Media Release
For Release: 3 May 2011

ANZ 2011 Half Year Result
Good underlying momentum in core businesses continues
ANZ today announced underlying profit of $2.8 billion and statutory profit of $2.7 billion for the halfyear ended 31 March 2011 both up 3% on the preceding half (HOH). Underlying profit was 23%
higher than for the prior corresponding period (PCP) while statutory profit was 38% higher PCP.
The proposed interim dividend of 64 cents per share fully franked is up 12 cents or 23% PCP.
Group Key Points1•Underlying profit growth was driven by a 3% increase in profit before provisions (PBP) and a
9% decrease in the provision charge. PBP increased 7% PCP with provisions down 40%. Thestronger Australian Dollar reduced profit growth by around 2%.

•Underlying earnings per share was up 2% HOH and up 20% PCP. The weighted average numberof shares increased 1% HOH and 2% PCP.

•Return on equity up 30 basis points (bps) HOH to 16.7%.

•The revenue and cost growth differential or “jaws” was neutral HOH.

•Customer deposits grew 4% (6% FX adjusted) driven by Commercial and Retail in Australia andInstitutional in Asia Pacific Europe & America (APEA). Lending grew 2% (4% FX adjusted)largely driven by Retail in Australia and Institutional in Australia and APEA.

•Group net interest margins excluding Global Markets rose 3 bps2 to 2.81% reflecting somerecovery of higher funding and deposit costs in Australia and New Zealand offset by a mix
change in Institutional with higher volume growth from Asia.

•Total provision coverage3 remains strong at 2.1% of Credit Risk Weighted Assets (CRWA) withthe collective provision ratio at 1.36% of CRWA. In New Zealand, collective provision was reallocated to cover the impacts of the earthquakes. A provision was established in relation tovarious natural disasters in Australia, in particular flooding in Queensland, including anadditional $79 million charge.

Business Key Points1•Australia region profit increased 2% reflecting income growth in the Australia Division offset bylower Institutional Global Markets income. Increased provision charges related to various
natural disasters offset continuing improvements in Institutional asset quality.

•APEA region pro forma4 US Dollar profit was up 12%, PBP up 22% driven by an improved Retailcontribution and a strong performance from Institutional.

•New Zealand region NZ Dollar profit was up 19% driven by Institutional Global Markets income,good cost management and lower provisions. Some existing collective provision was reallocated to cover earthquake impacts.

•Institutional profit was up 12% pro forma with income up 4%, expenses up 8% and provisions
down 50%. Other income up 24% driven largely by Global Markets in APEA.

ANZ Chief Executive Officer Mike Smith said: “This result is in line with our first quarter trading
update demonstrating good underlying momentum in our core businesses and continued progresswith our strategic goals.
“In key businesses our position is continuing to improve with market share gains and strong
customer satisfaction.

