2021 ANNUAL REVIEWT H E BAN K
WE’ R E BUI L DI N G

In 2017 we introduced our purpose...

Shape a world
where people andcommunities thrive

We’re building an ANZ that improves the financial wellbeing
and sustainability of customers, focused on:$$$

Helping people save for, buy
and own a sustainable, liveable
and affordable home.

2020
2019
2018
2017

Implemented our
Ethical Decision
Making Framework

Committed to fundand facilitate $50
billion by 2025 insustainable solutions
for our customers

Committed to fundand facilitate $10
billion of investment
by 2030 to deliver
more affordable,
accessible andsustainable homes1

2021

CONTENTS

Reached morethan 67,600
people throughour financial
wellbeing programs,
MoneyMinded
and Saver Plus2

Overview
Our 2021 reporting suite2021 performancesnapshot
Chairman’s message
CEO’s message
What matters most

Helping people start or buy
and sustainably growtheir business.

How we create value
2
3
4
6
9

About our business
Our strategy
How we create value
Our operating
environment
Our customers
Becoming a fairer andmore responsible bank

10
11
12
14
15
24

Our divisions
Our people
Our community
Improving our approachto human rights
Our approach toclimate change
GovernanceRisk management

Helping companies movegoods and capital around theregion and sustainably
grow their business.

26
29
34
37
38
40
51

Performanceoverview
Remuneration
overview
KPMG assurance
Shareholder
information

56
73
78
80

Established our Ethics
and Responsible
Business Committee
1. Refers to homes to buy and rent in Australia and New Zealand. 2. Includes individuals who have participated in more than one program (for example, people who have participatedin MoneyMinded as part of Saver Plus are counted twice as they are included in both the MoneyMinded and Saver Plus totals) in the period 1 October 2020 – 30 September 2021.

ANZ 2021 Annual Review

1OVERVIEWPERFORMANCEOVERVIEWHOW WE
CREATE VALUEREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOur 2021 reporting suite2021 performance snapshot$139.7M
in community investment2

2021 Annual Reportanz.com/annualreport

2021 ESG Supplement
anz.com/annualreport

ABOUT THIS ANNUAL REVIEWThis Annual Review contains sections from our 2021 Annual Report.
It includes information on Australia and New Zealand Banking
Group Limited’s1 financial and non-financial performance providing
readers with a holistic view of our performance. We outline our
response to external social and environmental challenges, including
how we are continuing to support our customers, employees andthe community through the COVID-19 pandemic and strengthening
our approach to climate change and human rights.
KPMG provides limited assurance over Environment, Social andGovernance (ESG) content within this Annual Review. A copyof KPMG’s limited assurance report over ESG content is on
page 78 to 79.
This review covers all ANZ operations worldwide over which,unless otherwise stated, we had control for the financial year
1 October 2020 to 30 September 2021. Monetary amounts in thisdocument are reported in Australian dollars, unless otherwise stated.

REPORTING SUITE
We produce a suite of reports to meet the needs and requirementsof a wide range of stakeholders.
Our 2021 Corporate Governance Statement discloses how we havecomplied with the ASX Corporate Governance Council’s ‘Corporate
Governance Principles and Recommendations – 4th edition’ and isavailable at anz.com/corporategovernance. This year is our firstreporting against the 4th edition.
Our ESG Supplement provides stakeholders with detailed ESG
disclosures, including performance against our ESG targets.
We will release our 2021 Climate-related Financial Disclosures
report prior to our Annual General Meeting.

2021 Climate-related
Financial Disclosuresanz.com/annualreport

2021 Corporate
Governance Statement
anz.com/corporategovernance

The following documents are available atanz.com/shareholder/centre:• Annual Report• News Release• Results Presentation and
Investor Discussion Pack

• Consolidated Financial Report, • Principal Risks andUncertainties Disclosure
Dividend Announcement& Appendix 4E• APS 330 Pillar III Disclosure
We are continually seeking to improve our reporting suite andwelcome feedback on this review. Please address any questions,comments or suggestions to investor.relations@anz.com.

DISCLAIMER & IMPORTANT NOTICE:
The material in the Annual Review contains general background information
about the Bank’s activities current as at 27 October 2021. It is information
given in summary form and does not purport to be complete. It is notintended to be and should not be relied upon as advice to investors
or potential investors and does not take into account the investment
objectives, financial situation or needs of any particular investor. Theseshould be considered, with or without professional advice when deciding
if an investment is appropriate. The Annual Review may contain forwardlooking statements or opinions including statements regarding our intent,
belief or current expectations with respect to ANZ’s business operations,market conditions, results of operations and financial condition, capital
adequacy, specific provisions and risk management practices. When usedin the Annual Review, the words ‘forecast’, ‘estimate’, ‘project’, ‘intend’,‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’,‘could’, ‘should’ and similar expressions, as they relate to ANZ and its
management, are intended to identify forward-looking statements or
opinions. Those statements: are usually predictive in character; or may beaffected by inaccurate assumptions or unknown risks and uncertainties;
or may differ materially from results ultimately achieved. As such,these statements should not be relied upon when making investment
decisions. These statements only speak as at the date of publication andno representation is made as to their correctness on or after this date.
Forward-looking statements constitute ‘forward-looking statements’for the purposes of the United States Private Securities Litigation ReformAct of 1995. ANZ does not undertake any obligation to publicly release
the result of any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof to reflect the occurrence of
unanticipated events.

1. Australia and New Zealand Banking Group Limited (the Company) and the entities it controlled at the year end and from time to time during the financial year (together, the Group).

2

142C

$6.2B

81%

Dividend for2021 per share

Cash profit1

employeeengagement$21.0912.3%

Net tangible
assets per share3

Common equity
Tier 1 Capital4

218.3CCash earnings
per share1

$

35.3%

9.9%

of women in leadership5

Cash return on equity1

CO 2$21.95 B
funded and facilitatedin sustainable solutions
since 2019

Supported around

151,600

customers to builda savings
habit since 2020

$1.43 B
funded and facilitated to deliver more
affordable, accessible and sustainable
homes to buy and rent since 20206

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 57. 2. Figure includes forgone revenue of $106m, thecost of providing low or fee-free accounts to a range of customers such as government benefit recipients, not-for-profit organisations, students and the elderly. International transfer fees were
waived for funds sent from Australia and New Zealand to the Pacific to support communities impacted by COVID-19. 3. Equals shareholders’ equity less preference share capital, goodwill,
software and other intangible assets divided by the number of ordinary shares. 4. APRA Level 2. 5. Measures representation at the Senior Manager, Executive and Senior Executive levels.
Includes all employees regardless of leave status but not contractors (who are included in Full Time Equivalents (FTE)). 6. In Australia and New Zealand.

ANZ 2021 Annual Review

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OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Chairman’s
message

The Board has exercised its discretion to reduce the variable
remuneration as a percentage of target for relevant executives
and we are confident the systematic actions being taken bymanagement will address these issues.

THE BANK WE ARE BUILDING
A joint-venture announced with European-based global payments
leader Worldline to provide the most advanced payments
technology and merchant services in Australia is the latest example
of our simplification program. While we still have some non-core
assets, namely our minority investments in Asian banks, the Boardand management team are now focused primarily on growing ourcore franchise.
Rapid change and disruption of traditional banking businessmodels are the new normal. At ANZ we are taking advantageof these changes with the ‘Bank We Are Building’ transformation.
We will continue to focus on driving simplification and efficiency
in our core business while also making significant investments inour digital platforms and advanced analytics capability so we canoffer compelling products and services to our customers.
Investments will also focus on new pivotal partnerships in theemerging digital ecosystems our customers are increasingly using.
Our Chief Executive Officer Shayne Elliott discusses this work inmore detail in his update.
We are also acutely aware of the leadership role we play in relation
to climate change. While the rapid decarbonisation of the global
economy will be a significant business opportunity, there arefinancial risks associated with lending to customers impacted byclimate change. We are committed to play our part in the path tonet zero by 2050 and will work with customers to assist them with
their transition.

The bank has navigated a year of historic health and economic challenges
while also supporting our customers and the community.
As we reflect on the events of 2021, I don’t think many of us would
have imagined enduring months of further lockdowns this year in
Melbourne, Sydney and, most recently, Auckland.
While it has been an incredibly difficult period for many, the future
does look much brighter as we adjust to the new phase of livingwith the virus. Impressive vaccination rates provide hope and if
we’ve taken anything from previous lockdowns, it has been theresilience of our people and our customers.
From a bank perspective, we delivered a solid financial outcome.
Our full-year statutory profit was up 72% to $6.16 billion. While
improving economic conditions meant we were able to releasesome of the credit reserves we put in place for expected losses,
the result also demonstrates the benefits of a diverse portfolio.
Prudent risk management over many years has resulted inmuch lower than anticipated loss rates, capital buffers remain
at an historically high-level with a CET1 of 12.3%, while earnings
have returned to near where they were pre-COVID-19 and Total
Shareholder Returns have substantially improved.

4

The overall improved performance of the business has beenreflected in our decision to restore dividends close to what they
were before the pandemic struck and to lead the industry inreturning capital to shareholders.
In fact, on a pro-forma basis we will have approximately $6 billion ofcapital above ‘unquestionably strong’ and will continue to consider
the best use of any surplus capital.
Highlights this year have included New Zealand having a strong
year and Institutional providing good returns for shareholders.
However, we did face challenges and although revenue in ourAustralia Retail & Commercial business in Australia increased,
elevated demand for home loans impacted our ability to processapplications in a timely manner which resulted in a loss ofmarket share. There was also a delay with one of our key digitaltransformation products.

SUPPORTING OUR COMMUNITIESCOVID-19 has reinforced the importance of community andI’m proud of the way ANZ has supported those in need throughthe pandemic.
The early days rightly prioritised supporting those who had been
most impacted by various lockdowns through loan deferrals. Thesedeferrals provided tens of thousands of customers with the criticaltime required to manage their cashflow through this difficult period.
There was less demand for customer deferrals this year, however
equally important has been our support of the Government loan
guarantee programs in Australia and New Zealand.

We also utilised our long experience withfinancial education to set up a program to
specifically help Pacific islanders, arrivingin Australia to fill labour shortages, better
understand how to manage their money.

ANZ of course has large operations in some of the countries
hardest hit by COVID-19. India, for example, a country inwhich we have a deep history, was devastated by its Delta
outbreak this year.
While we worked hard to support our staff in India, we also
donated $1 million to World Vision’s India COVID-19 appeal
as well as setting aside a further $1 million to match customer
and staff donations.
We have also taken action to ensure our people across our
network are supported. Despite almost two years of remote
working, our people remain highly engaged and we werepleased to be awarded the Number 1 position in the AustralianFinancial Review’s ‘Best Place to Work’ awards within our sector.

BOARD RENEWALFirstly, I’d like to acknowledge our former Chairman David Gonski.
David retired from the ANZ Board in October last year having madean enormous contribution to our bank during his seven years as
Chair. He helped build an organisation with a strong focus on
governance, accountability, culture and better customer outcomes.
There is no doubt ANZ is in much better shape as a result of his
stewardship and on behalf of all shareholders, I thank David for
his leadership.
Paula Dwyer will retire from the Board following our Annual
General Meeting (AGM) on 16 December 2021. Paula is oneof Australia’s most respected non-executive directors and wehave been incredibly fortunate to have her serve on our Boardfor the past nine years, particularly in her role as Chair of the Audit
Committee. From a personal perspective, I feel privileged to havebeen able to serve with her and on behalf of all shareholders thankPaula for her dedicated service to our company and wish her wellwith her future endeavours.
We are very fortunate to be welcoming Christine O’Reilly to theBoard. Christine is an outstanding company director and she
will make a significant contribution on behalf of all shareholders.
While Christine formally joins the Board on 1 November 2021,
she will stand for election as a Director at our AGM .
Finally, as a relatively new Chairman of ANZ, I would like tothank our shareholders for their support through the year.
I also acknowledge the hard work and dedication of the 40,000
professionals working at ANZ. The pandemic has meant it has
been another challenging year but our team has again stepped
up for our customers and shareholders.

Paul D O’Sullivan | Chairman

ANZ 2021 Annual Review

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CEO’s message
It has been another significant year in the transformation of ANZ, particularly when
considering the impacts COVID-19 is having on our customers and colleagues.
As we approach the final months of the year, I’m sure we all hoped
the pandemic would be largely behind us. It isn’t but there arepositive signs of a more optimistic 2022.

It’s a growth-oriented strategy – taking the best technology andfintech mindset and applying it to our already strong brand andcustomer base.

It was five years ago we outlined our vision for the future. A futurethat would see traditional banking models under significant
pressure from a range of new competitors.

Above all, it will be a radically different approach focused on
growing the financial wellbeing of our customers and we willcontinue to update shareholders on our progress through the year.

Customers want the same experience in banking they can getfrom online shopping or travel – convenient, safe, always on.
At the same time, society expects more from us. Investors andregulators are rightly more sensitive to banks operating in an
ethical, environmentally sustainable and transparent manner.
Politicians are also holding the industry to greater account.

To help prepare for this new world we also separated our venturesand incubator business, formerly known as ANZi, into a stand-alone
entity. This small but important change will accelerate our growthand deliver new digital solutions for our customers.

The pace of change has been faster than anticipated. Fortunately,
we had already made significant progress in readying theorganisation for the next phase of our evolution.
We’re now a much simpler and lower risk bank. We focus on thecustomers for whom we can add value and we’ve delivered onwhat we said we would. We are clear on who we bank and how
we will drive value for customers and shareholders.
As the Chairman mentions in his update, we’ve delivered a solid
result this year with highlights being the strong performance in
New Zealand and Institutional.

This leads to the next chapter of thebank we are building.
It is our purpose – to shape a world
where people and communities thrive –which directly underpins our strategy
of improving the financial wellbeing
and sustainability of our customers.
For the last couple of years we have been working on a program
we’ve internally referred to as ‘ANZx’. This is not just a set of new
products, rather it’s improving the digital capability, the digital‘mindset’ if you like, of our entire organisation.
The first phase of this will be the launch soon of a new proposition
we are calling ANZ Plus. Initially focused on savings and deposits,
ANZ Plus has been in pilot for a few months and has been
specifically designed to help people manage their money better.
But ANZ Plus is just the very first step in what will be a multi-yearroll out of what will eventually become the cornerstone of how
our retail and small business customers bank with us in the future.

6

Now known as 1835i, this independent venture business will
operate more like a start-up. We will invest where we see a pathto acquire more customers, deepen relationships with existingcustomers or co-develop new propositions we couldn’t develop on
our own. ANZ will, of course, continue to fund 1835i’s investments
and oversee its governance.
An example of how digital solutions can rapidly improve ouroperations was the launch this year of ANZ GoBiz. This allows
customers to plug their accounting software straight into oursystems so we can understand their financials almost instantly
and approve working capital loans much faster. We have also
digitised processes in the back-end.
It works with all the major accounting software packages – Xero,
MYOB and QuickBooks – covering about 70% of all small businesses
in Australia and effectively reduces the time it takes to get the moneyin the hands of small businesses from 30 to 2 days.
We are also preparing for one of the mega-trends of the global
economy – the rapid transformation of how we produce, distributeand consume energy.
This is one of the most exciting opportunities for ANZ and we are
well-placed to shape and support the required economic transition.
In fact, this is a major business opportunity and one in which wealready have made significant gains.
Key areas of interest for us include supporting the electrificationof the transport supply chain, commercialisation of hydrogen,financing energy efficient buildings and assisting our customers toestablish and develop their own transition plans. As well as beinga signatory to the Net-Zero Banking Alliance, these are significant
areas of commercial opportunity that will underpin
ANZ’s business for many years to come.
As we look to our strengths, one of the highlights this year has
been the progress we have made in improving the diversityof our workforce. In fact, this year saw the fastest improvementin the representation of Women in Leadership which increased
to 35.3%. This is in addition to my executive team which has
40% women and our Board which has 38%.

We know there is more to be done which is also why
we signed up to Hesta’s 40:40 initiative and I was proud
we were the only bank among the first ten signatories.
Our progress in building a talented and diverse team has
meant some of our most senior women, in particular ourformer Deputy CEO Alexis George and former CFO Michelle
Jablko, have been selected for high-profile and challenging
roles outside of the organisation.
While this could easily be seen as a negative, I’m incredibly
proud we are seen as an organisation that provides people
with the opportunities they deserve. It also means we areable to broaden the experience of other executives on theteam and, in the case of the CFO, appoint Farhan Faruqui tothe role.
Farhan is a deeply experienced global banker who playeda crucial role in the re-shaping of ANZ’s Institutional andInternational business and he will make just as importanta contribution as our next CFO.
Finally, while this is a period of significant disruption, I’m
confident in our ability to continue to deliver for all of our
stakeholders. We have never been financially stronger, we
are investing for growth and we have the team with themindset and agility to deliver.
I would like to acknowledge our terrific team acrossthe world who have done an outstanding job for theircustomers, our shareholders and the community. It has
been a difficult year for everyone but I continue to be
impressed with their resilience and hard work.

70 yearsas ANZTENACIOUS OFPURPOSEThis is a milestone year for us asit marks a major anniversary since
the start of the ‘modern’ ANZ.
It was in October 1951, 70 years ago, The Bank ofAustralasia joined with Union Bank of Australia andbecame ANZ Bank. This was a significant incarnation ofa bank whose antecedents stretched back to Cornwall
Bank, formed in Launceston in then Van Diemen’sLand in 1828.
In 1963 the bank was the first to ‘computerise’ and in 1970
merged with the English, Scottish and Australian Bank
(ES&A) to become Australia and New Zealand Banking
Group Limited – in what was at the time the largest
merger in Australian banking history.
While much has changed during this time, we are still themost international of the Australian banks and I’m proud
we’ve retained a culture so focused on our customers,
no matter their size or where they are in the world.

Shayne Elliott | Chief Executive Officer

ANZ 2021 Annual Review

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OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

What matters mostThrough our annual materiality assessment, we engage with internal and external
stakeholders to inform our identification of ESG risks and opportunities. We seek
to identify those issues with the most potential to impact our ability to operate
successfully and create value for our shareholders and other stakeholders.
We use the assessment to inform our strategy, public ESG targets
and external reporting.

COMMUNITY STORY

50,000 peoplesaving for the futureThis year Saver Plus reached a significant milestone.
The program has now enabled more than 50,000 lower income Australians
to save around $26 million for their education costs, with ANZ providing matchingof $21 million.

50,840Program participant Daisy from Greenacre Hill in New South Wales
says: “Saver Plus showed me how to save more money. Looking at
my needs versus wants when shopping with my kids, I realised I cansave so much more by using a list and shopping fortnightly. I’m stillusing the ANZ account and making deposits every single month.”1

Total participants since 2003

86 %

14%

FemaleparticipantsMaleparticipants

Melinda Moore, Acting Director Community Programs at
Brotherhood of St Laurence (BSL), says the Saver Plus program
has a lasting and sometimes life-changing impact on participants.
“Research shows many participants go on to establish a lastingsavings habit that sees them achieve their financial goals andimprove their financial wellbeing,” she says.

FINANCIAL WELLBEING AFTER SAVER PLUS2

for
75 % Saving
children’s education

17%

Saving forown education

8%

Savingfor both$26 M
Amount saved

1

$21 M

1

Amount received inmatching from ANZ

Average financial
wellbeing scorebefore Saver Plus:

Average financial
wellbeing scoreafter Saver Plus:

Australia
average financial
wellbeing score:

36

64

59

Saver Plus is the world’s largest and longest running matchedsavings and financial education program and was co-developedby BSL and ANZ.
F
 urther information on our financial wellbeing
programs is in our 2021 ESG Supplement available
at anz.com/annualreport.

This year we obtained stakeholder views on a broad range of
ESG issues.

Climate change: managing the business risks
and opportunities associated with climate change.
Includes the role we play in supporting ourcustomers to transition to a low carbon economy.

Overall, climate change emerged as the highest priority issue –with stakeholders noting both the social and environmental
impacts and the influence ANZ can have by deploying capital tofinance the transition to a net zero carbon economy. Stakeholders
highlighted the risks associated with our current exposure to highemitting sectors, but also emphasised the opportunities associatedwith the strong growth in sustainable finance.

Fairness and ethical conduct: a strong corporate
culture, known for ethics, values, fairness andtransparency. Simple and understandable products
and communications (i.e. product disclosure,including bank fees and charges) and appropriate
hardship/collections policies.

Fairness and ethical conduct continued to be seen as criticalto everything we do and key to our social license to operate.
Financial wellbeing was viewed as ‘core business’ and our efforts
in this area can improve customer experience and positively impact
the broader community. Finally, innovation and technology wereseen as essential to supporting customer experience in today’s
digital world.

INCREASING IMPORTANCE OF ESG IN
BUSINESS STRATEGY
The bank’s response to COVID-19 was well regarded byexternal stakeholders participating in the assessment,with several commenting there is a continuing rolefor banks to support customers who find themselvesin longer-term financial difficulty. COVID-19 was seen as
accelerating the importance of ESG – with a heightened
expectation that banks incorporate ESG considerationsin their business strategy.

“Every decision made now should be
integrating these ESG risks and taking
advantage of ESG-related opportunities.”
External stakeholder

Financial wellbeing: promoting and enabling
access to safe and affordable products and services,
particularly for lower-income and vulnerable
consumers. Work with cross-sector partners to help
customers, employees and the broader community
meet current financial commitments and needs,
and improve their financial resilience.

$

Customer experience: delivering value andimproved customer experience through appropriate
financial products and services for all customers,
small business and personal.
Innovation and technology: keeping pace withdigital innovation to ensure we are offering ourcustomers reliable and convenient products andservices in a rapidly changing market.

Insights from the assessment were presented to our executive
Ethics and Responsible Business Committee and Board Ethics,
Environment, Social and Governance Committee and helped
to inform the development of our public ESG targets.
Our material ESG issues are ‘mapped’ to thebank’s Key Material Risks on pages 54 to 55.
T he full list of our material ESG issues, as well as
the key steps in the materiality assessment process,are discussed in our 2021 ESG Supplement available
at anz.com/annualreport.
Detailed information on other ways in which we have engaged
with stakeholders is also included in the 2021 ESG Supplement.

1. As at 30 June 2021. 2.2018 Saver Plus: Pathways to Wellbeing Report.

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ANZ 2021 Annual Review

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About our business

Our strategy

We provide banking and financial products and services to around 8.7 million
retail and business customers, and operate across 32 markets.

To build a better bank we are bringing our purpose to life,
integrating our values and culture into our strategy.

Technology, Services & Operations and Group Centre –comprised of functions that support our business including Risk,
Finance, Communications and Public Affairs, Internal Audit andTalent & Culture.

Our expertise, products and services make us a bank.
Our people, purpose, values and culture make us ANZ.

OUR DIVISIONS
Australia Retail and Commercial – serves retail, commercial andprivate banking customers through our branch network, businesscentres, ATMs, and digital and mobile banking applications.
Institutional – serves institutional and business customers acrossAustralia, New Zealand, Asia, Europe and America including Papua
New Guinea and the Middle East.
New Zealand – serves retail, commercial and private banking
customers in New Zealand and is one of the largest New Zealandcompanies based on profit and assets.
Pacific – provides products and services to retail and commercial
customers located in the Pacific Islands, where our history dates
back 138 years.

OUR PURPOSE AND VALUES

Our strategy is to improve the financial wellbeing and sustainability of our customers. We will do this by providing excellent services,
tools and insights that engage and retain customers and positively change their behaviour.
In particular, we want to help customers:

Our purpose is to shape a world where
people and communities thrive.

$

$

$

Launched five years ago, our purpose explains ‘why’ we exist, guides
the decisions we make each day and drives everything we do.
Our values are the foundation of ‘how’ we work – living our values
every day enables us to deliver on our strategy and purpose,strengthen stakeholder relationships and earn the community’strust. All employees and contractors must comply with our Codeof Conduct, which sets out the expected standards of professional
behaviour and guides us in applying our values.

OUR VALUES ARE

Save for, buy and own asustainable, liveable andaffordable homeStart or buy andsustainably growtheir businessMove capital and goods aroundthe region and sustainably growtheir businessWe will achieve our strategy through…

INTEGRITYCOLLABORATIONACCOUNTABILITYOUR ENVIRONMENT, SOCIAL AND GOVERNANCE(ESG) FOCUS AREAS
We are helping to respond to complex societal issues central to ourcustomers and our business strategy. In particular, we are focusing
our efforts on:
Financial wellbeing – improving the financial wellbeingof our people, customers and the community by helping
them make the most of their money throughout their lives
Environmental sustainability – supporting household, businessand financial practices that improve environmental sustainability
Housing – improving the availability of suitable and affordable
housing options for all Australians and New Zealanders
Fundamental to our approach is a commitment to fair andresponsible banking – keeping pace with the expectations of
our customers, employees and the community, behaving fairly
and responsibly and maintaining high standards of conduct.
Integrating ESG and purpose into our strategy has created an
opportunity for us to better serve our customers and generate
long-term shareholder value.

10

RESPECTEXCELLENCE

Supporting sustainable development
We are committed to the United Nations (UN) Sustainable
Development Goals (SDGs) and believe that business has an importantrole to play in their achievement. Our 2022 ESG targets support 12 of
the 17 SDGs.
In 2019 we became a founding signatory to the UN Principles for
Responsible Banking. Under the Principles we are required to set
at least two targets that address our most significant (potential)
positive and negative impacts, aligned with the SDGs and the Paris
Climate Agreement.
F urther information on our progress towards
implementing the Principles, including targets
we have set, is in our 2021 ESG Supplement
available at anz.com/annualreport.

Propositions ourcustomers love... with easy
to use services that evolve tomeet their changing needs.
Through better use of data
we will be able to provide
valuable insights about ourcustomers and how they
can improve their financial
wellbeing and sustainability
over their lifetime, enabling us
to create superior propositions.

Flexible and resilient digitalbanking Platforms... powering
our customers and madeavailable for others topower the industry.
Platforms underpin ourown propositions andwill increasingly underpin
those of our customers,
notably other banks or
institutional corporations.

Building the financial wellbeing and sustainability of our customers
creates a positive cycle of benefits. It directly benefits customers
and also grows shareholder returns; it leads to a strong and positive
reputation; it ultimately means it costs less to acquire customers;
and it grows loyalty, which in turn generates better returns –delivering more capital so we can invest in building a better bankand continue to improve the lives of our customers.
We will know we have built a better bank when:• We support a higher share of customers in our target segments• Our customers have greater financial wellbeing over their
lifetimes, and implement more sustainable business practices
than others

Partnerships that
unlock new value... withecosystems that help
customers further improvetheir financial wellbeing
and sustainability.
We recognise that no one
institution can do everything or
innovate at the pace necessary
to satisfy customers’ needs –strong relationships withpartners is therefore vital.

Purpose and values-led
people... who drive value by
caring about our customers
and the outcomes we create.
Our people listen, learn
and adapt and do theright thing the first time,delivering the outcomesthat address financial andsustainability challenges.

• We serve our customers more efficiently than peers and oursystems are safer and more reliable• We attract and retain more of the people with the skills required
to reinvent banking, in line with our purpose and culture• We generate stronger long-term financial results (in termsof sustainable economic profits) than our peers• Our reputation with customers, community, potential employees
and regulators is better, both absolutely and relative to (domestic)competitors (existing and emerging)• Our practices and services provide more opportunity for thecommunity and we have supported and improved positive
economic development and transition.

• Our customers are more engaged, more loyal and avail
themselves of more of the right products and services thanthose banking with peers
ANZ 2021 Annual Review

11

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

How we create value
VALUE DRIVERS

Our value creation model outlines how we deliver positive outcomes for our key stakeholders through our business activities,
and identifies the value drivers (or capitals) that we rely on to meet our strategic goals and build a better bank. Long-termvalue creation is dependent on our ability to successfully manage the risks and opportunities in our operating environment.

...CREATING VALUE FOR OUR STAKEHOLDERS1...ENABLE OUR BUSINESS ACTIVITIES...

SHAREHOLDER VALUE$

Loans, transaction banking services, deposits
and other financial products developed forour customers.
Pay dividends toour shareholders

Finance• 31.8% TSR over the past 5 years

Access to capital through customer deposits,
debt and equity investors and wholesalemarkets enables us to run our operations andexecute our strategy.

CUSTOMER VALUE

Flexible, digital-ready infrastructure to provide
great customer experience, with systems andprocesses that are less complex, less prone toerror and more secure.

T IE

O UR OP PO R TU NI

Collaborate withpartners to
improve financial
wellbeing andenvironmental
sustainability

OUR
PUR P OS E

SocialTrusted relationships with our customers andthe community are essential to our brandand reputation.
Provide wealthmanagement products
and advisory services

Environment
Use of natural resources and impact on theenvironment, resulting from our operations
and the products and services we provide
our customers.

12

Support customers
with trade andcapital flows• $368 billion home loan portfolio, increase of $12 billion in 2021
(Australia and New Zealand)• Business loan balance of $91 billion and customer deposits
of $105 billion (Australia and New Zealand)

Lend money toretail, businessand institutionalcustomers• $12.8 billion funded and facilitated in sustainable solutions
GOVERNA NCE

Technology, data and risk management

Shape aworld where
people andcommunities
thriveTIN G EN VIR O N M E
ERANTEngaged workforce with the skills required toreinvent banking, in line with our purpose
and culture.

