2012
SHAREHOLDERREVIEW

RIGHT PLACE RIGHT TIMEOUR Super Regional Strategy puts ANZ in the

DOING THEOUR PEOPLE AND UNIQUE STRATEGYARE THE KEYS TO OUR SUCCESSOur Corporate Responsibility framework is designed to help us be a more
successful business by promoting our Values and Behaviours throughout ANZ
and by responding to the interests and needs of the societies and markets inwhich we operate.

right place at theright timeright THING at theright time

ANZ is executing a focused strategy to build the best connected, most respected bank across the Asia Pacific region.

The framework was developed in consultation with more than 600 stakeholders, including staff, customers, community
groups, non-government organisations, government and regulators.

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Creating educationand employment
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More information
General information on ANZ can beobtained from our website anz.com.
Shareholders can visit our Shareholder
Centre on shareholder.anz.com.

RA

All information contained within thisdocument is for the year ended
30 September 2012 unless otherwise
stated. All figures are in Australian
dollars unless otherwise stated.

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Our work promoting money
management skills among
disadvantaged groups remains ourpriority community investment focus.

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We live inyour worldA

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About this document
The 2012 Shareholder Review provides
an overview of ANZ’s 2012 financial
and non-financial performance and theGroup’s strategic direction.

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Responsible practices
24 Delivering Against Targets
26 Responsible Practices
28 Creating Education and
Employment Opportunities
30 Building Financial Capability
32 Bridging Urban
and Rural Divides
34 Supporting Urban
Sustainability
36 Financial Five-Year Summary
37 Non-Financial Five-Year
Summary
38 Non-Executive Directors’
Remuneration
39 Remuneration Overview
42 Handy Contacts

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UNITIES2 Strategic Overview
3 Corporate Responsibility
4 Financial Highlights
5 Non-Financial Highlights
6 Chairman’s Report
8 Chief Executive Officer’s Report
10 ANZ’s Super Regional Strategy:
A Five-Year Progress Report
14 Australia
16 International & Institutional
Banking
18 New Zealand
20 Global Wealth & Private Banking
22 Global Technology, Services& Operations

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MM» Growing and strengthening the bankby diversifying our earnings.

Contents

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HELPING&B• C lit y bigri ta cel
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» Building connectivity to support
customers who are operating
increasingly within and acrossour region.
» Providing our customers with theright financial solutions and insights
to help them progress.

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ct

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Progress» Strengthening our business inAustralia, New Zealand and thePacific, while establishing a significant
presence in key markets in Asia.

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Our SUPERREGIONAL strategy

Building
financial capability

Bridging urban
and rural divides

Supporting
urban sustainability

Our programs are helping
to build financial capability
in our communities acrossour region, particularly for
those on low incomes, andthose from disadvantaged
backgrounds (page 30).

We are playing a role inhelping to bridge urban
and rural divides throughextending banking accessand supporting financial
inclusion (page 32).

We can do much to reduce
the environmental footprintof our business activities
and to encourage andsupport our customers to
reduce theirs (page 34).

ANZ Corporate Governance – Policies,
Charters, Codes of Conduct and Ethics
Information regarding ANZ Corporate
Governance including information
about the Board, Board-related
charters, the Group Codes of Conduct
and Ethics, the Conduct and Ethics
Policy Framework (including Fraud
Policy, Anti-Bribery and Anti-Corruption
Policy, Whistleblower Protection
Policy, Equal Opportunity, Bullying
and Harrassment Policy, Health and
Safety Policy), the ANZ Constitution,
ANZ Shareholder Charter and otherrelated items can be accessed on the
ANZ website anz.com/governance.

We have continued to
improve our governancestructures; managementof social, environmental
and reputation risks andopportunities; and aresupporting our customers
facing hardship (page 26).

We can make a significant
and sustainabledifference to the livesof disadvantaged andunder-represented
individuals throughproviding education andemployment opportunities(page 28).

In this review The corporate responsibility content of this Shareholder Review focuses on our material impacts, concentrating on building an engaged andethical workforce and our responsible practices, with decisions informed by ongoing stakeholder engagement. It covers the five priority areas of our Corporate
Responsibility (CR) framework, as shown in the diagram above. These matters all contribute to our building a high-performing super regional culture.
On ANZ.com Our full Corporate Responsibility Report, for the financial year ending 30 September 2012 can be read at anz.com/cr.

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F I N A N C I A L & S T R AT E G I C O V E R V I E W

FINANCIALHIGHLIGHTSNON-FINANCIALHIGHLIGHTSGroup net profit
after tax $m

Group net profit aftertax (underlying#) $m

5,355 5,661

6,011

5,652

Net loans
and advances $b

9,094 9,557

397.3

Customer deposits $b

427.8

296.8

» $14.9m directly contributed tocommunities (as community investment).

6%

5%

8%

10%

INCREASE

INCREASE

INCREASE

INCREASE

INCREASE

2011 20122011 20122011 2012» Employee engagement remained
steady at 70%.
» 37.8% women in management.

327.9

6%

2011 2012#

Group profit
before provisions(underlying) $m

Total Employees (FTE)*

Taxes Borne** $mTaxes Collected *** $m50,297^ 48,239

2,782 2,829

4,355» Nearly 87,000 hours volunteeredby employees.
» More than 200,000 people now benefitingfrom ANZ’s financial literacy programs.

2011 2012

2011

2012

3,585

4%

2%

21%

Decrease

Increase

Increase2011 20122011 2012

 NZ adjusts statutory profit for certain non-core items to calculate underlying profit. The non-core items include one-off gains and losses,
A
non-continuing businesses, timing differences on economic hedges and acquisition-related costs.

ECONOMIC CONTRIBUTION
A top

One of the

Dividend increased by

FOUR

20

STRONG

listed company

largest banks
globally

capital position

A top 4 listed company on
the ASX with over 439,000
shareholders.

One of the 20 largest
banks globally by market
capitalisation.

Common equity tier 1
ratio of 8.8%.*

4%

The economic contribution we make to society is more than financial profits.
We create jobs, pay salaries and invest in the skills of our people. We also pay
taxes in the countries where we operate, support businesses in our supply chain
and provide products that satisfy the needs of our customers.

Total dividend of 145c per
share, up 4% on 2011.

Economic value generated $m 2012:

Revenues
Economic value distributed 2012:

ACHIEVEMENTS» Delivered a record underlying profit of $6.01 billion, up 6% on 2011.

ECONOMIC» We actively participate in:» Increased diversity of revenue with 21% of group revenue derived
outside of Australia and New Zealand in 2012.
» Launched ‘Banking on Australia’, a five-year $1.5 billion program that
includes branch transformation and greater focus on new consumer
technologies and channels all aimed at delivering an improved
customer experience and more flexible, lower cost footprint.
» ANZ has been ranked the most sustainable bank globally in the 2012
Dow Jones Sustainability Index (DJSI), the fifth time in six years.
*Measured under APRA Basel II prudential capital standards

4

36,139INDICATORS

Operating costs (excluding employment) ($m)
3,754
Employee wages and benefits ($m)
4,765
122,130
Payments to providers of funding ($m)
Financial contribution we have made to the community
14.9(community investment)2 ($m)
286,758Volunteer hours donated by ANZ people» We are a member of:Since 2010 we have been carbon neutral
across our worldwide operations, using offsets
accredited to the Australian Government’s
National Carbon Offset Standard (NCOS).

*FTE excludes staff on special leave including leave without pay, parental leave and long-term sick leave. **Taxes borne: immediate cost to
ANZ; impact to the profit and loss account and includes income tax, GST/VAT and employment taxes. ***Taxes collected: No cost to ANZ.
Collected from customers, suppliers and employees etc on behalf of the revenue authorities.
^2011 FTE numbers adjusted to include APEA contractors.
1
Payment to providers of funding includes all amounts pertaining to dividends paid to shareholders, interest payment made to providers ofloans, interest on all forms of debt and borrowings as well as arrears of dividends due to preferred shareholders. 2 We measure community
investment using the London Benchmarking Group (LBG) methodology. This does not include forgone revenue.

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F I N A N C I A L & S T R AT E G I C O V E R V I E W

YOUR

DIRECTORS>

john Morschel>Chairman

A MESSAGE FROMJOHN MORSCHEL

Chair of GovernanceCommittee
LLB (Melb), FAICD
Director since November 2008. Member of the
Audit and Human Resources Committees.

The final dividend of 79 cents per share brings the total
dividend for the year to 145 cents per share fully franked,
an increase of 4%.
Our capital position remains strong, placing ANZ among theworld’s best capitalised banks and we remain one of only asmall number of banks globally which have maintained an
AA rating from all three credit ratings agencies.
Super Regional Strategy
Over the past five years we have had a consistent focus
on creating the region’s best connected and mostrespected bank.
2012 has been another year of achievement. In Asia, we
continued to invest. For example, in our subsidiary bankin China we increased capital to support growth. Greater
China, including Hong Kong and Taiwan, is now ANZ’slargest market outside Australia and New Zealand. We also
opened our first Malaysian branch in Labuan.

Director since February 2004.
Member of the Risk and Human
Resources Committees.

>

LEE HSIEN YANG
MSc, BA
Director since February 2009.
Member of the Risk, Human
Resources and Technology Committees.

IAN MACFARLANE, AC>

DAVID MEIKLEJOHN, AM

Chair of Risk Committee

Chair of Audit Committee

BEc (Hons), MEc, Hon DSc (Syd), Hon DSc(UNSW), Hon DCom (Melb), Hon DLitt(Macq), Hon LLD (Monash)

BCom, DipEd, FCPA, FAICD, FAIM
Director since October 2004. Member of
the Technology and Risk Committees.

Director since February 2007. Member of
the Governance and Audit Committees.

>

In Australia and New Zealand, our largest markets, we also
continued to invest in customer service and innovation,and in leveraging connectivity with our international
network. This is increasingly a source of differentiation,
particularly in Commercial and Institutional banking.

Australia but has since regained momentum. Although wehave maintained strong customer satisfaction in New Zealand,
management refocused their efforts on improving satisfactionin Australia. There was early recognition of our progress with
ANZ receiving awards1 as Bank of the Year, Mortgage Lenderof the Year and Business Bank of the Year in 2012.

At the same time, we have increased our focus on simplifying
the bank and on containing cost growth. Alistair Currie
was appointed to the role of Group Chief Operating Officer
to deliver a more integrated approach to technology,
shared services and operations. In New Zealand, we madesignificant progress with our simplification program,including our migration to one technology platform anda decision to move to a single brand.

We were also pleased to be recognised for our long-term
commitment to building the money management skills
and savings of disadvantaged groups, receiving two major
awards at the MoneySmart Week Awards in Australia.
Throughout 2012, we have continued to equip our people
for high performance, continuing to support them to makeethically, socially and environmentally responsible decisions,while promoting their wellbeing.

Customers, our People and the Community

We have linked ANZ’s super regional strategy to our
corporate responsibility framework and continued to workwith stakeholders to guide our activities. This includes
reviewing and improving our responsible lending practices
which have been built into our training programs.

Since the onset of the global financial crisis, the reputationof banks throughout the world has been challenged.
Although Australian banks have remained strong
throughout this period, we have also had to face up tocommunity concerns about our industry and increase ourefforts with customers and with the wider community.
As we made structural changes to our business in 2012 toadjust to the more difficult operating environment, ourleading position on retail customer satisfaction slipped in>

Director since April 2012.
Member of the Audit and Risk
Committees.

This information sets out Board Committee memberships as at
30 September 2012. Full biography details can be found on our website:
anz.com/about-us/our-company/executive/board-of-directors.

ANZ delivered a STRONG FINANCIAL RESULT IN 2012 AND MADE CONSIDERABLE PROGRESSWITH ITS SUPER REGIONAL STRATEGY.

I am pleased to report that ANZ’s statutory profit after tax
for the year ended 30 September 2012 was $5.7 billion, up
6%. This good performance reflected continued progresswith our super regional strategy which saw growth acrossour key businesses in Australia, New Zealand and Asia
Pacific, together with a renewed focus on cost management.

PETER Hay

Paula Dwyer
BCom, FCA, F Fin, FAICD

BSc (Hons), PhD, FAPS, FTSE

Director since October 2004.
Chairman since March 2010.
Ex officio member all Committees.

>>

Chair of Technology
Committee

DipQS, FAICDCHAIRMAN’S REPORT

GREG CLARK

ANZ was ranked the most sustainable bank globally in the2012 Dow Jones Sustainability Index.
1Money magazine Bank of the Year and Home Lender of
the Year. AFR Capital Business Bank of the Year 2012. Top 5
Corporate Bank, Greenwich Associates Survey 2012.

MICHAEL SMITH, OBE>

ALISON WATKINS

Chief Executive Officer
Executive Director

Chair of Human
Resources Committee

BSc (Hons)

BCom, FCA, F Fin, FAICD

Chief Executive Officer since 1 October 2007.

Director since November 2008. Member ofthe Audit and Governance Committees.

Outlook
The global economy is softening as we enter our 2013
financial year with many European economies contracting
and the United States continuing to recover slowly.
Although China’s economy is also in a managed slow-down
we expect it will continue to grow at 7–8% in 2013. This will
see Asia remain the best performing region in the world.
In Australian and New Zealand consumer and business
confidence remains weak and growth during 2013 is
expected to be around 2.7% and 2.5% respectively.
Although the year ahead looks challenging with headwinds ina number of areas, ANZ’s unique strategy and the momentum
we have in adapting to the new environment for banks means
we are well placed to deliver value to our shareholders, ourcustomers and the community.
Finally, on behalf of shareholders, I would like toacknowledge the commitment and dedication of ourmanagement team and of all our 48,000 staff who haveworked so hard in 2012. My thanks also go to my fellow
Directors for their commitment and support during the year.

