ANZ Group Holdings Limited
ABN 16 659 510 791

Half Year
31 March 2023

Consolidated Financial Report
Dividend Announcement
and Appendix 4D

The Consolidated Financial Report and Dividend Announcement contains information required by Appendix 4D of the Australian Securities
Exchange (ASX) Listing Rules. It should be read in conjunction with ANZ’s 2022 Annual Report, and is lodged with the ASX under listing rule
4.2A.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Name of Company:

APPENDIX 4D

ANZ Group Holdings Limited
ABN 16 659 510 791

Report for the half year ended 31 March 2023

Operating Results1

Statutory operating income



6%

to

10,139Statutory profit attributable to shareholders of the Company



0%

to

3,547

Cash profit2



23%

to

3,821

AUD million



Dividends3

Cents

Proposed interim dividend4Frankedperamountshare

per share

81

100%

Record date for determining entitlements to the proposed 2023 interim dividend

16 May 2023

Payment date for the proposed 2023 interim dividend

3 July 2023

Dividend Reinvestment Plan and Bonus Option PlanANZ Group Holdings Limited has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2023
interim dividend. For the 2023 interim dividend, ANZ intends to provide shares under the DRP through an on-market purchase and BOP through theissue of new shares. The 'Acquisition Price' to be used in determining the number of shares to be provided under the DRP and BOP will be calculated byreference to the arithmetic average of the daily volume weighted average sale price of all fully paid ANZ ordinary shares sold in the ordinary course of
trading on the ASX and Cboe Australia during the ten trading days commencing on 19 May 2023, and then rounded to the nearest whole cent. Sharesprovided under the DRP and BOP will rank equally in all respects with existing fully paid ANZ ordinary shares. Election notices from shareholders wanting
to commence, cease or vary their participation in the DRP or BOP for the 2023 interim dividend must be received by ANZ's Share Registrar by 5.00pm(Australian Eastern Standard Time) on 17 May 2023. Subject to receiving effective contrary instructions from the shareholder, dividends payable toshareholders with a registered address in the United Kingdom (including the Channel Islands and the Isle of Man) or New Zealand will be converted toPounds Sterling or New Zealand Dollars respectively at an exchange rate calculated on 19 May 2023.

1.

2.

Unless otherwise noted, all comparisons are to the consolidated financial information for the half year ended 31 March 2022 for Australia New Zealand Banking Group Limited, which was
replaced by ANZ Group Holdings Limited as the listed entity on 3 January 2023.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the core business activities of the Group. The non-core items
are calculated consistently period on period so as not to discriminate between positive and negative adjustments, and comprise economic hedging and similar accounting items that
represent timing differences that will reverse through earnings in the future. The net after tax loss adjusted from statutory profit to arrive at cash profit was $274 million. Refer pages 71 to 73
for further details.

3.

There is no conduit foreign income attributed to the dividends.

4.

It is proposed that the interim dividend will be fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents per ordinary share.

2

ANZ GROUP HOLDINGS LIMITEDABN 16 659 510 791

CONSOLIDATED FINANCIAL REPORT, DIVIDEND ANNOUNCEMENT AND APPENDIX 4D
Half year ended 31 March 2023

CONTENTS

PAGE

Disclosure Summary5

Summary

7

Group Results

19

Divisional Results

49

Profit Reconciliation

71

Condensed Consolidated Financial Statements

75

Supplementary Information

119

Definitions

131

ASX Appendix 4D - Cross Reference Index

135

Alphabetical Index

136

This Consolidated Financial Report, Dividend Announcement and Appendix 4D (Results Announcement) has been prepared for ANZ Group Holdings
Limited (ANZGHL, Company, parent entity) and its subsidiaries (ANZ Group, ANZ, Group, the consolidated entity, us, we, or our). ANZGHL replaced
Australia and New Zealand Banking Group Limited (ANZBGL) as the listed entity on 3 January 2023 under a scheme of arrangement approved byshareholders at the Annual General Meeting on 23 December 2022.
All amounts are in Australian dollars unless otherwise stated. The ANZ Group has a formally constituted Audit Committee of the Board of Directors. The
Condensed Consolidated Financial Statements were approved by resolution of the Board of Directors on 4 May 2023.
DISCLAIMER & IMPORTANT NOTICE:
The material in the Results Announcement contains general background information about the ANZ Group’s activities current as at 4 May 2023. It is
information given in summary form and does not purport to be complete. It is not intended 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. These should beconsidered, with or without professional advice, when deciding if an investment is appropriate.
The Results Announcement may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations
with respect to ANZ Group’s business operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions
and risk management practices. When used in the Results Announcement, 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 Group and its management, areintended to identify forward-looking statements or opinions. Those statements are usually predictive in character; or may be affected 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 and no representation is made as to theircorrectness on or after this date. Forward-looking statements constitute ‘forward-looking statements’ for the purposes of the United States Private
Securities Litigation Reform Act of 1995. ANZ Group does not undertake any obligation to publicly release the result of any revisions to these forwardlooking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

3

ANZ GROUP HOLDINGS LIMITEDABN 16 659 510 791
This page has been left blank intentionally

4

DISCLOSURE SUMMARY

SUMMARY OF 2023 HALF YEAR RESULTS AND ASSOCIATED DISCLOSURE MATERIALSThe following disclosure items were lodged separately with the ASX and NZX and can be accessed via the ANZ Shareholder Centre on the Groupwebsite https://www.anz.com/shareholder/centre/reporting/results-announcement/.
ANZ Group Holdings Limited•

2023 Consolidated Financial Report, Dividend Announcement and Appendix 4D•

2023 Half Year Results Investor Discussion Pack•

News Release•

Key Financial Data (available on ANZ Shareholder website only)

Australia and New Zealand Banking Group Limited•

2023 Australia and New Zealand Banking Group Limited Consolidated Half Year Report•

2023 March Pillar 3 Disclosure•

United Kingdom Disclosure and Transparency Rules Submission

5

DISCLOSURE SUMMARY
This page has been left blank intentionally

6

SUMMARYCONTENTS

Page

Guide to Half Year Results

8

Statutory Profit Results

9Cash Profit Results

10

Key Balance Sheet Metrics

11

Large/Notable Items

12

Full Time Equivalent Staff

17

Other Non-Financial Information

17

7

SUMMARY
Guide to Half Year Results
ESTABLISHMENT OF A NEW GROUP ORGANISATIONAL STRUCTURE
On 3 January 2023, Australia and New Zealand Banking Group Limited (ANZBGL) established by a scheme of arrangement, a non-operating holding
company, ANZ Group Holdings Limited (ANZGHL), as the new listed parent holding company of the ANZ Group and implemented a restructure to
separate ANZ’s banking and certain non-banking businesses into the ANZ Bank Group and ANZ Non-Bank Group (Restructure). The ANZ Bank Group
comprises the majority of the businesses and subsidiaries that were held in ANZBGL prior to the Restructure. The ANZ Non-Bank Group comprisesbanking-adjacent businesses developed or acquired by the ANZ Group to focus on bringing new technology and banking-adjacent services to the ANZGroup’s customers, and a separate service company.
This Results Announcement has been prepared for the ANZ Group Holdings Limited consolidated group and reflects a continuation of the ANZ Groupprior to the Restructure. Refer to Establishment of a New Group Organisational Structure section in Supplementary Information for further details.
A copy of the Australia and New Zealand Banking Group Limited Consolidated Half Year Report is lodged separately with the ASX and NZX and can beaccessed via the ANZ Shareholder Centre on the Group website https://www.anz.com/shareholder/centre/reporting/results-announcement/.
NON-IFRS INFORMATION
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report andDividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian
Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers toassess Group and Divisional performance against prior periods and against peer institutions. The adjustments made in arriving at cash profit are included
in statutory profit which is subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cashprofit is not subject to review by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been
determined on a consistent basis across each period presented.
•

Adjustments between statutory profit and cash profit - To calculate cash profit, the Group excludes non-core items from statutory profit. Refer topages 71 to 73 for adjustments between statutory and cash profit.

•

Large/notable items within cash profit - The Group’s cash profit result includes a number of items collectively referred to as large/notable items.
While these items form part of cash profit, given their nature and significance, they have been presented separately together with comparative
information, where relevant, to provide transparency and aid comparison. Refer to pages 12 to 16 for details of large/notable items.

DISCONTINUED OPERATIONSThere are no discontinued operations in the current period.
Profit/(Loss) from discontinued operations in the comparative periods relates to immaterial residual operational costs from divested wealth businesses
and partial recovery of certain costs based on Transition Service Agreements, which ceased in April 2022.
DIVISIONAL PERFORMANCE
The presentation of divisional results has been impacted by the following structural changes during the period. Prior period comparatives have been
restated:•

Business Restructure - the non-banking businesses held in the Australia Commercial and Institutional divisions were transferred to the Group Centre
division. As a result of this transfer, Group Centre division holds all interests in the ANZ Non-Bank Group.

•

Corporate customer re-segmentation - certain business and property finance customers were transferred from the New Zealand division to theInstitutional division to better align customer needs with the right support and expertise delivery.

•

Cost reallocations - certain costs were reallocated across the Australia Retail, Australia Commercial, Institutional and Group Centre divisions.

Other than those described above, there have been no other significant changes. The divisions reported are consistent with internal reporting provided tothe chief operating decision maker, being the Chief Executive Officer.

8

SUMMARY
Statutory Profit Results
Half Year

Movement

Mar 23$M
8,503

Sep 22$M
7,774

Mar 22$M
7,100

Mar 23v. Sep 22
9%

Mar 23v. Mar 22
20%

Other operating income

1,636

2,110

2,442

-22%

-33%

Operating income

10,139

9,884

9,542

3%

6%
4%

Net interest income

Operating expenses(4,997)(4,788)(4,791)

4%

Profit before credit impairment and income tax

5,142

5,096

4,751

1%

8%

Credit impairment (charge)/release

(133)

(52)

284

large

large

Profit before income tax

5,009

5,044

5,035

-1%

-1%

Income tax expense and non-controlling interests(1,462)(1,441)(1,500)

1%-3%Profit attributable to shareholders of the Company from continuing operations

3,547

3,603

3,535

-2%

0%

-

(14)

(5)

large

large

3,547

3,589

3,530

-1%

0%

Profit/(Loss) from discontinued operations
Profit attributable to shareholders of the Company

Earnings Per Ordinary Share (cents)

Half Year
Reference
Page

Basic
DilutedMovement

92

Mar 23118.5

Sep 22
125.4

Mar 22
124.6

Mar 23v. Sep 22-6%

Mar 23v. Mar 22
-5%

92

112.8

117.5

116.7

-4%

-3%

Half Year
ReferencePage

Sep 22

Mar 22

81

-

72

-

74

-

91

81

74

72

91

68.6%

61.7%

57.0%

Ordinary Share Dividends (cents)
Interim1
Final1
Total
Ordinary share dividend payout ratio2
Profitability Ratios
Return on average ordinary shareholders' equity3

Mar 23

10.6%

11.4%

11.3%

Return on average assets

0.64%

0.67%

0.70%

Net interest margin

1.75%

1.68%

1.58%

Net interest income to average credit RWAs

4.77%

4.39%

4.10%

Efficiency Ratios
Operating expenses to operating income

49.3%

48.8%

50.5%

Operating expenses to average assets

0.90%

0.91%

0.96%

(30)

(8)

87

163

60

(371)

133

52

(284)

Individually assessed credit impairment charge as a % of average gross loans and advances4(0.01%)

0.00%

0.03%

Total credit impairment charge/(release) as a % of average gross loans and advances4

0.04%

0.02%

(0.09%)

Credit Impairment Charge/(Release)
Individually assessed credit impairment charge/(release) ($M)
Collectively assessed credit impairment charge/(release) ($M)
Total credit impairment charge/(release) ($M)

98

1.

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2023 interim dividend (2022 final dividend: NZD 9 cents;
2022 interim dividend: NZD 9 cents).
Dividend payout ratio for the March 2023 half is calculated using the proposed 2023 interim dividend of $2,433 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2022 half and the March 2022 half were calculated using actual dividends of $2,213 million and $2,012 million respectively.
3. Average ordinary shareholders’ equity excludes non-controlling interests.
4. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
2.

9

SUMMARY
Cash Profit Results1
Half Year

Movement

Mar 23$M
8,503

Sep 22$M
7,774

Mar 22$M
7,100

Mar 23v. Sep 22
9%

Mar 23v. Mar 22
20%

Other operating income

2,025

1,825

1,848

11%

10%

Operating income

10,528

9,599

8,948

10%

18%

Operating expenses(4,997)(4,788)(4,791)

4%

4%

Cash profit before credit impairment and income tax

5,531

4,811

4,157

15%

33%

Credit impairment (charge)/release

(133)

(52)

284

large

large
22%

Net interest income

Cash profit before income tax

5,398

4,759

4,441

13%

Income tax expense and non-controlling interests(1,577)(1,357)(1,328)16%

19%

Cash profit from continuing operations

3,821

3,402

3,113

12%

23%

Cash profit/(loss) from discontinued operations
Cash profit

-

(14)

(5)

large

large

3,821

3,388

3,108

13%

23%

Earnings Per Ordinary Share (cents)

Half Year

Movement

Basic

Mar 23
127.6

Sep 22
118.4

Mar 22
109.7

Mar 23v. Sep 22
8%

Mar 23v. Mar 22
16%

Basic - continuing operations

127.6

118.8

109.9

7%

16%

Diluted

121.1

111.1

103.1

9%

17%

Basic

2,994.1

2,862.5

2,832.9

5%

6%

Diluted

3,278.3

3,145.5

3,103.8

4%

6%

Basic

3,821

3,388

3,108

13%

23%

Diluted

3,971

3,495

3,200

14%

24%

Weighted Average Number of Ordinary Shares (M)Cash Profit Used in Calculating Earnings Per Ordinary Share ($M)

Half Year
Reference
Page

Mar 23

Sep 22

Mar 22

Ordinary Share Dividends
Ordinary share dividend payout ratio2

63.7%

65.3%

64.7%

Profitability Ratios
Return on average ordinary shareholders' equity3

11.4%

10.7%

10.0%

Return on average assets

0.69%

0.64%

0.62%

Return on average RWA

1.7%

1.5%

1.5%

Net interest margin

1.75%

1.68%

1.58%

Net interest income to average credit RWAs

4.77%

4.39%

4.10%

47.5%

50.3%

53.9%

0.90%

0.91%

0.96%

Efficiency Ratios
Operating expenses to operating income4
5

Operating expenses to average assets

Credit Impairment Charge/(Release)
Individually assessed credit impairment charge/(release) ($M)

(30)

(8)

87

Collectively assessed credit impairment charge/(release) ($M)

163

60

(371)

Total credit impairment charge/(release) ($M)

133

52

(284)

Individually assessed credit impairment charge as a % of average gross loans and advances629(0.01%)

0.00%

0.03%

Total credit impairment charge/(release) as a % of average gross loans and advances6

0.04%

0.02%

(0.09%)

1.

Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the core business activities of the Group. Refer to pages 71
to 73 for the reconciliation between statutory and cash profit.
Dividend payout ratio for the March 2023 half is calculated using the proposed 2023 interim dividend of $2,433 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2022 half and the March 2022 half were calculated using actual dividends of $2,213 million and $2,012 million respectively.
3. Average ordinary shareholders’ equity excludes non-controlling interests. Return on average shareholders’ equity - continuing operations for the March 2023 half was 11.4% (Sep 22 half:
10.8%; Mar 22 half: 10.0%).
4. Operating expenses to operating income - continuing operations for the March 2023 half was 47.5% (Sep 22 half: 49.9%; Mar 22 half: 53.5%).
5. Operating expenses to average assets - continuing operations for the March 2023 half was 0.90% (Sep 22 half: 0.90%; Mar 22 half: 0.95%).
6. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
2.

10

SUMMARY
Key Balance Sheet Metrics
As at
Reference
Page

Movement

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Mar 23v. Mar 22

Capital Management (Level 2)1
Common Equity Tier 1- APRA

44

13.2%

12.3%

11.5%

- Internationally Comparable2

44

18.9%

19.2%

18.0%

Credit risk weighted assets ($B)

45

345.3

359.4

348.8

-4%

-1%

Total risk weighted assets ($B)

45

435.5

454.7

437.9

-4%

-1%

APRA Leverage Ratio

47

5.3%

5.4%

5.2%

Balance Sheet: Key Items
Gross loans and advances ($B)

693.7

676.0

655.0

3%

6%

Net loans and advances ($B)

690.1

672.4

651.4

3%

6%

Total assets ($B)

1,111.2

1,085.6

1,017.4

2%

9%

Customer deposits ($B)

648.6

620.4

611.1

5%

6%

Total equity ($B)

69.6

66.4

61.8

5%

13%

Half Year
Balance Sheet: Average Balances
Average gross loans and advances
Average customer deposits

Movement

Mar 23$B
693.5

Sep 22$B
661.0

Mar 22$B
647.0

Mar 23v. Sep 22
5%

Mar 23v. Mar 22
7%

637.8

620.2

609.5

3%

5%

1,112.3

1,062.0

1,009.8

5%

10%

Average ordinary shareholders' equity3

67.1

62.9

62.5

7%

7%

Average RWA

451.9

445.5

427.3

1%

6%

Average credit RWA

357.3

353.5

347.3

1%

3%

Average interest earning assets

973.0

920.3

899.7

6%

8%

Average deposits and other borrowings

826.2

792.6

768.1

4%

8%

Average assets

As at
Liquidity Risk
Liquidity Coverage Ratio4

ReferencePage

Net Stable Funding Ratio

Movement

41

Mar 23128%

Sep 22
129%

Mar 22132%

Mar 23v. Sep 22-1%

Mar 23v. Mar 22
-4%

42

119%

119%

123%

0%

-4%

As at
Impaired Assets
Gross impaired assets ($M)

Reference
Page
33

Gross impaired assets as a % of gross loans and advances
Net impaired assets ($M)

33

Net impaired assets as a % of shareholders' equity
Individually assessed provision ($M)

31

Individually assessed provision as a % of gross impaired assets
Collectively assessed provision ($M)

31Collectively assessed provision as a % of credit risk weighted assets
Net Tangible Assets
Net tangible assets attributable to ordinary shareholders ($B)5
Net tangible assets per ordinary share ($)
1.

Movement

Mar 23
1,210

Sep 22
1,445

Mar 22
1,709

0.17%

0.21%

0.26%

789

903

1,073

1.1%

1.4%

1.7%

421

542

636

34.8%

37.5%

37.2%

4,040

3,853

3,757

1.17%

1.07%

1.08%

11

Mar 23v. Mar 22
-29%

-13%

-26%

-22%

-34%

5%

8%

65.0

62.0

57.7

5%

13%

21.66

20.75

20.64

4%

5%

March 2023 includes impacts on risk weighted assets from APRA Capital Reform. Refer to APRA Capital Reform section on page 44 for further details.
Refer to page 46 for further details regarding the differences between APRA and Internationally Comparable standards.
3. Average ordinary shareholders’ equity excludes non-controlling interests.
4. Liquidity Coverage Ratio is calculated on a half year average basis.
5. Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.
2.

Mar 23v. Sep 22-16%

SUMMARY
Large/Notable Items
Large/notable items included in cash profit are described below.
Business divestments/closures
There were no material divestment/closures during the March 2023 half. The financial impacts from divestments/closures in prior periods and thebusiness results for these divestments are summarised below.
Gain/(Loss) fromdivestments/closures

Completed divested businessresults

Total

Half Year

Half Year

Half Year

Mar 23$M-

Sep 22$M-

Mar 22$M
307

Mar 23$M-

Sep 22$M-

Mar 22$M
60

Mar 23$M-

Sep 22$M-

Financial planning and advice business

-

-

(69)

-

2

3

-

2

(66)

Legal entity rationalisation

-

-

(65)

-

-

-

-

-

(65)

Other business divestments/closures

-

(8)

(5)

-

-

-

-

(8)

(5)

Cash profit/(loss) before income tax
Income tax benefit/(expense) and noncontrolling interests

-

(8)

168

-

2

63

-

(6)

231

-

-

37

-

-

(19)

-

-

18

Cash profit/(loss)

-

(8)

205

-

2

44

-

(6)

249

Cash Profit Impact
ANZ Worldline partnership•Mar 22$M
367

ANZ Worldline partnership
The Group announced in December 2020 that it had entered into a partnership with Worldline SA (Worldline). The partnership arrangement involves
ANZ and Worldline forming a newly created merchant acquiring group, with ANZ and Worldline holding 49% and 51% interests respectively. During
the March 2022 half, the transaction completed and the Group recognised a $307 million gain in Other operating income and a $28 million income
tax benefit in the Australia Commercial division. The divested business results were recognised across the Australia Commercial and Institutional
divisions.

•

Financial planning and advice business
During the March 2022 half, the Group agreed to sell its financial planning and advice business servicing the affluent customer segment to Zurich
Financial Services Australia Ltd. As a result of the transaction, the Group recognised a $62 million loss largely comprising a goodwill write-off of$40 million in Other operating income, restructuring expenses of $7 million, and an income tax benefit of $9 million in the Australia Commercial
division. The transaction completed in the September 2022 half and the divested business results were recognised in the Australia Commercial
division.

•

Legal entity rationalisation
During the March 2022 half, in order to simplify the Group’s legal entity structure, the businesses previously conducted by Minerva Holdings Limited(Minerva) in the United Kingdom and ANZ Asia Limited (ANZ Asia) in Hong Kong were dissolved. As a result, the associated foreign currencytranslation reserves were recycled from Other comprehensive income to profit or loss, resulting in a $65 million loss recognised in Other operating
income in the Group Centre division.

•

Other business divestments/closures
During the March 2022 half, the Group announced the planned closure of the ANZ American Territories (ANZ American Samoa and ANZ Guam). A
loss of $18 million, comprising restructuring expenses of $12 million and a credit impairment charge of $6 million, was recognised in the Pacificdivision during the period. During the September 2022 half, a further $8 million loss was recognised, comprising a $7 million loss in Other operating
income and restructuring expenses of $1 million.
During the March 2022 half, the Group also released excess provisions originally raised as part of the UDC Finance and Paymark Limited
divestments completed in prior years and recognised a $13 million gain in Other operating income in the Group Centre division.

Customer remediation
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation costs and outcomes.
Half Year
Mar 23

Sep 22

Cash Profit Impact
Operating income

$M

$M

$M

(17)

(9)

(25)

Operating expenses

(43)

(42)

(148)

Cash profit/(loss) before income tax

(60)

(51)

(173)

Income tax benefit/(expense) and non-controlling interests

18

8

50

Cash profit/(loss)

(42)

(43)

(123)

12

Mar 22

SUMMARY
Restructuring
In addition to the restructuring expenses associated with business divestments/closures in prior periods, the Group recognised restructuring expenses of$38 million after tax in the March 2023 half year relating to operational changes predominantly in the Australia Retail and Group Centre divisions(Sep 22 half: $37 million; Mar 22 half: $31 million).
Transaction related costs
During the March 2023 half, the Group incurred transaction related costs of $44 million (Sep 22 half: $10 million; Mar 22 half: nil) after tax associated withestablishing the new group organisational structure and the pending Suncorp Bank acquisition.
Property rationalisation
During the March 2023 half, the Group entered into sale and leaseback contracts for the data centres in Australia to align with its long term strategy ofsimplifying its technology environment and migrating on-premise applications to cloud-based solutions. As a result of this, the Group recognised$37 million loss after tax on reclassification of these data centres to held for sale.
During the September 2022 half, the Group early terminated the head lease on the 55 Collins Street Melbourne building resulting in a net loss after tax of$17 million. The loss comprised a $31 million gain in Other operating income on lease modification arising from remeasurement of the lease liability andright-of-use asset net of a $8 million lease termination payment, a $47 million loss in Operating expenses associated with lease exit costs including
accelerated depreciation and asset write-offs, and an income tax benefit of $7 million.
Withholding tax
During the March 2022 half, a dividend payment of $714 million (net of withholding tax) was made by ANZ Papua New Guinea (ANZ PNG) to ANZBGL inorder to rebalance capital positions within the Group in response to APRA’s changes in the capital requirements for subsidiaries. ANZBGL made a capital
injection into ANZ PNG equivalent to the dividend, net of withholding tax. As a result of the dividend payment, a dividend withholding tax expense of$126 million was recognised during the period.

13

SUMMARY
Large/Notable items
Cash Profit Results

March 2023 Half Year v. March 2022 Half Year

March 2023 Half Year v. September 2022 Half Year

Mar 22Large/
notablesMar 22
ex. Large/
notablesMovt
ex. Large/
notables

$M

$M

$M

%

8,513

7,100

(3)

7,103

(50)

2,075

1,848

272

10,528(60)

10,588

8,948(4,997)(153)(4,844)(4,791)

5,531

(213)

5,744

4,157

22

Mar 23Large/
notablesMar 23
ex. Large/
notables

$M

$M

$M

Net interest income

8,503

(10)

Other operating income

2,025

Operating income
Operating expenses
Cash profit before credit impairment and income tax

Sep 22
ex. Large/
notablesMovt
ex. Large/
notablesMar 23Large/
notablesMar 23
ex. Large/
notablesSep 22Large/
notables

$M

$M

$M

$M

$M

$M

%

20%

8,503

(10)

8,513

7,774

3

7,771

10%

1,576

32%

2,025

(50)

2,075

1,825

15

1,810

15%

269

8,679

22%

10,528(60)

10,588

9,599

18

9,581

11%

(247)

(4,544)7%(4,997)(153)(4,844)(4,788)(162)(4,626)

5%

4,135

39%

5,531

(213)

5,744

4,811

(144)

4,955

16%

Credit impairment (charge)/release

(133)

-

(133)

284

(4)

288

large

(133)

-

(133)

(52)

-

(52)

large

Cash profit/(loss) before income tax

5,398

(213)

5,611

4,441

18

4,423

27%

5,398

(213)

5,611

4,759

(144)

4,903

14%

Income tax benefit/(expense) and non-controlling interests(1,577)52(1,629)(1,328)(59)(1,269)28%(1,577)52(1,629)(1,357)31(1,388)17%

Cash profit/(loss)

3,821

(161)

3,982

3,113

(41)

3,154

26%

3,821

(161)

3,982

3,402

(113)

3,515

13%

Mar 22
ex. Large/
notablesMovt
ex. Large/
notablesCash Profit/(Loss) By Division

Australia Retail
Australia Commercial

March 2023 Half Year v. March 2022 Half Year

March 2023 Half Year v. September 2022 Half Year

Mar 23Large/
notablesMar 23
ex. Large/
notablesMar 22Large/
notables

$M

$M

$M

$M

$M

$M

%

1,026

(55)

1,081

937

(131)

1,068

1%

Sep 22
ex. Large/
notablesMovt
ex. Large/
notablesMar 23Large/
notablesMar 23
ex. Large/
notables

$M

$M

$M

$M

$M

$M

%

1,026

(55)

1,081

1,072

(52)

1,124

-4%

Sep 22Large/
notables

739

(4)

743

883

314

569

31%

739

(4)

743

668

8

660

13%

Institutional

1,597

(5)

1,602

809

(140)

949

69%

1,597

(5)

1,602

1,128

(2)

1,130

42%

New Zealand

774

(5)

779

704

(4)

708

10%

774

(5)

779

745

14

731

7%

Pacific

34

(2)

36

(6)

(18)

12

large

34

(2)

36

15

(9)

24

50%

Group Centre

(349)

(90)

(259)

(214)

(62)

(152)

70%

(349)

(90)

(259)

(226)

(72)

(154)

68%

Cash profit/(loss)

3,821

(161)

3,982

3,113

(41)

3,154

26%

3,821

(161)

3,982

3,402

(113)

3,515

13%

14

SUMMARY
Large/Notable items
The Group has recognised some large/notable items within cash profit. These items are shown in the tables below.
March 2023 Half Year

March 2022 Half Year

Large/notable items included in continuing cash profit
Customer
remediation$M

Restructuring$M

Transaction
related costs$M

Net interest income

(10)

-

Other operating income(7)-

Large/notable items included in continuing cash profit
Businessdivestments/
closures$M

Customer
remediation Restructuring1$M$M

Litigation
settlements$M

Withholdingtax$M

Property
rationalisation
$M

Total
$M

-

-

(10)

-

(3)

-

-

-

(3)

-

(43)

(50)

294

(22)

-

-

-

272

Total
$M

Cash Profit

Operating income

(17)

-

-

(43)

(60)

294

(25)

-

-

-

269

Operating expenses

(43)

(54)

(56)

-

(153)

(59)

(148)

(30)

(10)

-

(247)

Cash profit before credit impairment and income tax

(60)

(54)

(56)

(43)

(213)

235

(173)

(30)

(10)

-

22

-

-

-

-

-

(4)

-

-

-

-

(4)

(60)

(54)

(56)

(43)

(213)

231

(173)

(30)

(10)

-

18

Credit impairment (charge)/releaseCash profit before income tax
Income tax benefit/(expense) and non-controlling interests

18

16

12

6

52

18

50

(1)

-

(126)

(59)

Cash profit/(loss)

(42)

(38)

(44)

(37)

(161)

249

(123)

(31)

(10)

(126)

(41)

Property
rationalisation
$M

Total
$M

March 2023 Half Year

September 2022 Half Year

Large/notable items included in continuing cash profit
Customer
remediation$M

Restructuring$M

Transaction
related costs$M

Cash Profit
Net interest income

(10)

-

Other operating income(7)-

Large/notable items included in continuing cash profit
Businessdivestments/
closures$M

Customer
remediation Restructuring1$M$M

Transaction
related costs$M

Property
rationalisation
$M

Total
$M

-

-

(10)

-

3

-

-

-

3

-

(43)

(50)

4

(12)

-

-

23

15

Operating income

(17)

-

-

(43)

(60)

4

(9)

-

-

23

18

Operating expenses

(43)

(54)

(56)

-

(153)

(10)

(42)

(51)

(12)

(47)

(162)

Cash profit before credit impairment and income tax

(60)

(54)

(56)

(43)

(213)

(6)

(51)

(51)

(12)

(24)

(144)

-

-

-

-

-

-

-

-

-

-

-

Cash profit before income tax

(60)

(54)

(56)

(43)

(213)

(6)

(51)

(51)

(12)

(24)

(144)

Income tax benefit/(expense) and non-controlling interests

18

16

12

6

52

-

8

14

2

7

31

Cash profit/(loss)

(42)

(38)

(44)

(37)

(161)

(6)

(43)

(37)

(10)

(17)

(113)

Credit impairment (charge)/release1.

Restructuring expense before tax of $51 million for the September 2022 half and $30 million for the March 2022 half do not include restructuring expenses incurred as part of the business divestments/closures of $1 million for the September 2022 half and $19 million for the March 2022 half.

15

SUMMARY
Large/Notable items
The Group has recognised some large/notable items within cash profit. The impact of these items on the divisional results are shown in the tables below.
March 2023 Half Year

March 2022 Half Year

Large/notable items included in continuing cash profit

Large/notable items included in continuing cash profit

Customer
remediation$M
Australia Retail
Australia Commercial

Businessdivestments/
closures$M

Customer
remediation Restructuring1$M$M

Restructuring$M

Transaction
related costs$M

Property
rationalisation
$M

Total
$M

(52)

(27)

-

-

(79)

(3)

(166)

(4)

(2)

-

-

(6)

297

(1)

Litigation
settlements$M

Withholding
tax
$M

Total
$M

(13)

-

-

(182)

(1)

-

-

295
(13)

Cash profit before income tax

Institutional

-

(7)

-

-

(7)

7

(6)

(4)

(10)

-

New Zealand

(1)

(6)

-

-

(7)

-

-

(6)

-

-

(6)

Pacific

(3)

-

-

-

(3)

(18)

-

-

-

-

(18)

-

(12)

(56)

(43)

(111)

(52)

-

(6)

-

-

(58)

(60)

(54)

(56)

(43)

(213)

231

(173)

(30)

(10)

-

18

Group Centre
Cash profit before income tax
Income tax benefit/(expense) and non-controlling interests

18

16

12

6

52

18

50

(1)

-

(126)

(59)

Cash profit/(loss)

(42)

(38)

(44)

(37)

(161)

249

(123)

(31)

(10)

(126)

(41)

Transaction
related costs$M

Property
rationalisation
$M

Total
$M

-

-

(72)
10

March 2023 Half Year

September 2022 Half Year

Large/notable items included in continuing cash profit

Large/notable items included in continuing cash profit

Restructuring$M

Transaction
related costs$M

Property
rationalisation
$M

Total
$M

Businessdivestments/
closures
$M

(52)

(27)

-

-

(79)

-

(53)

Australia Commercial

(4)

(2)

-

-

(6)

1

6

3

-

-

Institutional

-

(7)

-

-

(7)

1

8

(17)

-

-

(8)

New Zealand

(1)

(6)

-

-

(7)

-

25

(6)

-

-

19

Pacific

(3)

-

-

-

(3)

(8)

(1)

-

-

-

(9)

Group Centre

-

(12)

(56)

(43)

(111)

-

(36)

(12)

(12)

(24)

(84)
(144)

Customer
remediation$M
Australia RetailCustomer
remediation Restructuring1$M$M

Cash profit before income tax(19)

Cash profit before income tax

(60)

(54)

(56)

(43)

(213)

(6)

(51)

(51)

(12)

(24)

Income tax benefit/(expense) and non-controlling interests

18

16

12

6

52

-

8

14

2

7

31

Cash profit/(loss)

(42)

(38)

(44)

(37)

(161)

(6)

(43)

(37)

(10)

(17)

(113)

1.

Restructuring expense before tax of $51 million for the September 2022 half and $30 million for the March 2022 half do not include restructuring expenses incurred as part of the business divestments/closures of $1 million for the September 2022 half and $19 million for the March 2022 half.

16

SUMMARY
Full Time Equivalent Staff1
As at 31 March 2023, ANZ employed 39,802 staff (Sep 22: 39,381; Mar 22: 40,169) on a full time equivalent (FTE) basis.
As at

Division

Movement

Australia RetailMar 23
11,199Sep 22
11,107

Mar 22
11,475

Mar 23v. Sep 22
1%

Mar 23v. Mar 22-2%

Australia Commercial

3,607

3,551

3,528

2%

2%

Institutional

6,353

6,316

6,323

1%

0%

New Zealand

6,785

6,793

6,939

0%

-2%

Pacific

1,037

1,086

1,092

-5%

-5%

Group Centre

10,821

10,31910,3295%

5%

Total FTE from continuing operations

39,802

39,172

39,686

2%

0%

-

209

483

large

large

Total FTE including discontinued operations

39,80239,38140,1691%-1%

Average FTE from continuing operations

39,58939,25440,092

1%-1%

Average FTE including discontinued operations

39,58939,62740,6010%-2%Discontinued operations

As atGeography

Movement

Australia

Mar 23
19,575

Sep 22
19,396

Mar 2219,807

Mar 23v. Sep 22
1%

Rest of World12,975

12,705

12,931

2%

0%

New Zealand

7,252

7,280

7,431

0%

-2%

Total FTE

39,80239,38140,169

1%

-1%

1.

Mar 23v. Mar 22-1%

Comparative information has been restated to include FTE of the consolidated investments managed by 1835i Group Pty Ltd in the Group Centre division (FTE: Sep 22: 185; Mar 22: 157;
Average FTE: Sep 22 half: 172; Mar 22 half: 79).

Other Non-Financial Information
Half Year

Movement

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Mar 23v. Mar 22- high

26.08

28.25

28.98

-8%

-10%

- low

22.39

20.95

24.65

7%

-9%

- closing

22.93

22.80

27.60

1%

-17%

Shareholder value - ordinary shares
Share price ($)

Closing market capitalisation of ordinary shares ($B)

68.9

68.2

77.1

1%

-11%

Total shareholder returns (TSR)

3.6%-14.4%

0.5%

large

large

As at Mar 23
ANZBGL Credit ratings
Moody's Investors Service
S&P Global Ratings
Fitch Ratings

17

ShortTerm
P-1

LongTerm
Aa3

A-1+

AA-

StableF1

A+

StableOutlook
Stable

SUMMARYThis page has been left blank intentionally18

GROUP RESULTSCONTENTS

Page

Cash Profit

20

Cash Net Interest Income

21

Cash Other Operating Income

23

Cash Operating Expenses

26

Software Capitalisation

28

Credit Risk

29

Cash Income Tax Expense

35

Impact of Foreign Currency Translation

36

Earnings Related Hedges

38

Cash Earnings Per Share38

Dividends

39

Economic Profit

39

Condensed Balance Sheet

40

Liquidity Risk

41

Funding

42

Capital Management

43

Leverage Ratio

47

Capital Management - Other Developments

48

19

GROUP RESULTS
Non-IFRS Information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
IFRS. The Group provides additional measures of performance in the Consolidated Financial Report and Dividend Announcement which are prepared ona basis other than in accordance with accounting standards. The guidance provided in Australian Securities and Investments Commission (ASIC)
Regulatory Guide 230 has been followed when presenting this information.

Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers toassess Group and Divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items
from statutory profit (refer to Definitions on pages 131 to 134 for further details). The adjustments made in arriving at cash profit are included in statutory
profit which is subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash profit is not
subject to review by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on aconsistent basis across each period presented.
This Group Results section is reported on a cash profit basis from continuing operations unless otherwise stated.

Half Year

Statutory profit attributable to shareholders of the Company fromcontinuing operations
Adjustments between statutory profit and cash profit1
Economic hedges
Revenue and expense hedges
Total adjustments between statutory profit and cash profit
Cash profit from continuing operations
1.

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

3,547

3,603

3,535

-2%

0%

190

(196)

(373)

large

large

84

(5)

(49)

large

large

274

(201)

(422)

large

large

3,821

3,402

3,113

12%

23%

Refer to pages 71 to 73 for analysis of the adjustments between statutory profit and cash profit.

Half Year

Group performance - cash profit

Movement

Mar 23$M
8,503

Sep 22$M
7,774

Mar 22$M
7,100

Mar 23v. Sep 22
9%

Mar 23v. Mar 22
20%

Other operating income

2,025

1,825

1,848

11%

10%

Operating income

10,528

9,599

8,948

10%

18%

Operating expenses(4,997)(4,788)(4,791)

4%

4%

Cash profit before credit impairment and income tax

5,531

4,811

4,157

15%

33%

Net interest income

Credit impairment (charge)/release

(133)

(52)

284

large

large

Cash profit before income tax

5,398

4,759

4,441

13%

22%

Income tax expense and non-controlling interests(1,577)(1,357)(1,328)16%

19%

Cash profit from continuing operations

3,821

3,402

3,113

12%

23%

Half Year

Movement

Mar 23$M
1,026

Sep 22$M
1,072

Mar 22$M937

Mar 23v. Sep 22-4%

Mar 23v. Mar 22
9%

739

668

883

11%

-16%

Institutional

1,597

1,128

809

42%

97%

New Zealand

774

745

704

4%

10%

Pacific

34

15

(6)

large

large

Cash Profit/(Loss) by Division
Australia Retail
Australia Commercial

Group Centre

(349)

(226)

(214)

54%

63%

Cash profit from continuing operations

3,821

3,402

3,113

12%

23%

20

GROUP RESULTS
Cash Net Interest Income
Half Year

Movement

Mar 23$M
8,503

Sep 22$M
7,774

Mar 22$M
7,100

Mar 23v. Sep 22
9%

Mar 23v. Mar 22
20%

Average interest earning assets

972,972

920,340

899,678

6%

8%

Average deposits and other borrowings

826,160

792,561

768,118

4%

8%

1.75

1.68

1.58

7 bps

17 bps

8,339

7,483

6,684

11%

25%

Average interest earning assets

687,563

659,400

645,467

4%

7%

Average deposits and other borrowings

628,973

608,962593,241

3%

6%

2.43

2.26

2.08

17 bps

35 bpsGroup
Net interest income1

Net interest margin (%)
Group (excluding Markets business unit)
Net interest income1

Net interest margin (%)

Half Year

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

2.39

2.29

2.21

10 bps18 bpsAverage interest earning assets

253,743

245,434

245,462

3%

3%

Average deposits and other borrowings

152,392

147,689

143,8883%

6%

82 bps

Net interest margin by major division1
Australia Retail
Net interest margin (%) - cash

Australia Commercial2
Net interest margin (%) - cash

2.72

2.30

1.90

42 bpsAverage interest earning assets

60,86059,56858,162

2%

5%

Average deposits and other borrowings

113,276

115,269

114,924

-2%

-1%

0.91

0.91

0.88

0 bps

3 bps

Average interest earning assets

454,334

421,500

403,894

8%

12%

Average deposits and other borrowings

355,905

341,058

327,1124%

9%Institutional
Net interest margin (%) - cash

New Zealand
Net interest margin (%) - cash

1.
2.

