CHAIRMAN’S ADDRESS
2019 ANNUAL GENERAL MEETING
17 December 2019
Brisbane
Ladies and gentleman, my name is David Gonski and I welcome you to the 2019
Annual General Meeting.
Your directors, including our Chief Executive Officer Shayne Elliott, are all here
and they join me in welcoming you.
Before I start the meeting, I acknowledge both the Jagera people and theTurrbul people who are the traditional custodians of the land on which thismeeting is taking place.
We respect their spiritual relationship with their country and we pay respects totheir elders past, present and emerging.
I extend that respect to other Aboriginal and Torres Strait Islander people
joining us today.
On behalf of everybody at ANZ, I’d also like to express our concern for all thoseaffected by the fires here in Queensland, as well those in other parts of thecountry.
This has been an awful event for so many and those impacted remain in ourthoughts today.
As we have done for customers hit by drought, we have been offering financial
assistance at this very difficult time.
If more is needed, we will do what we can to support our customers, staff andthe community.
It is very pleasing to be in Brisbane, a wonderful city where we have many
interested shareholders.
Brisbane is a key part of our history. We started here as the Union Bank in 1851
and opened our first branch in Queen Street…not far from where we are meeting
today.
Following the closure of the Moreton Bay Penal Settlement, the Colony ofQueensland was formed in December 1859 - with only 7 and a half pence in its
Treasury.
All of which was stolen four days later!

The theft of the entire…albeit miniscule…Government coffers prompted a call for
proper banking services and we were appointed the official banker for the newState.
Today, Queensland is in very good shape and we have a large and active
business here.
Queensland lies at the heart of many industries, from tourism to agriculture toresources, which have created the modern Australian economy.
Brisbane is now a real alternative to Melbourne and Sydney as an Australianbusiness centre and ANZ is proud to play its part in building this great city andState.
Business Performance
Turning to our business performance.
As shareholders would be acutely aware, this has been a difficult year for thebroader industry and for ANZ.
Intense competition, lower interest rates and slower credit growth have had asignificant impact on our business.
We have also needed to respond to more regulatory attention and heightenedcommunity expectations following the Royal Commission as well as increased
remediation costs.
As a result, Statutory Profit for the year was down 7%, to $6 billion.
For the businesses that will remain part of ANZ in the future, cash profit was$6.5 billion - flat when compared with the previous year.
Importantly, cash earnings per share grew 2% to 228 cents…largely due to thecapital management actions taken in recent years.
Our capital ratios remain strong and allowed us to maintain our Full Yeardividend at 160 cents…with the final dividend of 80 cents being franked at 70%.
Your board recognises how important the dividend, its franking and its
predictability is to many shareholders.
The decision to reduce franking to a new base for now was difficult but
appropriate given the changing mix of our business.
As you would know, our ability to pay you franking credits relates only to the taxwe pay Australia.

We receive no franking benefit for Australian shareholders where we pay tax inother jurisdictions and the international nature of our business sees us making
profits in Australia, New Zealand and elsewhere.
While conditions have been tough, the actions taken in recent years to improve
our business has ANZ well placed to meet the industry’s challenges as well as
the long term opportunities.
We have strengthened our balance sheet, improved our culture and continued
the simplification of our business while also becoming more efficient.
A key milestone of our simplification agenda this year was the sale of our Life
Insurance business in Australia to Zurich Financial Services for $2.9 billion, as
well as the sale of our New Zealand Life Insurance Business to Cigna for around$660 million.
We also made steady progress on the sale of our Pensions & Investments
business to IOOF, and having now received the necessary regulatory approvals,
we expect to complete this transaction soon.
This simplification agenda allows management to focus on our areas of strength,
and to win in the market.
RemediationA key outcome of the Royal Commission has been the need for the industry tourgently fix the issues of the past.
ANZ has not been immune from this challenge and we announced an additionalcharge of $682 million for remediation work.
Your Board recognises the impact this has on shareholders. This is a real costand, as a result, it has impacted the remuneration outcome for management.
However, we also know it’s vital we return customers’ money as quickly as
possible – and we have a team of more than 1,000 people dedicated to thischallenge.
If there is a positive from this work, it is that much of the time and resources
committed to the task are actually making us a stronger and safer bank forcustomers and shareholders - lessons are learned, systems are improved andoperational risks are reduced for the business going forward.
This means that these failures are less likely to occur again.
Every failure damages our customers and our reputation, and costs us money.

