a number ofjurisdictions but stamp duty relief will not be formally granted until after implementation of the
Restructure; and•operating model disruption and senior management team distraction during the implementation
period.

Grant Samuel does not regard these risks as being beyond the normal risks of any corporate
restructuring transaction. In any event:

6.5•

even if the necessary consents to expand the scope of services provided by third parties are notobtained, any incremental cost would be unlikely to be material in the context of the overall ANZGroup;•

the provision of rulings confirming the availability of stamp duty relief prior to formal application
for stamp duty relief is the usual basis on which stamp duty relief is received and ANZ expects
that, on the basis that the facts and circumstances of the Restructure remain the same, stamp
duty relief will be available in relation to the Restructure; and•there is a dedicated project team at ANZ that is responsible for implementation to minimise
operating model disruption and senior management team distraction during the implementation
period.

Alternatives

The ANZ Board considered a number of alternatives to the Restructure, including a:dual listed company structure, where two companies retain separate legal entities, ownership andprimary stock exchange listings but operate as a single business (e.g. the Rio Tinto Group and BHPGroup Limited prior to its unification);

stapled security structure, where two or more entities with common ownership are legally boundtogether so that their securities cannot be traded separately (e.g. many ASX-listed real estate groups
including Goodman Group, Dexus and Stockland Group); andminority investment structure where only non-controlling interests are acquired or retained in an
asset (similar to ANZ’s current structure where it has acquired minority investments in non-banking
businesses).

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

Each of the alternatives was considered to have drawbacks:

a stapled security structure, while the most viable alternative to the Restructure having regard to
ANZ’s objectives, would limit the ANZ Group’s flexibility to raise and deploy capital between thebanking and non-banking entities in the stapled group; anda minority investment structure, while simpler from a regulatory perspective, would result in the ANZGroup not having control over key operational and strategic decisions and could risk dilution of the
ANZ brand over time. This type of structure is unlikely to be appropriate for certain non-banking
business investments.

The ANZ Board believes that, of the alternatives considered, the Restructure will provide the optimal
structure for the ANZ Group to achieve its objectives.

6.6

Other Matters

growing its non-banking businesses is a key component of the ANZ Group’s current strategy which has
been publicly stated and pursued for some time. Shareholders who are uncomfortable with, or not infavour of, this strategy have had the opportunity to sell their ANZ shares; and

shareholders are not being asked to vote on the appropriate strategy for the ANZ Group. This is aseparate question to whether the Restructure is in the best interests of shareholders.

The Restructure will not result in any change to the ANZ Group’s executive committee and minimal changes
to its Boards:
the Board of ANZ NOHC will be identical to the ANZ Board; andAnnexures

41

Section 10

Impact on Board and Executive Committee

Section 9

In any event, any shareholder objections are likely to be directed more to specific acquisitions rather thanthe ANZ Group’s overall strategy. Certainly, there is a wide range of business opportunities that could fall
into “non-banking” activities but which actually have a close alignment with the ANZ Group’s core banking
activities and have the potential to enhance the value proposition for customers and returns toshareholders.

Section 8Section 7

The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guaranteethat the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile ofthe non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However:Section 6

The Restructure will have no direct impact on the underlying businesses or strategy of the ANZ Group. The
ANZ Group will continue to operate as one of the largest banks in Australia and invest in growing its nonbanking businesses.

Section 5

Impact on Underlying Businesses and Strategy

Section 4

Section 3

the features that make a dual listed company structure attractive (e.g. a merger that cannot becompleted without value leakage and/or material risk) do not apply to ANZ. Furthermore, a dual
listed company structure is typically more expensive and complex to establish and operate and would
require an ongoing contractual link between the banking and non-banking entities to ensure all
shareholders are exposed to the benefits and risks of the group as a whole;

Section 2

Section 1

These alternatives and the Restructure were assessed against ANZ’s objectives to pursue its growthstrategies in non-banking activities while meeting its obligations to APRA and its depositors.

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

the Boards of ANZ Bank HoldCo, ANZ and ANZ Non-Bank HoldCo will be identical to the Board of ANZNOHC except that an independent non-executive director (who is not on the Board of ANZ NOHC and
ANZ Non-Bank HoldCo) will be appointed to the ANZ Bank HoldCo and ANZ Boards. This independent
non-executive director is a condition of APRA’s NOHC authorisation.

The Board of ServiceCo will comprise an independent non-executive director and appropriately qualified
senior management.
Impact on Customers
The Restructure will have no direct impact on ANZ’s customers. The products, pricing, services and support
that ANZ customers currently receive from ANZ will remain the same. ANZ customers will continue tointeract with ANZ as they do currently and any customer contracts with the ANZ Group will continue to bewith the same legal entity (e.g. ANZ for retail banking customers). In particular, depositors will continue tobenefit from the regulatory protections that govern the capital requirements and operations of the ANZGroup’s banking business.
The Restructure results in a more efficient corporate structure that has the potential to deliver benefits tocustomers in terms of an enhanced experience and a broader suite of products and services to meet
expectations, if the ANZ Group is successful in executing its strategy (see Section 6.3 for further discussion).
Impact on Employees
The Restructure will have no material impact on the ANZ Group’s employees. A small number (less than1%) of current ANZ employees may be transferred to ANZ ServiceCo at some future date under the sameterms and conditions in place at ANZ (except where a change is required by law). In particular, the same
performance and remuneration policies and practices will apply. Moreover, ANZ will consult with
employees and the Finance Sector Union on the Restructure and its impact on transferring employees.
No current ANZ employees are expected to transfer to ANZ Non-Bank HoldCo on implementation of the
Restructure (although new roles are likely to be created as the ANZ Non-Bank Group grows).
ANZ deferred shares, deferred share rights, restricted shares, restricted rights and performance rights thatare held by certain employees will be replaced with ANZ NOHC deferred shares, deferred share rights,
restricted shares, restricted rights and performance right on a one-for-one basis and will continue to be
governed by the relevant plan rules and same offer terms. The ANZ Incentive Plans will continue to operate
and apply after implementation of the Restructure on substantially the same terms and conditions, exceptthat the incentive plans will be operated by ANZ NOHC and provide interests in ANZ NOHC shares.
Impact on Dividends and Franking Credits
The Restructure is not expected to impact the ability of ANZ NOHC to pay dividends relative to ANZ.
While ANZ NOHC, ANZ Bank HoldCo and ANZ Non-Bank HoldCo will not be operating entities and therefore
will not generate cash from operations, ANZ will be an operating entity and will generate cash from its
operations which will be available to pay cash dividends to ANZ Bank HoldCo which will, in turn be able topay cash dividends to ANZ NOHC (in each case subject to APRA requirements). In this regard:

dividend payments from ANZ will continue to be subject to the same APRA regulations and guidelines
in relation to capital adequacy requirements, maintenance of appropriate capital buffers andregulatory approvals; andthe terms of ANZ’s existing capital notes will be amended to prevent ANZ Bank HoldCo from paying
dividends to ANZ NOHC if dividends are not paid on the capital notes in accordance with their terms(similar to the current restrictions on ANZ).

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

As a result, ANZ NOHC will have accumulated profits and cash from which to pay dividends (and/or othercapital distributions) to ANZ NOHC shareholders.

Section 5

If the Restructure is implemented, ANZ NOHC intends to establish a DRP and a bonus option plan on
substantially the same terms as the ANZ DRP and bonus option plan. ANZ shareholders who participate in
the ANZ DRP will agree to participate in the ANZ NOHC DRP in the same manner and to the same extent as
their current participation in the ANZ DRP. Residual balances in the ANZ DRP account of each participant
will be paid by ANZ to ANZ NOHC and applied under the ANZ NOHC DRP.

Section 4

The final dividend for FY22 (scheduled to be paid on 15 December 2022) will be paid by ANZ (not ANZNOHC).

Section 3

The Restructure is not expected to result in any change to the dividend guidance of the ANZ Group, which
will continue to target an annual payout ratio of between 60% and 65% of cash profit from continuing
operations excluding large and notable items. However, there can be no guarantee as to the amount ortiming of future dividend payments by ANZ NOHC which will be subject to the discretion of the ANZ NOHC
Board and will depend on, among other criteria, its financial position and capital requirements.

Section 2

Historically, ANZ has paid fully franked dividends to shareholders. After implementation of the Scheme, thefranking account balance of ANZ will transfer to ANZ NOHC and the ANZ NOHC Group will continue togenerate the same level of franking credits that are currently generated by the ANZ Group. The ANZGroup’s available New Zealand franking credits will continue to be held by the ANZ Group. The Restructureis therefore not expected to impact the capacity of ANZ NOHC to frank dividends.

Section 1

Similarly, to the extent that the subsidiaries of, or investments by, ANZ Non-Bank HoldCo generate cashfrom their operations or pay distributions, this cash will also be available to pay cash dividends to ANZ
NOHC.

Impact on Future Share Buybacks

Annexures

43

Section 10

To enable ANZ NOHC to undertake on-market share buybacks after implementation of the Scheme, ANZ will (when ANZ is ANZ NOHC’s
only shareholder) authorise ANZ NOHC to undertake an on-market share buyback in the 12 months after implementation.

Section 9________________________________________________________________________________________________________________________________________________________
35

Section 8

The Restructure will not have any impact on the ANZ Group’s ability to undertake on-market sharebuybacks in the future. If an on-market share buyback is considered to be appropriate as part of the ANZNOHC Group’s capital management plan, it will be undertaken by ANZ NOHC as the listed entity in the samemanner as on-market share buybacks have previously been undertaken by ANZ. The aggregate number of
ANZ NOHC shares that could be bought back would not exceed more than 10% of the ordinary shares that
ANZ NOHC has on issue when the Scheme is implemented (which will be the same number of shares as ANZ
currently has on issue)35. As a result, in assessing ANZ NOHC’s “10/12 limit” for the first 12 months after
implementation of the Scheme, the equity capital structure of ANZ NOHC and ANZ would effectively be
regarded as the same.

Section 7

On-market share buybacks undertaken within the “10/12 limit” set out in the Corporations Act do not
require shareholder approval. The “10/12 limit” restricts the number of ordinary shares that ANZ can buy
back in any rolling 12 month period to 10% of the smallest number of ordinary shares ANZ had on issueduring that 12 month period.

Section 6

ANZ has historically used on-market share buybacks as a capital management tool to return surplus capitalto shareholders. The most recent on-market share buyback was completed in March 2022 where ANZbought back 54.1 million shares for $1.5 billion, reducing its CET1 capital ratio by approximately 35 basis
points.

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Impact on Indebtedness and Credit Ratings
Implementation of the Restructure is not expected to result in any change to the indebtedness of ANZGroup, its overall funding requirements or its debt issuance capacity. In this regard:ANZ will continue to operate its own funding program and maintain its own Board approved capitalmanagement strategies (e.g. financial risk appetite and liquidity policies), governance frameworks andreporting regime reflecting its ADI operations;

ANZ NOHC will have the ability to issue debt instruments to support the funding requirements of both
the ANZ Bank Group and the ANZ Non-Bank Group. ANZ NOHC will establish its own Board approved
capital management strategy and its capital planning process will cover the requirements of the ANZNOHC Group as a whole; and

ANZ Non-Bank Group is not expected to have separate funding arrangements and will rely on ANZNOHC for funding as ANZ NOHC is expected to have a lower cost of funds than any ANZ Non-Bank
Group entities.

There is also not expected to be any impact on the ANZ Group’s liquidity and net stable funding ratios.
The Restructure is not expected to materially affect the credit ratings of the ANZ Group and its businesses.
The creditworthiness of ANZ and its wholly owned banking subsidiaries is expected to remain unchanged
because the Restructure does not result in any significant change to the ANZ Group’s overall business andfinancial profile. ANZ NOHC is likely to obtain an investment grade credit rating below that of ANZ becauseof the structural subordination of ANZ NOHC’s obligations. However:

this approach is consistent with the approach taken by the ratings agencies in other financial NOHC
restructures such as Macquarie Bank and Suncorp-Metway, where the credit ratings of the banking
entities remained unchanged but the credit ratings for the new NOHC were one notch lower than thebanking entities; and

the Restructure is not expected to have any immediate impact on overall funding costs for the ANZGroup as there is no intention for ANZ NOHC to raise debt finance in the short term.

Since announcement of the Restructure in May 2022, there has been no change to ANZ’s ratings or outlook
from its ratings agencies. Final ratings will be determined by the ratings agencies after implementation of
the Restructure.
Impact on Regulatory Capital Requirements
The Restructure is not expected to have any material impact on the ANZ Group’s regulatory capitalrequirements. The ANZ NOHC Group’s Level 3 regulatory capital requirements will be the sum of thecurrent ADI capital requirements plus the ANZ Non-Bank Group capital requirements determined by aneconomic capital model. ANZ expects that the total amount of capital held within the ANZ NOHC Group in
aggregate will remain materially the same after implementation of the Restructure.
This position contrasts with precedent financial NOHC restructures undertaken by financial institutions inAustralia (e.g. Macquarie Bank and Suncorp-Metway), where the capital advantages were a primary driver
for the restructure.
Furthermore, it is relevant to note that:

the ANZ Bank Group will continue to be appropriately capitalised after returning any excess capital(above target levels) to ANZ NOHC; and

non-bank investments represent a capital requirement of $426 million at 31 March 2022 or less than
1% of the ANZ Group’s CET1 capital.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

the ANZ NOHC Group acquires a mature non-banking business that application of the economic
capital model assesses carries less than 100% risk of potential loss.

However, neither of these situations is a certain outcome of the Restructure and, in any event, APRA may
adjust the ANZ Bank Group’s prudential capital requirement if it deems the assessment of ANZ Non-Bank
Group’s risk and capital requirements as insufficient.

Section 5

ANZ and its Australian resident wholly owned entities are currently members of a tax consolidated group,with ANZ as the head entity of the group. ANZ has applied for a private binding ruling from the ATO in
respect of certain aspects of the Scheme. Broadly, the private ruling will confirm that the tax consolidated
group will continue to exist with ANZ NOHC as the head entity. As head entity, ANZ NOHC will inherit the
tax attributes of ANZ, including its franking account balance and any carried forward capital losses.