2.67

2.61

2.33

6 bps

34 bpsAverage interest earning assets

118,639

115,874

116,779

2%

2%

Average deposits and other borrowings

102,113

100,984

101,7291%0%Includes the major bank levy of -$175 million for the March 2023 half (Sep 22 half: -$175 million; Mar 22 half: -$165 million).
Australia Commercial division generates positive net interest income from surplus deposits held. Accordingly, $59.3 billion of average deposits for the March 2023 half (Sep 22 half:$62.8 billion; Mar 22 half: $64.1 billion) have been included within average net interest earning assets for the net interest margin calculation to align with internal management reportingview.

Group net interest margin - March 2023 Half Year v March 2022 Half Year•

March 2023 v March 2022
Net interest margin (+17 bps)•

Asset pricing (-18 bps): primarily driven by home loan pricing competition in the Australia Retail and New Zealand divisions.

•

Deposit pricing and wholesale funding (+37 bps): driven by favourable deposit margins from a rising interest rate environment.

•

Asset and funding mix (-4 bps): driven by unfavourable deposit mix with a shift towards lower margin term deposits, increased term wholesalefunding relative to customer deposits, and unfavourable asset mix with higher growth in the Institutional division. This was partially offset byfavourable lending mix with a shift towards higher margin variable rate home loans.

21

GROUP RESULTS•

Capital and replicating portfolio (+14 bps): primarily driven by a rising interest rate environment.

•

Liquidity (-3 bps): driven by growth in lower yielding liquid assets to replace the Committed Liquidity Facility (CLF), and other increases in liquid
assets to meet regulatory compliance requirements.

•

Markets activities (-9 bps): lower net interest income was driven by higher funding costs, primarily on commodity and fixed income assets where
the related revenues are recognised as Other operating income.

Average interest earning assets (+73.3 billion or +8%)•

Average net loans and advances (+42.2 billion or +7%): driven by lending growth across all divisions, and the impact of foreign currencytranslation movements.

•

Average trading assets and investment securities (+5.0 billion or +4%): driven by higher liquid assets partially offset by the impact of foreign
currency translation movements.

•

Average cash and other liquid assets (+26.2 billion or +15%): driven by higher central bank balances and higher reverse repurchase agreements.

Average deposits and other borrowings (+58.0 billion or +8%)•

Average deposits and other borrowings (+58.0 billion or +8%): driven by growth in term deposits across all divisions, and increases in commercial
paper and certificates of deposit, partially offset by lower at-call deposits.

Group net interest margin - March 2023 Half Year v September 2022 Half Year•

March 2023 v September 2022
Net interest margin (+7 bps)•

Asset pricing (-9 bps): primarily driven by home loan pricing competition in the Australia Retail and New Zealand divisions.

•

Deposit pricing and wholesale funding (+20 bps): driven by favourable deposit margins from a rising interest rate environment.

•

Asset and funding mix (-3 bps): driven by unfavourable deposit mix with a shift towards lower margin term deposits, increased term wholesalefunding relative to customer deposits, and unfavourable asset mix with higher growth in the Institutional division. This was partially offset byfavourable lending mix with a shift towards higher margin variable rate home loans.

•

Capital and replicating portfolio (+7 bps): primarily driven by rising interest rate environment.

•

Liquidity (-2 bps): driven by growth in lower yielding liquid assets to replace CLF, and other increases in liquid assets to meet regulatorycompliance requirements.

•

Markets activities (-6 bps): lower net interest income was driven by higher funding costs, primarily on commodity and fixed income assets where
the related revenues are recognised as Other operating income.

Average interest earning assets (+52.6 billion or +6%)•

Average net loans and advances (+29.8 billion or +5%): driven by lending growth across all divisions, and the impact of foreign currencytranslation movements.

•

Average trading assets and investment securities (+3.7 billion or +3%): driven by higher liquid assets, partially offset by the impact of foreign
currency translation movements.

•

Average cash and other liquid assets (+19.2 billion or +11%): driven by higher central bank balances and higher reverse repurchase agreements.

Average deposits and other borrowings (+33.6 billion or +4%)•

Average deposits and other borrowings (+33.6 billion or +4%): driven by growth in term deposits in all divisions, increases in commercial paper,and certificate of deposits and the impact of foreign currency translation movements. This was partially offset by lower at-call deposits in alldivisions.

22

GROUP RESULTS
Cash Other Operating Income
Half Year

Movement

Net fee and commission income1

Mar 23$M890

Sep 22$M954

Mar 22$M953

Mar 23v. Sep 22-7%

Mar 23v. Mar 22-7%

Markets other operating income

985

464

396

large

large

Share of associates' profit/(loss)

101

103

74

-2%

36%

Other1

49

304

425

-84%

-88%

Total

2,025

1,825

1,848

11%

10%

Total excluding large/notable items2

2,075

1,810

1,576

15%

32%

Other operating income by division
Australia RetailMar 23$M281

Sep 22$M353

Mar 22$M
269

Mar 23v. Sep 22-20%

Mar 23v. Mar 22
4%-63%

Half Year

Movement

175

185

477

-5%

Institutional

1,373

868

783

58%

75%

New Zealand

199

216

244

-8%

-18%

Australia Commercial

Pacific

40

34

34

18%

18%

Group Centre

(43)

169

41

large

large

Total

2,025

1,825

1,848

11%

10%

Markets income
Net interest income

Mar 23$M
164

Sep 22$M
291

Mar 22$M416

Mar 23v. Sep 22-44%

Mar 23v. Mar 22
-61%

985

464

396

large

large

1,149

755

812

52%

42%

Half Year

Other operating income
Total
1.

Excluding the Markets business unit.
2. Refer to pages 12 to 16 for details of large/notable items.

23

Movement

GROUP RESULTS
Other operating income - March 2023 Half Year v March 2022 Half Year•

March 2023 v March 2022
Other operating income increased $177 million (+10%).
Net fee and commission income (-$63 million or -7%)•$71 million decrease in the Australia Commercial division driven by lower revenue following business divestments.

•$14 million decrease in the New Zealand division primarily driven by lower funds management fees.

•$21 million increase in the Australia Retail division driven by higher cards revenue reflecting an increase in consumer spending, new home loan
offset account fees, and lower customer remediation.

•$16 million increase in the Institutional division (excluding Markets) driven by higher guarantee fees in Transaction Banking and higher deal
activities in Corporate Finance, partially offset by lower revenue following business divestment.

Markets income (+$337 million or +42%)
Markets income increased $337 million driven by a $589 million increase in Other operating income, partially offset by a $252 million decrease in Net
interest income. The decrease in Net interest income was driven by higher funding costs, primarily commodity and fixed income assets where therelated revenues were recognised as Other operating income. The $337 million increase was attributable to the following business activities:•$133 million increase in Balance Sheet driven by favourable yield curve movements and portfolio repricing.

•$83 million increase in Foreign Exchange driven by customer demand for hedging solutions, with continued foreign exchange volatility andinterest rate differentials across currencies, and generally more favourable trading conditions.

•$80 million increase in Credit and Capital Markets driven by more favourable credit trading conditions and higher levels of customer issuances.

•$37 million increase in Derivative Valuation Adjustments with lower credit valuation adjustments arising from tightening credit spreads, and lower
currency and interest rate volatility.

•$27 million increase in Commodities driven by more favourable trading conditions and sustained customer demand for hedging solutions.

•$23 million decrease in Rates driven by less favourable trading conditions than the March 2022 half, partially offset by increased customer
demand for hedging solutions as interest rates increased.

Share of associates’ profit/(loss) (+$27 million or +36%)•$27 million increase in share of associates’ profits primarily driven by P.T. Bank Pan Indonesia (PT Panin) ($32 million) and AMMB Holdings
Berhad (AmBank) ($12 million), partially offset by equity accounted losses in Worldline Australia Pty Ltd ($17 million).

Other (-$376 million or -88%)•$231 million decrease in the Australia Commercial division driven by a gain on completion of the ANZ Worldline partnership ($307 million),
partially offset by a loss on sale of the financial planning and advice business ($62 million), both in the March 2022 half.

•$99 million decrease in the Group Centre division primarily driven by lower valuation adjustments from investments measured at fair value($48 million), a loss on reclassification of data centres to held for sale ($43 million), and lower realised gains on economic hedges against foreign
currency denominated revenue streams offsetting net favourable foreign currency translations elsewhere in the Group ($42 million). This waspartially offset by the recycling of foreign currency translation reserves from Other comprehensive income to profit or loss on dissolution of
Minerva and ANZ Asia ($65 million) in the March 2022 half.

•$31 million decrease in the New Zealand division driven by realised gains from the sale of government securities in the March 2022 half.

24

GROUP RESULTS•

March 2023 v September 2022
Other operating income increased $200 million (+11%).
Net fee and commission income (-$64 million or -7%)•$27 million decrease in the Australia Retail division driven by higher cards travel insurance premium reflecting the recovery in domestic andinternational travel, the timing of recognition of cards incentives, and seasonality of fees.

•$16 million decrease in the New Zealand division driven by lower cards revenue due to the reduction in domestic interchange rates.

Markets income (+$394 million or +52%)
Markets income increased $394 million driven by a $521 million increase in Other operating income, partially offset by a $127 million decrease in Net
interest income. The decrease in Net interest income was driven by higher funding costs, primarily commodity and fixed income assets where therelated revenues were recognised as Other operating income. The $394 million increase was primarily attributable to the following business activities:•$150 million increase in Balance Sheet driven by favourable outcomes from yield curve movements and portfolio repricing.

•$62 million increase in Derivative Valuation Adjustments with lower credit valuation adjustments arising from tightening credit spreads, and lower
currency and interest rate volatility.

•$59 million increase in Credit and Capital Markets driven by more favourable credit trading conditions, and higher levels of customer issuances.

•$50 million increase in Commodities driven by more favourable trading conditions, and increased customer demand for hedging solutions.

•$47 million increase in Rates driven by increased customer demand for hedging solutions, partially offset by less favourable trading conditions.

•$26 million increase in Foreign Exchange driven by customer demand for hedging solutions arising from continuing volatility and interest rate
differentials across currencies, and more favourable trading conditions.

Other (-$255 million or -84%)•$207 million decrease in the Group Centre division driven by lower realised gains on economic hedges against foreign currency denominatedrevenue streams offsetting net favourable foreign currency translations elsewhere in the Group ($59 million), lower valuation adjustments frominvestments measured at fair value ($49 million), a loss on reclassification of data centres in Australia to held for sale ($43 million) and a net gain
on modification of a significant lease arrangement in the September 2022 half ($23 million).

•$45 million decrease in the Australia Retail division driven by lower insurance-related income.

25

GROUP RESULTS
Cash Operating Expenses
Half Year

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

Personnel

2,893

2,642

2,654

10%

9%

Premises

334

380

341

-12%

-2%

Technology

836

806

815

4%

3%

Restructuring

54

52

49

4%

10%

Other

880

908

932

-3%

-6%

Total

4,997

4,788

4,791

4%

4%

Total excluding large/notable items1

4,844

4,626

4,544

5%

7%

Half Year

Movement

Operating expenses by division

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

Australia Retail

1,745

1,656

1,741

5%

0%
6%

685

652

649

5%

Institutional

1,328

1,293

1,273

3%

4%

New Zealand

630

622

651

1%

-3%

Australia Commercial

Pacific

74

73

80

1%

-8%

Group Centre

535

492

397

9%

35%

4,997

4,788

4,791

4%

4%

Mar 23v. Mar 22

Total

Half Year

Movement

FTE by division

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Australia Retail

11,199

11,107

11,475

1%-2%

Australia Commercial

3,607

3,551

3,528

2%

2%

Institutional

6,353

6,316

6,323

1%

0%

New Zealand

6,785

6,793

6,939

0%

-2%

Pacific

1,037

1,086

1,092

-5%

-5%

Group Centre2

10,821

10,31910,3295%

5%

Total FTE

39,802

39,172

39,6862%

0%39,58939,25440,092

1%-1%

Average FTE
1.
2.

2

Refer to pages 12 to 16 for further details on large/notable items.
Comparative information has been restated to include FTE of the consolidated investments managed by 1835i Group Pty Ltd in the Group Centre division (FTE: Sep 22: 185; Mar 22: 157;
Average FTE: Sep 22 half: 172; Mar 22 half: 79).

26

GROUP RESULTS
Operating expenses - March 2023 Half Year v March 2022 Half Year•

March 2023 v March 2022
Operating expenses increased by $206 million (+4%).

••

Personnel expenses increased $239 million (+9%) driven by inflationary impacts on wages including the revaluation of leave provisions, andincremental run costs associated with strategic initiatives including Cloud and ANZ Plus. This was partially offset by continued back and middleoffice optimisation.

•

Technology expenses increased $21 million (+3%) driven by higher software licence costs and inflationary impacts on vendor contracts. Thiswas partially offset by benefits from simplifying network infrastructure, lower amortisation, and reduction in spend on regulatory and complianceinitiatives.

•

Other expenses decreased $52 million (-6%) driven by a reduction in regulatory and compliance initiatives, partially offset by increases intransaction related costs and costs previously attributed to discontinued operations.

March 2023 v September 2022
Operating expenses increased by $209 million (+4%).
•

Personnel expenses increased $251 million (+10%) driven by inflationary impacts on wages including the revaluation of leave provisions,incremental run costs associated with strategic initiatives including Cloud and ANZ Plus, and the impact of unfavourable foreign currencytranslation movements. This was partially offset by continued back and middle-office optimisation.

•

Premises expenses decreased $46 million (-12%) driven by the modification of a significant lease arrangement in the September 2022 half.

•

Technology expenses increased $30 million (+4%) driven by higher software licence costs and inflationary impacts on vendor contracts. Thiswas partially offset by benefits from simplifying network infrastructure, lower amortisation, and reduction in spend on regulatory and complianceinitiatives.

•

Other expenses decreased $28 million (-3%) driven by a reduction in regulatory and compliance initiatives, partially offset by increases intransaction related costs and costs previously attributed to discontinued operations.

27

GROUP RESULTS
Software Capitalisation
Capitalised software comprises both costs incurred to develop software and costs to acquire software. These costs are capitalised as intangible assets
and amortised over the expected useful lives. Details are presented in the table below:
Half Year
Mar 23$M896

Balance at start of period

Sep 22$M
924

Movement
Mar 22$M960

Mar 23v. Sep 22-3%

Mar 23v. Mar 22-7%

Software capitalised during the period

143

160

155

-11%

-8%

Amortisation during the period

(163)

(186)

(189)

-12%

-14%
large

Software impaired/written-off

-

(1)

(2)

large

Foreign currency translation

1

(1)

-

large

n/a

Total capitalised software

877

896

924

-2%

-5%

Capitalised software by division

As at
Mar 23$M
132

Australia Retail

Movement

Sep 22$M141

Mar 22$M147

Mar 23v. Sep 22-6%

Mar 23v. Mar 22-10%
46%

Australia Commercial

86

74

59

16%

Institutional

415

405

399

2%

4%

New Zealand

14

15

20

-7%

-30%

Group Centre

230

261

299

-12%

-23%

Total capitalised software

877

896

924

-2%

-5%

28

GROUP RESULTS
Credit Risk
The Group’s assessment of expected credit losses (ECL) from its credit portfolio is subject to judgements and estimates made by management based ona variety of internal and external information, as well as the Group’s experience of the performance of the portfolio under previously stressed conditions.
Refer to Note 1 of the Condensed Consolidated Financial Statements for further information.
Allowance for expected credit losses
As at

Collectively assessed allowance for ECL

Mar 23$M
4,040

Sep 22$M
3,853

Mar 22$M
3,757

Mar 23v. Sep 22
5%

Mar 23v. Mar 22
8%

421

542

636

-22%

-34%

4,461

4,395

4,393

2%

2%

Individually assessed allowance for ECL
Total allowance for ECL

Movement

Credit impairment charge/(release)
Half Year

Movement

Collectively assessed credit impairment charge/(release)

Mar 23$M
163

Sep 22$M
60

Mar 22$M(371)

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large

Individually assessed credit impairment charge/(release)

(30)

(8)

87

large

large

Total credit impairment charge/(release)

133

52

(284)

large

large

Credit impairment charge/(release) by division
Half Year
Collectively assessed
Australia Retail

Movement

Mar 23$M50

Sep 22$M(11)

Mar 22$M(158)

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large

57

(5)

(165)

large

large

Australia Commercial
Institutional

5

13

(26)

-62%

large

New Zealand

66

79

(18)

-16%

large

Pacific

(15)

(16)

(3)

-6%

large

-

-

(1)

n/a

large

Total collectively assessed

163

60

(371)

large

large

Individually assessed
Australia Retail

32

(5)

45

large

-29%

Australia Commercial

9

(6)

43

large

-79%

Institutional

(79)

(15)

1

large

large

New Zealand

9

(3)

(13)

large

large

Pacific

(1)

7

6

large

large

Group Centre

-

14

5

large

large

Total individually assessed

(30)

(8)

87

large

large

Total credit impairment charge/(release)
Australia Retail

82

(16)

(113)

large

large

Australia Commercial

66

(11)

(122)

large

large

Institutional

(74)

(2)

(25)

large

large

New Zealand

75

76

(31)

-1%

large

Pacific

(16)

(9)

3

78%

large

Group Centre

-

14

4

large

large

133

52

(284)

large

large

Group Centre
Total credit impairment charge/(release)

29

GROUP RESULTS
Credit impairment charge/(release) by division, cont'dCollectively assessed

March 2023 Half Year
Australia Retail

Individually assessedStage 1
$M

Stage 2
$M

Stage 3
$M

Total
$M

Stage 3 New andincreased
$M

(39)

78

11

50

94

Stage 3 Recoveries
and writebacks
$M

Total
$M

Total
$M

(62)

32

82

Australia Commercial

(2)

75

(16)

57

62

(53)

9

66

Institutional

43

(31)

(7)

5

57

(136)

(79)

(74)

New Zealand

(2)

58

10

66

21

(12)

9

75

Pacific

(1)

(8)

(6)

(15)

3

(4)

(1)

(16)

Group Centre

-

-

-

-

-

-

-

-

Total

(1)

172

(8)

163

237

(267)

(30)

133

Australia Retail

27

(28)

(10)

(11)

97

(102)

(5)

(16)

Australia Commercial

(6)

46

(45)

(5)

76

(82)

(6)

(11)

Institutional

50

(46)

9

13

12

(27)

(15)

(2)
76

September 2022 Half Year

New Zealand

39

38

2

79

24

(27)

(3)

Pacific

3

(13)

(6)

(16)

10

(3)

7

(9)

Group Centre

-

-

-

-

-

14

14

14

113

(3)

(50)

60

219

(227)

(8)

52

Total
March 2022 Half Year
Australia Retail

(21)

(131)

(6)

(158)

121

(76)

45

(113)

Australia Commercial

77

(260)

18

(165)

118

(75)

43

(122)

Institutional

54

(71)

(9)

(26)

38

(37)

1

(25)

New Zealand

3

(23)

2

(18)

15

(28)

(13)

(31)

Pacific

(5)

-

2

(3)

9

(3)

6

3

Group Centre

(1)

-

-

(1)

-

5

5

4

107

(485)

7

(371)

301

(214)

87

(284)

Total

Collectively assessed credit impairment charge/(release)•

March 2023 v March 2022
The collectively assessed impairment charge of $163 million for the March 2023 half was driven by deterioration in economic outlook, a net increasein management temporary adjustments, and deterioration in credit risk. This was partially offset by an improvement in portfolio composition,
particularly in the Institutional division.
The collectively assessed credit impairment release of $371 million for the March 2022 half was driven by improvements in credit risk, favourable
changes in portfolio composition, and a net release of management temporary adjustments. This was partially offset by an increase for the downside
risks associated with the economic outlook.

•

March 2023 v September 2022
The collectively assessed impairment charge of $163 million for the March 2023 half was driven by deterioration in economic outlook, a net increasein management temporary adjustments, and deterioration in credit risk. This was partially offset by an improvement in portfolio composition,
particularly in the Institutional division.
The collectively assessed impairment charge of $60 million for the September 2022 half was driven by worsening base economic forecast andincreasing downside risks associated with the economic outlook. This was partially offset by portfolio risk and composition improvements, and a net
release of management temporary adjustments.

Individually assessed credit impairment charge/(release)•

March 2023 v March 2022
The individually assessed credit impairment charge decreased $117 million driven by decreases in the Institutional division (-$80 million) due tosignificant write-backs and recoveries, the Australia Commercial (-$34 million) and Australia Retail (-$13 million) divisions due to subdued
delinquency flows. This was partially offset by the New Zealand division (+$22 million) due to lower write-backs.

•

March 2023 v September 2022
The individually assessed credit impairment release increased $22 million driven by Institutional division (-$64 million) due to significant write-backand recoveries. This was partially offset by increases in the Australian Retail (+$37 million) and Australia Commercial (+$15 million) divisions due tolower write-backs and recoveries, and the New Zealand (+$12 million) division due to lower recoveries.

30

GROUP RESULTS
Allowance for expected credit losses by division1
As at

Movement

Sep 22$M899

Mar 22$M909

Mar 23v. Sep 22
6%

Mar 23v. Mar 22
4%

Collectively assessed
Australia RetailMar 23$M
949

Australia Commercial

1,033

976

982

6%

5%

Institutional

1,451

1,452

1,382

0%

5%

New Zealand

543

448

393

21%

38%

Pacific

63

77

89

-18%

-29%

Group Centre

1

1

2

0%

-50%

4,040

3,853

3,757

5%

8%

Total collectively assessed

Individually assessed
Australia Retail

68

75

106

-9%

-36%

Australia Commercial

149

188

258

-21%

-42%

Institutional

129

200

202

-36%

-36%

New Zealand

47

46

45

2%

4%

Pacific

28

33

25

-15%

12%

Group Centre
Total individually assessed

-

-

-

n/a

n/a

421

542

636

-22%

-34%

Allowance for ECL
Australia Retail

1,017

974

1,015

4%

0%

Australia Commercial

1,182

1,164

1,240

2%

-5%

Institutional

1,580

1,652

1,584

-4%

0%

New Zealand

590

494

438

19%

35%

Pacific

91

110

114

-17%

-20%

Group Centre
Total allowance for ECL
1.

1

1

2

0%

-50%

4,461

4,395

4,393

2%

2%

Includes allowance for ECL for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments - undrawn andcontingent facilities. For Investment securities - debt securities at FVOCI, the allowance for ECL is recognised in Other comprehensive income with a corresponding charge to profit or loss.

31

GROUP RESULTS
Allowance for expected credit losses by division, cont'd1
Individuallyassessed

Collectively assessedStage 1
$M

Stage 2
$M

Stage 3
$M

Australia Retail

107

660

182

Australia Commercial

350

586

97

Institutional

1,159

274

18

As at March 2023

Total
$M

Stage 3
$M

Total
$M

949

68

1,017

1,033

149

1,182

1,451

129

1,580

New Zealand

141

333

69

543

47

590

Pacific

16

28

19

63

28

91

Group Centre

1

-

-

1

-

1

1,774

1,881

385

4,040

421

4,461

145

583

171

899

75

974

Total

As at September 2022
Australia Retail
Australia Commercial

352

511

113

976

188

1,164

Institutional

1,124

303

25

1,452

200

1,652

New Zealand

134

259

55

448

46

494

Pacific

16

36

25

77

33

110

Group Centre

1

-

-

1

-

1

1,772

1,692

389

3,853

542

4,395

Australia Retail

119

609

181

909

106

1,015

Australia Commercial

358

465

159

982

258

1,240

Institutional

1,025

342

15

1,382

202

1,584

New Zealand

102

236

55

393

45

438

Pacific

12

47

30

89

25

114

Total

As at March 2022

Group Centre
Total
1.

1

1

-

2

-

2

1,617

1,700

440

3,757

636

4,393

Includes allowance for ECL for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments - undrawn andcontingent facilities. For Investment securities – debt securities at FVOCI, the allowance for ECL is recognised in Other comprehensive income with a corresponding charge to profit or loss.

32

GROUP RESULTS
Long-Run Loss Rates
Management believes that disclosure of modelled long-run historical loss rates for individually assessed provisions assists in assessing the longer term
expected loss rates of the lending portfolio by removing the volatility of reported earnings created by the use of accounting losses. The long-run loss
methodology used for economic profit is an internal measure and is not based on the credit loss recognition principles of AASB 9 Financial Instruments.
As at
Long-run loss as a % of gross lending assets by division

Mar 23

Sep 22

Mar 22Australia Retail

0.11%

0.11%

0.12%

Australia Commercial

0.53%

0.56%

0.62%

New Zealand

0.10%

0.11%

0.12%

Institutional

0.19%

0.21%

0.21%

Total Group

0.17%

0.19%

0.20%

Non-Performing Credit Exposures
As at

Movement

Mar 23$M804

Sep 22$M
1,043

Mar 22$M
1,286

Restructured items2

382

376

375

2%

2%

Non-performing commitments, contingencies and derivatives1

24

26

48

-8%

-50%

Gross impaired assets

1,210

1,445

1,709

-16%

-29%

Non-performing credit exposures not impaired

3,089

3,065

3,365

1%

-8%

Total non-performing credit exposures3

4,299

4,510

5,074

-5%

-15%

Gross impaired assets by division
Australia Retail

415

390

324

6%

28%

Australia Commercial

288

360

533

-20%

-46%

Institutional

302

425

683

-29%

-56%

New Zealand

100

93

113

8%

-12%

Impaired loans1

Mar 23v. Sep 22-23%

Mar 23v. Mar 22
-37%

105

177

56

-41%

88%

1,210

1,445

1,709

-16%

-29%

Gross impaired assets by size of exposure
Less than $10 million

956

1,084

1,054

-12%

-9%

$10 million to $100 million

123

131

221

-6%

-44%

Greater than $100 million

131

230

434

-43%

-70%

Gross impaired assets

1,210

1,445

1,709

-16%

-29%

(414)

(533)

(619)

-22%

-33%

(7)

(9)

(17)

-22%

-59%

789

903

1,073

-13%

-26%

Pacific
Gross impaired assets

Individually assessed provisions
Impaired loans
Non-performing commitments, contingencies and derivatives
Net impaired assets
1.

Impaired loans and non-performing commitments, contingencies and derivatives do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail
exposures of 90+ days past due and defaulted but well secured exposures.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed forStage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities
with similar risk.
3. Non-performing credit exposures are aligned with the definition in APS220 Credit Risk Management.
2.

•

March 2023 v March 2022
Gross impaired assets decreased $499 million (-29%) driven by decreases in the Institutional division (-$381 million) due to the upgrade andrepayments of several single name exposures, and the Australia Commercial division (-$245 million) due to underlying delinquency flows remaining
subdued and the upgrade and repayments of several single name exposures. This was partially offset by increases in the Australia Retail division($91 million) driven by well-secured home loans being classified as restructured exposures, and by the Pacific division ($49 million) driven by
exposures rolling off local COVID-19 support packages and classified as restructured exposures during the September 2022 half.

•

March 2023 v September 2022
Gross impaired assets decreased $235 million (-16%) driven by decreases in the Institutional division (-$123 million) due to the upgrade andrepayments of several single name exposures, the Australia Commercial division (-$72 million) due to underlying delinquency flows remaining
subdued, and the Pacific division (-$72 million) due to the upgrade of restructured exposures. This was partially offset by an increase in the Australia
Retail division (+$25 million) driven by well-secured home loans being classified as restructured exposures.
The Group’s individually assessed provision coverage ratio on impaired assets was 34.9% at 31 March 2023 (Sep 22: 37.5%; Mar 22: 37.2%;).

33

GROUP RESULTS
New Impaired Assets
Half Year

Movement

Mar 23$M405

Sep 22$M
320

Mar 22$M
478

Mar 23v. Sep 22
27%

Mar 23v. Mar 22-15%

Restructured items2

122

274

138

-55%

-12%

Non-performing commitments and contingencies1

11

5

23

large

-52%

Total new impaired assets

538

599

639

-10%

-16%

New impaired assets by division
Australia Retail

221

279

202

-21%

9%

Australia Commercial

93

109

191

-15%

-51%

Institutional

156

56

185

large

-16%

New Zealand

63

34

51

85%

24%

Pacific

5

121

10

-96%

-50%

538

599

639

-10%

-16%

Impaired loans1

Total new impaired assets
1.

2.

Impaired loans and non-performing commitments and contingencies do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail exposuresof 90+ days past due and defaulted but well secured exposures.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed forStage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new
facilities with similar risk.

•

March 2023 v March 2022
New impaired assets decreased $101 million (-16%) driven by decreases in the Institutional division (-$29 million) reflecting a number of single nameexposures recognised in the March 2022 half, and the Australia Commercial division (-$98 million) with underlying delinquency flows remaining
subdued. This was partially offset by increases in the Australia Retail division ($19 million) driven by restructured home loans, and the New Zealanddivision ($12 million) driven by the retail portfolio.

•

March 2023 v September 2022
New impaired assets decreased by $61 million (-9%) driven by decreases in the Pacific (-$116 million) and Australia Retail (-$58 million) divisions
due to high number of restructures recognised in the September 2022 half, and Australia Commercial division (-$16 million) with underlying
delinquency flows remaining subdued. This was partially offset by increases in the Institutional division ($100 million) reflecting impairment of several
single name exposures, and the New Zealand division ($29 million) driven by both the retail and commercial portfolios.

Ageing analysis of net loans and advances that are past due but not impaired
As at

Movement

1-29 days

Mar 23$M
6,213

Sep 22$M
5,322

Mar 22$M
4,676

Mar 23v. Sep 22
17%

Mar 23v. Mar 22
33%

30-59 days

1,965

1,243

1,368

58%

44%

60-89 days

759

598

635

27%

20%

90+ days

2,502

2,402

2,823

4%

-11%

Total

11,439

9,565

9,502

20%

20%

•

March 2023 v March 2022
Net loans and advances past due but not impaired increased $1,937 million (20%). The increase was primarily driven by home loan portfolios in theAustralia Retail and New Zealand divisions. This was partially offset by a decrease in the 90+ days category driven by subdued underlying
delinquency flows in the Australia Commercial division.

•

March 2023 v September 2022
Net loans and advances past due but not impaired increased $1,874 million (20%). The increases across all ageing categories were predominantly
driven by home loan portfolios in the Australia Retail and New Zealand divisions.

34

GROUP RESULTS
Cash Income Tax Expense
Half Year

Movement

Income tax expense from cash profit

Mar 23$M
1,563

Sep 22$M
1,356

Mar 22$M
1,328

Effective tax rate

29.0%

28.5%

29.9%

•

Mar 23v. Sep 22
15%

Mar 23v. Mar 22
18%

March 2023 v March 2022
The effective tax rate decreased from 29.9% to 29.0%. The decrease of 90 bps was driven by lower withholding tax expense on foreign dividends(-280 bps), lower net non-tax assessable gain from divestments/closures (-77 bps), and higher offshore earnings that attract a lower rate of tax(-54 bps). This was partially offset by the non-tax assessable gain on completion of the Worldline partnership in the March 2022 half (272 bps),
higher prior period adjustments booked in the March 2022 half (25 bps), and higher non-deductible interest on convertible instruments (23 bps).

•

March 2023 v September 2022
The effective tax rate increased from 28.5% to 29.0%. The increase of 50 bps was driven by higher prior period adjustments booked in the
September 2022 half (32 bps), higher equity accounted earnings (8 bps), and higher non-deductible interest on convertible instruments (12 bps).
This was partially offset by lower net non-tax assessable gain from divestments/closures (-8 bps).

35

GROUP RESULTS
Impact of Foreign Currency Translation
The following tables present the Group’s comparative cash profit results, net loans and advances and customer deposits neutralised for the impact offoreign currency translation movements. Comparative data has been adjusted to remove the translation impact of foreign currency movements byretranslating prior period comparatives at current period foreign exchange rates.
March 2023 Half Year v March 2022 Half Year
Half YearNet interest income

Movement

ActualFX
unadjusted

FX
impactFX
adjusted

FX
unadjusted

FX
adjustedMar 23$M
8,503

Mar 22$M
7,100

Mar 22$M(9)

Mar 22$M
7,091

Mar 23v. Mar 22
20%

Mar 23v. Mar 22
20%

Other operating income

2,025

1,848

(11)

1,837

10%

10%

Operating income

10,528

8,948

(20)

8,928

18%

18%

Operating expenses(4,997)(4,791)(4)(4,795)

4%

4%

Cash profit before credit impairment and income tax

5,531

4,157

(24)

4,133

33%

34%

Credit impairment (charge)/release

(133)

284

(1)

283

large

large

Cash profit before income tax

5,398

4,441

(25)

4,416

22%

22%

Income tax expense and non-controlling interests(1,577)(1,328)11(1,317)

19%

20%

Cash profit from continuing operations

3,821

3,113

(14)

3,099

23%

23%

1,026

937

-

937

9%

9%

Cash profit/(loss) from continuing operations by division
Australia Retail
Australia Commercial

739

883

-

883

-16%

-16%

Institutional

1,597

809

12

821

97%

95%

New Zealand

774

704

(18)

686

10%

13%

Pacific

34

(6)

-

(6)

large

large

Group Centre

(349)

(214)

(8)

(222)

63%

57%

Cash profit from continuing operations

3,821

3,113

(14)

3,099

23%

23%

Australia Retail

300,581284,548-284,548

6%

6%

Australia Commercial

59,911

57,625-57,625

4%

4%

Institutional

208,265

188,177

7,100

195,277

11%

7%

New Zealand

120,262

116,403879

117,282

3%

3%

1,661

1,664

86

1,750

0%

-5%

Net loans and advances by division

Pacific
Group Centre

(593)

3,019

-

3,019

large

large

690,087

651,436

8,065

659,501

6%

5%

Australia Retail

156,374

147,000-

147,000

6%

6%Australia Commercial

113,011

116,420-

116,420-3%-3%Net loans and advances

Customer deposits by division

Institutional

278,089

247,173

13,505

260,678

13%

7%

New Zealand

97,95896,765730

97,495

1%

0%

Pacific

3,562

3,763

210

3,973

-5%

-10%

Group Centre
Customer deposits

(367)

(67)

-

(67)

large

large

648,627

611,054

14,445625,499

6%

4%

36

GROUP RESULTS
March 2023 Half Year v September 2022 Half YearNet interest income

ActualMar 23$M
8,503

Half Year
FX
FX
unadjusted
impactSep 22
Sep 22
$M
$M
7,774
55

FX
adjusted
Sep 22$M
7,829

Movement
FX
FX
unadjusted
adjustedMar 23
Mar 23v. Sep 22
v. Sep 22
9%9%Other operating income

2,025

1,825

(11)

1,814

11%

12%

Operating income

10,528

9,599

44

9,643

10%

9%

Operating expenses(4,997)(4,788)(30)(4,818)4%

4%

Cash profit before credit impairment and income tax

5,531

4,811

14

4,825

15%

15%

Credit impairment (charge)/release

(133)

(52)

2

(50)

large

large

Cash profit before income tax

5,398

4,759

16

4,775

13%

13%

Income tax expense and non-controlling interests(1,577)(1,357)(1)(1,358)16%

16%

Cash profit from continuing operations

3,821

3,402

15

3,417

12%

12%

1,026

1,072

-

1,072

-4%

-4%

Cash profit/(loss) from continuing operations by division
Australia Retail
Australia Commercial

739

668

-

668

11%

11%

Institutional

1,597

1,128

19

1,147

42%

39%

New Zealand

774

745

11

756

4%

2%
large

Pacific

34

15

1

16

large

Group Centre

(349)

(226)

(16)

(242)

54%

44%

Cash profit from continuing operations

3,821

3,402

15

3,417

12%

12%

Australia Retail

300,581

290,322-290,3224%

4%Australia Commercial

59,911

59,727-59,7270%0%Institutional

208,265

207,241(804)

206,437

0%

1%

New Zealand

120,262

113,288

7,107

120,395

6%

0%

1,661

1,754

-

1,754

-5%

-5%

Net loans and advances by division

Pacific
Group Centre

(593)

75

-

75

large

large

690,087

672,407

6,303

678,7103%

2%

Australia Retail

156,374

149,953-

149,953

4%

4%

Australia Commercial

113,011

112,195-

112,195

1%

1%

Institutional

278,089

262,534(2,047)

260,487

6%

7%

New Zealand

97,95892,032

5,774

97,806

6%0%

Pacific

3,562

3,776

(19)

3,757

-6%

-5%

Net loans and advances

Customer deposits by division

Group Centre
Customer deposits

(367)

(61)

-

(61)

large

large

648,627

620,429

3,708

624,137

5%

4%

37

GROUP RESULTS
Earnings Related Hedges
Where it is considered appropriate, the Group takes out economic hedges against larger foreign exchange denominated revenue streams (primarily New
Zealand Dollar and US Dollar). New Zealand Dollar exposure relates to the New Zealand geography and USD exposures relate to Rest of World
geography. Details of these hedges are set out below.
Half YearNZD Economic hedges
Net open NZD position (notional principal)1,2
Amount taken to income (pre-tax statutory basis)3

Mar 23$M
3,011

Sep 22$M
2,585

Mar 22
$M
2,630

(148)

113

63

Amount taken to income (pre-tax cash basis)4

16

38

7

USD Economic hedges
Net open USD position (notional principal)1,2

750

685

529

Amount taken to income (pre-tax statutory basis)3

28

(80)

21

Amount taken to income (pre-tax cash basis)4

(20)

(12)

6

1.
2.

Value in AUD at contracted rate.
The following hedges were in place to partially hedge future earnings against adverse movements in exchange rates, at a NZD forward rate of NZD 1.10/AUD as at 31 March 2023 (Sep 22:
NZD1.09/AUD; Mar 22: NZD 1.07/AUD), and a USD forward rate of USD 0.69/AUD as at 31 March 2023 (Sep 22: USD 0.71/AUD; Mar 22: USD 0.75/AUD).
Half Year
Mar 23

Sep 22

Mar 22

At period end (NZD billion)

3.3

2.8

2.8

Matured during the period (NZD billion)

1.3

1.2

1.1

At period end (USD billion)

0.5

0.5

0.4

Matured during the period (USD billion)

0.1

0.1

0.2

NZD Economic Hedges

USD Economic Hedges

3.
4.

Unrealised valuation movement plus realised revenue from matured or closed out hedges.
Realised revenue from closed out hedges.

An unrealised loss on the outstanding NZD and USD economic hedges of $116 million for the March 2023 half (Sep 22 half: $7 million gain; Mar 22 half:$71 million gain) was recorded in statutory profit. This unrealised loss is treated as an adjustment to statutory profit in calculating cash profit (included inrevenue and expense hedge adjustments) as these are hedges of future NZD and USD revenues.

