ANZ 2022 ANNUAL REVIEWWE’RE CONTINUING TO
SHAPE A WORLD WHERE PEOPLE
AND COMMUNITIES THRIVEANZ 2022 Annual Review

Contents
Overview
Our 2022 reporting suite

22022 performance snapshot

3

Chairman’s message

4

CEO’s message

6

How we create value
How we create value

8

What matters mostto our stakeholders

10

Our operating environment

11

About our business

12

Achieving our strategy

13

Our approach to societal challenges 14
Our approach to climate change

16

Our divisions

18

Governance26

Risk management

36

Performance overview

44

Remuneration overview

62

KPMG assurance

66

Shareholder information

68

Many paths.
One Purpose.
Since 1835, ANZ has beenbuilding a better bank, increasingly
enabling customers to thrive. And
more than ever, we continue todeliver our purpose creating evengreater opportunities through:Platforms that are flexible and resilient
and leverage the kind of innovativetechnology that really makes a differencein our lives

Partnerships that unlock new value
with a great foundation and network
to help our customers prosper

People that are great at what they do
and care about our customers and thevalue we create
By giving individuals and businesses alikethe tools to grow, we help them achieve
a whole new level of financial wellbeing.

ANZ 2022 ANNUAL REVIEW

Propositions our customers love thatmake it easier to develop and growin a sustainable way

2

ANZ 2022 Annual Review

Our 2022
reporting suite2022 Annual Reportanz.com/annualreport

employees and the community throughthe COVID-19 pandemic and strengthening
our approach to climate change andhuman rights.

2022 Corporate
Governance Statement
anz.com/corporategovernance

Annual Review structure2022 Climate-related
Financial Disclosuresanz.com/annualreport

2022 ESG Supplement
anz.com/annualreport

Integrated reporting
This report includes information on Australia
and New Zealand Banking Group Limited’s1
financial and non-financial performance.
In preparing pages 1 to 60, we have drawn
on aspects of the International Integrated
Reporting Framework to describe how
our business model, strategy, governanceand risk management processes help us
manage risks and opportunities in ouroperating environment and deliver value
for stakeholders. We outline our response
to external social and environmental
challenges, including how we arecontinuing to support our customers,

The various elements of the Directors’
Report, including the Operating and
Financial Review, are covered on pages 1
to 60. Commentary on our performanceoverview contained on pages 44 to 60
references information reported in the
Financial Report pages 107 to 233.
The Remuneration Report on pages 62
to 103 and the Financial Report on pages
107 to 247 have been audited by KPMG.
KPMG also provides limited assurance overEnvironment, Social and Governance (ESG)
content within this Annual Report. A copyof KPMG’s limited assurance report overthe ESG content is on pages 242–243.
This report covers all ANZ operations
worldwide over which, unless otherwise
stated, we had control for the financial year
1 October 2021 to 30 September 2022.
Monetary amounts in this document
are reported in Australian dollars, unlessotherwise stated.

Additional information
We produce a suite of reports to meet theneeds and requirements of a wide rangeof stakeholders.

Our 2022 Corporate Governance Statement
discloses how we have complied with
the ASX Corporate Governance Council’s‘Corporate Governance Principles andRecommendations – 4th edition’ and isavailable at anz.com/corporategovernance.
This year is our first reporting against the
4th edition.
We will release our 2022 Climate-related
Financial Disclosures report prior to our
Annual General Meeting.
Our ESG Supplement provides stakeholders
with detailed ESG disclosures, including
performance against our ESG targets.
The following documents are available atanz.com/shareholder/centre:• News Release• Consolidated Financial Report, Dividend
Announcement & Appendix 4E• Results Presentation and Investor
Discussion Pack
• Annual Review2• Principal Risks and Uncertainties
Disclosure• APS 330 Pillar III Disclosure
We are continually seeking to improve
our reporting suite and welcome
feedback on this report. Please address
any questions, comments or suggestions
to investor.relations@anz.com.