Section 4

Taxation Consequences (excluding stamp duty)

Section 3

the ANZ NOHC Group’s existing start-up non-banking businesses grow to a sufficient size over timeand application of the economic capital model subsequently assesses that these non-banking
businesses carry less than a 100% risk of potential loss (i.e. these investments become less risky thanthey are currently); and/or

Section 2

Section 1

There is the potential that the Restructure could result in a regulatory capital advantage to the ANZ NOHC
Group in the future (relative to the regulatory capital requirement under its current structure). A
regulatory capital advantage is only likely to eventuate in circumstances where the risk of potential loss asassessed by the economic capital model for the ANZ Non-Bank Group is less than the 100% CET 1 capital
deduction that would be required under APRA’s Level 2 ADI capital ratios. For example, in the situation
where:The Scheme is not expected to give rise to any other capital gains tax or other tax related liability for ANZ or
ANZ NOHC.

Annexures

45

Section 10

Relevant Australian resident ANZ shareholders are those who are registered on the ANZ share register at 7.00pm on the record date for
the Scheme, are residents of Australia within the meaning of Section 6(1) of the Income Tax Assessment Act 1936 (Cth), are nottemporary residents within the meaning of Section 995-1(1) of the Income tax Assessment Act 1997 (Cth) and have not elected thetaxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (Cth) to apply in relation to their ANZ
shares.

Section 9________________________________________________________________________________________________________________________________________________________
36

Section 8

The analysis set out above outlines the major tax consequences of the Scheme and should be viewed asindicative only. It does not purport to represent formal tax advice regarding the taxation consequences of
the Scheme. Further details on the taxation consequences of the Scheme for Australian resident
shareholders as well as shareholders resident in New Zealand, the United Kingdom and the United States
are set out in Section 8 of the Explanatory Memorandum. In any event, the tax consequences for

Section 7

ANZ shareholders who are not residents of Australia and are not ineligible foreign shareholders should not
generally be subject to Australian capital gains tax rules if they hold their shares on capital account and their
ANZ shares are not considered “taxable Australian property”. The non-Australian taxation implications for
non-Australian resident shareholders will depend on the country of domicile of the shareholders. Many
countries have similar rollover relief to that available in Australia but some do not. Non-Australianresidents (including ineligible foreign shareholders) should seek their own taxation advice in relation to thetaxation impact of the Scheme.

Section 6

Similarly, it is expected that the Scheme will have no adverse tax consequences for relevant Australianresident ANZ shareholders36. It is expected that relevant Australian resident ANZ shareholders will be
eligible for rollover relief to defer the capital gains tax consequences of the capital gains tax events relating
to the Scheme. ANZ has applied to the ATO for a class ruling regarding the Australian income tax
consequences of the Scheme for those ANZ shareholders and expects that a final class ruling will be issued
in the form sought after implementation of the Scheme.

131

shareholders will depend on their individual circumstances. If in any doubt, shareholders should consult
their own professional adviser.
Ineligible Foreign Shareholders
Ineligible foreign shareholders will not be entitled to participate in the Scheme and will not receive ANZNOHC shares. Under the Scheme, the ANZ NOHC shares that they would otherwise be entitled to will be
issued to a sale agent and sold on the ASX through a sale facility. Ineligible foreign shareholders will receive
the cash proceeds from the sale of those ANZ NOHC shares. Ineligible foreign shareholders may also be
required to pay tax on any profit on that disposal (in their country of residence). However:

their ANZ NOHC shares will be sold for market value;the ineligible foreign shareholder can acquire ANZ NOHC shares through the ASX following its listing if
it wishes to retain an exposure to the ANZ NOHC Group; and

shareholders representing less than 0.2% of ANZ’s issued ordinary shares are expected to be impacted
by these provisions.

6.7

Shareholder Decision

Grant Samuel has been engaged to prepare an independent expert’s report setting out whether in its
opinion the Scheme is in the best interests of ANZ shareholders and to state reasons for that opinion.
Grant Samuel has not been engaged to provide a recommendation to shareholders in relation to the
Scheme, the responsibility for which lies with the directors of ANZ.
In any event, the decision whether to vote for or against the Scheme is a matter for individual shareholders
based on each shareholder’s views as to value and business strategy, their expectations about future
economic and market conditions and their particular circumstances including risk profile, liquidity
preference, investment strategy, portfolio structure and tax position. In particular, taxation consequences
may vary from shareholder to shareholder. If in any doubt as to the action they should take in relation to
the Scheme, shareholders should consult their own professional adviser.
Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell shares in ANZ or ANZ
NOHC. These are investment decisions upon which Grant Samuel does not offer an opinion and are
independent of a decision on whether to vote for or against the Scheme. Shareholders should consult theirown professional adviser in this regard.

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Chairman’s letter

7

Qualifications, Declarations and Consents
Qualifications

Disclaimers

Grant Samuel has had no involvement in the preparation of the Explanatory Memorandum issued by ANZ
and has not verified or approved any of the contents of the Explanatory Memorandum. Grant Samuel does
not accept any responsibility for the contents of the Explanatory Memorandum (except for this report).

Independence

Grant Samuel and its related entities do not have at the date of this report, and have not had within theprevious two years, any business or professional relationship with the ANZ Group or any financial or otherinterest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion
in relation to the Scheme.

Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30
March 2011.

Section 9

Grant Samuel will receive a fixed fee of $625,000 for the preparation of this report. This fee is notcontingent on the conclusions reached or the outcome of the Scheme. Grant Samuel’s out of pocket
expenses in relation to the preparation of the report will be reimbursed. Grant Samuel will receive noother benefit for the preparation of this report.

Section 8

Grant Samuel had no part in the formulation of the Restructure (including the Scheme). Its only role has
been the preparation of this report.

Section 7

7.3

Section 6

Grant Samuel has had no involvement in ANZ’s due diligence investigation in relation to the Explanatory
Memorandum and does not accept any responsibility for the completeness or reliability of the process
which is the responsibility of ANZ.

Section 5

It is not intended that this report should be used or relied upon for any purpose other than as an
expression of Grant Samuel’s opinion as to whether the Scheme is in the best interests of shareholders.
Grant Samuel expressly disclaims any liability to any ANZ shareholder who relies or purports to rely on thereport for any other purpose and to any other party who relies or purports to rely on the report for any
purpose whatsoever.

Section 4

7.2

Section 3

The persons responsible for preparing this report on behalf of Grant Samuel are Jaye Gardner BCom LLB(Hons) CA SF Fin GAICD and Stephen Wilson MCom (Hons) CA SF Fin. Each has a significant number of yearsof experience in relevant corporate advisory matters. Shaun Yu BBA CFA and Mitchell Skene BEng (Hons)
BCom assisted in the preparation of the report. Each of the above persons is a representative of Grant
Samuel pursuant to its Australian Financial Services Licence under Part 7.6 of the Corporations Act.

Section 2

The Grant Samuel group of companies provide corporate advisory services in relation to mergers andacquisitions, capital raisings, debt raisings, corporate restructurings and financial matters generally. The
primary activity of Grant Samuel & Associates Pty Limited is the preparation of corporate and businessvaluations and the provision of independent expert’s reports in connection with mergers and acquisitions,takeovers and capital reconstructions. Since inception in 1988, Grant Samuel and its related companies
have prepared more than 580 public independent expert and appraisal reports.

Section 1

7.1

Section 10
Annexures

47

133

7.4

Declarations

ANZ has agreed that it will indemnify Grant Samuel and its employees and officers in respect of any liability
suffered or incurred as a result of or in connection with the preparation of the report. This indemnity will
not apply in respect of the proportion of any liability found by a court to be primarily caused by any
conduct involving gross negligence or wilful misconduct by Grant Samuel. ANZ has also agreed toindemnify Grant Samuel and its employees and officers for time spent and reasonable legal costs andexpenses incurred in relation to any inquiry or proceeding initiated by any person. Any claims by ANZ arelimited to an amount equal to the fees paid to Grant Samuel. Where Grant Samuel or its employees andofficers are found to have been grossly negligent or engaged in wilful misconduct Grant Samuel shall bear
the proportion of such costs caused by its action.
Advance drafts of this report were provided to ANZ and its advisers. Certain changes were made to thedrafting of the report as a result of the circulation of the draft report. There was no alteration to themethodology, evaluation or conclusions as a result of issuing the drafts.

7.5

Consents

Grant Samuel consents to the issuing of this report in the form and context in which it is to be included in
the Explanatory Memorandum to be sent to shareholders of ANZ. Neither the whole nor any part of thisreport nor any reference thereto may be included in any other document without the prior written consent
of Grant Samuel as to the form and context in which it appears.

7.6

Other

The accompanying letter dated 26 October 2022 forms part of this report.
Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The Financial
Services Guide is set out at the beginning of this report.
GRANT SAMUEL & ASSOCIATES PTY LIMITED26 October 2022

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

INVESTIGATING ACCOUNTANT’S REPORT

kpmg

ABN: 43 007 363 215
Telephone: +61 2 9335 7000
Facsimile: +61 2 9335 7001
DX: 1056 Sydneywww.kpmg.com.au

Section 3

The Directors
Australia and New Zealand Banking Group Ltd
ANZ Centre Docklands
Level 9, 833 Collins Street
Docklands Victoria 3008

Section 2

P O Box H67 Australia Square
Sydney NSW 1213
Australia

Section 1

KPMG Transaction Services
A division of KPMG Financial Advisory Services(Australia) Pty Ltd
Australian Financial Services Licence No. 246901
Level 38 Tower Three
300 Barangaroo Avenue
Sydney NSW 2000

Chairman’s letter

ANNEXURE 2

Section 4

27 October 2022

Limited Assurance Investigating Accountant’s Report and Financial Services Guide

Introduction

This Investigating Accountant’s Report should be read in conjunction with the KPMG
Transaction Services Financial Services Guide included in the Explanatory Memorandum.

Section 8

Expressions defined in the Explanatory Memorandum have the same meaning in this report.

Section 7

KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Transaction Services is
a division) (“KPMG Transaction Services”) has been engaged by Australia and New Zealand
Banking Group Limited (“ANZ”) to prepare this report for inclusion in the Explanatory
Memorandum to be dated 27 October 2022 (“Explanatory Memorandum”), and to be issued
by ANZ in connection with the proposed restructure of ANZ into a non-operating holding
company (“NOHC”) structure with separate banking and non-banking activities (the“Restructure”).

Section 6

Investigating Accountant’s Report

Section 5

Dear Directors

Scope

Annexures

KPMG, an Australian partnership and a member
firm of the KPMG network of independent
member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss
entitySection 10

The pro forma historical financial information is presented in the Explanatory Memorandum inan abbreviated form, insofar as it does not include all of the presentation and disclosuresrequired by Australian Accounting Standards and other mandatory professional reporting
requirements applicable to general purpose financial reports prepared in accordance with the
Corporations Act 2001.

Section 9

You have requested KPMG Transaction Services to perform a limited assurance engagement inrelation to the pro forma historical financial information described below and disclosed in the
Explanatory Memorandum.

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Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022

Pro Forma Historical Financial Information
You have requested KPMG Transaction Services to perform limited assurance procedures inrelation to the pro forma historical financial information of ANZ (the responsible party) includedin the Explanatory Memorandum.
The pro forma historical financial information has been derived from the historical financial
information of ANZ, after adjusting for the effects of pro forma adjustments described in section
6 of the Explanatory Memorandum. The pro forma financial information consists of ANZ’s:— pro forma statement of financial position for the ANZ Bank HoldCo, ANZ Non-Bank HoldCo,and ANZ ServiceCo as at 31 March 2022 assuming the ANZ NOHC Group was in place onthat date (“Pro forma Balance Sheet”); and— pro forma income statements for the ANZ Bank HoldCo, ANZ Non-Bank HoldCo, and ANZServiceCo for the half year ended 31 March 2022 assuming that the ANZ NOHC Group wasin place during the period (“Pro forma Income Statement”).

(collectively the “ANZ NOHC Pro Forma Financial Information”).
as set out in section 6 of the Explanatory Memorandum issued by ANZ
The stated basis of preparation is the recognition and measurement principles contained inAustralian Accounting Standards applied to the historical financial information and the event(s)or transaction(s) to which the pro forma adjustments relate, as described in section 6 of the
Explanatory Memorandum. Due to its nature, the ANZ NOHC Pro Forma Financial Information
does not represent the company’s actual or prospective financial position and/or financial
performance.
The ANZ NOHC Pro Forma Financial Information has been compiled by ANZ to illustrate theimpact of the Restructure described in section 4 and 7 of the Explanatory Memorandum on
ANZ’s financial position as at 31 March 2022 and ANZ’s financial performance for the half year
ended 31 March 2022. As part of this process, information about ANZ’s financial position andfinancial performance has been extracted by ANZ from ANZ’s financial statements for the period
ended 31 March 2022.
The financial statements of ANZ for the half year ended 31 March 2022 were reviewed by
KPMG in accordance with Australian Auditing Standards. The review opinions issued to themembers of ANZ relating to those financial statements were unqualified.
For the purposes of preparing this report we have performed limited assurance procedures inrelation to ANZ NOHC Pro Forma Financial Information in order to state whether, on the basisof the procedures described, anything comes to our attention that would cause us to believethat the ANZ NOHC Pro Forma Financial Information is not prepared or presented fairly, in allmaterial respects, by the directors in accordance with the stated basis of preparation as set out
in section 6 of the Explanatory Memorandum.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022

Section 1

Directors’ responsibilities

Section 5

The directors’ responsibility includes establishing and maintaining such internal controls as the
directors determine are necessary to enable the preparation of financial information that is freefrom material misstatement, whether due to fraud or error.

Section 4

The directors of ANZ are responsible for the preparation of the ANZ NOHC Pro Forma Financial
Information, including the selection and determination of the pro forma transactions and/or
adjustments made to the historical financial information and included in the ANZ NOHC Pro
Forma Financial Information.

Section 3

The procedures performed in a limited assurance engagement vary in nature from, and are lessin extent than for, an audit. As a result, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we
performed an audit. Accordingly, we do not express an audit opinion about whether the ANZNOHC Pro Forma Financial Information is prepared, in all material respects, by the directors inaccordance with the stated basis of preparation.

Section 2

We have conducted our engagement in accordance with the Standard on Assurance
Engagements ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or
Prospective Financial Information.

Conclusions
Review statement on the ANZ NOHC Pro Forma Financial Information

the Pro forma Balance Sheet as at 31 March 2022; and•the Pro Forma Income Statement for the half year ended 31 March 2022

Section 7•

Section 6

Based on our procedures, which are not an audit, nothing has come to our attention that causes
us to believe that the ANZ NOHC Pro Forma Financial Information, as set out in section 6 of the
Explanatory Memorandum, comprising:

Independence

Section 9

KPMG Transaction Services does not have any interest in the outcome of the proposed
Restructure, other than in connection with the preparation of this report and participation in due
diligence procedures for which normal professional fees will be received. KPMG is the auditor of
ANZ and from time to time, KPMG also provides ANZ with certain other professional services
for which normal professional fees are received.