Cash Earnings Per ShareHalf Year

Movement

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Mar 23v. Mar 22

Basic

127.6

118.8

109.9

7%

16%

Diluted

121.1

111.6

103.3

9%

17%

Basic

2,994.1

2,862.5

2,832.9

5%

6%

Diluted

3,278.3

3,145.5

3,103.8

4%

6%

Cash profit from continuing operations ($M)

3,821

3,402

3,113

12%

23%

Cash profit from continuing operations used in calculating
diluted cash earnings per share ($M)

3,971

3,509

3,205

13%

24%

Cash earnings per share from continuing operations (cents)

Cash weighted average number of ordinary shares (M)38

GROUP RESULTS
Dividends
Movement

Half Year
Dividend per ordinary share (cents)1
InterimMar 2381

Sep 22-

Mar 22
72

Final

-

74

-

Total

81

74

72

2,433

2,213

2,012

Ordinary share dividends used in payout ratio ($M)2,3
Cash profit from continuing operations ($M)

3,821

3,402

3,113

Ordinary share dividend payout ratio (cash continuing basis)3

63.7%

65.0%

64.6%

1.

2.

3.

Mar 23v. Sep 22

Mar 23v. Mar 22

9%

13%

12%

23%

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2023 interim dividend (2022 final dividend: NZD 9 cents;
2022 interim dividend: NZD 9 cents).
Dividend paid to ordinary equity holders of the Company. Excludes dividends paid by subsidiaries to the Group’s non-controlling equity holders of $13 million (Sep 22 half: nil; Mar 22
half: $2 million).
Dividend payout ratio is calculated using the proposed 2023 interim dividend of $2,433 million, based on the forecast number of ordinary shares on issue at the dividend record date.
Dividend payout ratios for the September 2022 half and March 2022 half were calculated using actual dividends.

The Directors propose an interim dividend of 81 cents be paid on each eligible fully paid ANZ ordinary share on 3 July 2023. The proposed 2023 interim
dividend will be fully franked for Australian tax purposes. New Zealand imputation credits of NZD 9 cents per ordinary share will also be attached.

Economic Profit
Half Year

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

3,547

3,603

3,535

-2%

0%

274

(201)

(422)

large

large

Cash profit from continuing operations

3,821

3,402

3,113

12%

23%

Economic credit cost adjustment

(333)

(412)

(675)

-19%

-51%

Statutory profit attributable to shareholders of the Company fromcontinuing operations
Adjustments between statutory profit and cash profit from continuing operations

625

526

405

19%

54%

Economic return from continuing operations

4,113

3,516

2,843

17%

45%

Cost of capital(3,268)(3,072)(3,028)

6%

8%

845

444

(185)

90%

large

Imputation credits

Economic profit from continuing operations

Economic profit is a risk adjusted profit measure used to evaluate business unit performance. This is used for internal management purposes and is not
subject to review by the external auditor.
At a business unit level, capital is allocated based on regulatory capital, whereby higher risk businesses attract higher levels of capital. This method isdesigned to help drive appropriate risk management and ensure business returns align with the level of risk. Key risks covered include credit risk,
operational risk, market risk and other risks.
Economic profit is calculated via a series of adjustments to cash profit:•

The economic credit cost adjustment replaces the accounting credit loss charge with internal expected loss based on the average long-run loss rate
per annum on the portfolio over an economic cycle.

•

The benefit of imputation credits is recognised, estimated based on 70% of Australian tax.

•

The cost of capital is a major component of economic profit. At an ANZ Group level, this is calculated using average ordinary shareholders’ equity(excluding non-controlling interests), multiplied by the cost of capital rate (currently at 9.75% with comparative periods restated accordingly).

Economic profit increased by $1,030 million against the March 2022 half driven by higher cash profit, favourable economic credit cost adjustment andhigher imputation credits, partially offset by higher cost of capital.
Economic profit increased by $401 million against the September 2022 half, impacted by higher cash profit, favourable economic credit cost adjustment
and higher imputation credits, partially offset by higher cost of capital.

39

GROUP RESULTS
Condensed Balance Sheet
As at

Movement

AssetsCash / Settlement balances owed to ANZ / Collateral paid

Mar 23$B
225.1

Sep 22$B
185.6

Mar 22$B
186.0

Trading assets and investment securities

133.6

121.4

Derivative financial instruments

45.6

90.2

Net loans and advances

690.1

672.4

Mar 23v. Sep 22
21%

Mar 23v. Mar 22
21%

119.2

10%

12%

45.2

-49%

1%

651.4

3%

6%

16.8

16.0

15.6

5%

8%

1,111.2

1,085.6

1,017.4

2%

9%Settlement balances owed by ANZ / Collateral received

31.0

30.0

26.5

3%

17%

Other
Total assets
Liabilities
Deposits and other borrowings

842.6

797.3

780.3

6%

8%

Derivative financial instruments

46.2

85.1

47.8

-46%

-3%

Debt issuances

106.2

93.7

87.2

13%

22%

Other

15.6

13.2

13.8

18%

13%

Total liabilities

1,041.6

1,019.3

955.6

2%

9%

Total equity

69.6

66.4

61.8

5%

13%

•

•

March 2023 v March 2022•

Cash / Settlement balances owed to ANZ / Collateral paid increased $39.1 billion (+21%) driven by increases in balances with central banks($24.0 billion), reverse repurchase agreements ($9.3 billion), and the impact of foreign currency translation movements, partially offset by adecrease in collateral paid ($2.5 billion).

•

Trading assets and investment securities increased $14.4 billion (+12%) driven by an increase in semi-government bonds as part of portfolio
rebalancing, and the impact of foreign currency translation movements.

•

Net loans and advances increased $38.7 billion (+6%) driven by home loan growth in the Australia Retail ($14.6 billion), higher lending volumes
in the Institutional ($13.0 billion), New Zealand ($3.0 billion) and Australia Commercial ($2.3 billion) divisions, and the impact of foreign currencytranslation movements.

•

Settlement balances owed by ANZ / Collateral received increased $4.5 billion (+17%) driven by higher cash clearing account balances andhigher collateral received.

•

Deposits and other borrowings increased $62.3 billion (+8%) driven by increases in customer deposits across the Institutional ($17.4 billion) andAustralia Retail ($9.4 billion) divisions, certificates of deposit ($7.0 billion), commercial paper ($7.0 billion), deposits from banks and repurchaseagreements ($5.2 billion), and the impact of foreign currency translation movements. This was partially offset by a decrease in customer deposits
in the Australia Commercial ($3.4 billion) division.

•

Debt issuances increased $19.0 billion (+22%) driven by issue of new senior and subordinated debt, including ANZ Capital Notes 8, and theimpact of foreign currency translation movements.

March 2023 v September 2022•

Cash / Settlement balances owed to ANZ / Collateral paid increased $39.5 billion (+21%) driven by increases in balances with central banks($17.9 billion), settlement balances owed to ANZ ($11.6 billion), and reverse repurchase agreements ($11.5 billion), partially offset by a decreasein collateral paid ($3.2 billion).

•

Trading assets and investment securities increased $12.2 billion (+10%) primarily driven by an increase in semi-government bonds as part of
portfolio rebalancing.

•

Derivative financial assets and liabilities decreased $44.6 billion (-49%) and $38.9 billion (-46%) respectively driven by the maturity and/or
unwind of positions held in the prior period that were impacted by market rate movements, primarily the significant strengthening of the USD.

•

Net loans and advances increased $17.7 billion (+3%) driven by home loan growth in the Australia Retail division ($10.1 billion), higher lending
volumes in the Institutional division ($1.8 billion), and the impact of foreign currency translation movements.

•

Deposits and other borrowings increased $45.3 billion (+6%) driven by increases in customer deposits across the Institutional ($17.6 billion) andAustralia Retail ($6.4 billion) divisions, certificates of deposit ($10.5 billion), deposits from banks and repurchase agreements ($7.8 billion), andthe impact of foreign currency translation movements.

•

Debt issuances increased $12.5 billion (+13%) driven by the issue of new senior and subordinated debt, including ANZ Capital Notes 8, and theimpact of foreign currency translation movements.

40

GROUP RESULTS
Liquidity Risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations as they fall due, including repaying depositors or maturing wholesaledebt, or that the Group has insufficient capacity to fund increases in assets. The timing mismatch of cash flows and the related liquidity risk is inherent inall banking operations and is closely monitored by the Group and managed in accordance with the risk appetite set by the relevant Boards.
Following the Restructure on 3 January 2023, the Group has operated under a non-operating holding company structure whereby:•

ANZBGL’s liquidity risk management framework remains unchanged and continues to operate its own liquidity and funding program, governanceframeworks and reporting regime reflecting its authorised deposit-taking institution (ADI) operations;•ANZGHL (parent entity) has no material liquidity risk given the structure and nature of the balance sheet; and•

ANZ Non-Bank Group is not expected to have separate funding arrangements and will rely on ANZGHL for funding.

Furthermore, a separate liquidity policy has been established for ANZGHL and ANZ Bank Group to reflect the differing nature of liquidity risk inherent ineach business model. ANZGHL will ensure that the parent entity and ANZ Non-Bank Group holds sufficient cash reserves to meet operating andfinancing requirements.
Separately, ANZ Bank Group’s approach to liquidity risk management incorporates two key components:•

Scenario modelling of funding sources
ANZBGL Group’s liquidity risk appetite is defined by the ability to meet a range of regulatory requirements and internal liquidity metrics mandated by
the ANZBGL Board. The metrics cover a range of scenarios of varying duration and level of severity. The objective of this framework is to:•Provide protection against shorter term extreme market dislocation and stress.

•

Maintain structural strength in the balance sheet by ensuring that an appropriate amount of longer-term assets are funded with longer-term
funding.

•

Ensure that no undue timing concentrations exist in the Group’s funding profile.

A key component of this framework is the Liquidity Coverage Ratio (LCR), which is a severe short-term liquidity stress scenario mandated by banking
regulators globally, including APRA.
Consistent with APRA’s requirement, ANZ’s CLF was nil at 31 March 2023 (Sep 22: $2.7 billion; Mar 22: $8.0 billion).
•

Liquid assets
ANZBGL Group holds a portfolio of high quality unencumbered liquid assets in order to protect ANZBGL 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 repurchasewith 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 CLF and other eligible securities listed by the RBNZ.

ANZBGL 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 ANZBGL Board.
Half Year Average1

Movement

Mar 23$B

Sep 22$B

Mar 22$B

Mar 23v. Sep 22

Mar 23v. Mar 22

HQLA1

253.5

228.2

224.1

11%

13%

HQLA2

9.7

8.3

7.6

17%

28%

-

0.3

3.2

large

large

2.7

5.3

6.2

-49%

-56%

265.9

242.1

241.1

10%

10%

Cash outflows

268.8

245.9

230.3

9%

17%

Cash inflows

60.5

58.5

47.2

3%

28%

208.3

187.4

183.1

11%

14%

128%

129%

132%

-1%

-4%

Market Values Post DiscountInternal residential mortgage backed securities2
Other ALA2
Total liquid assets
Cash flows modelled under stress scenario

Net cash outflows
Liquidity Coverage Ratio
1.
2.

3.
4.

3, 4

Half year average basis, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.
Comprised of assets qualifying as collateral for the CLF, and any liquid assets as defined in the RBNZ's Liquidity Policy - Annex: Liquidity Assets - Prudential Supervision Department
Document BS13A12.
All currency Level 2 LCR.
LCR remained above the regulatory minimum thresholds throughout the periods.

41

GROUP RESULTS
Funding
The ANZ Bank Group targets a diversified funding base, avoiding undue concentrations by investor type, maturity, market source and currency.
During the March 2023 half, the ANZ Bank Group issued $23.9 billion of term wholesale funding (excluding Additional Tier 1 Capital) with a remaining
term greater than one year as at 31 March 2023, and $1.5 billion of Additional Tier 1 Capital.
The following table shows the ANZ Bank Group’s total funding composition:
As at

Movement

ANZ Bank GroupMar 23$B

Sep 22$B

Mar 22$B

Mar 23v. Sep 22

Customer deposits and other liabilities
Australia Retail

156.4

150.0

147.0

4%

6%

Australia Commercial

113.0

112.2

116.4

1%

-3%

Institutional

278.1

262.5

247.1

6%

13%

New Zealand

98.0

92.0

96.8

7%

1%

Pacific

3.6

3.8

3.8

-5%

-5%

Group Centre
Customer deposits

Mar 23v. Mar 22

(0.1)

(0.1)

-

0%

n/a

649.0

620.4

611.1

5%

6%

Other funding liabilities1

12.1

8.0

9.6

51%

26%

Total customer liabilities (funding)

661.1

628.4

620.7

5%

7%

Wholesale funding
Unsubordinated debt and central bank term funding2

97.1

89.0

86.4

9%

12%

Subordinated debt3

32.7

27.3

22.6

20%

45%

Certificates of deposit

44.5

34.0

36.9

31%

21%

Commercial paper

38.8

39.2

31.9

-1%

22%

Other wholesale borrowings4

122.5

110.8

111.3

11%

10%

Total wholesale funding

335.6

300.3

289.1

12%

16%

Shareholders' equity

68.6

66.4

61.8

3%

11%

1,065.3

995.1

971.6

7%

10%

Total funding
1.
2.

3.

4.

Includes interest accruals, payables and other liabilities, provisions and net tax provisions, and excludes liability for acceptances as they do not provide net funding.
Includes RBA TFF of $20.1 billion (Sep 22: $20.1 billion; Mar 22: $20.1 billion), RBNZ FLP of $3.2 billion (Sep 22: $2.3 billion; Mar 22: $1.4 billion) and TLF of $0.3 billion(Sep 22: $0.3 billion; Mar 22: $0.3 billion).
Includes subordinated debt issued by ANZ Bank New Zealand which constitutes Tier 2 capital under RBNZ requirements but does not meet the APRA Tier 2 requirements, and USD 300
million perpetual subordinated notes which ceased to be treated as Basel 3 transitional Tier 2 capital under APRA’s capital framework from 1 January 2022.
Includes borrowings from banks, securities sold under repurchase agreements, net derivative balances, special purpose vehicles, other borrowings, and RBA open repurchasearrangements netted down by the corresponding exchange settlement account cash balance.

Net Stable Funding Ratio
The following table shows the Level 2 Net Stable Funding Ratio (NSFR) composition:
As at

Movement

Mar 23$B

Sep 22$B

Required Stable Funding1
Retail & small and medium enterprises, corporate loans <35% risk weight2

200.5

204.8

202.2

-2%

-1%

Retail & small and medium enterprises, corporate loans >35% risk weight2

221.3

198.2

190.7

12%

16%

Other lending3

37.2

36.2

32.6

3%

14%

Liquid assets

13.1

12.0

11.5

9%

14%

Other assets4

45.2

39.7

36.5

14%

24%

517.3

490.9

473.5

5%

9%

Retail & small and medium enterprise customer deposits

292.9

282.6

301.5

4%

-3%

Corporate, public sector entities & operational deposits

136.9

132.7

118.4

3%

16%
18%

Total Required Stable Funding

Mar 22$B

Mar 23v. Sep 22

Mar 23v. Mar 22

1

Available Stable Funding

Central bank & other financial institution deposits

4.7

4.8

4.0

-2%

Term funding5

71.3

63.1

69.7

13%

2%

Short term funding & other liabilities

8.5

7.7

5.0

10%

70%

Capital

99.4

93.5

84.2

6%

18%

Total Available Stable Funding

613.7

584.4

582.8

5%

5%

119%

119%

123%

0%

-4%

Net Stable Funding Ratio
1.
2.
3.
4.
5.
6.

6

NSFR factored balance as per APRA Prudential Regulatory Standard APS 210 Liquidity.
Risk weighting as per APRA Prudential Regulatory Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk.
Includes loans to financial institutions and central banks, and non-performing loans.
Includes off-balance sheet items, net derivatives and other assets.
Includes balances from the drawdown of the RBA and RBNZ Funding Facilities (TFF, FLP and TLF).
The regulatory minimum NSFR is 100%.

42

GROUP RESULTS
Capital Management
ANZ’s capital management framework includes managing capital at Level 1, Level 2 and ANZGHL Group.
ANZ’s framework includes managing to Board approved risk appetite settings and maintaining all regulatory requirements. APRA requirements at Level 1
and Level 2 include ANZ operating at or above APRAs expectation for Domestic Systematically Important Banks (D-SIBs) following the implementation of
APRA’s Capital Reform which was effective January 2023.
APRA’s authority for ANZGHL to be a non-operating holding company (NOHC) of an ADI includes five conditions for ANZ’s capital management
framework. Two of these are quantitative requirements being:•

ANZGHL must always ensure that the quality and quantity of the total capital of the Level 3 group is equivalent to, or greater than, the quality andquantity of the sum of the total capital of the consolidated ANZ Bank Group and the consolidated ANZ Non-Bank Group.

•

ANZGHL must calculate and manage capital for the ANZ Non-Bank Group in accordance with an Economic Capital Model (ECM), which requires theamount of capital held, in the form of Common Equity Tier 1 (CET1), to be equal to or greater than the capital requirement as calculated under theECM.

ANZ has implemented an ECM to calculate the capital to support the ANZ Non-Bank Group operations. The material risks included in the Non-Bank
Group currently are investment risk and fixed asset risk.
ANZ’s compliance with these two conditions is presented in the following two tables:
As at Mar 23

As at Sep 22 As at Mar 22

Movement

ANZ Bank
Group1$M

ANZ NonBank
Group
$M

Shareholders' equity and non-controllinginterests

68,625739

245

Prudential adjustments to shareholders'equity

(358)

-

-

Gross Common Equity Tier 1 capital

68,267739

245

69,251

Deductions(10,887)--(10,887)

Common Equity Tier 1 capital

57,380739

245

58,36455,872Tier 1 capital

65,564739

245

66,54863,55858,001

5%

15%

Tier 2 capital

24,068--24,06819,277

14,78025%

63%

Total qualifying capital

89,632739

245

90,616

82,83572,781

9%

25%

1.

ANZ Group$M

ANZ Group$M

Mar 23v. Sep 22

Mar 23v. Mar 22

69,60966,401

61,756

5%

13%

(358)

(175)

180

large

large

66,226

61,9365%

12%(10,354)(11,425)5%-5%50,511

4%

16%

ANZGHL ANZ Group$M$M

ANZ Bank Group shareholders’ equity and non-controlling interests are adjusted for capital deductions, including deconsolidated entity adjustments, to calculate ANZ Level 2 CET1, Tier 1,
Tier 2 and total qualifying capital.

ANZ Non-Bank GroupAs at Mar 23
Economic Capital
Required$M

Actual Capital1$M

Actual vsEconomic Capital
$M

674

772

98

ANZ Non-Bank Group
1.

This represents the aggregation of ANZ NBH Pty Ltd and ANZ Group Services Pty Ltd’s shareholders’ equity.

43

GROUP RESULTS
ANZ Bank GroupAs at
Capital Reform

Internationally Comparable Capital Ratios1

APRA Basel 3

Mar 23

Sep 22

Mar 22

Mar 23

Sep 22

Mar 22

Common Equity Tier 1

13.2%

12.3%

11.5%

18.9%

19.2%

18.0%

Tier 1

15.1%

14.0%

13.2%

21.5%

21.5%

20.3%

Total capital

20.6%

18.2%

16.6%

29.0%

27.3%

24.9%

Risk weighted assets ($B)

435.5

454.7

437.9

341.8

331.1

324.6

Capital Ratios (Level 2)

1.

March 2023 Internationally Comparable methodology aligns with the Australia Banking Association Basel 3.1 Capital Comparison Study (March 2023). September 2022 and March 2022
Internationally Comparable methodology align with APRA’s information paper entitled ‘International Capital Comparison Study’ (13 July 2015).

APRA Capital Reform
APRA has released new bank capital adequacy requirements applying to Australian incorporated registered banks, which are set out in APRA’s Banking
Prudential Standard documents. ANZ has implemented these new requirements from 1 January 2023.
The new capital adequacy key requirements include changes to APS 110 Capital Adequacy (APS 110), APS 112 Capital Adequacy: Standardised
Approach to Credit Risk (APS 112) and APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113) with key features of thereforms including:•

improving the flexibility of the capital framework, through larger capital buffers that can be used by banks to support lending during periods of stress;•changes to risk weighted assets (RWA) through more risk-sensitive risk weights increasing capital requirements for higher risk lending anddecreasing it for lower risks;•changes to loss given default rates (LGD) including approved use of an internal ratings-based (IRB) approved LGD model for mortgage portfolios;•

an increase in the IRB scaling factor (from 1.06x to 1.1x);•

requirement that IRB ADIs calculate and disclose RWA under the standardised approach and the introduction of a capital floor at 72.5% of
standardised RWA; and•use of prescribed New Zealand authority’s equivalent prudential rules for the purpose of calculating the Level 2 regulatory capital requirement.

In addition, operational RWA is now calculated under APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk (APS 115)
which replaced the previous advanced methodology from December 2022.
The application of APRA Capital Reform reduced RWA by $34.5 billion, equivalent to a 100 bps CET1 ratio benefit. This was partially offset by APRA’s
expectations that ADIs operate a higher capital ratio to maintain an unquestionably strong level.

APRA Common Equity Tier 1 - March 2023 v September 2022

44

GROUP RESULTS•

March 2023 v September 2022
CET1 ratio increased +89 bps to 13.18% during the March 2023 half. Key drivers of the movement in the CET1 ratio were:•

APRA Capital Reform impacts, including changes from adoption of APS 115 increased the CET1 ratio by +100 bps.

•

Cash profit (Level 2) increased the CET1 ratio by +88 bps.

•

Higher underlying CRWA usage (excluding foreign currency translation movements, regulatory changes and other one-offs) decreased the CET1
ratio by -29 bps primarily driven by lending growth in the Institutional and Australia Retail divisions.

•

Lower underlying non-CRWA usage (excluding foreign currency translation movements) increased the CET1 ratio by +14 bps driven by
decreases in IRRBB RWA, partially offset by increases in market risk RWA.

•

IRB floor adjustment following implementation of APRA Capital Reform on 1 January 2023 decreased the CET1 ratio by -13 bps.

•

Payment of the 2022 final dividend (net of BOP and DRP issuance) reduced the CET1 ratio by -47 bps.

•

ANZ Bank Group surplus capital transfer to ANZGHL reduced CET1 ratio by -6 bps.

•

Other impacts totalling -18 bps primarily reflecting net movements in capital deductions, net imposts, non-cash adjustments, and net other items.

March 2023 pro-forma CET1 capital ratio of 12.10% includes pro-forma adjustments for:•

Suncorp Bank acquisition (including IRB floor adjustment) of -114 bps, and•NOHC surplus capital of +6 bps.
As at

Total Risk Weighted Assets

Credit RWA1

Mar 23$B
345.3

Sep 22$B
359.4

Movement
Mar 22$B
348.8

Mar 23v. Sep 22-4%

Mar 23v. Mar 22-1%

Market risk and IRRBB RWA

43.6

47.4

41.1

-8%

6%

Operational RWA2

42.3

47.9

48.0

-12%

-12%

Total

431.2

454.7

437.9

-5%

-2%

4.3

n/a

n/a

n/a

n/a

435.5

454.7

437.9

-4%

-1%

IRB floor adjustment
Total RWA
1.
2.

March 2023 balance relates to credit RWA calculated under revised APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk methodology effective 1 January 2023.
March 2023 balance relates to operational RWA calculated under APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk.

Total Risk Weighted Assets - March 2023 v September 2022•

March 2023 v September 2022
Total RWA decreased $19.2 billion driven by:•$14.3 billion increase in total CRWA primarily driven by higher divisional lending reflecting growth in the Institutional and Australia Retail
divisions,•$3.3 billion decrease in underlying non-CRWA (operational RWA, and market risk and IRRBB RWA) driven by a $6.2 billion reduction in
IRRBB RWA reflecting decreases in embedded losses from lower term rates, partially offset by an increase in market risk RWA,•

$34.5 billion decrease from APRA Capital Reform impacts which reduced CRWA by $28.5 billion and operational RWA by $6.0 billion, and•$4.3 billion increase in RWA from IRB floor adjustment, following implementation of APRA Capital Reform on 1 January 2023.

45

GROUP RESULTS
APRA Capital Reform to Internationally Comparable1 CET1 as at 31 March 2023

1. ANZ’s interpretation of the Basel Calculation of RWA for credit risk regulations (effective 1 Jan 2023) documented in The Basel Framework and The Australian Banking Association, Basel 3.1

Capital Comparison Study, March 2023.

The above graph provides a reconciliation of the CET1 ratio under APRA’s Capital Reform prudential capital standards to Internationally Comparable
Basel 3.1 standards. One of the objectives, although not the primary objective, of the revisions APRA has made is to ‘improve transparency, byincreasing the alignment of APRA’s standards with the international Basel framework’ (APRA Information Paper – An Unquestionably Strong Frameworkfor Bank Capital, November 2021). Despite this, material differences in the way credit risks are measured remain between the approaches allowed by
APRA and those proposed by Basel. As a result, Australian banks’ APRA Capital Reform reported capital ratios will not be directly comparable with theBasel 3.1 capital ratios or directly comparable with many international jurisdictions which are yet to transition to the revised Basel 3.1 Capital Framework.
The ANZ Internationally Comparable Basis CET1 ratio incorporates differences between both the Basel Committee Basel 3.1 framework and differences
identified in The Australian Banking Association Basel 3.1 Capital Comparison Study (March 2023).
The material differences between APRA Capital Reform and Internationally Comparable ratios include:
Deductions•

Investments in insurance and banking associates - APRA requires a full deduction against CET1. On an Internationally Comparable basis, theseinvestments are subject to a concessional threshold before a deduction is required.

•

Deferred tax assets - APRA requires a full deduction from CET1 for DTA relating to temporary differences. On an Internationally Comparable basis,
this is subject to a concessional threshold before the deduction is required.

Risk Weighted Assets•

Mortgages RWA•

Standard residential mortgages - APRA imposes risk weight multipliers of 1.4x against owner occupied, principal and interest mortgages and 1.7x
against all other mortgage types as well as a 5% risk weight floor across the total mortgage portfolio. Basel regulations impose no risk weightfloors or multipliers.

•

Non-standard residential mortgages - APRA excludes all non-standard residential mortgages from using the IRB approach unlike Basel.

•

Borrowers with multiple mortgaged investment properties – APRA treats these as retail exposures, with a 2.5x multiplier applied if the number ofinvestment properties exceeds 5. Basel allows these exposures to be treated as corporate exposures.

•

IRRBB RWA - APRA requires inclusion of IRRBB within the RWA base for the CET1 ratio calculation. This is not required on an Internationally
Comparable basis.

•Non-retail LGDs - APRA allows lower LGDs for sovereign (Foundation IRB treatment only) and critical infrastructure operator exposures than Baselbut requires higher LGDs for general corporate exposures.

•

New Zealand subsidiary lending - APRA requires the CRWA amounts for all credit exposures originated by a New Zealand subsidiary to be
calculated using the Reserve Bank of New Zealand (RBNZ) capital rules, except for APRA’s overall IRB scalar, which must replace the RBNZ scalar.
In comparison with Basel, the RBNZ uses a different supervisory slotting approach for specified asset classes, different LGD floors for farm lending,different LGD floors and correlation factors for residential mortgages, and different LGD and exposure at default (EAD) factors for undrawn non-retail
exposures.

•

Other RWA impacts - APRA requires the supervisory slotting approach to be used in determining credit RWA for specialised lending exposures. The
Internationally Comparable basis allows for the advanced IRB approach to be used when calculating RWA for these exposures. APRA has now
allowed the advanced IRB approach for income producing real estate exposures, which were previously required to use slotting.

•

Scaling factor on all IRB exposures of 1.1x is applied.

46

GROUP RESULTS
Leverage Ratio
At 31 March 2023, the ANZ Bank Group’s APRA Leverage Ratio was 5.3% which is above the 3.5% APRA minimum for IRB ADIs which includes ANZ.
The following table summarises the ANZ Bank Group’s Leverage Ratio calculation:
As atTier 1 Capital (net of capital deductions)On-balance sheet exposures (excluding derivatives and securities financing transaction
exposures)
Derivative exposures1

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

65,56463,55858,0013%

13%1,013,515

954,088928,6866%

9%44,61251,80036,474

-14%

22%
28%

Securities financing transaction exposures

43,75635,57034,223

23%

Other off-balance sheet exposures1

140,999

126,853

117,90411%20%

1,242,882

1,168,311

1,117,287

6%

11%

APRA Leverage Ratio

5.3%

5.4%

5.2%

Internationally Comparable Leverage Ratio

5.9%

6.1%

5.9%

Total exposure measure

1.

•

March 2023 includes impacts from APRA Capital Reform.

March 2023 v September 2022
APRA leverage ratio decreased -16 bps during the March 2023 half. Key drivers of the movement were:•

Net organic capital generation (largely from cash profit and movements in capital deductions), less dividends paid increased the leverage ratio by+12 bps,••

Additional Tier 1 capital impact (Capital Notes 8 issuance net of Capital Notes 3 redemption) increased the leverage ratio by +5 bps,
On-balance sheet exposures growth driven by increased liquid exposures and lending growth in the Institutional and Australia Retail divisions
decreased the leverage ratio by -24 bps,•

Net movements in derivative, securities financing transactions, and other off-balance sheet exposures decreased the leverage ratio by -5 bps,
and•Net other impacts decreased the leverage ratio by -4 bps.

47

GROUP RESULTS
Capital Management - Other Developments•

Capital Requirements
APRA implemented its final requirements in relation to capital adequacy and credit risk requirements for ADIs on 1 January 2023. However, APRA
continues to consult and finalise revisions to a number of remaining prudential standards, being IRRBB, Market Risk and Counterparty Credit Risk.
Given the number of items that are yet to be finalised by APRA, the aggregate final outcome from all changes to APRA's prudential standards
relating to their review of ADIs ‘unquestionably strong’ capital framework remains uncertain.

•

APRA Total Loss Absorbing Capacity Requirements
In July 2019, APRA announced its decision on loss-absorbing capacity requiring Australian domestic systematically important banks (D-SIBs),
including ANZBGL, to increase their total capital by 3% of RWA by January 2024. On 2 December 2021, APRA announced that it had finalised its
loss-absorbing capacity requirements and stated that it will require Australian D-SIBs to increase their total capital by a further 1.5% of RWA by
January 2026. Inclusive of the previously announced interim increase of 3%, this will result in a total increase to the minimum total capitalrequirement of 4.5% of RWA. APRA expects the requirement to be satisfied predominantly with additional Tier 2 capital with an equivalent decreasein other senior funding. The amount of the additional total capital requirement will be based on the Group’s actual RWA as at January 2026.

•

The Reserve Bank of New Zealand review of capital requirements
The RBNZ’s revised capital adequacy requirements for New Zealand banks, which are set out in the Banking Prudential Requirements (BPR)
documents are being implemented in stages during a transition period from October 2021 to July 2028. The key requirements for ANZ Bank New
Zealand Limited (ANZ Bank New Zealand) still being implemented are as follows:•

ANZ Bank New Zealand’s Tier 1 capital requirement will increase to 16% of RWA, of which up to 2.5% could be in the form of AT1 Capital. ANZBank New Zealand’s Total Capital requirement will increase to 18% of RWA, of which up to 2% can be Tier 2 Capital.

•

AT1 capital must consist of perpetual preference shares, which may be redeemable. It is anticipated that ANZ Bank New Zealand will be able torefinance existing internal AT1 securities to external counterparties. Tier 2 capital must consist of long-term subordinated debt.

The net impact on ANZ’s Level 1 CET1 capital is approximately $1 billion to $1.5 billion between 31 March 2023 and the end of the transition period
in 2028 (based on the Group’s 31 March 2023 balance sheet). The amount could vary over time subject to changes to the capital position in ANZBank New Zealand (e.g. from RWA growth, management buffer requirements, and potential dividend payments).
•

Group regulation - roadmap for review
In October 2022, APRA released a roadmap for review of the prudential framework for groups. The review will focus on rationalising requirements,
promoting consistency, and providing clarity across different standards that apply to groups. As part of the review, guidelines for licensing new NOHC
authorities will be updated. For existing APRA authorised NOHCs, there will be no immediate changes, although APRA will seek to ensure new or
adjusted NOHC license conditions are applied in a consistent manner. The review will be multi-year, finishing in 2025.

48

DIVISIONAL RESULTSCONTENTS

Page

Divisional Performance

50

Australia Retail

54

Australia Commercial

56

Institutional

58

New Zealand

65

Pacific

70

Group Centre

70

49

DIVISIONAL RESULTS
Divisional Performance
During the March 2023 half, the Group operated on a divisional structure with six divisions: Australia Retail, Australia Commercial, Institutional, New
Zealand, Pacific, and Group Centre. For further information on the composition of divisions, refer to the Definitions on page 134.
The presentation of divisional results has been impacted by the following structural changes during the period. Prior period comparatives have been
restated:•

Business Restructure - the non-banking businesses held in the Australia Commercial and Institutional divisions were transferred to the Group Centre
division. As a result of this transfer, Group Centre division holds all interests in the ANZ Non-Bank Group.

•

Corporate customer re-segmentation - certain business and property finance customers were transferred from the New Zealand division to theInstitutional division to better align customer needs with the right support and expertise delivery.

•

Cost reallocations - certain costs were reallocated across the Australia Retail, Australia Commercial, Institutional and Group Centre divisions.

Other than those described above, there have been no other significant changes.
The divisions reported are consistent with internal reporting provided to the chief operating decision maker, being the Chief Executive Officer.
The Divisional Results section is reported on a cash profit basis for continuing operations. A number of large/notable items are included in the
Divisional Results, refer to pages 12 to 16 for further details.

50

DIVISIONAL RESULTS
Divisional Performance
Cash profit by division - March 2023 Half Year v March 2022 Half Year

March 2023 Half YearNet interest income

Australia
Retail$M
3,018

Australia
Commercial
$M
1,632

Institutional
$M
2,071

New Zealand
$M
1,582

Pacific
$M
62

Group
Centre
$M
138

Group
$M
8,503

Other operating income

281

175

1,373

199

40

(43)

2,025

Operating income

3,299

1,807

3,444

1,781

102

95

10,528Operating expenses(1,745)(685)(1,328)

(630)

(74)

(535)

(4,997)

1,554

1,122

2,116

1,151

28

(440)

5,531

(82)

(66)

74

(75)

16

-

(133)

1,472

1,056

2,190

1,076

44

(440)

5,398

Income tax expense and non-controlling interests

(446)

(317)

(593)

(302)

(10)

91

(1,577)

Cash profit/(loss) from continuing operations

1,026

739

1,597

774

34

(349)

3,821

Australia
Retail$M

Australia
Commercial$M

Institutional$M

New Zealand$M

Pacific$M

Group
Centre
$M

Group
$M

2,706

1,158

1,772

1,354

46

64

7,100

269

477

783

244

34

41

1,848

Cash profit/(loss) before credit impairment andincome tax
Credit impairment (charge)/releaseCash profit/(loss) before income tax

March 2022 Half YearNet interest income
Other operating income
Operating income

2,975

1,635

2,555

1,598

80

105

8,948

Operating expenses(1,741)(649)(1,273)

(651)

(80)

(397)

(4,791)

Cash profit/(loss) before credit impairment andincome tax

1,234

986

1,282

947

-

(292)

4,157

Credit impairment (charge)/release

113

122

25

31

(3)

(4)

284

Cash profit/(loss) before income tax

1,347

1,108

1,307

978

(3)

(296)

4,441

Income tax expense and non-controlling interests

(410)

(225)

(498)

(274)

(3)

82

(1,328)Cash profit/(loss) from continuing operations

937

883

809

704

(6)

(214)

3,113

Australia
RetailAustralia
Commercial

Institutional

New ZealandPacific

Group
Centre

Group

12%

41%

17%

17%

35%

large

20%

Other operating income

4%

-63%

75%

-18%

18%

large

10%

Operating income

11%

11%

35%

11%

28%

-10%

18%

Operating expenses

0%

6%

4%

-3%

-8%

35%

4%

Cash profit/(loss) before credit impairment andincome tax

26%

14%

65%

22%

n/a

51%

33%

Credit impairment (charge)/release

large

large

large

large

large

large

large

Cash profit/(loss) before income tax

9%

-5%

68%

10%

large

49%

22%

Income tax expense and non-controlling interests

9%

41%

19%

10%

large

11%

19%

Cash profit/(loss) from continuing operations

9%

-16%

97%

10%

large

63%

23%

March 2023 Half Year v March 2022 Half YearNet interest income

51

DIVISIONAL RESULTS
Divisional Performance
Cash profit by division - March 2023 Half Year v September 2022 Half Year

March 2023 Half YearNet interest income

Australia
Retail$M
3,018

Australia
Commercial
$M
1,632

Institutional
$M
2,071

New Zealand
$M
1,582

Pacific
$M
62

Group
Centre
$M
138

Group
$M
8,503

281

175

1,373

199

40

(43)

2,025

Operating income

3,299

1,807

3,444

1,781

102

95

10,528Operating expenses(1,745)(685)(1,328)

(630)

(74)

(535)

(4,997)

1,554

1,122

2,116

1,151

28

(440)

5,531

Other operating income

Cash profit/(loss) before credit impairment andincome tax
Credit impairment (charge)/release

(82)

(66)

74

(75)

16

-

(133)

Cash profit/(loss) before income tax

1,472

1,056

2,190

1,076

44

(440)

5,398

Income tax expense and non-controlling interests

(446)

(317)

(593)

(302)

(10)

91

(1,577)

Cash profit/(loss) from continuing operations

1,026

739

1,597

774

34

(349)

3,821

Australia
Retail$M

Australia
Commercial$M

Institutional$M

New Zealand$M

Pacific$M

Group
Centre
$M

Group
$M

2,821

1,410

1,925

1,517

50

51

7,774

353

185

868

216

34

169

1,825

Operating income

3,174

1,595

2,793

1,733

84

220

9,599

Operating expenses(1,656)(652)(1,293)

(622)

(73)

(492)

(4,788)Cash profit/(loss) before credit impairment andincome tax

1,518

943

1,500

1,111

11

(272)

4,811

September 2022 Half YearNet interest income
Other operating income

Credit impairment (charge)/release

16

11

2

(76)

9

(14)

(52)

Cash profit/(loss) before income tax

1,534

954

1,502

1,035

20

(286)

4,759

Income tax expense and non-controlling interests

(462)

(286)

(374)

(290)

(5)

60

(1,357)

Cash profit/(loss) from continuing operations

1,072

668

1,128

745

15

(226)

3,402

Australia
RetailAustralia
Commercial

Institutional

New ZealandPacific

Group
Centre

Group

7%

16%

8%

4%

24%

large

9%

-20%

-5%

58%

-8%

18%

large

11%

Operating income

4%

13%

23%

3%

21%

-57%

10%

Operating expenses

5%

5%

3%

1%

1%

9%

4%

March 2023 Half Year v September 2022 Half YearNet interest income
Other operating income

Cash profit/(loss) before credit impairment andincome tax
Credit impairment (charge)/release

2%

19%

41%

4%

large

62%

15%

large

large

large

-1%

78%

large

large

Cash profit/(loss) before income tax

-4%

11%

46%

4%

large

54%

13%

Income tax expense and non-controlling interests

-3%

11%

59%

4%

large

52%

16%

Cash profit/(loss) from continuing operations

-4%

11%

42%

4%

large

54%

12%

52

DIVISIONAL RESULTS
Divisional Performance
Key Balance Sheet Metrics by division
As at
Net Loans and Advances
Australia Retail
Australia Commercial
Institutional

1

New Zealand1
Pacific1
Group Centre

Movement

Mar 23$B
300.6

Sep 22$B
290.3

Mar 22$B
284.6

Mar 23v. Sep 22
4%

Mar 23v. Mar 22
6%

59.9

59.7

57.6

0%

4%

208.3

207.2

188.2

0%

11%

120.3

113.3

116.4

6%

3%

1.7

1.8

1.7

-6%

0%

(0.7)

0.1

2.9

large

large

Total

690.1

672.4

651.4

3%

6%

Customer Deposits
Australia Retail

156.4

150.0

147.0

4%

6%

Australia Commercial

113.0

112.2

116.4

1%

-3%

Institutional1

278.1

262.5

247.1

6%

13%

New Zealand

98.0

92.0

96.8

7%

1%

Pacific1

3.6

3.8

3.8

-5%

-5%

1

(0.5)

(0.1)

-

large

n/a

Total

648.6

620.4

611.1

5%

6%

Risk Weighted Assets
Australia Retail

117.8

125.5

118.8

-6%

-1%

Australia Commercial

47.4

54.0

51.6

-12%

-8%

Institutional

183.1

208.1

198.7

-12%

-8%
20%

Group Centre

New Zealand

71.7

57.7

59.8

24%

Pacific

4.1

3.9

3.6

5%

14%

Group Centre

11.3

5.4

5.4

large

large

Total

435.5

454.7

437.9

-4%

-1%

Half Year
Return on Average Risk Weighted Assets - cash continuing operations
Australia RetailMar 23
1.7%

Sep 22
1.8%

Mar 22
1.6%

Australia Commercial

2.8%

2.5%

3.4%

Institutional

1.6%

1.1%

0.8%

New Zealand

2.4%

2.5%

2.4%

Pacific

1.8%

0.8%

(0.3%)(10.2%)(8.4%)(8.5%)

1.7%

1.5%

1.5%

Group Centre
Total
1.