DISCLAIMER & IMPORTANT NOTICE:
The material in the Annual Review contains general background information about the Bank’s activities current as at 26 October 2022. It is information
given in summary form and does not purport to be complete. It is not intended to be and should not be relied upon as advice to investors or potential
investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered,with or without professional advice when deciding if an investment is appropriate. The Annual Review may contain forward-looking statements or
opinions including statements regarding our intent, belief or current expectations with respect to ANZ’s business operations, market conditions, resultsof operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in the Annual Review, the words‘forecast’, ‘estimate’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions,as they relate to ANZ and its management, are intended to identify forward-looking statements or opinions. Those statements: are usually predictive incharacter; or may be affected by inaccurate assumptions or unknown risks and uncertainties; or may differ materially from results ultimately achieved. As
such, these statements should not be relied upon when making investment decisions. These statements only speak as at the date of publication and no
representation is made as to their correctness on or after this date. Forward-looking statements constitute ‘forward-looking statements’ for the purposesof the United States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions
to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.
1. Australia and New Zealand Banking Group Limited (the Company) and the entities it controlled at the year end and from time to time during the financial year (together, the Group).
2. The 2022 Annual Review is comprised of pages 1 to 60, 248 to 249 and 257 to 258 of this Annual Report and a Remuneration Overview.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information3

2022
performancesnapshot146 C
Total Dividend for 2022
per share$6.5 B
Cash profit¹

84%
employee engagement

More than

58 K
participants in our financial
education programs²$20.75

12.3%
Common equity Tier 1 Capital⁴

35.9%
of women in leadership⁵

Net tangible assets per share³

10.4%

228.8 CCash return on equity¹

Earnings per share (Basic)¹$40.04 B

Supported nearly

1.5 M
customers in saving regularly⁶
Over$4.4 B
funded and facilitated todeliver more affordable,
accessible and sustainable
homes to buy and rent
since 2018⁷

funded and facilitated insustainable solutions since 2019

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers inunderstanding the result of the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 45 . 2. Includes
individuals who have participated in more than one program (for example, people who have participated in MoneyMinded as part of Saver Plus are counted twice as they areincluded in both the MoneyMinded and Saver Plus totals). 3. Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets divided
by the number of ordinary shares. 4. APRA Level 2. 5. Measures representation at the Senior Manager, Executive and Senior Executive levels. Includes all employees regardlessof leave status but not contractors (who are included in Full Time Equivalents (FTE)). 6. On average, across Australia and New Zealand. 7. In Australia and New Zealand.

4

ANZ 2022 Annual Review

During a period of significant
global uncertainty, all our divisions
contributed to a full-year statutory
profit of $7.12 billion, up 16% on theprior year, driven by strong revenue
growth as well as disciplined costmanagement.
As a result, we were pleased to pay a Total
Dividend of 146c, which was up 4c on 2021,
and meant more than $4.2 billion was
returned to you, our shareholders.
With the bank in good shape, we are also
prepared for a period of global uncertainty.

A key measure of strength, our
Common Equity Tier 1 Ratio of 12.3%1
is well above the Australian Prudential
Regulation Authority’s “Unquestionably
Strong” benchmark of 10.5%.
Paul O’Sullivan
Chairman

Chairman’s
message
This was a year when we made significant
progress strengthening the bank forthe future while also delivering a solid
financial outcome for shareholders.

We have maintained prudent reserves tohelp weather any external shocks with acollective provision balance of $3.9 billion,
while materially improving the shape andcomposition of our lending book. An
example of this is how our investment
grade lending has increased by 50%
since 2016.
We also made good progress on thecontinued digitisation of the bank withthe launch of ANZ Plus, where we haveeffectively built a new retail banking
platform that will be the future foundationof ANZ in Australia.
Another highlight for the year was theagreement announced in July to acquire
Suncorp Bank.
While still subject to various Governmentand regulatory approvals, this will provide
ANZ with a platform for growth for the