GOVERNA NCE

PeopleOP

Pay taxes in
the countries
within which
we operateS

Our customers are financially better off over their lifetime andimplement more sustainable business practices than othersS&¢• 218.3 cents earnings per share2• 9.9% cash return on equity2• Proposed final dividend per share of 72 cents and interim
dividend per share of 70 cents• $21.09 net tangible assets per share3• 70.7% total shareholder return (TSR) in 2021

Provide transaction
banking services
and hold deposits

K
RI S

$

We generate stronger long-term financial results(in terms of sustainable economic profits) enabling
shareholders to meet their goals

Products and services

Help customers
mitigate andmanagefinancial risks

EMPLOYEE VALUE
Our diverse teams are engaged and optimised for success• 81% employee engagement• 35.3% Women in leadership• $4.9 billion in employee salaries and benefits• Over 1,275,000 hours of training provided

COMMUNITY VALUE
Our practices and services provide more opportunity forthe community and we have supported and improved
positive economic development and transition• Invested $1.29 billion in social and sustainable housing in Australia
and NZ$150 million in New Zealand• $2.4 billion in taxes paid to government4• More than 67,600 people reached through our financial literacy
programs MoneyMinded and Saver Plus5• Engaged with 100 of our largest emitting business customers
to support their low carbon transition
1. All figures below relate to the period 1 October 2020 - 30 September 2021 unlessotherwise stated. 2. On a cash profit (continuing operations) basis. Excludes non-core items
included in statutory profit and discontinued operations and is provided to assist readersin understanding the result of the ongoing business activities of the Group. For further
information on adjustments between statutory and cash profit refer to page 57. 3. Equals
shareholders’ equity less preference share capital, goodwill, software and other intangible
assets divided by the number of ordinary shares. 4. Total taxes borne by the Group, includes
unrecovered GST/VAT, employee-related taxes an other taxes. Inclusive of discontinued
operations. 5. Includes individuals who have participated in more than one program (forexample, people who have participated in MoneyMinded as part of Saver Plus are counted
twice as they are included in both the MoneyMinded and Saver Plus totals).

ANZ 2021 Annual Review

13

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Our operating environment

Our customers

The COVID-19 pandemic has fundamentally changed the external environment across thegeographies in which we operate. A summary of the key external challenges currently affecting
our business and our response to them is outlined below.

We are focused on developing the best propositions, across our platforms andin partnerships, to build the financial wellbeing of our customers. Whether thosecustomers are buying homes, growing small businesses or, in the case of large
businesses, trading internationally across our network, we want to help themto succeed.

CHALLENGEOUR RESPONSE

Social and economic impacts of COVID-19• Many customers continue to be financially impacted by
the pandemic, and need to adapt to a new environment• Responding to customer circumstances, by providing financial
support and information• Changed employment proposition due to continued stay-athome restrictions and employees moving to ‘blended’ models
of working where restrictions allow a return to office.

• Working cooperatively with government on policies to see
our customers through the COVID-19 pandemic and into aperiod of growth• Maintaining our focus on core banking services to improvecustomer outcomes, together with efficient allocation ofcapital and resources.

In Australia, our approach to assisting customers financially
impacted by the pandemic has been guided by our ‘Statementof Intent’ (available at anz.com), which we developed with key
stakeholders. The Statement outlines the support measuresavailable and our commitment to work with customers on asolution that is respectful, fair and appropriate. It is underpinnedby four key principles:• Challenges arising from regulatory expectations and changing
community standards and expectations• Supporting our customers, employees and the community
through the pandemic and ensuing recovery period

Protect what matters
Adapt to the changing environment
Engage with stakeholders
Prepare for the future• Failure to meet our ESG commitments and related social
expectations could lead to customer and community impacts
and reduced shareholder value.

• Building trust by ‘doing what we say’

• Providing targeted wellbeing and safety support to employees.

Limited growth• The economic contraction expected as a consequence of
prolonged lockdowns in New South Wales and Victoria will
impact households and many businesses. It could push
unemployment higher and cause more customers to deferloan repayments. Further pandemic-related disruptions are
possible over the coming year across our markets of operation.

Increased public and regulatory scrutiny• Working cooperatively with regulators, government and NGOs
• Strengthening our ESG policies and processes and ensuring
we implement effectively – transparently disclosing our progress.

Increased competition• Increased competition from digitally enabled competitors.

• Deploying new and improved digital services, products andprocesses to help meet customer needs for efficient andaccessible banking.

• Increased cyber-attacks, scams and attempted fraud.

• Potential financial risks associated with lending to businessand retail customers impacted by climate change.

• Developing new markets to leverage business opportunities
in Australia and the region as economies recover fromthe pandemic.

In New Zealand, support measures were reintroduced to help
business customers through COVID-19 disruptions in late August.
Short-term relief measures included waiving fees for contactless
debit cards, access to temporary overdrafts and removing fees
for loan restructuring.

• Providing sustainable finance products and services, such as
green and sustainability-linked loans and bonds, that drive thetransition to a low carbon economy

Globalisation and geopolitical changes• The COVID-19 pandemic and changing geopoliticalenvironment has hurt global prosperity and cooperation,
threatening flows of trade, investment and people. Thismay challenge supply chains and productivity acrossour geographies.

All retail and commercial customer applications for hardshipassistance are managed by our Customer Connect team. Relief
measures have been offered after assessing each customer’s
individual needs and the suitability of hardship assistance.

• Strengthening our policies, processes, products and services
to manage the risks and opportunities associated withclimate change.

• Meeting customer needs for safe, secure and reliable banking
through investing in our cyber security capabilities.

Climate change• Increasing regulatory, political and societal focus on thetransition risks associated with climate change

Financial relief measures and ongoing hardship support has been
provided for home loan and business customers affected bycontinuing lockdowns (particularly in New South Wales andVictoria), or those still recovering from earlier lockdowns.

Since the start of the pandemic, we have significantly increased
investment in our hardship capabilities. In 2020 we mobilised
employees across our branch network and operational teams tomeet demand from customers seeking assistance. This cross-skillingof teams has resulted in greater flexibility across our workforce,
meaning we can better match capacity to demand as hardship
applications fluctuate in response to lockdowns. We have alsoestablished hardship teams in New South Wales, Western Australia
and Queensland (in addition to our existing team in Victoria) toenhance local support for our customers and bankers. In addition,
we have made it easier for customers to access support, creatinga digital hardship portal that allows customers to submit theirdetails (including financial information) online to the Customer
Connect team.

Cyber security threats

14

SUPPORTING CUSTOMERS THROUGHTHE COVID-19 PANDEMIC

WE HAVE OFFERED A RANGE OF SUPPORTMEASURES FOR CUSTOMERS IMPACTED BY
COVID-19 LOCKDOWNSHome owners• Pausing loan repayments (deferrals)• Reducing repayments to the minimum repayment amount• Accessing redraw and/or offset balance• Changing repayments to interest only
• Refinancing and consolidating any other debts• Applying for financial assistance.

Business loans• Pausing loan repayments (deferrals)• Providing access to new loans and government
support schemes• Temporary increases in overdraft facilities for 12 months• Additional support for Asset Finance, Commercial Cards,
Trade and Merchants products.

HIGHLIGHT

In partnership with a specialist wellbeing organisation,
Benestar, we have introduced a customer support programproviding free and confidential counselling to Australianbased customers experiencing distress – whether it be asa result of domestic violence, mental health difficulties,
bereavement or a range of other factors. The program
includes up to five free counselling sessions with clinicians
specialising in psychological support. If a customer requires
ongoing support they may be referred to relevant
community services.
Further information on support available tocustomers experiencing financial hardship or
vulnerability is in our 2021 ESG Supplement
available at anz.com/annualreport.

ANZ 2021 Annual Review

15

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION“I’ve banked with ANZ since the 1980s andthe method of banking has changed so much.
I now use my iPad and iPhone to check my
accounts on internet banking regularly.”
Guy “Ted” Salmond | 95 years old

DIGITAL TRANSFORMATION – THE KEY TO
BUILDING A BETTER BANK
A key element of our strategy is the delivery of a digitaltransformation that will help us build a substantially better bank –one that provides tools, support and insights customers need to
improve their financial wellbeing.
We are investing heavily in this transformation, prioritising
digital products; improved use of data and analytics; innovative
strategic partnerships; a refreshed brand proposition;and human-centred design.

Our Australian businessOur transformation goals are focused on the delivery of:

IMPROVING FINANCIAL WELLBEING
THROUGH SUPERIOR DIGITAL EXPERIENCES

As the COVID-19 pandemic continues,
customers are increasingly using digitalbanking solutions for simple transactions,saving time and reducing unnecessary visits
to a branch or calls to the contact centre.
Digital wallet payments have increased by more than 74% intransaction amounts and more than 63% in transaction volumes
in 2021, compared to 2020.
In the past 12 months, only 8% of our customers in Australia haverelied solely on branches – meaning more than 90% are alreadyusing at least one self-service channel.
Over the past two years, we have been developing features within
the ANZ App (Australia) and goMoney App (New Zealand) to help
our customers do more of their everyday banking via self-service.
In Australia, more than 3.7 million customers are now using
the ANZ App, with almost 430,000 new registrations in 2021. Morethan 2.1 million customers are actively using ANZ Internet Banking
and Internet Banking for Business. New registrations for Internet
Banking for Business are up 20% compared to last year, and business
transactions have increased by 11%, indicating our businesscustomers are also increasingly moving towards digital self-service.
We have added features to the ANZ App to enhance our customers’
financial wellbeing. For example:• New customers can now join ANZ and open their first savings
account through the App. More than 68,000 savings accounts
have been opened since the feature was launched in October
2020, representing almost 50% of all new Progress Saver
accounts opened.
• We have enhanced the ‘Save for a Goal’ feature, introducing two
new ‘nudges’ to kick start customers’ savings goals, informing
them when they’re falling behind their goal target and providing
ideas for how to get back on track. Customers have now set up
over 500,000 savings goals in the App.
• Customers can apply a gambling block to prevent gamblingtransactions on an eligible credit card.
• Customers with an ANZ Smart Choice Super account cansearch and consolidate their super by using the updated
Australian Taxation Office SuperMatch service in the App.
16

In New Zealand, almost 1.6 million customers are now using ourdigital self-service channels, goMoney App and Internet Banking,with over 97,000 new registrations in 2021. This year, more than72,800 accounts have been opened using Internet Banking or
goMoney. In the past three months digital sales represented
49% of all new accounts opened.
New features added to the goMoney App include:• Eligible new customers can join ANZ via the goMoney App,with the majority also able to complete the identity and credit
check process within the App.
• The ability to decrease credit card limits, helping customers takecontrol of their spending and manage their credit card. A total of
12,287 decreases have been completed this year, for a total limit
value of NZ$39.2 million.

• A small number of purpose-led propositions thatpeople love to use• A mobile-first human supported distribution model• A simplified, high integrity, highly automateddigital platform• A customer-centric culture and leading workplace.
Retail customers in Australia will soon see change delivered throughour new and different ANZ Plus customer proposition.
One of the first things our customers will see is a new digitalbanking proposition to help people to manage their money better –by spending less, saving more and creating healthy money habits.

ANZ Plus includes, among other things, anintelligent mobile banking app, two new bankaccounts, and access to coaches – all designed
to help our customers improve their financial
wellbeing over time.
We are simplifying what we do, reducing the number of systems we
operate, cutting the length of customer terms and conditions, andusing the right tools and technology to build a quality, automated,digital experience.

Our Institutional businessIn our Institutional business, the digital transformation is focusedon making it simple and easy for our customers to do businesswith us by providing them with a digitally connected experience.
An example is the work we have done to build a business thatallows our customers to integrate their systems with ours toautomate payments and reconciliations processes. Receivables
data has increased by 37% since 2019, helping more customers
auto-reconcile their incoming payments, enabling
funds to be deployed as quickly as possible.
Another example is our platform and payments work to
help our customers provide payments to their customers andemployees. Payments through our digital channels has grownby 30% since 2019, powering transactions for our customers,
as well as customers of other banks where we process paymentson their behalf.

• Payments requiring more than one authoriser can now be created
and authorised in Internet Banking and goMoney, without
the need to visit a branch or contact us. Since the feature wasenabled, 128,485 payments have been authorised. This was a
key part of helping our customers with their banking while weremoved cheques as a payment method. We also ran customer
education campaigns, focused particularly on supporting
vulnerable customers. At the end of May 2021, ANZ became
the first major New Zealand bank to remove cheques as apayment method.

Self-service banking sits within the context of a broader societal
shift – in the way people shop, interact with services – and eveninteract with each other.
We want to support customers of all ages and abilities to bankdigitally with confidence and will seek to ensure our apps continue
to incorporate the latest adaptive and assistive technologies of the
major smartphone platforms.
In July 2020, we established a new Retail Customer Care team inAustralia to contact all customers older than 65 years, as well as
frequent branch users impacted by branch closures. Since thenwe have contacted 105,000 customers to discuss alternative ways
to bank and the self-service options available.

The digital transformation
is focused on making it
simple and easy for ourcustomers to do businesswith us by providing themwith a digitally connected
experience.

ANZ 2021 Annual Review

17

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEW$SHAREHOLDERINFORMATIONNEW PLATFORMS AND PARTNERSHIPS TO HELPOUR BUSINESS CUSTOMERS GROW

Working with 300 businessowners and their accountants
and bookkeepers, we created
the ANZ GoBiz platform toenable faster lending to oursmall business customers.

As the economy recovers from the pandemic we have a role toplay in supporting businesses – both large and small – to grow,and we are developing innovative solutions to help make thishappen. Earlier this year we launched our new digital lending
platform for small businesses, ANZ GoBiz.
Using agile ways of working, we established cross-functionaldelivery ‘squads’ comprised of frontline bankers, technology
architects, experience designers, data engineers, credit risk andassurance experts. Collaborating remotely, the team devised a way
to integrate external financial data to provide the instant lending
decisions our business customers were seeking. A process that
previously took more than 30 days to complete now takes aroundtwo days, with loan applications made via a smart phone receiving
conditional approval within minutes.

CASE STUDY

Helping women start, run and grow a small business
The ANZ Business Growth Program, established in 2014,is delivered by The Australian Centre for Business Growth,
University of South Australia.
Online courses, seminars and webinars are open to all Australianbusinesses participating in the program. ANZ business banking
customers can also be selected to participate in targeted
one-day clinics and an intensive nine-month program.
Results are impressive, with companies going through theprogram reporting increased revenue, profit, expansion of
employees and some also now exporting to new markets.

This year, there was a 27% uptake of women in leadership roles
participating in the one-day Business Growth CEO Clinics.
One of these women was Maria Konecsny, who co-founded
Gewürzhaus, a specialist Australian spice retailer, with hersister Eva.

We are assisting our Institutional customers through our market-leading New Payments Platform (NPP)1 offering. The platform enables
smaller or foreign banks to participate in real time payments within Australia using our systems. Over the last few years, our Institutional
business has won 10 mandates from our Financial Institution customers. Four of these are live, with these customers now transacting on
the platform.
With respect to our entire agency and clearing offering, Institutional won 37 new mandates this year, and we expect this number to increase
as we further develop our platforms strategy.

CASE STUDY

Digitising insurance claims to be real-time, simple
and streamlined

experience, the solution improves the claims process byautomating near immediate payment once a claim is approved.

Making an insurance claim can sometimes be a difficult andslow process.

“The ability to make faster and simpler claim payments createsa much better customer experience, particularly for people inurgent or emergency situations,” said Gerard Sitaramayya, Chief
Financial Officer of Chubb Insurance Australia and New Zealand.

In partnership with global Institutional customer Chubb
Insurance, we have been working to solve this issue, developing
the first real-time Australian claims process to help make theexperience for claimants quick and simple.
Using the banking industry’s New Payments Platform (NPP)1
infrastructure and Application Program Interface (API)connectivity – the technology enabling real-time exchange of
information between Chubb Insurance’s internal and customer
facing web-based applications – ANZ has been able to develop
this innovative solution.
Developed as part of Chubb Insurance’s wider global
transformation program to streamline its claims payment“By using the NPP, it means our customers can submit a claim
and have it paid into their nominated bank account in nearreal-time, 24/7, 365 days a year,” Gerard said.
Depending on the insurance type and/or amount, customers
can use either a web-based self-service portal or raise a claim
request over the phone with a claim examiner who can approveand process the payment in real-time.
This API solution marks a further shift in the transition fromlegacy payments infrastructure, such as cheques and direct entry
with remittance-based payments, to real time payments,
reducing the risk of potential fraud, delays and complications.

Passionate about creating a workplace and a business thatchallenges “business as usual”, Maria uses care and creativity
to responsibly address sustainability at Gewürzhaus.
On her success, Maria says it was about doing things for theright reasons from the start – “no compromise on quality,
no compromise on deeply engaging with our customers.”

FINANCING SUSTAINABILITY THROUGHPRODUCT INNOVATION
We continue to innovate our product suite in order to support
our customers’ sustainability and transition strategies:
Green, Sustainability, Sustainability-Linked andTransition Loans – lending to deploy capital intogreen, transition and sustainability initiatives
Green and Sustainable Infrastructure Project Finance –greenfield project financing to support the development oflong-term sustainable infrastructure such as renewable energy
Green, Social, Sustainability, Sustainability-Linked and Transition
Bonds – distribution of capital into green, transition andsustainability initiatives such as energy efficient buildings
Corporate finance advisory services for renewables –provision of advice in relation to the purchase, sale andraising of capital for renewable energy projects

Green Guarantees and Sustainable Supply Chain –trade facilities supporting green and sustainability initiatives
Sustainability-Linked Derivatives – hedging of interest rateand FX risks on Sustainability-Linked Bond or Sustainability
Linked Loan transactions. The same sustainability targetsof the underlying Bond or Loan are connected to the derivative,
further supporting the customer’s sustainability strategy
ANZ/Clean Energy Finance Corporation Energy Efficiency Asset
Finance program – financing to incentivise corporate and retailcustomers to invest in energy efficient and renewable energy
technologies to help reduce their energy costs and carbon emissions

In addition, we are supporting customers
through our $50 billion target to help
fund and facilitate initiatives that improve
environmental sustainability, support disaster
resilience, increase access to affordable
housing and promote financial wellbeing.

1. The New Payments Platform is a centralised platform and open infrastructure system that facilitates fast, real-time clearing and settlements of payments between participating Australianfinancial institutions.

18

ANZ 2021 Annual Review

19

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONCUSTOMER STORY

A RECORD YEAR FOR SUSTAINABLE FINANCE
The sustainable finance market represents a significant opportunity
for ANZ, as demand for sustainable finance products and services
continues to increase.
Our Sustainable Finance team is working closely with customers,
particularly our Institutional customers, to help fund their transition
to a low carbon economy.

In 2021 we saw record growth, completing 81 transactions,in comparison to 39 transactions in 2020. These transactions,comprising capital markets distribution and balance sheet lending,totalled $10.5 billion compared to $6.5 billion in 2020. This business
contributes materially to ANZ’s $50 billion sustainable
solutions target.

Sustainable investment
delivering real impact

Further information on sustainable finance is in our 2021
ESG Supplement available at anz.com/annualreport.

HIGHLIGHT

Executing on innovative sustainable finance deals
ANZ customer, Wesfarmers, issued the first Sustainability-Linked
Bond (SLB) in June 2021 into the Australian medium-term notemarket. The sustainability-linked bond commits Wesfarmers to
key sustainability targets.
As part of the transaction, Wesfarmers has committed to obtain
all of the electricity volume requirements for its Bunnings, KmartGroup and Officeworks retail businesses from renewable sourcesby the end of 2025. The company has also committed to limit the
average emissions intensity of its ammonium nitrate production
plant to 0.25 tonne of carbon dioxide equivalent (CO2e) per tonne
produced by the end of 2025.
In May 2021, ANZ Bank New Zealand partnered with Kathmandu
Holdings Limited to establish a syndicated $100 million
Sustainability-Linked Loan (SLL) facility, the largest syndicated
SLL in the New Zealand market to date.

Kathmandu’s SLL will be measured against a reduction ingreenhouse gas emissions, B Corp certification, and improving
the transparency, wellbeing and labour conditions for workers
in its supply chain.
Kathmandu Holdings Group CFO Chris Kinraid commented:“Sustainability is in our DNA and is a core foundation of theGroup, linking our financial arrangements to our sustainability
goals made perfect sense. It reinforces to our shareholders andstakeholders that we are committed to sustainability acrossall aspects of our Group”.
ANZ worked with both Wesfarmers and Kathmandu to structure
their deals in line with market best practice, ensuring targets set
were ambitious and material.

Fund manager Kilter Rural invests in theregeneration of rural farmland, water assets
and environmental protection.
As Kilter Rural CEO Cullen Gunn explains, “We focus on improving
Australian farmland and delivering returns while doing it. We workwith investors – mainly based in urban centres – and deliver
resources into under-capitalised rural regions.”

ANZ is supporting investment opportunities that achievecommercial, environmental and social outcomes and is providing
around $5 million of working capital for Kilter Rural’s Australian
Farmlands Fund (KAFF).

By 2050 it is estimated 50% more people will need to befed, globally. Cullen believes to achieve this, the world’s current
agricultural footprint must be stabilised and more food needs
to be produced through the regeneration of existing, often
degraded, farmland.

Established in 2018, the KAFF has a mandate to invest in a portfolioof irrigated farmland and water entitlements within the southern
Murray-Darling Basin.

“Australia is in a really good position to do this. We are regenerating
already highly modified, under-utilised farmland and remediating it
for agricultural and conservation purposes,” Gunn says.

20

Up to 30% of farmland will be actively reforested for biodiversity
protection and climate change mitigation outcomes. It aims to build
long-term investor value through improving the condition of natural
capital and earning payments for carbon sequestration.
To date, the fund has raised $44 million and purchased five farms
in Northern Victoria which were under-utilised and considered
unproductive in terms of financial and environmental outcomes.

ANZ 2021 Annual Review

21

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWIMPROVING THE AVAILABILITY OF AFFORDABLEAND SUSTAINABLE HOUSING
Throughout 2021 we have continued to support our home loancustomers experiencing financial difficulty due to the impactsof COVID-19.
While no new COVID-19 home loan deferrals were issued after
31 January 2021, we have assisted customers experiencing ongoing
financial hardship through our existing hardship support program.
Current deferrals make up only ~1% of the total deferrals provided
up to 31 January 2021.

This year in Australia we increased
our home loan balance by $3 billion
to $278 billion to help our customers
buy and own a home.
Our home loan balance in New Zealandgrew NZ$10 billion this year to
NZ$94 billion to help our customers
buy and own a home.

SHAREHOLDERINFORMATION

We are committed to improving the availability of suitable andaffordable housing options for all Australians and New Zealanders,and have targets to:• Fund and facilitate $10 billion of investment by 2030 to deliver
more affordable, accessible and sustainable homes to buy andrent in Australia and New Zealand• Support more customers into healthier homes with our
Health Home Loan Package and Interest-free insulationloans in New Zealand.
Our work spans many sub-sectors of the market, including
affordable housing, specialist disability accommodation, agedcare and homelessness. Key initiatives delivered include:• Joint arranger of all five bond issuances for the Commonwealth’s
National Housing Finance and Investment Corporation (NHFIC)
over the last three years totaling approximately $2 billion. The
capital raised allows NHFIC to provide low cost, long-term loans
to registered community housing providers to support theprovision of more social and affordable housing.
• Lead commercial financier of over $226 million in committed
facilities in the Specialist Disability Accommodation sector.
• Lead financier to the Land Lease Community sector, designed
to deliver affordable seniors housing.
• Advocating for institutional investment in long-term rental
housing through the backing of a range of ‘build-to-hold’and ‘build-to-rent’ projects.

CUSTOMER STORY

Increasing suitablehousing for people
with disability

CASE STUDY

22

Providing affordable accommodation for essential
workers

commute is expensive and can also impact the ability ofthese workers to participate in family and community life.

Australia has among the highest levels of homeownership in the world, but is also ranked in the
top 10 for the highest levels of unaffordability forhome purchase and rental. The availability of suitable
and affordable housing is an issue for many in thecommunity, particularly as house prices have risen
sharply in the past 12 months.

To increase the availability of affordable rental housing for
key workers, we have supported both Aware Super andtheir community housing provider partners. This support
includes the provision of a $90 million funding facility toassist in financing Aware Super’s portfolio of key worker
affordable housing. We intend to increase our funding inthis area as the portfolio grows.

Many key workers in essential industries such as health,education, emergency services and law enforcement are
directly impacted. Due to a lack of affordable housing inAustralian metropolitan areas, many key workers areunable to pay market rents close to their place of work,
on top of their general living expenses.

The portfolio currently consists of around 235 units
across New South Wales and Victoria – a combinationof completed projects and developments still underconstruction. Once developed, these properties will berented at a 20% discount off market rent to key workers.

The difficulty of finding affordable housing close to
their workplaces means that many key workers have torelocate or travel long distances to get to work. A long

Further information about housing
is in our 2021 ESG Supplement available
at anz.com/annualreport.

Australia suffers from a chronic lack of housing
supply for people with disability.
It is estimated there is an immediate need for at least 10,000 newSpecialist Disability Accommodation (SDA) places in Australia, withan associated cost of over $10 billion. This investment is necessary
to provide suitable alternative accommodation for younger people
in aged care and others with unmet needs.
ANZ is committed to growing the pipeline of new purpose-built
housing in the SDA sector. We are the largest commercial financerof SDA, investing over $226 million in committed facilities. This
investment ensures the development of new SDA homes forapproximately 650 Australians - around 6.5% of required SDA places.
In 2021 we provided a $100 million loan to a portfolio of SDA, tosupport Macquarie Assett Management and Summer Housing.
This loan is understood to be the largest SDA deal to date, andwill allow for the expansion of homes across New South Wales,

Queensland, Victoria and Western Australia. The transaction is
structured to allow for new SDA providers to be added as thepipeline of homes increase.
To further increase the supply of housing for people withdisability, we are also working with SDA providers and ourexisting property clients to facilitate the inclusion of SDA in
future property developments.
These initiatives will go some way to easing the acute shortageof Australian purpose-built housing for people with disability
needs and will allow residents to achieve as much independence
as possible.
Our SDA financing contributes to our target to fund and facilitate$10 billion of investment in affordable, accessible and sustainablehousing by 2030.

ANZ 2021 Annual Review

23

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEW

BECOMING A FAIRER AND MORERESPONSIBLE BANKOur response to the Royal Commission
We continue to act in response to the ‘spirit and letter’ of the Royal
Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry (the Royal Commission).
We provide public updates on our progress to implement the Royal
Commission recommendations to the House of Representatives
Standing Committee on Economics. Our most recent update (asat 9 September 2021) is available at anz.com.
• 41 of the Royal Commission’s 76 recommendations
are assessed as directly applicable to ANZ. Of these, we havecompleted actions relevant to 11 recommendations, including
the four directed at banks for direct implementation. Work
relevant to 13 recommendations is underway. The remaining
17 recommendations require actions by government, regulatorsor the ABA before we take any further steps.
• We also made 16 commitments in February 2019, taking action to
respond to a number of Commissioner Hayne’s recommendations
and comments. These commitments were made to improve
the treatment of retail customers, small businesses and farmers
in Australia.

– We have completed 12 of our 16 commitments. This year wecompleted the requirements of the Financial Sector Reform Act
2021 in relation to ongoing fee arrangements (commitment 16).

– Of the four remaining commitments, three are dependent on
reforms to the Banking Executive Accountability Regime thatwill be effected through the Financial Accountability Regime,
and one relates to our ongoing work on culture.

Many of the recommendations in the Royal Commission’s
final report require legislative change. We continue to engage
constructively with government, regulators and industry as
they respond to these.

SHAREHOLDERINFORMATIONOur APRA Risk Governance Self-Assessment Plan
Our Risk Governance Oversight Committee (formerly the Royal
Commission and Self-Assessment Oversight Group) monitors
progress with our Risk Governance Self-Assessment (RGSA) Plan.
The Committee is chaired by our Chief Risk Officer and provides
regular progress updates to the Executive Committee and the Board.
We have made significant progress across the five focus areasin our RGSA Plan: Culture; Governance and Accountability;
Management of Operational Risk; Remediation; and Simplification.
For example, we have:• Built a strong, purpose-led culture (see page 29)• Ensured accountabilities are clear and applied consequenceswhere there are failings, in line with our strengthened
Accountability and Consequence Framework (introduced in 2019)• Matured our approach to risk culture and risk management(see page 29)• Remediated customer accounts (see below)• Simplified our business, products and processes
Our RGSA Plan is well progressed, with clear accountability forand commitment to the remaining actions.
It is important to us that all of these actions deliver better outcomesfor our customers, our shareholders and the community, and thechanges we have made will endure.

Customer remediation
As discussed above, we are working hard to rebuild trust byidentifying our mistakes, fixing them and providing fair, consistentand timely remediation to our customers when we fail to get it right.
Across the Group we have close to 830 people focused on theexecution of customer remediation1, both within and outside
dedicated remediation teams. Since its inception in 2018, ourAustralian Retail and Commercial Responsible Banking team has
increased the number of resources committed to remediating ourcustomers from around 150 to around 390. In addition, 187 people
throughout the Australia Retail and Commercial business are also
focused on customer remediation activity.

LINKS TO 2021 GROUPPERFORMANCE FRAMEWORK
We have continued to demonstrate our commitment to improve
the financial wellbeing of our customers. Sound progress has
been made to deliver great outcomes across key segments,
however after a strong first half, we experienced material
challenges processing home loan application volumes inAustralia. This has resulted in our customers experiencing

longer than expected wait times for loan approval decisions
and increased volumes in our assessment backlog. While wewere able to tactically manage and improve the situation,
strengthening our policy and processes in this area remains
a high priority focus.
See section 4.5.3 of the Remuneration
Report for more details.

1. In addition, there are ~385 staff working on APRA remediation plans and ~504 staff working on other remediation related initiatives in Australia Retail and Commercial (as at September 2021).

24

Across our Australia Retail and Commercial business, we areresolving discrepancies such as fee or interest charges identified
with over 6.5 million customer accounts. Since April 2018 wehave remediated approximately $410 million across approximately
5.3 million customer accounts.2 This includes approximately$187 million in 2021. The team continues to focus on ways toincrease the pace of remediation.

During the year we have enhanced our complaints handlingcapabilities in Australia, delivering a new complaints recording
and management program to around 11,000 customer facing
staff who service our Retail and Commercial customers. More than
16,000 staff completed mandatory complaints awareness training,
ensuring a consistent understanding of our approach to resolving
customer complaints.

Our Responsible Banking team in New Zealand has more than
130 dedicated remediation resources. As at 30 September 2021,
they have remediated over 216,000 customer accounts and madepayments of NZ$23 million.

A Complaint Governance Forum has been established to provide
oversight of the end to end complaint management program,and complaints data and insights are regularly reported to senior
management and the Board.