Refer to pages 36 and 37 for Net loans and advances and customer deposits movements excluding the impact of foreign currency translation.

53

DIVISIONAL RESULTS
Australia Retail
Maile Carnegie
Half Year
Mar 23$M
3,018

Net interest income
Other operating income

Sep 22$M
2,821

Movement
Mar 22$M
2,706

Mar 23v. Sep 22
7%

Mar 23v. Mar 22
12%

281

353

269

-20%

4%

Operating income

3,299

3,174

2,975

4%

11%

Operating expenses(1,745)(1,656)(1,741)5%0%Cash profit before credit impairment and income tax

1,554

1,518

1,234

2%

26%

Credit impairment (charge)/release

(82)

16

113

large

large

Cash profit before income tax

1,472

1,534

1,347

-4%

9%

Income tax expense and non-controlling interests

(446)

(462)

(410)

-3%

9%

Cash profit

1,026

1,072

937

-4%

9%

300,581

290,322284,548

4%

6%

Balance Sheet
Net loans and advances

3,202

2,554

2,756

25%

16%

External assets

303,783

292,876

287,304

4%

6%

Customer deposits

156,374

149,953

147,000

4%

6%

3,854

3,541

3,732

9%

3%

External liabilities

160,228

153,494

150,732

4%

6%

Risk weighted assets

117,844

125,517

118,797-6%-1%

Average gross loans and advances

297,255

287,110285,426

4%

4%

Average deposits and other borrowings

152,392

147,689

143,888

3%

6%

RatiosReturn on average assets

0.69%

0.74%

0.65%

Net interest margin

2.39%

2.29%

2.21%

Operating expenses to operating income

52.9%

52.2%

58.5%

Operating expenses to average assets

1.17%

1.14%

1.22%
large

-29%

large

large

6%

28%

1%

-2%

Other external assets

Other external liabilities

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA1
Gross impaired assets

32

(5)

45

0.02%

(0.00%)

0.03%

50

(11)

(158)

0.03%

(0.01%)(0.11%)

415

390

324

Gross impaired assets as a % of GLA

0.14%

0.13%

0.11%

Total full time equivalent staff (FTE)

11,199

11,107

11,475

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Cash Profit March 2023 v March 2022

Performance March 2023 v March 2022
Lending volumes increased driven by home loan growth, partially offset bylower unsecured lending.
• Net interest margin increased driven by favourable deposit margins froma rising interest rate environment, favourable lending mix with a shift
towards higher margin variable home loans and higher earnings oncapital and replicating portfolio. This was partially offset by asset margin
contraction from competitive pressure, unfavourable deposit mix with ashift towards lower margin term deposits and higher net funding costs.
• Other operating income increased driven by higher cards revenue
reflecting an increase in consumer spending, new home loan offset
account fees, and lower customer remediation, partially offset by lower
insurance related income.
• Operating expenses were broadly stable. Inflationary pressure and higher
ANZ Plus run costs were offset by lower customer remediation,
simplification initiatives, and a reduction in regulatory and complianceinitiatives.
• Credit impairment charge increased driven by higher collectively
assessed credit impairment, partially offset by lower individually assessed
credit impairment due to subdued delinquency flows.

54

DIVISIONAL RESULTS
Australia Retail
Maile Carnegie
Individually assessed credit impairment charge/(release)
Half Year
Mar 23$M-

Home Loans

Movement

Sep 22$M(13)

Mar 22$M
5

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large
-21%

Cards and Personal Loans

31

7

39

large

Deposits and Payments1

1

1

1

0%

0%

Individually assessed credit impairment charge/(release)

32

(5)

45

large

-29%

Collectively assessed credit impairment charge/(release)

Half Year

Home Loans
Cards and Personal Loans
1

Movement

Mar 23$M30

Sep 22$M
3

Mar 22$M(122)

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large

19

(15)

(37)

large

large

Deposits and Payments

1

1

1

0%

0%

Collectively assessed credit impairment charge/(release)

50

(11)

(158)

large

large

Net loans and advances

As at

Movement

Mar 23$M
294,681

Sep 22$M
284,362

Mar 22$M
278,443

Mar 23v. Sep 22
4%

Mar 23v. Mar 22
6%

Cards and Personal Loans

5,865

5,926

6,070

-1%

-3%

Deposits and Payments1

35

34

35

3%

0%

Net loans and advances

300,581

290,322284,548

4%

6%

Home Loans

Customer deposits

As at
Mar 23$M
43,771

Home Loans2
Cards and Personal Loans

Sep 22$M
43,284

Movement
Mar 22$M
41,346

Mar 23v. Sep 22
1%

Mar 23v. Mar 22
6%

206

217

196

-5%

5%

Deposits and Payments

112,397

106,452

105,458

6%

7%

Customer deposits

156,374

149,953

147,000

4%

6%

1.
2.

Net loans and advances for the deposits and payments business represent amounts in overdraft.
Customer deposit amounts for the home loans business represent balances in offset accounts.

55

DIVISIONAL RESULTS
Australia Commercial
Clare Morgan
Half Year
Mar 23$M
1,632

Net interest income
Other operating income

Sep 22$M
1,410

Movement
Mar 22$M
1,158

Mar 23v. Sep 22
16%

Mar 23v. Mar 22
41%

175

185

477

-5%

-63%

1,807

1,595

1,635

13%

11%

Operating expenses

(685)

(652)

(649)

5%

6%

Cash profit before credit impairment and income tax

1,122

943

986

19%

14%
large

Operating income

Credit impairment (charge)/release

(66)

11

122

large

Cash profit before income tax

1,056

954

1,108

11%

-5%

Income tax expense and non-controlling interests

(317)

(286)

(225)

11%

41%

Cash profit

739

668

883

11%

-16%

59,911

59,72757,6250%

4%60%Balance Sheet
Net loans and advances

316

256

197

23%

External assets

60,22759,98357,822

0%

4%

Customer deposits

113,011

112,195

116,420

1%-3%

Other external assets

6,031

6,160

6,392

-2%

-6%

External liabilities

Other external liabilities

119,042

118,355

122,8121%-3%

Risk weighted assets

47,35954,04351,605-12%-8%

Average gross loans and advances

61,03059,79458,441

2%

4%

Average deposits and other borrowings

113,276

115,269

114,924-2%-1%

RatiosReturn on average assets

1.24%

1.09%

1.46%

Net interest margin1

2.72%

2.30%

1.90%

Operating expenses to operating income

37.9%

40.9%

39.7%

Operating expenses to average assets

1.15%

1.07%

1.07%
large

-79%

large

large

-20%

-46%

2%

2%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA2
Collectively assessed credit impairment charge/(release)

9

(6)

43

0.03%

(0.02%)

0.15%

57

(5)

(165)

0.19%

(0.02%)(0.57%)

288

360

533

Gross impaired assets as a % of GLA

0.47%

0.59%

0.91%

Total full time equivalent staff (FTE)

3,607

3,551

3,528

Collectively assessed credit impairment charge/(release) as a % of average GLA2
Gross impaired assets

1.

Australia Commercial division generates positive net interest income from surplus deposits held. Accordingly, $59.3 billion of average deposits for the March 2023 half (Sep 22 half:$62.8 billion; Mar 22 half: $64.1 billion) have been included within average net interest earning assets for the net interest margin calculation to align with internal management reporting view.
2. Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Cash Profit March 2023 v March 2022

Performance March 2023 v March 2022
Lending volumes increased driven by Specialist Business lending growth.
• Net interest margin increased driven by favourable deposit margins froma rising interest rate environment and higher earnings on capital andreplicating portfolio. This was partially offset by unfavourable deposit mix
with a shift towards lower margin term deposits, higher net funding costs
and asset margin contraction from competitive pressure.
• Other operating income decreased driven by the gain on sale relating to
the ANZ Worldline partnership in the March 2022 half and lower impact
of divested business results. This was partially offset by the loss on saleof the financial planning and advice business in the March 2022 half.
• Operating expenses increased driven by inflationary pressure, hiring offrontline FTE and higher strategic initiatives spend, partially offset bylower costs post business divestment.
• Credit impairment charge increased driven by higher collectively
assessed credit impairment, partially offset by lower individuallyassessed credit impairment charge due to subdued delinquency flows.

56

DIVISIONAL RESULTS
Australia Commercial
Clare Morgan
Individually assessed credit impairment charge/(release)
Half Year

Movement

Mar 23$M
10

Sep 22$M
4

Mar 22$M
47

Mar 23v. Sep 22
large

Mar 23v. Mar 22-79%

Specialist Business

(1)

(10)

(5)

-90%

-80%

Central Functions

-

-

1

n/a

large

Individually assessed credit impairment charge/(release)

9

(6)

43

large

-79%

SME Banking

Collectively assessed credit impairment charge/(release)

Movement

Half Year

SME Banking
Specialist BusinessMar 23$M50

Sep 22$M(30)

Mar 22$M(156)

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large

7

25

(9)

-72%

large

-

-

-

n/a

n/a

57

(5)

(165)

large

large

SME Banking1

Mar 23$M
38,602

Sep 22$M
38,573

Mar 22$M
39,128Mar 23v. Sep 22
0%

Mar 23v. Mar 22-1%

Specialist Business

20,082

19,585

17,781

3%

13%

Central Functions1

1,227

1,569

716

-22%

71%

Net loans and advances

59,911

59,72757,6250%

4%

Central Functions
Collectively assessed credit impairment charge/(release)

Net loans and advances

As at

Customer deposits

Movement

As at

Movement

SME Banking

Mar 23$M
76,994

Sep 22$M
77,135

Mar 22$M
78,464

Mar 23v. Sep 22
0%

Mar 23v. Mar 22-2%

Specialist Business

36,00635,04837,9393%-5%

Central Functions
Customer deposits
1.

11

12

17

-8%

-35%

113,011

112,195

116,4201%-3%During the September 2022 half, the standalone asset finance business has been reclassified from SME Banking to Central Functions on a prospective basis.

57

DIVISIONAL RESULTS
Institutional
Mark Whelan
Half YearNet interest income

Mar 23$M
2,071

Sep 22$M
1,925

Movement
Mar 22$M
1,772

Mar 23v. Sep 22
8%

Mar 23v. Mar 22
17%

Other operating income

1,373

868

783

58%

75%

Operating income

3,444

2,793

2,555

23%

35%

Operating expenses(1,328)(1,293)(1,273)

3%

4%

Cash profit before credit impairment and income tax

2,116

1,500

1,282

41%

65%

74

2

25

large

large

Cash profit before income tax

2,190

1,502

1,307

46%

68%

Income tax expense and non-controlling interests

(593)

(374)

(498)

59%

19%

Cash profit

1,597

1,128

809

42%

97%

Balance Sheet
Net loans and advances

208,265

207,241

188,177

0%

11%

Other external assets

317,483

336,825

281,506-6%

13%

External assets

525,748

544,066

469,683-3%

12%

Customer deposits

278,089

262,534

247,173

6%

13%

Other deposits and borrowings

89,42983,23084,8457%

5%Deposits and other borrowings

367,518

345,764

332,018

6%

11%

Other external liabilities

83,246

127,350

88,208-35%-6%External liabilities

450,764

473,114420,226-5%

7%

Risk weighted assets

183,125

208,119

198,669-12%-8%

Average gross loans and advances

214,883

196,195

183,890

10%

17%

Average deposits and other borrowings

355,905

341,058

327,1124%

9%

RatiosReturn on average assets

0.59%

0.44%

0.35%

Net interest margin

0.91%

0.91%

0.88%

Net interest margin (excluding Markets)

2.26%

2.03%

1.82%

Operating expenses to operating income

38.6%

46.3%

49.8%

Operating expenses to average assets

0.49%

0.50%

0.55%

(79)

(15)

1

large

large

(0.07%)(0.02%)

0.00%

5

13

(26)

-62%

large

0.00%

0.01%

(0.03%)

302

425

683

-29%

-56%

Gross impaired assets as a % of GLA

0.14%

0.20%

0.36%

Total full time equivalent staff (FTE)

6,353

6,316

6,323

1%

0%

Credit impairment (charge)/release

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)1

Collectively assessed credit impairment charge/(release) as a % of average GLA
Gross impaired assets

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Cash Profit March 2023 v March 2022

Performance March 2023 v March 2022
Lending volumes increased across Corporate Finance and Markets withstrong core lending and customer flows during the period. Customer
deposits increased in Markets and Transaction Banking.
• Net interest margin ex-Markets increased driven by favourable
deposit margins from a rising interest rate environment and higher
earnings on capital and replicating portfolio.
• Other operating income increased primarily driven by higher Markets
revenues from increased customer activity and more favourable
trading conditions.
• Operating expenses increased driven by inflationary pressure andhigher technology costs, partially offset by lower impact of divested
business.
• Credit impairment release increased driven by release of individuallyassessed credit impairment due to significant write-backs andrecoveries, partially offset by increase in collectively assessed credit
impairment.
• Income tax expense in the March 2022 half included the dividend
withholding tax on the dividend payment from ANZ PNG to ANZBGL.

58DIVISIONAL RESULTS
Institutional
Mark Whelan
Institutional by Geography
Half Year
Mar 23$M
844

Australia
Net interest income
Other operating income

Sep 22$M
1,021

Movement
Mar 22$M
947

Mar 23v. Sep 22-17%

Mar 23v. Mar 22
-11%

647

264

276

large

large

Operating income

1,491

1,285

1,223

16%

22%

Operating expenses

(610)

(595)

(603)

3%

1%

Cash profit before credit impairment and income tax

881

690

620

28%

42%

Credit impairment (charge)/release

129

(31)

39

large

large

Cash profit before income tax

1,010

659

659

53%

53%

Income tax expense and non-controlling interests

(303)

(199)

(201)

52%

51%

Cash profit

707

460

458

54%

54%

Individually assessed credit impairment charge/(release)

(86)

(1)

(2)

large

large

Collectively assessed credit impairment charge/(release)

(43)

32

(37)

large

16%

Net loans and advances

113,981111,117

98,552

3%

16%

Customer deposits

100,559

100,023

91,791

1%

10%

Risk weighted assets

86,459106,897

101,970

-19%

-15%

Net interest income

908

623

525

46%

73%

Other operating income

560

470

401

19%

40%

Operating income

1,468

1,093

926

34%

59%

Operating expenses

(614)

(587)

(551)

5%

11%

Cash profit before credit impairment and income tax

854

506

375

69%

large

Credit impairment (charge)/release

(19)

12

(3)

large

large

International and PNG

Cash profit before income tax

835

518

372

61%

large

Income tax expense and non-controlling interests

(193)

(84)

(220)

large

-12%

Cash profit

642

434

152

48%

large

Individually assessed credit impairment charge/(release)

(5)

(22)

(6)

-77%

-17%

Collectively assessed credit impairment charge/(release)

24

10

9

large

large

Net loans and advances

76,502

79,561

69,970-4%

9%

Customer deposits

153,480

139,707

131,913

10%

16%

Risk weighted assets

72,45877,427

71,296-6%

2%

Net interest income

319

281

300

14%

6%

Other operating income

166

134

106

24%

57%

New ZealandOperating income

485

415

406

17%

19%

Operating expenses

(104)

(111)

(119)

-6%

-13%

Cash profit before credit impairment and income tax

381

304

287

25%

33%

Credit impairment (charge)/release

(36)

21

(11)

large

large

Cash profit before income tax

345

325

276

6%

25%

Income tax expense and non-controlling interests

(97)

(91)

(77)

7%

26%

Cash profit

248

234

199

6%

25%

Individually assessed credit impairment charge/(release)

12

8

9

50%

33%

Collectively assessed credit impairment charge/(release)

24

(29)

2

large

large
-10%

Net loans and advances

17,782

16,563

19,655

7%

Customer deposits

24,05022,804

23,4695%

2%

Risk weighted assets

24,20823,79525,403

2%

-5%

59

DIVISIONAL RESULTS
Institutional
Mark Whelan
Half Year

Individually assessed credit impairment charge/(release)

Movement

Sep 22$M(15)

Mar 22$M(8)

Mar 23v. Sep 22-87%

Mar 23v. Mar 22
-75%
large

Transaction Banking

Mar 23$M(2)

Corporate Finance

(77)

-

9

n/a

-

-

-

n/a

n/a

(79)

(15)

1

large

large

Markets
Individually assessed credit impairment charge/(release)

Half Year

Collectively assessed credit impairment charge/(release)
Mar 23$M1

Sep 22$M(1)

Corporate Finance2Markets

2

Collectively assessed credit impairment charge/(release)

5

Transaction Banking

Movement
Mar 22$M(20)

Mar 23v. Sep 22
large

Mar 23v. Mar 22
large

11

(1)

-82%

large

3

(5)

-33%

large

13

(26)

-62%

large

As at

Net loans and advances

Movement

Transaction Banking

Mar 23$M
18,732

Sep 22$M
21,062

Mar 22$M
18,773

Mar 23v. Sep 22-11%

Corporate Finance

148,520

145,475

135,7352%9%Markets

40,95040,65633,655

1%

22%

63

48

14

31%

large

208,265

207,241

188,177

0%

11%Central Functions
Net loans and advances

As at

Customer deposits
Mar 23$M
148,314

Transaction Banking
Corporate FinanceMarkets
Central Functions
Customer deposits

60

Sep 22$M
153,477

Mar 23v. Mar 220%

Movement
Mar 22$M
141,956

Mar 23v. Sep 22-3%

Mar 23v. Mar 22
4%
-31%

1,065

1,842

1,554

-42%

128,414106,342102,006

21%

26%

296

873

1,657

-66%

-82%

278,089

262,534

247,173

6%

13%

DIVISIONAL RESULTS
Institutional
Mark Whelan

March 2023 Half YearNet interest income

Transaction
Banking$M753

Corporate
Finance$M
1,153

Markets$M
164

Central
Functions
$M
1

Total
$M
2,071

Other operating income

352

43

985

(7)

1,373

Operating income

1,105

1,196

1,149

(6)

3,444

Operating expenses

(407)

(340)

(545)

(36)

(1,328)Cash profit/(loss) before credit impairment and income tax

2,116

698

856

604

(42)

Credit impairment (charge)/release

1

75

(2)

-

74

Cash profit/(loss) before income tax

699

931

602

(42)

2,190

Income tax expense and non-controlling interests

(184)

(261)

(164)

16

(593)

Cash profit/(loss)

515

670

438

(26)

1,597

(2)

(77)

-

-

(79)

Individually assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release)

1

2

2

-

5

Net loans and advances

18,732

148,520

40,95063

208,265

Customer deposits

148,314

1,065

128,414296

278,089

Risk weighted assets

27,71999,271

54,954

1,181

183,125

Net interest income

322

1,029

416

5

1,772

Other operating income

335

42

396

10

783

Operating income

657

1,071

812

15

2,555

Operating expenses

(343)

(332)

(570)

(28)

(1,273)

Cash profit/(loss) before credit impairment and income tax

314

739

242

(13)

1,282

March 2022 Half Year

Credit impairment (charge)/release

28

(8)

5

-

25

Cash profit/(loss) before income tax

342

731

247

(13)

1,307

Income tax expense and non-controlling interests

(98)

(203)

(65)

(132)

(498)

Cash profit/(loss)

244

528

182

(145)

809

(8)

9

-

-

1

Individually assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release)

(20)

(1)

(5)

-

(26)

Net loans and advances

18,773

135,735

33,655

14

188,177

Customer deposits

141,956

1,554

102,006

1,657

247,173

Risk weighted assets

25,425

119,660

52,138

1,446

198,669

large

12%

-61%

-80%

17%

March 2023 Half Year v March 2022 Half YearNet interest income
Other operating income

5%

2%

large

large

75%

Operating income

68%

12%

42%

large

35%

Operating expenses

19%

2%

-4%

29%

4%

Cash profit/(loss) before credit impairment and income tax

large

16%

large

large

65%

Credit impairment (charge)/release

-96%

large

large

n/a

large

Cash profit/(loss) before income tax

large

27%

large

large

68%

Income tax expense and non-controlling interests

88%

29%

large

large

19%

Cash profit/(loss)

large

27%

large

-82%

97%

Individually assessed credit impairment charge/(release)

-75%

large

n/a

n/a

large

Collectively assessed credit impairment charge/(release)

large

large

large

n/a

large

0%

9%

22%

large

11%

Net loans and advances
Customer deposits

4%

-31%

26%

-82%

13%

Risk weighted assets

9%

-17%

5%

-18%

-8%

61

DIVISIONAL RESULTS
Institutional
Mark Whelan

March 2023 Half YearNet interest income

Transaction
Banking$M753

Corporate
Finance$M
1,153

Markets$M
164

Central
Functions
$M
1

Total
$M
2,071

Other operating income

352

43

985

(7)

1,373

Operating income

1,105

1,196

1,149

(6)

3,444

Operating expenses

(407)

(340)

(545)

(36)

(1,328)Cash profit/(loss) before credit impairment and income tax

2,116

698

856

604

(42)

Credit impairment (charge)/release

1

75

(2)

-

74

Cash profit/(loss) before income tax

699

931

602

(42)

2,190

Income tax expense and non-controlling interests

(184)

(261)

(164)

16

(593)

Cash profit/(loss)

515

670

438

(26)

1,597

(2)

(77)

-

-

(79)

Individually assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release)

1

2

2

-

5

Net loans and advances

18,732

148,520

40,95063

208,265

Customer deposits

148,314

1,065

128,414296

278,089

Risk weighted assets

27,71999,271

54,954

1,181

183,125

Net interest income

557

1,070

291

7

1,925

Other operating income

329

66

464

9

868

Operating income

886

1,136

755

16

2,793

Operating expenses

(335)

(324)

(566)

(68)

(1,293)

Cash profit/(loss) before credit impairment and income tax

551

812

189

(52)

1,500

September 2022 Half Year

Credit impairment (charge)/release

16

(11)

(3)

-

2

Cash profit/(loss) before income tax

567

801

186

(52)

1,502

Income tax expense and non-controlling interests

(152)

(217)

(47)

42

(374)

Cash profit/(loss)

415

584

139

(10)

1,128

Individually assessed credit impairment charge/(release)

(15)

-

-

-

(15)

Collectively assessed credit impairment charge/(release)

(1)

11

3

-

13

Net loans and advances

21,062

145,475

40,65648

207,241

Customer deposits

153,477

1,842

106,342873

262,534

Risk weighted assets

27,272

121,81757,8131,217

208,119

35%

8%

-44%

-86%

8%

Other operating income

7%

-35%

large

large

58%

Operating income

25%

5%

52%

large

23%

Operating expenses

21%

5%

-4%

-47%

3%

March 2023 Half Year v September 2022 Half YearNet interest income

Cash profit/(loss) before credit impairment and income tax

27%

5%

large

-19%

41%

Credit impairment (charge)/release

-94%

large

-33%

n/a

large

Cash profit/(loss) before income tax

23%

16%

large

-19%

46%

Income tax expense and non-controlling interests

21%

20%

large

-62%

59%

Cash profit/(loss)

24%

15%

large

large

42%

Individually assessed credit impairment charge/(release)

-87%

n/a

n/a

n/a

large

Collectively assessed credit impairment charge/(release)

large

-82%

-33%

n/a

-62%

Net loans and advances

-11%

2%

1%

31%

0%

Customer deposits

-3%

-42%

21%

-66%

6%

Risk weighted assets

2%

-19%

-5%

-3%

-12%

62

DIVISIONAL RESULTS
Institutional
Mark Whelan
Analysis of Markets operating income1
Half Year

Movement

Mar 23$M407

Sep 22$M
381

Mar 22$M324

Mar 23v. Sep 22
7%

Mar 23v. Mar 22
26%

Rates

158

111

181

42%

-13%

Credit and Capital Markets

112

53

32

large

large

Commodities

80

30

53

large

51%

Franchise Revenue

757

575

590

32%

28%

Balance Sheet2

356

206

223

73%

60%

Derivative valuation adjustments3

36

(26)

(1)

large

large

1,149

755

812

52%

42%

Composition of Markets operating income by productForeign Exchange

Markets operating income
1.
2.
3.

Markets operating income includes Net interest income and Other operating income.
Balance Sheet represents hedging of interest rate risk on the Group’s loan and deposit books and the management of the Group’s liquidity portfolio.
Includes funding and credit valuation adjustments.

Half Year

Movement

Mar 23$M
310

Sep 22$M
161

Mar 22$M
237

Mar 23v. Sep 22
93%

Mar 23v. Mar 22
31%

International and PNG

705

521

479

35%

47%

New Zealand

134

73

96

84%

40%

1,149

755

812

52%

42%

Composition of Markets operating income by geography
Australia

Markets operating income

63

DIVISIONAL RESULTS
Institutional
Mark Whelan
Market risk
Market risk stems from the Group’s trading and balance sheet management activities and the impact of changes and correlations between interest rates,
foreign exchange rates, credit spreads and volatility in bonds, commodity or equity prices.
The Group manages and controls market risk using Value at Risk (VaR), sensitivity analysis and stress testing. VaR measure the Group’s possible daily
loss based on historical market movements.
The Group’s VaR approach for both traded and non-traded risk is historical simulation using changes in market rates, prices and volatilities over theprevious 500 business days to calculate standard VaR and a 1-year stressed period to calculate stressed VaR.
VaR is measured at 99% confidence interval which means there is a 99% chance that a loss will not exceed the VaR for relevant holding period.
Traded market risk
Below are aggregate VaR exposures at a 99% confidence level covering both physical and derivative trading positions for the Bank’s principal trading
centres.
99% confidence level (1 day holding period)
As atHigh for
periodLow forperiodAvg forperiodAs at

High foryear

Low foryear

Avg foryear

Mar 23$M

Mar 23$M

Mar 23$M

Mar 23$M

Sep 22$M

Sep 22$M

Sep 22$M

Sep 22$M

Value at Risk at 99% confidence
Foreign exchange

3.9

3.9

1.6

2.6

1.8

4.8

1.1

2.4

Interest rate

5.5

18.3

5.1

8.5

7.9

22.7

5.0

9.5

Credit

3.9

5.9

2.5

4.1

2.6

11.8

1.6

4.9

Commodities

2.6

6.6

2.0

3.1

4.3

7.0

1.4

2.9

EquityDiversification benefit
Total VaR

-

-

-

-

-

-

-

-

(7.2)

n/a

n/a

(7.6)

(7.2)

n/a

n/a

(7.1)

8.7

18.2

7.3

10.7

9.4

26.9

5.6

12.6

Non-traded interest rate risk
Non-traded interest rate risk is managed by Markets and relates to the potential adverse impact of changes in market interest rates on future net interest
income for the Group and current valuation of the banking book. Interest rate risk is reported using various techniques including VaR and scenario
analysis based on a 1% rate shock.
99% confidence level (1 day holding period)
As atHigh for
periodLow forperiodAvg forperiodAs at

High foryear

Low foryear

Avg foryear

Mar 23$M

Mar 23$M

Mar 23$M

Mar 23$M

Sep 22$M

Sep 22$M

Sep 22$M

Sep 22$M

Australia

81.2

93.2

81.2

87.8

78.5

93.4

63.0

76.1

New Zealand

33.5

33.5

26.1

27.9

25.4

27.1

20.2

23.9

Rest of World

25.6

26.9

23.2

25.4

21.7

38.0

16.8

25.8

Diversification benefit1(52.8)

n/a

n/a(45.1)(38.1)

n/a

n/a(33.7)

87.5

101.5

87.5

96.0

87.5

104.9

66.8

92.1

Value at Risk at 99% confidence

Total VaR

Impact of 1% rate shock on the next 12 months’ net interest income2
As at
As at period end

Mar 230.74%

Sep 22
1.29%

Maximum exposure

1.14%

2.08%

Minimum exposure

0.61%

1.15%

Average exposure (in absolute terms)

0.84%

1.56%

1.

2.

The diversification benefit reflects risks that offset across categories. The high and low VaR figures reported for each factor did not necessarily occur on the same day as the high and low
VaR reported for the Group as a whole. Consequently, a diversification benefit for high and low would not be meaningful and is therefore omitted from the table.
Modelled 1% overnight parallel positive shift in the yield curve to determine the potential impact on Net interest income over the next 12 months. This is a standard risk measure whichassumes the parallel shift is reflected in all wholesale and customer rates.

64

DIVISIONAL RESULTS
New Zealand
Antonia Watson
Table reflects NZD for New Zealand (AUD results shown on page 69)
Half Year
Mar 23
NZD M
1,721

Net interest income
Other operating income

Sep 22
NZD M
1,674

Movement
Mar 22
NZD M
1,434

Mar 23v. Sep 22
3%

Mar 23v. Mar 22
20%

216

238

259

-9%

-17%

Operating income

1,937

1,912

1,693

1%

14%

Operating expenses

(685)

(688)

(689)

0%

-1%

Cash profit before credit impairment and income tax

1,252

1,224

1,004

2%

25%

(82)

(81)

32

1%

large

Cash profit before income tax

1,170

1,143

1,036

2%

13%

Income tax expense and non-controlling interests

(328)

(321)

(290)

2%

13%

Cash profit

842

822

746

2%

13%

Balance Sheet
Net loans and advances

128,433

128,574

125,249

0%

3%

Other external assets

3,527

3,326

3,513

6%

0%

External assets

131,960

131,900

128,762

0%2%

Customer deposits

104,614

104,450

104,118

0%

0%

Other deposits and borrowings

6,571

5,755

6,692

14%

-2%

Deposits and other borrowings

111,185

110,205

110,810

1%

0%

Other external liabilities

18,655

20,611

17,970-9%4%External liabilities

129,840

130,816

128,780-1%

1%

Risk weighted assets

76,60965,48264,35617%

19%

Average gross loans and advances

129,088

128,172

123,689

1%

4%

Average deposits and other borrowings

111,064

111,633

107,734-1%

3%

Credit impairment (charge)/releaseNet funds management income

96

95

101

1%

-5%

Funds under management

36,92834,31337,3588%-1%

Average funds under management

35,86735,87538,415

0%-7%

RatiosReturn on average assets

1.28%

1.25%

1.18%

Net interest margin

2.67%

2.61%

2.33%

Operating expenses to operating income

35.4%

36.0%

40.7%

Operating expenses to average assets

1.04%

1.05%

1.09%

10

(4)

(14)

large

large

0.02%

(0.01%)(0.02%)

72

85

(18)

-15%

large

0.11%

0.13%

(0.03%)

107

106

121

1%

-12%

Gross impaired assets as a % of GLA

0.08%

0.08%

0.10%

Total full time equivalent staff (FTE)

6,785

6,793

6,939

0%

-2%

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)1

Collectively assessed credit impairment charge/(release) as a % of average GLA
Gross impaired assets

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

Cash Profit March 2023 v March 2022

Performance March 2023 v March 2022
Lending volumes increased driven by home loan and business lending
growth.
• Net interest margin increased driven by favourable deposit margins
from a rising interest rate environment. This was partially offset byasset margin contraction from competitive pressure and unfavourable
deposit mix with a shift towards lower margin term deposits.
• Other operating income decreased driven by gain on sale ofgovernment securities in the March 2022 half, and lower funds
management fees.
• Credit impairment charge increased driven by increase in collectively
assessed credit impairment and increase in individually assessed
credit impairment due to lower write-backs.

65

DIVISIONAL RESULTS
New Zealand
Antonia Watson
Individually assessed credit impairment charge/(release)

Half Year

Personal

Mar 23
NZD M

Sep 22NZD M

Movement
Mar 22
NZD M

Mar 23v. Sep 22

Mar 23v. Mar 22

7

4

7

75%

0%

Home Loans

2

-

1

n/a

large

Other

5

4

6

25%

-17%

Business

3

(8)

(21)

large

large

Individually assessed credit impairment charge/(release)

10

(4)

(14)

large

large

Collectively assessed credit impairment charge/(release)

Movement

Half Year

Personal

Mar 23
NZD M

Sep 22
NZD M

Mar 22
NZD M

Mar 23v. Sep 22

Mar 23v. Mar 22

43

44

19

-2%

large

Home Loans

52

24

21

large

large

Other

(9)

20

(2)

large

large

Business

29

41

(37)

-29%

large

Collectively assessed credit impairment charge/(release)

72

85

(18)

-15%

large

As at

Net loans and advances

Personal
Home Loans
Other

Movement

Mar 23
NZD M
103,509

Sep 22
NZD M
103,014

Mar 22
NZD M
101,646

Mar 23v. Sep 22
0%

Mar 23v. Mar 22
2%

101,946

101,482

100,159

0%

2%

1,563

1,532

1,487

2%

5%

Business

24,92425,56023,603-2%

6%

Net loans and advances

128,433

128,574

125,249

0%

3%

As at

Customer deposits
Mar 23
NZD M
86,108Personal

Sep 22
NZD M
85,391

Movement
Mar 22
NZD M
84,039Mar 23v. Sep 22
1%

Mar 23v. Mar 22
2%

Business

18,506

19,05920,079-3%-8%

Customer deposits

104,614

104,450

104,118

0%

0%

66

DIVISIONAL RESULTS
New Zealand
Antonia Watson

Personal
NZD M
1,218

March 2023 Half YearNet interest income

Business
NZD M
496

Central
Functions
NZD M
7

Total
NZD M
1,721

192

26

(2)

216

Operating income

1,410

522

5

1,937

Operating expenses

(574)

(109)

(2)

(685)

Cash profit before credit impairment and income tax

836

413

3

1,252

Credit impairment (charge)/release

(50)

(32)

-

(82)

Cash profit before income tax

786

381

3

1,170

Income tax expense and non-controlling interests

(220)

(107)

(1)

(328)

Cash profit

566

274

2

842
10

Other operating income

Individually assessed credit impairment charge/(release)

7

3

-

Collectively assessed credit impairment charge/(release)

43

29

-

72

Net loans and advances

103,50924,924-

128,433

Customer deposits

86,10818,506-

104,614

Risk weighted assets

48,19926,251

2,159

76,609March 2022 Half YearNet interest income

1,024

415

(5)

1,434

Other operating income

202

24

33

259

Operating income

1,226

439

28

1,693

Operating expenses

(585)

(102)

(2)

(689)

Cash profit before credit impairment and income tax

641

337

26

1,004

Credit impairment (charge)/release

(26)

58

-

32

Cash profit before income tax

615

395

26

1,036

Income tax expense and non-controlling interests

(173)

(111)

(6)

(290)

Cash profit

442

284

20

746

Individually assessed credit impairment charge/(release)

7

(21)

-

(14)

Collectively assessed credit impairment charge/(release)

19

(37)

-

(18)

Net loans and advances

101,646

23,603-

125,249

Customer deposits

84,03920,079-104,118

Risk weighted assets

41,571

20,964

1,821

64,356

March 2023 Half Year v March 2022 Half YearNet interest income

19%

20%

large

20%

Other operating income

-5%

8%

large

-17%

Operating income

15%

19%

-82%

14%

Operating expenses

-2%

7%

0%

-1%

Cash profit before credit impairment and income tax

30%

23%

-88%

25%

Credit impairment (charge)/release

92%

large

n/a

large

Cash profit before income tax

28%

-4%

-88%

13%

Income tax expense and non-controlling interests

27%

-4%

-83%

13%

Cash profit

28%

-4%

-90%

13%

Individually assessed credit impairment charge/(release)

0%

large

n/a

large

Collectively assessed credit impairment charge/(release)

large

large

n/a

large

2%

6%

n/a

3%

Net loans and advances
Customer deposits

2%

-8%

n/a

0%

Risk weighted assets

16%

25%

19%

19%

67

DIVISIONAL RESULTS
New Zealand
Antonia Watson

Personal
NZD M
1,218

March 2023 Half YearNet interest income

Business
NZD M
496

Central
Functions
NZD M
7

Total
NZD M
1,721

192

26

(2)

216

Operating income

1,410

522

5

1,937

Other operating income

Operating expenses

(574)

(109)

(2)

(685)

Cash profit before credit impairment and income tax

836

413

3

1,252

Credit impairment (charge)/release

(50)

(32)

-

(82)

Cash profit before income tax

786

381

3

1,170

Income tax expense and non-controlling interests

(220)

(107)

(1)

(328)

Cash profit

566

274

2

842
10

Individually assessed credit impairment charge/(release)

7

3

-

Collectively assessed credit impairment charge/(release)

43

29

-

72

Net loans and advances

103,50924,924-

128,433

Customer deposits

86,10818,506-

104,614

Risk weighted assets

48,19926,251

2,159

76,609September 2022 Half YearNet interest income

1,196

470

8

1,674

212

28

(2)

238

Operating income

1,408

498

6

1,912

Operating expenses

(580)

(106)

(2)

(688)

Cash profit before credit impairment and income tax

828

392

4

1,224

Other operating income

Credit impairment (charge)/release

(48)

(33)

-

(81)

Cash profit before income tax

780

359

4

1,143

Income tax expense and non-controlling interests

(218)

(101)

(2)

(321)

Cash profit

562

258

2

822

Individually assessed credit impairment charge/(release)

4

(8)

-

(4)

Collectively assessed credit impairment charge/(release)

44

41

-

85

Net loans and advances

103,014

25,560-128,574

Customer deposits

85,391

19,059-104,450

Risk weighted assets

41,71021,945

1,827

65,482

March 2023 Half Year v September 2022 Half YearNet interest income

2%

6%

-13%

3%

Other operating income

-9%

-7%

0%

-9%
1%

Operating income

0%

5%

-17%

Operating expenses

-1%

3%

0%

0%

Cash profit before credit impairment and income tax

1%

5%

-25%

2%

Credit impairment (charge)/release

4%

-3%

n/a

1%

Cash profit before income tax

1%

6%

-25%

2%

Income tax expense and non-controlling interests

1%

6%

-50%

2%

Cash profit

1%

6%

0%

2%

Individually assessed credit impairment charge/(release)

75%

large

n/a

large

Collectively assessed credit impairment charge/(release)

-2%

-29%

n/a

-15%

Net loans and advances

0%

-2%

n/a

0%

Customer deposits

1%

-3%

n/a

0%

Risk weighted assets

16%

20%

18%

17%

68

DIVISIONAL RESULTS
New Zealand
Antonia Watson
Table reflects AUD for New Zealand
NZD results shown on page 65
Half Year

Movement

Mar 23$M
1,582

Sep 22$M
1,517

Mar 22$M
1,354

Mar 23v. Sep 22
4%

Mar 23v. Mar 22
17%

199

216

244

-8%

-18%

Operating income

1,781

1,733

1,598

3%

11%

Operating expenses

(630)

(622)

(651)

1%

-3%

Cash profit before credit impairment and income tax

1,151

1,111

947

4%

22%

Net interest income
Other operating income

(75)

(76)

31

-1%

large

Cash profit before income tax

Credit impairment (charge)/release

1,076

1,035

978

4%

10%

Income tax expense and non-controlling interests

(302)

(290)

(274)

4%

10%

Cash profit

774

745

704

4%

10%

Consisting of:
Personal

520

510

418

2%

24%

Business

252

233

269

8%

-6%

2

2

17

0%

-88%

774

745

704

4%

10%

120,262

113,288

116,403

6%

3%

Central Functions
Cash profit
Balance Sheet
Net loans and advances

3,303

2,930

3,264

13%

1%

External assets

123,565

116,218

119,667

6%

3%

Customer deposits

97,95892,032

96,765

6%

1%

Other deposits and borrowings

6,153

5,070

6,219

21%

-1%

Deposits and other borrowings

104,111

97,102102,984

7%

1%
5%

Other external assets

Other external liabilities

17,46918,161

16,699-4%

External liabilities

121,580

115,263

119,683

5%

2%

Risk weighted assets

71,73557,69659,810

24%

20%

Average gross loans and advances

118,683

115,946

116,794

2%

2%

Average deposits and other borrowings

102,113

100,984

101,729

1%

0%
-8%

88

86

96

2%

Funds under management

34,58030,32434,71914%

0%

Average funds under management

32,97532,44336,2752%-9%

RatiosReturn on average assets

1.28%

1.25%

1.18%

Net interest margin

2.67%

2.61%

2.33%

Operating expenses to operating income

35.4%

36.0%

40.7%

Operating expenses to average assets

1.04%

1.05%

1.09%
large

large

-16%

large

8%

-12%

0%

-2%

Net funds management income

Individually assessed credit impairment charge/(release)
Individually assessed credit impairment charge/(release) as a % of average GLA1
Collectively assessed credit impairment charge/(release)Collectively assessed credit impairment charge/(release) as a % of average GLA1
Gross impaired assets

9

(3)

(13)

0.02%

(0.01%)(0.02%)

66

79

(18)

0.11%

0.13%

(0.03%)

100

93

113

Gross impaired assets as a % of GLA

0.08%

0.08%

0.10%

Total full time equivalent staff (FTE)

6,785

6,793

6,939

1.

Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

69

DIVISIONAL RESULTS
Pacific
Antonia Watson
Movement

Half YearNet interest income

Mar 23$M
62

Sep 22$M
50

Mar 22$M
46

Mar 23v. Sep 22
24%

Mar 23v. Mar 22
35%

Other operating income

40

34

34

18%

18%

Operating income

102

84

80

21%

28%

Operating expenses

(74)

(73)

(80)

1%

-8%

Cash profit/(loss) before credit impairment and income tax

28

11

-

large

n/a

Credit impairment (charge)/release

16

9

(3)

78%

large

Cash profit/(loss) before income tax

44

20

(3)

large

large

Income tax (expense)/benefit and non-controlling interests

(10)

(5)

(3)

large

large

Cash profit/(loss)

34

15

(6)

large

large

Balance Sheet
Net loans and advances

1,661

1,754

1,664

-5%

0%

Customer deposits

3,562

3,776

3,763

-6%

-5%

Risk weighted assets

4,131

3,899

3,604

6%

15%

Total full time equivalent staff (FTE)

1,037

1,086

1,092

-5%

-5%

Group Centre
Half YearSep 22$M

Mar 22
$M

101

103

73

-2%

38%

(6)

117

32

large

large

Mar 23$M
Share of associates' profit/(loss)
Operating income (other)

Movement
Mar 23v. Sep 22

Mar 23v. Mar 22

Operating income1

95

220

105

-57%

-10%

Operating expenses2

(535)

(492)

(397)

9%

35%

Cash profit/(loss) before credit impairment and income tax

(440)

(272)

(292)

62%

51%

Credit impairment (charge)/release

-

(14)

(4)

large

large

Cash profit/(loss) before income tax

(440)

(286)

(296)

54%

49%

91

60

82

52%

11%

(349)

(226)

(214)

54%

63%

11,320

5,444

5,425

large

large

10,821

10,31910,3295%

5%

Income tax benefit and non-controlling interests
Cash profit/(loss)
Risk weighted assets
3

Total full time equivalent staff (FTE)1.

The March 2023 half includes the loss on reclassification of data centres to held for sale of $43 million. The September 2022 half includes the impact associated with the early termination of
the head lease on the 55 Collins Street Melbourne building of $23 million and customer remediation of -$14 million. The March 2022 half Includes a $65 million loss from recycling of foreign
currency reserves following dissolution of several entities.
2. The March 2023 half includes transaction related costs of $56 million, restructuring expense of $12 million (Sep 22 half: $12 million; Mar 22 half: $6 million). The September 2022 half also
includes remediation expense of $22 million and the loss associated with the early termination of the head lease on the 55 Collins Street Melbourne building of $47 million.
3. Comparative information has been restated to include FTE of the consolidated investments managed by 1835i Group Pty Ltd (Sep 22: 185; Mar 22: 157).

70

PROFIT RECONCILIATIONCONTENTS

Page

Adjustments between statutory profit and cash profit

72

Explanation of adjustments between statutory profit and cash profit

72

Reconciliation of statutory profit to cash profit

73

71

PROFIT RECONCILIATION
Non-IFRS information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report andDividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in ASIC Regulatory
Guide 230 has been followed when presenting this information.

Adjustments between statutory profit and cash profit
Cash profit represents ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group andDivisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory
profit (refer to Definitions on pages 131 to 134 for further details). The adjustments made in arriving at cash profit are included in statutory profit which is
subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash profit is not subject toreview by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on a consistentbasis across each period presented.
Half Year

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

3,547

3,603

3,535

-2%

0%

Economic hedges

190

(196)

(373)

large

large

Revenue and expense hedges

84

(5)

(49)

large

large

274

(201)

(422)

large

large

3,821

3,402

3,113

12%

23%

-

(14)

(5)

large

large

3,821

3,388

3,108

13%

23%

Statutory profit attributable to shareholders of the Company fromcontinuing operations
Adjustments between statutory profit and cash profit from continuing
operations

Total adjustments between statutory profit and cash profit from continuing
operations
Cash profit from continuing operations
Statutory profit/(loss) attributable to shareholders of the Company fromdiscontinued operations
Cash profit

Explanation of adjustments between statutory profit and cash profit•

Economic hedges
The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in accordance with accounting standards, resultin fair value gains and losses being recognised in the Income Statement. This includes gains and losses arising from approved classes of derivatives
not designated in accounting hedge relationships but which are considered to be economic hedges, as well as ineffectiveness from designatedaccounting hedges.
Economic hedges comprise:•

Derivatives (primarily cross currency interest rate swaps) used to convert the proceeds of foreign currency debt issuances into floating rate
Australian dollar and New Zealand dollar debt that do not qualify for hedge accounting. The main drivers of these fair value movements are
currency basis spreads and Australian dollar and New Zealand dollar fluctuations against other major funding currencies.

•

Economic hedges of select structured finance and specialised leasing transactions that do not qualify for hedge accounting. The main drivers ofthese fair value adjustments are movements in the Australian and New Zealand term structure of interest rates.

•

Ineffectiveness arising from differences in certain factors between the hedged items and the hedging instruments.

The Group removes the fair value adjustments from cash profit since the profit or loss will reverse over time to match with the profit or loss from theunderlying hedged item.
In the March 2023 half, the majority of the loss on economic hedges relates to funding related swaps, principally from narrowing USD/EUR currency
basis spreads and from the strengthening of AUD and NZD against USD. Further losses were driven by falling AUD yield curves on net pay fixedswap positions.
•

Revenue and expense hedges
The Group enters into economic hedges to manage exposures from larger foreign exchange denominated revenue and expense streams, primarily
NZD and USD (and USD correlated). The loss on revenue and expense hedges in the March 2023 half was mainly due to the depreciation of AUD
against the NZD.

72

PROFIT RECONCILIATION
Reconciliation of statutory profit to cash profit
Adjustments to statutory profit

Statutory profit

Economic
hedges

Revenue andexpensehedgesTotal
adjustments tostatutory profit

Cash profit

$M

$M

$M

$M

$M
8,503

March 2023 Half YearNet interest income

8,503

-

-

-

Other operating income

1,636

269

120

389

2,025

Operating income

10,139

269

120

389

10,528Operating expenses(4,997)---(4,997)

Profit before credit impairment and tax

5,142

269

120

389

5,531

Credit impairment (charge)/release

(133)

-

-

-

(133)

Profit before income tax

5,009

269

120

389

5,398

Income tax expense and non-controlling interests(1,462)

(79)

(36)

(115)

(1,577)

Profit after tax from continuing operations

3,547

190

84

274

3,821

-

-

-

-

-

Profit after tax

3,547

190

84

274

3,821

September 2022 Half YearNet interest income

7,774

-

-

-

7,774

Other operating income

2,110

(278)

(7)

(285)

1,825

Operating income

9,884

(278)

(7)

(285)

9,599

Operating expenses(4,788)---(4,788)

Profit before credit impairment and tax

5,096

(278)

(7)

(285)

4,811

(52)

-

-

-

(52)

Profit before income tax

5,044

(278)

(7)

(285)

4,759

Income tax expense and non-controlling interests(1,441)82

284(1,357)

Profit after tax from continuing operations

3,603

(196)

(5)

(201)

3,402

(14)

-

-

-

(14)

Profit after tax

3,589

(196)

(5)

(201)

3,388

March 2022 Half YearNet interest income

7,100

-

-

-

7,100

Other operating income

2,442

(524)

(70)

(594)

1,848

Operating income

9,542

(524)

(70)

(594)

8,948

Operating expenses(4,791)---(4,791)

Profit before credit impairment and tax

4,751

(524)

(70)

(594)

4,157

284

-

-

-

284

Profit before income tax

5,035

(524)

(70)

(594)

4,441

Income tax expense and non-controlling interests(1,500)

151

21

172

(1,328)

Profit after tax from continuing operations

3,535

(373)

(49)

(422)

3,113

(5)

-

-

-

(5)

3,530

(373)

(49)

(422)

3,108

Profit/(Loss) after tax from discontinued operations

Credit impairment (charge)/release

Profit/(Loss) after tax from discontinued operations

Credit impairment (charge)/release

Profit/(Loss) after tax from discontinued operations
Profit after tax

73

PROFIT RECONCILIATIONThis page has been left blank intentionally74

CONDENSED CONSOLIDATED FINANCIAL STATEMENTSCONTENTS

Page

Directors’ Report76

Condensed Consolidated Income Statement

77

Condensed Consolidated Statement of Comprehensive Income

78

Condensed Consolidated Balance Sheet79

Condensed Consolidated Cash Flow Statement80

Condensed Consolidated Statement of Changes in Equity

81

Notes to Condensed Consolidated Financial Statements

82

Directors’ Declaration

116

Auditor’s Review Report and Independence Declaration

117

75

DIRECTORS’ REPORTThe Directors present their report on the Condensed Consolidated Financial Statements for ANZ Group Holdings Limited (the Company) for the half year
ended 31 March 2023.
Directors
The names of the Directors of the Company who held office during and since the end of the half year are:Directors appointed on 20 December 2022
Mr PD O’Sullivan

Chairman

Mr SC Elliott

Director and Chief Executive Officer

Ms IR Atlas, AO

Director

Ms SJ Halton, AO PSM

Director

Rt Hon Sir JP Key, GNZM AC

Director

Mr JT Macfarlane

Director

Ms CE O’Reilly

Director

Mr JP Smith

Director

The following Directors held office prior to the Company’s listing on the ASX and while the Company was dormant. They each ceased office on
20 December 2022:
Dr T Warren

Director

Mr CT Brackenrig

Director

Ms ML Treloar

Director

Establishment of a New Group Organisational Structure
On 3 January 2023, Australia and New Zealand Banking Group Limited (ANZBGL) established by a scheme of arrangement, a non-operating holding
company, ANZ Group Holdings Limited (ANZGHL), as the new listed parent holding company of the ANZ Group and implemented a restructure to
separate ANZ’s banking and certain non-banking businesses into the ANZ Bank Group and ANZ Non-Bank Group (Restructure). The ANZ Bank Group
comprises the majority of the businesses and subsidiaries that were held in ANZBGL prior to the Restructure. The ANZ Non-Bank Group comprisesbanking-adjacent businesses developed or acquired by the ANZ Group to focus on bringing new technology and banking-adjacent services to the ANZGroup’s customers, and a separate service company.
On Restructure, each ANZ shareholder received one ANZGHL ordinary share for each ANZ ordinary share that they held prior to the implementation of
the Restructure.
Result
The consolidated profit attributable to shareholders of the Company was $3,547 million. Further details are contained in Group Results on pages 19 to 48
which forms part of this report, and in the Condensed Consolidated Financial Statements.
Review of operations
A review of the operations of the Group during the half year and the results of those operations are contained in the Group Results on pages 19 to 48
which forms part of this report.
Lead auditor’s independence declaration
The lead auditor’s independence declaration given under section 307C of the Corporations Act 2001 (as amended) is set out on page 118 which forms
part of this report.
Rounding of amounts
The amounts contained in these Condensed Consolidated Financial Statements have been rounded to the nearest million dollars, except whereotherwise indicated, as permitted by ASIC Corporations Instrument 2016/191.
Significant events since balance date
There have been no significant events from 31 March 2023 to the date of signing this report that have not been adjusted or disclosed.
Signed in accordance with a resolution of the Directors.

Paul D O’Sullivan
ChairmanShayne C ElliottManaging Director

4 May 2023

76

CONDENSED CONSOLIDATED INCOME STATEMENTANZ Group Holdings Limited
Half Year
Note
Interest income
Interest expense

Movement

Mar 23$M
22,830

Sep 22$M
13,902

Mar 22$M
9,707

Mar 23v. Sep 22
64%

Mar 23v. Mar 22
large
large

(14,327)(6,128)(2,607)large

Net interest income

2

8,503

7,774

7,100

9%

20%

Other operating income

2

1,495

1,922

2,313

-22%

-35%

Net income from insurance business
Share of associates' profit/(loss)

2

40

85

55

-53%

-27%

2, 16

101

103

74

-2%

36%

10,139

9,884

9,542

3%

6%

(4,997)(4,788)(4,791)

4%

4%

5,142

5,096

4,751

1%

8%

(133)

(52)

284

large

large

5,009

5,044

5,035

-1%

-1%

(1,448)(1,440)(1,500)

1%

-3%

3,561

3,604

3,535

-1%

1%

-

(14)

(5)

large

large

3,561

3,590

3,530

-1%

1%

3,547

3,589

3,530

-1%

0%

14

14

1

-

large

n/a

Basic

6

118.5

125.4

124.6

-6%

-5%

Diluted

6

112.8

117.5

116.7

-4%

-3%

Basic

6

118.5

125.9

124.8

-6%

-5%

Diluted

6

112.8

117.9

116.9

-4%

-4%

5

81

74

72

9%

13%

Operating income
Operating expenses

3

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

9

Profit before income tax
Income tax expense

4

Profit after tax from continuing operations
Profit/(Loss) after tax from discontinued operations
Profit for the period
Comprising:
Profit attributable to shareholders of the Company
Profit attributable to non-controlling interests
Earnings per ordinary share (cents) including discontinued operations

Earnings per ordinary share (cents) from continuing operations

Dividend per ordinary share (cents)

The notes appearing on pages 82 to 115 form an integral part of the Condensed Consolidated Financial Statements.

77

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

ANZ Group Holdings Limited
Half Year

Movement

Mar 23$M
3,561

Sep 22$M
3,604

Mar 22$M
3,535

Mar 23v. Sep 22-1%

Investment securities - equity securities at FVOCI

62

(66)

11

large

large

Other reserve movements

(34)

28

99

large

large

Profit for the period from continuing operations

Mar 23v. Mar 22
1%

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss
Foreign currency translation reserve

792

16

(775)

large

large

Other reserve movements

1,073(1,549)(2,631)

large

large

Income tax attributable to the above items

(306)

429

743

large

large

8

(50)

10

large

-20%

1,595

(1,192)(2,543)

large

large

-

(14)

(5)

large

large

5,156

2,398

987

large

large

5,112

2,412

987

large

large

44

(14)

-

large

n/a

Share of associates' other comprehensive income1
Other comprehensive income after tax from continuing operations
Profit/(Loss) after tax from discontinued operations
Total comprehensive income for the period
Comprising total comprehensive income attributable to:Shareholders of the Company
Non-controlling interests
1.

Share of associates’ other comprehensive income includes:
Mar 23 half$M

Sep 22 half$M

Mar 22 half
$M

FVOCI reserve gain/(loss)

2

(51)

(5)

Defined benefits gain/(loss)

6

-

15

Foreign currency translation reserve gain/(loss)

-

1

-

Total

8

(50)

10

The notes appearing on pages 82 to 115 form an integral part of the Condensed Consolidated Financial Statements.

78

CONDENSED CONSOLIDATED BALANCE SHEETANZ Group Holdings Limited
As at
AssetsCash and cash equivalents1

Note

Mar 23$M
208,800

Sep 22$M
168,132

Movement
Mar 22$M
168,054

Mar 23v. Sep 22
24%

Mar 23v. Mar 22
24%

Settlement balances owed to ANZ

7,020

4,762

7,141

47%

-2%

Collateral paid

9,245

12,70010,764-27%-14%

Trading assets

39,611

35,23739,43312%0%Derivative financial instruments

45,61490,17445,238-49%

1%Investment securities

93,97286,15379,7579%18%690,087

672,407651,436

3%

6%

646

632

661

2%

-2%

Net loans and advances

8

Regulatory deposits

2,253

2,181

2,018

3%

12%

Current tax assets

49

46

227

7%

-78%

Deferred tax assets

2,962

3,384

2,903

-12%

2%

Goodwill and other intangible assets

4,037

3,877

4,068

4%

-1%

Premises and equipment

2,289

2,431

2,702

-6%

-15%

Investments in associates

Other assets

4,615

3,613

2,959

28%

56%

Total assets

1,111,200

1,085,729

1,017,361

2%

9%Settlement balances owed by ANZ

23,01013,766

19,752

67%

16%

Collateral received

8,002

16,230

6,716

-51%

19%

842,564

797,281780,2886%

8%

46,15485,14947,795

-46%

-3%

347

829

320

-58%

8%

Liabilities

Deposits and other borrowings

10

Derivative financial instruments
Current tax liabilities

79

83

82

-5%

-4%

12,991

9,835

10,57932%

23%

Deferred tax liabilities
Payables and other liabilities

593

549

585

8%

1%

1,694

1,872

2,262

-10%

-25%

106,157

93,73487,22613%

22%

1,041,591

1,019,328

955,6052%

9%69,60966,401

61,7565%

13%

Employee entitlements
Other provisions
Debt issuances11

Total liabilities
Net assets
Shareholders' equity
Ordinary share capital

14

29,054

28,79725,091

1%

16%

Reserves

14(1,019)(2,606)(1,422)

-61%

-28%

Retained earnings

14

41,04939,71638,0783%

8%69,08465,907

61,747

5%

12%

Share capital and reserves attributable to shareholders of the Company
Non-controlling interests

14

Total shareholders' equity
1.

525

494

9

6%

large

69,60966,401

61,756

5%

13%

Includes settlement balances owed to ANZ that meet the definition of Cash and cash equivalents.

The notes appearing on pages 82 to 115 form an integral part of the Condensed Consolidated Financial Statements.

79

CONDENSED CONSOLIDATED CASH FLOW STATEMENTANZ Group Holdings Limited
Half Year
Mar 23$M
3,561

Sep 22$M
3,590

Mar 22$M
3,530

Credit impairment charge/(release)
Depreciation and amortisation

133
471

52
499

(284)
509

Loss on reclassification of data centres to held for sale

43

-

-

-

(8)

-

5,417

(4,055)(379)

Profit after income tax
Adjustments to reconcile to net cash flow from operating activities:(Profit)/loss on sale of premises and equipment
Net derivatives/foreign exchange adjustment(Gain)/loss on sale from divestments
Other non-cash movements

-

7

(259)

(746)

(734)

(175)
(1,934)

Net (increase)/decrease in operating assets:
Collateral paid

3,185

(704)

Trading assets(2,273)

4,557

3,463

Loans and advances(11,227)(18,073)(28,305)

(587)

574

111
48,911Other assets
Net increase/(decrease) in operating liabilities:
Deposits and other borrowings

41,391(32)

Settlement balances owed by ANZ

9,053(6,011)

2,525

Collateral received(7,892)

8,205

1,263

Other liabilities(1,072)

(332)

3,665

Total adjustments

35,896(16,055)

29,111

Net cash (used in)/provided by operating activities1

39,457(12,465)

32,641(13,553)(17,083)(17,209)

5,432

14,305

18,492

(10)

-

(65)

-

-

394

Cash flows from investing activities
Investment securities:
Purchases
Proceeds from sale or maturity
Controlled entities and associates:
Purchased, net of cash acquired
Proceeds from divestments, net of cash disposed

(350)

(132)

(519)

(8,481)(2,910)

1,093

937

794

432

Issue proceeds

25,041

15,955

7,467

Redemptions(14,689)(9,141)(16,876)

Dividends paid3(1,994)

Net investments in other assets
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Deposits and other borrowings drawn down
Debt issuances:2(1,979)(1,790)On market purchase of treasury shares

(19)

-

(117)

Repayment of lease liabilities

(156)

(60)

(158)
(846)

Share buy-back--

ANZ Bank New Zealand Perpetual Preference Shares

-

492

-

Share entitlement issue

-

3,497

(12,092)

Net cash (used in)/provided by financing activities

9,135

9,747

Net increase/(decrease) in cash and cash equivalents

40,111(5,628)21,642

Cash and cash equivalents at beginning of period

168,132

168,054

151,260

557

5,706

(4,848)208,800

168,132

168,054

Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period1.

Net cash (used in)/provided by operating activities includes interest received of $22,079 million (Sep 22 half: $13,129 million; Mar 22 half: $9,619 million), interest paid of $12,717 million(Sep 22 half: $5,223 million; Mar 22 half: $2,634 million) and income taxes paid of $1,827 million (Sep 22 half: $749 million; Mar 22 half: $1,422 million).
2. Non-cash changes in debt issuances include a loss of $2,072 million (Sep 22 half: $831 million gain; Mar 22 half: $3,894 million gain) from unrealised movements primarily due to fair value
hedge adjustments and foreign exchange differences.
3. Cash outflow for shares purchased to satisfy the Dividend Reinvestment Plan are classified in dividends paid.
The notes appearing on pages 82 to 115 form an integral part of the Condensed Consolidated Financial Statements.

80CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYANZ Group Holdings Limited

As at 1 October 2021

Ordinary
share
capital$M

Reserves$M

Retainedearnings$M

Share capitaland reserves
attributable toshareholders of
the Company$M

Noncontrollinginterests$M

Total
shareholders'equity$M

25,984

1,228

36,453

63,665

11

63,676

Profit/(Loss) from continuing operations

-

-

3,535

3,535

-

3,535

Profit/(Loss) from discontinued operations

-

-

(5)

(5)

-

(5)

Other comprehensive income for the period from continuing operations-(2,628)85(2,543)-(2,543)-(2,628)

3,615

987

-

987

-

-

(1,992)(1,992)(2)(1,994)

(846)

-

-

(846)

-

(846)

Total comprehensive income for the period
Transactions with equity holders in their capacity as equity holders:
Dividends paid
Group share buy-back1
Other equity movements:
Employee share and option plans
Other items
As at 31 March 2022

(47)

-

-

(47)

-

(47)

-

(22)

2

(20)

-

(20)

25,091(1,422)

38,07861,747

961,756

Profit/(Loss) from continuing operations

-

-

3,603

3,603

1

3,604

Profit/(Loss) from discontinued operations

-

-

(14)

(14)

-

(14)

Other comprehensive income for the period from continuing operations-(1,207)30(1,177)(15)(1,192)-(1,207)

3,619

2,412

(14)

2,398
(1,973)

Total comprehensive income for the period
Transactions with equity holders in their capacity as equity holders:
Dividends paid--

(1,973)(1,973)

-

183

-

-

183

-

183

3,497

-

-

3,497

-

3,497

26

-

-

26

-

26
492

Dividend Reinvestment Plan2
Share entitlement issue3
Other equity movements:
Employee share and option plans
4

ANZ Bank New Zealand Perpetual Preference Shares issued

-

-

(7)

(7)

499

Other items

-

23

(1)

22

-

22

28,797(2,606)

39,71665,907494

66,401As at 30 September 2022
Profit/(Loss) from continuing operations

-

-

3,547

3,547

14

3,561

Other comprehensive income for the period from continuing operations

-

1,607

(42)

1,565

30

1,595

-

1,607

3,505

5,112

44

5,156

Total comprehensive income for the period
Transactions with equity holders in their capacity as equity holders:
Dividends paid
Dividend Reinvestment Plan2--(2,172)(2,172)(13)(2,185)

206

-

-

206

-

206

53

-

-

53

-

53

Other equity movements:
Employee share and option plans
Other items
As at 31 March 2023

(2)

(20)

-

(22)

-

(22)

29,054(1,019)41,04969,084525

69,6091.

The Group completed its $1.5 billion on-market share buy-back of ANZ ordinary shares resulting in 31 million shares being cancelled in the March 2022 half.
8.4 million shares were issued under the Dividend Reinvestment Plan (DRP) for the 2022 final dividend (2022 interim dividend: 7.2 million; 2021 final dividend: nil). On-market sharepurchases for the DRP were $204 million in the March 2022 half.
3. The Group issued 187.1 million new ordinary shares under the share entitlement offer in the September 2022 half.
4. ANZ Bank New Zealand, a wholly owned subsidiary of ANZGHL, issued Perpetual Preference Shares in the September 2022 half which are considered non-controlling interests to theGroup. Refer to Note 14 Shareholders’ equity for further details.
2.

The notes appearing on pages 82 to 115 form an integral part of the Condensed Consolidated Financial Statements.

81

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation

Organisational Restructure
These Condensed Consolidated Financial Statements have been prepared for the ANZ Group Holdings Limited consolidated group. On 3 January 2023,
Australia and New Zealand Banking Group Limited (ANZBGL) established by a scheme of arrangement, a non-operating holding company, ANZ Group
Holdings Limited (ANZGHL), as the new listed parent holding company of the ANZ Group. Accordingly, these Condensed Consolidated Financial
Statements reflect a continuation of the existing ANZ Group and have been prepared on the basis of accounting policies and using methods ofcomputation consistent with those applied in the 2022 ANZ Annual Report.
Basis of Preparation
These Condensed Consolidated Financial Statements:•

have been prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards (AASs),•

should be read in conjunction with ANZ’s Annual Financial Report for the year ended 30 September 2022 and any public announcements made by
the Parent Entity and its controlled entities (the Group) for the half year ended 31 March 2023 in accordance with the continuous disclosure
obligations under the Corporations Act 2001 and the ASX Listing Rules;•

do not include all notes of the type normally included in the 2022 ANZ Annual Report;•

are presented in Australian dollars unless otherwise stated; and•were approved by the Board of Directors on 4 May 2023.

i)Statement of Compliance

These Condensed Consolidated Financial Statements have been prepared in accordance with the Corporations Act 2001 and AASB 134 Interim
Financial Reporting which ensures compliance with IAS 34 Interim Financial Reporting.
ii) Rounding of amounts
The amounts contained in these Condensed Consolidated Financial Statements have been rounded to the nearest million dollars, except whereotherwise indicated, as permitted by Australian Securities and Investments Commission Corporations Instrument 2016/191.
iii) Basis of measurement and presentation
The financial information has been prepared in accordance with the historical cost basis except the following assets and liabilities that are stated at theirfair values:•

derivative financial instruments as well as, in the case of fair value hedges, the fair value adjustment on the underlying hedged exposure,•financial assets and liabilities held for trading;•financial assets and liabilities designated at fair value through profit and loss (FVTPL);•

financial assets at fair value through other comprehensive income (FVOCI); and•assets and liabilities held for sale (except those required to be at carrying value).

In accordance with AASB 119 Employee Benefits, defined benefit obligations are measured using the Projected Unit Credit method.
There were no discontinued operations in the current period. For the purpose of comparative information, discontinued operations in the prior periods
were separately presented from the results of the continuing operations as a single line item ‘Profit/(Loss) after tax from discontinued operations’ in theCondensed Consolidated Income Statement.
iv) Accounting policies
These Condensed Consolidated Financial Statements have been prepared on the basis of accounting policies and using methods of computationconsistent with those applied in the 2022 ANZ Annual Report.

82

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dv) Use of estimates, assumptions and judgements
The preparation of these Condensed Consolidated Financial Statements requires the use of management judgement, estimates and assumptions
impacting the application of accounting policies and financial outcomes. Discussion of the critical accounting estimates and judgements, which include
complex or subjective decisions or assessments are provided in the 2022 ANZ Annual Report. Such estimates and judgements are reviewed on an
ongoing basis.
The global economy is facing challenges associated with high inflation, increasing interest rates, labour market constraints, and continuing geopoliticaltensions which contributes to an elevated level of estimation uncertainty involved in the preparation of these financial statements.
The Group has made various accounting estimates in these Condensed Consolidated Financial Statements based on forecasts of economic conditions
which reflect expectations and assumptions at 31 March 2023 about future events considered reasonable in the circumstances. Thus there is aconsiderable degree of judgement involved in preparing these estimates. Actual economic conditions are likely to be different from those forecast since
anticipated events frequently do not occur as expected, and the effect of these differences may significantly impact accounting estimates included inthese financial statements. The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to
expected credit losses and recoverable amounts of non-financial assets.
The impact of these uncertainties on each of these accounting estimates is discussed further below, along with assumptions and judgements made in
relation to other key estimates. Readers should consider these disclosures in light of the inherent uncertainties described above.
Allowance for expected credit losses
The Group measures the allowance for expected credit losses (ECL) using an expected credit loss impairment model as required by AASB 9 Financial
Instruments.
The Group’s allowance for expected credit losses is included in the table below (refer to Note 9 for further information).
As at
Mar 23$M

Sep 22$M

Mar 22$M

Collectively assessed

4,040

3,853

3,757

Individually assessed

421

542

636

4,461

4,395

4,393

1

Total
1.

Includes allowance for expected credit losses for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments undrawn and contingent facilities.

Individually assessed allowance for expected credit losses
During the March 2023 half, the individually assessed allowance for expected credit losses decreased $121 million.
In estimating individually assessed ECL, the Group makes judgements and assumptions in relation to expected repayments, the realisable value ofcollateral, business prospects for the customer, competing claims and the likely cost and duration of the work-out process. Judgements and assumptions
in respect of these matters have been updated to reflect amongst other things, the continuing uncertainties described above.
Collectively assessed allowance for expected credit losses
During the March 2023 half, the collectively assessed allowance for expected credit losses increased $187 million, attributable to $100 million fromdeterioration in economic outlook, $80 million from a net increase in management temporary adjustments, $24 million from deterioration in credit risk, and$24 million from foreign currency translation and other impacts. This was partially offset by $41 million from an improvement in portfolio composition.
In estimating collectively assessed ECL, the Group makes judgements and assumptions in relation to:•

the selection of an estimation technique or modelling methodology; and•the selection of inputs for those models, and the interdependencies between those inputs.

The judgements and associated assumptions have been made within the context of the uncertainty of how various factors might impact the global
economy, and reflect historical experience and other factors that are considered relevant, including expectations of future events that are believed to bereasonable under the circumstances. The Group’s ECL estimates are inherently uncertain and, as a result, actual results may differ from these estimates.

83

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’d

The following table summarises the key judgements and assumptions in relation to the model inputs and the interdependencies between those inputs,
and highlights significant changes during the current period.
Judgement/Assumption

Description

Considerations for the half year ended 31 March 2023

Determining when a

In the measurement of ECL, judgement is involved in

The Group has continued to adjust ECL this period to accountsignificant increase indetermining whether there has been a SICR since initialfor expected deterioration in credit-worthiness of certain

credit risk (SICR) has

recognition of a loan, which would result in the financial asset

customer segments which are considered particularly

occurred or reversed

moving from Stage 1 to Stage 2. This is a key area ofvulnerable to economic pressures such as higher interest

judgement since transition from Stage 1 to Stage 2 increases

rates, elevated inflation and labour market pressures.

the ECL from an allowance based on the probability of default(PD) in the next 12 months, to an allowance for lifetime
expected credit losses. Subsequent decreases in credit risk
resulting in transition from Stage 2 to Stage 1 may similarly
result in significant changes in the ECL allowance.
The setting of precise SICR trigger points requires judgement
which may have a material impact upon the size of the ECL
allowance. The Group monitors the effectiveness of SICR
criteria on an ongoing basis.
Measuring both 12-month

The probability of default, loss given default (LGD) and

The PD, LGD and EAD models are subject to the Group’s

and lifetime credit losses

exposure at default (EAD) factors used in determining ECL

model risk policy that stipulates periodic model monitoring andare point-in-time measures reflecting the relevant forward-

re-validation, and defines approval procedures and authorities

looking information determined by management. Judgement

according to model materiality.

is involved in determining which forward-looking informationis relevant for particular lending portfolios and for determining

There were no material changes to the policies.

each portfolio’s point-in-time sensitivity.
In addition, judgement is required where behaviouralcharacteristics are applied in estimating the lifetime of a
facility which is used in measuring ECL.
Base case economic

The Group derives a forward-looking ‘base case’ economic

There have been no changes to the types of forward-looking

forecast

scenario which reflects ANZ Research - Economics’ (ANZ

variables (key economic drivers) used as model inputs.

Economics) view of future macroeconomic conditions.

As at 31 March 2023, the base case assumptions have been
updated to reflect elevated inflation, continuing high interest
rates, continued cost of living pressures and tightness in thelabour market.
The expected outcomes of key economic drivers for the basecase scenario at 31 March 2023 are described below under theheading ‘Base case economic forecast assumptions’.

Probability weighting of

Probability weighting of each economic scenario is

The probability weightings for each scenario remained

each economic scenario

determined by management considering the risks andunchanged from 30 September 2022.

(base case, upside,

uncertainties surrounding the base case economic scenario

downside and severeat each measurement date.

downside scenarios)1

Weightings for current and prior periods are as detailed in thesection below under the heading on ‘Probability weightings’.

The assigned probability weightings in Australia, New
Zealand and Rest of World are subject to a high degree of
inherent uncertainty and therefore the actual outcomes may
be significantly different to those projected.

Management temporary

Management temporary adjustments to the ECL allowance

Management have continued to apply adjustments toadjustments

are used in circumstances where it is judged that our existingaccommodate uncertainty associated with higher inflation andinputs, assumptions and model techniques do not capture allinterest rates.

the risk factors relevant to our lending portfolios. Emerging
local or global macroeconomic, microeconomic or politicalevents, and natural disasters that are not incorporated into
our current parameters, risk ratings, or forward-looking
information are examples of such circumstances.
1.

Management overlays have been made for risks particular toretail, including home loans, credit cards and small business inAustralia, business banking in New Zealand, and for personal
and tourism in Pacific.

The upside and downside scenarios are fixed by reference to average economic cycle conditions (that is, they are not based on the economic conditions prevailing at balance date) and are
based on a combination of more optimistic (in the case of the upside) and pessimistic (in the case of the downside) economic conditions.

84

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dBase case economic forecast assumptions
Continuing uncertainties described above increase the risk of the economic forecast resulting in an understatement or overstatement of the ECL balance.
The economic drivers of the base case economic forecasts, reflective of ANZ Economics’ view of future macro-economic conditions, used at 31 March2023 are set out below. For years beyond the near-term forecasts below, the ECL models apply simplified assumptions for the economy to calculate
lifetime loss.
Actual calendar year2022

Forecast calendar year
2023

2024

Australia
GDP (annual % change)

3.6%

2.0%

1.2%

Unemployment rate

3.7%

3.7%

4.2%

Residential property prices (annual % change)

-6.9%

-9.2%

4.2%

Consumer price index (annual % change)

6.6%

5.3%

3.3%

GDP (annual % change)

2.8%

1.4%

-0.1%

Unemployment rate

3.3%

3.9%

5.2%

Residential property prices (annual % change)-13.0%

-9.7%

2.2%

Consumer price index (annual % change)

7.2%

6.1%

2.9%

GDP (annual % change)

2.1%

1.4%

0.4%

Consumer price index (annual % change)

8.0%

4.1%

2.7%

New ZealandRest of WorldThe base case economic forecasts for Australia, New Zealand and Rest of World are for continuing slowdowns in economic activity. Continued highinflation and tight labour markets are expected to keep interest rates high and dampen growth over the forecast period.
Probability weightings
Probability weightings for each scenario are determined by management considering the risks and uncertainties surrounding the base case economic
scenario including the uncertainties described above.
Scenario weightings remain the same as those applied in September 2022 as noted in the table below.
The assigned probability weightings in Australia, New Zealand and Rest of World are subject to a high degree of inherent uncertainty and therefore theactual outcomes may be significantly different to those projected. The Group considers these weightings in each geography to provide estimates of thepossible loss outcomes and taking into account short and long term inter-relationships within the Group’s credit portfolios. The average weightings
applied across the Group are set out below:
Mar 23

Sep 22

Mar 22

Base

45.0%

45.0%

40.0%

Upside

0.0%

0.0%

5.0%

Downside

40.0%

40.0%

45.0%

Severe downside

15.0%

15.0%

10.0%

Group

ECL - Sensitivity analysis
Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future periods,
expected credit losses reported by the Group should be considered as a best estimate within a range of possible estimates. The table below illustrates
the sensitivity of the Group’s allowance for collectively assessed ECL to key factors used in determining it at 31 March 2023:
Balance
Sheet$M(Profit) and Loss
Impact$M

If 1% of stage 1 facilities were included in stage 2

4,121

81

If 1% of stage 2 facilities were included in stage 1

4,035

(5)

100% upside scenario

1,315(2,725)

100% base scenario

1,816(2,224)

100% downside scenario

3,272

(768)

100% severe downside scenario

7,314

3,274

85

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’d

Fair value measurement of financial instruments
The majority of valuation models the Group used to value financial instruments employ observable market data as inputs. For certain financial instruments,
the Group may use data that is not readily observable in current markets requiring management to exercise judgement in determining fair value dependingon the significance of the unobservable input to the overall valuation. Generally, the Group derives unobservable inputs from other relevant market dataand compare them to observed transaction prices where available.
At 31 March 2023, the Group had $1,868 million of assets and $26 million of liabilities where the valuation was primarily derived using unobservable
inputs (Sep 22: $1,833 million assets and $31 million liabilities; Mar 22: $1,580 million assets and $23 million liabilities). The financial instruments which
are valued using unobservable inputs are predominantly equity securities and syndicated loans where quoted prices in active markets are not available.
Equity securities
The Group holds an equity investment in the Bank of Tianjin (BoT), which at 31 March 2023 has a carrying value of $900 million (Sep 22: $854 million;
Mar 22: $956 million). The shares in BoT are listed, but the shares are illiquid, and consequently the fair value is based upon a valuation model using
comparator group pricing multiples.
The Group holds equity investments in unlisted equities, which at 31 March 2023 have a carrying value of $545 million (Sep 22: $491 million; Mar 22:$426 million). The fair values of these investments are based on valuation techniques relevant to the investments, including use of discounted cash flow
approaches, prices from recent arm’s length transactions where available, and comparator group pricing multiples, such as price to book ratios.
For equity instruments valued using valuation techniques, judgement is required in both the selection of the model and inputs used. When the Group
adopts comparator group pricing multiples, judgement is required to determine an appropriate comparator group for the purposes of the specificvaluation.
Syndicated loans
The Group holds $380 million (Sep 22: $403 million; Mar 22: $113 million) of syndicated loans which are measured at fair value when there is no market
data available for the valuation. A fair value is derived using discounted cash flow techniques with discount factors sourced from credit default swaps as aproxy.
Investments in associates
The Group assesses the carrying value of its investments in associates for impairment indicators semi-annually. In addition, the recoverable amount of
the investments is assessed to determine whether it is appropriate to reverse any prior period impairment losses recorded in respect of thoseinvestments.
Investments may be subjected to impairment depending on whether indicators of impairment exist, and then where a value-in-use (VIU) or fair value lesscost of disposal (FVLCOD) recoverable value assessment indicate that impairment is warranted.
Investments are also assessed for reversals of any prior period impairments by comparing their carrying values to higher of value-in-use and FVLCOD
and determining whether the service potential of the investment has increased since it was last impaired.
Both VIU and FVLCOD are subject to management judgement including the inputs used in the VIU measurement. Depending on the judgements applied,decisions on the amount of impairment, reversals of prior-period impairments, or decisions on whether or not to adjust carrying values, may differ.
Customer remediation provisions
At 31 March 2023, the Group has recognised customer remediation provisions of $549 million (Sep 22: $662 million; Mar 22: $853 million) which includes
provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims, penalties and litigation costs andoutcomes.
Determining the amount of the provisions, which represent management’s best estimate of the cost of settling the identified matters, requires the exerciseof significant judgement. It will often be necessary to form a view on a number of different assumptions, including the number of impacted customers, theaverage refund per customer, associated remediation project costs, and the implications of regulatory exposures and customer claims having regard totheir specific facts and circumstances.
Consequently, the appropriateness of the underlying assumptions is reviewed on a regular basis against actual experience and other relevant evidence,
including expert legal advice, and adjustments are made to the provisions where appropriate.
Other provisions
The Group holds provisions for various obligations including restructuring costs, non-lending losses, fraud and forgeries and litigation related claims.
These provisions involve judgements regarding the timing and outcome of future events, including estimates of expenditure required to satisfy suchobligations. The appropriateness of the underlying assumptions is reviewed on a regular basis against actual experience and other relevant evidence,
including expert legal advice, and adjustments are made to the provisions where appropriate.

86NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of preparation, cont’dvi) Interest rate benchmark reform
Interbank offered rates (IBORs), such as the London Interbank Offered Rate (LIBOR), continue to play a critical role in global financial markets, serving
as reference rates for certain derivatives, loans and securities, and in the valuation of financial instruments. The IBOR reforms have a wide-ranging
impact for the Group and our customers given the fundamental differences between IBORs and risk-free rates (RFRs). RFRs are available both as
backward-looking in arrears rates and, for some currencies, as forward-looking term rates. The key difference between IBORs and RFRs is that IBOR
rates include a term and bank credit risk premium, whereas RFRs do not. As a result of these differences, adjustments are required to an RFR to ensure
contracts referencing an IBOR rate transition on an economically comparable basis.
Update on the Group’s approach to interest rate benchmark reform
In line with the regulatory announcements made in 2021, the majority of IBOR rates, including Pound Sterling (GBP), Euro (EUR), Swiss Franc (CHF)
and Japanese Yen (JPY), and the US Dollar (USD) 1-week and 2-month LIBOR rate settings ceased on 31 December 2021 and have been replaced byalternative RFRs. This transition had an immaterial impact to the Group’s profit and loss. Through its loan and derivative transactions with customers,
issuance of debt and its asset and liability management activities the Group continues to have exposure to the remaining USD LIBOR settings and other
IBOR-related benchmarks that are due to cease primarily by 30 June 2023.
The Group continues to manage the transition from the remaining USD LIBOR tenors and other IBOR settings to RFR’s through its enterprise-wide
Benchmark Transition Program (the Program). The program is responsible for managing the risks associated with the transition including operational,
market, legal, conduct and financial reporting risks that may arise.
Exposures subject to benchmark reform as at 31 March 2023
The table below presents the Group’s exposure to interest rate benchmarks still subject to IBOR reform. These are financial instruments that contractuallyreference an IBOR benchmark planned to transition to an RFR and have a contractual maturity date beyond the planned IBOR cessation date.

As at 31 March 2023
Gross loans and advances1
1

USD LIBOR

Others

$M

$M

7,735

48

Other non-derivative financial assets

149-

Non-derivative financial liabilities2

650

32

Derivative assets (notional value)3

597,784

11,064

Derivative liabilities (notional value)3

578,589

9,599

6,914

-

Loan commitments1,4
1.

Excludes Expected Credit Losses (ECL).
Comprises floating rate debt issuances by the Group.
For cross-currency swaps, where both the receive and pay legs are in currencies subject to reform, the Group discloses the Australian dollar-equivalent notional amounts for both. Where
one leg of a swap is subject to reform, the Group discloses the notional amount of the receive leg.
4.
For multi-currency IBOR referenced facilities, the undrawn balance has been allocated to the pricing currency of the facility. In the event there are multiple pricing currencies that are
impacted by cessation, the allocation is based on most likely currency of drawdown.
2.
3.

Hedge accounting exposures subject to IBOR reform
The Group has hedge-accounted relationships referencing USD LIBOR, primarily due to fixed rate investment securities and the Group’s fixed rate debt
issuances denominated in USD that are designated in fair value hedge accounting relationships. The table below details the carrying values of the
exposures designated in hedge accounting relationships referencing LIBOR that will be impacted by IBOR reform. The nominal value of the associatedhedging instruments is also presented:
As at 31 March 2023
$M

Hedged items
Investment securities at FVOCI

7,410

Net loans and advances

201

Deposits and other borrowings

157

Debt issuances

15,387
Notional designated up to
30 June 2023

Notional designatedbeyond 30 June 2023

$M

$M

$M

Fair value hedges

3,278

19,09822,376

Cash flow hedges

-

277

277

Hedging instruments

87

Total notional amountNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2.

IncomeHalf Year

Movement

Interest income

Mar 23$M
22,830

Sep 22$M
13,902

Mar 22$M
9,707

Mar 23v. Sep 22
64%

Mar 23v. Mar 22
largeInterest expense(14,152)(5,953)(2,442)

large

large

Major bank levy

(175)

(175)

(165)

0%

6%

Net interest income

8,503

7,774

7,100

9%

20%

Other operating incomei) Fee and commission income
Lending fees1
Non-lending fees

199

186

188

7%

6%

1,129

1,120

1,274

1%

-11%

Commissions

40

53

50

-25%

-20%

Funds management income

122

124

137

-2%

-11%

Fee and commission income

1,490

1,483

1,649

0%

-10%

Fee and commission expense

(552)

(494)

(666)

12%

-17%

Net fee and commission income

938

989

983

-5%

-5%

-47%

ii) Other income
Net foreign exchange earnings and other financial instruments income2

590

870

1,123

-32%

Gain on completion of ANZ Worldline partnership

-

-

307

n/a

large

Release of foreign currency translation reserve

-

-

(65)

n/a

large

-

-

(62)

n/a

large

(43)

-

-

n/a

n/a

Loss on disposal of financial planning and advice business
Loss on reclassification of data centres to held for sale
Other

10

63

27

-84%

-63%

Other income

557

933

1,330

-40%

-58%

1,495

1,922

2,313

-22%

-35%

40

85

55

-53%

-27%

Other operating income
Net income from insurance business
Share of associates' profit/(loss)
Operating income
1.

101

103

74

-2%

36%

10,139

9,884

9,542

3%

6%

Lending fees exclude fees treated as part of the effective yield calculation in interest income.
2. Includes fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges entered into to manage interest rate and foreign exchange risk,
ineffective portions of cash flow hedges, and fair value movements in financial assets and liabilities measured and/or designated at fair value through profit or loss.

88

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3.

Operating expenses
Half Yeari) Personnel
Salaries and related costs

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

2,608

2,376

2,378

10%

10%

Superannuation costs

195

187

188

4%

4%

Other

90

79

88

14%

2%

2,893

2,642

2,654

10%

9%

Personnelii) Premises
Rent

34

48

40

-29%

-15%

Depreciation

210

207

212

1%

-1%

Other

90

125

89

-28%

1%

Premises

334

380

341

-12%

-2%

-12%

iii) Technology
Depreciation and amortisation

257

285

293

-10%

Subscription licences and outsourced services

484

455

444

6%

9%

Other

95

66

78

44%

22%

Technology

836

806

815

4%

3%

iv) Restructuring

54

52

49

4%

10%

v) OtherAdvertising and public relations

93

88

77

6%

21%

Professional fees

407

471

464

-14%

-12%
-1%

Freight, stationery, postage and communication

86

85

87

1%

Other

294

264

304

11%

-3%

Other

880

908

932

-3%

-6%

4,997

4,788

4,791

4%

4%

Operating expenses

89

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4.

Income tax expense

Reconciliation of the prima facie income tax expense on pre-tax profit with the income tax expense recognised in the profit and loss.
Half Year

Movement

Profit before income tax from continuing operations

Mar 23$M
5,009

Sep 22$M
5,044

Mar 22$M
5,035

Mar 23v. Sep 22-1%

Mar 23v. Mar 22-1%

Prima facie income tax expense at 30%

1,503

1,513

1,511

-1%

-1%

large

Tax effect of permanent differences:
Net gain from divestments/closures

-

4

(87)

large

Share of associates' (profit)/loss

(31)

(31)

(22)

0%

41%

Interest on convertible instruments

38

28

21

36%

81%

(94)

(67)

(61)

40%

54%

Overseas tax rate differential
1

Provision for foreign tax on dividend repatriation

18

16

139

13%

-87%

Other

15

(7)

11

large

36%

Subtotal

1,449

1,456

1,512

0%

-4%

(1)

(16)

(12)

-94%

-92%

1,448

1,440

1,500

1%

-3%

849

884

960

-4%

-12%

Income tax (over)/under provided in previous years
Income tax expense
Australia

599

556

540

8%

11%

Income tax expense

Overseas

1,448

1,440

1,500

1%

-3%

Effective tax rate

28.9%

28.5%

29.8%

1.

Includes the $126 million withholding tax paid in the March 2022 half on the dividend payment made by ANZ Papua New Guinea to ANZBGL.

90

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5.

Dividends
Half Year

Dividend per ordinary share (cents)1

Movement

Mar 2381

Sep 22-

Mar 22
72

Final

-

74

-

Total

81

74

72

-

2,012

-

2,213

-

2,030

InterimOrdinary share dividend ($M)2
Interim dividend
Final dividend
Bonus option plan adjustment

Mar 23v. Sep 22

Mar 23v. Mar 22

9%

13%

(41)

(39)

(38)

5%

8%

Total

2,172

1,973

1,992

10%

9%

Ordinary share dividend payout ratio (%)3

68.6%

61.7%

57.0%

1.

2.

3.

Fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 cents for the proposed 2023 interim dividend (2022 final dividend: NZD 9 cents;
2022 interim dividend: NZD 9 cents).
Dividends paid to ordinary equity holders of the Company. Excludes dividends paid by subsidiaries of the Group to non-controlling equity holders of $13 million (Sep 22 half: nil;
Mar 22 half: $2 million).
The dividend payout ratio for the March 2023 half is calculated using the proposed 2023 interim dividend of $2,433 million, based on the forecast number of ordinary shares on issue at thedividend record date. Dividend payout ratios for the September 2022 half and March 2022 half were calculated using actual dividends of $2,213 million and $2,012 million respectively.

Ordinary Shares
The Directors propose an interim dividend of 81 cents be paid on each eligible fully paid ANZ ordinary share on 3 July 2023. The proposed 2023 interim
dividend will be fully franked for Australian tax purposes. New Zealand imputation credits of NZD 9 cents per ordinary share will also be attached.
ANZ has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2023 interim dividend.

91

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6.

Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number ofordinary shares outstanding during the period (after eliminating ANZ shares held within the Group referred to as treasury shares). Diluted EPS is
calculated by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares used in the basic EPS
calculation for the effect of dilutive potential ordinary shares.
Half Year

Movement

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Mar 23v. Mar 22

Earnings Per Share (cents)

118.5

125.4

124.6

-6%

-5%

Earnings Per Share (cents) from continuing operations

118.5

125.9

124.8

-6%

-5%

-

(0.5)

(0.2)

large

large

Earnings Per Share (cents)

112.8

117.5

116.7

-4%

-3%

Earnings Per Share (cents) from continuing operations

112.8

117.9

116.9

-4%

-4%

-

(0.4)

(0.2)

large

large

Earnings Per Share - Basic

Earnings Per Share (cents) from discontinued operations

Earnings Per Share - Diluted

Earnings Per Share (cents) from discontinued operations

Half Year

Movement

Mar 23

Sep 22

Mar 22

Mar 23v. Sep 22

Mar 23v. Mar 22

3,561

3,590

3,530

-1%

1%

Reconciliation of earnings used in earnings per share calculations
Basic:
Profit for the period ($M)
Less: Profit attributable to non-controlling interests ($M)

14

1

-

large

n/a

Earnings used in calculating basic earnings per share ($M)

3,547

3,589

3,530

-1%

0%

Less: Profit/(Loss) after tax from discontinued operations ($M)

-

(14)

(5)

large

large

3,547

3,603

3,535

-2%

0%

3,547

3,589

3,530

-1%

0%

150

107

92

40%

63%

3,697

3,696

3,622

0%

2%

-

(14)

(5)

large

large

3,697

3,710

3,627

0%

2%

2,994.1

2,862.5

2,832.9

5%

6%

277.3

275.7

264.0

1%

5%

6.9

7.3

6.9

-5%

0%

3,278.3

3,145.5

3,103.8

4%

6%

Earnings used in calculating basic earnings per share from continuing
operations ($M)
Diluted:Earnings used in calculating basic earnings per share ($M)
Add: Interest on convertible subordinated debt ($M)
Earnings used in calculating diluted earnings per share ($M)
Less: Profit/(Loss) after tax from discontinued operations ($M)
Earnings used in calculating diluted earnings per share fromcontinuing operations ($M)

Reconciliation of weighted average number of ordinary shares(WANOS) used in earnings per share calculations1
WANOS used in calculating basic earnings per share (M)Add: Weighted average dilutive potential ordinary shares (M)Convertible subordinated debt (M)Share based payments (options, rights and deferred shares) (M)
WANOS used in calculating diluted earnings per share (M)1.

WANOS excludes the weighted average number of treasury shares held in ANZEST Pty Ltd of 4.2 million in the March 2023 half (Sep 22 half: 4.3 million; Mar 22 half: 4.5 million).

92

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7.

Segment reportingi) Description of segments
During the March 2023 half, the Group operated on a divisional structure with six divisions: Australia Retail, Australia Commercial, Institutional, New
Zealand, Pacific, and Group Centre. For further information on the composition of divisions refer to the Definitions on page 134.
The presentation of divisional results has been impacted by the following structural changes during the period. Prior period comparatives have been
restated:•

Business Restructure - the non-banking businesses held in the Australia Commercial and Institutional divisions were transferred to the Group Centre
division. As a result of this transfer, Group Centre division holds all interests in the ANZ Non-Bank Group.

•

Corporate customer re-segmentation - certain business and property finance customers were transferred from the New Zealand division to theInstitutional division to better align customer needs with the right support and expertise delivery.

•

Cost reallocations - certain costs were reallocated across the Australia Retail, Australia Commercial, Institutional and Group Centre divisions.

Operating segments presented below are consistent with internal divisional reporting provided to the chief operating decision maker, being the Chief
Executive Officer.
ii) Operating segments
ANZ measures the performance of operating segments on a cash profit basis. To calculate cash profit, the Group excludes items from profit after tax
attributable to shareholders. For the current and prior periods, the adjustments relate to impacts of economic hedges and revenue and expense hedges
which represent timing differences that will reverse through earnings in the future.
Transactions between divisions across segments within ANZ are conducted on an arm’s-length basis and disclosed as part of the income and expensesof these segments.

March 2023 Half YearNet interest income

Australia
Australia
Retail Commercial Institutional
$M
$M
$M

New
Zealand$M

Pacific$M

Group
Centre
$M

Group
Total
$M

3,018

1,632

2,071

1,582

62

138

8,503
938

Net fee and commission income

235

162

346

199

10

(14)

Net income from insurance business

40

-

-

-

-

-

40

Other income1,2

6

13

1,027

-

30

(130)

946

-

-

-

-

-

101

101

Operating income1,2

3,299

1,807

3,444

1,781

102

95

10,528Operating expenses(1,745)(685)(1,328)

(630)

(74)

(535)

(4,997)

Cash profit before credit impairment and income tax

1,554

1,122

2,116

1,151

28

(440)

5,531

(82)

(66)

74

(75)

16

-

(133)

Cash profit before income tax

1,472

1,056

2,190

1,076

44

(440)

5,398

Income tax expense and non-controlling interests1,2

(446)

(317)

(593)

(302)

(10)

91

(1,577)

Cash profit/(loss) from continuing operations

1,026

739

1,597

774

34

(349)

3,821

1,026

739

1,597

774

34

(349)

3,821

Share of associates’ profit/(loss)

Credit impairment (charge)/releaseCash profit/(loss) from discontinued operations
Cash profit/(loss)-

Economic hedges1(190)

Revenue and expense hedges2(84)

Profit after tax attributable to shareholders

3,547

Financial Position
Total external assets

303,783

60,227525,748

123,565

3,489

94,3881,111,200

Total external liabilities

160,228

119,042

450,764

121,580

3,834

186,143

1,041,591

1.

The cash profit adjustment relates to the Institutional, New Zealand and Group Centre divisions. In the consolidated income statement, these amounts are recognised in Other operating
income (Mar 23 half: $269 million loss; Sep 22 half: $278 million gain; Mar 22 half: $524 million gain) and Income tax expense (Mar 23 half: $79 million benefit; Sep 22 half: $82 million
expense; Mar 22 half: $151 million expense).
2. The cash profit adjustment relates to the Group Centre division. In the consolidated income statement, these amounts are recognised in Other operating income (Mar 23 half: $120 million
loss; Sep 22 half: $7 million gain; Mar 22 half: $70 million gain) and Income tax expense (Mar 23 half: $36 million benefit; Sep 22 half: $2 million expense; Mar 22 half: $21 million expense).

93

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7.

Segment reporting, cont’d

September 2022 Half YearNet interest income

Australia
Australia
Retail Commercial Institutional
$M
$M
$M

New
Zealand$M

Pacific$M

Group
Centre
$M

Group
Total
$M

2,821

1,410

1,925

1,517

50

51

7,774

Net fee and commission income

262

170

339

215

14

(11)

989

Net income from insurance business

85

-

-

-

-

-

85

Other income1,2

6

15

529

1

20

77

648

Share of associates’ profit/(loss)

-

-

-

-

-

103

103

Operating income1,2

3,174

1,595

2,793

1,733

84

220

9,599

Operating expenses(1,656)(652)(1,293)

(622)

(73)

(492)

(4,788)Cash profit before credit impairment and income tax

1,518

943

1,500

1,111

11

(272)

4,811

16

11

2

(76)

9

(14)

(52)

Cash profit before income tax

1,534

954

1,502

1,035

20

(286)

4,759

Income tax expense and non-controlling interests1,2

(462)

(286)

(374)

(290)

(5)

60

(1,357)

Cash profit/(loss) from continuing operations

1,072

668

1,128

745

15

(226)

3,402

Credit impairment (charge)/releaseCash profit/(loss) from discontinued operations(14)

Cash profit/(loss)

3,388

Economic hedges1

196

Revenue and expense hedges2

5Profit after tax attributable to shareholders

3,589

Financial Position
Total external assets

292,876

59,983544,066

116,218

3,707

68,8791,085,729

Total external liabilities

153,494

118,355

473,114

115,263

4,065

155,037

1,019,328

March 2022 Half YearNet interest income

2,706

1,158

1,772

1,354

46

64

7,100

Net fee and commission income

214

233

312

213

12

(1)

983

Net income from insurance business

55

-

-

-

-

-

55

-

244

471

31

22

(32)

736

Other income1,2
Share of associates’ profit/(loss)

-

-

-

-

-

74

74

Operating income1,2

2,975

1,635

2,555

1,598

80

105

8,948

Operating expenses(1,741)(649)(1,273)

(651)

(80)

(397)

(4,791)

Cash profit before credit impairment and income tax

1,234

986

1,282

947

-

(292)

4,157

113

122

25

31

(3)

(4)

284

Cash profit before income tax

1,347

1,108

1,307

978

(3)

(296)

4,441

Income tax expense and non-controlling interests1,2

(410)

(225)

(498)

(274)

(3)

82

(1,328)Cash profit/(loss) from continuing operations

937

883

809

704

(6)

(214)

3,113

Credit impairment (charge)/releaseCash profit/(loss) from discontinued operations(5)

Cash profit/(loss)

3,108

Economic hedges1

373

Revenue and expense hedges2

49

Profit after tax attributable to shareholders

3,530

Financial Position
Total external assets

287,304

57,822

469,683

119,667

3,796

79,089

1,017,361

Total external liabilities

150,732

122,812420,226

119,683

3,986

138,166

955,605

1.

The cash profit adjustment relates to the Institutional, New Zealand and Group Centre divisions. In the consolidated income statement, these amounts are recognised in Other operating
income (Mar 23 half: $269 million loss; Sep 22 half: $278 million gain; Mar 22 half: $524 million gain) and Income tax expense (Mar 23 half: $79 million benefit; Sep 22 half: $82 million
expense; Mar 22 half: $151 million expense).
2. The cash profit adjustment relates to the Group Centre division. In the consolidated income statement, these amounts are recognised in Other operating income (Mar 23 half: $120 million
loss; Sep 22 half: $7 million gain; Mar 22 half: $70 million gain) and Income tax expense (Mar 23 half: $36 million benefit; Sep 22 half: $2 million expense; Mar 22 half: $21 million expense).

94

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8.

Net loans and advances
As at

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22
10%

Australia
Overdrafts

3,834

3,852

3,491

0%

Credit cards outstanding

5,670

5,658

5,707

0%

-1%

Commercial bills outstanding

4,898

5,214

5,632

-6%

-13%

Term loans - housing

292,597282,343

277,894

4%

5%

Term loans - non-housing

166,051

163,520

151,718

2%

9%

916

1,019

1,113

-10%

-18%

473,966

461,606

445,555

3%

6%

568

561

668

1%

-15%

6

6

6

0%

0%

475

490

464

-3%

2%

77,09579,87869,731

-3%

11%

613

1,016

1,332

-40%

-54%

78,757

81,951

72,201

-4%

9%

Other
Total Australia
Rest of World
Overdrafts
Credit cards outstanding
Term loans - housing
Term loans - non-housing
Other
Total Rest of WorldNew Zealand
Overdrafts

879

853

824

3%

7%

Credit cards outstanding

1,184

1,091

1,087

9%

9%

Term loans - housing

97,93991,792

95,794

7%

2%

Term loans - non-housing

38,38136,33238,512

6%0%

Total New Zealand

138,383

130,068

136,2176%

2%

Subtotal

691,106

673,625

653,973

3%

6%

(526)

(518)

(460)

2%

14%

Unearned income1
1

Capitalised brokerage and other origination costs
Gross loans and advances

Allowance for expected credit losses (refer to Note 9)2

Net loans and advances
1.
2.

3,165

2,882

1,482

10%

large

693,745675,989

654,995

3%

6%(3,658)(3,582)(3,559)2%

3%690,087

672,407651,436

3%

6%

Amortised over the expected life of the loan.
Net loans and advances include a balance of $558 million (Sep 22: $667 million; Mar 22: $724 million) relating to the ANZ Share Investing lending portfolio which was sold in April 2023.

95

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.

Allowance for expected credit losses
As at
Collectively
assessed$M

Mar 23
Individuallyassessed$M

3,244

Net loans and advances atamortised cost
Off-balance sheet commitments
Investment securities - debt securities
at amortised cost
Total

Total
$M

Collectively
assessed$M

Sep 22
Individuallyassessed
$M

414

3,658

3,049

767

7

774

29

-

29

4,040

421

13

-

Other Comprehensive Income
Investment securities - debt securities
at FVOCI1
1.

Total
$M

Collectively
assessed$M

Mar 22
Individuallyassessed
$M

Total
$M

533

3,582

2,940

619

3,559

766

9

775

788

17

805

38

-

38

29

-

29

4,461

3,853

542

4,395

3,757

636

4,393

13

10

-

10

10

-

10

For FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in Other comprehensive income with acorresponding charge to profit or loss.

The following tables present the movement in the allowance for ECL.
Net loans and advances at amortised cost
Allowance for ECL is included in Net loans and advances.

Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 1 October 2021

968

1,994

417

666

4,045

Transfer between stages

130

(152)

(58)

80

-

New and increased provisions (net of releases)

(73)

(301)

46

221

(107)

Write-backs

-

-

-

(111)

(111)

Bad debts written off (excluding recoveries)

-

-

-

(222)

(222)

Foreign currency translation and other movements1

(14)

(14)

(3)

(15)

(46)

1,011

1,527

402

619

3,559

Transfer between stages

155

(131)

(87)

63

-

New and increased provisions (net of releases)

(41)

158

46

156

319

As at 31 March 2022

Write-backs

-

-

-

(111)

(111)

Bad debts written off (excluding recoveries)

-

-

-

(206)

(206)

Foreign currency translation and other movements1

16

(6)

(1)

12

21

1,141

1,548

360

533

3,582

Transfer between stages

114

(100)

(63)

49

-

New and increased provisions (net of releases)

(103)

264

56

188

405

Write-backs

-

-

-

(164)

(164)

Bad debts written off (excluding recoveries)

-

-

-

(185)

(185)

As at 30 September 2022

1

Foreign currency translation and other movements
As at 31 March 2023
1.

7

17

3

(7)

20

1,159

1,729

356

414

3,658

Other movements include the impact of discounting on expected cash flows for individually assessed allowances for ECL during the period.

96

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.

Allowance for expected credit losses, cont’d

Off-balance sheet commitments - undrawn and contingent facilities
Allowance for ECL is included in Other provisions.
Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 1 October 2021

555

211

19

21

806

Transfer between stages

28

(27)

(2)

1

-

New and increased provisions (net of releases)

24

(5)

21

(1)

39

Write-backs

-

-

-

(4)

(4)

Foreign currency translation and other movements1

(30)

(6)

-

-

(36)

As at 31 March 2022

577

173

38

17

805

Transfer between stages

24

(18)

(7)

1

-

New and increased provisions (net of releases)

(29)

(12)

(2)

(1)

(44)

Write-backs

-

-

-

(7)

(7)

Foreign currency translation

21

1

-

(1)

21

As at 30 September 2022

593

144

29

9

775

Transfer between stages

24

(22)

(2)

-

-

New and increased provisions (net of releases)

(30)

30

1

-

1

Write-backs

-

-

-

(2)

(2)

Foreign currency translation

(1)

-

1

-

-

586

152

29

7

774

As at 31 March 2023
1.

Other movements include the impact of divestments completed during the period.

Investment securities - debt securities at amortised cost
Allowance for ECL is included in Investment securities.

Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 31 March 2022

29

-

-

-

29

As at 30 September 2022

38

-

-

-

38

As at 31 March 2023

29

-

-

-

29

Investment securities - debt securities at FVOCIFor FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in
Other comprehensive income with a corresponding charge to profit or loss.
Stage 3
Stage 1
$M

Stage 2
$M

Collectively
assessed$M

Individuallyassessed
$M

Total
$M

As at 31 March 2022

10

-

-

-

10

As at 30 September 2022

10

-

-

-

10

As at 31 March 2023

13

-

-

-

13

97

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.

Allowance for expected credit losses, cont’dCredit impairment charge/(release) analysis
Half Year

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

163

60

(371)

large

large

New and increased provisions (net of releases)1,2- Collectively assessed- Individually assessed

237

219

301

8%

-21%

Write-backs3

(166)

(118)

(115)

41%

44%

Recoveries of amounts previously written off

(101)

(109)

(99)

-7%

2%

Total credit impairment charge/(release)

133

52

(284)

large

large

1.
2.

Includes the impact of transfers between collectively assessed and individually assessed.
New and increased provisions (net of releases) includes:
Mar 23 half3.

Sep 22 half

Collectively
assessed$M

Individuallyassessed$M

Net loans and advances at amortised cost168

Off-balance sheet commitments

1

Investment securities - debt securities atamortised cost(8)-

Mar 22 half

Collectively
assessed$M

Individuallyassessed$M

Collectively
assessed$M

Individuallyassessed
$M

237

100

219

(408)

301

-

(44)

-

39

-

4

-

(1)

-

Investment securities - debt securities at FVOCI

2

-

-

-

(1)

-

Total

163

237

60

219

(371)

301

Consists of write-backs in Net loans and advances at amortised cost of $164 million for the March 2023 half (Sep 22 half: $111 million; Mar 22 half: $111 million), and Off-balance sheet
commitment of $2 million for the March 2023 half (Sep 22 half: $7 million; Mar 22 half: $4 million).

98

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10.

Deposits and other borrowings
As at

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

Certificates of deposit

37,92029,412

29,91429%

27%

Term deposits

76,341

51,31944,16549%

73%

On demand and short term deposits

270,418

285,677

286,191-5%-6%

Deposits not bearing interest

22,815

25,11024,785-9%-8%

Deposits from banks and securities sold under repurchase agreements

53,99047,14750,39815%

7%

Commercial paper

36,24836,61927,309-1%

33%

Total Australia

497,732

475,284

462,7625%

8%Australia

Rest of World
5,233

3,193

5,013

64%

4%

Term deposits

Certificates of deposit

127,467

107,557

97,52519%

31%

On demand and short term deposits

24,12528,97430,841-17%-22%

Deposits not bearing interest

5,453

6,957

7,314

-22%

-25%

Deposits from banks and securities sold under repurchase agreements

52,16052,34347,9670%

9%Total Rest of World214,438

199,024

188,660

8%

14%

New ZealandCertificates of deposit

1,392

1,444

2,018

-4%

-31%

Term deposits

47,59841,18838,93116%

22%

On demand and short term deposits

56,30754,80959,5903%-6%

Deposits not bearing interest

18,103

18,83921,712-4%-17%

Deposits from banks and securities sold under repurchase agreements

4,398

4,090

2,069

8%

large

2,596

2,603

4,546

0%

-43%

Total New Zealand

130,394

122,973

128,866

6%1%

Deposits and other borrowings

842,564

797,281780,2886%

8%

Commercial paper and other borrowings

99

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
11.

Debt issuances
As at
Mar 23$M
73,443

Total unsubordinated debt

Movement

Sep 22$M
66,406

Mar 22$M
64,645

Mar 23v. Sep 22
11%

Mar 23v. Mar 22
14%

Additional Tier 1 Capital (perpetual subordinated securities)1
ANZ Capital Notes (ANZ CN)2
ANZ CN3

-

970

969

large

large

ANZ CN4

1,620

1,619

1,618

0%

0%

ANZ CN5

929

928

928

0%

0%

ANZ CN6

1,488

1,487

1,487

0%

0%

ANZ CN7

1,297

1,297

1,298

0%

0%

ANZ CN8

1,482

-

-

n/a

n/a

ANZ Capital Securities3

1,380

1,404

1,282

-2%

8%

Tier 2 Capital - Term Subordinated Notes4

22,797

17,907

14,047

27%

62%

Other subordinated debt securities5

1,721

1,716

952

0%

81%

Total subordinated debt

32,71427,32822,58120%

45%

Total debt issuances

106,157

93,73487,226

13%

22%

1.
2.

ANZ Capital Notes and ANZ Capital Securities are Basel 3 compliant instruments.
Each of the ANZ Capital Notes will convert into a variable number of ordinary shares of ANZGHL on a specified mandatory conversion date at a 1% discount (subject to certain conditions
being satisfied). If ANZ’s Common Equity Tier 1 capital ratio is equal to or less than 5.125%, or ANZ receives a notice of non-viability from APRA, then the notes will immediately convert
into a variable number of ordinary shares of ANZGHL at a 1% discount subject to a maximum conversion number. Subject to certain conditions, the notes are redeemable or convertible into
ordinary shares of ANZGHL (on similar terms to mandatory conversion) by ANZ at its discretion on an early redemption or conversion date.
Issuer3.

4.

5.

Issue dateIssue amount$M

Early redemption orconversion date

Mandatory
conversion date

CN3

ANZ, acting through its New Zealand branch

5 Mar 2015

970

n/a

n/a

CN4

ANZ

27 Sep 2016

1,622

20 Mar 2024

20 Mar 2026

CN5

ANZ

28 Sep 2017931

20 Mar 2025

20 Mar 2027

CN6

ANZ

8 Jul 2021

1,500

20 Mar 2028

20 Sep 2030

CN7

ANZ

24 Mar 2022

1,310

20 Mar 2029

20 Sep 2031

CN8

ANZ

24 Mar 2023

1,500

20 Mar 2030

20 Sep 2032

All ANZ Capital Notes 3 were redeemed by ANZ’s New Zealand branch on 24 March 2023 with approximately $502 million of the proceeds from redemption reinvested into ANZ Capital
Notes 8 on the same date.
On 15 June 2016, ANZ acting through its London branch issued US$1 billion fully-paid perpetual subordinated contingent convertible securities (ANZ Capital Securities). If ANZ’s Common
Equity Tier 1 capital ratio is equal to or less than 5.125%, or ANZ receives a notice of non-viability from APRA, then the securities will immediately convert into a variable number of ANZ
ordinary shares at a 1% discount subject to a maximum conversion number. Subject to certain conditions, on the First Reset Date (15 June 2026) and on each 5 year anniversary, ANZ has
the right to redeem all of the securities at its discretion.
All the term subordinated notes are convertible and are Basel 3 compliant instruments. If ANZ receives a notice of non-viability from APRA, then the convertible subordinated notes will
immediately convert into a variable number of ordinary shares of ANZGHL at a 1% discount subject to a maximum conversion number.
ANZ Bank New Zealand Limited, a wholly owned subsidiary of the Group, issued NZ$600 million of unsecured subordinated notes in September 2021. Whilst these notes constitute Tier 2
capital under RBNZ requirements, the notes do not contain a Non-Viability Trigger Event and therefore do not meet APRA's requirements for Tier 2 capital instruments in order to qualify as
regulatory capital for the Group. Other subordinated debt securities also includes ANZ’s USD 300 million perpetual subordinated notes from 1 January 2022. The USD 300 million perpetual
subordinated notes ceased to be treated as Basel 3 transitional Tier 2 capital under APRA’s capital framework from 1 January 2022.

100

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Credit risk

Maximum exposure to credit risk
For financial assets recognised on the balance sheet, the maximum exposure to credit risk is the carrying amount. In certain circumstances there may bedifferences between the carrying amounts reported on the balance sheet and the amounts reported in the tables below. Principally, these differences
arise in respect of financial assets that are subject to risks other than credit risk, such as equity instruments which are primarily subject to market risk, orbank notes and coins.
For undrawn facilities, this maximum exposure to credit risk is the full amount of the committed facilities. For contingent exposures, the maximum
exposure to credit risk is the maximum amount the group would have to pay if the instrument is called upon.
The table below shows the maximum exposure to credit risk of on-balance sheet, and off-balance sheet positions before taking account of any collateral
held or other credit enhancements:

On-balance sheet positions
Net loans and advances

Mar 23$M
690,087

Reported

Excluded1

Maximum Exposure to Credit Risk

As at

As at

As at

Sep 22$M
672,407

Mar 22$M
651,436

Mar 23$M-

Sep 22$M-

Mar 22$M-

Mar 23$M
690,087

Sep 22$M
672,407

Mar 22$M
651,436

Investment securities- debt securities at amortised cost

7,912

7,943

8,505

-

-

-

7,912

7,943

8,505

- debt securities at FVOCI

84,58976,817

69,824---

84,58976,817

69,824- equity securities at FVOCI

1,453

1,353

1,390

1,453

1,353

1,390

-

-

-

- debt securities at FVTPL

18

40

38

-

-

-

18

40

38

314,646

314,580

273,507

8,521

9,769

13,117306,125

304,811260,390

1,098,705

1,073,140

1,004,700

9,974

11,122

14,507

1,088,731

1,062,018

990,193

Other financial assets
Total on-balance sheet positions
Off-balance sheet commitments
Undrawn and contingent facilities2
Total
1.
2.

292,550

285,041

264,137---

292,550

285,041

264,137

1,391,255

1,358,181

1,268,837

9,974

11,122

14,507

1,381,281

1,347,059

1,254,330

Excluded comprises bank notes and coins and cash at bank within Other financial assets, and investment securities - equity securities at FVOCI as they do not have credit exposure.
Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed allowance for expected credit losses.

Credit Quality
The Group’s internal Customer Credit Rating (CCR) is used to manage the credit quality of financial assets. To enable wider comparisons, the Group’s
CCRs are mapped to external rating agency scales as follows:
Moody'sRatingStandard &Poor'sRatingDemonstrated superior stability in their operating and financial performance over the
long-term, and whose earnings capacity is not significantly vulnerable to foreseeable
events.

Aaa - Baa3

AAA - BBB-CCR 5+ to 6-

Demonstrated sound operational and financial stability over the medium to long termeven though some may be susceptible to cyclical trends or variability in earnings.

Ba1 - B1

BB+ - B+Weak

CCR 7+ to 8=

Demonstrated some operational and financial instability, with variability anduncertainty in profitability and liquidity projected to continue over the short andpossibly medium term.

B2 - Caa

B - CCC

Defaulted

CCR 8- to 10

When doubt arises as to the collectability of a credit facility, the financial instrument(or ‘the facility’) is classified as defaulted.