>

JOHN MORSCHEL
Chairman

6

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F I N A N C I A L & S T R AT E G I C O V E R V I E W

MANAGEMENT

BOARD

>

SUSIE BABANI>Group Managing Director,
Human Resources

C H I E F E X E C UT I V E O F F I C E R ’ S R E P O R T>

A MESSAGE FROMMICHAEL SMITH

Revenue grew 5% with market share gains across key
segments and geographies. We continued to invest in our
strategy and future growth with costs up by 4%, but at thesame time we increased our focus on productivity which saw
cost growth trend lower during the year.
Our focus on costs resulted in significant change across
ANZ which impacted many of our staff and so I am pleased
to report that employee engagement remained steady at
70%. Our aim remains to reach global best-in-class standards
through a bank-wide commitment to customer service andto ensuring ANZ is a great place to work.
Divisional Performance
In the Australia Division we produced a solid result with profit
up 4% benefiting from market share gains, tighter managementof margins and a strong productivity focus. Retail lending grew
7% while average deposits grew at 12%. Commercial also
performed well, with average growth in customer numbers
and continued leverage of our regional capabilities.
1

8>Group Chief Operating Officer

Our 2012 results highlight that after five years ANZ’s super regional
strategy is delivering and has growing momentum.

ANZ has delivered another good performance1 in 2012
through a consistent focus on delivering our super regional
strategy by strengthening our domestic businesses inAustralia, New Zealand and the Pacific while driving
significant growth in Asia.

ALISTAIR CURRIE

Profit grew 3% in the International and Institutional
Banking Division. The division continues to grow anddiversify its earnings by geography, product and customer
with 43% of revenue and 54% of deposits now derived fromoutside Australia and New Zealand. This includes significant
growth in many of our priority segments based on theconnectivity of our international network, although this wasoffset by softer demand for loans and significant margin
contraction in Australia.
New Zealand delivered a good performance with profit up
12%. Business simplification showed benefits with improved
financial results based on productivity improvements andmarket share growth in key segments. We also announced
we would move to one brand in New Zealand – the ANZ
brand, and in late October 2012 we reached a significant
milestone when we moved to a single technology platform.
Profit from the newly-formed Global Wealth and Private
Banking Division was flat, in line with market conditions,however we saw improving performance trends during theyear, particularly in insurance and investment earnings, andthrough productivity gains.
Credit quality was stable with ANZ’s provision charge of$1.25 billion broadly in line with 2011 and the Group’s
provision coverage remains strong.

>

JOYCE PHILLIPS
Chief Executive Officer, Global
Wealth and Private Banking>

SHAYNE ELLIOTT>

ALEX THURSBY
Chief Executive Officer,
International & Institutional
Banking

Our Strategy and the Environment for Banking
While ANZ delivered a good performance in 2012, just as
important has been our strategic progress.
Five years ago, we articulated an ambition to create
value for our shareholders, our customers and the wider
community by becoming a super regional bank – a bankof global quality with regional focus. This included an
aspiration to source 20% of our revenues from outside
Australia and New Zealand.
I am pleased to report, despite having endured the global
financial crisis, our network in Asia Pacific, Europe andAmerica contributed 21% of Group revenue in 2012.
To deliver this outcome, the scale of transformation over the
past five years has been significant, involving a systematicand coordinated program of action in every area of thebank. In this Shareholder Review we have provided a
progress report on our strategy showing how we havestrengthened ANZ in our key domestic markets in Australia
and New Zealand while building a much bigger business in
the growth markets of Asia Pacific.

>

Chief Executive Officer,
New ZealandChief Financial Officer>

DAVID HISCO

ANNE WEATHERSTON
Chief Information Officer

PHILIP CHRONICAN
Chief Executive Officer,
Australia

GRAHAM HODGES
Deputy Chief Executive Officer>

NIGEL WILLIAMS
Chief Risk Officer

While we have made significant progress, the journey is notover. We have set new aspirations which will see further
growth, particularly in Asia, while also adapting the bank to
the post‑financial-crisis world.
We believe the lower growth business environment that wehave seen following the financial crisis will be with us forthe foreseeable future. We have been actively responding tothese fast-changing and challenging conditions in different
markets by driving both growth and productivity.
Our 2012 results highlight that after five years, ANZ’s
super regional strategy has growing momentum.
ANZ has moved from being a largely domestic bank to an
integrated and growing, regionally focused internationalbank that is increasingly delivering differentiated value
and performance.

>

MICHAEL SMITH
Chief Executive Officer

All figures on an underlying basis unless noted otherwise.

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F I N A N C I A L & S T R AT E G I C O V E R V I E W

At the same time, we have undertaken a multi-year program toshift ANZ’s culture and invest in the training and developmentof our people to focus more strongly on performance
underpinned by a clear set of Group-wide values.
Capital has increased by around $11 billion since 2007
with the Group’s Common Equity Tier 1 capital ratio at
10.0% at the end of 2012 on a Basel III1 internationallyharmonised basis.
We have established an enterprise approach to technology
and we have delivered good progress. This includes
a significant program to upgrade our technology
infrastructure and improve systems security, stability andstandardisation, and to respond to growing demand, scaleand complexity in the business. This has included deliveryof new cross-border systems in trade, cash management,
capital markets and foreign exchange.
We also established a strong sense of purpose with a clear
five-year roadmap to source 20% of revenues from Asia Pacific
Europe and America by end of 2012. In 2011, we extended
that roadmap with an aspiration to source 25% to 30% ofrevenue from Asia Pacific, Europe and America by 2017.

ANZ’s Super Regional Strategy:
A FIVE-Year Progress Report

To support this, a new brand and visual identity was createdthat was relevant in Asia and consistent throughout theregion. At the same time, we have continued our focus on
corporate responsibility. Our contribution to the community
has been guided by our corporate responsibility frameworkand has included a significant investment in building
financial capability. ANZ was recognised as Global Sector
Leader in the Dow Jones Sustainability Index in 2007, 2008,2009, 2010 and 2012.
Global Financial Crisis –Remediation and Opportunity

ANZ’s Super Regional Strategy is clear, consistEnt and aligned to the growth
opportunities in Australia, New Zealand and Asia Pacific.

Five years ago, at the start of the 2008 financial year, ANZ
embarked on a strategic journey which recognised there
was a unique opportunity to create value for shareholders
by becoming a super regional bank – a bank of global
quality with regional focus.

The scale of transformation at ANZ over that time has beensignificant, based on five key themes and a systematic andcoordinated program of action in every area of the bank.

The move recognised a once-in-a-century shift underway
in the global economy as growth opportunities moved fromthe developed economies of the West to Asian economies
and China in particular.

From early in the 2008 financial year, ANZ undertook aseries of fundamental changes to enable us to successfully
execute our strategy.

Five years later, ANZ’s super regional strategy has growing
momentum with investors ranking ANZ highly for its
long‑term growth strategy.

Super Regional Building Blocks

We recognised that ANZ would need a different sort ofmanagement team to build a significant international
business and we recruited a number of senior international
bankers and Asian insiders. This was supported by the
introduction of a new management model focused on
geographies and customer segments rather than theindividual product approach of the past.

These building blocks placed ANZ on a much stronger
footing, however the onset of the global financial crisis
during 2008 posed a number of challenges requiring
significant and, at times, painful remediation.
This involved focus on addressing customer andreputational issues arising from non-core businesses.
Subsequently, ANZ exited a number of these non-corebusinesses including custodian services, securities lending,private equity, institutional stockbroking and wholesalemortgage management.
At the same time, recognising the weaker economic
environment and the needs of our super regional strategy,
we brought in experienced risk management professionals
into key leadership roles and strengthened risk policies
and processes throughout the bank.
As business conditions tightened we also simplified the way
we ran the bank and started a multi-year process of driving
strategic cost reduction. This included reducing the layers of
middle management and investing in our offshore
operations and technology centres in Bangalore andestablishing new centres in Manila and Chengdu.

1

10

Despite these issues, our financial strength also allowed us
to look at the crisis as a time of opportunity. We:» acquired Asian assets from the Royal Bank of Scotland in
Taiwan, Singapore, Indonesia, Hong Kong, the Philippines
and Vietnam with approximately two million clients» purchased the remaining 51% of our wealth management
joint venture with ING in Australia and New Zealand» acquired the deposit and lending books of Landmark
boosting our presence in agribusiness in Australia.
The crisis and subsequent retreat from Asia by weakenedbanks from Europe and the United States also createdsignificant opportunities for organic growth by using ourstrong credit rating and balance sheet strength to step inand win business from quality customers.
The end result is that ANZ came out of the financial crisis astronger bank than we went in. Today we are one of the best
capitalised banks in the world with sector-leading capitalratios and one of only a small number of banks in the world
rated AA or better.
Establishing a Real Franchise in Asia
While ANZ had an established presence in Asia in 2007,
our country representation was often small and basedon limited banking licences. This has required significant
investment to build banking capability, introduce newtechnology, and to obtain regulatory approval for licences
to provide a wider range of services to customers.
Some highlights have included:» increasing our presence in China through local
incorporation in 2011 and opening new outlets andbranches in Beijing, Shanghai, Guangzhou and Chongqing,a Rural Bank in Liangping and an operations centre in
Chengdu. Total staff numbers have now reached 700
compared to 100 in 2007. We also have two partnershipinvestments with Shanghai Rural Commercial Bank andthe Bank of Tianjin» growing to become one of the largest international banksin Indonesia with 1,100 people working in 28 branches.
This compares to just two branches and 150 people in2007. We have also increased our strategic investment in
PT Panin Bank to 39% up from 30% in 2007
» expanding in the Philippines by obtaining a universalbanking licence and establishing an operations centre in
Manila. We also have a successful credit card joint venturewith Metro Bank» locally incorporating in Vietnam, paving the way to
expanding the branch network and services with
750 employees now in 11 outlets» re-commencing operations in India with the opening of abranch in Mumbai while also continuing to invest in ANZ’soperations and technology centre in Bangalore where wehave 5,600 staff compared to around 1,800 in 2007.

 NZ’s interpretation of the regulations documented in the Basel Committee publications; ‘Basel III: A global regulatory framework for moreA
resilient banks and banking systems’ (June 2011) and ‘International convergence of Capital Measurement and Capital Standards’ (June 2006).

11

F I N A N C I A L & S T R AT E G I C O V E R V I E W

ANZ has over 2.6 million
customers in Asia Pacificsupported by around
8,200 employees and 100
branches and pointsof representation.

>
We have also seen growth in other countries in Asia, forexample in Japan and in Korea. In Taiwan we now have
1,700 employees working in 18 branches. In our two
regional commercial hubs, in Hong Kong we employ around
1,100 people up from 30 in 2007, and in Singapore we
employ 2,000 people up from 150 in 2007. We also have an
important partnership with Malaysia’s AmBank in which we
hold a 24% stake, up from 19% in 2007.

In addition to growing in key segments, our super regional
strategy is seeing us build greater connectivity with our
network in Asia Pacific. In Retail, ANZ is the bank of choicefor customers coming to Australia from the region, forexample, Asian students coming to Australia and mortgages
for offshore Chinese residents. We have also leveraged
our regional network in Commercial where more than
two‑thirds of our customers have connections to Asia.

Throughout our international network, including the Pacific,
our expansion has been underpinned by a concerted
investment in upgrading premises to the standard of aninternational bank and to accommodate larger numbersof staff. This includes new signature offices in Singapore,
Hong Kong, Shanghai and Port Moresby as well as
investments in upgrading branches throughout the region.

In Institutional, we have focused on our strengths innatural resources, agriculture, infrastructure and financial
institutions – segments that are directly linked to Asia’s
growth. We have also seen substantial growth in the areas
we have invested in to support that strategy – in foreignexchange, trade and cash management.

The end result is that ANZ has built a significant businessin Asia Pacific with 2.6 million customers up from 925,000
in 2007. Our customers in Asia are supported by 8,200
employees, and 100 branches and points of representationcompared to just 30 in 2007. This has seen ANZ emerge asa leading international bank in the region. For example, in2012 ANZ was ranked as a top five Corporate Bank in Asia
by Greenwich Associates; five years ago ANZ ranked outside
the top 20.
Strengthening Australia, New Zealandand the Pacific
A key element of ANZ’s strategy is continuing to strengthen
our position in Australia, New Zealand and the Pacific.
In Australia our focus has been on growth in traditionalbanking in retail deposits, mortgages and commercial
banking as well as wealth solutions.

12

ANZ has also upgraded its premises in Australia rationalising
offices in Melbourne and opening a new 6-Star Green Star
global head office. New office premises have also opened in
Adelaide and Brisbane, and in Sydney we will move to newpremises in 2013.
To capitalise on the momentum in the Australian business,a five-year $1.5 billion investment program was announced
in 2012 to upgrade ANZ’s distribution network, simplify
products and processes, provide customers with additional
mobile and flexible banking options, and initiatives tosupport local communities.
In New Zealand, ANZ has a leading market position
across Retail, Wealth Commercial and Institutional witha relationship with more than two million customers –around 50% of New Zealanders.
Our focus has been on undertaking a major transformation
to simplify our business, reduce costs and improve thebanking experience for our customers. This has included atransition to one management structure across both
the ANZ and The National Bank brands, one customer
approval process and one set of products. More recently wehave moved to one brand and one core banking system.
We have also renewed our focus on growth opportunities.
In Retail for example, we are connecting New Zealanders
travelling and migrating to Australia, the Pacific and Asia,and targeting growth in mortgages particularly in the
Auckland region. In Commercial and Institutional, we
have extended our market leadership by leveraging ourinternational network to support New Zealand’s export
sector, particularly in agriculture.
A $100 million investment will also be made over the
next two years to ensure ANZ has a well positioned andattractive branch network for customers in current andnew communities. ANZ’s head office in Auckland is also
undergoing a major refurbishment.
In the Pacific, ANZ provides banking services to 500,000
customers in 12 countries across retail, wealth, commercial
and institutional. Our focus has been on continuing tosupport customers including opportunities associatedwith growing trade and investment linkages with Australia,
New Zealand and Asia, and on operational efficiency.
Adapting to the Lower Growth Environment
While we have been continuing to build on our strengths in
our major domestic markets of Australia and New Zealand,and exploiting the growth opportunities in Asia, we haverecognised that the global economy will be weaker for sometime, with growth in banking more closely following growth in
the economy.