Our Wealth Remediation team has completed all legacy advicerelated reviews pertaining to the ANZ Financial Planning business,
specifically inappropriate advice and fee for no service remediation.
The team has almost 125 people dedicated to remediation matters.
As at 30 September 2021, the team has remediated over 52,0003
cases for inappropriate advice and fees for no service in total andmade payments of $183.3 million. This includes the remediation
matters which are being completed for the ex-ANZ-owned aligned
dealer groups (RI Advice, Financial Services Partners, and Millennium
3) now owned by IOOF. ANZ acts as the agent for IOOF to complete
the remediation.

Further information on customer complaints
management is in our 2021 ESG Supplement,
available at anz.com/annualreport.

The Group’s customer remediation activities are regularly reviewed
by the Board. Directors are provided an overview of the status ofremediation matters; regulator engagement; repayments andprovisioning; and reviews underway to identify new matters.

Managing customer complaints
We seek to resolve complaints with empathy and fairness and arecommitted to listening to, and learning from, customer feedback sothat we can improve our products and services and deliver better
customer outcomes.

Improving customer experience
One of the ways we measure the experience of our customers isthrough our strategic Net Promoter Score (NPS). NPS enables us togauge whether we are meeting customer needs and expectations
and how we are performing relative to peers. It is measured byasking customers how likely they are to recommend ANZ (on a
0–10 scale) and is calculated by subtracting the percentage ofdetractors (those who give a score of 0–6) from the percentage
of promoters (those who give a 9 or 10).
While our NPS has improved for our retail customers in
New Zealand, it has decreased for our Retail and Commercial
customers in Australia and our commercial and agricultural customers
in New Zealand. We have failed to improve our performance relative
to our peers. Our Institutional NPS has increased in both Australia and
New Zealand compared to prior years. We are ranked a close secondin Australia and remain number one in New Zealand.

NET PROMOTER SCORE
AUSTRALIANEW ZEALAND

Retail: scored -4.3, ranked 4th4
(down from -1.3, ranked 3rd at end of 2020)

Retail: scored 28.4, ranked 4th7
(up from 27.3, ranked 4th at end of 2020)

Commercial: scored -19.0, ranked 4th5
(down from -17.1, ranked 4th at end of 2020)

Commercial and agricultural: scored -13.1, ranked 5th8
(down from -11.1, ranked 5th at end of 2020)

Institutional: scored 36, ranked 2nd6
(up from 33, ranked 1st in 2020)

Institutional: scored 33, ranked 1st9
(up from 28, ranked 1st in 2020)

2. Inclusive of one-off adjustments relating to remediation payments made in prior reporting periods and in certain instances:• We make a community service charity payment. As at 30 September 2021 charity payments have been made for ~850k accounts totaling ~$2.6m• We pay the customer via cheque. As at 30 September 2021 cheques have been issued for ~775k accounts totaling ~$112m. A portion of the cheques remain unpresented• We offer certain customers access to payment via a payment portal. As at 30 September 2021 offers to access payment via payment portal have been issued for ~55k accounts totaling ~$2m.
A portion of the offers remains unclaimed• We transfer payments through a process for unclaimed monies (includes payments for de-registered companies). As at 30 September 2021 payments transferred via this process have been
made for ~56k accounts totaling ~$10m
3. Doesn’t include the number reviewed, only those which have been paid. 4. Roy Morgan Single Source, Australian population aged 14+, Main Financial Institution, six-month rolling average to
Sep’20 and Sep’21. Ranking based on the four major Australian banks. 5. DBM Atlas (Business). Base: Commercial (<$100 million annual turnover) Main Financial Institution customers. Six-monthaverage to Sep’20 and Sep’21. Ranking based on the four major Australian banks. 6. Peter Lee Associates, 2020 – 2021 Large Corporate and Institutional Relationship Banking surveys, Australia.
7. Retail Market Monitor, Camorra Research, six-month rolling average to Sep’20 and Sep’21. Ranking based on the five major New Zealand banks. 8. Business Finance Monitor, TNS Kantar
Research. Base: Commercial ($3 million – $150 million annual turnover) and Agricultural (>500K annual turnover) customers. Four-quarter rolling average to Q3’20 and Q3’21. Ranking based on thefive major New Zealand commercial/agricultural banks. 9. Peter Lee Associates Large Corporate Relationship Banking surveys, New Zealand 2020 – 2021, ranked against the Top 4 competitors.

ANZ 2021 Annual Review

25

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR DIVISIONSOUR DIVISIONS

Australia Retail and Commercial

Institutional

As our customers navigate the current uncertainty – and their lives
in general – we’re here, ready to help with services and strategies
to improve their financial wellbeing.

This year our global banking network, insights and expertise supported companies
needing to move goods and capital around the region. We continued to deliver for bothshareholders and clients, deepening relationships with our high-quality customer baseand delivering strong returns, while building and supporting a market-leading team.

Mark Hand | Group Executive Australia Retail and Commercial Banking

Mark Whelan | Group Executive Institutional

OPERATING ENVIRONMENT
While COVID-19 lockdowns continue to impact business activity andcustomer spending, we expect economic activity will bounce backonce the vaccine rollout is complete. Until then, we remain flexible
to help our customers navigate the uncertainty.
Our Retail customers are increasing their use of digital and mobilebanking options. Home loan activity within the economy isparticularly strong. Our Retail customers are working on theirfinancial wellbeing by saving more, reducing debt and reviewing
their home loans. Our Commercial customers are tackling theuncertainty by innovating, adapting and reviewing their financial
commitments. As we head into 2022, we face considerable
challenges including a low-growth and interest rate environment
and margin pressures.

STRATEGY AND FOCUS
We are delivering on our strategy, in line with our purpose by
supporting business owners and home owners in uncertain times,
as we prepare for a digitally-enabled future. Since 2019, home loan
application volumes have doubled, particularly in the refinancemarket with customers moving to fixed rates, resulting in pressure
on our application turnaround times. We have made progress on
improving turnaround times for our customers and are increasing
our focus on opportunities to automate and simplify.
For our business owners, we have identified the need to modernise
our platforms and processes to meet customer expectations for
efficient and digital service. We have commenced building thefoundations through delivering new digital propositions, including
our Online Business Lending platform, ANZ GoBiz. We continue toexplore innovative ways to support our business owners.
In preparation for a digital-enabled future, we have been
progressively reshaping our branch network and supporting
simpler customer requests digitally. This is a key part of thebank’s transformation agenda.

Our customer remediation work is well-progressed and continues
to be well-managed and ensure our customers are treated fairly.
We have also invested in staff training and a new complaints
management system to ensure we are delivering on customer
promises and continuously improving our products and services.
Looking ahead, our vision is to be the partner of choice for homeowners and business owners and to improve their financial
wellbeing. To do this we will focus on a small number of purposeled propositions that serve our customers through a digital-first,
human-supported model. As we improve efficiency and reliability,
disciplined cost and margin management will remain a key focus.

PERFORMANCE HIGHLIGHTS
On balance, we have delivered a solid performance across a diverse
business while navigating some strong headwinds.
Cash profit increased 55% year on year, with growth in both lending
and customer deposits, a good margin performance and continued
cost discipline. While home loan revenue growth was in the low
double digits, second half volumes were impacted by a competitiverefinancing market, customers paying down their loans faster andprocessing issues. We have been working on a range of operational
and policy changes and those actions are already having a positive
impact on processing times.
Customer deposits were up ~$18 billion in the year, with Retail,and Commercial and Private Bank deposits growing 6% and 10%
respectively. Many customers are moving their money from term
deposits to at-call so they have greater flexibility.
Commercial lending remained broadly flat year-on-year in anenvironment of economic uncertainty and lower levels of business
confidence. Despite the weaker demand, lending was up 1% in ourbusiness banking segment in the second half.
Applications for ANZ GoBiz have averaged 2,900 per-month sincelaunching in May 2021, providing real-time conditional approvalthrough an online platform, including new-to-bank customers.

FINANCIAL PERFORMANCE CASH CONTINUING1

Cashprofit ($m)

Return on
Avg. RWAs (%)

FY21
FY20

3,617
2,337

FY21
FY20

2.21%
1.44%

Growth (%)

55 %Growth (%)

53 %Market conditions normalised in 2021, as companies re-establishedand re-configured supply chains following periods of significant
interruption in the early stages of the COVID-19 pandemic.
Customers were initially more focused on repaying facilities,
which reduced demand for credit. As customers adapted tochanging market conditions they sought opportunities to growtheir businesses, including through mergers and acquisitions.
This led to in an increase in activity for our Corporate Financeand Corporate Advisory services across the network (particularly
in Australia), and a 4% increase in revenue.
As expected, income from our Markets businesses steadied to$2 billion in 2021 as the market volatility experienced in 2020
normalised, and liquidity increased. Record low interest rates
continued to constrict margins for our Payments and CashManagement products.

STRATEGY AND FOCUS
Over the past five years the Institutional business has transformed.
We have scaled back the number of customers we support, andsimplified our business significantly to ensure a better experiencefor both our people and our customers. These changes positioned
the business well for the challenges and opportunities created by
the COVID-19 pandemic. We have been able to respond quickly toshifts in customer demand and have proven to be more resilient
through the cycle.
We have stronger customer relationships, improved margins andrisk management, disciplined growth, focused cost management
and a return on equity above the cost of capital. Our network across
32 markets continued to differentiate us from domestic competitorsand drove significant activity and volumes in our home markets. It
also provided diversification for our customers at times when supply
chains faced challenges.

Our ongoing investment in digital platforms helped drive
efficiencies and improve customer experience. Payments volumes
grew by 24% while in cyber security, we have continued to reduce
fraud for our customers, down year-on-year by 17%.

PERFORMANCE HIGHLIGHTS
A focus on execution, responsible growth and risk management saw
Institutional again deliver $1.9 billion in profit at returns above thecost of capital despite the challenging environment. The division’s
focus on productivity contributed to another year of cost reduction,with costs falling by 4% in 2021. The division has now reduced costs
for 11 consecutive half-year periods.
Net loans and advances were flat with improved momentum in thesecond half of the year (half-on-half growth 7%), while customer
deposits grew by 7%. Credit charges were negative for the year
reflecting the continued strength in the credit quality of the book.
ANZ maintained its position as the #1 Institutional bank in Australia
and New Zealand for relationship quality, as measured by a surveyof Corporate and Institutional customers by Peter Lee andAssociates, for the sixth year in a row. Customers called out ANZ’s
support for customers through the pandemic, rating the bank #1
for COVID-19 support.
Similarly, ANZ Institutional was again named #1 for Relationship
Quality in Asia, and a top five Corporate Bank for overall market
penetration in Asia by Greenwich.
Peter Lee also ranked ANZ as clear market leader in ESG and
Sustainable Finance. Globally, ANZ participated in $119 billion of
Sustainable Finance deals, up from $4 billion five years ago. Our
bankers are assisting businesses in their transition to a low carbon
economy and helping directly link their funding costs to sustainablebusiness goals.

FINANCIAL PERFORMANCE CASH CONTINUING1

Net Loans &Advances ($b)

Customer
Deposits ($b)

FY21
FY20

FY21
FY20

341,233
339,381

252,504
234,594

Growth (%)

1%

Growth (%)

8%

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 57.

26

OPERATING ENVIRONMENT

Cashprofit ($m)

Return on
Avg. RWAs (%)

FY21
FY20

FY21
FY20

1,887
1,854

2.24%
1.49%

Growth (%)

2%

Growth (%)

11 %Net Loans &Advances ($b)

Customer
Deposits ($b)

FY21
FY20

FY21
FY20

158,231
157,634

239,628
223,288

Growth (%)

0%

Growth (%)

7%

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 57.

ANZ 2021 Annual Review

27

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Our people

OUR DIVISIONSNew Zealand

COVID-19 has undoubtedly changed the way we work. In moving to our new ways
of working we have been conscious of how we can continue to build and maintain
ANZ’s culture while giving our people the opportunity to work flexibly and continue
doing their best work.

Although the landscape we operate in has changed for many in the wake of
COVID-19, I’m proud that we continue to prioritise what’s best for our customers, ourenvironment, and our people. This stems from our recognition that an organisation’s
success is dependent on the success of the communities they are part of.
Antonia Watson | Chief Executive Officer New Zealand

OPERATING ENVIRONMENTNew Zealand experienced a strong rebound in economic activity
following the 2020 COVID-19 lockdowns. Household and business
confidence surveys recovered quickly and investment had picked
up prior to the August 2021 outbreak. However, the environment
remains uncertain.
The Government’s income support measures have kept workers
employed and most businesses afloat. Provided that Aotearoa does
not see continued outbreaks, the labour market should continue totighten. Record house price inflation following the 2020 lockdown
has caused concern about affordability, especially for first homebuyers, although this inflation has now slowed. Consistent witha slowing global recovery, commodity prices may have reachedtheir cyclical peak, which could weigh on export returns.
The Reserve Bank of New Zealand has projected rate increases overthe next two years but this outlook could change. Uncertainty
will linger as long as the threat of future lockdowns remain.

STRATEGY AND FOCUS
In line with our simplification strategy we have implemented
our new customer referral model. This aims to match customers’
personal and business banking needs with the most appropriatebanking specialist to meet their needs. We reintroduced targeted
support measures to help customers through the COVID-19
lockdowns, including waiving fees for contactless debit cards
and access to temporary overdrafts.
To help bring balance to the housing market and help New
Zealanders into homes, we voluntarily increased the deposit
required from residential property investors to 40%, lowered
the deposit required for people to buy small apartments andintroduced a discount to the floating rate on new builds.

We commenced the wind up of the Bonus Bonds Scheme bycontacting customers to pay out refunds and reserves payments.
We continued to engage industry frameworks to support thetransition to net zero, including being a founding sponsor of Toitū
Tahua, the Centre for Sustainable Finance, and playing a criticalrole in developing the Sustainable Agriculture Finance Initiative.
On sustainable finance, this year we acted as a lead manager on
13 green, social or sustainable (GSS) bond transactions and one
Sustainability Linked Loan totalling over NZ$5 billion.
Our proportion of women in leadership increased to 37% and
we appointed our first Te Kaitohu Rautaki Māori (Head of Te Ao
Māori Strategy).

PERFORMANCE HIGHLIGHTS
We saw strong revenue momentum and lower credit impairment
charges driven by a credit impairment release, reflecting an
improved economic outlook. Net loans and advances grew 7%
driven by strong home lending growth of 10%, reflecting themarket’s historically low interest rates and supply constraints.
Unsurprisingly, we have seen subdued customer deposit growthof 4% in this low rate environment.
We have maintained a leading position in core banking productswith ~30% share of mortgages, ~33% share of household deposits(August 2021) and ~21% share of KiwiSaver (June 2021).
Our focus on improving customer experiences has seen strong
migration to our digital channels, with a reduction in over-thecounter transactions and contact centre calls.
Our Staff Foundation distributed over NZ$1.2 million in donations
to 103 charities across New Zealand.

FINANCIAL PERFORMANCE CASH CONTINUING1

Cash profit(NZDm)

FY21
FY20

1,607
1,079

Growth (%)

49%

Net Loans &Advances(NZDb)

FY21

Customer
Deposits(NZDb)

FY21

FY20

134,537
125,981Growth (%)

7%

We now have many flexible working modes: workplace first, where
employees perform their work from an ANZ workplace most or allof the time; blended, where employees spend some time in theweek in an ANZ workplace; and remote first, where employees
perform their work remotely, occasionally visiting an ANZ workplace.
The vast majority of our employees’ roles , now and in the future,
fit within the blended mode.
Coming together in our ANZ workplaces plays an important rolein how we learn and grow and helps employees who are new to
ANZ to build their networks and develop an understanding of ourculture. Enabling the majority of our people to work in a blended
way gives them the best of both worlds: the opportunity to
structure their working life in a way that provides greater flexibility
to work from home, and to be in the office for the critical, andoften intangible, benefits of developing our culture, building
social networks and learning from – and mentoring – colleagues.

CULTURE
We continue to develop and embed a culture focused on delivering
great customer outcomes, making things simpler and ‘always
learning’. This work is underpinned by our purpose and values.
This year, we finalised the design of a new culture and behaviour
framework. Developed with input from across the Group, theframework complements our values, building on and respecting ourpast, while orienting us towards the future. To deliver our purpose andstrategy, we need to: create opportunities by bringing in the best
ideas from inside and outside ANZ to create long-term value for ourcustomers and the bank; deliver what matters by executing well on
the things that matter most; and succeed together by engaging theright people, listening to and challenging each other. As we head into
the new financial year, we will start to see this come to life, with afocus on ensuring it is real and relevant to our people and reinforced
through our learning programs, people processes and systems.
We have made considerable progress in promoting the importance,
understanding and awareness of our risk culture. Our target risk
culture is founded on embedding those risk behaviours andpractices aligned to the five principles of: living the purpose; risk
management accountability; risk management execution; risk
management effectiveness; and proactive risk management. Plans
and actions are in place to further embed risk culture maturity. These
include the insights from our first risk culture survey. Refer to page 51
for further detail on the risk culture survey undertaken this year.

CULTURE REVIEWS AND ASSESSMENTS
Return on
Avg. RWAs (%)

FY21
FY20

2.24%
1.49%

Growth (%)

50 %

FY20

102,336
98,304Growth (%)

4%

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 57.

28

Our Talent and Culture team delivers data-led insights – qualitativeand quantitative – that are actionable and help drive sustainablecultural change. Multiple listening tools such as surveys, focus
groups and interviews enable the business to respond to employee
feedback on our culture.

Our Enterprise Steering Culture Group (ESCG), chaired by the CEO
and whose membership includes other members of the Executive
Committee, comes together twice a year to discuss key cultural
themes, strengths and areas for improvement. This year, the ESCG
has reinforced our ongoing commitment to employee wellbeing
and listening, as well as our learning strategy – prioritising the
reskilling and upskilling of employees in critical capabilities required
for a digital future, and building an ‘always learning’ culture. They
oversaw a significant jump in our speak up culture scores whichwere a key area of focus.
Our Internal Audit (IA) culture team provides independent
assessments of our current organisational culture. The assessments
are designed to: inform Board and management by providing
insights as to how organisational culture is enabling the bank’s
purpose and strategy; support the Board in meeting community
and regulatory expectations (e.g. the Australian Prudential
Regulation Authority Prudential Standard CPS 220); identify andfocus on cultural root causes of issues; and strengthen the bank’s
overall approach to strategic delivery and risk management.
Once an assessment is complete, a report on cultural themes,
including underlying issues and related impacts, is provided to thebusiness. The business then develops an action plan in response to
any identified cultural challenges. The plan is monitored and anactions effectiveness or reassessment is completed to determine
how effective it has been in shifting towards the desired culture.
In 2021, IA completed 19 culture reviews, of which nine werereassessments. The reassessments have highlighted leadershipaccountability as key to building a better bank and creating aculture that will deliver what matters for our customers, employees
and shareholders.
HIGHLIGHT

In 2018 a culture review identified a business area within thebank experiencing issues with inconsistent leadership, resulting
in a reluctance amongst team members to work effectively
together, raise issues and challenge constructively.
Following the assessment, the leadership team developed an
action plan focused on improving leadership capabilities andengagement through focusing on aligning as a leadershipteam and initiatives to embed desired leadership behaviours(e.g. using the leadership 180 survey tool that gathers feedback
on how well a leader is demonstrating our values andleadership behaviours) supported by development plans;
and implementing engagement plans to listen, provide
transparency and connect with staff.
Our reassessment of the business revealed a 25% increase instaff’s perception of leadership and a 26% increase in their
comfort to raise concerns and challenge constructively.

ANZ 2021 Annual Review

29

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWACCOUNTABILITY AND CONSEQUENCE
FRAMEWORK
Throughout 2021, we continued to strengthen ANZ’s Accountability
and Consequence Framework (A&CF). The Enterprise AccountabilityGroup (EAG), chaired by the CEO, supports the Board in monitoring
the implementation and ongoing effectiveness of ANZ’s A&CF,
being cognisant of its impact on the culture of ANZ. The EAG
reviews the most material risk, conduct and audit events,
accountability and the application of consequences, whereappropriate. See section 6 of the Remuneration Report for
more details.

EMPLOYEE ENGAGEMENT

In August, our overall engagement result was
81%. While this result is down five percentage
points from April 2020, it remains higher thanpre-pandemic levels (77% in 2019).
82% of employees said they felt supported
in managing their psychological wellbeing.

CHANGES TO REMUNERATIONWELLBEING

The introduction of a new remuneration standard by APRA
has driven a review of how we reward our executives. The new
regulatory standard does not come into effect until 1 January2023, however a range of changes are being considered for
implementation in 2022, subject to Board approval. These changes
are designed not only to meet both the letter and spirit of APRA’s
new prudential standard, but also to maintain our strong focus on
performance and risk management, and to attract, motivate andretain the best talent.

The health and wellbeing of our people remains a priority withthe management of COVID-19 and the impacts on our employees,
contractors and visitors continuing throughout the year.

We have implemented the recommendations from Stephen
Sedgwick’s ‘Retail Banking Remuneration Review’ (noting theindustry wide recommendations are ongoing). This review was
focused on strengthening the alignment of retail bank incentives,
sales practices and good customer outcomes. Mr Sedgwick
completed his final review of the implementation of therecommendations, with a report submitted to the Australian
Banking Association in June 2021. The report determined thatsignificant progress has been made across the industry to alignto the 2017 recommendations, with substantial investment in acustomer-centric culture, policies and practices evident across the
majority of banks. We continue to review our processes to ensureongoing adherence to the Sedgwick recommendations.

LINKS TO 2021 GROUPPERFORMANCE FRAMEWORKOur consistently strong management of people and culture
was again a highlight and reflects multiple years of purposefulinvestment in building the right leadership behaviours andenhancing our culture frameworks. Staff engagement survey
results remained strong, and following a global trend which
saw employer scores spike in 2020, ANZ’s 2021 results
expectedly returned to a steady positive trend. The wellbeingof our people continued to be a priority, with all staff
supported to complete mental health awareness training.
Embedding of our reward and performance framework
continued, with a focus on continuous performance
management capabilities, employee recognition, andreward arrangements for high performers in criticaltalent populations.
See section 4.5.3 of the Remuneration
Report for more details.

30

SHAREHOLDERINFORMATION

Targeted wellbeing and safety support has been provided to
employees and local leadership teams in different locations. For
example, due to the surge in COVID-19 cases in India, enhanced
support was provided to our employees including: access topersonal health insurance top-ups; unlimited free tele-consultation
medical services for employees and up to four family members;
assistance to access medical care; assistance with hospitalisation
where required; and provision of specific medical equipment athome or in hospital.
We have formalised a Chief Medical Officer arrangement, providing
access to specialist medical advice and ongoing guidance inmanaging the COVID-19 pandemic and other medical or healthchallenges as they arise. We have developed a COVID-19 vaccination
position statement, supporting the rollout of vaccines as animportant step in the global response to COVID-19. We encourage
all employees who are medically eligible for COVID-19 vaccines tobe vaccinated where it is locally available and approved byregulatory authorities. During the most recent outbreak in New
South Wales, we offered a vaccination program to employees andtheir households located in Local Government Areas with high casenumbers. This has since been extended to all of Greater Sydney and
Wollongong. We have provided a total of 315 vaccinations as partof the program, 70% of which were family members of employees.
Special paid leave has also been made available to employees who
may require time away from work due to COVID-19 impacts. This
may include recovery from COVID-19, isolation requirements andcaring responsibilities.
We recognise the impact of restricted movement and lockdowns on
mental wellbeing and are focused on empowering our employees
and leaders to support others and recognise the signs of
psychological distress in themselves. To support our employees andleaders in their understanding of and confidence in responding tomental health issues, a digital mental health awareness program has
been mandated for all employees. To date over 46,600 individuals
have completed this training. We have implemented Mental HealthFirst Aid training for our people in the United Kingdom and havecommenced the rollout of this program in New Zealand. We havealso piloted a Mental Health First Aid training course in Australia,
with planning for further rollout underway.

We continue to provide our employees with access to digital
wellbeing resources, developed in partnership with external
specialists, including psychologists and physiotherapists, tohelp them develop strategies to maintain mental, social andphysical health.
With many employees working remotely more frequently, we
provided funding for ergonomic equipment to enable employees
to be set up for optimal safety and productivity. Since the onset ofthe pandemic, over 14,700 employees have accessed this funding.
Further specialist support is provided to employees requiring
tailored ergonomic assistance or other workplace adjustments
to maintain their wellbeing.

DIVERSITY AND INCLUSION

We believe our diverse workforce andinclusive culture will improve the qualityof decision making and drive innovation,
making us a better bank for our customers
and helping us to shape a world where
people and communities thrive.
The representation of Women in Leadership increased this year to35.3% (up from 33.4% as at September 2020), exceeding our targetof 34.4% by the end of 2021. Our progress is monitored monthly by
the CEO and the Group Execution and Performance Committee.
We are focused on growing female talent by providing female
employees with the critical skills and experiences required to moveinto senior roles, delivering a number of women in leadershiptraining programs throughout the year.
With the departure of Alexis George and Michelle Jablko, our Key
Management Personnel has dropped from 50% to 33.3%, below ourtarget to maintain at least 40% women as Key Management
Personnel. Importantly, however, women hold key line roles on our
Executive Committee and the portfolio of Kathryn van der Merwe,
our Group Executive Talent & Culture, has been expanded to include
responsibility for our Service Centres, a critical part of our networkand service offering. We are also proud to have a strong alumni of
successful executive women in significant roles outside ANZ.
Our numerous employee networks continue to play an importantrole in building a strong sense of community and belonging by
advocating for and supporting the diverse communities they
represent. Particularly as the COVID-19 pandemic has evolved,
the voice of our networks has ensured we are taking an inclusive
approach to supporting our people.
We have continued to develop capability across our recruitmentcommunities to create inclusive and accessible recruitment
processes for women, people with disability, Aboriginal and Torres
Strait Islander people, Māori and Pasifika people, people fromdifferent cultural and religious backgrounds, and people from the
LGBTIQ+ community. Our Diversity and Inclusion Policy is available
at anz.com/corporategovernance.

The representation of Womenin Leadership increased this year
to 35.3% (up from 33.4% as at
September 2020), exceeding ourtarget of 34.4% by the end of 2021.

NEW DIVERSITY AND INCLUSION STRATEGYThis year we finalised our new Diversity and Inclusion
Strategy. It was co-created with employees from all levels
and geographies, including representatives from ouremployee networks, and has been endorsed by ANZ’s
Executive Committee and the Human Resources Committeeof the Board.
We now have a vision for diversity and inclusion that is
unique and relevant to ANZ, aligning with our purpose andbusiness strategy, and the expectations of our customers,
suppliers and community.
We have established the following five strategic priorities:
1

Createan inclusive culture and improve the experience
of our employees who represent all dimensionsof diversity

2

Build
the confidence and capability of people leadersto lead diverse and inclusive teams

3

Improve the diversity of our leadership population

4

Strengthen and empower our employee networks

5Improve accountability and governance

There are many dimensions of diversity, and all are importantat ANZ. Therefore, the focus on creating an inclusive culture
is our most critical strategic priority.
Our strategy will assist us to make decisions about where
we will focus our effort and resources to maximise impact.

ANZ 2021 Annual Review

31

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONCASE STUDY

Supporting mid-career and mature aged workers
This year, we had the opportunity to support mid-career andmature aged workers to reignite their career, or embark on a
new career in ANZ.
In August, we announced a collaboration with the Victoriangovernment to pilot a Digital Jobs Program in ANZ, supporting
unemployed and underemployed Victorians to transition into
new roles.
The program involves:• 12 weeks of free training in a high-quality, industry-backed
digital course• 12 weeks in a paid digital role with a Victorian business

Culture and Service Centres. “We believe that strong partnerships
like this are key to building the capability we need for the future.”“Employees who come to us from other roles bring professional
skills and experiential diversity which can help us think differently
about solutions for our customers and staff. They are also more
likely to have the skills that position them for a faster career
trajectory than people who are just starting out in their careers.”
We also launched an initiative encouraging mature aged workers
to email their resumes directly to our Chief Executive Officer,
Shayne Elliott, to be considered for roles in ANZ. We received
close to 500 applications and have placed successful candidates
in our Legal, Talent and Culture and Australia Retail andCommercial teams.

• Ongoing support from a mentor throughout the program.
The first placements for the program commenced in October,and are working with leaders and mentors over the 12-weekprogram in our Technology, Australia Business Transformation,
Finance and Institutional teams.
“The Digital Jobs Program is giving ANZ an opportunity tosupport unemployed and underemployed Victorians to moveinto new roles which we expect to be in high demand both now
and in the future”, said Kathryn van der Merwe, Head of Talent &“What we found is that a lot of people, particularly
women who were older and for whatever reason
had moved out of the workforce, somehow felt they
weren’t worthy or capable of coming back”, said
Shayne Elliott. “So we’ve got a program to bringpeople back to the workforce and it has beenenormously successful.”

CASE STUDY

Empowering Aboriginal
youth for a bright future
Juggling the final year of high school, two after-school jobs, a Certificate II in
Business, a school-based traineeship and a local Aboriginal school-to-work transition
program, young Indigenous Australian woman Talia Trimboli is seizing every
opportunity that comes her way.
Talia is one of 15 Aboriginal students participating in Ganbina’s
Youth Leadership Program in Shepparton, Victoria. ANZ is a financial
supporter and corporate partner of Ganbina.
The program, which identifies Aboriginal youth who have thepotential to be leaders within their community, helps them unlock
their full potential by keeping them engaged in education, training
and employment.

32

Talia is also undertaking a school-based traineeship with ANZ
in Shepparton. Her favourite part of the traineeship has beendeveloping her customer service and communications skills, aswell as the relationships she has formed with her colleagues atthe branch.
“Out of all the skills I’m learning, I enjoy developing my customer
service skills the most because I really enjoy talking to the people
who come into the bank,” says Tahlia.