Section 8

is not prepared or presented fairly, in all material respects, on the basis of the pro forma
transactions and/or adjustments described in section 6 of the Explanatory Memorandum, and inaccordance with the recognition and measurement principles prescribed in Australian
Accounting Standards, and ANZ’s accounting policies.

Section 10
Annexures

3

137

Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022

General advice warningThis report has been prepared, and included in the Explanatory Memorandum, to provide
investors with general information only and does not take into account the objectives, financial
situation or needs of any specific investor. It is not intended to take the place of professional
advice and investors should not make specific investment decisions in reliance on theinformation contained in this report. Before acting or relying on any information, an investor
should consider whether it is appropriate for their circumstances having regard to theirobjectives, financial situation or needs.
Design and Distribution Obligations (“DDO”)
KPMG has made reasonable enquiries of ANZ as to whether the underlying financial productpursuant to the Restructure is captured by Design and Distribution Obligations (“DDO”)
regulations. Where a Target Market Determination (“TMD”) is required KPMG has reviewed the
TMD to ensure the content of the IAR is consistent with the TMD.
Restriction on use
Without modifying our conclusions, we draw attention to section 6 of the Explanatory
Memorandum, which describes the purpose of the financial information, being for inclusion in
the Explanatory Memorandum. As a result, the financial information may not be suitable for use
for another purpose. We disclaim any assumption of responsibility for any reliance on thisreport, or on the financial information to which it relates, for any purpose other than that for
which it was prepared.
KPMG Transaction Services has consented to the inclusion of this Investigating Accountant’s
Report in the Explanatory Memorandum in the form and context in which it is so included, but
has not authorised the issue of the Explanatory Memorandum. Accordingly, KPMG Transaction
Services makes no representation regarding, and takes no responsibility for, any otherstatements, or material in, or omissions from, the Explanatory Memorandum.
Yours faithfully

Paul Guinea
Authorised Representative

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

ABN 43 007 363 215
Australian Financial Services Licence No. 246901

Chairman’s letter

KPMG Financial Advisory Services (Australia) Pty Ltd

Section 1

Financial Services Guide
What is a Financial Services Guide (FSG)?

•

KPMG FAS and its Authorised Representative and how they can be contacted;•

The services KPMG FAS and its Authorised Representative are authorised to provide;•

How KPMG FAS and its Authorised Representative are paid;
Any relevant associations or relationships of KPMG FAS and its Authorised Representative;•

How complaints are dealt with as well as information about internal and external dispute resolution systems andhow you can access them; and•The compensation arrangements that KPMG FAS has in place.

Section 5•

Section 4

This FSG includes information about:

Section 3

This FSG is designed to help you to decide whether to use any of the general financial product advice provided by KPMG
Financial Advisory Services (Australia) Pty Ltd ABN 43 007 363 215 (“KPMG FAS”), Australian Financial Services
Licence Number 246901 (of which KPMG Transaction Services is a division) (‘KPMG Transaction Services’), and Paul
Guinea as an authorised representative of KPMG FAS, authorised representative number 001245044 (Authorised
Representative).

Section 2

Dated October 2021

The distribution of this FSG by the Authorised Representative has been authorised by KPMG FAS.

KPMG FAS holds an Australian Financial Services Licence, which authorises it to provide, amongst other services,financial product advice for the following classes of financial products:
Deposit and non-cash payment products;
Derivatives;
Foreign exchange contracts;
Government debentures, stocks or bonds;•

Interests in managed investments schemes including investor directed portfolio services;•

Securities;•

Superannuation;•

Carbon units;•

Australian carbon credit units; and•Eligible international emissions units,©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Section 10

to retail and wholesale clients.

Section 9••

Section 8••

Section 7

Financial services that KPMG FAS and the Authorised Representative are authorised to provide

Section 6

This FSG forms part of an Investigating Accountant’s Report (Report) which has been prepared for inclusion in adisclosure document or, if you are offered a financial product for issue or sale, a Product Disclosure Statement (PDS).
The purpose of the disclosure document or PDS is to help you make an informed decision in relation to a financial
product. The contents of the disclosure document or PDS, as relevant, will include details such as the risks, benefits, andcosts of acquiring the particular financial product.

Liability limited by a scheme approved under Professional Standards Legislation.

Annexures

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation139

We provide financial product advice when engaged to prepare a report in relation to a transaction relating to one of thesetypes of financial products. The Authorised Representative is authorised by KPMG FAS to provide financial product advice
on KPMG FAS’s behalf.

KPMG FAS and the Authorised Representative’s responsibility to you
KPMG FAS has been engaged by Australia and New Zealand Banking Group Limited (“ANZ”) to provide general financial
product advice in the form of a Report to be included in the Explanatory Memorandum (“Document”) prepared by ANZ in
relation to the proposed restructure of ANZ into a non-operating holding company structure with separate banking andnon-banking activities (the “Restructure”).
You have not engaged KPMG FAS or the Authorised Representative directly but have received a copy of the Reportbecause you have been provided with a copy of the Document. Neither KPMG FAS nor the Authorised Representative
are acting for any person other than ANZ.
KPMG FAS and the Authorised Representative are responsible and accountable to you for ensuring that there is areasonable basis for the conclusions in the Report.

General advice
As KPMG FAS has been engaged by ANZ, the Report only contains general advice as it has been prepared without taking
into account your personal objectives, financial situation or needs.
You should consider the appropriateness of the general advice in the Report having regard to your circumstances before
you act on the general advice contained in the Report.
You should also consider the other parts of the Document before making any decision in relation to the Restructure.

Fees KPMG FAS may receive, and remuneration or other benefits received by our representatives
KPMG FAS charges fees for preparing reports. These fees will usually be agreed with, and paid by ANZ. Fees are agreed
on either a fixed fee or a time cost basis. In this instance, the ANZ has agreed to pay KPMG FAS $375,000 for preparing
the Report. KPMG FAS and its officers, representatives, related entities and associates will not receive any other fee orbenefit in connection with the provision of the Report.
KPMG FAS officers and representatives (including the Authorised Representative) receive a salary or a partnership
distribution from KPMG’s Australian professional advisory and accounting practice (the KPMG Partnership). KPMG FAS’
representatives (including the Authorised Representative) are eligible for bonuses based on overall productivity. Bonuses
and other remuneration and benefits are not provided directly in connection with any engagement for the provision ofgeneral financial product advice in the Report.
Further details may be provided on request.

Referrals
Neither KPMG FAS nor the Authorised Representative pay commissions or provide any other benefits to any person forreferring customers to them in connection with a Report.

Associations and relationships
Through a variety of corporate and trust structures KPMG FAS is controlled by and operates as part of the KPMG
Partnership. KPMG FAS’ directors and Authorised Representatives may be partners in the KPMG Partnership. The
Authorised Representative is a partner in the KPMG Partnership. The financial product advice in the Report is provided by
KPMG FAS and the Authorised Representative and not by the KPMG Partnership.
From time to time KPMG FAS, the KPMG Partnership and related entities (KPMG entities) may provide professional
services, including audit, tax and financial advisory services, to companies and issuers of financial products in the ordinary
course of their businesses.
No individual involved in the preparation of this Report holds a substantial interest in, or is a substantial creditor of, theANZ or has other material financial interests in the transaction.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.
Liability limited by a scheme approved under Professional Standards Legislation.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation

140

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents

Internal complaints resolution process

Section 1

If you have a complaint, please let KPMG FAS or the Authorised Representative know. Complaints can be sent in writing
to The Complaints Officer, KPMG, GPO Box 2291U, Melbourne, VIC 3000 or via email (AU-FM-AFSLCOMPLAINT@kpmg.com.au). If you have difficulty in putting your complaint in writing, please telephone the Complaints
Officer on (03) 9288 5555 and they will assist you in documenting your complaint.

Chairman’s letter

Complaints resolution

We will acknowledge receipt of your complaint, in writing, within 1 business day or as soon as practicable.
Section 2

Following an investigation of your complaint, you will receive a written response within 30 calendar days. If KPMG FAS isunable to resolve your complaint within 30 calendar days, we will let you know the reasons for the delay and advise youof your right to refer the matter to the Australian Financial Complaints Authority (AFCA).

External complaints resolution process

Address:
Telephone:

Australian Financial Complaints Authority Limited, GPO Box 3, Melbourne Victoria 3001
1800 931 678

Email:

info@afca.org.au
Section 5

The Australian Securities and Investments Commission also has a freecall infoline on 1300 300 630 which you may use to
obtain information about your rights.

Section 4

Further details about AFCA are available at the AFCA website www.afca.org.au or by contacting them directly at:

Section 3

If KPMG FAS or the Authorised Representative cannot resolve your complaint to your satisfaction within 30 calendar
days, you can refer the matter to AFCA. AFCA is an independent body that has been established to provide free advice
and assistance to consumers to help in resolving complaints relating to the financial services industry. KPMG FAS is amember of AFCA (member no 11690).

Compensation arrangements
Section 6

KPMG FAS holds professional indemnity insurance cover in accordance with section 912B of the Corporations Act
2001(Cth).

Contact details
KPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd)
Level 38, International Towers Three
300 Barangaroo Avenue
Sydney NSW 2000(02) 9335 7621(02) 9335 7001

Section 10

Telephone:
Facsimile:

Section 9

Paul Guinea
C/O KPMG
PO Box H67
Australia Square
NSW 1213

Section 8

PO Box H67
Australia Square
NSW 1213
Telephone:(02) 9335 7621
Facsimile:(02) 9335 7001

Section 7

You may contact KPMG FAS or the Authorised Representative using the below contact details:©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation

Annexures

Liability limited by a scheme approved under Professional Standards Legislation.

141

ANNEXURE 3
SCHEME OF ARRANGEMENT

Scheme of arrangement
Australia and New Zealand Banking Group Limited
Scheme Shareholders

Scheme of arrangement
Australia and New Zealand Banking Group Limited
Scheme Shareholders

80 Collins Street Melbourne Vic 3000 Australia
GPO Box 128 Melbourne Vic 3001 Australia

142

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

T +61 3 9288 1234 F +61 3 9288 1567
herbertsmithfreehills.com DX 240 Melbourne

Contents
Chairman’s letter
Section 1

Scheme of arrangement – share scheme

Section 2

This scheme of arrangement is made under section 411 of the Corporations Act
2001 (Cth)Between the parties

Section 3

Australia and New Zealand Banking Group Limited
ABN 11 005 357 522 of 833 Collins St, Docklands VIC 3008

Definitions and interpretation

1.1

Definitions

Section 5

1

Section 4

The Scheme Shareholders

ANZBGL Registry

Computershare Investor Services Pty Ltd ACN 078 279 277.

ANZBGL Sharea fully paid ordinary share in the capital of ANZBGL.

ANZBGL Shareholder

each person who is registered as the holder of a ANZBGL Share in the
Share Register.

ANZ NOHCANZ Group Holdings Limited ACN 659 510 791.

ANZ NOHC Register

the register of shareholders maintained by ANZ NOHC or its agent.

Section 10

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

Section 9

ANZBGL

Section 8

Meaning

Section 7

Term

Section 6

The meanings of the terms used in this Scheme are set out below.

Annexures

98481504

Scheme of arrangement

page 1143

Term

Meaning

ANZ NOHC Registry

Computershare Investor Services Pty Ltd ACN 078 279 277.

ANZ NOHC Sharea fully paid ordinary share in ANZ NOHC.

ASIC

the Australian Securities and Investments Commission.

ASX

ASX Limited ABN 98 008 624 691 and, where the context requires, thefinancial market that it operates.

Business Day

business day as defined in the Listing Rules.

CHESS

the Clearing House Electronic Subregister System operated by ASX
Settlement Pty Ltd and ASX Clear Pty Limited.

Corporations Act

the Corporations Act 2001 (Cth).

Court

the Federal Court of Australia, Victoria Registry, or such other court ofcompetent jurisdiction under the Corporations Act determined by
ANZBGL.

Deed Pollthe deed poll substantially in the form of Attachment 2 of the
Implementation Deed under which ANZ NOHC covenants in favour of
the Scheme Shareholders to perform the obligations attributed to ANZNOHC under this Scheme.

Effective

when used in relation to this Scheme, the coming into effect, undersubsection 411(10) of the Corporations Act, of the Court order madeunder paragraph 411(4)(b) of the Corporations Act in relation to thisScheme.

Effective Datethe date on which this Scheme becomes Effective.

Eligible Foreign
Jurisdiction

is expected to include:
1

China, Cook Islands, Fiji, France, Germany, Hong Kong, India,
Korea, Malaysia, Papua New Guinea, Philippines, Samoa,
Singapore, Taiwan, the United Kingdom, the United States(including American Samoa and Guam) and Vanuatu; and2

in the case of Scheme Shareholders who are an ANZ employee asat the Scheme Record Date, those jurisdictions listed in 1 above

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Contents
Chairman’s letter

Term

Meaning
Section 1

and Indonesia and Japan,

Ineligible Foreign
Shareholdera Scheme Shareholder whose address shown in the Share Register on
the Scheme Record Date is a place outside Australia (and its external
territories), New Zealand, or an Eligible Foreign Jurisdiction, unless
ANZ NOHC determines that it is lawful and not unduly onerous or
impracticable to issue that Scheme Shareholder with ANZ NOHC
Shares when this Scheme becomes Effective.

Listing Rules

the official listing rules of ASX.

NOHC Restructure

has the meaning given to that term in the Implementation Deed.

Registered Address

in relation to a ANZBGL Shareholder, the address shown in the Share
Register as at the Scheme Record Date.

Sale Agentthe entity appointed by ANZBGL to act as the sale facility agent andnominee of the Ineligible Foreign Shareholders under this Scheme.

Schemethis scheme of arrangement under Part 5.1 of the Corporations Act
between ANZBGL and the Scheme Shareholders subject to any

page 3Annexures

Scheme of arrangement

Section 10

the NOHC Restructure Implementation Deed dated 26 October 2022
between ANZBGL and ANZ NOHC relating to the implementation of
the NOHC Restructure, including this Scheme.

Section 9

Implementation Deed

Section 8

the fifth Business Day after the Scheme Record Date, or such otherdate after the Scheme Record Date as determined by ANZBGL.

Section 7

Implementation Date

Section 6

any foreign or Australian government or governmental, semigovernmental, administrative, fiscal or judicial body, department,
commission, authority, tribunal, agency or entity (including any stock orother securities exchange), or any minister of the Crown in right of theCommonwealth of Australia or any state, or any other federal, state,provincial, local or other government, whether foreign or Australian.