1

All comparisons in the Group Key Points and Business Key Points are underlying and HOH unless otherwise stated
Including Global Markets, Group net interest margins declined 3 bps to 2.47%
Total provision coverage ratio is individual provisions plus collective provisions as a proportion of CRWA. Collective provision ratio is CP as a proportion of CRWA
4
Pro forma analysis adjusts for the financial impact of recent acquisitions and exchange rates
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“Our APEA Division continues to perform strongly. We saw good results in Institutional particularly in
New Zealand and in Asia; a continued improvement in the New Zealand business; and a solid but
uneven outcome in Australia with Retail performing well but Commercial and Wealth impacted bynatural disasters. These results have also benefited from improved credit quality trends in
Institutional and New Zealand although provisions have increased in Australia.
“The operating environment is continuing to present challenges. Parts of the Australian economy
have hit a flat spot with consumers and businesses becoming more conservative after the financial
crisis. In other areas we are starting to see the effects of a structural change underway as theAustralian economy continues the shift toward being based much more on hard and soft
commodities. One of those changes is the stronger Australian Dollar which has impacted ourinternational earnings. We are also managing the impact of the floods in Australia and theearthquake in New Zealand on economic activity and credit quality.
“Nevertheless our Super Regional strategy is giving us a greater exposure to Asia’s growth and it’saligning us closely to the new and emerging growth segments of the Australian and New Zealandeconomies as evidenced by the lift we are seeing in non-interest income and cross-border flows.
We are investing aggressively in these opportunities, particularly in APEA and in Institutional.
“While this is a long-term game we recognise the need to continue to deliver in the near-term.
Having put a number of building blocks in place, including through acquisition and the investments
made in building capability, we believe there is further upside in the business. This includes ourperformance in Wealth, Commercial and Institutional in Australia and Retail and Wealth in Asia.
There is also the opportunity across the bank to continue developing stronger customer
propositions, driving productivity gains from our hubs and integrating the Super Regional strategy
into all our businesses.
“This gives us confidence that we are well positioned going into the second half,” Mr Smith said.
PERFORMANCE BY REGION5
Australia
Regional profit grew 2%, the result of continued revenue growth in Retail offset by higher expense
growth in Institutional and Commercial. Provisions include a natural disaster overlay. Overall
Regional revenue growth was 2% while expenses grew 4%.
Australia Division (Retail, Wealth, Commercial) PBP increased 4%, net profit was impacted by a
69% increase in the provision charge largely due to the impacts from severe weather events.
Lending growth of 3% was largely driven by increased volume in Mortgages, Small Business and theBusiness Bank. Mortgages grew at 4% (1.2 times system) while household customer deposits grew
7% (1.6 times system) and Commercial deposits grew 10%.
ANZ is continuing to develop links to the fast growing Asia Pacific region to become the bank ofchoice for migrants from New Zealand, the Pacific and Asia. Examples of some of the initiatives
supporting this drive include simplified account opening procedures for New Zealand customers andcustomers of Shanghai Rural Commercial Bank, and the rollout of multi-lingual ATMs.
The Retail business performed well delivering PBP growth of 7%. Increased provision charges
impacted profit which was up 2%. The business grew market share in key categories and hasmarket leading customer satisfaction levels.
The Commercial business was particularly impacted by increased flood related provisioning. A goodoutcome in the Business Bank (revenue and PBP up 4% HOH), and in SME (revenue up 5%, PBP up4%), was offset by more difficult conditions for the Regional Commercial (revenue down 1%, costsflat, PBP down 2%) and Esanda businesses (revenue down 2%, costs down 8%, PBP flat).