INVESTING IN STRATEGIC CAPABILITIESWe use people analytics and modelling to understand the current
state of our workforce and identify potential skills shortages/gaps.
This analysis informs employee development and recruitment
programs, ensuring we continue to develop the capabilities aligned
to our strategy.
This year we launched our PeopleHub program, designed to replacelegacy human resources systems with ‘smarter’, more integrated
technology, supporting new functionality and improved processes
across the Group.
The program will strengthen our ability to ’future-proof’ ourworkforce, by providing greater visibility of the current state of
our workforce and identifying potential skills shortages and gaps.
Data and engineering continued to be an area of focus in 2021.
COVID-19 has exacerbated the scarcity of critical technology
talent, with job vacancies at historically high levels creating talent
competition across our major geographies.
We have refined our attraction, engagement and recruitment
strategies. For each of our key geographies, we have dedicatedteams focused on talent marketing and proactive sourcing of top
candidates in our strategic demand areas of data and engineering.
We are working harder to contact candidates via non-traditional
methods, for example approaching a candidate through their blog
or other social media. While first engagement is taking longer, ourtime to offer has only slightly increased. In 2021, we recruited over
5,100 technology candidates, a 92% increase from 2020.

In addition to hiring new talent, we continue to build theengineering capability of our existing workforce by implementing
targeted learning initiatives designed to develop both deep
technical skills and core ‘soft skills’. Our #TechLearningAcademy
and engineering career hubs enable our engineers to identify
their strengths and growth opportunities and provide self-guided
learning on priority capabilities. Sixteen hours of dedicated learning
time has now been scheduled for everyone in Technology.
We rolled out PluralSight, an online education provider, to morethan 1,620 people in Technology, providing our people with
opportunities to build valuable new technology skills such as
cloud computing, software development, cyber security andmachine learning.
In India, we have continued the rollout of our Digital Transformation
Academy, providing our people with a self-directed learning
platform to upskill in the latest digital transformation tools. The
program covers topics on emergent technologies like robotic
process automation, machine learning, artificial intelligence andblockchain. To date, over 2,100 of our people have completed
the program.

Further information on employee learning anddevelopment and our approach to diversity
and inclusion is in our 2021 ESG Supplement,
available at anz.com/annualreport.

ANZ 2021 Annual Review

33

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOur community
We invest significantly in the communities in which we operate and play a role insupporting their capacity, resilience and financial wellbeing. Strong relationships
with our stakeholders and the broader community is one of our key value drivers.
SUPPORTING THE COMMUNITY THROUGHTHE COVID-19 PANDEMIC
We have continued to work closely with our community
partners to support the communities in which we live andwork during the COVID-19 pandemic.
In April 2021, in response to the devastating health crisis in
India, we donated $1 million to World Vision Australia’s India
COVID-19 Appeal to provide funding for more beds, oxygen
machines and hospital medical supplies in some of the worst
hit districts.
In addition, we launched an India COVID-19 Appeal
encouraging employees and customers to donate, with ANZmatching donations dollar-for-dollar over two months – atotal of approximately $1.6 million was raised. FJ$60,000 was
also committed to grassroots organisations across Fiji tosupport communities impacted by COVID-19.

IN 2021

RECONCILIATION ACTION PLAN

15.5 %

of our employees
volunteered1 over 54,645 hours
to community organisations

We matched employee donations,collectively contributing $3.2m
through our workplace giving
programs. Investing a total of$139.7m in the community2
Around $2m was distributed tocommunities through our community
grants programs, including our Staff
Foundations in Australia, New Zealandand Fiji, and our Seeds of Renewal
grants program that provides fundingfor community groups in rural andregional Australia.

After two years of reflection, development and consultation,
we will commence our second Stretch Reconciliation Action
Plan (RAP) in October 2021, our fifth RAP as an organisation.
Through our RAP we will partner with Aboriginal andTorres Strait Islander organisations to create meaningful
opportunities for Aboriginal and Torres Strait Islander
peoples and businesses by:

Beyond providing core banking services, we can play a key role inthe community by leading thinking about the ‘drivers’ of financial
wellbeing and applying insights from our research to our financial
education programs, Saver Plus and MoneyMinded. These programs
involve close collaboration with partners from the community andgovernment sectors.
More than 841,900 people have been reached through these
programs since 20023.
Saver Plus: our matched savings and financial education program,developed in partnership with the Brotherhood of St Laurence.
Participants open an ANZ savings account, set a savings goal andmake deposits regularly over 10 months while also attending
MoneyMinded financial education sessions. On reaching their goal,savings are matched by ANZ dollar for dollar, up to $500, whichmust be spent on education.

COMMUNITY STORY

Pacific workers
picking financial
skills and fresh
produce

MoneyMinded: supports adults with low levels of financial
literacy and those on lower incomes build their financial
skills, knowledge and confidence. The program is deliveredby community organisations in Australia and New Zealand,
and a mix of community organisations and ANZ employees
in 15 markets across Asia and the Pacific region.
MoneyBusiness: developed in partnership with the AustralianGovernment in 2005, following our research which showed that
financial exclusion was a significant problem for First Nations
people, particularly those living in remote communities. Program
materials have been developed in consultation with local First
Nations communities and community workers, ensuring theinformation is culturally appropriate.
Further information about our community
investment and financial education programs
is in our 2021 ESG Supplement available atanz.com/annualreport.

Our MoneyMinded financial education
program – designed to help adults build
budgeting, saving and money skills –has been helping Pacific workers during
their mandatory two-week quarantine
period in Australia.
The Australian agriculture industry, particularly the fresh produce
sector, relies on seasonal interstate and overseas labour.

• Improving
financial wellbeing

However, the availability of workers has been heavily impacted
by COVID-19, with lockdowns and border closures making it
difficult for backpacker and overseas work programs to operate.

• Providing employment
and facilitating career
progression

Many Australian farmers have therefore been left with unharvested
crops and wasted produce.
The Australian Government’s ‘Pacific Labour Scheme’ has helped
fill regional and rural labour shortages, connecting Australianbusinesses with workers from nine Pacific Islands and Timor-Lesteto help farmers harvest crops.

• Building the capacityof Aboriginal and Torres
Strait businesses• Improving understandingof Aboriginal and Torres Strait
Islander cultures within ourorganisation.

Credit: Marcus Lee

We have set a target to achieve the 17 actions set out in our
RAP by the end of 2024, elevating accountability for delivery
to our Executive Committee. We have also implemented
an Aboriginal and Torres Strait Islander employee referencegroup we will consult with on any matters that impact themas ANZ employees to ensure we are listening to the voicesof First Nations employees.

1. Our Volunteer Leave Policy, that applies to permanent, regular and fixed-term employees, provides for at least one day of paid volunteer leave each year. 2. Figure includes forgone revenueof $106m, the cost of providing low or fee-free accounts to a range of customers such as government benefit recipients, not-for-profit organisations, students and the elderly. Internationaltransfer fees were waived for funds sent from Australia and New Zealand to the Pacific to support communities impacted by COVID-19.

34

OUR FINANCIAL EDUCATION PROGRAMS

Arriving from the Pacific, workers are required to complete 14 daysof mandatory quarantine when they arrive in Australia, before they
can start work assisting farmers to harvest crops.
ANZ has provided MoneyMinded training and resources toPowerpac, an approved provider of the Federal Government’s
Pacific Labour Scheme. Powerpac is delivering MoneyMinded
to arriving workers during their quarantine period.
Around 240 people have been through the first delivery of
MoneyMinded, with hundreds more expected over coming months.

3. Includes individuals who have participated in more than one program (for example, people who have participated in MoneyMinded as part of Saver Plus are counted twice as they areincluded in both the MoneyMinded and Saver Plus totals).

ANZ 2021 Annual Review

35

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Improving our approachto human rights
CASE STUDY

Financial education goes virtual
As schools and other educational facilities moved online becauseof the pandemic, so too did MoneyMinded.
Of the 64,011 participants estimated to have completed
MoneyMinded between 1 October 2020 – 30 September
2021, more than 4,900 of those were part of the MoneyMinded
Online program, an increase from 1,700 the previous year.
In the 2020 MoneyMinded Impact Report, 81% of online
participants reported the program had a positive impact
on their financial wellbeing.
Sharon, a coach working with vulnerable families in Melbourne
as a case manager at MacKillop Family Services, completed her
MoneyMinded training with the Brotherhood of St Laurence
through virtual sessions and started using similar delivery
methods with her clients during the year. Sharon was able
to run classes in the evening which allowed her participants
to manage other commitments during the day.

CONTRIBUTION TO PUBLIC POLICY
We seek to contribute constructively to public policy formation
and understand the perspectives of our community’s elected
representatives, policymakers and regulators. We contribute topolicy formation on business, economic, social and environmental
issues affecting our customers and shareholders.
We are also a member of a number of industry associations that
contribute to public policy debate and formation.

In 2021, our key membership payments included:
Australian Banking Association $3,055,932
Business Council of Australia $93,500

While virtual program delivery has benefited many, it has also
highlighted the digital divide, with a number of people reportinga lack of internet access or access to a suitable device, or theconfidence to use a digital medium, as a barrier to participation.
We are working with our community partners and facilitators
to find ways to adapt our programs post COVID-19, without
unintentionally excluding those who cannot easily access online
modules and virtual sessions.

“I managed to pay off a number of small but
significant debts completely since starting
MoneyMinded Online. I’m able to plan for the
future and start looking at options for homeloans and how to progress to the point when
we’re ready to purchase a house.”
MoneyMinded | participant

Payment to the New Zealand Bankers’ Association includes ourannual fee as well as expenditure related to the trial of regionalbanking hubs, contribution to an industry partnership with anationwide financial capability charity, the establishment of anindustry whistle-blower scheme run by the Banking Ombudsman,and industry initiatives in response to COVID-19 andregulatory issues.
We understand our stakeholders are interested in the position wetake on issues such as banking accessibility, problem gambling andclimate change, and our membership of industry associations thatdevelop policies and undertake advocacy on these issues.
We have begun a process of periodically reviewing our membershipof key associations and will publicly disclose outcomes and any
material change to our position.

New Zealand Bankers’ Association NZ $746,796
Business New Zealand NZ $46,460

We committed to these two actions in the 2020 Statement of
the Parties setting out the resolution of a complaint brought
against ANZ by Inclusive Development International and Equitable
Cambodia concerning a loan made to Phnom Penh Sugar in 2014.
Agreement was reached with the assistance of the Australian
National Contact Point.
Our Statement and Mechanism have been informed by an
external multi-stakeholder working group including civil society
organisations, academics, business representatives and customers.
Their involvement did not infer endorsement of the outcomes ofthis review or other work carried out by ANZ.

The Statement outlines our respect for international
human rights standards and includes:• No tolerance for retaliation against individuals
or communities• Reference to climate change and associatedhuman rights impacts• Support for an open civic space and humanrights defenders• Scenarios where domestic laws conflictwith international human rights standards• Our process when a customer’s human rights
practices are inconsistent with our expectations.

International standards we respect include the International Labour
Organisation Declaration on Fundamental Principles and Rights at
Work, the International Bill of Human Rights and the UN Guiding
Principles on Business and Human Rights (UNGPs).
The UNGPs are the global standard for preventing and addressing
the risk of adverse human rights impacts linked to businessactivities. They incorporate three pillars, including governments’duty to protect human rights and the responsibility of businesses
to respect human rights.

LINKS TO 2021 GROUPPERFORMANCE FRAMEWORK
2021 has continued to be a challenging year for many. Our focus
on our purpose and values, combined with strong governanceand leadership, has enabled us to continue to help support thecommunities in which we live and work during the COVID-19
pandemic. ANZ ranked #1 overall amongst major domestic peers

This year we have significantly upgraded our Human Rights Statement(Statement) and developed a new Grievance Mechanism (Mechanism)
for people whose human rights may have been impacted by our large
business lending customers.

in the RepTrak™ corporate reputation survey and ANZ was again
the leading Australian bank as measured by the 2020 Dow Jones
Sustainability Index, ranked in the 97th percentile globally in thebanking sector.

Our Statement is aligned with the UNGP second pillar, including
support and respect for human rights of our employees, customers
and communities. We expect the same from everyone who works
for or with us, including business customers, suppliers and partners.
The UNGP third pillar refers to the need for victims of businessrelated abuses to have access to remedy. We support access toremedy through our new Grievance Mechanism and participationin the Organisation for Economic Co-Operation and Development(OECD) National Contact Point (NCP) remediation processes.1
Our new Mechanism will help encourage responsible businessconduct, including by our large business lending customers. In
establishing this Mechanism, we sought to provide a framework
through which:• Efforts can be made to resolve complaints by affected
communities about adverse human rights impacts associatedwith ANZ customers; and• Feedback and recommendations aimed at strengthening
our due diligence processes can be provided.
The Mechanism is designed to be informal and flexible, and we arecommitted to handling complaints in a way that builds confidence
in its effectiveness. As this is new we understand the need topromote its availability, and will use any complaints submitted
as an opportunity for learning and reflection.
Implementation of the new Statement and Mechanism willcontinue in 2022 through our governance, policies, staff training
and disclosures.
Engagement will again be sought with external stakeholders inreviews of the Mechanism in 2023 and the Statement in 2024.
We will also report on complaints submitted to the Mechanism.

The Statement and the Grievance Mechanism
are available at anz.com.
Information on our approach to modern slavery is in our
2021 ESG Supplement available at anz.com/annualreport.

See section 4.5.3 of the Remuneration
Report for more details.
1. NCP is responsible for promoting the OECD Guidelines for Multinational Enterprises (an international standard on responsible business conduct) and providing conciliation services toresolve complaints against multinational enterprises.

36

ANZ 2021 Annual Review

37

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PROGRESS ON THE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURESOur progress to date

Focus areas – 2022/23

We are committed to playing our part in supporting the transition
to net zero emissions by 2050.

• Board Risk Committee oversees management ofclimate-related risks• Align with regulatory guidance on• An enhanced
climate-related risk governance, including
risk management
stress-testing of selected portfolios
framework that
anticipates potential
climate-related
impacts, andassociated regulatory
requirements

The most important role we can play in meeting the Paris
Agreement goals is to help our customers reduce emissions andenhance their resilience to a changing climate. We support anorderly transition that recognises and responds to social impacts.
This aligns with our purpose to shape a world in which people andcommunities thrive.

CUSTOMER ENGAGEMENT
We have engaged with 100 of our largest emitting businesscustomers, supporting them to establish and, where appropriate,
strengthen existing transition plans.
Customers have valued our engagement on this topic, and ourperspectives. A number of customers outside of the 100 havesought to engage with us, seeking clarity on our expectations,or requesting suggestions to improve their approach.

Within each industry our customers have different starting points.
Since this initial assessment, nine customers have sufficiently
improved their governance, strategies and targets or disclosures,
leading to an improved ranking. Many other customers have also
clearly demonstrated improvement since their initial assessment.
For example, we observed a rise in the intention to develop ‘Parisaligned’ or ‘science-based’ targets or report under the TCFD
framework, and a similar rise in interest in engaging with ANZ
on this topic.

“Coles believes that sustainable businesses are
better businesses, and our Sustainability-Linked
Loans reflect our commitment to working withall our stakeholders to make positive changes.
“The SLL incentive structure is linked to ourprogress against company-wide sustainability
goals, with delivery of those goals delivering
improved cost of capital, therefore being aneffective tool to drive sustainability throughout
our business.”• Climate change identified as a Principal Risk andUncertainty in our UK Disclosure and Transparency
Rules (DTR) Submission• Guidelines and training provided to over 1,000 of
our Institutional bankers on customers’ transition
plan discussions• Enhanced financial analysis and stronger credit approvalterms applied to agricultural property purchases inregions of low average rainfall or measured variability• New agribusiness customers assessed for financial
resilience and understanding of rainfall and climate
trends in their area, and water budgets considered
if irrigating• Support 100 of our largest emitting business customers
to establish or strengthen low carbon transition plansby 2021, with metrics developed to track progress

Metrics and targets

While we consider this to be good progress, we understand there is
still much to be done. That is why we have committed to continue
supporting these larger emitting customers to implement and,
where appropriate, strengthen their low carbon transition plans andenhance their efforts to protect biodiversity, by end 2024. As part ofthis engagement we expect that more customers will improve theirplans to a developing/intermediate, or advanced stage over the
next three years.

• Include climate risk reference in lending
guidance documents for relevant
industry sectors used by our frontline bankers• Low carbon products and services within our
Institutional business focused on climate-related
opportunities• Climate change risk added to Group and Institutional
Risk Appetite Statements

In late August 2021, ANZ worked as a Joint Sustainability
Coordinator on Coles’ $1.3bn sustainability-linked loans, thefirst within the supermarket sector in Australia and the largest
in the local market.

Commenting on the deal, Coles Chief Financial Officer,
Leah Weckert, said:• Participated in APRA’s climate vulnerability assessment(CVA) to assess portfolio transition and physical risks• Extending analysis of flood-relatedrisks to incorporate bushfire andother risks relating to retail customers
through the CVA

Beyond 2022 vision• ANZ business strategy
to grow in a way thatis more closely aligned
to a resilient andsustainable economy
that supports theParis Agreement
goals and Sustainable
Development
Goals (SDGs)• Analysis of flood-related risks for our home loan portfolio
in a major regional location of Australia and associatedtest-pilot of socio-economic indicators showing financial
resilience of home loan customers with respect toflood risk

Having banked Coles since its demerger from Wesfarmers in
2018, we are supporting the retailer’s ambition to minimise its
environmental footprint and mitigate the environmental andsocial impacts of climate change.

Coles replaced $1.3bn of its existing bank debt facilities withsustainability-linked loans to draw a direct link between its
sustainability performance and its cost of capital, providing
transparency and accountability as it works to achieve its
sustainability targets.

• Ethics and Responsible Business Committee (executive
management) oversees our approach to environment,social and governance (ESG) risks and opportunities,
and reviews climate-related risks• Managing the net zero carbon transition focuses onan orderly transition that recognises and responds tosocial impacts

Risk management

Following initial engagement, customer transition plans weregrouped into levels of maturity – advanced, developing/intermediate, underdeveloped/starting out, and no public plans.

Food, liquor and convenience retailer Coles is one ofAustralia’s most trusted brands with an average of 20 million
customer transactions each week across its network of almost
2,500 stores and its online platforms.
In March 2021, Coles launched its Together to Zerosustainability ambitions. A focus area is Together to zero
emissions underpinned by new targets to accelerate climate
action and reduce greenhouse gas emissions, as well as its
ambition to deliver net zero greenhouse gas emissions by
2050 and its target to have the entire Coles Group poweredby 100% renewable electricity by the end of FY25.

• Board Ethics, Environment, Social and Governance(EESG) Committee approves climate-related objectives,
policy and targets• ANZ’s Climate Change Statement (available at anz.com)
confirms support for the Paris Agreement goals andtransition to a net zero carbon economy

Strategy

Our climate change statement outlines our approach andcommitments in support of a global transition to net zero. We
are reviewing our position. Our updated position will be released
prior to our Annual General Meeting together with our 2021
Climate-related Financial Disclosures (our fifth report using therecommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)), available at anz.com/annualreport.

CASE STUDY

GovernanceOur approach to climate change• Metrics to enable our progress to be tracked in reducing‘financed emissions’, beginning with two key sectors:
large-scale commercial property and power generation.
Metrics are tailored to each sector (e.g. carbon emissions
per square metre of net lettable space for commercial
property) and disclosed every 12 months• $50 billion target to fund and facilitate sustainable
solutions by 2025
• Target to procure 100% renewable electricity for ANZ’soperations by 2025

• Encouraging and supporting 100 of
our largest emitting business customers
to implement and, where appropriate,
strengthen their low carbon transition
plans and enhance their efforts toprotect biodiversity, by end 2024

• Further integrateassessment ofclimate-relatedrisks into our Grouprisk management
framework• Customer engagement to identify
customer or sector-specific transitionor physical risks, focused on corporate
and Institutional customers• Standard discussions
with businesscustomers include
climate-related risks
and opportunities• Further develop an enhanced climate
risk management framework thatstrengthens our governance andanticipates potential climate-related
impacts and associated regulatory
requirements• Complete transition plan engagementwith high emitting customers andconsider how to integrate into ourregular customer assessments• Implement targets to reduce metrics
for ‘financed emissions’ in key sectors
by 2030 towards a long-term net zero
goal by 2050
• Consider expanding new metrics formeasuring impact of our progress onenvironmental sustainability to otherkey sectors• Assessment ofcustomer transition
plans part of standard
lending decisions andportfolio analysis• Continue to evolve ourreporting with leading
practices to measure
the alignment of ourlending with the Paris
Agreement goals• Reduce ANZ’soperational emissions
in line with thedecarbonisation
trajectory of the Paris
Agreement goals• Ongoing emissions reduction targets for ANZ energy
use aligned with the Paris Agreement goals
38

ANZ 2021 Annual Review

39

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Governance
CORPORATE GOVERNANCE FRAMEWORKSHAREHOLDERSPaul O’Sullivan

Shayne Elliott

Chairman, Independent
Non-Executive Director

Chief Executive Officer,
Executive Director

Ilana Atlas, AO

Paula Dwyer

Independent
Non-Executive Director

Independent
Non-Executive Director

Jane Halton, AO PSM

RT Hon Sir John Key,GNZM AC

BOARD OF DIRECTORS

Audit
Committee

Ethics, Environment,
Social and GovernanceCommittee

Risk
Committee

Human
Resources
Committee

Digital Businessand Technology
Committee

Nomination and
Board Operations
Committee

Board reserved powers and delegation of authority

CHIEF EXECUTIVE OFFICERGROUP EXECUTIVE COMMITTEE

BOARD OF DIRECTORS

ANZ’s strong governance frameworkprovides a solid structure for effective
and responsible decision-making
within the organisation.
The Board is responsible for the oversight of ANZ
and its sound and prudent management, withspecific duties as set out in its charter available
at anz.com/corporategovernance.
There are six principal Board Committees –the Audit Committee, the Ethics, Environment,

Social and Governance Committee, the Risk Committee,
the Human Resources Committee, the Digital Business andTechnology Committee and the Nomination and Board
Operations Committee.

Independent
Non-Executive Director

Independent
Non-Executive Director

Each Committee has its own charter setting out its roles
and responsibilities. At management level, the Group
Executive Committee comprises ANZ’s most senior
executives. There is a delegations of authority frameworkthat clearly outlines those matters delegated to the CEO
and other members of senior management.
For further detail on ANZ’s governance framework see
our 2021 Corporate Governance Statement available atanz.com/corporategovernance.
Graeme Liebelt

John Macfarlane

Independent
Non-Executive Director

Independent
Non-Executive Director

Full biography details can be found on our website at anz.com/directors and on pages 46-50 of this report.

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Executive Committee

Directors’ meetings
The number of Board, and Board Committee, meetings held during the year and each Directors’ attendance at those meetings are set out below:

Board

Risk
Committee

Audit
Committee

Human
Resources
Committee

Ethics,Environment,
DigitalSocial and Business andGovernance Technology
Committee
Committee

SpecialCommitteeof the Board

Nominations
Committee
and Boardof the Board1 Operations

SharesCommittee1

A

A

B

A

B

A

B

A

B

A

B

A

B

A

B

Paul O’Sullivan

15

15

9

9

8

8

5

5

4

4

6

6

4

4

Ilana Atlas, AO

15

15

9

9

5

5

5

5

Paula Dwyer

15

15

9

9

5

5

Shayne Elliott

15

15David Gonski, AC22

2Jane Halton, AO PSM

15

15

RT Hon Sir John
Key, GNZM AC

15

13

9

8

Graeme Liebelt

15

15

9

9

9

9

John Macfarlane

15

15

9

9

9

9

9

1

9

1

1

1

1

1

1

1

5

5

5

5

6

5

5

6

5

4

4

2

2

4

4

2

2

A

B

A

B

3

3

2

2

3

3

1

1

3

3
1

1

1

1

6

3

3

6

3

3

5
6

B

6

4

4

3

3

4

4

3

3

Maile Carnegie

Chief Executive Officer(appointed CEO on
1 January 2016)

Group Executive Digital andAustralia Transformation

Joined the Executive
Committee* on 1 June 2009

Joined the
Executive Committee
on 27 June 2016

Kevin Corbally

Farhan Faruqui

Group Chief Risk Officer

Chief Financial Officer(appointed CFO on
11 October 2021)
Joined the Executive Committee
on 1 February 2016

Joined the
Executive Committee
on 19 March 2018

Column A Indicates the number of meetings the Director was eligible to attend as a member. Column B Indicates the number of meetings attended. The Chairman became an ex-officio
member of the Risk, Audit, Human Resources, Ethics, Environment, Social and Governance, Digital Business and Technology and Nomination and Board Operations Committees on 28 October
2020, upon David Gonski’s retirement. With respect to Committee meetings, the table above records attendance of Committee members. Any Director is entitled to attend these meetings
and from time to time Directors attend meetings of Committees of which they are not a member.
1. The meetings of the Committee of the Board and Shares Committee as referred to in the table above include those conducted by written resolution. 2. David Gonski retired as Chairman
and as a Non-Executive Director on 28 October 2020.

“The Board has remained responsive to the continuing
disruption brought about by the COVID-19 pandemic,
allocating appropriate time throughout the year
for open and transparent discussions at Board andCommittee meetings in alignment with ANZ’s purpose,and to facilitate greater focus on the achievementof the Bank’s long-term strategy.”Paul O’Sullivan | Chairman

Shayne Elliott

Gerard Florian

Emma Gray

Group Executive
Technology

Group Executive
Data and Automation

Joined the
Executive Committee
on 30 January 2017

Joined the
Executive Committee
on 1 May 2020

Mark Hand

Kathryn van der Merwe

Group Executive Australia Retailand Commercial Banking

Group Executive Talent &Culture and Service Centres

Joined the
Executive Committee
on 15 May 2018

Joined the
Executive Committee
on 1 May 2017

Antonia Watson

Mark Whelan

Chief Executive Officer
New ZealandGroup Executive
Institutional

Joined the
Executive Committee
on 17 June 2019

Joined the
Executive Committee*
on 20 October 2014

Full biography details can be found on our website at anz.com/exco.
*previously known as Management Board.

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Board areas of focus
The Board and its Committees engage in key strategic, governanceand oversight activities each year. The topics below are illustrative
to provide stakeholders with an insight into some of the key
matters considered by the Board and its Committees during2021 and are not intended to be a comprehensive list.

Risk, regulation
and reputation
The Board and its Committees also continued to oversee
the important work carried out by management toprogress ANZ’s risk governance roadmap. Management
provided regular reports on progress, as well as ANZ’s
approach to improving and simplifying organisationaland risk culture.

Strategy and the future

COVID-19 pandemic

The Board and its Committees continued to focus on
longer-term strategic matters. During the year, Directors
participated in three specific Board strategy sessions,using internal and external experts to provide different
points of view. The sessions included assessing theexternal operating, technological, economic andcompetitive environment and challenging ANZ’slong-term response and plans.

The Board and its Committees continued to play
an active role in providing oversight of the impactof, and ANZ’s response to, the COVID-19
pandemic, including:

The Board regularly discussed and revisited ANZ’s strategic
and growth priorities, including adjusting the Board agenda toensure appropriate, distinct and continuous focus on growthmatters at each Board meeting.
As a key part of this, the Board regularly discussed andprovided oversight with respect to ANZ’s approach to thelong-term transformation of its Australian business, including
technology and digital-related matters. The Board received‘deep dives’ into the design of the technology to best meetcustomer needs, and the Board, utilising the breadth of focus
of its Committees received numerous reports overseeing
key aspects of the transformation, including testingand implementation.
An additional important focus of the Board during theyear was succession planning and development focus inrespect of ANZ’s most senior executives, and in respectof its own composition.

44• The relief measures in place to support our customers,
including customer take up, delivery andongoing communications.
• The impact of COVID-19 on the economy, domestic
and international, considering both the immediateand longer-term impacts.
• The impact of the pandemic on our people, andthe different geographic responses undertaken in
the jurisdictions in which we operate. This included
consideration of vaccination trends, the futureof the workplace and actions required to protect
and support our people operating remotely.

As part of this, the Board approved ANZ’s approach to risk culture
and what ANZ’s target risk culture is, with the Risk Committee
providing ongoing oversight of work to achieve that, with the
Human Resources Committee and Board continuing to focus on
and discuss Management’s actions to strengthen and simplify
ANZ’s broader organisational culture
The Board also met with ANZ’s key Australian regulators during
the course of the year with the purpose of maintaining
constructive and two-way dialogue.
As a key aspect of ensuring the correct focus on ANZ’s strategy
and growth, the Board regularly discussed second and third line’s
assessment of the risks associated with the implementationof ANZ’s strategic transformation agenda.
The Board and its Committees continued to review ANZ’s
approach and performance in relation to compliance aswell as reviewing ANZ’s preparedness for regulatory change,
including in relation to breach reporting, design and distribution
obligations and responsible lending laws. It also received regulareducation and briefing materials on key areas such as anti-money
laundering and counter-terrorism financing, competition law,whistleblowing and cyber security.
The Board also discussed and reviewed the current statusof embedding ANZ’s purpose throughout the business,reflecting on progress since its introduction five years ago.
The Board considered and discussed ‘how we bank’ –with an ethical and Environment, Social and Governance(ESG) lens, including ESG focus areas, customers experiencing
vulnerability, product suitability, accessibility and diversity and
our COVID-19 Statement of Intent. The Board also considered‘who we bank’, through industry sector and country specificreviews, human rights policy and modern slavery and climatechange policy.

Financial/Operational
While the Board and its Committees have had a strong
focus on the long-term future of the Group, the Board(and its Committees) maintains an equally strong focus
on the current performance of the Group, including:• Reviewing, challenging and ultimately endorsing ANZ’soperating and strategic plans, both annual and longer-term,
including in relation to ANZ’s investment and business as
usual cost ambitions.
• Regularly discussing merger and acquisitions matters.
• Providing oversight of key capital management matters,
including the approval of the issue of Capital Notes 6 and
ANZ’s on-market share buyback.
• Developing and implementing standardised Business
Performance Templates for discussion at each Board
meeting with the Group Executives leading each of
ANZ’s major businesses.