Section 5

Government Agency

Section 4

the later of 30 June 2023, or such other date determined by ANZBGL.
Section 3

98481504

End Date

Section 2

noting that ANZ may change these jurisdictions on the basis that ANZ
determines that it is not lawful or unduly onerous or impracticable toissue ANZ NOHC Shares in a particular jurisdiction when the Scheme
becomes Effective.

145

Term

Meaningalterations or conditions made or required by the Court undersubsection 411(6) of the Corporations Act and agreed to in writing by
ANZBGL and ANZ NOHC.

Scheme Booklet

the scheme booklet published by ANZBGL and dated 27 October
2022.

Scheme Considerationfor each ANZBGL Share held by a Scheme Shareholder as at the
Scheme Record Date, one ANZ NOHC Share.

Scheme Meetingthe meeting of the ANZBGL Shareholders ordered by the Court to beconvened under subsection 411(1) of the Corporations Act to consider
and vote on this Scheme and includes any meeting convened following
any adjournment or postponement of that meeting.

Scheme Record Date

7.00pm on the second Business Day after the Effective Date or suchother date as determined by ANZBGL.

Scheme Shares

all ANZBGL Shares held by the Scheme Shareholders as at the
Scheme Record Date.

Scheme Shareholder

a holder of ANZBGL Shares recorded in the Share Register as at the
Scheme Record Date.

Scheme Transfer

a duly completed and executed proper instrument of transfer in respectof the Scheme Shares for the purposes of section 1071B of the
Corporations Act, in favour of ANZ NOHC or the Sale Agent (asapplicable) as transferee, which may be a master transfer of all or partof the Scheme Shares.

Second Court Datethe first day on which an application made to the Court for an orderunder paragraph 411(4)(b) of the Corporations Act approving thisScheme is heard or, if the application is adjourned or subject to appeal
for any reason, the day on which the adjourned application or appeal isheard.

Share Register

the register of members of ANZBGL maintained by ANZBGL or the
ANZBGL Registry in accordance with the Corporations Act.

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Scheme of arrangement

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Contents
Chairman’s letter

1.2

Interpretation(e)a reference to a person includes any company, partnership, joint venture,association, corporation or other body corporate and any Government Agency
as well as an individual;(f)a reference to a clause, party, schedule, attachment or exhibit is a reference toa clause of, and a party, schedule, attachment or exhibit to, this Scheme;(g)a reference to any legislation includes all delegated legislation made under it
and amendments, consolidations, replacements or reenactments of any of them(whether passed by the same or another Government Agency with legal power
to do so);(h)a reference to a document (including this Scheme) includes all amendments or
supplements to, or replacements or novations of, that document;(i)a reference to ‘$’, ‘A$’ or ‘dollar’ is to Australian currency;(j)a reference to any time is, unless otherwise indicated, a reference to that time in
Melbourne;(k)a term defined in or for the purposes of the Corporations Act, and which is notdefined in clause 1.1, has the same meaning when used in this Scheme;(l)a reference to a party to a document includes that party’s successors andpermitted assignees;(m)

if a period of time is specified and dates from a given day or the day of an act orevent, it is to be calculated exclusive of that day;(n)a reference to a day is to be interpreted as the period of time commencing at
midnight and ending 24 hours later;(o)

if an act prescribed under this Scheme to be done by a party on or by a given
day is done after 5.00pm on that day, it is taken to be done on the next day; and(p)a reference to the Listing Rules includes any variation, consolidation or
replacement of these rules and is to be taken to be subject to any waiver or
exemption granted to the compliance of those rules by a party..

Section 8other parts of speech and grammatical forms of a word or phrase defined in thisScheme have a corresponding meaning;

Section 7

words of any gender include all genders;(d)Section 6(c)Section 5

the singular includes the plural and the plural includes the singular;

Section 4(b)

Section 3

headings and bold type are for convenience only and do not affect theinterpretation of this Scheme;

Section 2

1.3

(a)

Section 1

In this Scheme:

Interpretation of inclusive expressions
Section 9

Specifying anything in this Scheme after the words ‘include’ or ‘for example’ or similar
expressions does not limit what else is included.

1.4

Business Day

Scheme of arrangement

page 5Annexures

98481504

Section 10

Where the day on or by which any thing is to be done is not a Business Day, that thing
must be done on or by the next Business Day.

147

2

Preliminary matters(a)

ANZBGL is a public company limited by shares, registered in Victoria, Australia,
and has been admitted to the official list of the ASX. ANZBGL Shares arequoted for trading on the ASX. As at 23 October 2022, 2,989,923,751 ANZBGLShares were on issue.

(b)

ANZ NOHC is an unlisted public company limited by shares registered in
Victoria, Australia. As at 23 October 2022, one ANZ NOHC Share was on issue,
which is held by ANZBGL. The board of ANZ NOHC has resolved to become
the new parent of ANZBGL by acquiring all the Scheme Shares under thisScheme.

(c)

ANZBGL and ANZ NOHC have agreed, by executing the Implementation Deed,to implement the NOHC Restructure, including this Scheme.

(d)This Scheme attributes actions to ANZ NOHC but does not itself impose an
obligation on it to perform those actions. ANZ NOHC has agreed, by executing
the Deed Poll and the Implementation Deed, to perform the actions attributed toit under this Scheme.

3

Conditions

3.1

Conditions precedentThis Scheme is conditional on and will have no force or effect until, the satisfaction ofeach of the following conditions precedent:
(a)

3.2

all the conditions in clause 3.1 of the Implementation Deed (other than thecondition in the Implementation Deed relating to Court approval of this Scheme)
having been satisfied or waived;(b)neither the Implementation Deed nor the Deed Poll having been terminated;(c)approval of this Scheme by the Court under paragraph 411(4)(b) of the
Corporations Act, including with any alterations made or required by the Court
under subsection 411(6) of the Corporations Act and agreed to by ANZ NOHC
and ANZBGL;(d)the orders of the Court made under paragraph 411(4)(b) (and, if applicable,
subsection 411(6)) of the Corporations Act approving this Scheme coming into
effect, pursuant to subsection 411(10) of the Corporations Act on or before the
End Date (or any later date ANZBGL and ANZ NOHC agree in writing).

Certificate(a)

ANZBGL and ANZ NOHC will provide to the Court on the Second Court Date acertificate, or such other evidence as the Court requests, confirming (in respectof matters within their knowledge) whether or not all of the conditions precedentin clauses 3.1(a) and 3.1(b) have been satisfied or waived.

(b)

The certificate referred to in clause 3.2(a) constitutes conclusive evidence thatsuch conditions precedent were satisfied, waived or taken to be waived as at
the Second Court Date.

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Chairman’s letter

3.3

End Date(a)the Effective Date does not occur on or before the End Date; or(b)

the Implementation Deed or the Deed Poll is terminated in accordance with its
terms,

Section 1

This Scheme will lapse and be of no further force or effect if:

Implementation of this Scheme

4.1

Lodgement of Court orders with ASIC

Section 3

4

Section 2

unless ANZBGL and ANZ NOHC otherwise agree in writing.

4.2

Section 4

ANZBGL must lodge with ASIC, in accordance with subsection 411(10) of the
Corporations Act, an office copy of the Court order approving this Scheme as soon as
possible after the Court approves this Scheme and in any event by 5.00pm on the first
Business Day after the day on which the Court approves this Scheme.

Transfer of Schemes Shares held by Ineligible Foreign Shareholders
to Sale Agent
(a)

(1)

ANZBGL delivering to the Sale Agent a duly completed Scheme
Transfer, executed on behalf of the Ineligible Foreign Shareholders by
ANZBGL; and(2)

ANZBGL procuring that the Sale Agent duly executes the Scheme
Transfer and attending to the stamping of the Scheme Transfer (ifrequired); andSection 7

immediately following receipt of the Scheme Transfer in accordance with clause
4.3(a)(2), ANZBGL must enter, or procure the entry of, the name of the Sale
Agent in the Share Register in respect of all the Scheme Shares transferred to
the Sale Agent in accordance with this Scheme.

Section 8

4.3

all the Scheme Shares held by the Ineligible Foreign Shareholders, together
with all rights and entitlements attaching to those Scheme Shares as at the
Implementation Date, must be transferred to the Sale Agent, without the needfor any further act by any Ineligible Foreign Shareholder, by:

Section 6(b)Section 5

On the Implementation Date:

Transfer of Scheme Shares to ANZ NOHC
On the Implementation Date, following the transfer referred to in clause 4.2 and the issueof ANZ NOHC Shares under clause 5.1:
the Scheme Shares (including those transferred to the Sale Agent under clause4.2), together with all rights and entitlements attaching to the Scheme Sharesas at the Implementation Date, must be transferred to ANZ NOHC, without theneed for any further act by any Scheme Shareholder or the Sale Agent), by:
ANZBGL delivering to ANZ NOHC a duly completed Scheme
Transfer, executed on behalf of the Scheme Shareholders and theSale Agent by ANZBGL, for registration; andpage 7

Annexures

Scheme of arrangement

Section 10(1)98481504

Section 9

(a)

149

(2)

(b)

ANZ NOHC duly executing the Scheme Transfer, attending to thestamping of the Scheme Transfer (if required) and delivering it to
ANZBGL for registration; andimmediately following receipt of the Scheme Transfer in accordance with clause
4.3(a)(2), ANZBGL must enter, or procure the entry of, the name of ANZ NOHCin the Share Register in respect of all the Scheme Shares transferred to ANZNOHC in accordance with this Scheme.

5

Scheme Consideration

5.1

Provision of Scheme Consideration
ANZ NOHC must, subject to clauses 5.2, 5.3 and 5.5:

5.2

(a)

on the Implementation Date, after the transfer of the Scheme Shares by
Ineligible Foreign Shareholders under clause 4.2, but before the transfer of the
Scheme Shares to ANZ NOHC under clause 4.3, issue the Scheme
Consideration to the Scheme Shareholders (other than the Ineligible Foreign
Shareholders) and the Sale Agent and procure that the name and address ofeach Scheme Shareholder (other than the Ineligible Foreign Shareholders) andthe Sale Agent is entered in the ANZ NOHC Register in respect of those ANZNOHC Shares that comprise the Scheme Consideration; and(b)procure that on or before the date that is 10 Business Days after the
Implementation Date, a share certificate or holding statement (or equivalent
document) is sent to the Registered Address of each Scheme Shareholder(other than the Ineligible Foreign Shareholders) and the Sale Agent
representing the number of ANZ NOHC Shares issued to the Scheme
Shareholder or Sale Agent (as applicable) pursuant to this Scheme.

Joint holders
In the case of Scheme Shares held in joint names:

5.3

(a)

the ANZ NOHC Shares to be issued under this Scheme must be issued to andregistered in the names of the joint holders;(b)

any cheque required to be sent under this Scheme will be made payable to thejoint holders and sent to either, at the sole discretion of ANZBGL, the holder
whose name appears first in the Share Register as at the Scheme Record Dateor to the joint holders; and(c)any other document required to be sent under this Scheme, will be forwarded toeither, at the sole discretion of ANZBGL, the holder whose name appears first in
the Share Register as at the Scheme Record Date or to the joint holders.

Ineligible Foreign Shareholders(a)

ANZBGL and ANZ NOHC must procure that:(1)

as soon as reasonably practicable after the Implementation Date (andafter completion of the transfers referred to in clauses 4.2 and 4.3 andthe issue of the ANZ NOHC Shares in accordance with clause 5.1),

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Contents
Chairman’s letterthe Sale Agent sells or procures the sale of all the ANZ NOHC Sharesissued to the Sale Agent under clause 5.1;

Section 1(2)

each Ineligible Foreign Shareholder is paid, promptly following thesale of all the ANZ NOHC Shares in accordance with clause 5.3(a)(1),
the amount ‘A’ calculated in accordance with the following formula androunded down to the nearest cent:

Section 2

A = (B ÷ C) x D
Where
B = the number of ANZBGL Shares held by that Ineligible Foreign
Shareholder as at the Record Date;

Section 3

C = the total number of ANZBGL Shares held by all Ineligible Foreign
Shareholders as at the Record Date; andD = the proceeds of sale of the ANZ NOHC Shares under clause
5.3(a)(1) (after deduction of any applicable brokerage, stamp duty andother costs, taxes and charges).

New Zealand dollars, in which case the amount A referred to in clause
5.3(a)(2) applicable to that Ineligible Foreign Shareholder will be
converted into New Zealand dollars at a date determined by ANZBGL
on the basis of the Australian dollar-New Zealand dollar exchange
rate procured by ANZBGL on that date, and that Ineligible Foreign
Shareholder will be paid the proceeds in New Zealand dollars; and(2)

Pounds sterling, in which case the amount A referred to in clause
5.3(a)(2) applicable to that Ineligible Foreign Shareholder will be
converted into pounds sterling at a date determined by ANZBGL on
the basis of the Australian dollar-pounds sterling exchange rate
procured by ANZBGL on that date, and that Ineligible Foreign
Shareholder will be paid the proceeds in pounds sterling.

(d)

ANZBGL must make, or procure the making of, payments to Ineligible Foreign
Shareholders under clause 5.3(a) by either (in the absolute discretion of
ANZBGL, and despite any election referred to in clause 5.3(d)(1) or authority
referred to in clause 5.3(d)(2) made or given by the Scheme Shareholder):(2)paying or procuring the payment of, the relevant amount by electronicmeans to a bank account nominated by the Ineligible Foreign
Shareholder by an appropriate authority from the Ineligible Foreign
Shareholder to ANZBGL; orpage 9Annexures

Scheme of arrangement

Section 10

if an Ineligible Foreign Shareholder has, before the Scheme Record
Date, made a valid election in accordance with the requirements of
the ANZBGL Registry to receive dividend payments from ANZBGL byelectronic funds transfer to a bank account nominated by the Ineligible
Foreign Shareholder, paying, or procuring the payment of, therelevant amount by electronic means in accordance with that election;

Section 9(1)

Section 8

The Ineligible Foreign Shareholders acknowledge that none of ANZ NOHC,ANZBGL or the Sale Agent gives any assurance as to the price that will beachieved for the sale of ANZ NOHC Shares described in clause 5.3(a).

Section 7(c)Section 6(1)

Section 598481504

Each payment to an Ineligible Foreign Shareholder in accordance with clause
5.3(a) must be made in Australian dollars, other than in respect of any Ineligible
Foreign Shareholder who has, prior to the Scheme Record, made a valid
election to receive dividends from ANZBGL in:

Section 4

(b)

151

(3)

5.4

dispatching, or procuring the dispatch of, a cheque for the relevant
amount to the Ineligible Foreign Shareholder by prepaid post to their
Registered Address (as at the Scheme Record Date), such cheque
being drawn in the name of the Ineligible Foreign Shareholder (or in
the case of joint holders, in accordance with the procedures set out inclause 5.2).