The magnitude of the shift the banking industry is facing issignificant around the world and we are actively adapting
ANZ to this environment. Loan growth is lower and funding
costs are higher. At the same time, increased regulation andgrowth in our business means we now hold almost twice asmuch capital as we did in 2007.
The implication is that now and for the foreseeable future,
we need a much greater emphasis on productivity and on
capital efficiency. This means:» more actively managing capital across our portfolio of
businesses so we continue to build out our super regional
strategy in the most capital-efficient way» re-engineering the way we operate to drive along‑term, sustainable cost advantage particularly byusing the flexibility provided by our operations andtechnology hubs.
Delivering on our Promises
ANZ’s super regional strategy is clear, consistent and aligned
to the economic opportunity in the Asia Pacific region.
Over the past five years we have dramatically transformed
ANZ, creating a business portfolio diversified by geography,
by business and by industry focus. It provides us with options
and choices to deliver differentiated revenue growth –choices that are not available with a domestic‑only strategy.
Since 2007, this transformation has seen ANZ move frombeing a largely domestic bank to an integrated and growing,regionally focused international bank that is increasingly
delivering differentiated value and performance toshareholders, customers, staff and the community.

13

D i v isional P erformance

CASE
STUDY
Australia

Regional presence andsector expertiseRemondis is one of the world’s leading water andenvironmental services companies and this year selected
ANZ to deliver all its banking services across Australia and
New Zealand.
Headquartered in Germany, Remondis promotes the
economic and efficient use of natural resources to over
20 million individuals and thousands of companies
around the world. Such services include water supply andwater production, recovery of raw materials from waste,innovative recycling products and alternative forms ofenergy production. ANZ’s extensive network, spanning
Germany, Australia, New Zealand and the Asia Pacific region
is well aligned to Remondis’ own business activities andfuture plans.

AU S T R A L I A

Australia

Remondis Australia Chief Financial Officer David Cohen:“ANZ showed Remondis that it could quickly respond to
our needs, delivering banking facilities that supported ouroperations across Australia and New Zealand. Moreover,the bank had a deep understanding of our sector andshowed our management insights and expertise todeliver sophisticated solutions that support our own
growth agenda.”

PHILIP CHRONICAN
Chief Executive Officer, Australia

We are focused on making it easier for our customers toprogress by understanding their goals, and by leveraging
the local and international connectivity of ANZ’s network.
Australia is ANZ’s largest market and in 2012 we announced
a five-year $1.5 billion investment program to make iteasier for our customers to deal with us and easier for ourpeople to meet our customers’ needs and the community’s
expectations.
BUSINESS HIGHLIGHTS» Delivered a solid financial performance, with profit in
Retail up 4% and in Commercial up 5%.
» Achieved above system growth in Housing Lending andin Household Deposits1.
» Grew Traditional Banking market share to 13.7% overthe 12 months to August 2012.
2» Extended ANZ’s popular mobile banking application,
ANZ goMoneyTM to Android devices. More than 780,000
users are now registered to use ANZ goMoneyTM with over
30 million transactions valued at more than $17 billion
conducted in 2012.

» Completed more than one million A-Z Reviews helping
retail customers and small businesses with theirfinancial goals.
» Acquired 30,000 new Commercial customers largely insmall business banking helping to deliver lending growthof 9% and deposit growth of 9%.
» Commenced providing Australian property mortgages toChinese nationals seeking to invest in Australian property.
» Customers now able to apply for hardship assistanceonline via anz.com.
Our progress with our customers, our people and in
our community contribution was also recognised bya series of awards.
» Money magazine’s Bank of the Year and Home Lenderof the Year.
» The Australian Financial Reviews Capital magazine’s
Business Bank of the Year.
» Disability Employment Award and Indigenous
Employment Award at the inaugural Australian Human
Resources Institute Diversity Awards.
» MoneySmart Week Outstanding Achievement award forour research into financial literacy in Australia and for our
Saver Plus program.

1
2

14

Remondis Australia>

Across ANZ’s Australian Retail and Commercial businesses,
we serve approximately six million customers through our
network of around 800 branches, 115 business centres, our
24-hour contact centre, 2,700 ATMs and leading online andmobile banking applications.

APRA banking statistics.
Source: Roy Morgan Research: Aust Pop’n aged 14+, rolling
12 months, Trad Banking Consumer Market (Deposits, Cards& Loans), Peers: CBA (excl Bankwest), NAB, Westpac(excl Bank of Melbourne & St George).

Financial Performance# ($m)

20122011 Movt%

Non-Financial Performance##

2012

2011

Operating income

7,118

6,967

2%

Retail Customer Satisfaction

76%

80%

(source: Roy Morgan Research –Main Financial Institution)

Total employees (FTE)*

13,982

14,635

Employee engagement

70%

72%

Operating expenses(2,893) (2,836)

2%

Profit before credit impairment
and income tax

4,225

2%

Provision for credit impairment

(666)

(719)

-7%

Profit before income tax

3,559

3,412

4%

Income tax expense andnon‑controlling interest(1,067) (1,022)

4%

Volunteering hours2

Profit after tax

2,492

2,390

4%

GHG emissions (tonnes CO2-e)

247,531 231,113

7%

Paper5 (tonnes per FTE)

Total assets
Contribution to group earnings

41%

4,131

Total Women in Management

1

Community investment2 ($m)
3

42.9%

43%

33,53443,5609.5

11.8

163,906 166,3114
0.16

0.17

42%

#
Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group, including one-off gains
and losses, non-continuing businesses, timing differences on economic hedges and acquisition-related costs. ## Customer and employee
data reported by Division, environmental data reported by geography. * FTE excludes staff on special leave including leave without pay,parental leave and long-term sick leave. 1 Women in management is calculated using a head count of active employees and includes staff
working for and being paid by ANZ. 2 Calculated according to the London Benchmarking Group methodology and excludes foregone
revenue. 3 Pending external verification. Includes Scope 1 and 2 emissions, developed in accordance with NGERS. A detailed GHG profile(Scope 1, 2 and 3) and our full environmental report will be available on anz.com. 4 Figure updated from 166,756 as reported last year due
to updates of estimates to actual figure 5 Pending external verification, includes both office and print (customer) paper.

15

DIVISIONAL PERFORMANCE

CASE
STUDY
International &Institutional Banking

Our super regional
strategy at work

International and Institutional Banking delivered its first
Chinese Yuan currency transaction for a major natural
resources customer in December 2011, with a first of its kind
Yuan-denominated and US dollar-hedged supply contract
for Fortescue Metals Group.
The hedge contract enabled Fortescue to pay US$93 million
worth of Yuan for Chinese manufactured rail transport cars
as part of a broader expansion of its Pilbara operations inWestern Australia.

EUROPEASIA

PAC I F I CInternational &Institutional BankING
ALEX THURSBY
Chief Executive Officer, International and Institutional Banking
Business Profile
International and Institutional Banking has a global focus
on large multi-national companies and Institutions withsophisticated needs, along with a fast-growing Commercial
business and a Retail business serving affluent andemerging affluent customers in Asia.
The division is spearheading ANZ’s ambition to be a superregional bank with a growing presence and capability
across Australia, New Zealand and 28 markets in Asia Pacific,
Europe and America (APEA). We now serve more than
2.6 million Institutional, Commercial and Retail customers.
Our goals are to help deliver on ANZ’s aspiration to source
25 to 30% of Group revenue from APEA by 2017, and tocontinue to grow our Institutional business in Australia and
New Zealand.
Business Highlights» Delivered a sound financial performance with profit up 3%.
» Global Markets continued its strategy to grow customer
sales with revenue up 14%.
» Received a retail Renminbi (RMB) licence becoming
the first Australian bank to offer a range of RMB-related
products and services to retail customers in China.
» Invested a further $300 million in our locally incorporated
subsidiary in China with seven outlets in Beijing, Shanghai,Chongqing and Guangzhou.
» Donated 75,000 Fiji Dollars to the Fiji Red Cross, The Prime
Minister’s Flood Relief Appeal and local charities to support
those affected by devastating floods in March 2012.

16» Delivered the MoneyMinded financial literacy program in
Papua New Guinea, Fiji, American Samoa and Cook Islands,
while establishing pilot programs in India, Vietnam,
Indonesia, Hong Kong, Solomon Islands, Timor Leste,
Vanuatu and Kiribati.

ANZ has a designated Chinese currency team basedin Hong Kong to support its customers and help themcapture opportunities as the internationalisation of theYuan for trade settlement purposes accelerates, and is well
positioned to expand its currency and hedging services withsome of the world’s biggest natural resources companies.

Fortescue Rail>AMERICAThis was the first time Fortescue signed an underlying
contract in Yuan and then hedged this in US dollars. Settlingtrade transactions in Yuan can provide benefits for importers
and exporters with trade ties to China. These range fromadded convenience, cost and pricing advantages, as well as
relationship benefits for both parties. The wider use of theYuan in offshore markets also provides hedging flexibility
for companies as their Yuan exposures can be managed ona global basis.

» Opened our first street-level branch in Hong Kong in
one of the city’s busiest retail and commercial districts.
The flagship Kowloon branch supports the banking needsof Retail and Commercial customers.
» ANZ Transactive is a web-based cash management
platform for Institutional and Commercial customers.
This product has now been deployed into Australia,
New Zealand, Singapore, Hong Kong, Japan and thePacific. Deployment into remaining markets will befinalised by the end of 2013.

Financial Performance# ($m)

20122011 Movt%

Non-Financial Performance##

Operating income

6,592

6,190

6%

Operating expenses(2,933) (2,757)

6%

Institutional Relationship Strength
Index ranking

Profit before credit impairment
and income tax

3,659

3,433

7%

The continued growth of International and Institutional
Banking is based on a significant commitment to building
customer relationships. In 2012 we:

Provision for credit impairment

(427)

(293)

46%

Profit before income tax

3,232

3,140

3%

Income tax expense andnon‑controlling interest

(860)

(839)

3%

Profit after tax

2,372» retained the No. 1 Relationship Strength Index position
for Lead Relationships in the 2012 Peter Lee Associates
Large Corporate and Institutional Relationship Banking inAustralia Study» ranked as a top five corporate bank in Asia by Greenwich
Associates. Four years ago, ANZ ranked outside the top 20» were voted the No. 2 foreign exchange provider in Asia
Pacific in Asiamoney magazine’s 2012 poll. Last year, ANZ
ranked outside the top 10

Total assets
Contribution to group earnings

2012

2011

2

1

Total employees (FTE)*

16,04916,527

Employee engagement

70%

N/A

(source: Peter Lee Associates Large Corporate
and Institutional Relationship Banking
Report 2012, Australia. Ranked against top
four competitors.)

Total Women in Management

37%

30%

2,301

3%

Volunteering hours2

7,748

8,434

276,306 259,397

7%Community investment2 ($m)

0.67

0.85

39%

1

41%

#
Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group, including one-off gains
and losses, non-continuing businesses, timing differences on economic hedges and acquisition-related costs. ## Customer and employee
data reported by Division. * FTE excludes staff on special leave including leave without pay, parental leave and long-term sick leave.
1
Women in management is calculated using a head count of active employees and includes staff working for and being paid by ANZ.
2
Calculated according to the London Benchmarking Group methodology and excludes foregone revenue.

» ranked the No. 1 mandated lead arranger for syndicatedloans in Asia Pacific (excluding Japan) league tables byThomson Reuters.

17

DIVISIONAL PERFORMANCE

CASE
STUDY

New Zealand Simplification
Project: building
New Zealand’s best bank

New Zealand

ANZ New Zealand, which traces its roots back to early
European settlement in 1840, bought The National Bank in2003 and ran both brands for almost 10 years. From October
2012 we started to combine the brands into one. ANZ.
This was a logical and important next step after
progressively reducing duplication and simplifying our
New Zealand business by creating one management
structure, one approval process for customers, one set of
products and one technology platform.
NEW ZEALAND“We use the ANZ brand in 32 markets globally and thelicence agreement for the National Bank logo expires in
2014, so it makes sense for us to make this decision. We wantto build New Zealand’s best bank and this will help us do it,”said CEO New Zealand, David Hisco.

New Zealand

The move to one brand further strengthens ANZ in the
New Zealand market, making it easier for the bank toconnect customers across its global network.
ANZ is New Zealand’s largest financial services provider withmore branches and ATMs than any other bank and is thecountry’s first major bank to offer trade deals in Renminbi– making it easier for New Zealand firms to do businesswith China.

DAVID HISCO
Chief Executive Officer, New Zealand2012 has been a year of significant change for ANZ in
New Zealand. In September, we announced that afteralmost 10 years of operating ANZ and The National Bankin New Zealand, the two brands would progressively be
brought together as ANZ.
This major change will combine the best of both banks –ANZ’s strength and presence across Asia Pacific and The
National Bank’s reputation for customer service. It will besupported by a $100 million investment over the next two
years to ensure ANZ has a well positioned and attractive
branch network in current and new communities.