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Directors’ qualifications, experienceand special responsibilities
As at the date of this report, the Board
comprises seven Non-Executive Directors
and one Executive Director, the Chief
Executive Officer. The names of thecurrent Directors, together with detailsof their qualifications, experience andspecial responsibilities are set out below.
It was announced in August 2021 that
one of Australia’s leading non-executive
directors, Christine O’Reilly, will join
the Board on 1 November 2021 as a
Non-Executive Director. Following her
appointment, Christine will stand forelection as a Director at ANZ’s AGM
on 16 December 2021.

Audit Committee

Paul O’Sullivan

Shayne Elliott

Chair

Chair

MemberMemberPosition

Position

Position

Chairman, Independent Non-Executive Director

Chief Executive Officer and Executive Director

Independent Non-Executive Director

Qualifications

Qualifications

Qualifications

BA (Mod) Economics, Advanced
Management Program of Harvard

BCom

BJuris (Hons), LLB (Hons), LLM

Responsibilities

Responsibilities

Responsibilities

Chief Executive Officer and Executive Director
since 1 January 2016.

Non-Executive Director since September 2014.
Ilana is Chair of the Human Resources Committee and is amember of the Audit Committee, Ethics, Environment, Socialand Governance Committee and Nomination and Board
Operations Committee.

Chairman since October 2020 and a Non-Executive
Director since November 2019.
Paul is an ex-officio member of all Board Committees
and Chair of the Ethics, Environment, Social andGovernance Committee and Nomination
and Board Operations Committee.

CareerEthics, Environment, Socialand Governance Committee

Risk Committee

Human Resources Committee

Digital Business andTechnology Committee

Nomination and Board
Operations Committee

Ilana Atlas, AO

Paul has experience in the telecommunications and oil andgas sectors, both in Australia and overseas. He has held senior
executive roles with Singapore Telecommunications (Singtel) andwas previously the CEO of Optus. He has also held management
roles with the Colonial Group and the Royal Dutch Shell Group in
Canada, the Middle East, Australia and United Kingdom.

Relevant other directorships
Chairman: Singtel Optus Pty Limited (from 2014, Director from2004) and Western Sydney Airport Corporation (from 2017).
Director: St Vincent’s Health Australia (from 2019) and Australian
Tower Network Pty Ltd (from 2021).

Relevant former directorships held in last three years include
Former Director: Telkomsel Indonesia (2010–2020), Healthscope
Limited (2016–2019), National Disability Insurance Agency(2017–2020) and Coca-Cola Amatil (2017–2021).
Age 61 years

Residence Sydney, Australia

Career
Shayne has over 30 years’ experience in banking in Australia andoverseas, in all aspects of the industry. Shayne joined ANZ as CEO
Institutional in June 2009, and was appointed Chief Financial
Officer in 2012.
Prior to joining ANZ, Shayne held senior executive roles at EFG
Hermes, the largest investment bank in the Middle East, which
included Chief Operating Officer. He started his career with
Citibank New Zealand and worked with Citibank/Citigroup for
20 years, holding various senior positions across the UK, USA,
Egypt, Australia and Hong Kong.
Shayne is a Director of the Financial Markets Foundation forChildren and a member of the Australian Banking Association,
the Business Council of Australia and the Australian Customs
Advisory Board.

Relevant other directorships

CareerIlana brings a strong financial services background and legal
experience to the Board. Ilana was a partner at law firm Mallesons
Stephen Jaques (now King & Wood Mallesons), where in addition to
her practice in corporate law, she held a number of management
roles in the firm including Executive Partner, People andInformation, and Managing Partner. She also worked at Westpac for
10 years, where her roles included Group Secretary and GeneralCounsel and Group Executive, People, where she was responsible
for human resources, corporate affairs and sustainability. Ilana has
a strong commitment to the community, in particular the artsand education.

Relevant other directorships
Chairman: Jawun (from 2017, Director from 2014).

Director: ANZ Bank New Zealand Limited (from 2009) andthe Financial Markets Foundation for Children (from 2016).

Director: Paul Ramsay Foundation (from 2017), Scentre Group(from 2021) and Origin Energy Limited (from 2021).

Member: Business Council of Australia (from 2016), the Australian
Banking Association (from 2016, Chairman 2017–2019) and theAustralian Customs Advisory Board (from 2020).

Member: Panel of Adara Partners (from 2015).

Age 57 years

Residence Melbourne, Australia

Relevant former directorships held in last three years include
Former Chairman: Coca-Cola Amatil Limited (2017–2021,
Director from 2011).
Former Director: Westfield Corporation Limited (2014–2018) and
OneMarket Limited (2018–2019).
Former Fellow: Senate of the University of Sydney (2015–2019).
Age 67 years

46

Residence Sydney, Australia

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Paula Dwyer

Jane Halton, AO PSM

Chair

Chair

MemberMemberMemberMemberPosition

Position

Position

PositionIndependent Non-Executive Director

Independent Non-Executive Director

Independent Non-Executive Director

Independent Non-Executive Director

Qualifications

Qualifications

Qualifications

Qualifications

BCom, FCA, SF Fin, FAICD

BA (Hons) Psychology, FIPAA, Hon. FAAHMS,
Hon. FACHSE, Hon. DLitt, FAIM , FAICD

BCom, DCom (Honoris Causa)

BEc (Hons), FAICD, FTSE, FIML

Responsibilities

Responsibilities

Responsibilities

Non-Executive Director since February 2018. Sir John is amember of the Ethics, Environment, Social and GovernanceCommittee, Risk Committee, Digital Business and Technology
Committee and Nomination and Board Operations Committee.

Non-Executive Director since July 2013. Graeme is Chair of
the Risk Committee and is a member of the Audit Committee,
Human Resources Committee and Nomination and Board
Operations Committee.

Career

Career

Sir John was Prime Minister of New Zealand from 2008 to 2016,
having commenced his political career in 2002. Sir John had a longcareer in international finance, primarily for Bankers Trust in New
Zealand and Merrill Lynch in Singapore, London and Sydney. He
was previously a member of the Foreign Exchange Committeeof the Federal Reserve Bank of New York (from 1999 to 2001).

Graeme brings to the Board his experience of a 23-year executive
career with Orica Limited (including a period as Chief Executive
Officer), a global mining services company with operations in morethan 50 countries. He has extensive international experience anda strong record of achievement as a senior executive, including instrategy development and implementation. Graeme is committed
to global trade and cooperation, as well as community education.

Responsibilities
Non-Executive Director since April 2012. Paula is Chair of the
Audit Committee and is a member of the Risk Committee,
Human Resources Committee and Nomination and Board
Operations Committee.

CareerPaula has extensive experience in financial markets, corporate
finance, risk management and investments, having held senior
executive roles at Calibre Asset Management, Ord Minnett (now J P
Morgan) and at Price Waterhouse (now PricewaterhouseCoopers).
Her career as a company director spans financial services,
investment, insurance, healthcare, gambling and entertainment,
fast-moving consumer goods, property and construction and retailsectors. Paula has a strong interest in education and medical
research, having served as a member of the Geelong Grammar
School Council and the Business and Economics Faculty at the
University of Melbourne and as Deputy Chairman of Baker IDI.

RT Hon Sir John
Key, GNZM AC

Graeme Liebelt
Chair

Non-Executive Director since October 2016. Jane is Chair of theDigital Business and Technology Committee and is a member ofthe Human Resources Committee, Ethics, Environment, Socialand Governance Committee and Nomination and Board
Operations Committee.

CareerJane’s 33 year career in the public service includes the positionsof Secretary of the Australian Department of Finance, Secretary of
the Australian Department of Health, Secretary for the Department
of Health and Ageing, and Executive Co-ordinator (Deputy
Secretary) of the Department of the Prime Minister and Cabinet.
She brings to the Board extensive experience in finance, insurance,risk management, information technology, human resources,
health and ageing and public policy. She also has significant
international experience.

Sir John was made a Knight Grand Companion of the New ZealandOrder of Merit in the 2017 Queen’s Birthday Honours. In 2017 Sir
John became a Companion of the Order of Australia for advancing
the Australia-New Zealand bilateral relationship.

Jane has contributed extensively to community health throughlocal and international organisations including the World HealthOrganisation and National Aboriginal and Torres Strait Islander
Health Council.

Relevant other directorships

Relevant other directorships

Relevant former directorships held in last three years include

Relevant former directorships held in last three years include

Chairman: Vault Systems (from 2017), Coalition for Epidemic
Preparedness Innovations (Norway) (from 2018, Member
from 2016) and Council on the Ageing Australia (from 2017).

Former Chairman: The International Democratic Union(2014–2018).

Former Chairman: Tabcorp Holdings Limited (2011–2020,
Director from 2005) and Healthscope Limited (2014–2019).

Director: Clayton Utz (from 2017), Crown Resorts Limited(from 2018) and Naval Group Australia Pty Ltd (from 2021).

Age 61 years

Member: Executive Board of the Institute of Health Metrics
and Evaluation at the University of Washington (from 2007).

Relevant other directorships
Chairman: Kin Group Advisory Board (from 2014) andAllianz Australia Limited (from 2020, Director from 2019).
Director: Lion Pty Ltd (from 2012).
Member: Kirin International Advisory Board (from 2012)
and Australian Government Takeovers Panel (from 2017).

Residence Melbourne, Australia

Chairman: ANZ Bank New Zealand Limited (from 2018,
Director from 2017).
Director: Palo Alto Networks (from 2019).

Relevant other directorships
Chairman: Amcor Limited (from 2013, Director from 2012).
Director: Australian Foundation Investment Company Limited(from 2012) and Carey Baptist Grammar School (from 2012).

Relevant former directorships held in last three years include
Former Chairman: DuluxGroup Limited (2018–2019, Director
from 2016).
Age 67 years

Residence Melbourne, Australia

Former Director: Air New Zealand Limited (2017–2020).
Age 60 years

Residence Auckland, New Zealand

Adjunct Professor: University of Sydney and Universityof Canberra.
Council Member: Australian Strategic Policy Institute (from 2016).

Relevant former directorships held in last three years include
Former Member: National COVID-19 Commission Advisory Board(2020–2021).
Age 61 years

48

Residence Canberra, Australia

ANZ 2021 Annual Review

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CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWJohn Macfarlane

SHAREHOLDERINFORMATIONCOMPANY SECRETARIES’QUALIFICATIONS AND EXPERIENCE
Currently there are two people appointed as Company Secretariesof the Company. Details of their roles are contained in the Corporate
Governance Statement.

Member

Their qualifications and experience are as follows

Position

Ken Adams

Independent Non-Executive Director

Qualifications
BCom, MCom (Hons)

Position

Responsibilities

Group General Counsel

Non-Executive Director since May 2014. John is a memberof the Audit Committee, Risk Committee, Digital Businessand Technology Committee and Nomination and Board
Operations Committee.

Qualifications

CareerJohn is one of Australia’s most experienced international bankers
having previously served as Executive Chairman of Deutsche Bank
Australia and New Zealand, and CEO of Deutsche Bank Australia.
John has also worked in the USA, Japan and PNG, and brings to
the Board a depth of banking experience in ANZ’s key markets inAustralia, New Zealand and the Asia Pacific. He is committed tocommunity health, and is a Director of the Aikenhead Centre of
Medical Discovery Limited (from 2016).

BA, LLB, LLM
Ken joined ANZ as Group General Counsel in August 2019, having
assisted ANZ with major legal issues for over 10 years. Prior to ANZ,
Ken was a Partner of Freehills and later Herbert Smith Freehills for
21 years, and for six years was a member of the Herbert Smith
Freehills Global Board. Ken is one of Australia’s leading commercial
lawyers with significant experience in class actions and othercomplex legal issues. He holds a Master of Laws from the Universityof Melbourne and is a co-author of Class Actions in Australia.

Relevant other directorships
Director: Colmac Group Pty Ltd (from 2014), AGInvest Holdings
Limited (MyFarm Limited) (from 2014, Chairman 2014–2016),
Balmoral Pastoral Investments (from 2017) and L1 Long Short
Fund (from 2018).

Simon Pordage

Relevant former directorships held in last three
years include

Position

Former Director: St Vincent’s Institute of Medical Research(2008–2018) and Craigs Investment Partners Limited (2013–2020).

Qualifications

Age 61 years

Residence Melbourne, Australia

The COVID-19 pandemic has
continued to impact our operating
environment. Our Risk Management
Framework has underpinned our
response during this challenging
time and has enabled us to maintainsound risk management practices.
Over the last year we have continued to invest in our Risk
Management Framework, processes and systems, strengthening ourability to respond to changes in existing risks, and to deal with newrisks as they arise in our increasingly complex external environment,
including those discussed below.

COVID-19
We have maintained a range of support measures to assist
employees and customers, and to deliver safe and secure operations
throughout the pandemic. The Risk function has helped with thetransition of staff to remote working, or conversely, their return tothe office. We are continuing to assess the implications of ‘living with
COVID’, which is still evolving. The Risk function has also partneredwith our divisions to protect the bank through the management ofcredit risk associated with customer COVID-19 support, as well as
industry deep dives and portfolio reviews.
We recognise the mental health and wellbeing risks associatedwith staff fatigue after almost two years of COVID-induced change.
We are working together with our Talent & Culture team to ensure
appropriate supports are in place. For further detail on how wehave supported our people see page 30.

RISK CULTURE

Company Secretary
LLB (Hons), FGIA, FCG (CS, CGP)
Simon joined ANZ in May 2016. He is a Chartered Secretary andChartered Governance Practitioner and has extensive company
secretarial and corporate governance experience. From 2009
to 2016 he was Company Secretary for Australian Foundation
Investment Company Limited and a number of other listed
investment companies. Other former roles include being Deputy
Company Secretary for ANZ and Head of Board Support for
Barclays PLC in the United Kingdom.
He is a formal brand ambassador for, and is a former National
President and Chairman of, Governance Institute of Australia,
and is a member and former Chairman of its National Legislation
Review Committee. Simon is committed to the promotion andpractice of good corporate governance, and regularly presents
on governance issues.

50

Risk management

We strive for a risk culture where our employees demonstrate theright risk behaviours, have clear risk roles and responsibilities and areenabled by effective policies and processes. This year we conducted
an internal Risk Culture survey for the first time. The survey gathered
the perceptions of target risk behaviours from more than 24,000
employees. We have undertaken a lot of work over the past three
years to encourage a strong ‘speak up’ and risk culture and,pleasingly, responses to the survey confirmed our people believe
they can speak up and challenge each other respectfully if they
see unethical behaviour, with over 80% of staff expressing a very
positive sentiment for ANZ’s risk culture.
Risk culture (as a critical component of our organisational culture)remains an important focus. We have refined our risk culture
principles and defined our target risk culture. A framework forassessing each risk culture principle is embedded across theorganisation and incorporates desired risk behaviours andbusiness and risk outcomes. Risk culture maturity is assessedat an organisational level, as well as divisional and functional
levels, with risk culture plans in place to address identified gaps.
Risk culture goals have been set to monitor progress and drive
sustainable change towards our aspirational culture.
A priority this year has been transforming behaviours throughformal mechanisms (including systems, structures, policies,
procedures and processes) as we seek to ensure leadersdemonstrate accountability for managing risk within a ‘speak up’environment, with clear consequence management processes.
Guided by our purpose, our behaviours help us to bring our values
to life and to execute our strategy. To further strengthen and evolve
our risk culture, this year the Enterprise Accountability Group(see page 30) recognised over 40 individuals as role modelling
outstanding risk behaviours for their work to manage and mitigate
the organisation’s risks and their continuous improvement of our risk
culture. The recognition provided included personalised messages
from the CEO, the opportunity to meet with the Board and ExCoand having their achievements profiled on our intranet and ininternal newsletters .

CONDUCT RISK
Providing our products and services in a manner that delivers faircustomer outcomes and promotes market integrity is integral to ourstrategy. This year Conduct Risk was elevated as a key material risk
for the bank, highlighting its importance in our Risk Management
Framework. In addition to key initiatives to strengthen our Conduct
Risk management approach, our Code of Conduct was enhanced
to provide clear guidance to our people. For example, there is
guidance relating to some of the ethical considerations employees
may encounter in daily decision-making, when dealing withcustomers and/or undertaking market activities – we expect
our people to consider not only whether ‘can we’ do something,
but also ‘should we’?

LINKS TO 2021 GROUPPERFORMANCE FRAMEWORKOur already strong risk management framework enabled ANZ tocontinually manage the evolving risks presented by COVID-19.
Clear progress continues to be made on risk culture maturity,evidenced in employee engagement scores including ‘Mybusiness leaders demonstrate personal accountability for
managing risk and sound risk behaviours’ (87%) and ‘I can raiseissues and concerns in ANZ without fear of reprisals or negative
consequences’ (80%), exceeding the record highsreached in 2020.

These results are the product of sustained efforts over several
years to encourage a speak up and risk culture where people feelthey can challenge each other respectfully. Sound progress has
been made in addressing the findings of the Risk GovernanceSelf-Assessment and on key regulatory/non-financial risk
projects. However, a $500 million APRA capital overlay remains inplace pending confirmation of an improvement in operationalrisk management across the bank.
See section 4.5.3 of the Remuneration
Report for more details.

ANZ 2021 Annual Review

51

REMUNERATIONOVERVIEWNON-FINANCIAL RISKWe are improving how we manage our obligations and operationalrisks by strengthening our non-financial risk, control, governanceand compliance focus in line with our Risk Management Framework.
This year, to further enhance non-financial risk management, wehave adopted a new taxonomy into our Operational and Compliance
Risk Framework. Our Compliance and Operational Risk Strategy
provides a comprehensive, proactive and well-planned approachto improving our management of non-financial risk by driving
transformation across our processes, policies, systems and people,
guided by our purpose and contributing to the bank’s strategic
priority to improve the financial wellbeing of our customers.
Last year we reviewed our Risk Appetite Statement (RAS) metrics
to ensure appropriate coverage of our non-financial risks. The
review concluded earlier this year, with the Board Risk Committee
approving a collection of over 36 metrics and indicators. This is anincrease from 12 prior to the review, and demonstrates the growing
importance of non-financial factors in helping inform decisions
within our Risk function.
We have developed and launched a new tool that streamlines how
we capture and report against the RAS metrics, reducing the time ittakes from weeks to days. In addition, we developed a purpose-built
dashboard to support the proactive management of our risk
appetite using trend analysis technology.
These changes have provided our Board Risk Committee andmanagement with greater visibility and control over our nonfinancial risk appetite.

FINANCIAL CRIME
We continue to improve our financial crime risk management
program. We have invested significantly in enhancing data analytics
capability for the bank, creating a central Financial Crime Data Hub
and Intelligence ecosystem that uses a range of analytical tools,
including:• Network and link analysis capability – using these tools we canbetter detect syndicated crimes and demonstrate a ‘big picture’view of criminal activity• Dynamic algorithms – using agile monitoring and detection
solutions, we can detect changes in customer behaviours,
which can assist AUSTRAC and police investigations.
F urther information on financial crime is available inour 2021 ESG Supplement at anz.com/annualreport.
EMERGING RISKS
Two risks that continue to evolve and that we are paying particularattention to are:
Cyber security risk: We take the security of our bank, ourcustomers and our customers’ information very seriously. Cyber
security threats continue to be significant and our approach to
mitigating cyber security risk involves a range of controls relying
on people, technology and process. We are continually testing
our defences internally and through independent third parties. We
have a very sophisticated cyber security protection capability andhave invested heavily in a range of recognised industry practices
and technologies, processes and defences. In addition, we arecooperating with our counterparts, governments and associated

SHAREHOLDERINFORMATION

entities around the world to protect against cyber security threats,
which have increased since COVID-19 and the consequent shift
to digital banking and remote working.
We are now blocking around 16 million malicious emails a month –compared to about four million pre-COVID-19 in October 2019.

CYBER SCAMMERS ON THE RISE

There has been a significant increase in ‘business email
compromise’ (BEC), with cyber scammers targetingtransactions and payment systems by intercepting businesscorrespondence.

OUR RISK MANAGEMENT FRAMEWORKThe Board is ultimately responsible for establishing and overseeing
the Group’s Risk Management Framework (RMF) which is supportedby the Group’s underlying systems, structures, policies, procedures,processes and people. The Board has delegated authority to theBoard Risk Committee (BRC) to develop and monitor compliancewith the Group’s risk management policies. The Committee reports
regularly to the Board on its activities. The key pillars of the Group’s
RMF include:

A publication released by the Australian Cyber Security
Centre (ACSC) shows total losses for the 2020–21 financial
year were approximately $81million, an increase of nearly
15% from the previous financial year. Average loss per
successful BEC transaction also increased by 54%.

• The Risk Management Statement (RMS), which describes theapproach for managing risks arising from the Group’s purpose andstrategy and the key elements of the RMF that give effect to thatstrategy. The RMS includes: how the risk function is structured tosupport the Group’s purpose and strategy, and the execution of
the Group Chief Risk Officer’s prescribed responsibilities as an
Accountable Person for the Group under the Banking Executive
Accountability Regime; the values, attitudes and behaviours
required of employees in delivering on strategic priorities; adescription of each material risk; and an overview of how the
RMF addresses each risk, with reference to the relevant policies,
standards and procedures. It also includes information on how
the Group identifies, measures, evaluates, monitors, reports
and then either controls or mitigates material risks.

To assist our customers to protect their businesses against
these types of scams, we encourage them to take a numberof steps including making an organisational PACT1 to protect
their virtual valuables. In addition, we are educating ourcustomers on data protection and privacy through focused
campaigns, threat intelligence newsletters and cyber security
business guide books.

BOARD OF DIRECTORS

Many of these compromised emails appear to represent
existing suppliers, customers and professional advisors suchas accountants or lawyers, and request changes to accountor payment details.

Climate change risk: The financial risks associated with climatechange remain a key focus. We have set a public ESG target todevelop an enhanced risk management framework that anticipates
potential climate-related impacts, and associated regulatory
requirements, by the end of 2022. To help deliver on this target,
a number of work streams have been established, including
regulatory monitoring and carbon metrics. A new Climate Advisory
and Coordination Forum, which is Chaired by the Group Executive,
Institutional and includes the Group Chief Risk Officer, has also
overseen the development of an updated climate change
statement that will be released prior to our Annual General Meeting.
We are continuing to work with our customers to better understandhow they are transitioning to a low carbon future. We have now
engaged with 100 of our largest emitting business customers toencourage and support them to develop their low carbon transition
plans. The majority of the 100 customers recognise climate change
risk and have started their transition plan ‘journey’. Some customers
have advanced plans towards net zero by 2050. We are using what
we learn from this customer engagement to inform how wemanage the risks in higher emitting customer portfolios.
We are participating in APRA’s Climate Vulnerability Assessment(CVA), which examines the material exposures and financial risks
that banks, the financial system and economy may face due toclimate risks. APRA’s CVA comprises two stress tests, counterparty
assessment and data assessment. APRA intends to disclose theoutcomes of the CVA in 2022, which may also be used to informfuture supervisory guidance.

• The Risk Appetite Statement (RAS), which sets out the Board’s
expectations regarding, for each material risk, the maximum levelof risk that the Group is willing to accept in pursuing its strategic
objectives and its operating plans considering its stakeholders’,
depositors’ and customers’ interests.
• The Risk Culture, an important component of the Group’s
organisational culture and an intrinsic part of the Group’s RMF.
The Group operates a Three Lines-of-Defence Model in regard to risk
management, helping to embed a culture where risk is everyone’s
responsibility.
The business has first line of defence responsibility for day-to-day
ownership of risks and controls and accountability for
implementation and ongoing maintenance of the RMF.
The Group Risk (including Compliance) teams form the second lineof defence, providing independent oversight of the Group’s risk
profile and RMF.
Internal Audit is the final line of defence, providing independent
evaluation and assurance on the appropriateness, effectiveness andadequacy of the Group’s RMF.
The governance and oversight of risk management, while embeddedin day-to-day activities, is also the focus of committees and regularforums across the bank (see diagram below). The committees andforums discuss and monitor known and emerging risks, review
management plans and monitor progress to address known issues.

EXECUTIVE COMMITTEEGROUP PERFORMANCE EXECUTION COMMITTEE

ANZ’s most senior executives meet
regularly to discuss performanceand review shared initiatives.

ANZ’s key Management Committee charged withoversight of the Group’s overall operational performanceand position and execution of the operating plan.

ENTERPRISEACCOUNTABILITY
GROUP

KEY MANAGEMENT COMMITTEES
Credit andMarket Risk
Committee

Group Assetand Liability
Committee

Credit Ratings
System OversightCommittee

Capital and Stress
Testing OversightCommittee

Modelling Ratings
Working Groups
and Usage Forums

Divisional
Initiatives Review
Committees/
Project
Advisory Councils

Operational
Risk Executive
Committee

Eithics andResponsible
Business
Committee

Investment
Committee

Divisional
Risk Management
Committees

Various Divisional SpecificManagement Committees

Risk GovernanceOversight
CommitteeGroup

PERFORMANCEOVERVIEW

Division

HOW WE
CREATE VALUECountry

OVERVIEW

Regional orCountry Risk
Management
Committee

Operational
Risk Committee

Product
Committee

Divisional/
Functional
AccountabilityGroupsCountry Assetand Liability
Committees

1. PACT: Pause before sharing your personal information; Activate two layers of security; Call out suspicious messages; Turn on automatic software updates.

52

ANZ 2021 Annual Review

53

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Key material risks
The material risks facing the Groupper the Group’s Risk Management
Strategy, and how these risks aremanaged, are summarised below.
As part of the annual review of our Risk Management
Strategy we have classified Conduct Risk as a key material
risk to enhance the profile and maturity, comply with better
practice and align with the direction of the Compliance andOperational Risk Strategy to identify significant obligations
and material risks that matter to the Group.

Fairnessand ethicalconduct

Customerexperience

Innovation
andtechnology

ClimatechangeDescription

Managing the risk

CapitalAdequacy
Risk

The risk of loss arising from the Group failingto maintain the level of capital required by
prudential regulators and other key stakeholders(shareholders, debt investors, depositors,
rating agencies, etc.) to support the Group’s
consolidated operations and risk appetite.

We pursue an active approach to Capital Management,
which is designed to protect the interests ofdepositors, creditors and shareholders throughongoing review, and Board approval, of the level
and composition of our capital base against key
policy objectives.

The risk of failure to act in accordance withlaws, regulations, industry standards and codes,
internal policies and procedures and principles
of good governance as applicable to theGroup’s businesses.

Key features of how we manage Compliance Risk
as part of our Operational Risk and Compliance
Framework include:

CreditRisk

The risk of financial loss resulting from:• A counterparty failing to fulfil its obligations• A decrease in credit quality of a counterparty
resulting in a financial loss.
Credit Risk incorporates the risks associatedwith us lending to business and retail customers
who could be impacted by climate change
or by changes to laws, regulations, or otherpolicies adopted by governments or regulatory
authorities, including carbon pricing and climatechange adaptation or mitigation policies.

Liquidity
andFunding
Risk

Description

Managing the risk

MarketRisk

The risk to the Group’s earnings arising from:We have a detailed market risk management and control
framework to support our trading and balance sheet
activities, which incorporates an independent risk
measurement approach to quantify the magnitudeof market risk within the trading and balance sheet
portfolios. This approach, along with related analysis,
identifies the range of possible outcomes, that can be
expected over a given period of time, and establishes
the likelihood of those outcomes and allocates anappropriate amount of capital to support these activities.

Operational
Risk

The risk of loss and/or non-compliance withlaws resulting from inadequate or failed internal
processes, people and/or systems, or fromexternal events. This definition includes legalrisk, and the risk of reputation loss, or damage
arising from inadequate or failed internal
processes, people and systems, but excludes
strategic risk.

The Group’s foundational operational risk policy is
the Operational Risk Approach. The Operational Risk
Approach and its supporting requirements includes
management and measurement of operational risks
and compliance with laws, regulations, industry
standards, codes and principles of good governance,
and internal policies and procedure. The Grouptakes a risk-based approach to the managementof operational risk and obligations. This enables theGroup to be consistent in proactively identifying,assessing, managing, reporting and escalating
operational risk-related risk exposures, which
respecting the specific obligations of eachjurisdiction in which the Group operates.

Risks that affect or are created by anorganisation’s business strategy and strategic
objectives. A possible source of loss might arise
from the pursuit of an unsuccessful businessplan. For example, Strategic risk might arise
from making poor strategic business decisions,from the sub-standard execution of decisions,from inadequate resource allocation, or froma failure to respond well to changes in thebusiness environment.

Strategic risks are discussed and managed throughour annual strategic planning process, managed by
the Executive Committee and approved by the Board.
Where the strategy leads to an increase in other Key
Material Risks (e.g. Credit Risk, Market Risk, Operational
Risk) the risk management strategies associated withthese risks form the primary controls.

• Changes in any interest rates, foreignexchange rates, credit spreads, volatility,
and correlations; or• Fluctuations in bond, commodity or
equity prices.

$

Risk type

Compliance
Risk

54

For further information about the principal risks
and uncertainties that the Group faces, see our“Principal Risks and Uncertainties” disclosure
available at anz.com/shareholder/centre.

• Centralised management of key obligations via
a Global Obligations Library, enable our change
management capability in relation to new andrevised obligations, and emphasis on theidentification of changing regulations and thebusiness environment, to enable proactive
assessment of emerging compliance risks.
• Recognition of incident management as a separate
element to enhance ANZ’s ability to identify,
manage and report on incidents/breaches ina timely manner.

Financial
wellbeing

Material
ESG issues

Strategic
Risk

Technology
Risk• Repaying depositors or maturing wholesale
debt; or• The Group having insufficient capacity
to fund increases in assets.

• ANZ’s short term liquidity scenario modelling
stresses cash flow projections against multiple
survival horizons’ over which the Group is required
to remain cash flow positive; and• Longer-term scenarios are in place that measure thestructural liquidity position of the balance sheet.

The risk of loss and/or non-compliancewith laws from inadequate or failed internal
processes, people or systems that deliver
Technology assets and services to customers
and staff. This risk includes Technology assets
and services delivered or managed by third
parties, and external events.

Approach to manage Technology Risk is to manage
our operational risks caused by the use of technology,
including risks associated with cyber security and third
party providers, in a manner that seeks to ensure
customer information is secure and service disruption
is within acceptable levels.