1. Pro forma CET1 of 11.1% when accounting for the recently
announced acquisition of Suncorp Bank.

Overview

How wecreate value

Performanceoverview

coming decades, particularly in the
fast-growing Queensland market.
We believe this acquisition will help ANZ
compete more effectively in Queensland
and ultimately provide better services tocustomers across Australia.
The associated $3.5 billion capitalraising was well received despite volatile
market conditions. It was the world’s
largest equity raise this calendar year
for a Mergers and Acquisitions (M&A)
transaction, structured in a way toensure all ANZ shareholders weretreated equally, and I’d like to thankshareholders for their support.
The annual report also sets out ourapproach to climate change and we know
this is important to all our shareholders.
We want to be the leading Australia and
New Zealand-based bank in supporting
customers’ transition to net zero emissions
by 2050. We also recognise we can havethe most impact by working with ourcustomers to reduce their emissions.
Our policy is to support customers throughthe transition, backing their plans byproviding more finance for less emissions.
We have high expectations, particularly
for our customers in the energy sector.
We expect our energy customers’ plans
to be net-zero aligned, public and specific.
We acknowledge some stakeholders havesuggested that ANZ immediately cease
lending to companies in carbon-intensive
sectors like energy.
This approach may reduce ANZ’s exposuresof ‘financed emissions’. However, it does not
reduce emissions in the ‘real world’ if thecompany receives funding from an alternate
source. We are also then precluded from
actively supporting the development of
their net-zero aligned transition plans.

Remuneration
overview

Shareholder
information

5

Non-Operating Holding Company

Board Renewal

Our core business is banking and that
won’t change.

I’d like to acknowledge the enormous
contribution of Graeme Liebelt who isretiring from the Board at the upcoming
Annual General Meeting.

However, to help us better compete
in the future we are introducing a newcorporate structure, known as a NonOperating Holding Company. This will be
subject to a shareholder vote in December.
Like other traditional banking businesses,
ANZ faces significant disruption, largely
from non-banking businesses competingin financial services. Understandably, thesebusinesses are not regulated in the same
way as banks like ANZ.
The proposed structure will allow ournon-banking businesses to operate
on a more level playing field with nonbanking companies, while maintaining
an appropriate regulatory environment
for the bank as a whole.
These structures are not new and arecommon for many financial institutions
around the world, including Barclays,
Lloyds Bank, DBS, Citigroup and HSBC
as well as Australian financial institutions
Macquarie and Suncorp.
This will help make our banking businessmore efficient, providing us with greater
strategic and operational flexibility and,
importantly, allowing us to better meet
our customers’ needs.
All of your Directors intend to vote all the
ANZ shares they own or control in favourof the Scheme. I would encourage you
to look at the detailed scheme booklet,
located at anz.com/schememeeting, whichsets out in more detail the benefits and thecosts of implementation of this proposal.

Graeme has given tireless service overthe last nine years, particularly in his roles
chairing the Human Resources and Risk
committees. I will personally miss his wise
counsel, strategic insight and experience.
It has been an honour to serve on the Board
with him and on behalf of all shareholders
I wish him well with his future endeavours.
I am also pleased to formally welcome
Jeff Smith who joined the Board in August
and will stand for election at the upcoming
AGM. Jeff is an experienced global businessand technology executive having been
Chief Information Officer at several
organisations – including IBM, Suncorp
and Telstra – and has already made asignificant contribution for shareholders.
Finally, I’d like to also thank my fellow
shareholders for their support in what
has been a transformational year andacknowledge the more than 39,000
people who work tirelessly each day
for their customers.

Paul O’Sullivan Chairman

6

ANZ 2022 Annual Review

CEO’s message
We go into the new year with solid
momentum and cash profit before
provisions excluding large/notable
items growing at 20% in the second
half, which is the fastest half-on-halfgrowth we have recorded in morethan a decade.

We’ve achieved all this while also preparing
the bank for the future.
We agreed the acquisition of Suncorp
Bank which, if approved by governmentand regulators, will provide an important
platform for growth, particularly in the
fast-growing and rapidly diversifying
Queensland economy.

We restored momentum in Australian homeloans with application approval times backin line with industry peers. This was assisted
by our decision to bring Australia Retailand Digital Transformation together as
one division.

Suncorp Bank is a well-run business thatwill see more than one million new retailcustomers join ANZ, sharing in the benefitsof a wider range of products and services.
It also means the Suncorp Group is able
to focus on its core mission of being thebest insurance company in Australia and
New Zealand.

We continued the re-platforming ofAustralia Retail onto ANZ Plus, which is our
new digital bank, with deposits growing
at a rate faster than any new digital bank inAustralia. Around a third of those customers
joined ANZ for the first time.