» Completed preparations for the adoption of a single corebanking system which was completed in October 2012.

ANZ and The National Bank combine» Established a $120 million start-up package to help
young farmers.
» Launched a mobile banking application for Android
smartphones, building on the success of the ANZ
goMoneyTM banking application which, together, haveseen 100,000 customers perform an average $2.5 million
transactions a month.

Financial Performance# ($m)

20122011 Movt%

Non-Financial Performance##

2012

2011

Operating income

2,097

2,017

4%

Retail customer satisfaction

89%

89%

» ANZ (source: Nielsen Consumer
Finance Monitor)

Total employees (FTE)*

7,841

8,195

Employee engagement

74%

70%

Operating expenses

(921)

(906)

2%

Profit before credit impairment
and income tax

1,176

1,111

6%

Provision for credit impairment

(148)

(166)

-11%

» Committed up to $500 million in new discounted
mortgage lending to customers impacted by theCanterbury earthquakes.

Profit before income tax

1,028

945

9%

Income tax expense andnon‑controlling interest

(285)

(283)

1%

Volunteering hours2» Launched a New Zealand MoneyMinded pilot program
teaching savings and money management skills.

Profit after tax

743

662

Total assets

71,816

69,072

Our progress in supporting our customers was recognised
through a number of awards during 2012.

Contribution to group earnings

12%

12%

BUSINESS HIGHLIGHTS» Delivered a good financial performance, with profit
up 12%.

» OnePath was named the Morningstar Fund Managerof the Year and KiwiSaver Manager of the Year.

» Achieved Retail market share gains, particularly inmortgages in the larger and growing Auckland region,
with around one in three New Zealanders now choosing
ANZ for their home loan.

» Our Institutional business received the Institute of Finance
Professionals New Zealand Bank of the Year Award.

#
Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group, including one-off gains
and losses, non-continuing businesses, timing differences on economic hedges and acquisition-related costs. ## Customer and employee
data reported by Division, environmental data reported by geography. *FTE excludes staff on special leave including leave without pay,parental leave and long-term sick leave. 1 Women in management is calculated using a head count of active employees and includes staff
working for and being paid by ANZ. 2 Calculated according to the London Benchmarking Group methodology and excludes foregone
revenue. 3 Pending external verification. Includes Scope 1 and 2 emissions, developed in accordance with NGERS. A detailed GHG profile(Scope 1, 2 and 3) and our full environmental report is available on anz.com. 4 Pending external verification, includes both office and print(customer) paper.

We have also continued to focus on making things simpler
for customers and driving efficiencies by streamlining ourhead office management and processes. This has included
completing the transition to one management structure
across the ANZ and The National Bank, one customer
approvals process and moving to one set of products andone, The National Bank’s, technology system.

18» Made significant progress with a simplification program
to reduce complexity for our customers and contributeto improved efficiency.

>

Business Profile
ANZ is New Zealand’s largest bank with a relationshipwith more than two million customers – around 50% of
New Zealanders.

» Continued to support the New Zealand community
including sponsorship of the New Zealand Olympic teamat London 2012.

» The National Bank was named the Best Agribusiness BankNew Zealand by CANSTAR.

Total Women in Management

34.6%

34.8%

18,317

16,720Community investment2 ($m)

2.73

2.46

12%

GHG emissions (tonnes CO2-e)

14,009

11,164

4%Paper4 (tonnes per FTE)

0.16

0.13

3

1

19

DIVISIONAL PERFORMANCE

CASE
STUDY
Global Wealth &Private Banking

Giving back to theAustralian community
for over 130 years

ANZ’s Global Wealth and Private Banking business has been
assisting individuals, charitable trusts and foundations to giveback to the community for over 130 years.
We provide guidance, governance, investment management,
estate planning, and charitable giving structures and strategies
to help our clients fulfil their philanthropic ambitions.
In 2012 we managed $1.3 billion in charitable funds invested
for community benefit in Australia and generated $75 million
for distribution to charity.

ASIA

AU S T R A L I A

ANZ’s commitment to inclusivity is also reflected in thecommunity involvement activities facilitated through apartnership with the Cerebral Palsy Alliance, a relationshipwhich spans over two decades.

NEW ZEALAND

This year, we funded the Emerge Mentoring Program, ayear‑long leadership and work readiness program whichmatches ANZ mentors with young adults with cerebral
palsy. We also partnered with Alliance families to help themcomplete the four-kilometre Family Run at the 2012 Sydney
Running Festival, continuing a six-year tradition. Prior tothis, we funded Ignition Mentoring – a program supporting
teenagers with cerebral palsy build their confidence,
self‑esteem and resilience.

Global Wealth andPrivate BankING
Joyce Phillips

These programs support ANZ’s volunteering policy, which
provides staff with one day of paid volunteer leave each year.

Chief Executive Officer, Global Wealth and Private Banking

In responding to this opportunity the Division is building
new and more distinctive ways of engaging with ourcustomers across Australia, New Zealand and the Asia
Pacific. We are also leveraging our global scale andexpertise to improve efficiency and deliver a stronger
customer experience across all markets.
Our aim is to help ANZ customers progress by providing
compelling investment, superannuation and insurance
solutions together with quality advice tailored to their
specific needs. Customers can access ANZ’s wealth solutions
through teams of highly qualified financial experts,
innovative online and mobile platforms and through ANZ’s
broader distribution network.
BUSINESS HIGHLIGHTS» Global Wealth & Private Banking profit was flat in 2012,
however performance improved significantly in thesecond half reflecting a strong uplift in insurance andinvestment earnings and a decline in costs as productivity
benefits emerged.
» The New Zealand business continues to strengthen with
FUM growth for KiwiSaver product up 39%.
» In Australia our market leading insurance businessincreased sales by 11% with new business margins also
trending upwards.

20» Launched simple wealth products and invested intraining of staff across Australian bank channels togive customers easier access to simple insurance andsuperannuation solutions.

Emerge Mentoring Program>

Business Profile
In March 2012 the Global Wealth and Private Banking
Division was created to strengthen focus on the significant
opportunity the Wealth market offers ANZ.

» Experienced solid growth in Private Banking with FUM
inflows up 14% in Asia and increased levels of client
satisfaction in New Zealand.
» Industry awards.
- 2012 Money Management/DEXX&R Adviser Choice
Risk Awards: Named Risk Company of the Year forthe third year running and awarded gold in the Termand Total & Permanent Disability and Risk Trauma
Insurance categories.
- Money Magazine’s 2012 ‘Best of the Best’ awards:
Awarded Best Featured Pension for OneAnswer Frontier.
- New Zealand Morningstar Awards 2012: Our specialist
investment manager OnePath was named New ZealandFund Manager of Year and was also the KiwiSaver
Category Winner.

Financial Performance# ($m)

20122011 Movt%

Non-Financial Performance##

2012###

2011###

Operating income

1,478

1,485

0%

Total employees (FTE)*

4,042

4,564

Operating expenses

(857)

(853)

0%

Employee engagement

58%–

Profit before credit impairment
and income tax

621

632

-2%

Total Women in Management1

38.9%

–

Provision for credit impairment(4)

Volunteering hours

2,597

–

Community investment2 ($m)

0.48

–

2

8

Large

Profit before income tax

617

640

-4%

Income tax expense andnon‑controlling interest

(166)

(183)

-9%

Profit after tax

451

457

-1%

Contribution to group earnings

8%

8%

#
Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group including one-off gains andlosses, non-continuing businesses, timing differences on economic hedges and acquisition related costs. ## Customer and employee datareported by Division. ### Global Wealth and Private Banking is a Division newly formed in March 2012. The 2012 numbers therefore reflect
six months performance. 2011 performance data is not available. * FTE excludes staff on special leave including leave without pay, parental
leave and long-term sick leave. 1 Women in management is calculated using headcount of active employees and includes staff working forand being paid by ANZ. 2 Calculated according to the London Benchmarking Group methodology and excludes forgone revenue.

21

DIVISIONAL PERFORMANCE

CASE
STUDY

Our regional network
benefits employees
AND customers

Global Technology,
Services & Operations

Our expanding network of operations throughout the Asia
Pacific region is helping us to effectively and consistently
promote the health and wellbeing of our employees.
In 2012 we further strengthened our programs, promoting
the health, safety and wellbeing of our employees acrossour regional hubs in Bangalore, Chengdu, Manila and Suva.
Integration across the four hubs was a key focus, enabling
the development of common objectives and targets, andencouraging sharing of good practices.
B A N G A LO R E

MANILAMELBOURNE

W E L L I N G TO N

S UVAGlobal technology, Services &Operations
Alistair CurrieGroup Chief Operating Officer
Business Profile

Services

Global Technology, Services & Operations is ANZ’s businesssupport division responsible for the delivery of technology,
shared services and operations through our operating hubs
in Melbourne, Wellington, Bangalore, Manila, Chengdu
and Suva. The division is also responsible for majortransformation projects and ANZ’s property and facilities.

» Improved efficiency primarily through improvements tosourcing and property management.

The division was formed during 2012 to provide an
integrated approach to ANZ’s business transformation
agenda and to enable and accelerate the delivery of theGroup’s super regional strategy. This includes a focus on
rapid productivity improvements and delivering value toour customers.
BUSINESS HIGHLIGHTS
Technology» Continued strategic progress in aligning and reshaping
technology to support our super regional strategy as partof ANZ’s Technology Roadmap. This includes upgrading
legacy systems, new system delivery to support growth,and digital innovations including ANZ Transactive and
ANZ goMoneyTM.
» Service incidents decreased significantly, down 26%
during 2012 providing increasingly seamless service to
our customers.
» Operating costs remained flat with the division absorbing
volume growth through efficiencies and improved
resource use.

22

» Supported ANZ’s sustainability strategy by maintaining
our global carbon neutrality status, significant reductions
in paper use through process improvements and theintroduction of managed print services, and a focus onsustainable global property solutions.
For example, our Singapore offices are located in
the Ocean Financial Centre – the first high-rise officedevelopment to receive the Platinum Green Mark fromSingapore’s Building and Construction Authority.
» ANZ’s online environmental reporting system was
extended to 32 countries, improving our environmental
performance management.
Operations» Continued standardising processes to better serve ourcustomers and reduce operational costs. For example,
implementation of automated case management andincreased system integration for ANZ Travel Cards.
» Connecting our hubs in Bangalore, Manila, Chengdu andSuva under the umbrella of Group Hubs.
» Opening a second campus in Manila and moving to newlarger premises in Chengdu to support future growthand expansion.
» Demonstrating business continuity planning and risk
management, our Bangalore Hub held a successfulbank‑wide business continuity simulation exercise.

Chengdu Hub>

CHENGDU

Our health, safety and wellbeing programs had reacheda mature stage of implementation in Bangalore, closely
followed by Manila, which assisted the 2012 rollout in
Chengdu. Increased focus on encouraging hazard andincident reporting across the hubs has improved employee
awareness of health and safety and resulted in a greater
ability to manage risks to our people. Our consistent
approaches to promoting health and wellbeing are also
tailored for local conditions. In 2012 all hubs held education
sessions on diabetes, heart health and asthma. Locally,education sessions were held on tuberculosis in India,
on malaria and dengue fever prevention in Suva, and oncommon illnesses associated with flooding events in Manila.

Financial Performance#* ($m)

20122011 Movt%

Non-Financial Performance##

2012###

2011###

Operating income

294

153

Total employees (FTE)*

5,919

5,981

Operating expenses

(418)

(366)

14%

Employee engagement

69%–

Profit before credit impairment
and income tax

(124)

(213)

-42%

Total Women in Management1

31.3%

–

Provision for credit impairment

(1)

(41)

-98%

Volunteering hours

24,562–

Profit before income tax

(125)

(254)

-51%

1.52

–

Income tax expense andnon‑controlling interest

78

96

-19%

Profit after tax

(47)

(158)

-70%

92%

2

Community investment2 ($m)#
Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group, including one-off gains
and losses, non-continuing businesses, timing differences on economic hedges and acquisition-related costs. *Financial performance also
includes Group Centre and shareholder function activities. ## Customer and employee data reported by Division. ### Global Technology
Services & Operations is a Division newly formed in March 2012. 2011 non-financial performance data is not available. * FTE excludes staff
on special leave including leave without pay, parental leave and long-term sick leave. 1 Women in management is calculated using a headcount of active employees and includes staff working for and being paid by ANZ. 2 Calculated according to the London Benchmarking
Group methodology and excludes foregone revenue.

23

C O R P O R AT E R E S P O N S I B I L I TY

PERFORMANCE KEY

ACHIEVEDPA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

Responsible Practices

Delivering against
targets

Improve customer satisfaction and achieve the No.1 or 2 position amongst major banks for our
retail, commercial and Institutional businesses.
– In Australia, retained No. 1 Relationship Strength Index position for Lead Relationships in the2012 Peter Lee Associates Large Corporate and Institute Relationship Banking Research.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012– Customer satisfaction in Retail and Commercial Banking declined in the second half of the year,
due to a number of issues including adverse publicity regarding interest rate decisions. Steps arein place to improve our customer satisfaction and we are seeing positive momentum.

Our Corporate Governance structure ensures oversight of our business‑wide
financial and non-financial targets, ensuring Corporate Responsibility
performance is monitored throughout ANZ.

Resolve 90% of customer complaints within five business days.
Develop and pilot a program to improve staff understanding of customers in financial difficulty
to aid early identification of and assistance to affected customers.
Reduce Lost Time Injury Frequency Rate (LTIFR) in Australia and New Zealand by between 5–10%
and continue implementation of our safety and wellbeing programs globally.