(e)Each Ineligible Foreign Shareholder appoints ANZBGL as its agent to receiveon its behalf any financial services guide (or similar or equivalent document) orother notices (including any updates of those documents) that the Sale Agent isrequired to provide to Ineligible Foreign Shareholders under the Corporations
Act or any other applicable law.

(f)

Payment of the amount calculated in accordance with clause 5.3(a) to an
Ineligible Foreign Shareholder in accordance with this clause 5.3 satisfies in fullthe Ineligible Foreign Shareholder’s right to Scheme Consideration.

Unclaimed monies
ANZBGL may cancel a cheque issued under this clause 5 if the cheque:

5.5

(a)

is returned to ANZBGL; or(b)

has not been presented for payment within six months after the date on which
the cheque was sent.

Orders of a court or Government Agency
If written notice is given to ANZBGL (or the ANZBGL Registry) or ANZ NOHC (or the ANZNOHC Registry) of an order or direction made by a court of competent jurisdiction or byanother Government Agency that:(a)requires consideration to be provided to a third party (either through payment ofa sum or the issuance of a security) in respect of Scheme Shares held by aparticular Scheme Shareholder, which would otherwise be payable or required
to be issued to that Scheme Shareholder by ANZBGL in accordance with thisclause 5, then ANZBGL shall be entitled to procure that provision of thatconsideration is made in accordance with that order or direction; or(b)prevents ANZBGL from providing consideration to any particular Scheme
Shareholder in accordance with this clause 5, or the payment or issuance ofsuch consideration is otherwise prohibited by applicable law, ANZBGL shall beentitled to (as applicable):(1)

retain an amount, in Australian dollars, equal to the number of
Scheme Shares held by that Scheme Shareholder multiplied by the
Scheme Consideration; or(2)direct ANZ NOHC not to issue, or to issue to a trustee or nominee,such number of ANZ NOHC Shares as that Scheme Shareholder
would otherwise be entitled to under clause 5.1,

until such time as provision of the Scheme Consideration in accordance withthis clause 5 is permitted by that (or another) order or direction or otherwise by
law.

5.6

Withholdings and deductions
If withholding is required by law or ANZBGL (or the ANZBGL Registry) or ANZ NOHC (orthe ANZ NOHC Registry) (each a Payor) receives professional advice or written notice98481504

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Chairman’s letter(b)

ANZ NOHC may issue the relevant Scheme Shareholder with Scheme
Consideration only to the extent (if at all) that the issue is net of any suchwithholding or other tax, and issue the balance of the Scheme Consideration (ifany) to a trustee or nominee who will sell those ANZ NOHC shares and deal
with any proceeds of their disposal as required by law or the requirements of
the relevant Government Agency;

Section 3

the relevant Payor is entitled to withhold (or procure the withholding of) the
relevant amount from the payment or from the provision of Scheme
Consideration to the relevant Scheme Shareholder;

Section 2(a)Section 1

that any withholding or other tax is required by law or by a Government Agency to be
withheld from a payment (including from a payment to an Ineligible Foreign Shareholder
under clause 5.3(a)), or from the provision of Scheme Consideration to any Scheme
Shareholder, then:(c)Payment or provision of the reduced amount shall be taken to be full payment
or provision of the relevant amount, without any requirement to gross up, for the
purposes of this Scheme (including clause 5.3(a)(2)).

Status of ANZ NOHC Shares

Section 5

5.7

Section 4

the relevant Payor must pay (or procure the payment of) any amount so withheld to therelevant Government Agency as required by law or the requirements of therelevant Government Agency, and if requested in writing must provide (orprocure the provision of) a receipt or other appropriate evidence of suchpayment; andSubject to this Scheme becoming Effective, ANZ NOHC must:(b)

ensure that each such ANZ NOHC Share issued under this Scheme is duly andvalidly issued in accordance with all applicable laws and ANZ NOHC’sconstitution, fully paid and free from any mortgage, charge, lien, encumbrance
or other security interest (except for any lien arising under ANZ NOHC’sconstitution); and(c)

use all reasonable endeavours to ensure that such ANZ NOHC Shares are,from the Business Day following the date this Scheme becomes Effective (orsuch later date as ASX requires), quoted for trading on the ASX initially on adeferred settlement basis and thereafter on an ordinary settlement basis.

Dealings in ANZBGL Shares

6.1

Determination of Scheme Shareholders

Section 8

6

Section 7

issue the ANZ NOHC Shares required to be issued by it under this Scheme on
terms such that each such new ANZ NOHC Share will rank equally in all
respects with each existing ANZ NOHC Share;

Section 6(a)Section 9

To establish the identity of the Scheme Shareholders, dealings in ANZBGL Shares orother alterations to the Share Register will only be recognised if:(a)page 11

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98481504

in the case of dealings of the type to be effected using CHESS, the transferee isregistered in the Share Register as the holder of the relevant ANZBGL Shares
before the Scheme Record Date; and

153

(b)

in all other cases, registrable transfer or transmission applications in respect of
those dealings, or valid requests in respect of other alterations, are received
before the Scheme Record Date at the place where the Share Register is kept,

and ANZBGL must not accept for registration, nor recognise for any purpose (except atransfer to the Sale Agent or ANZ NOHC pursuant to this Scheme), any transfer ortransmission application or other request received after such times, or received prior tosuch times but not in registrable or actionable form, as appropriate.

6.2

7Register(a)

ANZBGL must register registrable transmission applications or transfers of the
Scheme Shares that are received in accordance with clause 6.1(b) before the
Scheme Record Date.

(b)

If this Scheme becomes Effective, a holder of Scheme Shares (and any person
claiming through that holder) must not dispose of, or purport or agree to disposeof, any Scheme Shares or any interest in them on or after the Scheme Record
Date otherwise than pursuant to this Scheme, and any attempt to do so will
have no effect and ANZBGL shall be entitled to disregard any such disposal.

(c)

All statements of holding for ANZBGL Shares (other than statements of holding
in favour of ANZ NOHC or any Excluded Shareholders) will cease to have effectafter the Scheme Record Date as documents of title in respect of those shares
and, as from that date, each entry current at that date on the Share Register(other than entries on the Share Register in respect of ANZ NOHC) will cease tohave effect except as evidence of entitlement to the Scheme Consideration in
respect of the ANZBGL Shares relating to that entry.

Quotation of ANZBGL Shares(a)

ANZBGL must apply to ASX to suspend trading on the ASX in ANZBGL Shareswith effect from the close of trading on the Effective Date.

(b)

On a date after the Implementation Date to be determined by ANZ NOHC,ANZBGL must apply for termination of the official quotation of ANZBGL Shareson the ASX.

8General Scheme provisions

8.1

Consent to amendments to this Scheme
If the Court proposes to approve this Scheme subject to any alterations or conditions:

8.2

(a)

ANZBGL may by its counsel consent on behalf of all persons concerned tothose alterations or conditions; and(b)each Scheme Shareholder agrees to any such alterations or conditions whichANZBGL has consented to.

Scheme Shareholders’ agreements and warranties(a)Each Scheme Shareholder:

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Contents(3)agrees to, on the direction of ANZ NOHC, destroy any holding
statements or share certificates relating to their ANZBGL Shares;(4)

other than each Ineligible Foreign Shareholder agrees to become amember of ANZ NOHC and to be bound by the terms of theconstitution of ANZ NOHC; and(5)

acknowledges and agrees that this Scheme binds ANZBGL and all
Scheme Shareholders (including those who do not attend the Scheme
Meeting and those who do not vote, or vote against this Scheme, at
the Scheme Meeting).

Section 3

agrees to the variation, cancellation or modification of the rights
attached to their ANZBGL Shares constituted by or resulting from thisScheme;Section 2(2)

Section 1

agrees to the transfer of their ANZBGL Shares together with all rights
and entitlements attaching to those ANZBGL Shares in accordancewith this Scheme;

Chairman’s letter

(b)

(1)

On the Implementation Date:each Scheme Shareholder is taken to have warranted to ANZBGLand ANZ NOHC; and(2)each Ineligible Foreign Shareholder is taken to have warranted to theSale Agent,

Section 4(1)

Section 6

8.3

Section 5that all their ANZBGL Shares (including any rights and entitlements attaching tothose shares) which are transferred under this Scheme will, at the date oftransfer, be fully paid and free from all mortgages, charges, liens,
encumbrances, pledges, security interests (including any ‘security interests’
within the meaning of section 12 of the Personal Property Securities Act 2009(Cth)) and interests of third parties of any kind, whether legal or otherwise, andrestrictions on transfer of any kind, and that they have full power and capacity totransfer their ANZBGL Shares to ANZ NOHC or the Sale Agent (as applicable)
together with any rights and entitlements attaching to those shares.

Title to and rights in Scheme Shares

Immediately after the provision of the Scheme Consideration to each Scheme
Shareholder in the manner contemplated by clause 5.1, and upon the transferof the Scheme Shares, ANZ NOHC will be beneficially entitled to the Scheme
Shares transferred to it under this Scheme pending registration by ANZBGL of
ANZ NOHC in the Share Register as the holder of the Scheme Shares. Prior to
the transfer of the Scheme Shares to ANZ NOHC under this Scheme, ANZNOHC will have no interest in, or entitlement to, the Scheme Shares.

Section 9(b)

Section 8

To the extent permitted by law, the Scheme Shares (including all rights andentitlements attaching to the Scheme Shares) transferred under this Scheme to
ANZ NOHC or the Sale Agent (as applicable) will, at the time of transfer of themvest in ANZ NOHC or the Sale Agent (as applicable) free from all mortgages,
charges, liens, encumbrances, pledges, security interests (including any‘security interests’ within the meaning of section 12 of the Personal Property
Securities Act 2009 (Cth)) and interests of third parties of any kind, whether
legal or otherwise and free from any restrictions on transfer of any kind.

Section 7(a)Section 10

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8.4

Appointment of sole proxy
Immediately upon the provision of the Scheme Consideration to each Scheme
Shareholder in the manner contemplated by clause 5.1 and until ANZBGL registers ANZNOHC as the holder of all Scheme Shares in the Share Register, each Scheme
Shareholder:

8.5

(a)

is deemed to have appointed ANZ NOHC as attorney and agent (and directed
ANZ NOHC in each such capacity) to appoint any director, officer, secretary or
agent nominated by ANZ NOHC as its sole proxy and, where applicable orappropriate, corporate representative to attend shareholders' meetings,
exercise the votes attaching to the Scheme Shares registered in their name andsign any shareholders' resolution or document;(b)must not attend or vote at any of those meetings or sign any resolutions,
whether in person, by proxy or by corporate representative (other than pursuant
to clause 8.4(a)); and(c)acknowledges and agrees that in exercising the powers referred to in clause
8.4(a), ANZ NOHC and any director, officer, secretary or agent nominated by
ANZ NOHC under clause 8.4(a) may act in the best interests of ANZ NOHC as
the intended registered holder of the Scheme Shares.

Authority given to ANZBGLEach Scheme Shareholder, without the need for any further act, on the Implementation
Date, irrevocably appoints ANZBGL and each of its directors, officers and secretaries(jointly and each of them severally) as its attorney and agent for the purpose of executing
any document or doing or taking any other act necessary, desirable or expedient to giveeffect to this Scheme and the transactions contemplated by it, including (without
limitation) executing the Scheme Transfer, and ANZBGL accepts each such appointment.
ANZBGL as attorney and agent of each Scheme Shareholder, may sub-delegate its
functions, authorities or powers under this clause 8.5 to all or any of its directors, officers,
secretaries or employees (jointly, severally or jointly and severally).

8.6

Instructions and elections(a)

If not prohibited by law (and including where permitted or facilitated by relief
granted by a Government Agency), all instructions, authorisations, notifications
or elections by a Scheme Shareholder to ANZBGL that are binding or deemedbinding between the Scheme Shareholder and ANZBGL relating to ANZBGL or
ANZBGL Shares, including instructions, authorisations, notifications or elections
relating to:(1)

whether dividends are to be paid by cheque or into a specific bankaccount;(2)

payments of dividends on ANZBGL Shares, including the currency inwhich dividends are to be paid;(3)

participation in the ANZBGL dividend reinvestment plan;(4)

forgoing dividends and participation in the ANZBGL bonus option
plan; and(5)

personal details including for payments and for receipt of notices orother communications from ANZBGL (including by email),

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Chairman’s letterOn the Implementation Date, provided that a Scheme Shareholder has properly
notified ANZBGL of the Scheme Shareholder’s Australian Tax File Number(TFN), , Australian Business Number (ABN) or any relevant exemption fromproviding a TFN (as applicable), the Scheme Shareholder will be deemed tohave authorised ANZBGL to transfer to ANZ NOHC on the Scheme
Shareholder’s behalf the Scheme Shareholder’s TFN, ABN or any relevant
exemption from providing a TFN, unless prior to the Effective Date, the Scheme
Shareholder notifies the ANZBGL Registry that the Scheme Shareholder’s TFN,ABN or any relevant exemption from providing a TFN is not to be provided to
ANZ NOHC.

Section 3
Section 4

8.7

Section 2(b)

Section 1

will be deemed from the Implementation Date (except to the extent determinedotherwise by ANZ NOHC in its sole discretion), by reason of this Scheme, to bemade by the Scheme Shareholder to ANZ NOHC and to be a binding
instruction, authorisation, notification or election to, and accepted by, ANZNOHC in respect of the ANZ NOHC Shares issued to that Scheme Shareholder
until that instruction, notification or election is revoked or amended in writing
addressed to ANZ NOHC at its registry. Any residual credit balances in a
Scheme Shareholder’s ANZBGL dividend reinvestment plan account or
ANZBGL bonus option plan account will be transferred to that Scheme
Shareholder’s NOHC dividend reinvestment plan account or NOHC bonus
option plan account, as applicable, under this Scheme.

Register details(a)Share Register; and(b)

ANZ NOHC Register,

Section 5

ANZBGL and ANZ NOHC must procure that the:are updated (as applicable) after each of the steps set out in clauses 4.2, 4.3 and 5.1.
Section 6

8.8

Binding effect of Scheme

General

9.1

Stamp duty

Section 8

9

Section 7

This Scheme binds ANZBGL and all of the Scheme Shareholders (including those who
did not attend the Scheme Meeting to vote on this Scheme, did not vote at the Scheme
Meeting, or voted against this Scheme at the Scheme Meeting) and, to the extent of any
inconsistency, overrides the constitution of ANZBGL.