The ‘non-operating holding company’
structure, which shareholders will havethe opportunity to vote on in December,is another important step that will help
us further strengthen and grow ourcore business.

In New Zealand, we maintained an industry
leading position across our key segments
while also reaching the final stages of BS11.
This was one of the largest regulatory
programs implemented in New Zealandbanking history. It now means we are well
positioned to focus on the future andfurther build the franchise.

We are a safer bankInstitutional continues to benefit fromour multi-year transformation as risingrates across the globe create favourable
conditions for the business.

Combined with the exit of Financial
Planning & Advice, as well as all the
associated remediation being at thevery final stage, we are the only majorbank in Australia to have removed therisks associated with wealth management
for shareholders.

We also did what we said we would do.

The expansion of our platforms strategy,
where we lead the market in providingbanking services for other financial
institutions, resulted in the volumeof payments processed using ANZ’s
infrastructure growing by 85%. We also
continued to innovate in our approachto digital assets, executing the firstever Australian bank-issued Australian
dollar stablecoin.
Australia Commercial delivered a strong
first-up result as a stand-alone divisionand is already benefiting from increased
focus and a refreshed strategy. A highlight
was the commencement of the ANZWorldline joint venture that will allow
us to provide business customers withworld-leading point-of-sale and online
payment technology.

We continued the systematic de-riskingof the bank, highlighted by the sale of ourmargin lending business and the formal
separation of our Wealth businesses to
Insignia, formerly known as IOOF, andZurich last month.

We further strengthened our loan portfolio,
particularly in Commercial and Institutionalbanking, where we have deliberately exited
high-risk portfolios while increasing our
focus on investment grade lending.
During the year we invested significantly
to help prevent customers falling victim to
fraud as well as continually improving our
cyber defences.
A good example of this is the behaviouralbiometrics capability we implemented
which has detected approximately 3,600
fraudulent applications, preventing nearly$40 million of identity fraud.

While preventing cybercrime remains achallenge for all businesses, we take ourrole seriously and maintain a sophisticated,
24/7 internal Security Operations Centre,
analysing millions of events daily. As you
would expect, our team works closely withother banks and government agencies
around the world to protect against theever-evolving cyber security threats.

ANZ Plus
As mentioned earlier, we launched this year
our new retail banking platform in Australia,
ANZ Plus.
ANZ Plus is effectively a new retail bank; onethat is focused on improving the financial
wellbeing of our customers. This is good forcustomers and the early signs are promisingwith solid deposit growth, particularly withcustomers new to the bank.
A key feature of ANZ Plus is the ability
to easily save for multiple goals without
the need to open a new account. This isimportant because we know a savings
habit is core to financial wellbeing.
We have seen strong growth in the numberof savings goals created with 45% of ouractive customers taking advantage of thefunctionality, compared with less than 5%
on our traditional platform.
ANZ Plus also has the very high levelsof security our customers and regulators
expect with market-leading fraud
prevention technology already having
a material impact.
We will begin moving existing customers
across to ANZ Plus while also piloting
a new digital home loan in the coming
weeks. This will see the introduction of afully automated digital home loan offering,
initially focused on the re-finance market,
later in 2023.

Sustainability
ANZ has been taking important steps to
not only reduce our own emissions but
also help our customers, particularly 100of our largest emitting business customers,
reduce their emissions and enhance theirresilience to a changing climate.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

7

During the year we formed a strategic
partnership with Pollination, a marketleading global climate change investment
and advisory firm, that will focus on thetransition needs of ANZ’s customers globallyin the areas of Sustainable Finance, Project& Export Finance, Carbon Markets andCorporate Advisory, including mergers
and acquisitions.
An example is the partnership we announcedin Australia with INPEX Corporation and
Qantas to explore a carbon farming andrenewable biofuels project in the Wheatbelt
region of Western Australia. This is an exciting
opportunity with two important customers
that has the potential to develop a domestic,
sustainable aviation fuel industry in Australia.
In New Zealand, we launched our Good
Energy Home Loan which allows customers
to borrow up to $80,000 at a 3-year fixed
rate of 1% to make their homes moreenergy efficient. We also introduced asimilar initiative for business and corporate
customers, allowing them to access up
to $3 million at a special floating interest
rate for up to five years to be used on
environmental initiatives.
There are economic risks ahead, but weare entering 2023 in great shape and withpositive momentum.
We have a balanced portfolio of businesses,
leadership in intermediating trade andcapital flows, particularly aligned tosustainability and a strong balance sheet
which means ANZ is better positioned
than most for the opportunities ahead.
Finally, I want to thank the entire teamat ANZ for their ongoing commitment
to our customers and the community.
Our culture is strong, we have industry
leading employee engagement and wehave an embedded sense of purpose –to shape a world where people andcommunities thrive.