$

The risk specifically includes Information
Security and Cyber Security and how
information held by the Group needs to beprotected from inappropriate modification,
loss, disclosure and unavailability.
Conduct
Risk

Key principles in managing our Liquidity and Funding
Risk include:$$

Our Credit Risk framework is top down, being
defined by credit principles and policies. Credit
policies, requirements and procedures cover all
aspects of the credit life cycle from initial approval
and risk grading, through ongoing management
and problem debt management.

The risk that the Group is unable to meet its
payment obligations as they fall due, including:Material
ESG issues

Risk typeThe risk of loss or damage arising from thefailure of the Group, its employees or agents
to appropriately consider the interests ofcustomers, the integrity of the financial markets
and the expectations of the community inconducting its business activities.

Approach to manage Conduct Risk is to seek to ensurethat risks to customers, community and market
integrity are identified, assessed, measured, evaluated,
treated, monitored and reported in a structured
environment with appropriate governance oversight.

$

The Risk may arise not only from deliberateor negligent actions of individual employees,
but may also be inadvertent and caused byinadequacies in the Group’s systems, processes
and procedures.
ANZ 2021 Annual Review

55

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

OUR
OUR PERFORMANCEPERFORMANCE (continued)(continued)
OUR PERFORMANCE (continued)
OUR
PERFORMANCEOUR PERFORMANCE (continued)(continued)

Performance overview

GROUP
GROUP PERFORMANCEPERFORMANCEGROUP PERFORMANCE
GROUP
GROUP
PERFORMANCEThe
resultsPERFORMANCEof the Group’s operations and financial position are set out on pages 56-71. Page 11 outlines the Group’s strategy and pages

The results of the Group’s operations and financial position are set out on pages 56-71. Page 11 outlines the Group’s strategy and pages
The resultsof theGroup’sdetail
operations
and financial
position
areof
setfutureout onpages 56-71.
Page
11
outlines the Discussion
Group’s strategy
and
pages
10-28
describe
intheprospects
infinancial
positionandperformance.
ofapproach
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andposition
are
set
out
pages
Page
outlines
Group’s
pages
10-28
describe
in further
furtherthe Group’sGroup’s
prospects
in terms
terms
financial
position
and11
performance.
of ourour andapproach
The results
resultsof thetheGroup’sdetail
operations
and financial
financial
position
areof
setfutureout onon
pages 56-71.
56-71.
Page
11
outlines thethe Discussion
Group’s strategy
strategy
and
pages
10-28
describeinfurther
detailtheGroup’s
prospects
in
terms
of
futurefinancial
positionandperformance.
Discussionofourapproachtoriskmanagement,
includingaathesummaryofourrisks,
is
on
pages
10-28
in
further
detailGroup’s
prospects
in
terms
of
futurefinancialandperformance.
Discussionofourapproachtorisk describe
management,
includingsummaryof
our keykey materialmaterial
risks,
is outlined
outlined
onposition
pages 51-55.
51-55.
10-28
describeinfurther
detailtheGroup’s
prospects
in
terms
of
futurefinancial
positionandperformance.
Discussionofourapproachto risk management, including a summary of our key material risks, is outlined on pages 51-55.
toto riskrisk management,
management, including
including aa summary
summary ofof ourour keykey materialmaterial risks,
risks, isis outlined
outlined on
on pages
pages 51-55.
51-55.
CORONAVIRUS
CORONAVIRUS (COVID-19)(COVID-19)
CORONAVIRUS (COVID-19)
CORONAVIRUS(COVID-19)
The
continues
CORONAVIRUS(COVID-19)
The COVID-19
COVID-19 pandemic
pandemic
continues toto causecause major
major disruptions
disruptions toto community
community healthhealth andand economic
economic activities
activities with
with wide-ranging
wide-ranging impacts
impacts
The COVID-19
pandemic
continues
to causemajor
disruptions
to community health and economic activities with wide-ranging impacts
acrossmany
business
sectorsinAustralia,
New
Zealandandglobally.
The
COVID-19
pandemic
continues
to
cause
major
disruptions
tocommunity
healthandeconomic
activities
withwide-ranging
impacts
acrossmany
business
sectorsinAustralia,
New
Zealandandglobally.
The
COVID-19
pandemic
continues
to
cause
major
disruptions
tocommunity
healthandeconomic
activities
withwide-ranging
impacts
across many business sectors in Australia, New Zealand and globally.
acrossmany
business
sectorsinAustralia,
New
Zealandandglobally.
across manybusiness
sectors
inthe
Australia,
New
Zealandand globally.
Duringthe2021
financialyear,
spreadoftheDeltavariant
resultedinnewandextended
lockdowns
inSydney,Melbourne
andDuring the 2021 financial year, the spread of the Delta variant resulted in new and extended lockdowns in Sydney, Melbourne and Auckland.
Auckland.
Duringthe continues
2021 financial
year,support
the spreadof customers
the Delta variant
resultedthein new
andofextended
lockdowns
inSydney,Melbourneand Auckland.
The
Group
to
to
to
impactCOVID-19,
however
loandeferrals
at2021
Duringthe2021
financialyear,
thespreadoftheDeltavariant
resulted
innewandlockdowns
Sydney,Melbourne
andAuckland.
The
Group
continues
to offer
offer
supportto ourourcustomers
to counteract
counteract
theimpactofextended
COVID-19,
however inloandeferrals
at 30
30 September
September
2021
Duringthe2021
financialyear,
thespreadoftheDeltavariant
resultedinnewandextended
lockdowns
inSydney,Melbourne
andAuckland.
The
Group
continuesthan
to offer
supporttoour customers
to counteract
the impact toof COVID-19,
however
loandeferrals
at 30 September
2021
were
less
significant
theprevious
financial
year.
Facilities
whichtransitioned
interest-only
or
took
up
term
extensions
offeredasaresultThe
continues
to
offer
our
customers
tocounteract
theimpactof
COVID-19,
howeverdeferrals
at30
September
wereGroup
less significant
than
the support
previousto
financialyear. Facilities
which transitioned
tointerest-onlyor tookloan
up term
extensions
offered as a2021
resultThe
Group
continues
tooffer
supporttoourcustomers
tocounteract
theimpactof
COVID-19,
however
loandeferrals
at30
September
2021
were
less
significant
thantheprevious
financial
year.
Facilities
whichtransitioned
tointerest-only
or
took
up
term
extensions
offeredasaresultof
COVID-19,
arenow
subsumed
withinthenormalloan
population
andaremanagedaccordingly.
were
less
significant
thantheprevious
financial
year.
Facilities
whichtransitioned
tointerest-only
or
took
up
term
extensions
offeredasaresultof
COVID-19,
are nowthan
subsumed
withinfinancial
the normal
loan
populationandare managed
accordingly.
were
less
significant
theprevious
year.
Facilities
whichtransitioned
tointerest-only
or
took
up
term
extensions
offeredasaresultof COVID-19, are now subsumed within the normal loan population and are managed accordingly.
of
COVID-19,
arenow
subsumed
withinthenormalloan
population
andaremanagedaccordingly.
of
COVID-19,
arenow
subsumed
withinthenormalloan
population
andaremanagedaccordingly.
The
The ramifications
ramifications ofof COVID-19
COVID-19 remain
remain uncertain
uncertain andand itit isis difficult
difficult toto predict
predict thethe ongoingongoing impact
impact oror duration
duration ofof thethe pandemic
pandemic andand relaxation
relaxation ofof
The ramificationsof COVID-19
remainstatements,
uncertain anditmadeis difficult
to predict
the ongoing
impactor durationof theonpandemicandrelaxation of
restrictions.
In
the
we
variousaccounting
estimatesforeventsforecasts
ofThe
ramificationsof
COVID-19
remainuncertainandisdifficulttopredict
theongoingordurationofthepandemicrelaxationofrestrictions.
In preparing
preparing
the financial
financialstatements,
weit
made
variousaccounting
estimatesimpact
for future
futureevents based
basedon
forecastsandof economic
economicThe
ramificationsof
COVID-19
remainuncertainanditisdifficulttopredict
theongoing
impactor
durationofthepandemicandrelaxation
restrictions.which
In preparing
the financial statements,
we madevariousaccounting
estimatesfor future
eventsbasedunderon forecastsof economic ofconditions
reflect
and
as
30
2021
that
are
reasonable
therestrictions.
In
preparingthefinancialstatements,
we
madeaccountingforfuturebasedonforecastsofeconomic
conditions
which
reflect expectations
expectations
and assumptions
assumptionsas atatvarious
30 September
September
2021estimatesthat we
we believe
believe
areevents
reasonable
under
the circumstances.
circumstances.
restrictions.
In
preparingthefinancialstatements,
we
madevariousaccounting
estimatesforfutureeventsbasedonforecastsofeconomic
conditions which reflect expectations and assumptions as at 30 September 2021 that we believe are reasonable under the circumstances.
conditions
which
reflect
expectations
andas
Septemberthatarereasonablecircumstances.
conditions
whichacrossreflectthe
expectations
and assumptions
assumptions
as at
at 30
30uncertainty
Septemberis2021
2021
that we
we believe
believeareto
reasonable
under
the
circumstances.
Whilepervasive
financial statements,
statements,
the estimation
estimation
predominantly
relatedexpected undercredit thelosses(ECL) where
where we
we
Whilepervasiveacross thefinancial
theuncertainty is
predominantly
relatedto expectedcreditlosses(ECL)
Whilepervasiveacrossthefinancialstatements,
theestimation
uncertainty
ispredominantly
relatedtoexpected
creditlosses
(ECL)
where werecognisedacreditimpairment
releaseof$567
millionpre-taxinthe2021
financial
year(2020:$2,738millioncharge).
Thecreditimpairment
Whilepervasiveacrossthefinancialstatements,
theestimation
uncertainty
ispredominantly
relatedtoexpected
creditlosses(ECL)
whererecognisedacreditimpairment
releaseof$567
millionpre-taxinthe2021
financial
year(2020:$2,738millioncharge).
Thecreditimpairment
Whilepervasiveacrossthe financial
statements,
the estimation
uncertainty
is predominantly
relatedexpected
creditThelosses
(ECL)
where we
werecogniseda credit
impairment
releaseof $567
millionpre-tax
inthe2021 financial
year (2020:$2,738toECL
millioncharge).
creditimpairment
releaseinthecurrent
periodwasprimarily
drivenbythereleaseofallowanceforcollectively
assessedlargely
reflectingtheimpactof ananrecognisedacreditimpairment
releaseof$567
millionpre-taxinthe2021
financial
year(2020:$2,738millioncharge).
Thecreditimpairment
releaseinthecurrent
periodwasprimarily
drivenbythereleaseofallowanceforcollectively
assessedECL
largely
reflectingtheimpactofrecognisedacreditimpairment
releaseof$567
millionpre-taxinthe2021
financial
year(2020:$2,738millioncharge).
Thecreditimpairment
release in thecurrentoutlook
period was
primarily
byattheof allowancefor collectively
assessed ECLinlargely
reflecting
impact of an
improved
economic
relativeto thethedriven
outlook
30release
September
2020, together
togetherwith improvements
improvements
portfolio
mix. thereleasecurrent
periodprimarily
drivenbythereleaseofforassessedlargely
reflecting
the impact of an
improved
economic
relativetooutlook30
September
2020,
with
portfoliomix.
release inin thethecurrentoutlook
period waswas
primarily
byatof allowanceallowance
for collectively
collectively
assessed ECL
ECLin
reflecting
improved
economic
outlookrelativeto thedriven
outlook
atthe
30release
September
2020, together
with improvements
inlargely
portfolio
mix. the impact of an
improved
improved economic
economic outlook
outlook relative
relative toto thethe outlook
outlook at
at 30
30 September
September 2020,
2020, together
together with
with improvements
improvements inin portfolio
portfolio mix.
mix.

CONTINUING OPERATIONS
Key measures of our financial position and performance are set out below.
O p e r a t in g e x p e n s e s t oo p e r a t in g i n c o m e –c a sh 1 (%)

N et in t er est m a r g in –cash1 ( % )
2021

1.64

2021

51.9

2021 (567)
(810)

2020

1.63

2020

52.9

2020

R etu r n o n eq u it y –c a sh 1 ( % )
9.9

2021
2020

1.
2.

6.2

218.3

2020

132.7

6,198

2021

2,738

2020

C o m m o n eq u it yt ier 1 ( % )E ar n in g s p e r s h a r e –c ash 1 (ce nts)
2021

C ash p r o fit1($m)

C r e d i t i m p a i r m en t c h a r g e/(r el ease) – c ash1 ( $ m )3,758

D i v i d en d p e r s h a r e 2( c e n t s)

2021

12.3

2021

2020

11.3

2020

142
60

Information has been presented on a cash profit from continuing operations basis.
The Directors propose a final dividend of 72 cents fully franked for Australia tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 8 cents per ordinary share.

ADJUSTMENTS BEWEEN STATUTORY PROFIT AND CASH PROFIT ($m)

6,179

96

0

6,198

Revenue andexpense hedges

Structured
creditintermediation
trades2021 Cashprofit continuing
operations

GROUP
GROUP PROFITPROFIT RESULTSRESULTSGROUP PROFIT RESULTS
GROUPPROFIT
GROUP PROFIT RESULTSRESULTS

56

2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Statutory
Cash
Statutory
Cash
Statutory
Cash
Statutory
Cash
Statutory
Cash
Statutory
Cash
IncomeStatement
$m
$m
$m
$m
Statutory
Cash
Statutory
Cash
Income Statement
$m
$m
$m
$m
Statutory
Cash
Statutory
Cash
Income Statement
$m
$m
$m
$m
IncomeStatement
$m
$m
$m
$m
IncomeStatement
$m
$m
$m
$m
Net
interest
income14,161
14,161
14,04914,049Net interest income
14,161
14,161
14,04914,049Net interest income
14,161
14,161
14,04914,049Net
income14,161
14,161
14,04914,049Other
operatingincome
3,259
3,286
3,588
3,703
Net interest
interest
income14,161
14,161
14,04914,049Other
operatingincome
3,259
3,286
3,588
3,703
Other operating income
3,259
3,286
3,588
3,703
Other
operatingincome
3,259
3,286
3,588
3,703
Operatingincome17,637
17,752
17,42017,447
Other
operatingincome
3,259
3,286
3,588
3,703
Operating income
17,637
17,752
17,42017,447
Operating income
17,637
17,752
17,42017,447
Operating expenses
income17,637
17,752
17,42017,447(9,383)(9,383)(9,051)(9,051)income17,637
17,752
17,42017,447
Operatingexpenses(9,383)(9,383)(9,051)(9,051)(9,383)(9,383)Operating expenses(9,051)(9,051)
Operatingexpenses(9,383)(9,383)(9,051)(9,051)
Profitbeforecreditimpairment
andincome
tax
8,254
8,369
8,369
8,396
Operatingexpenses(9,383)(9,383)(9,051)(9,051)
Profit before credit impairment and income tax
8,254
8,369
8,369
8,396
Profit before credit impairment and income tax
8,254
8,369
8,369
8,396
Profitbeforecreditimpairment
andincome
tax
8,254
8,369
8,369
8,396
Creditimpairment(charge)/release(2,738)(2,738)567
567
Profit before
credit (charge)/release
impairment and income tax
8,254
8,369
8,369
8,396
Creditimpairment(2,738)(2,738)567
567(2,738)(2,738)Credit impairment (charge)/release
567
567
Creditimpairment(charge)/release(2,738)(2,738)567
567
Profitincome
tax
8,936
8,963
5,516
5,631
Creditbefore
impairment(charge)/release(2,738)(2,738)567
567
Profitbeforeincome
tax
8,936
8,963
5,516
5,631
Profit before income tax
8,936
8,963
5,516
5,631
Profitbeforeincome
tax
8,936
8,963
5,516
5,631
Incometax
expense(2,756)(2,764)(1,840)(1,872)
Profit before
income tax
8,936
8,963
5,516
5,631
Incometax expense(2,756)(2,764)(1,840)(1,872)
Income tax expense(2,756)(2,764)(1,840)(1,872)
Income(2,756)(2,764)(1,840)(1,872)
Non-controllinginterests
(1)
(1)
(1)
(1)
Income tax
tax expense
expense(2,756)(2,764)(1,840)(1,872)
Non-controllinginterests
(1)
(1)
(1)
(1)
Non-controlling interests
(1)
(1)
(1)
(1)
Non-controllinginterests
(1)
(1)
(1)
(1)
3,675
3,758
Profit
after
tax
from
continuing
operations
6,179
6,198
Non-controllinginterests
(1)
(1)
(1)
(1)
3,675
3,758
Profit after tax from continuing operations
6,179
6,198
3,675
3,758
6,179
6,198
Profit after tax from continuing operations
3,675
3,758
Profit
after
tax
from
continuing
operations
6,179
6,198
Profit/(Loss)
after
tax
from
operations
(98)
(98)
(17)
(17)
3,675
3,758
Profit after tax
fromoperations
6,179
6,198
Profit/(Loss)after
tax continuingfrom discontinued
discontinued
operations
(98)
(98)
(17)
(17)
(98)
(98)
Profit/(Loss) after tax from discontinued operations
(17)
(17)
Profit/(Loss)
after
tax
from
discontinued
operations
(98)
(98)
(17)
(17)
3,577
3,660
Profit
for
the
year
6,162
6,181
Profit/(Loss)
after
tax
from
discontinued
operations
(98)
(98)
(17)
(17)
3,577
3,660
Profit for the year
6,162
6,181
3,577
3,660
Profit for the year
6,162
6,181
3,577
3,660
Profit
6,162
6,181
3,577
3,660
Profit forfor thethe year
year
6,162
6,181
Statutory
Statutory profit
profit after
after tax
tax forfor thethe yearyear ended
ended 30
30 September
September 2021
2021 increased
increased 72%
72% onon thethe prior
prior year
year toto $6,162$6,162 million.
million. Statutory
Statutory return
return on
on equity
equity isis
Statutory
profitafterearnings
tax for the
year
ended
30 cents,
September
2021 increased72%
onyear.
the prior year to $6,162 million. Statutory return on equity is
9.9%
andstatutory
per
share
is
217.1
an
increase
of
72%
on
prior
Statutory
profit
after
tax
for
the
year
ended
30
September
2021
increased
72%
on
the
prior
year
to
$6,162
million.
Statutory
returnonequityis9.9%
andstatutory
earnings
per
share
is
217.1
cents,
anincrease
of
72%
on
prior
year.
Statutory
profit
after
tax
for
the
year
ended
30
September
2021
increased
72%
on
the
prior
year
to
$6,162
million.
Statutory
returnonequityis
9.9% and statutory earnings per share is 217.1 cents, an increase of 72% on prior year.
9.9%
andstatutory
earnings
per
share
is
217.1
cents,
anincrease
of
72%
on
prior
year.
9.9%Groupand statutory
earnings
pershare ismeasure,217.1 cents,
an increaseof 72% on prior
year.
The
uses
cash
profit,anon-IFRS
toassesstheperformanceofitsbusiness
activities.
Itisanindustry-widemeasurewhich
The Group uses cash profit, a non-IFRS measure, to assess the performance of its business activities. It is an industry-wide measure which
The
Group
uses cash withprofit,a non-IFRS
measure,to assesstheprofit
performanceof itsstatutory
businessprofit
activities.
It is an industry-widemeasurewhich theenablescomparison
ourpeer group.
group.
We calculate
calculatecashby adjusting
adjustingfor non-core
non-core
items. In
In general,
general,it represents
represents
The
Group
uses
profit,aa non-IFRS
measure,totheperformanceofbusiness
activities.
Itmeasurewhich
enablescomparison
our
peer
We
cash
by
for
items.
itThe
Group
uses cash
cash withprofit,non-IFRS
measure,to assessassesstheprofit
performanceof itsitsstatutory
businessprofit
activities.
It is
is an
an industry-wideindustry-widemeasurewhich theenablescomparison
with
our
peer
group.
We
calculatecash
profitbyadjustingstatutory
profitfor
non-core
items.
In
general,itrepresents
thefinancialperformancewithof ourourcorebusiness
activities.
Wecashuse profit
cash profit
profitinternallyto set
set targets
targets
andnon-core
incentivise
our InSeniorExecutives
and theenablesourpeergroup.
calculatebystatutory
profititems.
general,itfinancialperformanceofactivities.
We
use
cash
internallytoandincentivise
ourSeniorExecutives
andenables comparison
comparison
withourcorepeerbusinessgroup. WeWe
calculatecash
profitby adjusting
adjustingstatutory
profit forfor
non-core
items.
In
general,it represents
represents
thefinancialperformance
of
our
core
business
activities.
We
use
cash
profitinternallytosettargetsandincentivise
ourSeniorExecutives
andleaders throughthroughour remuneration
remunerationplans. Refer
Refer
to page
page
57use
forcashadjustments
betweenstatutory
andcash
profit. The
The
adjustments
made andin
financialperformanceofactivities.
We
profittosetandincentivise
ourSeniorleaders
ourplans.
toforadjustments
betweenprofit.
madeinfinancialperformanceof ourour corecore businessbusiness
activities.
We57
cash
profit internallyinternallyto statutory
set targets
targetsand
andcashincentivise
ouradjustments
Senior Executives
Executives
andleaders throughour remunerationplans.
Refer
to page57use
foradjustments
betweenstatutory
andcash
profit. The
adjustments
madeinarriving
atcash
profitareincludedinstatutory
profitwhichissubject
toaudit
withinthecontext
oftheexternal
auditor’s
audit
of
the
2021
leaders
throughourremunerationplans.
Refer
to
page
57
for
adjustments
betweenstatutory
andcash
profit.
The
adjustments
madeinarriving
at cash profit
are included instatutorywhich
is subject
to audit
within statutory
the context
the external
auditor’s
audit ofthe 2021
leaders throughour remunerationplans.
Refer profit
to page
57 foradjustments
betweenandof
cash
profit. The
adjustments
madeinarriving
atcash
profitareincludedinstatutory
profitwhichissubject
toaudit
withinthecontext
oftheexternal
auditor’s
audit
of
the
2021
Financial
Report.
arriving
atReport.
cash
Financialarriving
cash profit
profit areare included
included inin statutory
statutory profit
profit which
which isis subject
subject toto audit
audit within
within thethe context
context ofof thethe external
external auditor’s
auditor’s audit
audit ofof thethe 2021
2021
FinancialatReport.
Financial
Report.
Financial
Report.
Cashprofitisnotsubject
to
audit
by
the
external
auditor.
Our
external
auditorhas
informedthe
Audit
Committeethatadjustments
betweenCash profit is not subject to audit by the external auditor. Our external auditor has informed the Audit Committee that adjustments between
Cash profit
is notsubject
to audit
bydeterminedthe externalon
auditor.
Our external
auditoreachhas ofinformed
the Audit
Committee that adjustments between
statutory
andcashsubject
profit have
have
been
consistentbasis acrossacrossthe periods
periods
presented.
Cashprofitistobythe
auditor.
Our
auditorhas
informedtheCommittee
statutory
andcash
profitbeen
aa consistent
basis
the
presented.
Cashprofitis notnot
to audit
audit
bydeterminedthe external
externalon
auditor.
Our external
external
auditoreachhas ofinformed
the Audit
Audit
Committee thatthat adjustments
adjustments between
betweenstatutory
andcashsubject
profit havebeen
determinedona consistentbasis acrosseachof
the periods
presented.
statutory
statutory andand cashcash profit
profit have
have been
been determined
determined on
on aa consistentconsistent basis
basis acrossacross each
each ofof thethe periods
periods presented.
presented.
DISCONTINUEDDISCONTINUED OPERATIONSOPERATIONSDISCONTINUED OPERATIONSDISCONTINUEDOPERATIONS
We
completed
thesale
DISCONTINUEDOPERATIONS
We completed thesale ofof ourour alignedaligned dealer
dealer groups
groups businessbusiness andand our
our OnePath
OnePath pensions
pensions andand investment
investment businessbusiness to
to IOOFIOOF Holdings
Holdings Limited,
Limited,We
completedthe salebusinessof our aligned
dealergroupsbusinessand our
OnePathpensions
and investment
business
to IOOFresults
Holdings
Limited,
and
our
life
insurancetoZurichFinancial
Services
Australia
across
the
2020
and
2019
financial
years.
The
financialofWe
completed
the
sale
of
our
aligneddealergroupsbusiness
and
our
OnePathpensionsandinvestment
business
to
IOOF
Holdings
Limited,andour life insurance
business
to ZurichFinancial
Services
Australia
acrossthe 2020
and 2019
financial years.
The financial
resultsof thesetheseWecompleted
the
sale
of
our
aligneddealergroupsbusiness
and
our
OnePathpensionsandinvestment
business
to
IOOF
Holdings
Limited,
and
our
life
insurancebusinesstoZurichFinancial
Services
Australia
across
the
2020
and
2019
financial
years.
The
financialresultsofthesebusinesses
aretreatedasdiscontinued
operations
fromafinancialreportingperspective.
The
financialresults
after
transaction
completion
and
our
life
insurancebusinesstoZurichFinancial
Services
Australia
across
the
2020
and
2019
financial
years.
The
financialresultsofthesebusinesses
aretreatedbusinessas discontinued
operations
from a financial
reportingperspective.
The financial
results
afterfinancialtransaction
completion
and
our
life
insurancetoZurichFinancial
Services
Australia
across
the
2020
and
2019
financial
years.
The
resultsofthesebusinesses
are treatedas discontinued
operations
from a financial
reportingperspective.
The
financialTransition
results after
transaction
completion
primarily
relatetooperationalonandrecoverybasedrespective
Service
Agreements.
Therebusinessesareasoperations
fromfinancialresultstransaction
completion
primarily
relateto residual
residual
operational costs
costs
on separation
separationand part
partreporting
recovery perspective.
based onon thetheTherespective
Service
Agreements.
Therebusinesses
are treatedtreatedas discontinued
discontinued
operations
from aa financial
financialreportingperspective.
The
financialTransition
results after
after
transaction
completion
primarily
relatetoresidual
operational
costs
onseparation
andpart
recovery
based
on
the
respective
Transition
Service
Agreements.
There
were
no
material
financial
impactsfromthediscontinued
operations
in
the
2021
or
2020
financial
years.
primarily
relatetoresidual
operational
costs
onseparation
andpart
recovery
based
on
the
respective
Transition
Service
Agreements.
werenomaterial
financial
impactsfromthediscontinued
operations
in
the
2021
or
2020
financial
years.
primarily
relate tofinancial
residual impacts
operationalon separationoperations
and part recovery
based
thefinancial
respective
Transition Service Agreements. There
There
were
no material
fromcosts
the discontinued
in the 2021
or on
2020
years.
were
were nono materialmaterial financial
financial impacts
impacts fromfrom thethe discontinued
discontinued operations
operations inin thethe 2021
2021 oror 2020
2020 financial
financial years.
years.

(77)

2021 Statutory
profit continuing
operations

Economic
hedgesAdjustments between continuing operations statutory profit and cash profit are summarised below:
Adjustment
Economic hedges
2021: ($77) million
2020: $121 million
Revenue andexpense hedges
2021: $96 million
2020: ($36) million
Structured credit
intermediation
trades2021: nil
2020: ($2) million

Reason for the adjustment
The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in
accordance with accounting standards, result in fair value gains and losses being recognised within the Income
Statement. We remove the fair value adjustments from cash profit since the profit or loss resulting from the hedgetransactions will reverse over time to match with the profit or loss from the economically hedged item as part ofcash profit. This includes gains and losses arising from derivatives not designated in accounting hedge
relationships but which are considered to be economic hedges, including hedges of foreign currency debt
issuances and foreign exchange denominated revenue and expense streams, primarily NZD and USD (and USD
correlated), as well as ineffectiveness from certain designated accounting hedges.
ANZ entered into a series of structured credit intermediation trades prior to the Global Financial Crisis involving
the selling of credit default swaps (CDSs) as protection over specific debt structures and purchasing CDS
protection over the same structures. We have subsequently exited our positions with the remaining two CDS
deals having matured during the 2021 financial year.

ANZ 2021 Annual Review
ANZ 2021 ANNUAL REPORT

57

57

OVERVIEWPERFORMANCE

HOW WE

CREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

GROUP CASH PROFIT PERFORMANCE FROM CONTINUING OPERATIONSLARGE/NOTABLE ITEMS INCLUDED IN CASH PROFIT FROM CONTINUING OPERATIONSCash profit performance and the analysis thereof has been presented on a cash profit from continuing operations basis.

Within continuing cash profit, the Group recognised a number of large/notable items. The impact of these items on a post-tax basis is
as follows:

CASH PROFIT FROM CONTINUING OPERATIONS ($m)

Gain/(Loss) on sale from divestments

3,305

UDC Finance (UDC)
New Zealand legacy insurance portfolio
ANZ Share Investing

6,198
(892)

2021
$m

2020
$m

13
(251)

(34)
-

-

57

(221)
(48)
-

(279)
(138)
(815)

(347)
(92)
-

(66)
(34)
(115)
(77)

Divested business results
112

3,758

UDC Finance (UDC)

332
(417)

2020 Cashprofit continuing
operations

Net interest
incomeOther
operatingincomeOther large/notable items

OperatingexpensesCreditimpairment

Income tax
expense &non-controllinginterests

2021 Cashprofit continuing
operations

2021
$m

2020
$m

Movt

Net interest income
Other operating income

14,161
3,286

14,049
3,703

1%
-11%

Operating income

17,447(9,051)

17,752(9,383)

-2%
-4%

8,396
567

8,369
(2,738)0%
large

Income tax expense
Non-controlling interests

8,963(2,764)(1)

5,631(1,872)
(1)

59%
48%
0%

Cash profit from continuing operations

6,198

3,758

65%

Operating expenses
Profit before credit impairment and income tax
Credit impairment (charge)/release
Profit before income tax

Customer remediation
Litigation settlements
Accelerated software amortisation
Asian associate impairments
Asian associate items
Lease-related items
Restructuring
Goodwill write-off

Cash profit from continuing operations increased $2,440 million (65%) compared with the 2020 financial year.
Net interest income increased $112 million (1%) driven by 1 bps increase in net interest margin. The increase of 1 bps was driven by deposit
margin management across all divisions, favourable wholesale funding costs, and a reduction in lower margin Markets average interest
earning assets as a result of lower reverse repurchase agreements. This was partially offset by growth in lower yielding liquid assets and theimpact of low interest rates on earnings on capital and replicating deposits. Average interest earning assets increased $0.8 billion driven byhigher central bank balances, higher liquid assets, and home lending growth across the New Zealand and Australia Retail and Commercial
divisions. This was partially offset by a decrease in Institutional lending, lower reverse repurchase agreements and the impact of foreign
currency translation movements.
Other operating income decreased $417 million (-11%) driven by a decrease of $754 million in Markets other operating income following
normalisation of financial market conditions and the impact of surplus system liquidity, a decrease in share of associates’ profit of $331 million,a loss of $251 million associated with the disposal of ANZ Share Investing, and a decrease in net fee and commission income driven by lower
volumed related fees due to the impact of COVID-19. This was partially offset by the impairment of Asian associates of $815 million in the prioryear and favourable adjustments to loans measured at fair value.
Operating expenses decreased $332 million (-4%) driven by an accelerated software amortisation charges of $197 million, goodwill
impairment of $77 million and lease-related items of $50 million all in the prior year, lower restructuring expenses of $34 million andproductivity benefits, partially offset by higher investment spend and a litigation settlement of $69 million.
Credit impairment charges decreased $3,305 million driven by a decrease in the collectively assessed credit impairment charges reflecting an
improved economic outlook together with improvements in portfolio mix, and a decrease in individually assessed credit impairment charges.

