Media Release
For release: 15 August 2014

ANZ Trading Update – 9 months to 30 June 2014
- super regional strategy sees ANZ deliver a strong profit performance year to date ANZ today announced an unaudited cash profit1 of $5.2 billion and an unaudited statutory net profit of$5.0 billion for the 9 months to 30 June 2014, both up 8% on the same period in 2013. Cash profit
increased 6% on an FX adjusted basis.
Chief Executive Officer Mike Smith said: “ANZ has continued to perform well with strong results in Asiaand consistent performances in both New Zealand and Australia despite parts of the Australian economy
being a little slower than expected.
“Our strategy continues to strengthen our position across all key markets. In Australia, our Retail andCommercial businesses are demonstrating consistent performance with further market share increases
in home lending and continued lending growth in small business banking. After a period of subdued
demand we are seeing signs of a pick up in corporate sector borrowing appetite. In New Zealand wehave had a continuing productivity focus following the brand and systems merger and our market
position is seeing us benefit from the economic upturn outperforming peers across a range of metrics.
“Strong growth in Asia and in businesses linked to Asia continues to be a highlight. Our unique regional
capability also helped us regain the number one lead bank position in Institutional Banking in Australia
and retain the number one lead bank position in New Zealand2.
“Corporate balance sheets remain in good shape across the region, leading to strengthening credit
quality and a corresponding reduction in provisions. Combined with weak business investment, surplusglobal liquidity and strong competition though these trends also saw a further small contraction in loan
spreads.
“Our focus on productivity continues to provide us with the flexibility to adjust for the economic
environment. This includes further progress with our delivery transformation strategy which isproducing better quality outcomes for customers and further reductions in unit costs.
“Our portfolio of businesses has produced a strong profit and we are on track to meet full year
expectations. Looking ahead the balance we are creating between growth, return and capital generation
positions ANZ well for improved financial performance in the medium and longer term,” Mr Smith said.
GROUP OVERVIEW3•

Third quarter expense trends were similar to the first half with revenue trends a little softer4. The
same macro conditions that provided headwinds for revenue provided tailwinds for credit quality
which is reflected in the provision charge trend5.

•Customer deposits are up 8.3% with net loans and advances up 5.8%. Deposit growth has beenstrong across all geographies however lending demand has varied across the Group.

•Group Net Interest Margin was slightly lower compared to the end of the first half. Improved fundingand deposit pricing has been offset by some asset pricing pressure which was broadly based.

1 Statutory profit is adjusted to exclude non-core items to arrive at Cash Profit, the result for the ongoing activities of the Group
2 Peter Lee Associates Large Corporate and Institutional Relationship Banking surveys, Australian and New Zealand 2014
3 All comparisons are against the prior comparable period (YTD FY14 versus YTD FY13) and FX adjusted unless otherwise stated
4 Comment refers to trends 1H14 PCP FX adjusted. Guidance was provided on an FX adjusted basis
5 Guidance at 1H14 result was that year on year FX adjusted (FY14 compared to FY13) ANZ expected to deliver 4 to 5% revenue growth and 2%
expense growth with stable credit quality such that the credit provision charge would be around 10% lower than for FY13 (FY13 $1.2b).
Australia and New Zealand Banking Group Limited ABN 11 005 357 522

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ANZ completed the sale of its Trustees business after the close of the third quarter. As indicated inthe April 2014 sale announcement, the gain from the sale is being reinvested in a range of specificgrowth and efficiency initiatives across the Group. Both the proceeds of the sale and the investmentof those proceeds will be taken above the line at the FY14 results and clearly identified.

•The third quarter APS330 released today shows ongoing portfolio quality improvement. The
provision charge for the quarter was $246 million reflecting lower new provision requirements, less
top-up requirements and a steady level of write-backs and recoveries. Despite strong asset growth,credit risk weighted assets have been stable since the end of the December.

•On an underlying basis excluding the dividend timing impact, the CET1 capital ratio improved bycirca 20 bps for the quarter6. It is expected that the CET1 ratio will be above 8.5% at the close of
FY14 reflecting progress on Group-wide capital management initiatives, which incorporate a gradualincrease in capital as we approach calendar year 20167, along with ANZ’s ongoing focus on capitalefficiency. At 30 June the APRA CET1 ratio was 8.3% (Basel 3 fully harmonised 10.3%).

DIVISIONAL HIGHLIGHTS•

The Australia Division has performed consistently delivering steady improvement in core segments.
Home lending has now grown above system for the past 18 quarters8. Customer numbers in theCorporate and Commercial business have continued to increase and credit quality remains sound.

•The New Zealand Division has increased market share in home lending, credit cards and commerciallending9. The improving economic environment is encouraging growth in the commercial sector andANZ has been well positioned to capture the opportunity, growing comfortably above system.

•The Global Wealth business has seen good underlying momentum across key business lines. Aseries of innovations delivering simple accessible wealth solutions have been launched during theyear, including the ‘Grow by ANZ’ digital app and the Grow Centre in Sydney. Since launch, ‘Growby ANZ’ has been delivering around 6,000 downloads per week.

•In International and Institutional Banking, Transaction Banking performed well with solid growth inboth Trade and Cash Management, particularly in Asia and New Zealand. Seasonality impacts
typically see a slower second half for Global Markets. This year that pattern was heightened byhistorically low market volatility impacting third quarter trading and balance sheet revenues
however customer sales were only moderately lower and Asia continued to be strong. Year to date
Global Markets revenue is up 6% (1% FX adjusted).

OUTLOOK
Trading conditions have shown some signs of improvement coming into the final quarter of FY14. Whileasset pricing remains highly competitive, particularly in the corporate and institutional sectors inAustralia, Asian growth remains strong and we are seeing some top line momentum in New Zealandalong with some pick up evident in Global Markets volumes.
Subject to economic conditions and excluding the impact of the sale of ANZ Trustees, ANZ expects
earnings (FX adjusted) to be in line with guidance, with revenue at the lower end of guidance range andcosts well controlled ensuring revenue to cost jaws are positive. The provision charge is now expected
to be around 12% lower than for FY13..
For media enquiries contact:

For investor/analyst enquiries contact:

Paul Edwards
Group GM, Corporate Communications
Tel: +61-3-8654 9999 or +61-434-070101
Email: paul.edwards@anz.com

Jill Craig
Group GM, Investor Relations
Tel: +61-3-8654 7749 or +61-412-047448
Email: jill.craig@anz.com

Video interviews with ANZ’s Chief Executive Officer Mike Smith and Chief Financial Officer Shayne Elliott regarding
today’s trading update can be found at ANZ BlueNotes www.bluenotes.anz.com.

6 Under Basel 3, volatility occurs in quarterly capital ratios through the impact of twice yearly dividend payments (i.e. full impact of the payment
against one quarter of capital generation). Underlying basis analysis allows for the timing impact of the dividend payment by spreading thedividend impact evenly over the half
7 In December 2013, APRA released details of its Domestic Systematically Important Banks (D-SIB) requirements for Australia's major banks which
require an additional 100 bps Higher Loss Absorbency (HLA) be met by CET1 capital from January 2016 (as part of the Capital Conservation
Buffer)8 APRA monthly bank statistics June 2014 excluding the impact of the sale of Origin in September 2012
9 RBNZ system June YTD.