ANZ NOHC will:(b)

indemnify each Scheme Shareholder against any liability arising from failure tocomply with clause 9.1(a).

page 15

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Section 10

pay all stamp duty and any related fines and penalties in respect of this Schemeand the Deed Poll, the performance of the Deed Poll and each transaction
effected by or made under or in connection with this Scheme and the Deed Poll;andSection 998481504

(a)

157

9.2

Consent
Each of the Scheme Shareholders consents to ANZBGL doing all things necessary or
incidental to, or to give effect to, the implementation of this Scheme, whether on behalf of
the Scheme Shareholders, ANZBGL or otherwise.

9.3

9.4

9.5

Notices(a)

If a notice, transfer, transmission application, direction or other communicationreferred to in this Scheme is sent by post to ANZBGL, it will not be taken to bereceived in the ordinary course of post or on a date and time other than the date
and time (if any) on which it is actually received at ANZBGL’s registered officeor at the office of the ANZBGL Registry.

(b)

The accidental omission to give notice of the Scheme Meeting or the nonreceipt of such notice by a ANZBGL Shareholder will not, unless so ordered by
the Court, invalidate the Scheme Meeting or the proceedings of the Scheme
Meeting.

Governing law(a)This Scheme is governed by the laws in force in Victoria.

(b)

The parties irrevocably submit to the non-exclusive jurisdiction of courts
exercising jurisdiction in Victoria and courts of appeal from them in respect ofany proceedings arising out of or in connection with this Scheme. The parties
irrevocably waive any objection to the venue of any legal process in thesecourts on the basis that the process has been brought in an inconvenient forum.

Further action
ANZBGL must do all things and execute all documents necessary to give full effect to thisScheme and the transactions contemplated by it.

9.6

No liability when acting in good faith
Each Scheme Shareholder agrees that neither ANZBGL nor ANZ NOHC nor any director,
officer, secretary or employee of any of those companies shall be liable for anything doneor omitted to be done in the performance of this Scheme or the Deed Poll in good faith.

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Chairman’s letter

ANNEXURE 4
DEED POLL

Section 1

Deed poll

Section 2
Section 3

Deed poll

Section 4

Scheme deed poll

Section 5

ANZ Group Holdings Limited

Section 6

Execution version

Section 7

Scheme deed poll

Section 8

ANZ Group Holdings Limited

Execution version

Section 9
Section 10

T +61 3 9288 1234 F +61 3 9288 1567
herbertsmithfreehills.com DX 240 Melbourne

Annexures

80 Collins Street Melbourne Vic 3000 Australia
GPO Box 128 Melbourne Vic 3001 Australia

159

Share scheme deed poll
26 October 2022

Date ►

This deed poll is madeBy

ANZ Group Holdings Limited
ACN 659 510 791 of 833 Collins St, Docklands VIC 3008
(ANZ NOHC)in favour ofeach person registered as a holder of fully paid ordinary shares in
ANZBGL in the Share Register as at the Scheme Record Date.

Recitals

ANZ NOHC is making this deed poll for the purpose of covenanting infavour of the Scheme Shareholders to perform its obligations under
the Scheme.

This deed poll provides as follows:1

Definitions and interpretation

1.1

Definitions(a)

The meanings of the terms used in this deed poll are set out below.

Term

MeaningANZBGL

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

First Court Datethe first day on which an application made to the Court for an orderunder subsection 411(1) of the Corporations Act convening the
Scheme Meeting is heard or, if the application is adjourned or
subject to appeal for any reason, the day on which the adjourned
application is heard.

Implementation Deedthe NOHC Restructure Implementation Deed dated 26 October
2022 between ANZBGL and ANZ NOHC relating to the103295625

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2

Conditions to obligations
Chairman’s letter

Term

Meaning
Section 1

implementation of the NOHC Restructure, including the Scheme.

SchemeSection 3

1.2

Section 2(b)

the scheme of arrangement under Part 5.1 of the Corporations Act
between ANZBGL and the Scheme Shareholders, substantially inthe form set out in Schedule 2 of the Implementation Deed, subject
to any alterations or conditions made or required by the Court
under subsection 411(6) of the Corporations Act and agreed to inwriting by ANZBGL.

Unless the context otherwise requires, terms defined in the Scheme have thesame meaning when used in this deed poll.

Interpretation
Section 4

Clauses 1.2, 1.3 and 1.4 of the Scheme apply to the interpretation of this deed poll,
except that references to ‘this Scheme’ are to be read as references to ‘this deed poll’.

1.3

Nature of deed poll
Section 5

ANZ NOHC acknowledges that this deed poll may be relied on and enforced by any
Scheme Shareholder in accordance with its terms even though the Scheme Shareholders
are not party to it.

Conditions to obligations

2.1

Conditions

Section 62

2.2

Section 7

This deed poll and the obligations of ANZ NOHC under this deed poll are subject to the
Scheme becoming Effective.

Termination(a)the Implementation Deed is terminated; or(b)

the Scheme is not Effective on or before the End Date,

Section 8

The obligations of ANZ NOHC under this deed poll to the Scheme Shareholders willautomatically terminate and the terms of this deed poll will be of no force or effect if:

2.3

Section 9

unless ANZBGL and ANZ NOHC otherwise agree in writing (and, if required, as approvedby the Court).

Consequences of termination(a)

ANZ NOHC is released from its obligations to further perform this deed poll; andShare scheme deed poll

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Section 10

If this deed poll terminates under clause 2.2, in addition and without prejudice to any
other rights, powers or remedies available to it:

161

3

(b)

Scheme obligations

each Scheme Shareholder retains the rights they have against ANZ NOHC in
respect of any breach of this deed poll which occurred before it was terminated.

3

Scheme obligations

3.1

Undertaking to issue Scheme Consideration
Subject to clause 2, ANZ NOHC undertakes in favour of each Scheme Shareholder to:(a)provide, or procure the provision of, the Scheme Consideration to each Scheme
Shareholder in accordance with the terms of the Scheme; and(b)undertake all other actions, and give each acknowledgement, representation
and warranty (if any), attributed to it under the Scheme,in each case, subject to and in accordance with the provisions of the Scheme.

3.2

Shares to rank equally
ANZ NOHC covenants in favour of each Scheme Shareholder that the ANZ NOHC
Shares which are issued to each Scheme Shareholder in accordance with the Scheme
will:

4

(a)

rank equally with all existing ANZ NOHC Shares; and(b)be issued fully paid and free from any mortgage, charge, lien, encumbrance orother security interest.

Warranties
ANZ NOHC represents and warrants in favour of each Scheme Shareholder, in respect ofitself, that:(a)it is a corporation validly existing under the laws of its place of registration;(b)

it has the corporate power to enter into and perform its obligations under thisdeed poll and to carry out the transactions contemplated by this deed poll;(c)it has taken all necessary corporate action to authorise its entry into this deedpoll and has taken or will take all necessary corporate action to authorise theperformance of this deed poll and to carry out the transactions contemplated bythis deed poll;(d)this deed poll is valid and binding on it and enforceable against it in accordancewith its terms; and(e)this deed poll does not conflict with, or result in the breach of or default under,
any provision of its constitution, or any writ, order or injunction, judgment, law,rule or regulation to which it is a party or subject or by which it is bound.

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5

Chairman’s letter

5

Continuing obligations

Continuing obligations

Section 1

This deed poll is irrevocable and, subject to clause 2, remains in full force and effect until:(a)

ANZ NOHC has fully performed its obligations under this deed poll; or(b)the earlier termination of this deed poll under clause 2.

6.1

Form of Notice

Section 3

Notices

Section 2

6

A notice or other communication in respect of this deed poll (Notice) must be:
in writing and in English and signed by or on behalf of the sending party; and(b)addressed to ANZ NOHC in accordance with the details set out below (or any
alternative details nominated by ANZ NOHC by Notice).
Craig Brackenrig

Address

833 Collins St, Docklands VIC 3008

Email address

Craig.Brackenrig@anz.com

Section 5

Attention

Section 4
Section 6

6.2

(a)

How Notice must be given and when Notice is received
A Notice must be given by one of the methods set out in the table below.

(b)

A Notice is regarded as given and received at the time set out in the tablebelow.

Section 7(a)

By hand to the nominated address

When delivered to the nominated address

By pre-paid post to the nominatedaddress

At 9.00am (addressee’s time) on the second BusinessDay after the date of posting

By email to the nominated email

The first to occur of:Section 10

When Notice is regarded as given and received

Section 9

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Method of giving Notice

Section 8

However, if this means the Notice would be regarded as given and received outside theperiod between 9.00am and 5.00pm (addressee’s time) on a Business Day (businesshours period), then the Notice will instead be regarded as given and received at the startof the following business hours period.

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7

address

6.3

General1

the sender receiving an automated message
confirming delivery; or2

two hours after the time that the email was sent (asrecorded on the device from which the email wassent) provided that the sender does not, within the
period, receive an automated message that the email
has not been delivered.

Notice must not be given by email or other electronic communication
A Notice must not be given by email or other electronic means of communication.

7

General

7.1

Stamp duty
ANZ NOHC:

7.2

7.3

(a)

will pay all stamp duty and any related fines and penalties in respect of the
Scheme and this deed poll, the performance of this deed poll and eachtransaction effected by or made under or in connection with the Scheme andthis deed poll; and(b)indemnifies each Scheme Shareholder against any liability arising from failure
to comply with clause 7.1(a).

Governing law and jurisdiction(a)This deed poll is governed by the law in force in Victoria.

(b)

ANZ NOHC irrevocably submits to the non-exclusive jurisdiction of courts
exercising jurisdiction in Victoria and courts of appeal from them in respect ofany proceedings arising out of or in connection with this deed poll. ANZ NOHC
irrevocably waives any objection to the venue of any legal process in thesecourts on the basis that the process has been brought in an inconvenient forum.

Waiver(a)

ANZ NOHC may not rely on the words or conduct of any Scheme Shareholder
as a waiver of any right unless the waiver is in writing and signed by the
Scheme Shareholder granting the waiver.

(b)

No Scheme Shareholder may rely on words or conduct of ANZ NOHC as awaiver of any right unless the waiver is in writing and signed by ANZ NOHC.

(c)

The meanings of the terms used in this clause 7.3 are set out below.
Term

Meaning

conduct

includes delay in the exercise of a right.

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7

GeneralChairman’s letterany right arising under or in connection with this deed poll andincludes the right to rely on this clause.

waiverincludes an election between rights and remedies, and conduct
which might otherwise give rise to an estoppel.

Section 1
Section 2

7.4

right

Variation
A provision of this deed poll may not be varied unless:if before the First Court Date, the variation is agreed to by ANZBGL; or(b)

if on or after the First Court Date, the variation is agreed to by ANZBGL and the
Court indicates that the variation would not of itself preclude approval of the
Scheme,Section 3

(a)

7.5

Section 4

in which event ANZ NOHC will enter into a further deed poll in favour of the Scheme
Shareholders giving effect to the variation.

Cumulative rights

7.6

Assignment(a)

The rights created by this deed poll are personal to ANZ NOHC and each
Scheme Shareholder and must not be dealt with at law or in equity without theprior written consent of ANZ NOHC.

(b)

Any purported dealing in contravention of clause 7.6(a) is invalid.

Section 6

Further action

Section 7

7.7

Section 5

The rights, powers and remedies of ANZ NOHC and the Scheme Shareholders under thisdeed poll are cumulative and do not exclude any other rights, powers or remedies
provided by law independently of this deed poll.

ANZ NOHC must, at its own expense, do all things and execute all documents necessary
to give full effect to this deed poll and the transactions contemplated by it.

Section 8
Section 9
Section 10

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NOTICE OF SCHEME MEETING

Chairman’s letter

ANNEXURE 5

Section 1
Section 6
Section 7
Section 8

Important Dates

Section 5

Time and location of the Scheme Meeting

Section 4

CONTENTS

Section 3

Australia and New Zealand Banking Group
Limited ABN 11 005 357 522 (ANZ) gives notice
that, by order of the Federal Court of Australia(Court) pursuant to section 411(1) of the
Corporations Act, a meeting of holders of fully
paid ordinary shares in ANZ (Scheme Meeting)will be held on Thursday, 15 December 2022 at
the later of 12:00pm (Adelaide Time) or theconclusion (or adjournment) of ANZ’s 2022
Annual General Meeting (AGM).

Section 2

ANZ 2022
SCHEME MEETINGANZ Shareholder Centre Website
Explanatory Memorandum
How Business will be conducted at the Meeting
Discussion and asking questions

Section 9

Scheme Meeting

Hybrid Scheme Meeting, webcast and photography
Explanatory Notes

Section 10

Notice of Scheme Meeting

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ANZ 2022 Scheme Meeting

TIME AND LOCATION OF
THE SCHEME MEETING
Thursday, 15 December 2022
To be held at the later of 12:00pm (Adelaide Time) or the conclusion(or adjournment) of ANZ’s 2022 Annual General Meeting (AGM)

Festival DriveFestival
TheatreFestival Drive

Adelaide
CasinoAdelaide
Train
StationRiverside
CentreNorth Terrace

Parliament
House

King William Street

Adelaide
Convention Centre

lD

King William Street

Morphett Street

Morphett Street

Fe stiva
InterContinental
Hotel

North Terrace
Car ParkriveRiverbank
Car Park

North Terrace

North Terrace

City West
Tram Stop

Adelaide Convention Centre,
Hall H, North Terrace
Adelaide SA 5000

Adelaide Railway
Station Tram Stop

North Terrace

Adelaide
Convention Centre
INTERNAL LAYOUT

Tram Line
L1a
L1b

L2 L3

Vehicle AccessF

West
EntranceG

Car Park

L

Tram StopBus StopM

CentralEntrance

H

N
O

Taxi Rank
EntranceI

168

Train Station

J

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDK

Contents
Chairman’s letter

To participate online visit https://meetnow.global/ANZ2022 on your smartphone, tablet, or computer.
You will need the latest versions of Chrome, Firefox, Safari & Edge. Please ensure your browser is compatible.
Refer to the instructions on the Online Meeting Guide document.

Section 1

Join the meeting online

Section 2

Join the meeting in person
ADELAIDE CONVENTIONCENTRE (ACC)

Car
There are two car parks available for visitors
to the Adelaide Convention Centre, namely
the Riverbank and North Terrace car parks
which are open 24 hours/day, 7 days aweek. The car parks are situated under
the Convention Centre (Riverbank) andbeneath the Exhibition Hall.