ANZ 2021 Annual Review

58
58

ANZ 2021 ANNUAL REPORTANZ 2021 ANNUAL REPORT59

59

OVERVIEW

HOW WEPERFORMANCECREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Description of large/notable items:
Item

Description

Gain/(Loss) on salefrom divestments

The 2021 financial year included a loss on disposal of ANZ Share Investing, and a gain on sale of the New Zealandlegacy insurance portfolio. The 2020 financial year included a loss on sale of the UDC business.

Divested businessresults

The 2020 financial year included the divested business results of UDC.

Customer
remediation

Customer remediation includes provisions for expected refunds to customers, remediation project costs andrelated customer and regulatory claims, penalties and litigation outcomes.

Litigation
settlements

During the 2021 financial year, the Group reached an agreement to settle a United States class action related to
the Bank Bill Swap Rate (BBSW) and the trading of BBSW-based products. The settlement is without admission of
liability and remains subject to negotiation and execution of complete settlement terms as well as court approval.
The Group recognised a provision in relation to the settlement and related expenses during the year.

Accelerated softwareamortisation

During the 2020 financial year, the Group recognised an accelerated amortisation charge arising from the revised
application of the Group’s software amortisation policy in the 2020 financial year reflecting the shorter useful life ofsoftware caused by rapidly changing technology and business requirements.

Asian associate
impairments

During the 2020 financial year, the Group recognised an impairment in respect of two of the Group’s investments
to adjust their carrying values in line with their value-in-use calculations. No further impairments were recognisedin the 2021 financial year (refer to Note 26 Investments in Associates in the Financial Report for further details).

Asian associate items

The Group recognised the following adjustments to equity accounted earnings from its Asian associates:
 AmBank 1MDB settlement: following AMMB Holdings Berhad’s (AmBank) agreement with the Malaysian
Ministry of Finance to resolve potential claims relating to its involvement with 1Malaysia Development Berhad(1MDB), the Group recognised a $212 million reduction in equity accounted earnings after tax reflecting its
share of the settlement provision during the 2021 financial year.
 AmBank goodwill impairment: during the 2021 financial year, AmBank partially impaired goodwill and theGroup recognised a $135 million reduction in equity accounted earnings after tax reflecting its share of theimpairment.
 PT Panin AASB 9 adjustment: when the Group adopted AASB 9 Financial Instruments on 1 October 2018, an
estimate of PT Bank Pan Indonesia (PT Panin)’s transition adjustment was recognised through opening retained
earnings to align accounting policies. PT Panin adopted AASB 9 during the 2020 financial year recognising atransition adjustment in retained earnings. The $66 million represents the Group’s equity accounted share of
the transition adjustment net of amounts previously adjusted by the Group on 1 October 2018.

Lease-related items

Following the adoption of the new lease accounting standard (AASB 16) on 1 October 2019, the Group recognised
additional charges which were presented as a large/notable item at the time as the 2019 comparatives wereprepared under the previous lease accounting standard (AASB 117). The ongoing AASB 16 impacts for the 2020
financial year are now presented on a consistent basis to the 2021 financial year. The residual lease related item
relates to non-recurring items recognised in the 2020 financial year.

Restructuring

Restructuring charges largely related to business and property changes in Australia Retail and Commercial divisionand operational changes in Technology, Services & Operations (TSO) and Group Centre division.

Goodwill write-off

The Group recognised the following goodwill write-off during the 2020 financial year:

OUR PERFORMANCE (continued)

ANALYSIS OF CASH PROFIT PERFORMANCE
Net interest income
GROUP NET INTEREST MARGIN FROM CONTINUING OPERATIONS (bps)

7

0

1

6
163

164
(1)

(7)
159
(5)

2020 Cashnet interest
margin1.

Wholesalefunding &depositpricingAssetpricing

Asset andfunding mix

Liquidity

Impact ofrates net of
repricing2021 Cashnet interest
marginsubtotal

Large/
notableitems

2021 Cashnet interest
margin

2021
$m

2020
$m

Movt

14,161
1.64
863,691
712,540

14,049
1.63

1%
1 bps

862,882
679,3360%5%Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.

Net interest income
Net interest margin (%) - cash1
Average interest earning assets
1

Average deposits and other borrowings
1.

Markets
Balance
Sheet
activities 1

Includes the major bank levy of -$346 million (2020: -$406 million).

Net interest income increased $112 million (1%) driven by 1 bps increase in net interest margin.
Net interest margin increased 1 bps driven by deposit margin management across all divisions, favourable wholesale funding costs, andreduction in lower margin Markets average interest earning assets as a result of lower reverse repurchase agreements. This was partially offset
by growth in lower yielding liquid assets and the impact of low interest rate on earnings on capital and replicating deposits.
Average interest earning assets increased $0.8 billion (flat) driven by higher central bank balances, higher liquid assets, and home lending
growth across the New Zealand and Australia Retail and Commercial divisions. This was partially offset by a decrease in Institutional lending,lower reverse repurchase agreements and the impact of foreign currency translation movements.
Average deposits and other borrowings increased $33.2 billion (5%) driven by growth in at-call deposits across all divisions and increases incommercial paper and certificates of deposit, partially offset by lower term deposits and the impact of foreign currency translation
movements.

 Pacific division: the impact of COVID-19 on the economies of the Pacific region had been significant andconditions were expected to take some time to recover. Goodwill of $50 million was impaired.
 New Zealand division: as a result of changes in the economic environment and outlook, the Group announced
its intention to begin winding up the Bonus Bonds business in the New Zealand division by 31 October 2020.
As a result, the Group wrote off the associated goodwill of $27 million.

ANZ 2021 Annual Review

60
60

ANZ 2021 ANNUAL REPORTANZ 2021 ANNUAL REPORT61

61

OVERVIEWPERFORMANCE

HOW WE

CREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

Other operating income

Operating expenses

OTHER OPERATING INCOME ($m)

OPERATING EXPENSES ($m)

68

3,703
3,286

820

(152)

9,383
(84)

(754)
(331)
(236)

9,051

(34)
(46)

2020 Cashother
operatingincomeNet fee andcommission
income 1

MarketsotheroperatingincomeShare ofassociates’
profit/(loss)

Other 12021 Cashother
operatingincome2020 Cashoperatingexpenses

2021
$m

2020
$m

Movt

Net fee and commission income1
Markets other operating income
Share of associates' profit/(loss)
Other1

2,063
1,130
(176)
269

2,215
1,884
155
(551)

-7%
-40%
large
large

Total cash other operating income

3,286

3,703

-11%

1.

Excluding the Markets business unit.

Net fee and commission income decreased $152 million (-7%) driven by lower volume related fees due to the impact of COVID-19, higher
customer remediation, reduction or removal of fees, and reduced commission income from the wind-up of the Bonus Bonds business.
Markets other operating income decreased $754 million (-40%) driven by lower income across the Rates, Credit and Capital Markets, Foreign
Exchange and Commodities businesses following normalisation of financial market conditions and the impact of surplus system liquidity, anda credit valuation adjustment gain in the prior year. This was partially offset by higher Balance Sheet income from net realised gains during theperiod and customer remediation provision releases.
Share of associates' profit decreased $331 million driven by the Group’s equity accounted share of AmBank 1MDB settlement and goodwill
impairment of $347 million, and a decrease in equity accounted share of profits of $52 million. This was partially offset by the Group’s equity
accounted share of PT Panin’s transition adjustment on its adoption of AASB 9 of $68 million in the prior year.
Other increased $820 million driven by the impairment of the Asian associates of $815 million in the prior year, higher realised gains on
economic hedges against foreign currency denominated revenue streams, favourable adjustments to loans measured at fair value in theInstitutional division, higher insurance income and a loss on sale of the UDC business in the prior year. This was partially offset by the loss
associated with the disposal of ANZ Share Investing of $251 million.

Personnel

Premises

Technology

Personnel
Premises
Technology
Restructuring
Other
Total cash operating expenses from continuing operations
Full time equivalent staff (FTE) from continuing operations
Average full time equivalent staff (FTE) from continuing operations

Restructuring

Other

2021
$m
4,946
705
1,588
127
1,685
9,051
39,68438,0432021 Cashoperatingexpenses

2020
$m
4,878
789
1,824
161
1,731
9,383
37,50637,728

Movt
1%
-11%
-13%
-21%
-3%
-4%
6%
1%

Personnel expenses increased $68 million (1%) driven by an uplift in investment in digital capabilities, cloud enabled simplification andmeeting regulatory and compliance obligations, as well as additional resourcing for COVID-19 hardship support, regulatory mandated
complaints support and Home Loans operations. This was partially offset by the continued benefits enabled by customers embracing digitalchannels, and favourable foreign currency translation movements.
Premises expenses decreased $84 million (-11%) driven by ongoing optimisation of property footprint across all geographies and lower leaserelated costs.
Technology expenses decreased $236 million (-13%) driven by accelerated amortisation of $197 million and lease-related items of $50 million
in the prior year, benefits from vendor contract negotiations, lower amortisation and favourable foreign currency translation movements. Thiswas partially offset by increased spend on investment initiatives.
Restructuring expenses decreased $34 million (-21%) driven by lower charges in the Australia Retail and Commercial and New Zealanddivisions, partially offset by operational changes in the TSO and Group Centre division.
Other expenses decreased $46 million (-3%) driven by a goodwill write-off of $77 million in the prior year, lower travel expenses and lower
freight and cartage. This was partially offset by increased spend on investment initiatives, and a litigation settlement of $69 million.

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63

OVERVIEW

HOW WEPERFORMANCECREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

Credit impairment

GROSS IMPAIRED ASSETS BY DIVISION ($m)
2021
(823)
256
(567)
1,965
342.5
4,882
35.0%
1.22%

Collectively assessed credit impairment charge/(release) ($m)
Individually assessed credit impairment charge ($m)
Credit impairment charge/(release) ($m)
Gross impaired assets ($m)
Credit risk weighted assets ($b)
Total allowance for expected credit losses (ECL) ($m)
Individually assessed as % of gross impaired assets
Collectively assessed as % of credit risk weighted assets

2020
1,717
1,021
2,738
2,459
360.0
5,899
36.2%
1.39%

Movt
large
-75%
large
-20%
-5%
-17%

2,459

270
12

0

1,965

Pacific

TSO andGroup Centre

2021 Gross
impaired assets(183)

COLLECTIVELY ASSESSED CREDIT IMPAIRMENT CHARGE/(RELEASE) ($m)

(593)

1,717

2020 Gross
impaired assets

Australia Retailand Commercial

Institutional

New ZealandGross impaired assets decreased $494 million (-20%). The decrease in the Australia Retail and Commercial division was driven by therepayment of a single name restructured exposure and decreases in the retail portfolio as underlying delinquency flows remained subdued
due to the impact of various COVID-19 support initiatives. The decrease in the New Zealand division was driven by upgrade of a large Agricustomer and a number of Agri asset sales. The increase in the Institutional division was driven by impairments of a small number of wellsecured single name exposures.
(1,672)TOTAL ALLOWANCE FOR EXPECTED CREDIT LOSSES ($m)(532)

2020 Collectively
assessed credit
impairment charge

Australia Retailand Commercial

Institutional

3
(309)

(30)

New ZealandPacific(823)
TSO andGroup Centre

2021 Collectively
assessed credit
impairment release

5,899

The collectively assessed credit impairment charge decreased $2,540 million. Collectively assessed credit impairment provision increased
substantially in the prior year driven by the forward-looking impacts of the COVID-19 pandemic. Improvement in the economic outlook
together with improvements in portfolio mix resulted in collectively assessed credit impairment provision releases in the current year.
(824)

INDIVIDUALLY ASSESSED CREDIT IMPAIRMENT CHARGE ($m)

(130)

17

3

4,882

Pacific

TSO andGroup Centre

2021 Total
allowance
for expectedcredit losses

(83)

1,021
2020 Total
allowance
for expectedcredit losses

(401)

(251)

0
(112)

256

(1)

Australia Retailand Commercial

Institutional

New Zealand

The collectively assessed allowance for expected credit losses decreased $813 million (-16%) driven by a reduction of $448 million from theimproving economic outlook partially offset by changes to scenario weightings and an allowance for model uncertainty due to the continuing
pandemic and reductions in government support programs, a reduction of $282 million due to lower lending volumes and changes in
portfolio composition, and a reduction of $153 million attributable to changes in credit risk. This was partially offset by an increase of $60
million in management adjustments and an increase of $10 million from foreign currency translation movements.
The individually assessed allowance for expected credit losses decreased $204 million (-23%) due to the impact of COVID-19 support
initiatives.

2020 Individuallyassessed credit
impairment charge

Australia Retailand Commercial

Institutional

New ZealandPacific

TSO andGroup Centre

2021 Individuallyassessed credit
impairment charge

The individually assessed credit impairment charge decreased by $765 million (-75%). The decrease in the Australia Retail and Commercial
division was driven by lower impairments as the underlying flows remained subdued due to the impact of various COVID-19 support
initiatives. The decrease in the Institutional division was driven by a number of impairments in the prior year. The decrease in the New Zealanddivision was driven by lower transitions to impairment and the write-back of a large Agri customer.

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65

65

OVERVIEW

HOW WEPERFORMANCECREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

DIVISIONAL PERFORMANCE
Australia
Retail andCommercial

Net interest margin
Operating expenses to operating income

DIVISIONAL PERFORMANCE

Pacific

TSO andGroup
CentreGroup

Australia Retail and Commercial

2.33%
39.7%

2.98%
89.4%

n/a
n/a

1.64%
51.9%

1,887

1,508

(3)

(811)

6,198

158.2
239.6
5,332

128.5
97.7
7,060

1.8
3.8
1,089

11,723629.7
593.6
39,684Australia
Retail andCommercial

Institutional

New
Zealand

Pacific

TSO andGroup
CentreLending volumes increased driven by home loan growth, partially offset by lower unsecured lending due to COVID-19 lockdown
impacts and a decrease in commercial lending. Net interest margin decreased driven by unfavourable lending mix from stronger
growth in lower margin fixed rate home loans, deposit margin compression and lower earnings on capital. This was mostly offset bydeposit and asset repricing benefits, favourable funding deposit mix due to strong deposit growth, and lower funding costs. Other
operating income decreased driven by the loss associated with the disposal of ANZ Share Investing and lower credit card andinternational transaction volumes due to COVID-19 impacts. Operating expenses decreased driven by productivity benefits, lower
restructuring expenses, and lease-related items and accelerated amortisation in the prior year. This was partially offset by higher
investment spend and customer remediation. Credit impairment charges decreased driven by a collectively assessed credit
impairment release reflecting an improved economic outlook, and lower individually assessed credit impairment charge as theunderlying flows remained subdued due to the impact of various COVID-19 support initiatives.

Group

Net interest margin
Operating expenses to operating income

2.59%
45.1%

0.76%
43.9%

2.26%
44.8%

3.10%
106.2%

n/a
n/a

1.63%
52.9%

Cash profit from continuing
operations ($m)

2,337

1,854

1,017

(62)

(1,388)3,758

Net loans and advances ($b)
Customer deposits ($b)
Number of FTE

339.4
234.6
14,078

157.6
223.3
5,291

116.6
91.0
6,679

1.9
3.5
1,113

1.6
10,345617.1
552.4
37,506

Institutional

New
Zealand

2.58%
45.3%

0.81%
49.1%

Cash profit from continuing
operations ($m)

3,617

Net loans and advances ($b)
Customer deposits ($b)
Number of FTE

341.2
252.5
14,4802021

2020

Institutional
Lending volumes increased in Corporate Finance and Transaction Banking, partially offset by a decrease in Markets. Customer
deposits increased in Transaction Banking and Markets. Net interest margin ex-Markets increased driven by improved lending
margins. Other operating income decreased driven by lower Markets revenue following normalisation of financial market conditions
and the impact of surplus system liquidity, partially offset by lower customer remediation. Other operating expenses decreased
driven by productivity benefits and accelerated amortisation in the prior year, partially offset by a litigation settlement and higher
restructuring expenses. Credit impairment charges decreased driven by a collectively assessed credit impairment release reflecting
an improved economic outlook, and lower individually assessed credit impairment charges in Transaction Banking.
New ZealandLending volumes increased driven by home loan growth. Net interest margin increased driven by favourable deposit mix, lower
funding costs and deposit repricing benefits, partially offset by headwinds from lower home loan margins due to competition,
unfavourable lending mix with growth weighted to fixed rate home loans, and lower income post UDC sale completion in the prioryear. Operating expenses decreased driven by lower customer remediation and restructuring expenses, lower expenses post UDC
sale completion, realisation of productivity benefits, and goodwill impairment and accelerated software amortisation in the prioryear. This was partially offset by higher personnel costs and investment spend. Credit impairment charges decreased driven bycollectively assessed credit impairment release reflecting an improved economic outlook, and lower individually assessed credit
impairment charge due lower transitions to impairment and the write-back of a large Agri customer.
Pacific
Operating income decreased driven by the full year impact of Commercial portfolio repricing and reduced card fees due to borderclosures. Operating expenses were lower largely due to a goodwill write-off in the prior year. Credit impairment charges decreased
driven by lower collectively assessed credit impairment charges.
TSO and Group Centre
The 2021 financial year included the losses from the Group’s share of AmBank 1MDB settlement and goodwill impairment. The 2020
financial year included the impairment of the Asian associates and a loss on sale of UDC.

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67

OVERVIEW

HOW WEPERFORMANCECREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

FINANCIAL POSITION OF THE GROUP – INCLUDING DISCONTINUED OPERATIONS

Funding
2021
$b

2020
$b

Customer liabilities
Wholesale funding
Shareholders’ equity

601.7
274.3
63.7

561.3
277.5
61.3

Total funding

939.7

900.1

Net Stable Funding Ratio

124%

124%

Condensed balance sheet
As at
2021
$b

2020
$b

Movt

129.7
144.3
135.3

30%
-11%
-71%

Other

168.0
127.8
38.7
629.7
14.7

617.1
15.9

2%
-8%

Total assets

978.9

1,042.3-6%

AssetsCash / Settlement balances owed to ANZ / Collateral paid
Trading and investment securities
Derivative financial instruments
Net loans and advances

Liabilities
31.5

-27%

Derivative financial instruments
Debt issuances
Other

23.1
743.1
36.0
101.1
11.9

682.3
134.7
119.7

9%
-73%
-16%

12.8

-7%

Total liabilities

915.2

981.0

-7%

Total equity

63.7

61.3

4%

Settlement balances owed by ANZ / Collateral received
Deposits and other borrowings

Cash / Settlement balances owed to ANZ / Collateral paid increased $38.3 billion (30%) driven by an increase in balances with central banks,
partially offset by decreases in reverse repurchase agreements, collateral paid and the impact of foreign currency translation movements.
Trading and investment securities decreased $16.5 billion (-11%) driven by a decrease in liquid assets in Markets.
Derivative financial assets and liabilities decreased $96.6 billion (-71%) and $98.7 billion (-73%) respectively driven by a reduction following achange in legal arrangements for the settlement of derivative transactions with a central clearing counterparty (reduction of $55.1 billion inderivative assets and $55.2 billion in derivative liabilities), and the impact of market rate movements.
Net loans and advances increased $12.6 billion (2%) driven by increases across the New Zealand ($8.2 billion) and Australia Retail andCommercial ($1.9 billion) divisions reflecting home loan growth, and the impact of foreign currency translation movements.
Settlement balances owed by ANZ / Collateral received decreased $8.4 billion (-27%) driven by decreases in collateral received and cash
clearing account balances.
Deposits and other borrowings increased $60.8 billion (9%) driven by increases in customer deposits across the Australia Retail andCommercial ($17.9 billion), Institutional ($17.6 billion) and New Zealand ($3.9 billion) divisions, increases in commercial paper ($16.5 billion)
and certificates of deposit ($5.2 billion), a further $8.1 billion drawdown of the RBA Term Funding Facility (TFF) and $1.2 billion drawdown of
the Reserve Bank of New Zealand’s (RBNZ) Funding for Lending Programme (FLP) and Term Lending Facility (TLF), and the impact of foreign
currency translation movements. This was partially offset by decreases in deposits from banks and repurchase agreements ($10.0 billion).
Debt issuances decreased $18.6 billion (-16%) driven by lower senior debt issuances which were partially replaced by the further drawdownof the TFF, classified in Deposits and other borrowings.

The Group targets a diversified funding base, avoiding undue concentration by investor type, maturity, market source and currency.
Net Stable Funding Ratio remained above the regulatory minimum of 100% throughout this period.
$10.7 billion of term wholesale debt with a remaining term greater than one year as at 30 September 2021 was issued during the year. In
addition, the Group drew down $8.1 billion of supplementary TFF funding in Australia.
RBA Term Funding Facility
As an additional source of funding, in March 2020, the RBA announced a term funding facility (TFF) for the banking system to support lending
to Australian businesses. The TFF is a three-year secured funding facility to Authorised Deposit-taking Institutions (ADIs) at a fixed rate of 0.25%.
APRA has determined that the TFF qualifies for inclusion in determining the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio(NSFR). ADIs can obtain initial funding of up to 3% of their existing credit outstanding to Australian households and businesses, and haveaccess to additional funding if they increase lending to business, especially to small and medium-sized businesses. As at 30 September 2021,
ANZ had drawn $20.1 billion under the RBA’s TFF. The TFF closed to drawdowns on 30 June 2021.
RBNZ Funding for Lending Programme and Term Lending Facility
 Between May 2020 and July 2021, the RBNZ made funds available under a term lending facility (TLF) to promote lending to businesses. The
TLF is a three to five-year secured funding facility for New Zealand banks at a fixed rate of 0.25%.
 In November 2020, the RBNZ announced a funding for lending programme (FLP) which aimed to lower the cost of borrowing for New
Zealand businesses and households. The FLP is a three-year secured funding facility for NZ banks at a floating rate of the New Zealand
Official Cash Rate (OCR). New Zealand Banks can obtain initial funding of up to 4% of their lending to New Zealand resident households,
non-financial businesses and non-profit institutions serving households as at 31 October 2020 (eligible loans). An additional allocation of up
to 2% of eligible loans is available, subject to certain conditions. The additional allocation is available until 6 December 2022, and the initial
allocation is available until 6 June 2022.
As at 30 September 2021, ANZ Bank New Zealand Limited had drawn $0.3 billion under the TLF and $0.9 billion under the FLP.
Liquidity

Total liquid assets ($b)
Liquidity Coverage Ratio (LCR) 1
1

1.

Average
2021

2020

225.9
137%

213.9
139%

Full year average, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.

The Group holds a portfolio of high quality unencumbered liquid assets in order to protect the Group’s liquidity position in a severely stressed
environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions consistent
with Basel 3 LCR: Highest-quality liquid assets (HQLA1): cash, highest credit quality government, central bank or public sector securities eligible for
repurchase with central banks to provide same-day liquidity.
 High-quality liquid assets (HQLA2): high credit quality government, central bank or public sector securities, high quality corporate debt
securities and high quality covered bonds eligible for repurchase with central banks to provide same-day liquidity.
 Alternative liquid assets (ALA): assets qualifying as collateral for the Committed Liquidity Facility (CLF) and other eligible securities listed by
the RBNZ.
The Group monitors and manages the size and composition of its liquid assets portfolio on an ongoing basis in line with regulatory
requirements and the risk appetite set by the Board.
COVID-19 has impacted the normal operations of financial markets including funding markets, however the actions of governments globallyand central banks including the RBA, RBNZ and the US Federal Reserve have provided significant liquidity support to the system and financial
markets generally. ANZ’s liquidity measures have remained above the regulatory minimum of 100% throughout this period.

ANZ 2021 Annual Review

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69

69

OVERVIEWPERFORMANCE

HOW WE

CREATE VALUEOVERVIEWOUR PERFORMANCE(continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATIONOUR PERFORMANCE (continued)

Five year summary

Capital management
2021

2020

Movt

Common Equity Tier 1 (Level 2)- APRA Basel 3

12.3%

11.3%

Credit risk weighted assets ($b)

342.5

360.0

-5%

Total risk weighted assets ($b)

416.1

429.4

-3%

APRA Leverage ratio

5.5%

5.4%

FIVE YEAR SUMMARY

APRA, under the authority of the Banking Act 1959, sets minimum regulatory requirements for banks including what is acceptable asregulatory capital and provides methods of measuring the risks incurred by the Bank.
The Group’s Common Equity Tier 1 ratio was 12.3% based on APRA Basel 3 standards, exceeding APRA’s minimum requirements. It increased
100 bps driven by cash earnings, benefits from credit impairment release, partially offset by the impact of dividends during the year.
At 30 September 2021, the Group’s APRA leverage ratio was 5.5% which is above the 3.5% proposed minimum for internal ratings-based
approach ADI (IRB ADI), which includes ANZ.
Dividends
Our financial performance allowed us to propose that a final dividend of 72 cents be paid on each eligible fully paid ANZ ordinary share,bringing the total dividend for the year ended 30 September 2021 to 142 cents per share. This represents a dividend payout ratio of 64.9% ofcash profit from continuing operations.
The proposed 2021 final dividend of 72 cents per share will be fully franked for Australian taxation purposes, and carry New Zealand
imputation credits of NZD 8 cents per ordinary share. It will be paid on 16 December 2021 to owners of ordinary shares at the close of businesson 9 November 2021 (record date).
ANZ has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2021 final dividend.
For the 2021 final dividend, ANZ intends to provide shares under the DRP through an on-market purchase and BOP through the issue of newshares.
Further details on dividends provided for or paid during the year ended 30 September 2021 are set out in Note 6 Dividends in the Financial
Report.
Shareholders Returns
E a r n ings p er sh a re –cash1 ( c ent s)
2021
2020
1.

218.3
132.7

Div id end p er sh ar e
( c en t s)
142

2021
2020

60

Information has been presented on a cash profit from continuing operations basis.

To tal shar eho l d err et u r n ( % )Div iden d p a yo u t
r a t io 1 ( % )
2021
2020

64.9
45.3

70.7

2021
2020

(36.9)

2021
$m

2020
$m

2019
$m

2018
$m

2017
$m

Financial performance - cash1
Net interest income
Other operating income
Operating expenses

14,161
3,286(9,051)

14,0493,703(9,383)

14,3394,690(9,071)

14,514
4,853(9,401)

14,875
4,941(8,967)

Profit before credit impairment and income tax
Credit impairment charge
Income tax expense
Non-controlling interests

8,396
567
(2,764)(1)

8,369(2,738)(1,872)
(1)

9,958
(795)
(2,678)
(15)

9,966
(688)
(2,775)(16)

10,849(1,199)(2,826)(15)

Cash profit from continuing operations1
Cash profit/(loss) from discontinued operations

6,198
(17)

3,758
(98)

6,470
(309)

6,487
(682)

6,809
129

Cash profit
Adjustments to arrive at statutory profit1

6,181
(19)

3,660
(83)

6,161
(208)

5,805
595

6,938
(532)

Profit attributable to shareholders of the Company

6,162

3,577

5,953

6,400

6,406

978,857
63,67612.3%
18.3%

1,042,286
61,29711.3%
16.7%

981,137
60,794
11.4%
16.4%

943,182
59,405
11.4%
16.8%

897,326
59,075
10.6%
15.8%

9.9%
0.6%
52.2%

5.9%
0.3%
53.8%

10.0%
0.6%
49.5%

10.9%
0.7%
52.0%

11.0%
0.7%
46.1%

Total return to shareholders (share price movement plus
dividends)

70.7%-36.9%

9.2%

0.6%

13.1%

Market capitalisation
Dividend (cents)
Franked portion– interim– finalShare price– high (dollars)– low (dollars)– closing (dollars)

79,483
142
100%
100%
$29.64$16.97$28.1548,83960
100%
100%$28.67$14.10$17.2280,842
160
100%
70%$29.30$22.98$28.5280,979
160
100%
100%
$30.80$26.08$28.1886,948
160
100%
100%
$32.95$25.78$29.60217.1
65.3%$21.09
2,824

126.4
47.6%
$20.04
2,840

210.0
76.2%
$19.59
2,835

221.6
72.1%
$18.47
2,874

220.1
73.4%
$17.662,937$27.91-$18.06$22.19$27.79$25.03$27.76$26.03$28.80$29.0240,221
534,166

38,579553,171

39,060506,847

39,924509,238

44,896522,425

Financial position
AssetsNet assets
Common Equity Tier 1
Common Equity Tier 1 – Internationally
Comparable Basel 32
Return on average ordinary equity (statutory)3
Return on average assets (statutory)
Cost to income ratio (cash)1
Shareholder value – ordinary shares

Share information(per fully paid ordinary share)
Earnings per share (cents) (statutory)
Dividend payout ratio (statutory)
Net tangible assets per ordinary share4
No. of fully paid ordinary shares issued (millions)
Dividend reinvestment plan (DRP) issue price– interim– finalOther information
No. of employees (full time equivalents)
No. of shareholders
1.

Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the ongoing business activities of the Group. Cash profit is not
audited; however, the external auditor has informed the Audit Committee that the adjustments have been determined on a consistent basis across each period presented.

2.

Internationally Comparable Methodology applied for 2017–2021 aligns with APRA’s information paper entitled ‘International Capital Comparison Study’ (13 July 2015). Basel Internationally
Comparable ratios do not include an estimate of the Basel l capital floor requirement.

3.

Average ordinary equity excludes non-controlling interests.
Equals shareholders’ equity less total non-controlling interests, goodwill and other intangible assets, divided by the number of ordinary shares.

4.

ANZ 2021 Annual Review

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OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEW

Five year summary (continued)

REMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

2021

2020

2019

2018

2017

Australia Retail1

4

3

4

3

4

Australia Commercial2

4

4

3

3

4

Australia Institutional3

2

1

1

1

2

New Zealand Retail4

4

4

4

4

4

New Zealand Commercial and Agricultural5

5

5

5

5

5

New Zealand Institutional6

1

1

1

1

3

Fair and responsible banking
Net Promoter Score Ranking (relative to peers)

Remuneration overview
The following pages provide a summary of the remuneration for our Key Management Personnel (KMP): Non-Executive Directors (NEDs),
Chief Executive Officer (CEO) and Disclosed Executives. In this section we have included the remuneration tables that shareholder feedback
has told us are of the most interest. The full Remuneration Report is contained in the Annual Report from page 74 onwards – it includes
discussion of the Board’s considerations around executive remuneration outcomes, with particular detail for the CEO, together with outlining
our remuneration strategy and framework. The report can be accessed via the ANZ website at anz.com/annualreport.

NED REMUNERATIONThe Human Resources (HR) Committee reviewed NED fees for 2021 and determined not to increase their fees.
2021 STATUTORY REMUNERATION – NEDS

Code of Conduct
Breaches

573

569

784

1,114

1,443

Investigations resulting in termination

114

93

151

226

262

Whistleblower reports

157

157

156

137

121

The following table outlines the statutory remuneration disclosed in accordance with Australian Accounting Standards for the NEDs.
In addition to the fees shown below, Sir John Key also received NZD 391,000 in each of 2020 and 2021 for his role as Chairman for
ANZ Bank New Zealand Limited.
NEDS

Financial Wellbeing
People reached by our financial inclusion programs7

Short-term NED benefits
Financialyear>67,600>61,352>90,850>88,224>80,074

Employee Engagement (%)8

81

86

77

73

72

Current Non-Executive Directors

Total Women in Leadership (%)9

35.3

33.4

32.5

32.0

31.1

P O'Sullivan4

Recruitment of people from under-represented groups10

255

185

224

260

250

Total community investment ($million)11

139.7

139.5

142.2

136.9

131.1

Volunteer hours

54,64566,402

134,930

124,113113,127

15.5

20.5

42.4

34.6

29.4

Employees

Community

Employee volunteering participation rate (%)12

I AtlasP Dwyer

Sustainable Finance
J Halton

Total funded or facilitated towards:
Environmentally sustainable solutions (AU$ billion)

9.18

7.57

Housing (AU$ billion)13

1.40

1.45

Other social (AU$ billion)14

2.29

0.06

7.60

4.65

4.51
J Key

Environmental Sustainability

G Liebelt

Environmental footprint
Total scope 1 & 2 (tCO2e)

111,409

134,093

156,568

171,012

180,993

Total scope 1, 2 & 3 GHG emissions (tCO2e)

153,697

203,700

250,857

266,906

273,216

J Macfarlane

Project finance portfolio15
Renewables (%)

88

87

83

76

70

Former Non-Executive Directors

Coal (%)

3

5

9

13

16

D Gonski5

Gas (%)

9

7

8

10

13

1,425

1,501

1,371

1,076

1,141

Project finance commitment to renewable energy ($million)

1. Roy Morgan Single Source, Australian population aged 14+, Main Financial Institution, six-month rolling average to Sep’17, Sep’18, Sep’19, Sep’20 & Sep’21. Ranking based on the four
major Australian banks. 2. DBM Atlas (Business). Base: Commercial (<$100 million annual turnover) Main Financial Institution customers. Six-month average to Sep’17, Sep’18, Sep’19, Sep’20 &Sep’21. Ranking based on the four major Australian banks. 3. Peter Lee Associates, 2017–2020 Large Corporate and Institutional Relationship Banking surveys, Australia. Ranking based on thefour major Australian banks. 4. Retail Market Monitor, Camorra Research, six month rolling average to Sep’17, Sep’18, Sep’19, Sep’20 & Sep’21. Ranking based on the five major New Zealandbanks. 5. Business Finance Monitor, TNS Kantar Research. Base: Commercial ($3 million–$150 million annual turnover) and Agricultural (>500K annual turnover) customers. Four quarter rolling
average to Q3’17, Q3’18, Q3’19, Q3’20 & Q3’21. Ranking based on the five major New Zealand commercial/agricultural banks. 6. Peter Lee Associates Large Corporate Relationship Banking
surveys, New Zealand 2017–2021, ranked against the Top 4 competitors. 7. Includes individuals who have participated in more than one program or product (for example, people who haveparticipated in MoneyMinded as part of Saver Plus are counted twice as they are included in both the MoneyMinded and Saver Plus totals). 8. The 2017 engagement survey was run as apulse survey sent to 10% of the bank’s employees with a 57% response rate. 9. Measures representation at the Senior Manager, Executive and Senior Executive levels. Includes all employees
regardless of leave status but not contractors (which are included in FTE). 10. Including Aboriginal and Torres Strait Islander peoples, people with disability and refugees. 11. Figure
includes forgone revenue, being the cost of providing low or fee free accounts to a range of customers such as government benefit recipients, not-for-profit organisations, students and theelderly. International transfer fees were waived for funds sent from Australia and New Zealand to the Pacific to support communities impacted by COVID-19. 12. Commenced reporting in2017. 13. Commenced reporting in 2020. 14. Commenced reporting in 2020. Includes transactions eligible for inclusion in $50 billion target but unable to be allocated to environmentally
sustainable solutions, housing or financial wellbeing. 15. Breakdowns for 2020, 2018 and 2017 do not total to 100% due to rounding.

72

Total of all Non-Executive Directors

Post-employment

Fees1
$

Non monetary
benefits2$

Super
contributions1$

Total
remuneration3$

2021

764,033

19,931

22,163806,1272020

243,331–

19,207

262,5382021

322,337–

22,163

344,500

2020

323,324–

21,176

344,500

2021

365,000––

365,000

2020

354,326–

10,674

365,000

2021

306,837–

22,163

329,000

2020

307,824–

21,176

329,000

2021

278,837–

22,163301,000

2020

279,824–

21,176

301,000

2021

341,337–

22,163

363,500

2020

342,324–

21,176

363,500

2021

296,337–

22,163

318,500

2020

297,324–

21,176

318,500

2021

57,348

3,363

5,424

66,135

2020

803,824–

21,176825,000

2021

2,732,066

23,294

138,4022,893,762

2020

2,952,101–

156,937

3,109,038

1. Year-on-year differences in fees relate to changes in Committee memberships and changes to the superannuation Maximum Contribution Base. From 1 January 2020 to 30 September 2021,
P Dwyer elected to receive all payments in fees and therefore did not receive superannuation contributions during this period. 2. Non monetary benefits generally consist of companyfunded benefits (and the associated Fringe Benefits Tax) such as car parking and gifts provided upon retirement. 3. Long-term benefits and share-based payments do not apply for the NEDs.
4. P O’Sullivan commenced as a NED on 4 November 2019 and as Chairman from 28 October 2020, so 2020 remuneration reflects a partial service year. 5. D Gonski retired as Chairman on
28 October 2020, so 2021 remuneration reflects a partial service year.

ANZ 2021 Annual Review

73

OVERVIEW

HOW WE
CREATE VALUEREMUNERATIONOVERVIEWPERFORMANCEOVERVIEWSHAREHOLDERINFORMATIONCEO AND DISCLOSED EXECUTIVES’ REMUNERATIONDISCLOSED EXECUTIVES

Threshold vesting

YEAR-ON-YEAR REMUNERATION AWARDED

The awarded value may be higher or lower than future realised value
These tables show a year-on-year comparison of remuneration awarded to the CEO and Disclosed Executives for the 2019, 2020 and 2021
performance periods. Remuneration awarded includes any cash payments (e.g. fixed remuneration and cash variable remuneration) and thevalue of deferred shares and performance rights awarded for the year but which have not yet vested (i.e. the value was not received during
the year).
2021 remuneration outcomes reflect both the overall performance of the Group and the variability in the performance of each individual/
Division. In particular, the outcomes for the CEO, the Group Executive, Australia Retail and Commercial Banking, and Group Executive, Digitaland Australia Transformation, have been most impacted by the Australian mortgage business loan processing challenges and delivery delays
in some areas of our digital transformation agenda.
Variable Remuneration outcomes for the CEO and Disclosed Executives are higher in 2021 compared to 2020. In 2020, the Board used its
discretion and applied a 50% reduction to the 2020 variable remuneration outcomes (Annual Variable Remuneration (AVR) for the CEO andVariable Remuneration (VR) for Disclosed Executives), having regard to the impact of COVID-19 on the business, shareholders, as well as thebroader community. If we compare 2021 to 2020 without the 50% COVID-19 reduction, the CEO’s total remuneration would be lower.

Financial
Fixed
year remuneration$

S Buggle

2021

Financial
Fixed
year remuneration
$

AVR
cash
$

AVR
deferredshares
$

LTVR
Total
Total performance remuneration
AVR
rightsawarded$$$AVR as % of

LTVR
Total
performance remunerationrightsawarded$$Target Maximum
opportopportunity
unity

M Carnegie

K Corbally

G Florian

M HandCEOS Elliott 2021

2,500,000 1,000,000 1,000,000 2,000,000

1,750,000

6,250,000

3,500,000

8,000,000

80%

53%

2020

2,500,000

625,000

625,000 1,250,000

1,750,000

5,500,000

3,500,000

7,250,000

50%

33%

2019

2,100,000

750,000

750,000 1,500,000

2,100,000

5,700,000

4,200,000

7,800,000

71%

48%

VR
VR
Total
VR
Total
deferred performance remuneration performance remuneration
shares1rights2
awardedrights2
awarded$$$$$Target Maximum
opport- opportunity
unity

704,000 462,000

462,000

476,000

2,104,000

952,000

2,580,000

99%

66%

2021

1,200,000 569,250

569,250

586,500

2,925,000

1,173,000

3,511,500

72%

48%

2020

1,200,000 409,200

409,200

421,600

2,440,000

843,200

2,861,600

52%

34%

2019

1,000,000 495,000

495,000

510,000

2,500,000

1,020,000

3,010,000

75%

50%

2021

1,100,000 613,800

613,800

632,400

2,960,000

632,400

2,960,000

94%

63%

2020

1,100,000 429,000

429,000

442,000

2,400,000

442,000

2,400,000

66%

44%

2019

950,000 478,500

478,500

493,000

2,400,000

493,000

2,400,000

85%

57%

2021

1,084,500 676,500

676,500

697,000

3,134,500

1,394,000

3,831,500

95%

63%

2020

1,075,000 371,250

371,250

382,500

2,200,000

765,000

2,582,500

52%

35%

2021

1,200,000 544,500

544,500

561,000

2,850,000

1,122,000

3,411,000

69%

46%

2020

1,200,000 462,000

462,000

476,000

2,600,000

952,000

3,076,000

58%

39%

2019

726,000 198,000

198,000

204,000

1,326,000

408,000

1,530,000

41%

28%

2021

907,000 594,000

594,000

612,000

2,707,000

1,224,000

3,319,000

99%

66%

2020

850,000 330,000

330,000

340,000

1,850,000

680,000

2,190,000

59%

39%

2021

1,078,682 687,167

687,167

707,991

3,161,008

1,415,981

3,868,998

97%

64%

2020

1,015,599 334,681

334,681344,8222,029,783

689,645

2,374,605

50%

33%

2019

219,440 170,255

113,504–

503,199–

503,199

65%

43%

2021

1,276,000 810,150

810,150

834,700

3,731,000

1,669,400

4,565,700

96%

64%

2020

1,200,000 363,000

363,000

374,000

2,300,000

748,000

2,674,000

46%

31%

2019

1,200,000 874,500

874,500

901,000

3,850,000

1,802,000

4,751,000

110%

74%

n/a

n/a

n/a

913,000

n/a

913,000

n/a

n/a

2020

1,100,000 363,000

363,000

374,000

2,200,000

748,000

2,574,000

50%

33%

2019

1,000,000 528,000

528,000

544,000

2,600,000

1,088,000

3,144,000

80%

53%

2021

528,000

n/a

n/a

n/a

528,000

n/a

528,000

n/a

n/a

2020

1,100,000 363,000

363,000

374,000

2,200,000

748,000

2,574,000

50%

33%

2019

1,000,000 544,500

544,500

561,000

2,650,000

1,122,000

3,211,000

83%

55%

(8 months Acting in role)

CEO

Full vesting

VR as % ofCurrent Disclosed Executives

The 2021 Long Term Variable Remuneration (LTVR) shown below has not yet been awarded to the CEO, approval will be sought fromshareholders at the 2021 AGM.

Threshold vesting

VR
cash
$

Full vesting(9 months as
Disclosed Executive)

K van der Merwe

A Watson3(3.5 months in role)

M Whelan

Former Disclosed Executives		
A George

2021

913,000(10 months to term date)

M Jablko(6 months to term date)

1. Deferred share rights for the Acting CFO. 2. Deferred share rights for the CRO. 3. Paid in NZD and converted to AUD. Year to date average exchange rate used to convert NZD to AUD as at
30 September for the relevant year.

74

ANZ 2021 Annual Review

75

OVERVIEW

HOW WE
CREATE VALUEREMUNERATIONOVERVIEWPERFORMANCEOVERVIEWSHAREHOLDERINFORMATION

2021 VARIABLE REMUNERATION AWARDED

2021 ACTUAL REMUNERATION RECEIVED

This table shows the variable remuneration awarded to the CEO and Disclosed Executives for the year ending 30 September 2021.
For Disclosed Executives, the average outcome was 60% of maximum opportunity (ranging from 46% to 66%).

Received value includes the value of prior equity awards which vested in that year

Maximum opportunity

CEO

S Elliott
AVR $2,000,000

This table shows the remuneration the CEO and Disclosed Executives actually received in relation to the 2021 performance year as cash, or in
the case of prior equity awards, the value which vested in 2021. The final column also shows the value of prior equity awards which lapsed/
were forfeited in 2021.

1$1,000,000+

53% of max+=

CEO AND DISCLOSED EXECUTIVES$1,000,000

LTVR $3,500,000 performance rights face value at full vesting (subject to shareholder approval at the 2021 AGM)

Fixed
remuneration$=
Total variable remuneration $5,500,000
Cash

Maximum opportunity

CURRENT DISCLOSED EXECUTIVES2==

M Carnegie
VR $2,311,500=

K Corbally
VR $1,860,000=

G Florian
VR $2,747,000=

M HandVR $2,211,000=

K van der Merwe
VR $2,412,000=

A Watson
VR $2,790,316=

M Whelan
VR $3,289,700

=

3

Cash

+

+

$462,000$952,000$462,000$569,250++$569,250$1,173,000$613,800$676,500$544,500

Total
cash
$

Other deferredremuneration
which vested
during the year1$

Actualremuneration
received$

Deferred variable
remuneration which
lapsed/forfeitedduring the year1, 2$

CEO and Current Disclosed Executives

Deferred shares

S Buggle
VR $1,876,000

Cash variable
remuneration$

Deferred variable
remuneration
which vested
during the year1$+$613,800$632,400++$676,500$1,394,000+$544,500$1,122,000$687,167$810,150
Deferred shares or deferred share rights

48% of max++$594,000

66% of max

63% of max
63% of max
46% of max++$594,000$1,224,000++$687,167$1,415,981++$810,150$1,669,400

66% of max
64% of max
64% of max

S Elliott

2,500,000

1,000,000

3,500,000

2,252,821–

5,752,821(1,895,738)

S Buggle

704,000

462,000

1,166,000––

1,166,000–

M Carnegie

1,200,000

569,250

1,769,250

807,983–

2,577,233(499,918)

K Corbally

1,100,000

613,800

1,713,800

297,341–

2,011,141(39,997)

G Florian

1,084,500

676,500

1,761,000

424,282–

2,185,282(257,321)

M Hand1,200,000

544,500

1,744,500

329,920–2,074,420(59,348)

K van der Merwe

907,000

594,000

1,501,000

378,251–

1,879,251(154,402)

A Watson3

1,078,682

687,167

1,765,849

309,419–

2,075,268(37,204)

M Whelan

1,276,000

810,150

2,086,150

1,561,716–

3,647,866(963,057)

Former Disclosed Executives		
A George

913,000

n/a

913,000

582,907–

1,495,907(4,344,826)

M Jablko4

528,000

n/a

528,000

991,724

119,239

1,638,963(5,514,701)

1. The point in time value of previously deferred remuneration granted as shares/share rights and/or performance rights is based on the one day Volume Weighted Average Price (VWAP) of theCompany’s shares traded on the ASX on the date of vesting or lapsing/forfeiture multiplied by the number of shares/share rights and/or performance rights. 2. The lapsed/forfeited values relate
to 56.7% of the performance rights we awarded in November/December 2017 which lapsed in November/December 2020 due to the performance hurdles not being met, and for A George
and M Jablko forfeiture on resignation of unvested deferred remuneration. 3. Paid in NZD and converted to AUD. 4. Other deferred remuneration for M Jablko relates to previously disclosed
compensation for deferred remuneration forfeited as a result of joining ANZ.

Performance rights face value at full vesting4

1. Variable remuneration for the CEO = AVR + LTVR. 2. 2021 VR not awarded for former Disclosed Executives A George and M Jablko. 3. CRO receives deferred share rights instead of performancerights. 4. Divide by two to convert to face value at threshold vesting for performance rights.

76

ANZ 2021 Annual Review

77

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Independent Limited Assurance Report to
the Directors of Australia and New Zealand
Banking Group Limited
CONCLUSION

Based on the evidence we obtained from the procedures
performed, we are not aware of any material misstatementsof the specified ESG Information in the ANZ 2021 Annual
Report and ANZ 2021 Annual Review which has been
prepared by ANZ in accordance with ANZ’s Basis ofReporting for the year ended 30 September 2021.

WHAT DID KPMG’S WORK INVOLVE – SCOPE
OF WORK
Australia and New Zealand Banking Group Limited (ANZ) engaged
KPMG to perform a limited assurance engagement in relation to
the ESG Information in the ANZ 2021 Annual Report and ANZ 2021
Annual Review. The scope of work comprised limited assurance overthe material text and data claims as specified in the table below.

WHAT WAS THE BASIS FOR KPMG’S
CONCLUSION?

WHAT IS LIMITED ASSURANCE AND MATERIALMISSTATEMENT?

We conducted our work in accordance with International Standard
on Assurance Engagements ISAE 3000 (Standard). In accordance with
the Standard we have:

A limited assurance engagement is restricted primarily to enquiries
and analytical procedures. The procedures performed in a limited
assurance engagement vary in nature and timing from, and areless in extent than for, a reasonable assurance engagement.
Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would
have been obtained had a reasonable assurance engagement been
performed. The Standard requires our report to be worded aroundwhat we have not found, rather than what we have found.

• Used our professional judgement to plan and perform theengagement to obtain limited assurance that we are not awareof any material misstatements in the ESG Information, whether
due to fraud or error;• Considered relevant internal controls when designing our
assurance procedures, however we do not express a conclusionon their effectiveness; and• Ensured that the engagement team possess the appropriate
knowledge, skills and professional competencies.

Our limited assurance conclusion is based on the evidence obtained
from performing the following procedures:Page

2021 performance snapshot

3

What matters most9

Our customers

15 - 23

Becoming a fairer and more responsible bank24 - 25

Our people

29 - 33

Our community

8, 34 - 36

Improving our approach to Human Rights

37

Our approach to climate change

38 - 39• Undertaking analytical review procedures to support thereasonableness of the data;

Five year summary72• Identifying and testing assumptions supporting the calculations;

WHAT WAS THE REPORTING CRITERIA USED?
The ESG Information was prepared in accordance with theManagement’s Basis of Reporting, which draws upon the Integrated
Reporting Framework published by the International Integrated
Reporting Council (“the criteria”).

This report has been prepared for the Directors of ANZ for
the purpose of providing an assurance conclusion on the ESG
Information within the ANZ 2021 Annual Report and ANZ 2021
Annual Review and may not be suitable for another purpose. We
disclaim any assumption of responsibility for any reliance on thisreport, to any person other than the Directors of ANZ, or for any
other purpose than that for which it was prepared.

Misstatements, including omissions, are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence relevant decisions of the Directors of ANZ.

WHAT DID KPMG DO TO SUPPORT THE SCOPE
OF WORK – OUR PROCEDURESESG information

The ANZ 2021 Annual Report and ANZ 2021 Annual Review covers
ANZ’s global operations for the year ended 30 September 2021
unless otherwise indicated.

USE OF THIS ASSURANCE REPORT• Enquiries of relevant management to understand ANZ’s process
for determining material ESG issues;• Interviews with relevant management concerning ANZ’s
ESG framework and policies for material ESG issues, and theimplementation of these across the business;• Interviews with relevant staff responsible for developing thecontent (text and data) within the ESG Information to understandthe approach for management, monitoring, collation andreporting of such information and the accuracy, completenessand existence of reported text and data;

ANZ is responsible for:

KPMG is responsible for:• Determining that the criteria is appropriate to meet their needs;

Our responsibility is to perform a limited assurance engagement inrelation to the ESG Information for the year ended 30 September
2021, and to issue an assurance report that includes our conclusion.

• Preparing and presenting the ESG Information in accordancewith the criteria; and• Establishing internal controls that enable the preparation andpresentation of the ESG Information that is free from material
misstatement, whether due to fraud or error.

KPMG Independence and Quality Control
We have complied with our independence and other relevant
ethical requirements of the Code of Ethics for Professional Accountants
issued by the Australian Professional and Ethical Standards Boardand complied with the applicable requirements of AustralianStandard on Quality Control 1 to maintain a comprehensive systemof quality control. We have also complied with ANZ’s Stakeholder
Engagement Model for Relationship with External Auditor (available
at anz.com).

• Comparing text and data (on a sample basis) presented tounderlying sources;• Reviewing the ANZ 2021 Annual Report and ANZ 2021
Annual Review in their entirety for consistency with the
ESG Information; and• Reviewing other ANZ reporting including the ESG Supplement
in its entirety to ensure it is consistent with our knowledge
obtained through our assurance engagement.

KPMG

Adrian King | Partner

27 October 2021

Melbourne
27 October 2021

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 globalorganisation. Liability limited by a scheme approved under Professional Standards Legislation.

78

ANZ 2021 Annual Review

79

OVERVIEW

HOW WE
CREATE VALUEPERFORMANCEOVERVIEWREMUNERATIONOVERVIEWSHAREHOLDERINFORMATION

Important dates for shareholders1
MAY 2022

Contacts

NOVEMBER 2022

4 May

Half Year Results Announcement

7 November

Final Dividend Ex-Date

9 May

Interim Dividend Ex-Date

8 November

Final Dividend Record Date

10 MayInterim Dividend Record Date

9 November

DRP/BOP/Foreign Currency Election Date

11 MayDRP/BOP/Foreign Currency Election DateJULY 2022

1 JulyLuxembourg

ANZ Centre Melbourne
Level 9, 833 Collins Street
Docklands VIC 3008 Australia

Deutsche Bank Luxembourg S.A.
2, Boulevard Konrad Adenauer
L-1115 Luxembourg, Luxembourg

Telephone: +61 3 9273 5555
Facsimile: +61 3 8542 5252

Telephone: +352 4 21 22 1

Company Secretary: Simon Pordage

Computershare Investor Services Limited
Private Bag 92119
Auckland 1142 New Zealand

INVESTOR RELATIONSDECEMBER 2022

Interim Dividend Payment Date

REGISTERED OFFICE

15 December

Final Dividend Payment Date

15 December

Annual General Meeting

Level 10, 833 Collins Street
Docklands VIC 3008 Australia

New Zealand

Telephone: 0800 174 007
Facsimile: +64 9 488 8787

13 OctoberClosing date for receipt of Director Nominations

Telephone: +61 3 8654 7682
Facsimile: +61 3 8654 8886
Email: investor.relations@anz.com
Web: shareholder.anz.com

27 October

Annual Results Announcement

Group General Manager Investor Relations: Jill Campbell

Computershare Investor Services PLC
The Pavilions Bridgwater Road
Bristol BS99 6ZZ UKCOMMUNICATIONS AND PUBLIC AFFAIRS

Telephone: +44 870 702 0000
Facsimile: +44 870 703 6101

Level 10, 833 Collins Street
Docklands VIC 3008 Australia

United States

OCTOBER 2022

OUR INTERNATIONAL PRESENCE AND EARNING COMPOSITION BY GEOGRAPHY

2

Telephone: +61 2 6198 5001
Email: Tony.Warren@anz.com
Group General Manager Communications
and Public Affairs: Tony Warren

SHARE AND SECURITIES REGISTRAR AUSTRALIA
Australia
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001Australia
Telephone within Australia: 1800 11 33 99
International Callers: +61 3 9415 4010
Facsimile: +61 3 9473 2500
Email: anzshareregistry@computershare.com.au
Austraclear Services Limited
20 Bridge Street
Sydney NSW 2000 Australia

International$209 million

Telephone:1300 362 257

Australia$4,184 million
New Zealand$1,788 million

INTERNATIONAL
Asia
China
Hong Kong
India
Indonesia
Japan
Laos
Malaysia

Japan
Japan Securities Depository Center, Incorporated
1-1, Nihombashi Kayabacho 2-chome,
Chuo-ku, Tokyo 103-0025 Japan

United Kingdom

The Bank of New York Mellon
240 Greenwich St, Floor 7E
New York, NY 10286 USA
Telephone: +1 212 495 1784
BNY Mellon Shareowner Services
PO Box 505000
Louisville, KY 40233-5000 USA
USA Toll Free Telephone: 1888 269 2377
Telephone for International Callers: 1201 680 6825
Web: www-us.computershare.com/investor
Email: shrrelations@bnymellon.com
Deutsche Bank Trust Company Americas
60 Wall Street
New York, NY 10005 USA
Telephone: +1 212 250 2500

Germany
Deutsche Bank AG
Taunusanlage 1260262 Frankfurt am Main Germany
Telephone: +49 69 910 00

Telephone: +81-3-3661-0139
Myanmar
The Philippines
Singapore
South Korea
TaiwanThailand
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Pacific
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General Information on ANZ can be obtained from our website at anz.com.
Shareholders can visit our Shareholder Centre at anz.com/shareholder/centre.
ANZ Corporate Governance: For information about ANZ’s approach to Corporate
Governance and to obtain copies of ANZ’s Constitution, Board/Board Committee
Charters, Code of Conduct and summaries of other ANZ policies of interest to
shareholders and stakeholders, visit anz.com/corporategovernance.

Founding Signatory of:Australia and New Zealand Banking Group Limited ABN 11 005 357 522.
1. If there are any changes to these dates, the Australian Securities Exchange will be notified accordingly. 2. On a cash profit (continuing operations) basis. Excludes non-core items included
in statutory profit and discontinued operations included in cash profit. It is provided to assist readers in understanding the result of the ongoing business activitives of the Group. For further
information on adjustments between statutory and cash profit refer to page 57.

80

This Annual Report has been prepared for Australia and New Zealand Banking
Group Limited (“the Company”) together with its subsidiaries which are variously
described as: “ANZ”, “Group”, “ANZ Group”, “the Bank”, “us”, “we” or“our”.

DISCLOSURE INSIGHT ACTION

ANZ 2021 Annual Review

81186 years old and70 years as ANZ“The values forged in this merger
70 years ago are still part of the fabricof who we are today. We are stilla bank that wants to back people
with a vision for a better life.”
Shayne Elliott | Chief Executive Officer

1961

70 yearsof ANZ

1835
Bank of Australasia wasan Australian Bank inoperation from 1835–1951.
Headquartered in London
and incorporated by Royal
Charter in March 1834.

1837
The Union Bank
of Australia wasan Australian Bankin operation from1837–1851. Was
established in London
in October 1837.

1970
1951
The Union Bank ofAustralia merged with
the Bank of Australasia
to form the Australia
and New Zealand
Bank Ltd (ANZ).

TENACIOUS OFPURPOSE

1961
Mobile branches in vansvisited factories andworkplaces bringing
banking to staff.

In what was then the largest
merger in Australian banking
history, ANZ Ltd mergedwith the English, Scottish
and Australian Bank Limited
to form Australia and New
Zealand Banking Group
Limited – the modern ANZ.

2010
ANZ launched a freemobile banking application
for the iPhone called ANZ
goMoney. ANZ was the firstbank in Australia to offer
customers a mobile-tomobile payment application.

1997
1982
ANZ launches Nightand Day Bank (ATM).

Asian language phonebanking launched,a first among major
Australian banks.

1958

1965

1973

1983

2007

ANZ adopted a newelectronic bookkeeping
machine thatrevolutionised ledgerposting procedures.

ANZ’s first computer –EMANZA (Electronic
Method of ANZ
Accounting) – wasinstalled at 177 Toorak
Road, South Yarra.

Miss Enid O’Toole appointed
at Rockhampton North
branch as the first female
ANZ branch accountant.

ANZ appoints Australia’s
first female bank
Director – Dame Leonie
Kramer DBE.

ANZ Reconciliation
Action Plan launched –Australian-first.

01
December
1982

15
January
1965

82

shareholder.anz.com

Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.
ANZ’s colour blue is a trade mark of ANZ.