As we address these problems at their root, this will make us easier to deal with,more efficient – a better institution to bank with.
Capital Management
A key focus of the Board has been on the efficient use of capital, given theincreased regulatory capital required of banks around the world and theattention shareholders rightly place on return on equity.
This is highlighted by the increased capital requirements introduced into New
Zealand earlier this month.
Under the final changes announced by the RBNZ, without any management
intervention, we would be required to hold an additional $3 billion in New
Zealand over the next seven and a half years.
While the increased capital requirements remain significant, the finalisation of
the changes announced earlier this month provide the certainty required toprepare our business for the future.
We are confident we can meet the higher requirements without having to raise
new capital from shareholders given the work already completed to comply withhigher capital requirements, our early attention to the need for a strong starting
capital position and the recently announced extension to the transition period.
Board GovernanceDuring the year, our regulator APRA asked a range of banks, superannuationcompanies and insurers to take a closer look at their own behaviour andoperations.
We took this task extremely seriously and as a result we were able to identify
and reflect on many critical issues that will ultimately make ANZ more efficientand more sustainable.
For our part as directors, we identified three core areas requiring additional
Board attention:
These were ‘short-termism’, complexity, and accountability.
As a result we conducted a detailed review and formally inscribed theimportance of looking at the long-term into the Board’s charter.
We also spent significant time as a Board providing greater clarity on the role ofour various Committees.
This includes:

The role of the Board and Board Human Resources Committee in theoversight of ANZ’s culture.

The role of the Board in understanding and overseeing the impact ofANZ’s actions and operations on our customers, specifically matters suchas remediation and complaints handling.

The role of the Board and its Digital Business and Technology Committee
in the oversight of information security matters.

The Role of the Board Ethics, Environment, Social and GovernanceCommittee in oversight of who and how we bank.

And finally, the role of the Board in both the oversight and application ofour evolving accountability and consequence framework.

This year we have also continued to strengthen the composition of the Board,
welcoming Paul O’Sullivan as a Director.
While Paul will introduce himself to you later in the meeting, he brings extensive
business and technology experience and I’m confident he will make a valuable
contribution for all shareholders.
Resolutions
Before I turn to the outlook for our business, I wanted to give you the Board’s
perspective on some of the resolutions being put to the meeting today.
First, the adoption of the remuneration report. While the Chair of our HumanResources Committee, Ilana Atlas, will talk more on the approach tocompensation shortly, it is appropriate I make some initial comments.
As you may recall, ANZ recorded a ‘first strike’ last year when around one thirdof shares were voted against our remuneration report.
The Board took this very seriously and sought feedback from both ourinstitutional and retail shareholders.
As a direct result of this feedback, we have responded to shareholder concerns
in a number of ways.
This includes providing much more information on how we assess theperformance of the management team as well as improvements to accountability
and consequence management.
You will notice a significant differentiation in the remuneration awarded this year
to our executives, reflecting the different levels of accountability.

You will also note our CEO, despite a solid personal performance this year, has
had his remuneration impacted by the broader performance of the Group.
I also note here that APRA released a draft of its approach to remuneration forbanks under its CPS511 consultation paper.
We made a comprehensive submission to APRA having spent considerable timereflecting on how it impacts our remuneration structure. This was very important
given the final outcome of APRA’s review will have implications for our approachgoing forward.
The second resolution I wanted to specifically address relates to the climatechange policies of our industry associations.
As you would expect, we contribute to policy debate on social, economic andenvironmental issues affecting our customers and shareholders and we often do
this though our membership of industry associations.
However, it is not the role of any association to represent any single member’sview and from time to time we may take positions on certain matters notsupported by the relevant industry association.
For example, your bank was the first major bank to support a ‘last resort’compensation scheme for victims of misconduct in the retail financial planningsector. Such a scheme is now public policy.
That being said, we understand that a range of stakeholders are interested in
the alignment of our policy position on climate change with those of our industry
associations.
In light of this we will conduct a review in 2020 of those matters and will publish
the outcome in next year’s annual report.
I also committed to the Australian Shareholders Association, whom I welcome tothe meeting once again, that I would address the issue of auditor independence,
which we believe is fundamental to the credibility of running a public company.
Given KPMG has been our auditor since 1969, the Board has put strong
processes in place to ensure auditor independence.
In fact, our policies go beyond what is required by both the corporations’ law inAustralia and the Securities and Exchange Commission in the United States.
Any non-audit services must be signed off by the Board Audit Committee and welimit additional services to no more than 5% of audit billings in any one year.

This year it was $116 thousand or around 0.6% of our total KPMG fee. This waslowest of any of the major banks.
We also require that the lead partner involved in the external audit should not
remain in a key audit role longer than five years and should not return to theaudit team for a further five years.
The Directors are aware of their obligations in this regard and are satisfied theindependence of our auditor has not been compromised.
Your Board regularly evaluates the effectiveness of the external audit and, likewe have this year, conducts a formal review every year.
To assist shareholders, we have also resolved to include these matters in ourannual report in the years to come.
Conclusion
Ladies and gentleman, while the Board is pleased with the progress we have
made, we do expect challenging trading conditions for all banks to continue wellinto the foreseeable future.
Competition will remain intense. Regulation continues to rise and we of course
need to continue to work even faster fixing the failures of the past.
Despite the tough conditions we are facing, your Board believes we remain wellplaced to navigate these challenges given the strong progress we have made intransforming our business.
We have the right strategy and a strong balance sheet. Perhaps mostimportantly, we believe we have the right people in place to maximise ouropportunities in this complex environment.
On behalf of the Board and all shareholders, I’d like to thank all our staffmembers for their hard work and dedication to our customers.
I want them to know we appreciate their ongoing efforts.
I now invite our CEO Shayne Elliott to give you an overview of the actions weare taking to meet the challenges the industry is facing.