Shayne Elliott Chief Executive Officer

Shayne Elliott
Chief Executive Officer

This has been a transformational year during
which we delivered a strong financial resultwith all our divisions making a material
contribution, demonstrating the benefits of awell-managed and diversified portfolio.

8

ANZ 2022 Annual Review

How wecreate value
Value drivers

Our strategy and business model

Products and services
Loans, transaction banking services,
deposits and other financial products
developed for our customers.

Better accessto capital andtalent, driving
greater capacity
to invest well

Finance
Access to capital through customer
deposits, debt and equity investors,
and wholesale markets to support ouroperations and execution of our strategy.

PeopleEngaged workforce with the skills
required to reinvent banking, inline with our purpose and culture.

Technology, data andrisk management
Flexible, digital-ready infrastructure
to provide a great customer experience,with systems and processes that areless complex, less prone to error andmore secure.

Better customer
propositions thatare purposeful,engaging, efficientand safe

Better financial
outcomes
for shareholders
and staff

Better acquisition
and retention
rates, and higher
share of target
customers

Our customers will haverelatively better financial
wellbeing, more sustainable
practices and generate higher
average lifetime value

Better data,
insights, risk
decisions andpricing

Better financial
wellbeing andsustainability outcomesfor customers andthe community

Better reputation
among customers
and the community,and higher workforce
engagement

Better customer
engagement,
and greater useof our products
and services

SocialTrusted relationships with ourcustomers, business partners
and the community to strengthen
our brand and reputation.

Environment
Minimising the impact of our operations,
including through:• The customers we choose to bank
• How we design and distributeour products• Collaboration with partners

To embrace the opportunities, address the risks presented by
the external environment and realise our vision, we are pursuingfour strategic imperatives to: create a simpler, better capitalised, betterbalanced bank; build a superior experience for our people and customers
in order to compete in the digital age; focus our efforts on attractive
areas where we can carve out a winning position; and drive a purposeand values-led transformation of the bank.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

9...creating value for our stakeholders1

Shareholder value

Customer value

Employee value

We generate stronger long-term
financial results (in terms of sustainableeconomic profits) enabling shareholders
to meet their goals.

Our customers are financially betteroff over their lifetime and implement
more sustainable business practices
than others.

Our diverse teams are engaged
and optimised for success.

228.8 C$374 B84%

cash earnings per share (Basic)2

home loan portfolio, increaseof $6 billion in 2022 (Australia
and New Zealand)

employee engagement

cash return on equity2

Business lending balance

Women in leadership

Proposed final dividend
per share of(Australia and New Zealand)

10.4%

74 C
and interim dividend
per share of 72 cents

3

$93 B

35.9%
$5.3 Bin employee salaries and benefits$357B
Retail & Business customer deposit
balances (Australia & New Zealand) and$259 billion of Institutional deposits

Community value

Funded and facilitated overMore than

Our practices and services
provide more opportunity for thecommunity and we have supported
and improved positive economic
development and transition.

$4.4 B

58 K

to deliver more affordable,
accessible and sustainable homes
to buy and rent since 20184

people reached throughour financial literacy programs
MoneyMinded and Saver Plus6$3.4 B$40.04 B

in taxes paid to government

5

Funded and facilitatedin sustainable solutions
since 2019

1. All figures below relate to the period 1 October 2021 – 30 September 2022 unless otherwise stated. 2. On a cash profit (continuing operations) basis. Excludes non-core

items included in statutory profit and discontinued operations and is provided to assist readers in understanding the result of the ongoing business activities of the Group.
For further information on adjustments between statutory and cash profit refer to page 45. 3. Includes Private Bank. 4. In Australia and New Zealand. 5. Represents statutory
income tax expense (including discontinued operations), unrecovered GST/VAT, employee related taxes, and other taxes/duties. 6. Includes individuals who have participatedin more than one program (for example, people who have participated in MoneyMinded as part of Saver Plus are counted twice as they are included in both the MoneyMinded
and Saver Plus totals).