5All comparisons use underlying profit and are HOH unless otherwise noted2

Wealth is making good progress on the OnePath integration program. The cost to income ratio
improved 60 bps and management has been strengthened with new appointments to a number ofleadership roles.
The insurance business performed well despite impacts in General Insurance from the recent
flooding, with annual in-force premiums up 5% and lapse rates improving 140 bps. WealthManagement growth rates are expected to improve as the integration benefits take hold. The focus
is on distribution efficiency and developing products which more easily integrate into the bankchannel and work well in a simpler superannuation environment.
Institutional Australia profit increased 10% assisted by a 57% decrease in provisions. Income
declined 4% impacted by the increasing geographic diversification of Global Markets revenues andstrong deposit competition while costs were up 6% as investment in key strategic initiatives, suchas the cash management platform, payments infrastructure and customer data management
capabilities continued.
Across the Australian Region we are seeing divergent credit trends with an improving corporate
credit environment being offset by pockets of stress in the Retail and Rural portfolios. The
agriculture sector remains under pressure from adverse long term weather conditions, as well as
recent flooding, and there are some signs of stress in Retail, particularly in Queensland whereunemployment rates peaked higher and later than the national average and remain elevated.
Asia Pacific, Europe & America (all figures in USD)
Momentum in the underlying business continues to build. While Institutional and Partnerships
delivered the majority of profit, the Retail business has begun to see benefits emerging from theRBS acquisition.
Pro forma profit in the region grew 12% with income up 18% and jaws positive 3%. Other income
grew 29% reflecting a strong contribution from the Institutional Global Markets business withincreased FX volumes, Commodities Trading and Fixed Income sales reflecting the continued
investment in our Markets capabilities together with favourable markets conditions and increased
client activity.
The APEA business has continued to invest for growth with much of the recent focus on expanding
and supporting distribution including continued investment in systems, core banking capabilities,operations support and risk management. Staff numbers increased 5% mainly in client facing roles
in Asia.
Customer deposits grew 22%, with lending up 19% driven mainly by continued growth inTransaction Banking through increased customer penetration and sales activity. Retail deposits
increased 53% PCP to almost $13 billion driven by the RBS acquisition and continued clientacquisition.
Progress is being made on organic expansion with ANZ’s local incorporation in China in October, theopening of a new branch in Chongqing in February and ANZ’s first branch in India to be opened midMay. ANZ deepened its relationship with its Chinese partner, Shanghai Rural Commercial Bank, witha further RMB1.65 billion (AUD250 million) investment as part of a RMB8.1 billion (AUD1.2 billion)
capital-raising to support its continued growth.
ANZ is also investing in the Retail and Wealth business and this has started to build momentum withan increased focus on affluent customer acquisition in consumer finance. Non-core segments fromthe former RBS businesses have been exited, including the sale of restructured cards portfolios inTaiwan.
In the Pacific we are implementing a strategy to modernise each of our businesses to deliver a more
focussed and efficient customer offering, including the introduction of an affluent banking
proposition for Retail. We are also broadening customer offerings in Corporate and Institutionalbanking, for example with the arrangement of a Fiji Sovereign Bond.
New Zealand (all figures in NZD)
Regional profit grew 19% with pro forma income up 4% assisted by a 17% increase in other income
reflecting the contribution from Global Markets, and a 35% reduction in the provision charge.
For the New Zealand Businesses, a 1% increase in income and a 41% decline in the provision
charge saw profit rise 20%. Costs were well managed down 4%.
3The emerging economic recovery has been disrupted by the Christchurch earthquakes and thebroader consumer and business deleveraging trend. It is expected the Rugby World Cup will deliver
a boost to the economy in the second half of the year.
Initiatives to simplify the business, drive efficiencies and improve customer experience have beentaken including the move to a single banking technology platform. An NZ$98 million post tax charge
related to that project is reflected in the half-year accounts.
The business is also leveraging the Group’s Super Regional strategy to deliver opportunities forcustomers including becoming the first major New Zealand bank to complete an RMB denominatedtrade settlement for a New Zealand company.
Margin recovery in the New Zealand businesses has continued up 5bps with lending margin
improvements partially offset by higher costs for wholesale funding and deposits. Fixed rate loans
now comprise 46% of the mortgage book versus 68% for the same period last year.
Credit quality has continued to improve. While loss rates have shown a steady reduction PCP, theFebruary earthquake in Christchurch is likely to have an impact on individual provisions over theshort to medium term. While it is still too early to quantify fully the impact of the earthquake, ANZ
considers it holds sufficient collective provisions in New Zealand to cover foreseeable losses.
INSTITUTIONAL (all figures pro forma and FX adjusted)
Institutional profit rose 12%, driven by a 4% increase in revenue and a 50% reduction in the credit
impairment charge. Other revenue grew 24% reflecting a strong contribution from Global Markets
and reduced reliance on interest income.
The Division continues to invest in diversification of Global Markets revenues and in the Super
Regional strategy with expenses up 8%. This includes building out the Cash Management platform
and Global Markets capabilities. In February ANZ became the first Australian bank to offer a TranTasman Cash Management solution. Employee numbers were up 3% with the largest increase inAsia (up 7%).
Institutional is diversifying its client base, revenue streams and geographic footprint while investingin underlying support systems, delivering more revenue from more customers in more products
across more markets than ever before. More than 670 new relationships were added during the half,
a 10% increase, while customer franchise revenues improved 6% and cross border revenues grewfurther 10%.
Global Markets income grew 12%. The proportion of revenue coming from Foreign Exchange andCommodities grew to 36% during the half up from 32% and 29% in the previous two halves.
ANZ is raising more debt capital for Australian borrowers in the Asian region than any other bankrising to first position on the Dealogic Asia Pacific (Ex-Japan) International Loan bookrunner ranking
table for the quarter to March6.
In Transaction Banking trade revenues were up 8% driven by strong growth in Asia where newcustomers were up over 250% and funded volumes grew 26%. Competitive pressure impacted
deposit revenues in Australia while deposit growth was strong in Asia with volumes up $2.9 billion.
Margins (ex Global Markets) declined 9 bps. Excluding an interest write back in the prior half,
underlying margins were 4 bps lower mainly due to mix impacts from lower margin but higher
volume lending growth in Asia. However competitive pressures are building across all regions.
Deposits grew 4% FX Adjusted (21% PCP); lending volumes have improved up 8% FX adjusted(13% PCP).
CREDIT QUALITY
The total underlying provision charge reduced 9% HOH and 40% PCP to $660 million.