Leadership from the top
Our five Board Committees (Audit, Governance, Human
Resources, Risk and Technology) meet throughout theyear. The Governance Committee is responsible foroversight of our Corporate Responsibility strategy, targets
and performance, and our reporting.
Details about the Board, Board-related charters, theGroup Codes of Conduct and Ethics, the Conduct
and Ethics Policy Framework (including Fraud Policy,
Anti‑Bribery and Anti-Corruption Policy, Whistleblower
Protection Policy, Equal Opportunity, Bullying andHarrassment Policy, Health and Safety Policy), the
ANZ Constitution, ANZ Shareholder Charter and otherrelated items can be found at anz.com/governance.
Aligning corporate responsibility anddiversity performanceThis year, we refined our executive oversight of corporate
responsibility (CR), combining our Corporate Responsibility
and our Diversity committees to form a single Corporate
Responsibility and Diversity Committee (CRD). This furtheraligns these two inherently connected areas and reflects
our view that to be a super regional organisation we needto profoundly embrace diversity. The CRD Committee ischaired by our Chief Executive Officer and includes two
additional members of Management Board, and senior
representatives from ANZ’s business divisions.
Responsibilities of the CRD Committee include providing
strategic leadership on our Group-wide CR and diversity
strategies, priorities and targets and identifying,overseeing and monitoring current and emerging CR
risks and opportunities. The CRD Committee reports
on progress in achieving the Group’s CR and diversity
objectives to Management Board and the ANZ Board
Governance Committee.
We further increase our accountability by setting public
targets in areas in which we have identified that we can use
our skills and resources to deliver business performance
while making a significant contribution to society.
Valuing individual performance
Employees in the bank have different roles and expertise,but everyone has a responsibility to make decisions thatare balanced and ethical, being conscious of the potential
economic, social and environmental impacts of their actions.

24

Implement our Responsible Sourcing Program with a focus on our top 10 highest impact categories
and publicly report the progress of our supplier education and auditing strategy.

Each year, all employees are required to complete online
training under the ‘ANZ essentials’ risk accreditation
framework covering topics such as anti-money laundering,
fraud, corruption and bribery, equal opportunity, andhealth and safety. Our ‘welcome to ANZ’ module provides
an overview of our CR framework and tests new joiners on
applying the framework in practice.
In 2012 we amended our approach to business unit andindividual performance planning and target setting so that
our five core Values and Behaviours will be more deeply
embedded in creating plans, monitoring and rewarding
performance against targets.

Publicly report progress on the implementation, application of and training in our sensitive sector
lending policies and human rights statement.
Increase our lending to lower carbon emission power generation (i.e. renewables and gas)by 15–20% by 20201.

Education and Employment Opportunities
Reach at least 40% representation of women in management, and achieve gender balance andgreater cultural diversity in our key recruitment, talent development and learning programs.
Improve employee engagement, including perceptions of ‘values-based leadership.’
Provide 230 positions through our traineeships, graduate program and permanent employment
to people from disadvantaged backgrounds and enhance purchasing criteria to develop more
relationships with companies which employ and support people with disability.

Public reporting
Our reporting takes place throughout the year with somekey dates on which we publish specific information.
Since 2010 we have combined the Shareholder Review
and Corporate Responsibility Review as our performance ismeasured by both our financial and non-financial results.
Our full Corporate Responsibility Report is published on our
website anz.com. That report contains more in-depth CR
information about our strategy, targets and performance. The
content is prepared in accordance with the Global Reporting
Initiative (GRI) guidelines, including the Financial Services
Sector Supplement. It reflects our Global Compact Report on
Progress and our application of the London Benchmarking
Group Measurement methodology. Our website also
contains our external reporting Assurance Statement.
In May, we release our Interim Corporate Responsibility
Report detailing our mid-year progress.

Advance the role of women in society through engagement on key public policy issues,
including advocacy for more accessible, affordable and flexible childcare in Australia.

Financial Capability
Reach 30,000 people from low-income and disadvantaged backgrounds with our MoneyMindedfinancial capability program.
Report publicly and engage key stakeholders in strategic review.
Enrol 14,250 people in our Saver Plus program across Australia by 2014.

Bridging Urban and Rural Divides
Implement mobile phone banking in Papua New Guinea, Vanuatu, Samoa and Solomon Islands in 2012,
then in Timor Leste in 2013.

We inform stakeholders of our activities and progress
throughout the year via our regular Corporate
Responsibility E-bulletin.
External Assurance

Launch the Pacific Money Transfer Card to enable cost-effective remittances and sign up 2,800 customers.

Urban Sustainability

Our annual Corporate Responsibility Report has beenexternally assured by Corporate Citizenship in keepingwith the International Standard on Assurance Engagement(ISAE 3000) and the Accountability Assurance Standard(AA1000AS-2008).
Both our full Corporate Responsibility Report and Corporate
Citizenship’s assurance statement, detailing their review ofour performance and reporting, is available at anz.com/cr.
Our Annual Report and Financial Statements are externallyassured by KPMG.

Evaluate the pilot of our revised Environmental Management System and expand to cover twomaterial markets in our Asian business.
Work towards achieving our three-year environmental targets in Australia and New Zealand,
including greenhouse gas, premises energy, commercial waste, water, paper and air travel.
1

Target applies to Project and Structured Finance transactions.

Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

25

C O R P O R AT E R E S P O N S I B I L I TY

In 2012 we worked with an NGO partner, BSR, to conduct
supplier forums in China and Indonesia, to help build
supplier capacity, understanding and support for our
Supplier Code of Practice. Suppliers worked in groups to
examine the relevance and value of ANZ’s approach to CR.
Session outputs are being used to inform our compliancestandards, development of strategies and partnerships tominimise environmental impacts, and to optimise social
benefits across our supply chain.

Responsible
practices
The banking sector remains under public scrutiny. Banks must work to restore
credibility and contribute to stable financial systems. Our responsible practices
are designed to help manage our own operations as well as CONTRIBUTE to thesebroader objectives.

Responsible corporate actions depend
on individuals
Our ability to compete today and sustain growth in the
future depends on employing highly skilled, motivatedpeople, equipped to make responsible decisions.
This year we continued to emphasise our Values andBehaviours as central to our business strategy as we build abusiness that delivers responsible growth and prosperity forour customers, shareholders, people and communities.
Promoting responsible behaviours
Banking is an industry with relatively ‘light’ direct impacts
but we can be exposed to significant impacts throughthe companies we finance. We are committed to having
deep knowledge of our clients’ businesses, including
understanding the social and environmental impacts ofsectors and specific operations that we bank.
We look to work with companies that operate atinternationally accepted and best-in-class standards. Thisis particularly important as we expand in the fast-growing
Asia Pacific economies, where accepted norms, government
oversight and regulation vary widely.
We seek to differentiate ourselves, working with companies
that see value in achieving internationally accepted
standards and value a bank that partners with them toachieve that goal.
In 2012, we piloted a new Sustainability Leadership Program
training course, aimed at staff in the International andInstitutional Business (IIB). This half-day course, deliveredin partnership with WWF-Australia, is designed to help staff
make more informed decisions, considering the social andenvironmental contexts in which our clients operate.
The course emphasises the need to be alert to social andenvironmental risks and opportunities in business and theimportance of understanding such issues to support ourclients and act as a partner of choice. We will now implement
the training across IIB and the Asia Pacific region.
Almost 1,000 employees completed our online Social andEnvironmental Risk training in 2012. This incorporates ANZ’s
Values and Behaviours, our sensitive sector policies and ourapproach to human rights, as well as how and when staff
should identify and escalate potential issues.

26

We monitor our portfolio of existing and prospective clientson a continuous basis through our ‘Reputation Risk Radar’.
Notable incidents and allegations inform regular Early Alert
Review meetings, which consider social, environmental andgovernance, as well as credit risks.
Exceptionally, where clients are unwilling or unable to answer
our enquiries, the matter may be raised to our Reputation Risk
Committee. The ultimate decision for us is whether to exit a
relationship if a client is not prepared to operate responsibly.
Our preference is always to work with clients to remediate
matters. This is in ANZ’s commercial interests, as well as having
better long-term benefits for our clients and the communities
in which they operate.
New guidelines and updating our approach tohuman rights
To ensure relevance and good practice, we regularly review
our ‘sensitive sector’ and associated policies, designed
to ensure social and environmental considerations areincorporated into banking practices, particularly with regard
to high-impact industries.

We promoted internal support for Responsible Sourcing
by conducting staff workshops in Australia, New Zealand,
Singapore and Taiwan, increasing awareness and building
actions into the everyday work of our sourcing teams.
Class Action Updates
In September 2010, class action proceedings werecommenced against ANZ, claiming that some fees
charged on deposit and credit card accounts are penalties,
or alternatively, that the imposition of these fees was
unconscionable or unfair, and that the fees charged should
be repaid with interest.

SAM – Sustainable
Asset Management
Scorers of Dow Jones
Sustainability Index

ANZ is defending the claim. The courts have considered
and ruled on some preliminary matters but the case is at
an early stage.

in loss of life and caused disruptions to economies and ouroperations. In both cases, local governments declared statesof emergency.

IMF (Australia) Ltd, a publicly listed company that provides
funding for legal claims on a no-win, no-fee basis, is funding
the class action. IMF has also initiated similar class actions
against other major banks in Australia.

ANZ quickly launched Employee Financial Assistance Programsfor our staff, drawing on the successful program developed for
ANZ staff impacted by the 2010 Queensland floods.

Emergency relief
Fortunately, this year did not witness the level ofhumanitarian disasters that marked our Region in 2010
and 2011. However, there were still significant events
that affected our people and their communities.
Severe flooding in Western Fiji in early 2012 and in thePhilippines, particularly around Manila, in August resulted
PERFORMANCE KEY

ACHIEVEDThe assistance packages included special leave arrangements
as well as financial grants for severely impacted staff. We
also provided support to communities in need, including
staff volunteering in the many areas where significant
clean-up and repair efforts were needed.
In addition to our direct assistance to employees, loan
repayment suspensions for customers and other foregone
costs, we contributed $0.6 million to supporting thecommunities impacted by these events.

PA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

Responsible Practices

In 2012, this led us to update our People and Communities
statement to reflect the release of the United Nations Principles
on Business and Human Rights. Following enquiries fromexternal parties, including Socially Responsible Investor groups,
we made it clear that by publicly supporting the UN Global
Compact we acknowledge the United Nations Declaration of
Human Rights and the three other Conventions underpinning
the Compact.

Improve customer satisfaction and achieve the No.1 or 2 position amongst major banks for our
retail, commercial and Institutional businesses.
– In Australia, retained No. 1 Relationship Strength Index position for Lead Relationships in the2012 Peter Lee Associates Large Corporate and Institute Relationship Banking Research.
– Customer satisfaction in Retail and Commercial Banking declined in the second half of the year,
due to a number of issues including adverse publicity regarding interest rate decisions. Steps arein place to improve our customer satisfaction and we are seeing positive momentum.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012Resolve 90% of customer complaints within five business days.

Through our 2012 review, we identified a need for a
Hydropower policy, supplementing our existing Water andEnergy policies. This policy was developed in consultation
with a range of internal and external stakeholders, including
clients, industry associations and non-governmentalorganisations to ensure it balances the interests of our manydifferent constituents.

Develop and pilot a program to improve staff understanding of customers in financial difficulty
to aid early identification of and assistance to affected customers.
Reduce Lost Time Injury Frequency Rate (LTIFR) in Australia and New Zealand by between 5–10%
and continue implementation of our safety and wellbeing programs globally.
Implement our Responsible Sourcing Program with a focus on our top 10 highest impact categories
and publicly report the progress of our supplier education and auditing strategy.

Further information on our sensitive sector policies and ourapproach to human rights policies can be found at anz.com/cr.
Promoting responsibility in our supply chain
Our commitment to responsible practices across our businessmeans we support our suppliers in complying with all local
legal frameworks and to be considerate of the ethical, socialand environmental impacts on the communities where they
operate. Our requirements are published in our Supplier Codeof Practice and integrated into our standard contract terms.

ANZ’s sustainable business practices, exceptionalrisk and crisis management procedures andits strong focus on sustainable investment
products have earned it the leading position in
the banking supersector. In addition to using
comprehensive social and environmental
screening tools for its credit assessment process,it is actively engaged in financing renewableenergy and emission trading.

Publicly report progress on the implementation, application of and training in our sensitive sector
lending policies and human rights statement.
Increase our lending to lower carbon emission power generation (i.e. renewables and gas)by 15–20% by 20201.
1

Target applies to Project and Structured Finance transactions.

Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

27

E d u cat ion & E mploy men t

can significantly benefit the lives of disadvantaged andunder-represented individuals, including people withdisability, and among Indigenous and refugee communities.
Since we introduced our disability employment program in
2008, ANZ has employed 131 people with a self-disclosed
disability, with a retention rate of 74%. In 2012, we
employed 38 people with disability – 13 in Australia, 15 inIndia, two in the Philippines and eight in New Zealand.
Our Abilities team helps us make banking easier for customers.
For example, our vision-impaired team enhanced ouraward-winning ANZ goMoney™ app for iPhone, introducing
voice-overs and zooms to ensure ease and accessibility.

Creating education andemployment opportunities

Since 2003 we have provided traineeships and employment
to more than 650 Indigenous Australians. This year, we
employed an additional 79 Indigenous trainees in our
retail network; 23 Indigenous candidates were successfully
recruited to full-time positions and 56 recruited via our
Indigenous trainee program.
In 2012, ANZ was recognised by the Australian Human
Resources Institute (AHRI) for excellence in the employmentof people with disability and Indigenous Australians.