10

ANZ 2022 Annual Review

What matters mostto our stakeholders
Through our materiality assessment,
we seek to identify those issues withthe most potential to impact ourability to operate successfully andcreate value for our shareholders
and other stakeholders. We
engage with internal and external
stakeholders to inform ouridentification of and responses
to ESG risks and opportunities.
We use the results to inform our strategy,
ESG targets, group remuneration scorecard
and external reporting.
This year, our materiality assessment again
highlights the importance of continuing to
act on climate change. Greenwashing was
identified as an emerging topic.
The importance of information security
has increased commensurate to the scaleand sophistication of scams targeting
individuals. This is part of a broader
theme of payments system safety.
Innovation and technology is recognised
as foundational to providing customers
with a digitally connected experience,
while also ensuring the responsible
use of emerging technologies.
Customer experience is determined by
the products we offer customers andthe value they deliver, and ensuring wehave empathetic and helpful processes
for when things go wrong, such as
managing complaints and for customers
in financial difficulty. This is of particularimportance given the emerging impact
of macroeconomic conditions on thecost of living and housing affordability.
As staff return to workplaces, employee
capability and wellbeing, including mental
health, was viewed as essential to maintainan engaged and resilient workforce.

Top 5 material issues:
Employee capability and wellbeing
Climate changeManaging the business risks andopportunities associated with climatechange. Includes the role we play insupporting our customers to transition
to a low carbon economy.

Information Security
Policies and processes in place toprotect our systems, data and customers
against scams and cyber attacks. Includes
customer access to personal data.

Innovation and technology
Keeping pace with digital innovation
to ensure we are offering our customers
reliable and convenient products andservices in a rapidly changing market.

Customer experience
Delivering value and improved customer
experience through appropriate financial
products and services for all customers,
small business and personal.

Attracting and retaining a capable andengaged workforce, that is diverse andinclusive, helping us serve our customers
better and drive strong business performanceacross the markets in which we operate.
Includes supporting the physical andmental health and wellbeing of employees.

Insights from the assessment were
presented to our executive Ethics andResponsible Business Committee and
Board Ethics, Environment, Social andGovernance Committee.

Our material ESG issues are ‘mapped’
to the bank’s Key Material Risks on
pages 40–42.

The full list of our material ESG issues
and key steps in the materiality
assessment process are discussed inour 2022 ESG Supplement available
at anz.com/annualreport
Detailed information on other ways
in which we have engaged withstakeholders is also included in the2022 ESG Supplement.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

11

Our operating
environment
CHALLENGE

Rising inflationand interest rates,
and moderating
credit growth

OUR RESPONSE• Consumers are facing abrupt costof living adjustments through rises
in prices of energy and other items,
and more recently, interest rates• After a period of strong growth,credit growth is moderating – driven
by lower demand for housing credit

Increased public
and regulatory
scrutiny• Challenges arising from regulatory
expectations, and changing community
standards and expectations, particularly
as they relate to ESG• Effectively assessing borrowers’ resilience to rising rates• Ensuring consumers are offered financially appropriate
products and services• Dealing appropriately with customers experiencing
financial hardship or needing extra care
• Adjusting our staff salaries appropriately• Ensuring our products and services are appropriate
for customers• Building trust by ‘doing what we say’
• Working cooperatively with regulators, government
and NGOs• Strengthening our ESG policies and processes andensuring we implement them effectively – transparently
disclosing our progress

Increasedcompetition• Ongoing competitive intensity,from both ‘traditional’ and new,digitally-enabled competitors• Deploying new and improved digital services, products
and processes to help meet customer needs for
efficient and accessible banking• Investing in underlying technology and systems
to establish more flexible and responsive platforms

Cyber-security
threats• Increased cyber-attacks,
scams and attempted fraud• Ongoing investment in cyber-security and scams
detection capabilities and raising customer
awareness as to the relevant risks