N/A

N/A

Credit Quality
Description

Internal CCR

ANZ Customer Requirement

Strong

CCR 0+ to 4-

Satisfactory101

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Credit risk, cont’d

Net loans and advances
Stage 3
Collectively
Individuallyassessedassessed$M$M

As at March 2023

Stage 1
$M

Stage 2
$M

Strong416,053

14,678--

430,731

Satisfactory

176,054

40,305--

216,359

Weak

10,072

10,293--

20,365

-

-

3,378

804

4,182

602,179

65,276

3,378

804

671,637(1,159)(1,729)

(356)

(414)

(3,658)601,020

63,5473,022

390

667,979

0.19%

2.65%

10.54%

51.49%

Defaulted
Gross loans and advances at amortised cost
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio
Loans and advances at fair value through profit or loss

Total
$M

0.54%
19,469Unearned income(526)

Capitalised brokerage and other origination costs

3,165

Net carrying amount

690,087

As at September 2022
Strong443,571

15,880--459,451

Satisfactory

154,823

31,864--

186,687

9,197

9,244

-

-

18,441

-

-

3,328

1,043

4,371
668,950

Weak
Defaulted
Gross loans and advances at amortised cost

607,591

56,988

3,328

1,043

Allowance for ECL(1,141)(1,548)

(360)

(533)

(3,582)Net loans and advances at amortised cost

606,450

55,4402,968

510

665,368

0.19%

2.72%

10.82%

51.10%

0.54%

Coverage ratio
Loans and advances at fair value through profit or loss

4,675

Unearned income(518)

Capitalised brokerage and other origination costs

2,882

Net carrying amount

672,407

As at March 2022
Strong431,582

13,744--445,326

Satisfactory

145,404

30,144--

175,548

Weak

11,70910,721--

22,430

-

-

3,628

1,286

4,914

Gross loans and advances at amortised cost

588,695

54,609

3,628

1,286

648,218

Allowance for ECL(1,011)(1,527)

(402)

(619)

(3,559)Net loans and advances at amortised cost

587,684

53,082

3,226

667

644,659

0.17%

2.80%

11.08%

48.13%

0.55%

Defaulted

Coverage ratio
Loans and advances at fair value through profit or loss

5,755

Unearned income(460)

Capitalised brokerage and other origination costs

1,482

Net carrying amount

651,436102

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Credit risk, cont’d

Off-balance sheet commitments - undrawn and contingent facilities
Stage 3
Collectively
Individuallyassessedassessed$M$M

As at March 2023

Stage 1
$M

Stage 2
$M

Strong200,066

1,439

-

-

201,505

Satisfactory

18,769

2,742

-

-

21,511

904

782

-

-

1,686

-

-

89

24

113

219,739

4,963

89

24

224,815

Weak
Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

Total
$M

(586)

(152)

(29)

(7)

(774)

219,153

4,811

60

17

224,041

0.27%

3.06%

32.58%

29.17%

0.34%

Undrawn and contingent facilities not subject to ECL1

68,509Net undrawn and contingent facilities

292,550

As at September 2022
Strong

191,363

1,703

-

-

193,066

Satisfactory

18,583

3,078

-

-

21,661

774

706

-

-

1,480

Weak
Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

-

-

113

19

132

210,720

5,487

113

19

216,339

(593)

(144)

(29)

(9)

(775)

210,127

5,343

84

10

215,564

0.28%

2.62%

25.66%

47.37%

0.36%

Undrawn and contingent facilities not subject to ECL1

69,477Net undrawn and contingent facilities

285,041

As at March 2022
Strong

175,462

1,244

-

-

176,706

Satisfactory

23,219

3,637

-

-

26,856

Weak

1,728

782

-

-

2,510

-

-

112

37

149

200,409

5,663

112

37

206,221

Defaulted
Gross undrawn and contingent facilities subject to ECLAllowance for ECL included in Other provisions
Net undrawn and contingent facilities subject to ECL
Coverage ratio

(577)

(173)

(38)

(17)

(805)

199,832

5,490

74

20

205,416

0.29%

3.05%

33.93%

45.95%

0.39%

Undrawn and contingent facilities not subject to ECL1

58,721

Net undrawn and contingent facilities

264,137

1.

Commitments that can be unconditionally cancelled at any time without notice.

103

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Credit risk, cont’d

Investment securities - debt securities at amortised cost
Stage 3
Collectively
Individuallyassessedassessed$M$M

Stage 1
$M

Stage 2
$M

6,191

-

-

-

6,191

82

-

-

-

82

Weak

1,668

-

-

-

1,668

Gross investment securities - debt securities at amortised cost

7,941

-

-

-

7,941

(29)

-

-

-

(29)

Net investment securities - debt securities at amortised cost

7,912

-

-

-

7,912

Coverage ratio

0.37%

-

-

-

0.37%

6,279

-

-

-

6,279

113

-

-

-

113

Weak

1,589

-

-

-

1,589

Gross investment securities - debt securities at amortised cost

7,981

-

-

-

7,981

(38)

-

-

-

(38)

As at March 2023
StrongSatisfactory

Allowance for ECL

Total
$M

As at September 2022
StrongSatisfactory

Allowance for ECL
Net investment securities - debt securities at amortised cost

7,943

-

-

-

7,943

Coverage ratio

0.48%

-

-

-

0.48%

6,978

-

-

-

6,978

As at March 2022
StrongSatisfactory

120

-

-

-

120

Weak

1,436

-

-

-

1,436

Gross investment securities - debt securities at amortised cost

8,534

-

-

-

8,534

(29)

-

-

-

(29)

Net investment securities - debt securities at amortised cost

8,505

-

-

-

8,505

Coverage ratio

0.34%

-

-

-

0.34%

Stage 3
Collectively
Individuallyassessedassessed
$M
$M

Total
$M

Allowance for ECL

Investment securities - debt securities at FVOCI

As at March 2023

Stage 1
$M

Stage 2
$M

Strong84,589

-

-

-

-

-

-

-

-

84,589---84,589

(13)

-

-

-

(13)

0.02%

-

-

-

0.02%

76,668---76,668

149

-

-

-

149

76,817---76,817

Satisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

84,589As at September 2022
StrongSatisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

(10)

-

-

-

(10)

0.01%

-

-

-

0.01%

69,656---69,656

168

-

-

-

168

69,824---

69,824

(10)

-

-

-

(10)

0.01%

-

-

-

0.01%

As at March 2022
StrongSatisfactory
Investment securities - debt securities at FVOCIAllowance for ECL recognised in Other comprehensive income
Coverage ratio

104

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12.

Credit risk, cont’d

Other financial assets
As at

StrongSatisfactory1

Weak
Defaulted
1

Other financial assets
1.

Includes Investment securities - debt securities at FVTPL of $18 million (Sep 22: $40 million; Mar 22: $38 million).

105

Mar 23$M

Sep 22$M

Mar 22$M

302,785

301,735

257,543

2,285

2,164

2,483

1,069

945

391

4

7

11

306,143

304,851

260,428

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Fair value of financial assets and financial liabilities

Classification of Financial Assets and Financial Liabilities
The Group recognises and measures financial instruments at either fair value or amortised cost, with a significant number of financial instruments on thebalance sheet at fair value. Fair value is the best estimate of the price that would be received to sell an asset, or paid to transfer a liability, in an orderlytransaction between market participants at the measurement date.
The following tables set out the classification of financial asset and liabilities according to their measurement bases with their carrying amounts asrecognised on the balance sheet.

At amortised cost$M

At fair value
$M

Total
$M

184,092

24,708208,800

Settlement balances owed to ANZ

7,020

-

7,020

Collateral paid

9,245

-

9,245

Trading assets-

39,611

39,611As at March 2023
Financial assets
Cash and cash equivalents1

Derivative financial instruments
Investment securities
1-

45,61445,614

7,912

86,06093,972690,087

670,618

19,469Regulatory deposits

646

-

646

Other financial assets

3,710

-

3,710

883,243

215,462

1,098,705

Settlement balances owed by ANZ

23,010-23,010Collateral received

8,002

-

8,002

811,236

31,328842,564
46,154

Net loans and advances

Total
Financial liabilities

Deposits and other borrowings1-

46,154

8,258

4,733

12,991

Debt issuances

104,626

1,531

106,157

Total

955,132

83,746

1,038,878

At amortised cost$M

At fair value
$M

Total
$M

Derivative financial instruments
Payables and other liabilities

As at September 2022
Financial assets
Cash and cash equivalents

168,132-

168,132

Settlement balances owed to ANZ

4,762

-

4,762

Collateral paid

12,700-12,700

Trading assets-

35,23735,237

Derivative financial instruments-

90,17490,174

Investment securities

7,943

78,21086,153Net loans and advances

667,732

4,675

672,407

Regulatory deposits

632

-

632

Other financial assets

2,943

-

2,943

864,844

208,296

1,073,140

Total
Financial liabilities
Settlement balances owed by ANZ

13,766-

13,766

Collateral received

16,230-

16,230

Deposits and other borrowings

794,6212,660

797,281

Derivative financial instruments-

85,14985,149

Payables and other liabilities

6,596

3,239

9,835

Debt issuances

92,623

1,111

93,734

Total

923,836

92,1591,015,995

1.

During the March 2023 half, within the trading book in its Markets business, a component of the Institutional division, the Group commenced the management of repurchase agreements
and associated reverse repurchase agreements on a fair value basis. This resulted in repurchase and associated reverse repurchase agreements being recognised and measured at fairvalue through profit and loss.

106

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Fair value of financial assets and financial liabilities, cont’d

As at March 2022

At amortised cost$M

At fair value
$M

Total
$M
168,054

Financial assets
Cash and cash equivalents

168,054-

Settlement balances owed to ANZ

7,141

-

7,141

Collateral paid

10,764-

10,764

Trading assets-

39,43339,433

Derivative financial instruments-

45,23845,238Investment securities

8,505

71,25279,757Net loans and advances

645,6815,755

651,436

Regulatory deposits

661

-

661

Other financial assets

2,216

-

2,216

843,022

161,678

1,004,700
19,752

Total
Financial liabilities
Settlement balances owed by ANZ

19,752-

Collateral received

6,716

-

6,716

775,699

4,589

780,288-

47,79547,795

5,945

4,634

10,579Deposits and other borrowings
Derivative financial instruments
Payables and other liabilities
Debt issuances

85,362

1,864

87,226

Total

893,474

58,882

952,356

107

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Fair value of financial assets and financial liabilities, cont’di) Assets and liabilities measured at fair value
The fair values of financial assets and financial liabilities are generally determined at the individual instrument level. If the Group holds offsetting risk
positions, then the portfolio exception in AASB 13 Fair Value Measurement (AASB 13) is used to measure the fair value of such groups of financial
assets and financial liabilities. The Group measures the portfolio based on the price that would be received to sell a net long position (an asset) for aparticular risk exposure, or to transfer a net short position (a liability) for a particular risk exposure.
a)

Fair value designation

The Group designates certain loans and advances and certain deposits and other borrowings and debt issuances as fair value through profit or loss:•

where they contain separable embedded derivatives and are managed on a fair value basis, the total fair value movements are recognised in profit orloss in the same period as the movement on any associated hedging instruments; or•

in order to eliminate an accounting mismatch which would arise if the assets or liabilities were otherwise carried at amortised cost. This mismatcharises due to measuring the derivative financial instruments (used to mitigate interest rate risk of these assets or liabilities) at fair value through profit
or loss.

The Group’s approach ensures that it recognises the fair value movements on the assets or liabilities in profit or loss in the same period as the movementon the associated derivatives.
The Group may also designate certain loans and advances, certain deposits and other borrowings and debt issuances as fair value through profit or loss
where they are managed on a fair value basis to align the measurement with how the instruments are managed.
b)

Fair value approach and valuation techniques

We use valuation techniques to estimate the fair value of assets and liabilities for recognition, measurement and disclosure purposes where no quoted
price in an active market for that asset or liability exists. This includes the following:
Asset or Liability

Fair Value Approach

Financial instruments held for trading:

Valuation techniques are used that incorporate observable market inputs for financial
instruments with similar credit risk, maturity and yield characteristics.

• Securities sold short• Derivative financial assets and financial liabilities• Debt and equity securities
Financial instruments classified as:• Derivative financial assets and financial liabilities(not held for trading)• Net loans and advances

Equity securities where an active market does not exist are measured using
comparable company valuation multiples (such as price-to-book ratios).
Discounted cash flow techniques are used whereby contractual future cash flows of the
instrument are discounted using wholesale market interest rates, or market borrowing
rates for debt or loans with similar maturities or yield curve appropriate for theremaining term to maturity.

• Deposits and other borrowings
Financial instruments classified as:• Investment securities – debt or equity

Valuation techniques use comparable multiples (such as price-to-book ratios) or
discounted cashflow (DCF) techniques incorporating, to the extent possible, observable
inputs from instruments with similar characteristics.

There were no significant changes to valuation approaches during the current or prior periods.

c)

Fair value hierarchy

The Group categorises assets and liabilities carried at fair value into a fair value hierarchy in accordance with AASB 13 based on the observability of
inputs used to measure the fair value:•

Level 1 - valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;•

Level 2 - valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or
indirectly; and•Level 3 - valuations where significant unobservable inputs are used to measure the fair value of the asset or liability.

There were no significant changes to levelling approaches during the current or prior periods.

108

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Fair value of financial assets and financial liabilities, cont’d

The following table presents assets and liabilities carried at fair value in accordance with the fair value hierarchy:
Fair value measurements
As at March 2023
AssetsCash and cash equivalents (measured at fair value)1
Trading assets2
Derivative financial instruments
Investment securities2
Net loans and advances (measured at fair value)

1

Total

Level 1
$M

Level 2
$M

Level 3
$M

Total
$M

-

24,708-24,70826,59313,017

1

39,611

315

45,27524

45,614

68,176

16,421

1,463

86,060-19,089380

19,46995,084

118,510

1,868

215,462

Liabilities
Deposits and other borrowings (designated at fair value)1-

31,328-31,328Derivative financial instruments

765

45,36326

46,154

Payables and other liabilities3

3,572

1,161

-

4,733

Debt issuances (designated at fair value)
Total

-

1,531

-

1,531

4,337

79,38326

83,74628,455

6,782-

35,237As at September 2022
AssetsTrading assets2
Derivative financial instruments

944

89,18545

90,174

68,211

8,614

1,385

78,210

-

4,272

403

4,675

97,610108,853

1,833

208,296

-

2,660

-

2,660

Derivative financial instruments

309

84,80931

85,149

Payables and other liabilities3

2,842

397

-

3,239

-

1,111

-

1,111

3,151

88,97731

92,159Investment securities2
Net loans and advances (measured at fair value)
Total
Liabilities
Deposits and other borrowings (designated at fair value)

Debt issuances (designated at fair value)
Total
As at March 2022
AssetsTrading assets2

31,901

7,532-

39,433

Derivative financial instruments

1,302

43,88947

45,238Investment securities2

59,312

10,5201,420

71,252

-

5,642

113

5,755

92,51567,583

1,580

161,678

Net loans and advances (measured at fair value)
Total
Liabilities
Deposits and other borrowings (designated at fair value)

-

4,589

-

4,589

Derivative financial instruments

655

47,11723

47,795

Payables and other liabilities3

4,226

408

-

4,634

-

1,864

-

1,864

4,881

53,97823

58,882

Debt issuances (designated at fair value)
Total
1.

2.

3.

During the March 2023 half, within the trading book in its Markets business, a component of the Institutional division, the Group commenced the management of repurchase agreements
and associated reverse repurchase agreements on a fair value basis. This resulted in repurchase and associated reverse repurchase agreements being recognised and measured at fairvalue through profit and loss.
During the March 2023 half, $7,246 million of assets were transferred from Level 1 to Level 2, (Sep 22: $1,043 million; Mar 22: $3,949 million), and $1,181 million of assets were transferredfrom Level 2 to Level 1 (Sep 22: $1,677 million; Mar 22: $1,181 million) due to a change of the observability of bond valuation inputs. There were no other material transfers during theperiod. Transfers into and out of levels are measured at the beginning of the reporting period in which the transfer occurred.
Payables and other liabilities relate to securities sold short which are classified as held for trading and measured at FVTPL.

109

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.

Fair value of financial assets and financial liabilities, cont’dii) Details of fair value measurements that incorporate unobservable market dataa)Level 3 fair value measurements

Level 3 financial instruments are a net asset of $1,842 million (Sep 22: $1,802 million; Mar 22: $1,557 million). The assets and liabilities which incorporatesignificant unobservable inputs are:•equity securities for which there is no active market or traded prices cannot be observed;•

loans and advances measured at fair value for which there is no observable market data; and•derivatives referencing market rates that cannot be observed primarily due to lack of market activity.

Level 3 Transfers
During the March 2023 half, the Group transferred $3 million of derivatives measured at fair value from Level 3 to Level 2, as a result of valuation inputs
becoming observable during the period. There were no other transfers into or out of Level 3 during the period.
The material Level 3 financial instruments as at 31 March 2023 are summarised below:i)

Investment Securities - equity holdings classified as FVOCIBank of Tianjin (BoT)The Group holds an investment in the BoT. The investment is valued based on comparative price-to-book (P/B) multiples (a P/B multiple is the ratio of themarket value of equity to the book value of equity). The extent of judgement applied in determining the appropriate multiple and comparator group fromwhich the multiple is derived resulted in the Level 3 classification. As at March 2023, the BoT equity holding balance was $900 million (Sep 22:$854 million, Mar 22: $956 million). An increase in the BoT fair valuation in the March 2023 half was mainly due to the increase of the P/B multiple usedin the valuation over the half.
Other equity investments
The Group holds $545 million (Sep 22: $491 million; Mar 22: $426 million) of unlisted equities classified as FVOCI, for which there are no active markets
or traded prices available, resulting in Level 3 classification. The increase in unlisted equity holdings balance was mainly due to new investment
purchases and small revaluation increase of the equity instruments during the March 2023 half.
ii) Net loans and advances - classified as FVTPL
Syndicated loans
The Group holds $380 million (Sep 22: $403 million; Mar 22: $113 million) of syndicated loans for sale which are measured at FVTPL. These loans areclassified as Level 3 when there is no observable market data available for the valuation. The decrease in the Level 3 loan balances for the March 2023
half was mainly due to FX translation impact as well as scheduled repayments.
b) Sensitivity to Level 3 data inputs
When we make assumptions due to significant inputs to a valuation not being directly observable (Level 3 inputs), then changing these assumptions
changes the Group’s estimate of the instrument’s fair value. Favourable and unfavourable changes are determined by changing the primary
unobservable parameters used to derive the fair valuation.
Investment securities - equity holdings
The valuation of the equity investments is sensitive to variations in select unobservable inputs, with valuation techniques used including P/B multiples anddiscounted cashflow techniques. If for example, a 10% increase or decrease to the primary input into the valuations were to occur (such as the P/B
multiple), it would result in a $145 million increase or decrease in the fair value of the portfolio, which would be recognised in shareholders’ equity in theGroup, with no impact to net profit or loss.
Net loans and advances
Syndicated loan valuations are sensitive to credit spreads and discount curves in determining their fair valuation. However as these are primarily
investment-grade loans, an increase or decrease in credit spreads and / or interest yield would have an immaterial impact on net profit or net assets of
the Group.
Other
The remaining Level 3 balance is immaterial and changes in inputs have a minimal impact on net profit and net assets of the Group.

110

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13.
c)

Fair value of financial assets and financial liabilities, cont’dDeferred fair value gains and losses

When fair values are determined using unobservable inputs significant to the fair value of a financial instrument, the Group does not immediately
recognise the difference between the transaction price and the amount determined based on the valuation technique (referred to as the day one gain orloss) in profit or loss. The amount deferred at initial recognition is recognised in profit or loss over the life of the transaction on a straight line basis orwhen all inputs become observable.
The day one gains and losses deferred are immaterial.
iii) Financial assets and liabilities not measured at fair value
The classes of financial assets and liabilities listed in the table below are predominately carried at amortised cost on the Group’s balance sheet. Whilst
this is the value at which we expect the assets will be realised and the liabilities settled, the Group provides an estimate of the fair value of these financial
assets and liabilities at balance date in the table below.

Carrying amount in the balance sheet

Fair value

At amortisedcost$M

At fairvalue$M

Investment securities1

7,912

86,06093,972

93,958Net loans and advances

670,618

19,469690,087

687,457

Total

678,530

105,529784,059

781,415

Deposits and other borrowings

811,236

31,328842,564

842,215

Debt issuances

104,626

1,531

106,157

105,800

Total

915,862

32,859948,721948,015

Investment securities1

7,943

78,21086,153

86,128Net loans and advances

667,732

4,675

672,407

668,407

Total

675,675

82,885758,560

754,535

As at March 2023
Financial assets

Total
$M

$M

Financial liabilities

As at September 2022
Financial assets

Financial liabilities
Deposits and other borrowings

794,6212,660

797,281796,784

Debt issuances

92,623

1,111

93,734

93,121

Total

887,244

3,771

891,015889,905

Investment securities1

8,505

71,25279,757

79,678Net loans and advances

645,6815,755

651,436

649,142

Total

654,186

77,007731,193

728,820775,699

4,589

780,288780,104

Debt issuances

85,362

1,864

87,22687,727

Total

861,061

6,453

867,514

867,831

As at March 2022
Financial assets

Financial liabilities
Deposits and other borrowings

1.

Investment securities at amortised cost includes $4,260 million of assets that are part of the Group’s liquidity portfolio (Sep 22: $3,976 million; Mar 22: $4,664 million). These are all short tenor(<1 year) instruments primarily in the Group’s Rest of World geography and represent <4% of the Group’s total liquid asset securities at 31 March 2023.

111

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Shareholders’ equity
As ati) Issued securities
Ordinary shares
Opening balance

Mar 23
No.
2,989,923,751

Sep 22No.
2,794,104,174

Mar 22No.
2,823,563,652--(30,831,227)

Share buy-back1
2

Share entitlement issue-

187,105,950-

Bonus Option Plan

1,657,422

1,518,519

1,371,749

Dividend Reinvestment Plan issuances

8,406,9787,195,108-

Employee share and option plans

3,378,631--

3,003,366,782

2,989,923,751

2,794,104,174

Closing balanceLess: Treasury Shares
Closing balanceIssued/(Repurchased) during the period(4,099,015)(4,209,150)(4,391,572)

2,999,267,767

2,985,714,601

2,789,712,602

13,443,031

195,819,577(29,459,478)

1.

The Group completed its $1.5 billion on-market share buy-back of ANZ ordinary shares in the March 2022 half, purchasing $846 million worth of shares and resulting in 31 million shares
being cancelled in the March 2022 half.
2. On 18 July 2022, the Group announced a fully underwritten pro rata accelerated renounceable entitlement offer of new ANZ ordinary shares to help fund the Group’s anticipated acquisitionof Suncorp Bank. All eligible shareholders were invited to purchase one new ordinary share for every 15 existing ordinary shares held on 21 July 2022 at an issue price of $18.90 per share.
The Group issued a total of 187.1 million ordinary shares under the offer, raising $3,497 million of new share capital (net of issue costs).

As at

Movement

Mar 23$M

Sep 22$M

Mar 22$M

29,054

28,79725,091

Foreign currency translation reserve1

644

(148)

Share option reserve

58

78ii) Shareholders' equity
Ordinary share capital
Reserves

FVOCI reserve

Mar 23v. Sep 22
1%

Mar 23v. Mar 22
16%

(164)

large

large

54

-26%

7%

(412)

(478)

(43)

-14%

large

(1,287)(2,036)(1,247)

-37%

3%

(22)

(22)

(22)

0%

0%

Total reserves(1,019)(2,606)(1,422)

-61%

-28%

Retained earnings

41,04939,71638,0783%

8%

Share capital and reserves attributable to shareholders of the Company

69,08465,907

61,747

5%

12%

525

494

9

6%

large

69,60966,401

61,756

5%

13%

Cash flow hedge reserve
Transactions with non-controlling interests reserve

Non-controlling interests
Total shareholders' equity
1.

As a result of the dissolution of Minerva Holdings Limited in the United Kingdom and ANZ Asia Limited in Hong Kong, $65 million of the associated foreign currency translation reserve wasrecycled from Other comprehensive income to profit or loss in the March 2022 half.

112

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14.

Shareholders’ equity, cont’dProfit attributable tonon-controlling interests

Equity attributable tonon-controlling interests

Dividend paid to
non-controlling interests

Half YearAs at

Half Yeariii) Non-controlling interests
Mar 23$M
13

Sep 22$M-

Mar 22$M-

Other non-controlling interests

1

1

-

10

10

Total

14

1

-

525

494

ANZ Bank New Zealand PPS

Mar 23$M
515

Sep 22$M484

Mar 22$M-

Mar 23$M
13

Sep 22$M-

Mar 22
$M
-

9

-

-

2

9

13

-

2

ANZ Bank New Zealand Perpetual Preference Shares
ANZ Bank New Zealand, a wholly owned subsidiary of ANZGHL, issued $484 million (NZD 550 million) of Perpetual Preference Shares (PPS) on 18 July
2022. These are considered non-controlling interests of the Group.
The key terms of the PPS are as follows:
PPS dividends
PPS dividends are payable at the discretion of the Directors of ANZ Bank New Zealand and are non-cumulative. ANZ Bank New Zealand must not
resolve to pay any dividend or make any other distribution on its ordinary shares until the next PPS dividend payment date if a PPS dividend is not paid.
Should ANZ Bank New Zealand elect to pay a PPS dividend, the PPS dividend is 6.95% per annum up until 18 July 2028 and thereafter a floating rateequal to the aggregate of the New Zealand 3 month bank bill rate plus 3.25%, multiplied by one minus the New Zealand company tax rate (where the
PPS dividend is fully imputed), with PPS dividend payments due on 18 January, 18 April, 18 July and 18 October each year.
Redemption features
Holders of PPS have no right to require that the PPS be redeemed. ANZ Bank New Zealand may at its option redeem all of the PPS on an optional
redemption date (each PPS dividend date from 18 July 2028), or at any time following the occurrence of a tax or regulatory event, subject to prior written
approval of RBNZ and meeting other conditions.

15.

Changes in composition of the Group

There were no acquisitions or disposals of material controlled entities for the half year ended 31 March 2023.

16.

Investments in associates
Half Year
Mar 23$M
101

Share of associates' profit/(loss)

Contributions to profit

Sep 22$M
103

Mar 22$M74

Mar 23v. Sep 22-2%

Mar 23v. Mar 22
36%

Contribution toGroup profit after tax

Ownership interest
held by Group

Half Year

As at

Associates
Mar 23$M
56

P.T. Bank Pan Indonesia (PT Panin)

Movement

Sep 22$M
58

Mar 22$M
24

Mar 23%39

Sep 22%
39

Mar 22%
39

AMMB Holdings Berhad (AmBank)

63

57

51

22

22

22

Worldline Australia Pty Ltd

(17)

(10)

-

49

49

49

Other associates

(1)

(2)

(1)

n/a

n/a

n/a

101

103

74

Share of associates' profit/(loss)

17.

Related party disclosure

There have been no transactions with related parties that are significant to understanding the changes in financial position and performance of the Groupsince 30 September 2022.

113

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
18.

Contingent liabilities and contingent assets

There are outstanding court proceedings, claims and possible claims for and against the Group. Where relevant, expert legal advice has been obtained
and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made. In some instances, we have not disclosed theestimated financial impact of the individual items either because it is not practicable to do so or because such disclosure may prejudice the interests of
the Group.
Refer to Note 33 of the 2022 ANZ Annual Financial Report for a description of commitments, contingent liabilities and contingent assets as at
30 September 2022. A description of the contingent liabilities and contingent assets as at 31 March 2023 is set out below.
•

Regulatory and customer exposures
The Group regularly engages with its regulators in relation to regulatory investigations, surveillance and reviews, reportable situations, civil
enforcement actions (whether by court action or otherwise), formal and informal inquiries and regulatory supervisory activities in Australia andglobally. The Group has received various notices and requests for information from its regulators as part of both industry-wide and Group-specificreviews and has also made disclosures to its regulators at its own instigation. The nature of these interactions can be wide ranging and, for example,
include or have included in recent years a range of matters including responsible lending practices, regulated lending requirements, productsuitability and distribution, interest and fees and the entitlement to charge them, customer remediation, wealth advice, insurance distribution, pricing,competition, conduct in financial markets and financial transactions, capital market transactions, anti-money laundering and counter-terrorism
financing obligations, privacy obligations and information security, business continuity management, reporting and disclosure obligations and productdisclosure documentation. There may be exposures to customers which are additional to any regulatory exposures. These could include classactions, individual claims or customer remediation or compensation activities. The outcomes and total costs associated with such reviews andpossible exposures remain uncertain.

•

South African rate action
In February 2017, the South African Competition Commission commenced proceedings against local and international banks including ANZBGL
alleging breaches of the cartel provisions of the South African Competition Act in respect of trading in the South African rand. The potential civil
penalty or other financial impact is uncertain.

•

Capital raising action
In September 2018, the Australian Securities and Investments Commission (ASIC) commenced civil penalty proceedings against ANZBGL alleging
failure to comply with continuous disclosure obligations in connection with ANZBGL’s August 2015 underwritten institutional equity placement. ASIC
alleges ANZBGL should have advised the market that the joint lead managers took up approximately 25.5 million ordinary shares of the placement.
ANZBGL is defending the allegations.

•

Consumer credit insurance litigation
In February 2020, a class action was brought against ANZBGL alleging breaches of financial advice obligations, misleading or deceptive conduct andunconscionable conduct in relation to the distribution of consumer credit insurance products. The issuers of the insurance products, QBE and
OnePath Life, are also defendants to the claim. An agreement to settle the claim was reached in November 2022. The financial impact is notmaterial. The settlement is without admission of liability and remains subject to court approval.

•

Esanda dealer car loan litigation
In August 2020, a class action was brought against ANZBGL alleging unfair conduct, misleading or deceptive conduct and equitable mistake inrelation to the use of flex commissions in dealer arranged Esanda car loans. ANZBGL is defending the allegations.

•

OnePath superannuation litigation
In December 2020, a class action was brought against OnePath Custodians, OnePath Life and ANZBGL alleging that OnePath Custodians breached
its obligations under superannuation legislation, and its duties as trustee, in respect of superannuation investments and fees. The claim also allegesthat ANZBGL was involved in some of OnePath Custodians’ investment breaches. ANZBGL is defending the allegations.

•

New Zealand loan information litigation
In September 2021, a representative proceeding was brought against ANZ Bank New Zealand Limited, alleging breaches of disclosure requirements
under consumer credit legislation in respect of variation letters sent to certain loan customers. ANZ Bank New Zealand Limited is defending theallegations.

•Credit cards litigation
In November 2021, a class action was brought against ANZBGL alleging that certain interest terms in credit card contracts were unfair contract terms
and that it was unconscionable for ANZBGL to rely on them. ANZBGL is defending the allegations.

•

Available funds action
In May 2022, ASIC commenced civil penalty proceedings against ANZBGL in relation to fees charged to customers in some circumstances for credit
card cash advance transactions made using recently deposited unprocessed funds. ASIC alleges that ANZBGL made false or misleading
representations, engaged in misleading or deceptive conduct and breached certain statutory obligations as a credit licensee. ANZBGL is defending
the allegations.

114

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
18.
•

Contingent liabilities and contingent assets, cont’dRoyal Commission
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released its final report on 4 February 2019.
Following the Royal Commission there have been, and continue to be, additional costs and further exposures, including exposures associated withfurther regulator activity or potential customer exposures such as class actions, individual claims or customer remediation or compensation activities.
The outcomes and total costs associated with these possible exposures remain uncertain.

•

Security recovery actions
Various claims have been made or are anticipated, arising from security recovery actions taken to resolve impaired assets. These claims will bedefended.

•Warranties, indemnities and performance management fees
The Group has provided warranties, indemnities and other commitments in favour of the purchaser and other persons in connection with various
disposals of businesses and assets and other transactions, covering a range of matters and risks. It is exposed to claims under those warranties,
indemnities and commitments, some of which are currently active. The outcomes and total costs associated with these exposures remain uncertain.
The Group has entered an arrangement to pay performance management fees to external fund managers in the event predetermined performance
criteria are satisfied in relation to certain Group investments. The satisfaction of the performance criteria and associated performance management
fee remains uncertain.

•

Clearing and settlement obligations
Certain group companies have a commitment to comply with rules governing various clearing and settlement arrangements which could result in a
credit risk exposure and loss if another member institution fails to settle its payment clearing activities. The Group’s potential exposure arising fromthese arrangements is unquantifiable in advance.
Certain group companies hold memberships of central clearing houses, including ASX Clear (Futures), London Clearing House (LCH) SwapClear
and RepoClear, Korea Exchange (KRX), Hong Kong Exchange (HKEX), Clearing Corporation of India and the Shanghai Clearing House. These
memberships allow the relevant group company to centrally clear derivative instruments in line with cross-border regulatory requirements. Common
to all of these memberships is the requirement for the relevant group company to make default fund contributions. In the event of a default by anothermember, the relevant group company could potentially be required to commit additional default fund contributions which are unquantifiable inadvance.

•Parent entity guarantees
ANZGHL and ANZBGL have issued letters of comfort and guarantees in respect of certain subsidiaries in the normal course of business. Under
these letters and guarantees, ANZGHL and ANZBGL undertake to ensure that those subsidiaries continue to meet their financial obligations, subject
to certain conditions including that the entity remains a controlled entity.

•

Sale of Grindlays businessOn 31 July 2000, ANZBGL completed the sale to Standard Chartered Bank (SCB) of ANZ Grindlays Bank Limited (Grindlays) and certain otherbusinesses. ANZBGL provided warranties and indemnities relating to those businesses.
The indemnified matters include civil penalty proceedings and criminal prosecutions brought by Indian authorities against Grindlays and certain of its
officers, in relation to certain transactions conducted in 1991 that are alleged to have breached the Foreign Exchange Regulation Act,1973. Civil
penalties were imposed in 2007 which are the subject of appeals. The criminal prosecutions are being defended.

Contingent Assets•

National Housing BankANZBGL is pursuing recovery of the proceeds of certain disputed cheques which were credited to the account of a former Grindlays customer in theearly 1990s.
The disputed cheques were drawn on the National Housing Bank (NHB) in India. Proceedings between Grindlays and NHB concerning the proceedsof the cheques were resolved in early 2002.
Recovery is now being pursued from the estate of the Grindlays customer who received the cheque proceeds. Any amounts recovered are to beshared between ANZBGL and NHB.

19.

Significant events since balance date

There have been no significant events from 31 March 2023 to the date of signing this report.

115

DIRECTORS’ DECLARATION
Directors’ Declaration
The Directors of ANZ Group Holdings Limited declare that:1.

2.

in the Directors’ opinion the Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements are inaccordance with the Corporations Act 2001, including:•section 304, that they comply with the Australian Accounting Standards and any further requirements in the Corporations Regulations 2001;
and•section 305, that they give a true and fair view of the financial position of the Group as at 31 March 2023 and of its performance for the halfyear ended on that date; andin the Directors’ opinion as at the date of this declaration there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Paul D O’Sullivan
ChairmanShayne C ElliottManaging Director

4 May 2023

116

AUDITOR’S REVIEW REPORT AND INDEPENDENCE DECLARATION

Independent Auditor’s Review Report to the shareholders of ANZ Group Holdings Limited
Report on the Condensed Consolidated Financial Statements
Conclusion
We have reviewed the accompanying Condensed Consolidated Financial Statements of ANZ Group Holdings Limited (the Group).
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the Condensed Consolidated Financial
Statements of ANZ Group Holdings Limited do not comply with the Corporations Act 2001, including:i)giving a true and fair view of the Group’s financial position as at 31 March 2023 and of its performance for the half year ended on that date; andii)
complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
The Condensed Consolidated Financial Statements comprise:•
The condensed consolidated balance sheet as at 31 March 2023;•
The condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statementof changes in equity, and condensed consolidated cash flow statement for the half year ended on that date;•Notes 1 to 19 comprising a summary of significant accounting policies and other explanatory information; and•The Directors’ Declaration.
The Group comprises ANZ Group Holdings Limited (the Company) and the entities it controlled at the half year’s end or from time to time during the half
year.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our
responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirementsof the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including IndependenceStandards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities inaccordance with these requirements.
Responsibilities of the Directors for the Condensed Consolidated Financial Statements
The Directors of the Company are responsible for:•the preparation of the Condensed Consolidated Financial Statements that give a true and fair view in accordance with Australian AccountingStandards and the Corporations Act 2001; and•such internal control as the Directors determine is necessary to enable the preparation of the Condensed Consolidated Financial Statements thatgive a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility for the review of the Condensed Consolidated Financial Statements
Our responsibility is to express a conclusion on the Condensed Consolidated Financial Statements based on our review. ASRE 2410 requires us toconclude whether we have become aware of any matter that makes us believe that the Condensed Consolidated Financial Statements do not comply
with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 March 2023 and its performance for the halfyear ended on that date, and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations
2001.
A review of Condensed Consolidated Financial Statements consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit opinion.

KPMG

Martin McGrath
Partner

Maria Trinci
Partner

Melbourne
4 May 2023

Melbourne
4 May 2023

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 right reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by ascheme approved under Professional Standards Legislation.

117

AUDITOR’S REVIEW REPORT AND INDEPENDENCE DECLARATION

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To the Directors of ANZ Group Holdings Limited
I declare that, to the best of my knowledge and belief, in relation to the review of ANZ Group Holdings Limited for the half year ended 31 March 2023,
there have been:(i)no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and(ii)

no contraventions of any applicable code of professional conduct in relation to the review.

KPMG

Martin McGrath
Partner
Melbourne
4 May 2023

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 right reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by ascheme approved under Professional Standards Legislation.

118

SUPPLEMENTARY INFORMATIONCONTENTS

Page

Establishment of a new group organisational structure

120

ANZGHL and ANZBGL summary financial information

121

Capital management

122

Average balance sheet and related interest

126

Select geographical disclosures

129

Exchange rates

130

119

SUPPLEMENTARY INFORMATION
Establishment of a new group organisational structure
On 3 January 2023, Australia and New Zealand Banking Group Limited (ANZBGL) established by a scheme of arrangement, a non-operating holding
company, ANZ Group Holdings Limited (ANZGHL), as the new listed parent holding company of the ANZ Group and implemented a restructure to
separate ANZ’s banking and certain non-banking businesses into the ANZ Bank Group and ANZ Non-Bank Group (Restructure).
Overview of the Restructure
The key steps undertaken in the Restructure were:• New legal entities ANZGHL, ANZ BH Pty Ltd (ANZ Bank HoldCo), ANZ NBH Pty Ltd (ANZ Non-Bank HoldCo) and ANZ Group Services Pty Ltd (ANZ
ServiceCo) were created;• ANZBGL transferred its beneficial interests in the 1835i trusts, its non-controlling interest in the Worldline merchant acquiring joint venture withWorldline, and its equity interests in Lygon, TIN and Pollination to ANZ Non-Bank HoldCo;• ANZBGL transferred its interest in ANZ Centre Trust, ANZ Centre Chattels Trust, certain fixtures and fittings (including leasehold improvement assets)
and ANZ Centre Pty Ltd to ANZ ServiceCo;• ANZBGL transferred all shares in ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo to ANZGHL; and• ANZGHL transferred all shares in ANZBGL to ANZ Bank HoldCo.
The composition of the ANZ Group after the Restructure is shown in the diagram below1.

1.