The success of our super regional strategy depends on us having an experienced,
ethical and engaged workforce, with employees who deeply understand and connect
with their colleagues, our customers and communities, wherever we operate.

ANZ participates in The Brotherhood of St Laurence’s Given the
Chance refugee employment programs, providing refugees
in Australia with skills and experience to enter the workforce.
So far, 56 refugees have taken part in areas including Retail
Products, Operations, Australian Branch Network, and theAustralian Call Centre with a retention rate of 73%.
Supporting employees through changeIntercultural capability
Our business strategy means ANZ’s workforce will
increasingly be required to understand and support
customers within and across the Asia Pacific region. In
building our workforce of the future, we have focused on
recruiting and developing inspiring, values-based leaders
and a diverse and inclusive team.

This year we aimed to increase the representation of women in
management to 40%, however we remained steady at around38%. While we did not achieve our overall goal, there wasprogress at senior levels. Three women sit on our Management
Board while others lead major global businesses and key
countries in our growth strategy. In our Australia Division
women hold 43% of all management positions.

Around 73% of our top 181 executives have significant
international experience comprising a minimum of three tofive years working outside their home country.

Developing a strong pipeline of senior female leaders is apriority. We provide opportunities for high potential women
to gain experience in key banking roles, necessary for future
careers as senior leaders in the industry. Women represent
44% of participants in our Generalist Banker accelerated
development program; 53% of our upcoming 2013 graduate
intake; and 46% of participants in our Leadership Pathway
development programs.

ANZ’s workforce represents in excess of 120 cultural
backgrounds, speaks more than 90 languages and follows
over 80 different religions. Networks, mentoring schemes
and a ‘sister branch’ program, connect employees in Australia
and New Zealand with peers across Asia Pacific. We also offer
short-term secondments and promote culturally-focused
festivals to help our people develop relationships, build
customer insights and increase cross-border/divisionalcustomer referrals.
At a community level, our CEO heads AsiaLink’s Asia Capable
Workplace strategy and our employees participate in theirAsia Literacy for Schools program in Australia. We are alead sponsor of the Diversity Council of Australia and theAustralian Government’s inaugural research into cultural
diversity and capability of Australian Boards and businesses.
Gender equality in leadership
Increasing the proportion of women at all levels ofmanagement will enable ANZ to tap into a broader rangeof talents, leadership styles and skill-sets to manage ourbusiness and serve our customers.

28

We work at a community level with organisations such as
Chief Executive Women; the Australian Sex Discrimination
Commissioner’s Male Champions for Change Initiative; andMelbourne Business School to promote gender equality inbusiness, better understanding the conditions and culturethat enable women to thrive in leadership.
In March, our approach and progress in creating a moregender balanced business was recognised through ourcitation as Employer of Choice for Women for the eighth
time from the Equal Opportunity in the Workplace Agencyof Australia (EOWA).
Recruiting and developing employees fromdisadvantaged communities
Education and employment enhance livelihoods, and arehigh on the development agendas of governments across
our Region. As a large employer, our employment decisions

We experienced challenges meeting some of ouremployment targets this year due to economic conditions,
low employment growth and restructures within ourbusiness, which meant we prioritised redeploying existing
employees into available roles. These circumstances saw
the loss of around 1000 full-time roles, largely in ourAustralian business.
A comprehensive program was put in place tosupport affected employees. They received assistancefinding alternative roles within ANZ through an active
redeployment program, or outside of ANZ throughoutplacement services, which provide career coaching,job search training and professional support services.
In addition, our New Career Training Fund offered grants
of up to $10,000, enabling those impacted to retrain forcareers outside banking.

PERFORMANCE KEY

ACHIEVED

Denysha Marshall, a Personal Banker in Western
Australia and ANZ Indigenous Employment
program participant initially joined the ANZ
Indigenous School Based Traineeship. She says
the program teaches people how to be ambitious
from a young age.
While most young Indigenous people can get ajob, this is the start of a career – whether it’s in abranch or as a Business Specialist or a Financial
Planner. The traineeship helped me to think about
my future in a more mature manner.

Inspiring and engaging our team
Amidst these challenging conditions, our annual ‘My Voice’survey showed employee engagement levels steady ataround 70% – consistent with the banking sector average.
84% of employees feel their manager demonstrates throughaction the importance of customer service; 79% believe
ANZ is creating a workforce that is open and accepting ofindividual difference; 76% believe their opinions count;and 80% believe their manager enables them to effectively
manage their work and life commitments. Engagement
amongst women overall is equal to men; while engagement
among our most senior women increased from 75% to 82%.
Initiatives are in place to address the survey findings andachieve our best-practice employee engagement aims.
Initiatives include a group-wide program to help employees
deeply understand our super regional strategy and how
their work contributes to our goals, alongside continual
reinforcement of ANZ’s Values and Behaviours.

WOMEN IN MANAGEMENT
30 Sept
2011
Baseline

2012
Targets

30 Sept
2012
Results

22.8%

24%

23.9%

Senior Executive
Senior Manager

28.5%

31.5%

28.1%

Manager

40.3%

42%

39.6%

Total Womenin Management

38.2%

40%

37.8%

PA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

CREATING Education and Employment Opportunities
Reach at least 40% representation of women in management; and achieve gender balance andgreater cultural diversity in our key recruitment, talent development and learning programs.
Improve employee engagement, including perceptions of ‘values-based leadership.’
Provide 230 positions through our traineeships, graduate program and permanent employment
to people from disadvantaged backgrounds and enhance purchasing criteria to develop more
relationships with companies which employ and support people with disability.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012Advance the role of women in society through engagement on key public policy issues,
including advocacy for more accessible, affordable and flexible childcare in Australia.
Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

29

B U I L D I N G F I N A N C I A L C A PA B I L I TY

Our approach to advancing financial literacy in Australia
has been recognised with ‘Outstanding’ MoneySmart Week
Awards, for Research and Community, two of the four award
categories.
The ANZ Survey of Adult Financial Literacy in Australia isconducted every three years. The Survey identifies groups
with low levels of financial literacy and provides insight
into the attitudes and behaviours which determine howa person perceives and manages their finances. It is the
only Australian survey of its kind, and assists policy makers,
community organisations and other companies to develop
targeted programs to lift financial literacy levels.

Building Financial Capability
We have a long commitment to building money management skills andsavings of disadvantaged groups in Australia and across our region.
In 2012 a strategic review of our Australian programs found they aremarket-leading, providing real social benefits to our community throughMoneyMinded, MoneyBusiness and SaverPlus.

At the most recent Survey launch, Peter Kell, ASIC
Commissioner said, “ASIC welcomes ANZ’s long-term
commitment to financial literacy and to this national
survey. OECD research tells us that this survey is themost frequently repeated long running national financial
literacy survey in the world. The longevity of this survey
is vital, as it helps us to track progress in improving thefinancial skills, knowledge and behaviour of Australians.
The survey also helps ASIC to better target and focus ourfinancial literacy efforts.”

Society, The Smith Family and other local community
organisations. Since 2003, it has assisted around 14,000
Australians to develop a savings habit. A further 10,000
Australians are expected to participate in Saver Plusbetween 2012 and 2014.
More than 87% of Saver Plus participants have developed asavings habit, continuing to save at the same rate, or more,
for up to three years after completion.

I can see us actually having a good future now,and not one where we’re struggling from pay
cheque to pay cheque. It’s through doing Saver
Plus and MoneyMinded that I’m a lot more
driven to save. I look at what I can achieve
now and I know that the program helped me
get to where I am today. I feel like I’ve won
the financial war.
Delphi Anderson,
Saver Plus Participant

Saver Plus is ANZ’s financial education and matched savings
program developed with the Brotherhood of St Laurence(BSL) and delivered by BSL, Berry Street, The Benevolent

Case Study One: Impact of MoneyMinded in Australia
CHANGES IN SAVINGS PATTERN
Expanding MoneyMinded
We are committed to making a significant contribution to theeconomic development and wellbeing of the communities weserve through building financial literacy and inclusion.
This remains the overwhelming focus of our community
investment activities. It aligns with our purpose as a bank andwe have built notable expertise, working with governments,
community partners and experts to develop our approaches.
MoneyMinded is our flagship program.
We developed our MoneyMinded program in Australia in
consultation with the community sector, educators andgovernment with the goal of improving people’s confidence inmanaging money effectively. In support of our super regional
strategy, MoneyMinded has been adapted for use across our
Region. The program is now delivered in 13 countries and in2012 we ran new pilots in India, Indonesia, Solomon Islands,
Timor Leste, Vietnam, Kiribati, Vanuatu and New Zealand.
In New Zealand, we are partnering with the Solomon Group inSouth Auckland to pilot MoneyMinded. Eleven Solomon Group
staff received accreditation as MoneyMinded facilitators in 2012
and 70 clients have already completed the pilot program.
In Indonesia we are delivering MoneyMinded by partneringwith Yayasan Cinta Anak Bangsa (YCAB). Working closely with
YCAB, a not-for-profit organisation that provides micro loans
to women in underdeveloped areas, we help the organisation
to deliver MoneyMinded training to their clients. As a pilot
project in 2012, we trained 150 YCAB clients.

30

RMIT University evaluated the impacts of MoneyMinded onparticipants who have completed the program in Fiji andPapua New Guinea. Key findings are:Question to participants: Describe yoursavings pattern. Figures are percentages

BeforeMoneyMinded

After
MoneyMinded

Change21.4» 74% increased their monthly savings deposits and nearly all(97%) reported a greater capacity to make ends meet

I save a set amount on a regular basis

13.3

34.7

I save what is left over after expenses on a regular basis

13.3

32.7

19.4

» 91% encouraged their children and family members to save

I save odd amounts when I can

43.9

27.6

(16.3)» participants feeling completely satisfied with life
increased 51%.

I was never able to save

29.6

5.1

(24.5)

More than 200,000 people have participated in MoneyMinded
and more than 6,000 facilitators have been trained to deliver
the program internationally since 2005, but there is still muchto be done. Working with our partners, we aim to reach afurther 200,000 people over the next five years.

Source: MoneyMinded Summary Report (“The Reach and Impact of MoneyMinded in Asia Pacific 2010–2011”). May 2012.
Survey: Participants attending MoneyMinded sessions between 1 October 2010 to 30 September 2011.
Sample Size: Estimated total of 30,215 people in Australia and New Zealand.

MoneySmart week

PERFORMANCE KEY

We partnered with businesses, community organisations
and government in Australia’s inaugural MoneySmart Week,a national not-for-profit initiative aimed at promoting theimportance of financial literacy and raising awareness ofprograms and support available.
We encourage our staff and customers to ‘be money
smart’ by providing seminars on money management andpromoting the use of the free online Money Health Check tool
via our branch network and website, anz.com.

ACHIEVEDPA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

Financial Capability
Reach 30,000 people from low-income and disadvantaged backgrounds with our MoneyMindedfinancial capability program.
Report publicly and engage key stakeholders in strategic review.
Enrol 14,250 people in our Saver Plus program across Australia by 2014.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012

Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

31

Helping B ridge Urban & R u ral E conomic & S ocial D i v ides

We developed another innovation in response to the severe
floods in Fiji in early 2012. Our branch in Nadi, a town
described as the gateway to Fiji, is now the first in ANZ’s
network to have a ‘waterproof design’, which can be used inflood-prone areas around the world. When natural disasters
occur, our businesses can be among the first to recover andplay a vital role in restoring impacted economies.

Bridging Urban and Rural Divides
As cities continue to grow, more jobs are in urban environments and theopportunity gap between communities in urban and rural settings becomes
more pronounced.

Supporting national agendas

Innovative banking solutions

Helping bridge economic and social divides between urban
and rural regions is a significant priority for governments
and communities in many of our markets. Improving accessto banking and encouraging financial inclusion are key ways
we can make a difference.

In June 2012 we opened our first banktainer in Papua New
Guinea (PNG). This is our first full service branch able to be‘dropped in’ to service remote communities, such as Lihir
Island, an important natural resources hub in PNG. This
innovative, transportable solution provides international
companies and the Lihir community with critical banking
services that connect customers to our main branch in Port
Moresby, as well as to expertise across our regional network.

We have been operating in the Pacific for over 130 years andhave over 40% of banking market share. Many governmentsin the region look to us to demonstrate good practicebanking models and to support them in their efforts topromote development opportunities in their own countries
and links between them, the rest of Asia, Australia and
New Zealand.
Our ability to support these agendas is frequently ‘tied’ toour licence to operate. Bridging urban and rural divides by
providing fair, safe and affordable products and services, aswell as targeted financial literacy and inclusion programs,
are thus critical to our success and to the prosperity of thosecommunities.
Working with rural communities in Asia PacificOur rural banking service in Fiji provides face-to-facebanking services to more than 300 communities and
170 schools through purpose-built trucks, ‘banktainers’,
that travel between remote villages.
We have extended the service to other Pacific island
countries, now serving nearly 90,000 people throughout
Fiji, the Solomon Islands, Samoa and Vanuatu. As part ofthe services, we also conduct financial literacy education
through MoneyMinded Pacific.