6Dealogic Asia Pacific (ex-Japan) International* loan bookrunner ranking table (*defined as AUD, USD, HKD, Singapore Dollar, Euro, NZD, Sterling and JPY)

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Total gross impaired assets declined 5% reflecting a 14% decrease in impaired loans and NPCCDs7
and the sale of $720 million of Centro debt. While new impaired loans and NPCCDs decreased 21%
the inclusion of Oswal in restructured items saw new impaired assets increase 5%. ANZ continues toexpect a full recovery in relation to the Oswal exposure.
The collective provision charge was $66 million. Increased collective provision in Australia wasprimarily related to natural disasters, in particular the Queensland flooding. In New Zealand thecollective provision charge reduced; ANZ expects to be able to absorb the impact from theChristchurch earthquakes within the existing collective provision balance. Based on current
information and assumptions the Group provision charge for the year is expected to be around$1.3 billion.
The coverage ratios remain strong with the total provision ratio at over 2.1% of CRWA and thecollective provision ratio steady at 1.36% of CRWA.
CAPITAL AND FUNDING
ANZ is well capitalised with a Tier 1 ratio as at 31 March 2011 of 10.5% and a Core Tier 1 ratio of8.5%.
The Core Tier 1 ratio equates to a Pro forma Core Tier 1 ratio under Basel III (assuming fullharmonisation) of circa 9.5%. While this is well above the 7% effective Core Tier 1 minimum underBasel III, we await Australian Prudential Regulation Authority's interpretation of these revised
standards.
The ongoing improvement in funding profile has continued during the half with deposit growth.
Reliance on short-term wholesale debt has continued to reduce and now represents 11% of thefunding base while customer deposits are at 60% of funding. This outcome is likely to see ourannual term debt issuance at the lower end of the $20 billion to $25 billion range. We are wellprogressed against this target with $14 billion of term debt issued to end March.
NON-CORE ITEMS
ANZ provides underlying profit figures which adjust statutory profit for non-core items. The Group
believes that separating out non-core items helps with the analysis of the underlying businesstrends.
There was a net $154 million charge in non-core items during the half. The key items were a$75 million charge to move to a single core banking system in New Zealand and $72 million in
integration and amortisation costs associated largely with the OnePath and RBS acquisitions.
For media enquiries contact:
Paul Edwards
Group GM, Corporate Communications
Tel: +61-3-8654 9999 or +61-434-070101
Email: Paul.Edwards@anz.com

Stephen Ries
Senior Manager, Media Relations
Tel: +61-3-8654 3659 or +61-409-655551
Email: Stephen.Ries@anz.com

For investor and analyst enquiries contact:
Jill Craig
Group GM, Investor Relations
Tel: +61-3-8654 7749 or +61-412-047448
Email: Jill.Craig@anz.com

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Ben HeathManager, Investor Relations
Tel: +61-3-8654 7793 or +61-435-655033
Email: Ben.Heath@anz.com

NPCCDs – non performing commitments, contingents and derivatives

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