Geopoliticaltension• Heightened tension in our operating
regions and other nations, affecting
the global economy and creating
significant societal disruption• Contingency plans have been developed forour medium-to-higher risk jurisdictions withtrigger events identified and monitored

Climate change andbiodiversity loss

• Increasing regulatory, political andsocietal focus on the transition risks
associated with climate change,
including financial risks associatedwith lending to customers impacted
by climate change• Providing sustainable banking and finance products andservices, such as green and sustainability-linked loans andbonds, that drive the transition to a low carbon economy• Strengthening our strategy, policies, processes, products
and services to manage the risks and opportunities
associated with climate change and biodiversity loss

12

ANZ 2022 Annual Review

About ourbusiness
Our divisions
Australia Retail – serves retail customers
across Australia through our branch
network, ATMs, digital and mobilebanking applications including ANZ Plus.
Australia Commercial – serves commercial
and private banking customers acrossAustralia through our business centres,
digital and mobile banking applications.
Institutional – serves institutional andbusiness customers across Transaction
Banking, Loans and Specialised Financeand Markets.
New Zealand – serves retail and commercial
banking customers in New Zealand and is
one of the largest New Zealand companies
based on profit and assets.

• Supporting household, businessand financial practices that improve
environmental sustainability; and• Improving the availability of suitable
and affordable housing options for
all Australians and New Zealanders.

In particular, we want tohelp customers:$

Save for, buy and own
a liveable home

Pacific – provides products and services toretail and commercial customers located in
the Pacific Islands, where our history dates
back 139 years.
Group Centre – provides support to theoperating divisions, including technology,
property, risk management, financial
management, strategy, marketing,human resources and corporate affairs.

We provide banking
and financial products
and services to around 8.5
million retail and businesscustomers, and operate
across 32 markets.

Our purpose and strategy

Our expertise, products
and services make us abank. Our people, purpose,values and culture makeus ANZ.

We bring our purpose to life through ourstrategy; to improve the financial wellbeing
and sustainability of customers throughexcellent services, tools and insights thatengage and retain them, and help positively
change their behaviour.

Our purpose is to shape a world where
people and communities thrive. It explains‘why’ we exist and drives everything we
do at ANZ, including the choices we makeeach day about those we serve and how
we operate.

Through our purpose we have elevatedareas facing significant societal challengesaligned with our strategy and our reach
which include commitments to:• Improving the financial wellbeing ofour people, customers and communities
by helping them make the most of theirmoney throughout their lives;$

Start or buy and sustainably
grow their business$Move capital and goods aroundthe region and sustainably growtheir business
Fundamental to our approach is acommitment to fair and responsiblebanking – keeping pace with the
expectations of our customers, employees
and the community, behaving fairly
and responsibly and maintaining highstandards of conduct, as well as addressing
issues identified through our annualmateriality assessment.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

13

Achieving
our strategy
Integrating ESG and purpose into our strategy has created an
opportunity for us to better serve our customers and generate
long-term shareholder value.
We will achieve our strategy
through…
Propositions our customers love... witheasy-to-use services that evolve to meettheir changing needs.
Through better use of data we will be able toprovide valuable insights about our customers
and how they can improve their financial
wellbeing and sustainability over their lifetime,enabling us to create superior propositions.
Flexible and resilient digital banking
platforms... powering our customers
and made available for others to power
the industry.
Platforms underpin our own propositions
and will increasingly underpin those of
our customers, notably other banks or
institutional corporations.
Partnerships that unlock new value...
with ecosystems that help customers
further improve their financial wellbeing
and sustainability.
We recognise that no one institution can doeverything or innovate at the pace necessary
to satisfy customers’ needs – strong
relationships with partners are therefore vital.

Purpose- and values-led people... whodrive value by caring about our customers
and the outcomes we create.
Our people listen, learn, adapt anddo the right thing the first time – delivering
the outcomes that address financial andsustainability challenges.

Building the financial wellbeing
and sustainability of our customers
creates a positive cycle of benefits. It
directly benefits customers and also
grows shareholder returns; it leads toa strong and positive reputation; itultimately means it costs less to acquire
customers; and it grows loyalty, which inturn generates better returns – delivering
more capital so we can invest in building
a better bank and continue to improve
the lives of our customers.