15 December 2022
Scheme Meeting to be held at the laterof 12:00pm (Adelaide Time) or theconclusion (or adjournment) of ANZ’s
2022 Annual General Meeting (AGM).

ANZ Shareholder Centre Website
Shareholders are able to view informationin the manner that best suits them on
our website: anz.com/shareholder/centre.
Documents are available in various formats.

Explanatory Memorandum

Section 10
Annexures

Scheme Booklet
anz.com/schememeeting

Section 9

These documents are available atanz.com/schememeeting or by calling
the Share Registrar on 1800 11 33 99(within Australia) or (+61 3) 9415 4010
(outside Australia) to request a hard copy.

Section 8

ANZ proposes to establish a non-operatingholding company as the new listed parent
company of the ANZ Group and to separate
ANZ’s banking and certain non-banking
businesses within the ANZ Group(“Restructure”). As part of that process, ANZ
is required to convene a meeting of ANZshareholders to consider and vote on a schemeof arrangement (“Scheme Meeting”), which isone of the steps required to implement the
Restructure. The Explanatory Memorandum(also referred to as the Scheme Booklet) as
announced to the ASX, provides the important
information you need to help you decide on
how to vote at the Scheme Meeting.

Section 7

Air-conditioned trams stop outside the
Adelaide Convention Centre. Trips within
the city centre are free. The route runs
from Glenelg via Rundle Mall and theCentral Market. Further information can beaccessed at www.adelaidemetro.com.au

A taxi rank is positioned immediately infront of the Adelaide Convention Centre
on North Terrace. Additional ranks exist
along North Terrace within close proximity.

3:30pm (Adelaide Time)
Latest time for receipt
of proxy appointments

Section 6

Trams

Taxi

13 December 2022

Section 5

TRAVELLING BY
PUBLIC TRANSPORT

The main railway station is right nextdoor to the Adelaide Convention Centre
and it provides access from Adelaide’s major
suburban centres. Further information canbe accessed at www.adelaidemetro.com.au

All times are given in Australian Central
Daylight Time (Adelaide Time) unlessotherwise specified.

Section 4

The Adelaide Convention Centre(ACC) is located in the central business
district off Adelaide, South Australia.
The fully-equipped centre is close
to public transport hubs and just 15
minutes by car from Adelaide Airport.

Suburban Rail

Section 3

Important Dates

169

22

ANZ 2022 Scheme Meeting

SCHEME MEETING

Thursday, 15 December 2022

Commencing at the later of
12:00 pm (Adelaide Time),or the conclusion (oradjournment) of ANZ’s 2022
Annual General Meeting.
Registration opens

For those shareholders attending
the meeting online – please log onto
your electronic device and register
your attendance(you will need your SRN/HIN number
in order to login to the online Meeting
platform. For Proxyholders, a login will
be provided to you by Computershare)
Scheme Meeting commences• Welcome to Shareholders – Chairman• Chief Executive Officer’s presentation• Item of BusinessHow business will be
conducted at the meeting
The Scheme Meeting is an important
event and we encourage shareholders
to actively participate.
Important information about the conductof the Scheme Meeting is set out below.

Discussion and asking questions
Discussion will take place on the item ofbusiness that is put to the Meeting – refer
to “Business” and “Explanatory Notes” sections
for further information relating to the itemsof business.
Shareholders as a whole will have areasonable opportunity to ask questions
at the Scheme Meeting and also via theonline platform or verbally by phone.
To ensure that as many shareholders as
possible have the opportunity to participate,shareholders are requested to observe thefollowing guidelines:

170• all shareholder questions should bestated clearly and should be relevant tothe business of the Scheme Meeting;• if a shareholder has more than one question
on an item of business, all questions should
be asked at the one time; and• shareholders should not ask questions
at the Scheme Meeting relating to
any matters that are personal to theshareholder or commercial in confidence.
Shareholders who prefer to registerquestions in advance of the Scheme
Meeting are invited to do so.
A “Questions from Shareholders Form”
will be made available on our Website
anz.com/schememeeting. You can also
submit any questions via the Proxy Voting
Link investorvote.com.au/login (Control
Nbr 131546).
We will attempt to address as many of themore frequently asked questions as possible
in the Chairman’s and Chief Executive Officer’s
presentations to the Scheme Meeting.
Written questions must be received by theCompany by 4:30pm (Adelaide Time) on
8 December 2022, and can be submitted
online, by mail, or email as set out on the topof the Questions from Shareholders Form.

To participate you will need a computer ormobile/tablet device with internet access.
When you log onto the Online platform
on the day of the Scheme Meeting, youwill need to provide your details (including
SRN or HIN) to be verified as a shareholder
or proxyholder. Proxyholders will need theirlogin details which will be provided byComputershare no later than 24 hours
before the Meeting. Following this you will
be given details as to how to vote and ask
questions online during the Scheme Meeting.
More information about how to use the
Scheme Meeting online platform (including
how to vote and ask questions online during
the Scheme Meeting) is available in theOnline Meeting Guide and Online Frequently
Asked Questions document, which havebeen lodged with ASX and are available atanz.com/schememeeting. If you intend touse the online platform, we recommend thatyou test to see that it works on your device
before the Scheme Meeting commences.
Further instructions on device configurations
are provided in the Online Meeting Guide.
Alternatively, shareholders may listen to
the proceedings of the Scheme Meetingby dialing:
Guest
PasscodeCountry

NumberHybrid Scheme Meeting, webcast
and photography

Australia

1800 173 224/
1800 556 264

7500882

We have arranged for the Scheme Meeting tobe filmed and broadcast via a webcast which
can be viewed at anz.com/schememeeting.

New
Zealand0800 452 794/
0800 880 585

7500882

After the Meeting you can also watch anarchived recording on the ANZ website.

Worldwide+61 7 3107 0200

7500882

We have arranged for photographs to betaken at the Scheme Meeting. If you attend
the Meeting in person, you may be includedin photographs or the webcast recording.

If you wish to ask a question over the phone,please register follow the details below:

For the safety and security of all thosepresent at the Scheme Meeting, cameras
and recording devices are not permitted.

To register call the Share Registrar on
1800 11 33 99 or +61 3 9415 4010
and press option 3 (ANZ Meeting Phone
conference details) to request a PIN
and the conference call number.

Participating and voting online

See question 20 in the Frequently Asked
Questions document for further details.

For those shareholders who are attending
the Scheme Meeting online, the Scheme
Meeting will be webcast live online forparticipation and voting by shareholders andproxyholders via the online Meeting Platform
at https://meetnow.global/ANZ2022.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDIn addition to the above, shareholders
can also watch an archived recordingof the webcast after the Meeting at
anz.com/schememeeting.

Contents
Chairman’s letter

NOTICE OF SCHEME MEETING

2. Eligibility to participate in andvote at the Scheme Meeting(a) Participating and voting in person

In accordance with section 411(4)(a) of
the Corporations Act, for the Scheme tobe approved by ANZ Shareholders, theScheme Resolution must be passed by:• unless the Court orders otherwise, amajority in number (more than 50%) of
ANZ Shareholders present and voting(either in person or by proxy); and• at least 75% of the votes cast on the
Scheme Resolution.

4. Participation in the Scheme Meeting
ANZ Shareholders will have the opportunity
to participate in the Scheme Meeting in thefollowing ways:• in person by attending Scheme Meeting
held at The Adelaide Convention Centre,
North Terrace, Adelaide immediately after
the AGM but not before 12.00pm(Adelaide Time);• lodge a proxy in advance of the Scheme
Meeting; orAlternative arrangements
In the lead up to the Scheme Meeting,
ANZ will be closely monitoring the
COVID-19 situation in Adelaide. If it
becomes necessary or appropriate
to make alternative or supplementaryarrangements to hold the Scheme
Meeting to those set out in this notice,
ANZ Shareholders will be given as muchnotice as possible. Information relating
to any alternative or supplementary

Annexures• lodge questions in advance of the
Scheme Meeting.

If you are not attending the AGM prior
to the Scheme Meeting, you should
arrive at the Scheme Meeting venue
30 minutes before the time designatedfor the Scheme Meeting. This will allow
time for your shareholding to be checkedagainst the ANZ Share Register andattendance noted, or any power ofattorney or certificate of appointmentof corporate representative to beverified, and attendance noted.

Section 10• online by participating and voting online
at https://meetnow.global/ANZ2022;

If you are attending the AGM prior to
the Scheme Meeting, you may remainin the venue following the conclusion(or adjournment) of the AGM. The
Scheme Meeting will commence
immediately after the conclusion(or adjournment) of the AGM but
not before 12.00pm (Adelaide time).

Section 9

For the purpose of voting at the Scheme
Meeting, ANZ Shareholders will be entitledto participate in and vote at the Scheme
Meeting if they are a registered holder of
ANZ Shares on the ANZ Share Register as
at 6.30pm (Adelaide time) on Tuesday,
13 December 2022. This means that transfersof ANZ Shares registered after that time will
be disregarded in determining entitlements
to participate in the Scheme Meeting andvote on the Scheme Resolution.

3. Required majorities at the
Scheme Meeting

27 October 2022

Section 8

Unless otherwise defined, terms usedin this notice have the same meaning
as set out in the Glossary in section 10of the Explanatory Memorandum.

Australia and New Zealand Banking
Group Limited

Section 7

This notice of meeting and the Scheme
Resolution should be read in conjunction
with the explanatory memorandum ofwhich this notice forms part (Explanatory
Memorandum). The Explanatory
Memorandum provides the important
information you need to help you decideon how to vote on the Scheme Resolution.

Simon Pordage – Company Secretary

Terms used in this notice have the same
meaning as set out in the Glossary insection 11 of the Explanatory Memorandum

Section 6

1. General

By order of the Court and the Board
of Australia and New Zealand Banking
Group Limited.

Section 5

Explanatory notes

Explanatory notes and otherinformation

If you would like to receive a hard copyof this Notice of Scheme Meeting, pleasecontact the ANZ Shareholder Information
Line on 1800 11 33 99 (within Australia)
or +61 3 9415 4010 (outside Australia).
This line is open between 8.00am and4.30pm (Adelaide time), Monday to Friday(excluding public holidays).

Section 4

The Scheme Meeting will be held at
The Adelaide Convention Centre,
North Terrace, Adelaide and online athttps://meetnow.global/ANZ2022.

“That, pursuant to and in accordance withsection 411 of the Corporations Act 2001 (Cth),the scheme of arrangement proposed
between Australia and New Zealand Banking
Group Limited and the holders of its fully
paid ordinary shares as contained in andmore precisely described in the Explanatory
Memorandum of which the notice convening
this meeting forms part, is approved (withor without modification as approved by theFederal Court of Australia).”(of which this Notice of Scheme Meeting
forms part), unless indicated otherwise.

Section 3

Australia and New Zealand Banking
Group Limited ABN 11 005 357 522 (ANZ)
gives notice that, by order of the Federal
Court of Australia (Court) pursuant to section
411(1) of the Corporations Act, a meetingof holders of fully paid ordinary shares in
ANZ (Scheme Meeting) will be held on
Thursday, 15 December 2022 at the laterof 12.00pm (Adelaide time) or the conclusion(or adjournment) of ANZ’s 2022 Annual
General Meeting (AGM).

The purpose of the Scheme Meeting is toconsider and, if thought fit, to agree (with orwithout modification or conditions) to thefollowing resolution (Scheme Resolution):

Section 2

Notice of meeting

Business of the Scheme Meeting

Section 1

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

171

ANZ 2022 Scheme Meetingarrangements will be communicatedto ANZ Shareholders by way of anannouncement to the ASX andpublished on ANZ’s website atanz.com/schememeeting.

(b) Participating and voting online
ANZ Shareholders (or their proxies,
attorneys or authorised corporate
representatives) will be able to participate
in the Scheme Meeting including to voteand ask questions, in real-time online
at https://meetnow.global/ANZ2022.
ANZ Shareholders can access the Scheme
Meeting online using a computer,tablet or mobile device with an internet
connection. The link to attend the
Scheme Meeting and AGM online
is the same for both meetings.
By participating in the Scheme Meeting
online, you will be able to:• hear the meeting discussion and viewpresentation slides;• ask questions while the Scheme
Meeting is progressing; and• vote during the Scheme Meeting.
If you intend to participate in the
Scheme Meeting online, we recommendthat you test to see that it works on yourdevice before the Scheme Meeting
commences in accordance with the
instructions below.
• ANZ Shareholders can register toparticipate in the Scheme Meeting
online by entering the following URL in
their browser https://meetnow.global/
ANZ2022. As the Scheme Meetingis being held after the AGM, ANZ
Shareholders may register for the
Scheme Meeting any time after
registration for the AGM has opened.
Registration for the AGM will open at
9.00am (Adelaide Time) (being 1 hour
before the start of the AGM; and• ANZ Shareholders will need thefollowing details in order to log
in to the Scheme Meeting online:Ŧ Securityholder Reference Number(SRN) or Holder Identification
Number (HIN); and postcode
registered on your holding if you are
an Australian shareholder. If you arean overseas shareholder, select thecountry registered on your holding
from the drop-down menu.

172

If you are attending the AGM online,
and intend to participate in the Scheme
Meeting online, we recommend that you
stay logged in following the conclusion(or adjournment) of the AGM in orderto participate in the Scheme Meeting.
The Scheme Meeting will commence
immediately after the conclusion(or adjournment) of the AGM but
not before 12.00pm (Adelaide time).
Proxyholders will need to contact
Computershare Investor Services on+61 3 9415 4024 no later than 1 hour
before the Scheme Meeting to obtaina unique email invitation link toparticipate online.
Online voting will be open between thecommencement of the Scheme Meetingon Thursday, 15 December 2022 and thetime at which the chair of the Scheme
Meeting announces the poll is closed.
Further information on how toparticipate and vote online, and ask
questions during the Scheme Meeting,is set out later in this notice and in
the Online Meeting Guide available
at anz.com/schememeeting.