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

APRA Regulatory Requirements
As part of the Restructure, ANZ’s prudential policy framework was adjusted to reflect APRA’s regulation of the ANZ Group after the Restructure. A
summary of APRA’s regulation of the ANZ Group after the Restructure is set out below.
• ANZGHL: a non-operating holding company that is authorised by APRA and is required to comply with certain conditions including specific capitalrequirements. As an authorised NOHC, ANZGHL is also subject to regulation under the Banking Act 1959 (Cth) (Banking Act) and certain APRA
prudential standards. As the head of a Level 3 group, ANZGHL is required to ensure certain APRA prudential standards are applied appropriately
throughout the ANZ Group (including the ANZ Bank Group and relevant members of the ANZ Non-Bank Group).
• ANZ Bank HoldCo: includes the ANZ Group’s entities that conduct banking business (including ANZBGL and ANZ Bank New Zealand). ANZ Bank
HoldCo is subject to the full suite of APRA prudential and reporting standards for ADIs, including standards in relation to capital adequacy and liquidity.
• ANZ Non-Bank HoldCo: comprises investments and entities that are not within the ANZ Bank Group. Subject to the requirements relating to APRA’s
authorisation, these entities are not subject to ADI-specific regulation, such as bank capital adequacy and liquidity requirements currently applied to
ANZBGL. As noted above, ANZGHL is required to apply certain APRA prudential standards appropriately throughout the ANZ Group, including torelevant members of the ANZ Non-Bank Group being those where ANZGHL has considered it appropriate to do so to protect the ANZ Group or ANZ
customers or where APRA has required ANZGHL to do so.
Initially, ANZ's risk management framework will apply to the ANZ Group following the Restructure in substantially the same form as the current risk
management framework. However, over time, ANZ's risk management framework and risk appetite statement may be adjusted as the ANZ Non-Bank
Group develops.
Further information relating to the implementation of the Group Organisational Structure can be found on www.anz.com at
https://www.anz.com/shareholder/centre/about/anzs-non-operating-holding-company/

120

SUPPLEMENTARY INFORMATIONANZGHL and ANZBGL summary financial information
Condensed Income Statement
ANZBGL Consolidated

ANZGHL Consolidated

Half YearNet interest income

Half Year

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23$M

Sep 22$M

Mar 22
$M

8,500

7,774

7,100

8,503

7,774

7,100

Other operating income

1,647

2,110

2,442

1,636

2,110

2,442

Operating income

10,147

9,884

9,542

10,139

9,884

9,542

Operating expenses(4,986)(4,788)(4,791)(4,997)(4,788)(4,791)

Profit before credit impairment and income tax

5,161

5,096

4,751

5,142

5,096

4,751

Credit impairment (charge)/release

(133)

(52)

284

(133)

(52)

284

Profit before income tax

5,028

5,044

5,035

5,009

5,044

5,035

Income tax expense and non-controlling interests(1,460)(1,441)(1,500)(1,462)(1,441)(1,500)

Profit attributable to shareholders of the Company
from continuing operations

3,568

3,603

3,535

3,547

3,603

3,535

Profit/(Loss) from discontinued operations

-

(14)

(5)

-

(14)

(5)

3,568

3,589

3,530

3,547

3,589

3,530

Economic hedges

190

(196)

(373)

190

(196)

(373)

Revenue and expense hedges

84

(5)

(49)

84

(5)

(49)

3,842

3,388

3,108

3,821

3,388

3,108

Profit attributable to shareholders of the Company

Cash profit

Condensed Balance SheetANZBGL Consolidated

ANZGHL Consolidated

As at

As at

Mar 23$B

Sep 22$B

Mar 22$B

Mar 23$B

Sep 22$B

Mar 22
$B

225.1

185.6

186.0

225.1

185.6

186.0

Trading assets and investment securities

133.1

121.4

119.2

133.6

121.4

119.2

Derivative financial instruments

45.6

90.2

45.2

45.6

90.2

45.2

Net loans and advances

690.7

672.4

651.4

690.1

672.4

651.4

AssetsCash / Settlement balances owed to ANZ / Collateral paid

Other
Total assets

17.1

16.0

15.6

16.8

16.0

15.6

1,111.6

1,085.6

1,017.4

1,111.2

1,085.6

1,017.4

Liabilities
Settlement balances owed by ANZ / Collateral received

31.0

30.0

26.5

31.0

30.0

26.5

Deposits and other borrowings

843.1

797.3

780.3

842.6

797.3

780.3

Derivative financial instruments

46.2

85.1

47.8

46.2

85.1

47.8

Debt issuances

106.2

93.7

87.2

106.2

93.7

87.2

Other

16.5

13.2

13.8

15.6

13.2

13.8

Total liabilities

1,043.0

1,019.3

955.6

1,041.6

1,019.3

955.6

Total equity

68.6

66.4

61.8

69.6

66.4

61.8

121

SUPPLEMENTARY INFORMATION
Capital management
ANZ provides information as required under APRA’s prudential standard APS 330: Public Disclosure. This information is located in the Regulatory
Disclosures section of ANZ’s website: https://www.anz.com/shareholder/centre/reporting/regulatory-disclosure/.
The disclosures below represent the position for ANZ BH Pty Ltd as the head of ANZ’s Level 2 banking group following the Restructure described on
page 120 (Australia and New Zealand Banking Group Limited for prior years). The capital position for ANZGHL, the head of the Level 3 conglomerategroup, is outlined on page 43.
As atQualifying Capital
Tier 1
Shareholders' equity and non-controlling interests
Prudential adjustments to shareholders' equity

Mar 23v. Sep 22

Mar 23v. Mar 22

66,401

61,756

3%

11%

(358)

(175)

180

large

large

68,267

66,226

61,9363%

10%

Table 2

(10,887)(10,354)(11,425)5%-5%57,38055,87250,511

3%

14%

Table 3Tier 1 capital
Tier 2 capitalMar 22$M

68,625

Common Equity Tier 1 capital
Additional Tier 1 capitalSep 22$M

Table 1Gross Common Equity Tier 1 capital
Deductions

Movement

Mar 23$M

Table 4

Total qualifying capital

8,184

7,686

7,490

6%

9%

65,56463,55858,0013%

13%

24,06819,277

14,78025%

63%

89,632

82,83572,781

8%

23%

-4%

-1%

Capital adequacy ratios (Level 2)
Common Equity Tier 1

13.2%

12.3%

11.5%

Tier 1

15.1%

14.0%

13.2%

Tier 2

5.5%

4.2%

3.4%

Total capital ratio
Risk weighted assets

Table 5

122

20.6%

18.2%

16.6%

435,514454,718

437,910

SUPPLEMENTARY INFORMATION
Capital management, cont’d
As at
Mar 23$M

Movement

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

Table 1: Prudential adjustments to shareholders' equity
Shareholders' equity attributable to deconsolidated entities

(233)

(48)

(150)

large

55%

Deferred fee revenue including fees deferred as part of loan yields

453

440

386

3%

17%

Non-controlling interests and other deductions

(578)

(567)

(56)

2%

large

Total

(358)

(175)

180

large

large

Unamortised goodwill & other intangibles (excluding ANZ New ZealandInvestments Holdings Ltd)

(2,994)(2,914)(3,073)

3%-3%

Intangible component of investments in ANZ New Zealand Investments
Holdings Ltd

(71)

(67)

(71)

6%

0%

Table 2: Deductions from Common Equity Tier 1 capital

Capitalised software
Capitalised expenses (including loan and lease origination fees)
Applicable deferred net tax assets
Expected losses in excess of eligible provisions

Table 8Investment in other insurance subsidiaries
Investment in ANZ New Zealand Investments Holdings Ltd

(868)

(896)

(924)

-3%

-6%

(1,874)(1,625)(1,548)15%

21%(2,461)(2,511)(2,908)

-2%

-15%

(39)

(11)

(32)

large

22%

(284)

(348)

(347)

-18%

-18%

(45)

(43)

(45)

5%

0%

Investment in associates(2,214)(2,181)(2,018)2%

10%

Other equity investments(973)(1,385)(1,432)

-30%

-32%

Cashflow hedge reserve and other deductions

936

1,627

973

-42%

-4%

(10,887)(10,354)(11,425)

5%

-5%

Total

Table 3: Additional Tier 1 capital
ANZ Capital Notes 3

-

970

969

large

large

ANZ Capital Notes 4

1,620

1,619

1,618

0%

0%

ANZ Capital Notes 5

929

928

928

0%

0%

ANZ Capital Notes 6

1,488

1,487

1,487

0%

0%

ANZ Capital Notes 7

1,297

1,297

1,298

0%

0%

ANZ Capital Notes 8

1,482

-

-

n/a

n/a

ANZ Capital Securities

1,380

1,404

1,282

-2%

8%

(12)

(19)

(92)

-37%

-87%

8,184

7,686

7,490

6%

9%

Regulatory adjustments and deductions
Total

Table 4: Tier 2 capital
General reserve for impairment of financial assets

1,781

1,233

1,082

44%

65%

Term subordinated debt notes

22,797

17,907

14,047

27%

62%

(510)

137

(349)

large

46%

24,06819,277

14,78025%63%Regulatory adjustments and deductions
Total

123

SUPPLEMENTARY INFORMATION
Capital management, cont’d
As at

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

On balance sheet

269,191

268,741

262,7740%2%Commitments

45,94458,03958,578-21%-22%

Contingents

14,227

12,33011,64615%

22%

Derivatives

15,932

20,332

15,819-22%

1%

Table 5: Risk weighted assets

Total credit risk weighted assets

Table 6345,294

359,442

348,817-4%-1%Market risk - Traded

11,737

9,282

7,705

26%

52%

Market risk - IRRBB

31,88738,06333,402-16%-5%

Operational risk

42,31947,931

47,986-12%-12%

Total risk weighted assets

431,237

454,718

437,910-5%-2%

RWA adjustment for the IRB capital floor
Total risk weighted assets including floor adjustment

4,277

n/a

n/a

n/a

n/a

435,514

n/a

n/a

n/a

n/a

As at

Movement

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

Corporate

62,680146,069

141,243

-57%

-56%

Sovereignn/a10,955

9,781

n/a

n/a

Bank

n/a

12,071

10,742n/an/aResidential mortgage

86,726

113,590111,355

-24%

-22%

Retail SME

10,065

n/a

n/a

n/a

n/a

Qualifying revolving retail

3,325

3,272

3,418

2%

-3%

Table 6: Credit risk weighted assets by Basel asset class
Subject to Advanced IRB approach

Other retail

1,709

17,02918,200-90%-91%

164,505

302,986

294,739

-46%

-44%

3,577

39,79238,432-91%-91%

Corporate

38,808

n/a

n/a

n/a

n/a

Sovereign

11,199

n/a

n/a

n/a

n/a

Financial institution

32,832

n/a

n/a

n/a

n/a

Credit risk weighted assets subject to Foundational IRB approach

82,839

n/a

n/a

n/a

n/a

Corporate

4,911

6,235

6,149

-21%

-20%

Sovereign

88

29

36

large

large

1,809

224

194

large

large

Other retail

32

11

12

large

large

Other assets

4,138

n/a

n/a

n/a

n/a

Credit risk weighted assets subject to Standardised approach

10,978

6,499

6,391

69%

72%

Credit Valuation Adjustment and Qualifying Central Counterparties

3,449

3,865

3,154

-11%

9%

Exposures of New Zealand banking subsidiaries

77,717

n/a

n/a

n/a

n/a

Credit risk weighted assets relating to securitisation exposures

2,229

2,424

2,090

-8%

7%

n/a

3,876

4,011

n/a

n/a

345,294

359,442

348,817-4%-1%Credit risk weighted assets subject to Advanced IRB approach
Credit risk weighted assets subject to supervisory slotting approach
Subject to Foundation Internal Rating Based (IRB) approach

Subject to Standardised approach

Residential mortgage

Other assets
Total credit risk weighted assets

124

SUPPLEMENTARY INFORMATION
Capital management, cont’dCollectively and Individually
Assessed Provision

Table 7: Total provision for credit impairment and Basel expected
loss by division

Basel Expected Loss1

Australia RetailMar 23$M
1,017

Sep 22$M974

Mar 22$M
1,015

Mar 23$M824

Sep 22$M957

Mar 22$M
991

Australia Commercial

1,182

1,164

1,240

657

826

927

Institutional

1,580

1,652

1,584

814

984

959

New Zealand

590

494

438

515

514

572

Pacific

91

110

114

17

17

14

Group Centre

1

1

2

2

3

3

4,461

4,395

4,393

2,829

3,301

3,466

Total provision for credit impairment and expected loss
1.

Only applicable to IRB portfolios.

As at

Movement

Table 8: APRA Expected loss in excess of eligible provisions

Mar 23$M

Sep 22$M

Mar 22$M

Mar 23v. Sep 22

Mar 23v. Mar 22

APRA Basel 3 expected loss: non-defaulted

1,875

2,231

2,235

-16%

-16%

Less: Qualifying collectively assessed provisionCollectively assessed provision(4,040)(3,853)(3,757)

5%

8%

Non-qualifying collectively assessed provision

384

389

440

-1%

-13%

Standardised collectively assessed provision

141

147

142

-4%

-1%

-

-

-

n/a

n/a

954

1,070

1,231

-11%

-23%

Individually assessed provision

(421)

(542)

(636)

-22%

-34%

Additional individually assessed provision for partial write offs

(181)

(213)

(206)

-15%

-12%

44

51

43

-14%

2%

(357)

(355)

(400)

1%

-11%

39

11

32

large

22%

-

-

-

n/a

n/a

Defaulted excess included in deduction

39

11

32

large

22%

Gross deduction

39

11

32

large

22%

Non-defaulted excess included in deduction
APRA Basel 3 expected loss: defaulted
Less: Qualifying individually assessed provision

Standardised individually assessed provisionCollectively assessed provision on IRB defaulted
Shortfall in expected loss not included in deduction

125

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest1
Mar 23 Half YearSep 22 Half Year

Mar 22 Half YearAvg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

Avg bal
$M

Int
$M

Rate
%

Home loans2

344,016

8,730

5.1%

333,606

6,159

3.7%

334,774

4,941

3.0%

Consumer finance

12,320493

8.0%

12,130456

7.5%

12,286490

8.0%

Business lending

293,374

8,853

6.1%

274,341

5,123

3.7%

260,680

3,502

2.7%

Loans and advances

(457)

-

n/a

(587)

-

n/a

(653)

-

n/a

649,253

18,076

5.6%

619,490

11,7383.8%607,087

8,933

3.0%

Cash and other liquid assets

196,798

2,712

2.8%

177,619952

1.1%

170,61989

0.1%

Trading and investment securities

126,358

2,040

3.2%

122,643

1,194

1.9%

121,366

678

1.1%

563

2

n/a

588

18

n/a

606

7

n/a

Individual provisions for credit impairment
Total
Non-lending interest earning assets

Other assets
Total

323,719

4,754

2.9%

300,850

2,164

1.4%

292,591774

0.5%

Total interest earning assets3

972,972

22,8304.7%

920,340

13,902

3.0%

899,678

9,707

2.2%

Non-interest earning assets2

139,344

141,680

110,098

1,112,316

1,062,020

1,009,776

Total average assets
Interest bearing deposits and other borrowings
Certificates of deposit

41,710674

3.2%

37,232235

1.3%

38,14840

0.2%

Term deposits

226,515

3,998

3.5%

191,680

1,471

1.5%

176,866440

0.5%

On demand and short term deposits4

317,740

4,268

2.7%

334,447

1,899

1.1%

339,419858

0.5%

Deposits from banks and securities sold under agreement torepurchase103,137

1,677

3.3%

100,096572

1.1%

91,070103

0.2%

Commercial paper and other borrowings

43,553883

4.1%

34,993243

1.4%

29,431

55

0.4%

Total

732,655

11,500

3.1%

698,448

4,420

1.3%

674,934

1,496

0.4%

Non-deposit interest bearing liabilities
Collateral received and settlement balances owed by ANZ

22,349271

2.4%

18,984124

1.3%

14,50713

0.2%

Debt issuances & subordinated debt

96,609

2,080

4.3%

89,023

1,222

2.7%

94,683799

1.7%

Other liabilities

9,293

476

n/a

9,084

362

n/a

8,776

299

n/a

Total

128,251

2,827

4.4%

117,091

1,708

2.9%

117,966

1,111

1.9%

Total interest bearing liabilities3

860,906

14,327

3.3%

815,539

6,128

1.5%

792,900

2,607

0.7%

Non-interest bearing liabilities4

183,799

183,361

154,332

1,044,705

998,900

947,232

67,611

63,12062,544

Total average liabilities

Total average shareholders' equity
1.

Averages used are predominantly daily averages.
2. Home loans are reported net of average mortgage offset balances of $43,799 million (Sep 22: $41,990 million; Mar 22: $40,329 million), which are included in non-interest earning assets.
While these balances are required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s
net interest margin.
3. Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
4. On demand and short-term deposits exclude average mortgage offset balances of $43,799 million (Sep 22: $41,990 million; Mar 22: $40,329 million), which are included in non-interest
bearing liabilities.

126

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest1, cont’dMar 23 Half YearSep 22 Half YearAvg bal
$M

Int
$M

Rate
%

Avg bal$M

Australia

432,682

11,721

5.4%

410,151

Rest of World

80,510

2,588

6.4%

75,812

New Zealand

136,061

3,767

5.6%

133,527649,253

18,076

5.6%

619,490

Australia

62,933

1,151

3.7%

61,583

Rest of World46,819661

2.8%

43,971New Zealand

16,606228

2.8%

126,358

2,040

Australia

595,274

Rest of World

211,188

New ZealandInt$M

Mar 22 Half YearRate%

Avg bal
$M

Int
$M

Rate
%

7,691

3.7%

402,017

6,097

3.0%

1,260

3.3%

69,003

689

2.0%

2,787

4.2%

136,067

2,147

3.2%

11,7383.8%607,087

8,933

3.0%

621

2.0%

61,595

272

0.9%

405

1.8%

40,857276

1.4%

17,089168

2.0%

18,914

130

1.4%

3.2%

122,643

1,194

1.9%

121,366678

1.1%

14,356

4.8%

562,269

8,857

3.1%

548,966

6,368

2.3%

4,184

4.0%

196,306

1,989

2.0%

184,992

1,018

1.1%

166,510

4,290

5.2%

161,765

3,056

3.8%

165,720

2,321

2.8%

972,972

22,8304.7%

920,340

13,902

3.0%

899,678

9,707

2.2%

Loans and advances2

Total
Trading assets and investment securities

Total
Total interest earning assets3

Total
Total average assets
Australia

664,826

646,314617,384

Rest of World

266,218

238,668

212,617

New Zealand

181,272

177,038

179,775

Total average assets

1,112,316

1,062,020

1,009,776

Interest bearing deposits and other borrowings4
Australia

415,469

6,202

3.0%

405,671

2,320

1.1%

391,882869

0.4%

Rest of World

206,186

3,590

3.5%

185,569

1,256

1.3%

174,536235

0.3%

New Zealand

111,000

1,708

3.1%

107,208

844

1.6%

108,516392

0.7%

732,655

11,500

3.1%

698,448

4,420

1.3%

674,934

1,496

0.4%

Australia

504,444

8,132

3.2%

484,186

3,442

1.4%

472,317

1,556

0.7%

Rest of World

223,615

3,927

3.5%

202,915

1,494

1.5%

190,269434

0.5%

New Zealand

132,847

2,268

3.4%

128,438

1,192

1.9%

130,314617

0.9%

860,906

14,327

3.3%

815,539

6,128

1.5%

792,900

2,607

0.7%

Total
Total interest bearing liabilities3

Total
Total average liabilities
Australia

599,344592,028564,609

Rest of World

282,113

247,059

220,531

New Zealand
Total average liabilities

163,248

159,813

162,092

1,044,705

998,900

947,232

67,09462,90562,532

Total average shareholders' equity
Share capital and reserves attributable to shareholders of theCompany
Non-controlling interests
Total average shareholders' equity
Total average liabilities and shareholders' equity

517

215

12

67,611

63,12062,544

1,112,316

1,062,020

1,009,776

1.

Averages used are predominantly daily averages.
Home loans are reported net of average mortgage offset balances of $43,799 million (Sep 22: $41,990 million; Mar 22: $40,329 million), which are included in non-interest earning assets.
While these balances are required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s
net interest margin.
3. Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
4. On demand and short-term deposits exclude average mortgage offset balances of $43,799 million (Sep 22: $41,990 million; Mar 22: $40,329 million), which are included in non-interest
bearing liabilities.
2.

127

SUPPLEMENTARY INFORMATION
Average balance sheet and related interest1, cont’d
Half Year
Mar 23%

Sep 22%

Mar 22%Australia

5.03

3.23

2.39

Rest of World

4.20

2.08

1.06

New Zealand

5.17

3.77

2.81

Group

4.71

3.01

2.16

1

Gross earnings rate

Net interest spread and net interest margin analysis as follows:
Half Year
Australia1
Net interest spread

Mar 23%

Sep 22%

Mar 22
%

1.51

1.73

1.73

Interest attributable to net non-interest bearing items

0.42

0.17

0.08

Net interest margin - Australia

1.93

1.90

1.81

Net interest spread

0.68

0.61

0.60

Interest attributable to net non-interest bearing items

0.19

0.08

0.03

Net interest margin - Rest of World

0.87

0.69

0.63

Net interest spread

1.71

1.88

1.82

Interest attributable to net non-interest bearing items

0.65

0.36

0.19

Net interest margin - New Zealand

2.36

2.24

2.01

Net interest spread

1.37

1.51

1.50

Interest attributable to net non-interest bearing items

0.38

0.17

0.08

Net interest margin

1.75

1.68

1.58

Net interest margin (excluding Markets)

2.43

2.26

2.08

Rest of World1

New Zealand1

Group

1.

Geographic gross earnings rate, net interest spread and net interest margin are calculated gross of intra-group items (Intra-group interest earning assets and associated interest income andintra-group interest bearing liabilities and associated interest expense).

128

SUPPLEMENTARY INFORMATION
Select geographical disclosures
The following divisions operate across the geographic locations illustrated below:• Australia Retail division - Australia• Australia Commercial division - Australia• Institutional division - Australia, New Zealand and Rest of World• Pacific division – Rest of World• New Zealand division - New Zealand• Group Centre division - Australia, New Zealand and Rest of WorldThe Rest of World geography includes all geographies in which the Group operates in outside of Australia and New Zealand. This includes Asia, Pacific,
Europe & America.
Australia$M

New Zealand$M

Rest of World
$M

Total
$M
3,547

March 2023 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

1,804

922

821

Cash profit/(loss)

2,001

1,018

802

3,821

Net loans and advances

473,874

138,044

78,169690,087

Customer deposits

369,574

122,008

157,045648,627

Risk weighted assets

262,828

95,93676,750435,514

September 2022 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

1,987

1,089

513

3,589

Cash profit/(loss)

1,882

993

513

3,388

Net loans and advances

461,235

129,851

81,321

672,407

Customer deposits

362,105

114,836

143,488

620,429

Risk weighted assets

291,783

81,48281,453454,718

March 2022 Half Year
Statutory profit/(loss) attributable to shareholders of the Company

2,229

1,035

266

3,530

Cash profit/(loss)

1,928

914

266

3,108

Net loans and advances

443,739

136,057

71,640651,436

Customer deposits

355,141

120,233

135,680

611,054

Risk weighted assets

277,646

85,22075,044437,910New Zealand geography (in NZD)
Half Year
Mar 23
NZD M
2,127

Net interest income
Other operating income

Sep 22NZD M
2,000

Movement
Mar 22
NZD M
1,761

Mar 23v. Sep 22
6%

Mar 23v. Mar 22
21%

363

401

383

-9%

-5%

Operating income

2,490

2,401

2,144

4%

16%

Operating expenses

(809)

(822)

(824)

-2%

-2%

Cash profit before credit impairment and income tax

1,681

1,579

1,320

6%

27%

Credit impairment (charge)/release

(121)

(59)

20

large

large

Cash profit before income tax

1,560

1,520

1,340

3%

16%

Income tax expense and non-controlling interests

(453)

(424)

(372)

7%

22%

Cash profit

1,107

1,096

968

1%

14%

Adjustments between statutory profit and cash profit

(105)

107

128

large

large

Statutory profit

1,002

1,203

1,096

-17%

-9%

Individually assessed credit impairment charge/(release)

23

6

(4)

large

large

Collectively assessed credit impairment charge/(release)

98

53

(16)

85%

large

Net loans and advances

147,423

147,373

146,397

0%

1%

Customer deposits

130,297

130,330

129,371

0%

1%

Risk weighted assets

102,449

92,477

91,697

11%

12%

7,252

7,280

7,431

0%

-2%

Total full time equivalent staff (FTE)129

SUPPLEMENTARY INFORMATION
Exchange rates
Major exchange rates used in the translation of foreign subsidiaries, branches, investments in associates and issued debt are as follows:
Balance Sheet

Profit & Loss Average

As atHalf Year

Chinese Renminbi

Mar 234.6079Sep 224.6021Mar 224.7505

Mar 234.6763

Sep 224.7031Mar 224.6261Euro

0.61580.66180.67030.64090.67470.6406

Pound Sterling

0.54190.58450.57040.56180.57450.5398

Indian Rupee

55.18852.97156.66355.06954.87254.500Indonesian Rupiah

10,051

9,879

10,743

10,315

10,307

10,387

Japanese Yen

89.28093.80291.43291.66493.53683.399

Malaysian Ringgit

2.95983.0093

3.14603.00183.0872

3.0413

New Taiwan Dollar

20.42520.60321.412

20.69620.91320.264

New Zealand Dollar

1.06791.13491.07601.08771.1063

1.0590

Papua New Guinean Kina

2.36342.28492.63472.35892.46172.5492

United States Dollar

0.67120.64890.74830.66990.69910.7260130

DEFINITIONSAASB means Australian Accounting Standards Board. The term ‘AASB’ is commonly used when identifying Australian Accounting Standards issued by
the AASB.
ADI means Authorised Deposit-taking Institution as defined by APRA.
ADSs means American Depositary Shares.
ANZ means ANZBGL or the ANZGHL, as the context requires.
ANZ Bank HoldCo means ANZ BH Pty Ltd, a non-operating intermediate holding company owned by ANZGHL and which owns the ANZ Bank Group(including ANZBGL and ANZ Bank New Zealand).
ANZ Bank Group means all businesses and entities owned by ANZ Bank HoldCo, including ANZBGL and ANZ Bank New Zealand.
ANZBGL means Australia and New Zealand Banking Group Limited.
ANZBGL Group means ANZBGL and each of its subsidiaries.
ANZ Bank New Zealand means ANZ Bank New Zealand Limited.
ANZEST means ANZ Employee Share Trust.
ANZ Group means the ANZBGL Group or the ANZGHL Group as a whole (including all businesses), as the context requires.
ANZGHL means ANZ Group Holdings Limited.
ANZGHL Group means all businesses owned by ANZGHL after the Restructure (including ANZ Bank HoldCo, ANZBGL, ANZ ServiceCo and ANZ NonBank HoldCo).
ANZ Non-Bank Group means ANZ ServiceCo and all businesses and entities owned by ANZ Non-Bank HoldCo, including ANZ’s beneficial interests in
the 1835i trusts, non-controlling interests in the Worldline merchant acquiring joint venture, and equity interests in Lygon, TIN and Pollination.
ANZ Non-Bank HoldCo means ANZ NBH Pty Ltd, a non-operating intermediate holding company owned by ANZGHL and which will own certain nonbanking subsidiaries.
ANZ Research - Economics, a business unit within ANZ, which conducts analysis of key economic inputs and developments and assessment of thepotential impacts on the local, regional and global economies.
ANZ ServiceCo means ANZ Group Services Pty Ltd.
ANZ Share means a fully paid ordinary share in the capital of ANZ.
APRA means Australian Prudential Regulation Authority.
APS means ADI Prudential Standard.
ASX means Australian Securities Exchange.
ASX Listing Rules means the official Listing Rules of the ASX.
AT1 means Additional Tier 1 capital.
BOP means Bonus Option Plan.
Cash and cash equivalents comprise coins, notes, money at call, balances held with central banks, liquid settlement balances (readily convertible to
known amounts of cash which are subject to insignificant risk of changes in value) and securities purchased under agreements to resell (reverse
repurchase agreements) in less than three months.
Cash profit is an additional measure of profit which is prepared on a basis other than in accordance with accounting standards. Cash profit represents
ANZ’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group and Divisional performance against
prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory profit as noted below. These items
are calculated consistently period on period so as not to discriminate between positive and negative adjustments.
Gains and losses are adjusted where they are significant, or have the potential to be significant in any one period, and fall into one of three categories:
1.

gains or losses included in earnings arising from changes in tax, legal or accounting legislation or other non-core items not associated with thecore operations of the Group;2.

economic hedging impacts and similar accounting items that represent timing differences that will reverse through earnings in the future; and3.

accounting reclassifications between individual line items that do not impact reported results, such as credit risk on impaired derivatives.

Cash profit is not a measure of cash flow or profit determined on a cash accounting basis.
Collectively assessed allowance for expected credit loss represents the Expected Credit Loss (ECL), which incorporates forward-looking informationand does not require an actual loss event to have occurred for a credit loss provision to be recognised.
Committed Liquidity Facility (CLF) – The RBA established a CLF to offset the shortage of High-Quality Liquid Assets (HQLA) in Australia. In
September 2021, APRA wrote to ADIs to advise that APRA and the RBA consider there to be sufficient HQLA for ADIs to meet their LCR requirements,
and therefore the use of the CLF should no longer be required beyond calendar year 2022.
Covered bonds are bonds issued by an ADI to external investors secured against a pool of the ADI’s assets (the cover pool) assigned to a bankruptcy
remote special purpose entity. The primary assets forming the cover pool are mortgage loans. The mortgages remain on the issuer’s balance sheet. The
covered bond holders have dual recourse to the issuer and the cover pool assets. The mortgages included in the cover pool cannot be otherwise pledged
or disposed of but may be repurchased and substituted in order to maintain the credit quality of the pool. The Group issues covered bonds as part of its
funding activities.
Credit risk is the risk of financial loss resulting from the failure of ANZ’s customers and counterparties to honour or perform fully the terms of a loan orcontract.
Credit risk weighted assets (CRWA) represent assets which are weighted for credit risk according to a set formula as prescribed in APS 112/113.

131

DEFINITIONS

Customer deposits represent term deposits, other deposits bearing interest, deposits not bearing interest and borrowing corporations’ debt excluding
securitisation deposits.
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation outcomes.
Derivative credit valuation adjustment (CVA) - Over the life of a derivative instrument, ANZ uses a model to adjust fair value to take into account the
impact of counterparty credit quality. The methodology calculates the present value of expected losses over the life of the financial instrument as afunction of probability of default, loss given default, expected credit risk exposure and an asset correlation factor. Impaired derivatives are also subject toa CVA.
Dividend payout ratio is the total ordinary dividend payment divided by profit attributable to shareholders of the Company.
DRP means Dividend Reinvestment Plan.
Embedded losses - In relation to interest rate risk in the banking book, APRA requires ADIs to give consideration to embedded gains or losses inbanking book items that are not accounted for on a marked-to-market basis when determining regulatory capital. The embedded loss or gain measuresthe difference between the book value and the economic value of banking book activities at a point in time.
Fair value is an amount at which an asset or liability could be exchanged between knowledgeable and willing parties in an arm’s length transaction.
Funding for Lending Programme (FLP) refers to three-year funding announced by the RBNZ in November 2020 and offered to New Zealand banks,
which aimed to lower the cost of borrowing for New Zealand businesses and households.
Gross loans and advances (GLA) is made up of loans and advances, capitalised brokerage and other origination costs less unearned income.
Group means ANZ Group Holdings Limited and its subsidiaries.
Impaired assets are those financial assets where doubt exists as to whether the full contractual amount will be received in a timely manner, or whereconcessional terms have been provided because of the financial difficulties of the customer.
Impaired loans comprise drawn facilities where the customer’s status is defined as impaired.
Individually assessed allowance for expected credit losses is assessed on a case-by-case basis for all individually managed impaired assets taking
into consideration factors such as the realisable value of security (or other credit mitigants), the likely return available upon liquidation or bankruptcy, legal
uncertainties, estimated costs involved in recovery, the market price of the exposure in secondary markets and the amount and timing of expected
receipts and recoveries.
Interest rate risk in the banking book (IRRBB) relates to the potential adverse impact of changes in market interest rates on ANZ’s future net interest
income. The risk generally arises from:1.

Repricing and yield curve risk - the risk to earnings or market value as a result of changes in the overall level of interest rates and/or the
relativity of these rates across the yield curve;

2.

Basis risk - the risk to earnings or market value arising from volatility in the interest margin applicable to banking book items; and3.

Optionality risk - the risk to earnings or market value arising from the existence of stand-alone or embedded options in banking book items.

International and PNG comprises the countries outside of Australia and New Zealand that form part of the Institutional division. This includes Asia,
Papua New Guinea, Europe & America.
Internationally comparable ratios are ANZ’s interpretation of Basel Calculation of RWA for credit risk regulations (effective 1 Jan 2023) documented in
the Basel Framework and the ‘Australian Banking Association Basel 3.1 Capital Comparison Study’ (Mar 2023). This definition is for measures fromMarch 2023 onwards.
Level 1 in the context of APRA supervision, means ANZBGL consolidated with certain approved subsidiaries.
Level 2 in the context of APRA supervision, means consolidated ANZ Bank Group, excluding insurance and funds management entities, commercial
non-financial entities and certain securitisation vehicles.
Level 3 in the context of APRA supervision, means ANZ Group, the conglomerate group at the widest level.
Net interest margin is net interest income as a percentage of average interest earning assets.
Net loans and advances represent gross loans and advances less allowance for expected credit losses.
Net Stable Funding Ratio (NSFR) is the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF) defined by
APRA. The amount of ASF is the portion of an ADI capital and liabilities expected to be a reliable source of funds over a one year time horizon. The
amount of RSF is a function of the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs must maintainan NSFR of at least 100%.
Net tangible assets equal share capital and reserves attributable to shareholders of the Company less unamortised intangible assets (including goodwill
and software).
NZX means New Zealand’s Exchange.
RBA means Reserve Bank of Australia, Australia’s central bank.
RBNZ means Reserve Bank of New Zealand, New Zealand’s central bank.
Regulatory deposits are mandatory reserve deposits lodged with local central banks in accordance with statutory requirements.
Restructure means the restructure of the ANZ Group, as part of the establishment of the non-operating holding company, implemented by the scheme ofarrangement under the Corporations Act between ANZBGL and shareholders.
Restructured items comprise facilities in which the original contractual terms have been modified for reasons related to the financial difficulties of thecustomer. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond thosetypically offered to new facilities with similar risk.

132

DEFINITIONS

Return on average assets is the profit attributable to shareholders of the Company, divided by average total assets.
Return on average ordinary shareholders’ equity is the profit attributable to shareholders of the Company, divided by average ordinary shareholders’equity.
Risk weighted assets (RWA) are risk weighted according to each asset’s inherent potential for default and what the likely losses would be in the case ofdefault. In the case of non-asset backed risks (i.e. market and operational risk), RWA is determined by multiplying the capital requirements for those risks
by 12.5.
Settlement balances owed to/by ANZ represent financial assets and/or liabilities which are in the course of being settled. These may include trade
dated assets and liabilities, vostro accounts and securities settlement accounts.
Term Funding Facility (TFF) refers to three-year funding announced by the RBA on 19 March 2020 and offered to ADIs in order to support lending toAustralian businesses at low cost.
Term Lending Facility (TLF) refers to three to five-year funding offered by the RBNZ between May 2020 and July 2021 to promote lending to New
Zealand businesses.

133

DEFINITIONS
Description of divisions
During the March 2023 half, the Group operated on a divisional structure with six divisions: Australia Retail, Australia Commercial, Institutional, New
Zealand, Pacific, and Group Centre.

Australia Retail
The Australia Retail division provides a full range of banking services to Australian consumers. This includes Home Loans, Deposits, Credit Cards andPersonal Loans. Products and services are provided via the branch network, home loan specialists, contact centres, a variety of self-service channels(digital and internet banking, website, ATMs and phone banking) and third-party brokers. It also includes the costs related to the development andoperation of the ANZ Plus proposition for retail customers.

Australia Commercial
The Australia Commercial division provides a full range of banking products and financial services, including asset financing, across the following
customer segments: small business owners and medium commercial customers (SME Banking) and large commercial customers, high net worth
individuals and family groups (Specialist Business).

Institutional
The Institutional division services governments, global institutional and corporate customers across Australia, New Zealand and International (including
PNG) via the following business units:•

Transaction Banking provides customers with working capital and liquidity solutions including documentary trade, supply chain financing, commodity
financing as well as cash management solutions, deposits, payments and clearing.

•

Corporate Finance provides customers with loan products, loan syndication, specialised loan structuring and execution, project and export finance,
debt structuring and acquisition finance and corporate advisory services.

•

Markets provides customers with risk management services in foreign exchange, interest rates, credit, commodities and debt capital markets inaddition to managing the Group's interest rate exposure and liquidity position.

New Zealand
The New Zealand division comprises the following business units:•

Personal provides a full range of banking and wealth management services to consumer and private banking customers. We deliver our services via
our internet and app-based digital solutions and a network of branches, mortgage specialists, relationship managers and contact centres.

•

Business provides a full range of banking services including small business banking, through our digital, branch and contact centre channels, andtraditional relationship banking and sophisticated financial solutions through dedicated managers. These cover privately owned small, medium andlarge enterprises, the agricultural business segment, government and government-related entities.

Pacific
The Pacific division provides products and services to retail and commercial customers (including multi-nationals) and to governments located in the
Pacific region excluding PNG which forms part of the Institutional division.

Group Centre
Group Centre division provides support to the operating divisions, including technology, property, risk management, financial management, strategy,
marketing, human resources and corporate affairs. It also includes Group Treasury, Shareholder Functions, minority investments in Asia and interests in
the ANZ Non-Bank Group.

134

ASX APPENDIX 4D - CROSS REFERENCE INDEX

Page
Details of the reporting period (4D Item 1) ............................................................................................................................................................................. 2
Results for Announcement to the Market (4D Item 2) ............................................................................................................................................................ 2
Net Tangible Assets per security (4D Item 3) ....................................................................................................................................................................... 11
Details of entities over which control has been gained or lost (4D Item 4) ......................................................................................................................... 113
Dividends and dividend dates (4D Item 5) ............................................................................................................................................................................. 2
Dividend Reinvestment Plan (4D Item 6) ............................................................................................................................................................................... 2
Details of associates and joint venture entities (4D Item 7) ................................................................................................................................................ 113

135

ALPHABETICAL INDEX

Page
Allowance for Expected Credit Losses ................................................................................................................................................................................. 96
ANZGHL and ANZBGL Summary Financial Information .................................................................................................................................................... 121
Appendix 4D - Cross Reference Index ............................................................................................................................................................................... 135
Appendix 4D Statement ......................................................................................................................................................................................................... 2
Auditor’s Review Report and Independence Declaration ................................................................................................................................................... 117
Average Balance Sheet and Related Interest .................................................................................................................................................................... 126
Basis of Preparation ............................................................................................................................................................................................................. 82
Capital Management .......................................................................................................................................................................................................... 122
Changes in Composition of the Group ............................................................................................................................................................................... 113
Condensed Consolidated Balance Sheet ............................................................................................................................................................................. 79
Condensed Consolidated Cash Flow Statement .................................................................................................................................................................. 80
Condensed Consolidated Income Statement ....................................................................................................................................................................... 77
Condensed Consolidated Statement of Changes in Equity .................................................................................................................................................. 81
Condensed Consolidated Statement of Comprehensive Income ......................................................................................................................................... 78
Contingent Liabilities and Contingent Assets ..................................................................................................................................................................... 114
Credit Risk.......................................................................................................................................................................................................................... 101
Debt Issuances .................................................................................................................................................................................................................. 100
Definitions .......................................................................................................................................................................................................................... 131
Deposits and Other Borrowings ........................................................................................................................................................................................... 99
Directors’ Declaration ......................................................................................................................................................................................................... 116
Directors’ Report .................................................................................................................................................................................................................. 76
Dividends ............................................................................................................................................................................................................................. 91
Divisional Results ................................................................................................................................................................................................................. 49
Earnings Per Share .............................................................................................................................................................................................................. 92
Establishment of a New Group Organisational Structure ................................................................................................................................................... 120
Exchange Rates ................................................................................................................................................................................................................. 130
Fair Value of Financial Assets and Financial Liabilities ...................................................................................................................................................... 106
Full Time Equivalent Staff .................................................................................................................................................................................................... 17Group Results ...................................................................................................................................................................................................................... 19
Income ................................................................................................................................................................................................................................. 88
Income Tax Expense ........................................................................................................................................................................................................... 90
Investments in Associates .................................................................................................................................................................................................. 113
Net Loans and Advances ..................................................................................................................................................................................................... 95
Operating Expenses............................................................................................................................................................................................................. 89
Profit Reconciliation ............................................................................................................................................................................................................. 71
Related Party Disclosure .................................................................................................................................................................................................... 113
Segment Reporting .............................................................................................................................................................................................................. 93
Select Geographical Disclosures ....................................................................................................................................................................................... 129
Shareholders’ Equity .......................................................................................................................................................................................................... 112
Significant Events Since Balance Date .............................................................................................................................................................................. 115
Summary ................................................................................................................................................................................................................................ 7136