32

The arrival of the ANZ banktainer has definitely
sparked the interest of the Lihir community;
this is evident by the lines of ANZ customers
queued to use the ATMs and teller service.
The banktainer is being used by mine workers
as well as the local community.
Importantly for Newcrest, the additional banking
facilities are proving to be a great convenienceto the Lihirian community and its arrival will no
doubt enable more people to be introduced toand have access to banking services.
Newcrest congratulates ANZ for establishing
the banktainer.
Peter John Aitsi,
Country Manager – PNG

This year, as part of a commitment to support microfinance institutions in the Asia Pacific region, three ofour high‑performing staff participated in three-monthsecondments, facilitated by Australian Volunteers
International (AVI).
Casey Morecroft from our Institutional Agribusiness teamworked with the Pacific Islands Private Sector Organisation(PIPSO). Casey’s work was presented at the 2012 PacificIslands Forum in the Cook Islands, attended by AustralianPrime Minister Julia Gillard and US Secretary of State
Hillary Clinton. It highlighted that a major obstacle toprivate sector development in the Pacific, with high rural
populations, is people’s lack of access to banking services.
Mobile phone banking is one way to address this. With
six million people in the Pacific currently unable to accessfinancial services, but rapidly growing mobile phone
penetration, as high as 60% in Samoa and 70% in Papua
New Guinea, it is a critical channel offering the ability forpeople to benefit quickly from banking infrastructure.
In 2012 we overcame impediments to implementing ourmobile phone banking services in key Pacific markets andhave targeted reaching 50,000 people in 2013.
Promoting rural development in Western China
We continue to support rural industries in China throughour extensive rural finance expertise, and to foster andimprove economic sustainability among rural farmers. For
example, our Chongqing Liangping ANZ Rural Bank helps
businesses in aquaculture, livestock, tea, medicine culture
and silk worm industries.
One such business customer used to employ several farmers
to extract plant oil in a time-consuming process, selling
only to local villagers. Through loans and training by ANZ
staff, in aspects of financial and enterprise management,
the business has grown significantly in size so that by 2012it has become a leading enterprise in the municipality.

PERFORMANCE KEY

ACHIEVED

Working with Indigenous Australians
In Australia, we have demonstrated our strong commitment
to supporting Indigenous communities through a wide
range of activities, including our MoneyBusiness Programand our Indigenous Action Plan.
MoneyBusiness is an adult financial education program
adapted specifically to build the money management
skills and confidence of Indigenous Australians and tohelp develop a stronger savings culture in Indigenous
communities. It was developed by ANZ and the AustralianGovernment. As of 2012, it is being delivered by community
agencies in more than 215 communities around Australia.
In June this year, we released our new Indigenous Action Plan,
which continues our commitment to provide employment andtraining opportunities for Indigenous people.
In May 2012 ANZ was selected to manage all of the
Indigenous Land Corporation’s (ILC) transactional banking.
The ILC is an independent statutory authority of theAustralian Government. A deciding factor in our winning
the tender, in addition to our core banking skills, was
ANZ’s clear commitment to Indigenous communities
demonstrated by our Indigenous employment and trainee
programs and MoneyBusiness.
Further supporting rural and regional Australia
In June 2012 we partnered with the Australian Beef Industry
Foundation (ABIF) to deliver a scholarship program aimed
at developing future generations of Australian ruralagribusiness leaders.
Frank Archer, Chairman of the ABIF, said, “There is a definite
skills shortage within rural and regional areas acrossAustralia, but particularly so in the beef industry. ANZ has
recognised this as an important issue for the industry and is
working hand-in-hand with us to provide the much-needed
support this issue needs.”
More broadly, we support rural and regional communities inAustralia through our Seeds of Renewal program, in which
we partner with the Foundation for Rural and Regional
Renewal. The program provides small grants of up to
AU$15,000 to community organisations in remote areas tosupport local leadership development and new educationand employment opportunities. This year, we supported
30 new projects across regional Australia.

PA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

Bridging Urban and Rural Divides
Implement mobile phone banking in Papua New Guinea, Vanuatu, Samoa and Solomon Islands
in 2012, then in Timor Leste in 2013.
Launch the Pacific Money Transfer Card to enable cost-effective remittances and sign up
2,800 customers.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012

Newcrest Mining Limited
Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

33

S u ppor t ing Urban S u s tainabili t y

Further implementation of our EMS across our global
business in 2013 will enable us to establish a group-widebaseline for our energy use and associated GHG emissions
with improved granularity to set targets for global
reductions going forward.
Improving our performance
We monitor, set targets and report progress annuallyon a number of environmental impact areas relating to
our Australian and New Zealand operations, including:energy, greenhouse gas emissions, water, paper andresource efficiency.

Supporting Urban Sustainability
As much of the Asia Pacific region continues to urbanise, improving
urban sustainability is an increasing priority for governments,
customers and communities.

Energy mix is key to urban sustainability
We are committed to improving environmental
sustainability performance in the cities where we operate.
We actively support our customers and suppliers inthis regard and are committed to delivering soundenvironmental outcomes in our workplaces and branches.
ANZ’s activities in the energy sector need to meetinternational performance standards, as expressed in our
Energy policy. When considering financing the energy
sector, we support customers in examining lower carbon
options and our decision-making framework is influenced
by explicit thresholds of carbon intensity of energy
production. High emissions production proposals go
directly to our Reputation Risk Committee for consideration.
Our Energy policy also includes a target to increase
our lending to lower carbon emission generation by
15–20% by 20201.
To see our full suite of sector and other policies, go to
anz.com/governance.
Responding to regulatory environments
An important development this year was the introduction of
the Australian Government’s ‘Clean Energy Future’ package,
which came into effect on 1 July 2012.
In preparation, we established ANZ’s Carbon Working
Group to ensure that both ANZ and our customers were
well prepared for its impacts, able to manage any risks, andbenefit from opportunities of the new legislation.

34

We have notable experience in this. In response to the
New Zealand Emissions Trading Scheme and otherinternational carbon markets we have an established
Energy and Emissions Trading desk. Through the trading
desk we assist our clients in managing their liabilities arisingunder such schemes.
We also work with our customers to reduce energy andother resource consumption across their businesses byfinancing more efficient plant, equipment and buildings.

Our Australian operations account for over two thirds ofour global GHG emissions. In 2012 ANZ reduced absolute
GHG emissions from our Australian operations by over 5%against the 2011 year baseline. This was achieved throughimplementation of a number of operational improvements
in our property portfolio and reductions in corporate travel.

Contact has partnered with ANZ because they
have a strong track record in delivering Export
Credit Agency facilities in the New Zealandmarket, but also significant experience working
with the New Zealand electricity market.
Contact is currently constructing the 166MW
Te Mihi geothermal power station, locatednear Taupo. When commissioned, Te Mihi
will provide New Zealand with additional
renewable, baseload electricity to power morethan 100,000 homes.
Louise Tong,
Corporate Treasurer
Contact Energy

In 2012, energy savings at our headquarters, the ANZ Centre
in Melbourne, made the largest single impact in reducing
emissions from our commercial portfolio. Since moving into
this building we have reduced our GHG emissions by over
15% against our 2010 baseline.
Further savings have also been achieved through therelocation of our Queensland head office to a ‘6-Star GreenStar’ building in Brisbane’s central business district. Our
rolling refurbishment program across our bank branch
network has continued in 2012, and has included theinstallation of a range of energy efficiency measures thathave further contributed to our GHG emission reductions.
After energy use in our commercial buildings, GHG
emissions associated with air travel represent our next
greatest emissions source. In 2012 we reduced our global
air travel emissions by approximately one quarter, achieving
associated cost savings of over $15 million, throughminimising non-customer-related travel, coupled with thecontinued rollout of virtual communication technology,
notably telepresence video-conferencing.

Travelling to see customers is a critical part of our service.
In New Zealand, ANZ leases over 700 vehicles and in 2009 wecommenced a program to lease only four-cylinder vehicles.
By the end of 2012, all remaining six-cylinder vehicles in our
New Zealand fleet will have been replaced with four-cylindermodels, improving the fuel efficiency of our vehicle fleet,
reducing our GHG emissions and delivering cost savings ofapproximately $0.5 million per annum.
We remain committed to maintaining carbon neutrality
across our global business, with a priority on reducing ourfootprint, supported by the purchase of international offsets
to compensate for unavoidable carbon emissions. Carbon
offsets purchased by ANZ are accredited to the AustralianGovernment’s National Carbon Offset Standard (NCOS).

Implementation of our Environmental
Management System in Asia
In our own workplaces, we continually seek to identify,
control and improve our environmental impacts. Our
Environmental Management System (EMS) provides a
structured approach to assessing the operational impactof our physical footprint on the environment and helps set
targets to improve our performance.
Following a successful pilot in Singapore in 2011, we havecontinued to roll out the EMS across our operations in Asia
during 2012, with a focus on Cambodia and India.
The continued expansion of the EMS across Asia has
included the extension of our online environmental
reporting, which now captures data from over 30 countries,
thereby improving our ability to manage our global
environmental performance.
1

PERFORMANCE KEY

ACHIEVEDPA R T I A L LY A C H I E V E D O R I N P R O G R E S S

DID NOT ACHIE VE

Urban Sustainability
Evaluate the pilot of our revised Environmental Management System and expand to cover
two material markets in our Asian business.
Work towards achieving our three-year environmental targets in Australia and New Zealand,
including greenhouse gas, premises energy, commercial waste, water, paper and air travel.

KEY GOALSWE SET OUT
TO ACHIEVE
IN 2012

Context to our performance, targets achieved as well as missed, is given in our full Corporate Responsibility Report on anz.com/cr.

Target applies to Project and Structured Finance transactions.

35

F I N A N C I A L s u mmar y & R em u nerat ion

FIVE-YEAR SUMMARY
Financialnon-financial

FIVE-year Summary 2008–2012

FIVE-year performance summary 2008–2012
2012
$m

2011
$m

2010
$m

2009
$m

2008
$m

Net interest income

Other operating income

2

Operating expenses

12,111

11,498

10,862

9,890

7,855

Retail customer satisfaction

5,468

5,314

4,920

4,477

4,440

» Australia1(5,406)» New Zealand(8,022)

2009

2008

(7,718)(6,971)(6,068)

2

76%

79.8%

79.9%

76.5%

77.1%

89%

89%

85%

86%

88%

Profit before credit impairment and income tax

9,557

9,094

8,811

8,299

6,889

Provision for credit impairment(1,246)(1,211)(1,820)(3,056)(2,090)» Australia211(equal)21Income tax expense and non-controlling interest(2,300)(2,231)(1,966)(1,471)(1,373)» New Zealand

1

1

1

3

1

Underlying profit

48,23950,2974

6,011

5,652

5,025

3,772

3,426

O u r people

Adjustments between statutory and underlying profit1

(350)

(297)

(524)

(829)

(107)

Total employees (FTE)

47,09937,68736,925

Profit attributable to shareholders of the Company

5,661

5,355

4,501

2,943

3,319

Employee engagement survey results

70%

70%

64%

66%5

62%

F inancial posi t ion

Total women in management

37.8%

38.2%

38.4%

36.8%

37%

Assets

42.5

50.2

47.5

43

58.5

1

Net Assets
Tier 1 capital ratio

4642,127604,213531,703476,987

470,293

Investment in learning and development ($m)

41,22037,954

34,15532,42926,552

Lost Time Injury Frequency Rate

10.8%

10.9%

10.1%

10.6%

7.7%

» Australia

1.5

2.1

2.2

1.9

2.4

1.2

1.5

1.7

1.4

1.4

1.8

2.2

1.5

2

14.6%

15.3%

13.9%

10.3%

14.5%

Australia6

0.9%

0.9%

0.9%

0.6%

0.8%

» New Zealand

0.9

44.0%

» APEA

7

0.3

–

–

–

–

S h are h older Valu e – O rdinar y S h ares

» India8

0.3

0.0

0.0

0.60

–

Total return to shareholders(share price movement plus dividends)

35.4%(12.6%)

1.9%

40.3%

(33.5%)OUR COMMUNITIES

14.9

16.9

16.2

22.2

18.9

Market capitalisation

67,25551,31960,61461,08538,26386,75891,41090,65158,097

79,620145 cents

140 cents

126 cents

102 cents

136 cents$24.75$19.52$23.68$24.39$18.75

163,906

166,31112

170,299

161,985

154,335

Points of representation6

1,337

1,381

1,394

1,352

1,346

» New Zealand

14,009

11,164

12,42913,70016,072

Number of employees (full-time equivalent)7

48,23950,29747,09937,68736,925» Asia Pacific, Europe and America

31,16430,18922,725––

Number of shareholders

438,958

442,943

411,692

396,181

376,813Paper consumption (tonnes per FTE)

Return on average ordinary equity

5

Return on average assets2

45.6%

Cost to income ratio

1

Dividend
Share price – 30 September closing price

45.9%

44.2%

42.2%

8

9

Total value of community investment ($m)

O t h er I nformat ion

Volunteer hours
OUR ENVIRONMENT

10

GHG emissions11 (tonnes CO2-e)» Australia

Profit has been adjusted for certain non-core items to arrive at underlying profit, the result for the ongoing business activities of
the Group. These adjustments have been determined on a consistent basis with those made in prior years. The adjustments made inarriving at underlying profit are included in statutory profit which is subject to audit within the context of the Group statutory audit
opinion. Underlying profit is not audited, however, the external auditor has informed the Audit Committee that the adjustments, andthe presentation thereof, are based on the guidelines released by the Australian Institute of Company Directors (AICD) and the Financial
Services Institute of Australasia (FINSIA), and have been determined on a consistent basis with those made in prior years. Refer to page
204 to 206 for analysis of the adjustments between statutory profit and underlying profit. 2 The 2011 comparative information has been
restated to reflect the impact of the current period reporting treatment of derivative related collateral posted/received and the associatedinterest income/expense. Refer to note 1 of the financial statement for further details. The 2008 to 2010 comparative information has notbeen restated. 3 In 2010, consolidated assets included assets from ANZ Wealth Australia (formerly OnePath Australia), OnePath NZ (formerly
ING NZ), Landmark and RBS acquired during the financial year. 4 Calculated in accordance with APRA requirements effective at the relevant
date. Basel II has been applied from 1 January 2008. 5 Average ordinary equity excludes non-controlling interests and preference shares.
6
Includes branches, offices, representative offices and agencies. 7 Comparative amounts have changed reflecting an amendment to FTE toalign to the current year methodology (2011: FTE increased by 1,359). 8 Excludes employees whose only ANZ shares are held in trust under
ANZ employee share schemes.