Technical difficulties
Technical difficulties may arise during
the Scheme Meeting. The chair of the
Scheme Meeting has discretion as towhether and how the Scheme Meetingshould proceed if a technical difficultyarises. In exercising their discretion, thechair will have regard to the number of
ANZ Shareholders impacted and the extent
to which participation in the business of
the Scheme Meeting is affected.
Where considered appropriate, the chairof the Scheme Meeting may continue tohold the meeting and transact business,
including conducting a poll and voting inaccordance with valid proxy instructions.
For this reason, ANZ Shareholders areencouraged to lodge a proxy vote,even if they plan to attend the Scheme
Meeting in person or online.
In the event of a technological failure thatprevents ANZ Shareholders from having
a reasonable opportunity to participate
in the Scheme Meeting, ANZ will provide
an update on its website and the ASX
platform to communicate the details ofany postponement or adjournment of the
Scheme Meeting to ANZ Shareholders.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

5. How to vote
Voting at the Scheme Meeting will be
conducted by poll.
If you are an ANZ Shareholder entitled tovote at the Scheme Meeting, you may vote:• in person, by attending the Scheme
Meeting held at The Adelaide Convention
Centre, North Terrace, Adelaide on
15 December 2022 immediately after
the AGM but not before 12.00pm(Adelaide time);• online, by participating and voting online
at https://meetnow.global/ANZ2022;• by proxy, by completing a proxy form
online at www.investorvote.com.au or bycompleting, signing and lodging a paper
proxy form for the Scheme Meeting inaccordance with the instructions set out
on the form. To be valid, your proxy form
(online or paper) must be received by the
ANZ Share Registry by 3.30pm (Adelaide
Time) on 13 December 2022;• by attorney, by appointing an attorney
to attend and vote at the Scheme
Meeting on your behalf and providing aduly executed power of attorney to the
ANZ Share Registry by 3.30pm (Adelaide
Time) on 13 December 2022; or• by corporate representative, if you
are a body corporate, by appointing a
corporate representative to attend andvote at the Scheme Meeting on behalf ofthat ANZ Shareholder. The representativeneeds to provide a duly executed
certificate of appointment (in accordance
the Corporations Act) to be to admitted
to the Scheme Meeting.

6. Jointly held ANZ Shares
If ANZ Shares are jointly held, each of thejoint ANZ Shareholders is entitled to vote.
However, if more than one ANZ Shareholder
votes in respect of jointly held ANZ Shares,
only the vote of the shareholder whose nameappears first on the ANZ Share Register will
be counted.

Contents
Chairman’s letter(a) During the Scheme Meeting

A Scheme Meeting Questions Form will
be made available on the ANZ website
at anz.com/schememeeting.

8. How to submit a proxyAnnexures

Australia and New Zealand
Banking Group Limited
C/- Computershare
Investor Services Pty Ltd
GPO Box 242
Melbourne VIC 3001
Australia

The ANZ Directors recommend you
vote “Yes” in favour of the Scheme.

Section 10• by post: posting it to the ANZ Share Registry,Computershare Investor Services Pty Ltd in
the reply paid envelope provided (whereapplicable) or to the following address:

In accordance with section 411(4)(b) of the
Corporations Act, to become Effective, theScheme must be approved by the order of
the Court. If the Scheme Resolution set out
in this notice is agreed to by the required
majorities set out above and the conditions
set out in the Scheme are satisfied or waived(where capable of waiver), ANZ will apply to
the Court for the necessary orders to giveeffect to the Scheme.

Section 9• by mobile device: if you have a smart
phone or other compatible mobile device,
you can lodge your vote via the ANZ Share
Registry’s voting website by scanning the
QR code on the front of the proxy form.
Log-in using the SRN/HIN and postcode
for your shareholding;

10. Court approval

Section 8• online: submitting it online atwww.investorvote.com.au by following
the prompts;

The chair of the Scheme Meeting intends
to vote undirected proxies in favour of the
Scheme Resolution.

Section 7

To appoint a proxy, you should complete
and submit the proxy form in accordancewith the instructions on that form.

If the chair of the Scheme Meeting is a proxy,either by appointment or default, and theappointment does not provide any voting
directions on the proxy form, by signingand returning the proxy form, the ANZ
Shareholder will be expressly authorising
the chair of the Scheme Meeting to casttheir vote on the Scheme Resolution as
the chair of the Scheme Meeting sees fit.

Section 6

Questions must be received by 4.30pm(Adelaide Time) on Thursday, 8 December
2022, and can be submitted online, or by
mail, fax, or email as set out on the top of
the Scheme Meeting Questions Form.

9. Proxy voting by the chair of the
Scheme Meeting

Section 5(b) In advance of the Scheme Meeting

If you complete and return a proxy form,
you may still attend the Scheme Meetingin person or online. At registration you will
have the opportunity to revoke your proxyappointment and vote at the meeting. Or you
may allow the proxy appointment to standand vote as per your voting instructions andattend as a non-voting shareholder which
will allow you to ask questions.

Section 4

To ask a question verbally by phone,
ANZ Shareholders can call the ANZ
Shareholder Information Line on
1800 11 33 99 (within Australia) or+61 3 9415 4010 to request a PIN
and the conference call number.

• by fax: faxing it to the ANZ Share Registryon 1800 783 447 (within Australia) or+61 3 9473 2555 (outside Australia).

Section 3

More information on how to ask
questions during the Scheme Meeting
online is set out in the Online Meeting
Guide and the Frequently Asked
Questions document available atanz.com/schememeeting.

452 Johnston Street
Abbotsford VIC 3067; orSection 2

ANZ Shareholders will have a reasonable
opportunity to ask questions or makecomments about the Scheme andRestructure at the Scheme Meetingin person, online or verbally by phone.

• by hand delivery: depositing it at the
ANZ Share Registry, Computershare
Investor Services Pty Ltd, during normal
business hours at the following address:

Section 1

7. How to ask questions

173

shareholder.anz.com

shareholder.anz.com

FSC logo

Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.
ANZ’s colour blue is a trade mark of ANZ.

174

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDFSC logo

Contents

APRA CONDITIONS

Chairman’s letter

ANNEXURE 6

Section 1
Section 3

Banking Act 1959

Section 2

Authority to be a NOHC of an ADI 2022 – ANZGroup Holdings Limited
To: ANZ Group Holdings Limited ACN 659 510 791 (the NOHC)

This instrument commences on the day the restructure arrangement takes effect.

Section 5

Under subsection 11AAA(1) of the Act, I IMPOSE on this NOHC authority the conditions
specified in the schedule.

Section 4

I, Therese McCarthy Hockey, a delegate of APRA, under subsection 11AA(2) of the Banking
Act 1959 (the Act), GRANT the NOHC an authority to be a NOHC of an ADI.

Dated: 4 October 2022

Section 7

Interpretation

Section 6

Therese McCarthy Hockey
Executive Director
Banking Division

In this instrument:
ADI has the meaning given in subsection 5(1) of the Act.

Section 8

APRA means the Australian Prudential Regulation Authority.
NOHC has the meaning given in subsection 5(1) of the Act.
restructure arrangement means the arrangement set out in the Federal Court of Australia
matter of Australia and New Zealand Banking Group Limited (File number VID536/2022).

Section 9

NOHC authority has the meaning given in subsection 5(1) of the Act.

Notes

This NOHC authority operates as an authority in relation to the NOHC and any ADIs that are subsidiaries of the
NOHC from time to time.

Annexures

A decision to impose conditions on a NOHC authority is a decision to which Part VI of the Act applies. You may
request APRA reconsider the decision in accordance with subsection 51B(1) of the Act. The request for

Section 10

APRA is required to publish this instrument in the Gazette, and may also publish this instrument in any other way
that APRA considers appropriate.

175

reconsideration must be made in writing, must state the reasons for the request, and must be given to APRA within
21 days after the day on which you first received notice of this decision, or within such further period as APRA
allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the
Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for review of thereconsidered decision. The address where written notice may be given to APRA is Level 12, 1 Martin Place, Sydney
NSW 2000.

Schedule – conditions on the NOHC authority
Capital1.

The NOHC must calculate and manage capital for the Non-Bank Group in accordancewith an Economic Capital Model (ECM). The NOHC must ensure that the capital is held
as Common Equity Tier 1 Capital within the Non-Bank Group at all times and that theability of the NOHC’s prudentially regulated subsidiaries to meet their obligations todepositors, policy holders or beneficiaries is not adversely impacted by risks emanatingfrom the Non-Bank Group.

2.

The ECM must be subject to appropriate governance, oversight and independent
assurance.

3.

The NOHC must always ensure that the quality and quantity of the total capital of the
NOHC’s Level 3 group is equivalent to, or greater than, the quality and quantity of thesum of the total capital of the consolidated Bank Group and the consolidated Non-Bank
Group (adjusted as required to exclude any external capital raised directly by any Level
3 institution), unless otherwise agreed with APRA.

4.

The NOHC must ensure that the Internal Capital Adequacy Assessment Process(ICAAP) for the Bank Group includes an assessment of contagion risk from exposure to
the NOHC and the Non-Bank Group.

5.

The NOHC must provide any information requested by APRA that APRA considers
necessary to assess the prudential risks of the NOHC’s Level 3 group, including any
information about the NOHC or the Non-Bank Group. The NOHC must provide quarterly
reports to APRA, in a form acceptable to APRA and commencing with the quarter ending
31 March 2023, on capital adequacy, funding and exposures (a) between the Bank
Group and the NOHC, and (b) between the Bank Group and the Non-Bank Group. Eachreport must be provided within 20 business days of the end of the quarter to which it
relates, or within such further time as APRA may agree in writing.

Governance
6.

The NOHC must ensure that the Boards of the ADI and the Bank Holding Company
each have at least one independent director who is not also a director of the NOHC or
a company in the Non-Bank Group. The NOHC must ensure that the Chair, and amajority of the members, of the Board of the NOHC are not executives of any Level 3
institution.

Activities
7.

The NOHC must not undertake any activities, other than those set out below, unless the
NOHC has obtained prior written agreement from APRA:(a)hold investments in its subsidiaries;
Page 2 of 4

176

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Chairman’s letter

raise funds to invest in, or to provide support to, its subsidiaries;(c)hold properties used by other Level 3 institutions;(d)raise funds to conduct activities permitted under these conditions;(e)invest funds on behalf of the NOHC’s Level 3 group;(f)provide executive leadership across the NOHC’s Level 3 group;(g)activities that must be undertaken by a Level 3 Head to meet its obligations under
APRA’s Prudential Standards, activities that the NOHC is required to undertake
under a law, listing rule or requirement of any governmental agency or regulatory
body; and(h)activities that relate to undertaking a ‘corporate centre’ role including groupfinancial control, group treasury activities, risk management, settlements,
information technology, human resources, financial reporting, taxation and othergroup services such as company secretarial services. These roles may be
performed by companies in the Bank Group or service subsidiaries of the NOHC
formed for that purpose.

Section 1
Section 3
Section 4

The NOHC must not:Section 2

8.

(b)

(b)

trade in financial instruments (other than for hedging for the purposes of carrying
on the activities specified in paragraphs (a) to (e) of condition 7);(c)provide security over investments in its subsidiaries except with APRA’s priorwritten agreement;(d)conduct any other business that is not in connection with the activities specified in
condition 7; and(e)provide material guarantees of the obligations of its subsidiaries except with
APRA’s prior written agreement (including any related or similar guarantees that
may be collectively material).

11.

The NOHC must ensure that all critical functions are conducted within the ADI. Where afunction is developed in the Non-Bank Group that becomes a critical function, it must be
expeditiously transferred into the Bank Group.

12.

The NOHC must ensure that all activities of the Non-Bank Group that are not requiredor related to the business of the Bank Group are financially and operationally separablefrom the Bank Group immediately in resolution.

Annexures

Page 3 of 4

Section 10

The NOHC must ensure that all services that are, or business that is, critical to theoperations of the ADI are conducted within the ADI, or that the ADI will at all times havesatisfactory access to the services or business if they are provided by third parties,
including in the event of the exercise of APRA’s resolution powers.

Section 9

10.

Section 8

The NOHC must not start any material business activity in the Non-Bank Group unlessthe NOHC has obtained prior written confirmation that APRA has no objection, and must
consult with APRA in relation to any business in the Non-Bank Group that becomesmaterial over time. The NOHC must ensure that the Non-Bank Group transfers to the
Bank Group any activity that APRA notifies in writing to constitute an activity APRA
determines may give rise to a prudential risk if retained by the Non-Bank Group.

Section 7

9.

Section 6

itself issue deposit liabilities;

Section 5

(a)

177

13.

The NOHC must ensure that the NOHC’s Level 3 group does not carry on any activities
that pose excessive risk to the ADI. The NOHC must ensure that the Bank Grouptransfers to the Non-Bank Group any activities that APRA notifies in writing to constitutean undue risk to the ADI.

Interpretation
In this schedule:
Bank Group means the group of companies at Level 2 (within the meaning given in Prudential
Standard APS 001 Definitions) of which the Bank Holding Company is the parent company.
Bank Holding Company means ANZ BH Pty Ltd ACN 658 939 952.
Common Equity Tier 1 Capital has the meaning given in Prudential Standard APS 111
Capital Adequacy: Measurement of Capital.
critical function means any function provided by an APRA-regulated entity that is importantto financial system stability or the availability of essential financial services to a particularindustry or community.
Internal Capital Adequacy Assessment Process (ICAAP) has the meaning given in
Prudential Standard APS 110 Capital Adequacy.
Level 3 group has the meaning given in Prudential Standard 3PS 001 Definitions.
Level 3 Head has the meaning given in Prudential Standard 3PS 001 Definitions.
Level 3 institution means an institution that is a member of the NOHC’s Level 3 group.
Non-Bank Group means all Level 3 institutions other than the NOHC and companies in the
Bank Group.
prudentially regulated subsidiaries of the NOHC are those subsidiaries that are bodies
regulated by APRA within the meaning given in the Australian Prudential Regulation Authority
Act 1998.
the ADI means Australia and New Zealand Banking Group Limited ACN 005 357 522.
the NOHC means ANZ Group Holdings Limited ACN 659 510 791.
Unless the contrary intention appears, a reference in this schedule to an Act or Prudential
Standard is a reference to the Act or Prudential Standard as in force from time to time.

Page 4 of 4

178

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDContents
Section 6

ANZ Share Registry and
ANZ NOHC Share Registry
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001

Section 5

Independent Expert
Grant Samuel & Associates Pty Limited
Level 19 Governor Macquarie Tower, 1 Farrer Place
Sydney NSW 2000

Section 4

Australian taxation adviser
King & Wood Mallesons
Level 27, Collins Arch
447 Collins Street
Melbourne VIC 3000

Section 3

Legal adviser
Herbert Smith Freehills
80 Collins Street
Melbourne VIC 3000

Section 2

ANZ Group Holdings Limited
ANZ Centre Melbourne
Level 9, 833 Collins Street
Docklands VIC 3008 Australia

Section 1

Australia and New Zealand
Banking Group Limited
ANZ Centre Melbourne
Level 9, 833 Collins Street
Docklands VIC 3008 Australia

Chairman’s letter

CORPORATE DIRECTORY

Section 7
Section 8
Section 9
Section 10
Annexures

179

Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.

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