36

2010

Institutional Relationship Strength Index ranking3

2,3

1

2011

O u r c u s t omers

U N D E R LY I N G F inancial performance 1
2

2012

13

14

» Australia

0.163

0.167

0.211

0.178

0.189

» New Zealand

0.155

0.125

0.148

0.146

0.163

1
Source: Roy Morgan Research – Main Financial Institution. 2 Source: Nielsen Consumer Finance Monitor. 3 Source: Peter Lee Associates
Large Corporate and Institutional Relationship Banking Report 2012. Ranked against top four competitors. 4 2011 FTE numbers adjusted toinclude APEA contractors. 5 Interim survey and change in provider; 2009 results onwards are not comparable with previous years. 6 LTIFR
only includes LTIs that result in claims. 7 APEA started to calculate LTIF in 2011. 8 India started to calculate LTIF in 2009. 9 Community
investment is measured according to the London Benchmarking Group Methodology and does not include foregone revenue. 10 2012 datais pending external verification. A full, verified environmental report will be available on anz.com 11 Scope 1 + 2 only. A full GHG profile(scope 1, 2 and 3) will be available on anz.com 12 Figure updated from 166,756 as reported last year due to updates of estimates to actual
figure. 13 Emission factors were updated by the NZ Government in 2011 – leading to a revision of 2009/10 data. 14 Includes both office andprint (customer) paper.

37

F I N A N C I A L s u mmar y & R em u nerat ion

NON-EXECUTIVEDIRECTORS’ REMUNERATION

Remuneration
overview

THE BOARD IS RESPONSIBLE TO SHAREHOLDERS FOR THE GOVERNANCE OF ANZ, ANDOVERSEES ANZ’S OPERATIONS AND FINANCIAL PERFORMANCE. IT APPROVES THE STRATEGICDIRECTION, FINANCIAL OBJECTIVES AND APPROPRIATE RISK APPETITE FOR THE ORGANISATION.

THE FOLLOWING PROVIDES A SUMMARY OF THE REMUNERATION FOR THE CHIEF EXECUTIVEOFFICER (CEO) AND DISCLOSED EXECUTIVES – KEY MANAGEMENT PERSONNEL*.
A MORE DETAILED REMUNERATION REPORT IS CONTAINED IN THE ANNUAL REPORT PAGE 13.
THE REPORT CAN BE ACCESSED VIA THE ANZ WEBSITE http://anz.com/annualreport AS WELL
AS IN HARD COPY.

FinancialYear

Short-term
NED Benefits$

PostEmployment$

Total
Remuneration$

2012

775,000

15,949790,949

2011

775,000

15,343790,3432012

300,000

15,949315,9492011

300,000

15,343

315,3432012

136,250

8,061

144,3112012

302,500

15,949318,4492011

302,500

15,343317,8432012

280,000

15,949295,949

2011

280,000

15,343295,3432012

314,500

15,949330,4492011

314,500

15,343329,8432012

321,322

15,949337,2712011

320,186

15,343

335,5292012

312,500

15,949328,4492011

312,500

15,343327,8432012

2,742,072

119,704

2,861,776

2011

2,604,686

107,401

2,712,087

C u rren t N on - E xec u t i v e D irec t ors

J Morschel

G Clark

P Dwyer

1

P Hay

H Lee

I Macfarlane

D Meiklejohn

A Watkins

Total of all Non-Executive Directors

1

ANZ’s remuneration framework is designed to focus
our people on creating and enhancing value for ourshareholders and other stakeholders. We aim to ensure
there is a strong alignment between the short andlong-term interests of both our shareholders and theexecutive team.
There are three components to remuneration – Fixed
Remuneration, Short Term Incentive (STI) and Long Term
Incentive (LTI). In the case of the CEO, his remuneration
opportunity is split evenly between the three components.
In the case of Disclosed Executives, a significant portion of
their remuneration is ‘at risk’ with the outcomes differingfrom executive to executive. Refer to the Annual Report,
page 16, for a detailed description of the ‘Composition of
Remuneration at ANZ’.

The following summary has been prepared to provide
shareholders with a view of remuneration structure andhow remuneration was paid or communicated to the CEO
and Disclosed Executives for 2011 and 2012 and includes:» the actual amounts or grants made in respect of the years
2011 and 2012;» any amounts which had to be deferred in respect of theyears 2011 and 2012; and» the actual amounts received in respect of the years
2011 and 2012.

 Dwyer commenced as a Non-Executive Director on 1 April 2012 so remuneration reflects amounts receivedP
for the partial service for the 2012 year.

* The term Key Management Personnel is defined under the Corporations Act.

38

39

F I N A N C I A L s u mmar y & R em u nerat ion

Remuneration
Overview

Remuneration
Overview

Non-statutory Remuneration table
F ixedSTI

LT I

To tal R em u nerat ion

FinancialYear

Remuneration1$Nonmonetary
benefits$

2012

3,150,000

121,900

1,900,000

1,800,000

3,700,000

117%

47%

3,150,000

5,171,900

4,950,000

10,121,900

2011

3,150,000

105,5151,750,000

1,550,000

3,300,000

105%

42%

3,150,000

5,005,515

4,700,000

9,705,515

P Chronican3
Chief Executive Officer, Australia

2012

1,300,000

7,590

850,000

750,000

1,600,000

103%

41%

650,000

2,157,590

1,400,000

3,557,590

2011

1,300,000

5,744

900,000

700,000

1,600,000

103%

41%

650,000

2,205,744

1,350,000

3,555,744

S Elliott4
Chief Financial Officer

2012

1,187,000

40,853

1,100,000

1,000,000

2,100,000

140%

56%

1,200,000

2,327,853

2,200,000

4,527,853

2011

1,050,000

10,191

604,000

404,000

1,008,000

80%

32%

650,000

1,664,191

1,054,000

2,718,191

D Hisco5
Chief Executive Officer, New Zealand2012

1,000,000

309,757

900,000

800,000

1,700,000

142%

57%

500,000

2,209,757

1,300,000

3,509,757

2011

960,000

357,283

902,400

710,400

1,612,800

140%

56%

480,000

2,219,683

1,190,400

3,410,083

G Hodges6
Deputy Chief Executive Officer

2012

1,000,000

13,789650,000

550,000

1,200,000

100%

40%

500,000

1,663,789

1,050,000

2,713,789

2011

1,000,000

24,350700,000

500,000

1,200,000

100%

40%

500,000

1,724,350

1,000,000

2,724,350

J Phillips7
CEO Global Wealth & Private Banking

2012

580,000

5,500

377,000

319,000

696,000

100%

40%

290,000

962,500

609,000

1,571,500

A Thursby8
Chief Executive Officer, International & Institutional Banking

2012

1,187,000

7,590

1,100,000

1,000,000

2,100,000

140%

56%

1,200,000

2,294,590

2,200,000

4,494,590

2011

1,050,000

7,375

900,000

700,000

1,600,000

127%

51%

700,000

1,957,375

1,400,000

3,357,375

N Williams9
Chief Risk Officer

2012

790,000

32,675533,250454,250

987,500

104%

42%

474,000

1,355,925

928,250

2,284,175

Name

Cash
$

Deferred as
equity$Total$

As % oftarget%

As % ofmaximum
opportunity%

Total(deferred as
equity)$Received$

Deferred as
equity$Total$

C E O A N D C U R R E N T D I S C LO S E D E X E C UT I V E S

M Smith2
Chief Executive Officer

1 Fixed remuneration was unchanged for Disclosed Executives, other than those promoted during the year whose remuneration wasincreased to reflect expanded responsibilities.
2 M Smith – The 2012 LTI relates to the LTI grant that is proposed for 2012, subject to approval by shareholders at the 2012 Annual General
Meeting. The 2011 LTI relates to the LTI grant approved by shareholders at the 2011 Annual General Meeting. Non monetary benefits
include car parking, life insurance and taxation services. In 2012 equity to the value of $1,936,189 vested in respect of previously disclosed
deferred STI granted in 2009 and 2010. Also, equity to the value of $5,370,176 vested in respect of previously disclosed deferred LTI
granted in 2007, as approved by shareholders. In addition, equity to the value of $4,732,490 vested in respect of previously disclosed
Special Options granted in 2008, as approved by shareholders.
3 P Chronican – Non monetary benefits include car parking expenses. In 2012 equity to the value of $262,017 vested in respect ofpreviously disclosed deferred STI granted in 2010.
4 S Elliott – Fixed remuneration represents what was paid during the year (an increase to $1,250,000 occurred at date of promotion,
1 March 2012 – this figure has been referenced to calculate STI as a % of target and maximum opportunity). Non monetary benefits
include car parking and taxation services/expenses. In 2012 equity to the value of $273,800 vested in respect of previously disclosed
deferred STI granted in 2009 and 2010.
5 D Hisco – Commenced in role on 13 October 2010 so 2011 remuneration reflects amounts received for the partial service for the2011 year. Non monetary benefits include relocation expenses such as housing assistance, and car parking and taxation services
expenses. In 2012 equity to the value of $297,076 vested in respect of deferred STI granted in 2009 and 2010. In addition, equity to thevalue of $508,199 vested in respect of deferred LTI granted in 2008.

40

6 G Hodges – Non monetary benefits include car parking and taxation services. In 2012 equity to the value of $355,078 vested in respect ofpreviously disclosed deferred STI granted in 2009 and 2010. In addition, equity to the value of $1,092,491 vested in respect of previously
disclosed deferred LTI granted in 2008.
7 J Phillips – Commenced in role 1 March 2012 so remuneration (fixed, STI and LTI) reflects amounts received for the partial service for the2012 year. Non monetary benefits include taxation services.
8 A Thursby – Fixed remuneration represents what was paid during the year (an increase to $1,250,000 occurred at date of promotion,
1 March 2012 – this figure has been referenced to calculate STI as a % of target and maximum opportunity). Non monetary benefits
include car parking expenses. In 2012 equity to the value of $1,047,116 vested in respect of previously disclosed deferred STI granted in2009 and 2010 and equity to the value of $1,201,741 vested in respect of previously disclosed deferred LTI granted in 2008. In addition,
equity to the value of $1,081,040 vested in respect of previously disclosed equity granted in 2009 in connection with his commencementwith ANZ.
9 N Williams – Commenced in role 17 December 2011 so remuneration (fixed, STI and LTI) reflects amounts received for the partial service
for the 2012 year. Non monetary benefits include relocation, car parking and taxation services expenses.

41

Handy Contacts

Share Registrar

REGISTERED OFFICEANZ Centre Melbourne
Level 9, 833 Collins Street
Docklands VIC 3008 Australia
Telephone +61 3 9273 5555
Facsimile +61 3 8542 5252
Company Secretary: John Priestley

AUSTRALIA
Computershare Investor Services Pty Ltd
GPO Box 2975 Melbourne
VIC 3001 Australia
Telephone 1800 11 33 99 (Within Australia)+61 3 9415 4010 (International Callers)
Facsimile +61 3 9473 2500
anzshareregistry@computershare.com.au

INVESTOR RELATIONS
Level 10, 833 Collins Street
Docklands VIC 3008 Australia
Telephone +61 3 8654 7682
Facsimile +61 3 8654 8886
Email: investor.relations@anz.com
Website: shareholder.anz.com
Group General Manager Investor Relations: Jill Craig
CORPORATE AFFAIRS/CORPORATE RESPONSIBILITY
Level 10, 833 Collins Street
Docklands VIC 3008 Australia
Telephone +61 3 8654 3276
Facsimile +61 3 8654 8886
Group General Manager Corporate Affairs: Gerard Brown

Important Dates for
Shareholders*Date				Event
Interim Results Announcement

30 April 2013

Interim Dividend Ex-Date		

9 May 2013

Interim Dividend Record Date

15 May 2013

Interim Dividend Payment Date

1 July 2013

Annual Results Announcement

29 October 2013

Final Dividend Ex-Date 		

7 November 2013

Final Dividend Record Date 		

13 November 2013

Final Dividend Payment Date

18 December 2013

Annual General Meeting 		18 December 2013

* If there are any changes to these dates, the Australian
Securities Exchange will be notified accordingly.

NEW ZEALAND
Computershare Investor Services Limited
Private Bag 92119 Auckland 1142
New Zealand
Telephone 0800 174 007
Facsimile +64 9 488 8787
UNITED KINGDOM
Computershare Investor Services plc
The Pavilions
Bridgwater Road Bristol BS99 6ZZ
United Kingdom
Telephone +44 870 702 0000
Facsimile +44 870 703 6101
UNITED STATESThe Bank of New York Mellon
P.O. Box 358516
Pittsburg, PA 15252-8516
Callers outside USA: 1-201-680-6825
Callers within USA (toll free): 1-888-269-2377(1-888-BNY-ADRS)Email: shrrelations@bnymelon.com
www.bnymellon.com/shareowner

Our International Presence» Australia» New Zealand» Asia – Cambodia, China, Hong Kong, India, Indonesia,
Japan, Korea, Laos, Malaysia, the Philippines,
Singapore, Taiwan, Thailand, Vietnam» Europe and United Kingdom» Pacific – American Samoa, Cook Islands, Fiji, Guam,
Kiribati, New Caledonia, Papua New Guinea, Samoa,
Solomon Islands, Timor-Leste, Tonga, Vanuatu» Middle East
» United States of America

42anz.com

Australia and New Zealand Banking Group Limited ABN 11 005 357 522