Our values
Our values shape how we deliver
our purpose-led strategy. They are thefoundation of ‘how’ we work – living ourvalues every day enables us to deliveron our strategy and purpose, strengthen
stakeholder relationships and earn thecommunity’s trust. All employees andcontractors must comply with our Code of
Conduct, which sets down the expected
standards of professional behaviour
and guides us in applying our values.

Our values are:Integrity
Collaboration
Accountability
Respect
Excellence

Supporting sustainable
development
We are committed to the United
Nations Sustainable Development
Goals (SDGs) and believe thatbusiness has an important roleto play in their achievement.
Our 2022 ESG targets supported
12 of the 17 SDGs.
In 2019 we became a founding
signatory to the UN Principles for
Responsible Banking. Under the
Principles we are required to set
at least two targets that address
our most significant (potential)
positive and negative impacts,aligned with the SDGs and theParis Climate Agreement.

Further information on our
progress towards implementing
the Principles, including targets
we have set, is in our 2022
ESG Supplement.

14

ANZ 2022 Annual Review

Our approach
to societal challenges
We’re focused on bringing our
purpose to life through helping
tackle complex issues that are core
to our business strategy and matterto society. This work is underpinnedby our commitment to fair andresponsible banking and informed
through our materiality assessment.

Performance against our Environment,
Social and Governance (ESG) targets andfurther information on our ESG approach
can be located in our ESG Supplement
available at anz.com/annualreport

Improving the availability ofaffordable and sustainablehousing, and supporting customers
through a changing economy
We remain committed to helping improve
the availability of suitable and affordable

housing options for all Australians and
New Zealanders. Our work spans many
sub-sectors of the market such as affordable
housing, specialist disability accommodation,
aged care and homelessness, as well asworking with community partners toprovide housing for people in need ofadditional support.
We have targets to:• Fund and facilitate $10 billion of
investment by 2030 to deliver more
affordable, accessible and sustainable
homes to buy and rent in Australia and
New Zealand. Since 2018 we have funded
and facilitated over $4.4 billion towards
the target.
• Support more customers into healthierhomes in New Zealand by 2025.
Since 2020 we have supported
1,446 households in New Zealand.
We strive to support our customers toachieve their home ownership goals ina way that also improves their financial
wellbeing. This includes ensuring homeloan customers are financially informed
about the details of their mortgage, haveborrowed within their means, and areresilient to potential future events.
During the pandemic, our default response
was to keep repayments at the same levelto help Australian customers get aheadon their mortgage, meaning we did not
automatically reduce minimum repayments
as interest rates decreased. This assisted
customers to build repayment buffers
ahead of rising interest rates in Australia.
With interest rates on an upwards trajectory
across many geographies and costs for both
discretionary and non-discretionary items
growing, staying on top of household
budgets and mortgage repayments has
been a key issue for our customers. We areusing real-time transaction data to adopt
a proactive approach to identifying andcontacting customers heading towards
difficulty to discuss how we can help
them before they get into trouble.

To help our customers buy andown a home, this year in Australia
we increased our home loan balance
by $6 billion to $284 billion
and our home loan balance in
New Zealand grew NZ$8 billion
this year to NZ$101 billion.
Improving the financial
wellbeing of our people,
customers and communities
Financial wellbeing is at the heart ofthe bank we’re building to create better
financial outcomes and resilience for ourcustomers. This is particularly importantas our customers navigate an economic
environment with rising interest rates andcost of living challenges.

Image: Assemble Kensington resident Sophie.

We are committed to improving thefinancial wellbeing of our people, customers
and communities by helping them makethe most of their money throughout theirlives. We continue to work closely with
our partners to ensure we are supporting
customers and the community in a
respectful, fair and appropriate way.

Overview

How wecreate value

Performanceoverview

This year we launched thefirst ANZ Plus retail banking
proposition, taking a digital-first
approach to designing banking
products which drive positive
financial wellbeing outcomesfor customers.

At the heart of ANZ Plus
are nine financial wellbeing
principles which aim to impartknowledge, provide clarity andempower customers to makebetter financial decisions:
1

Spend less than you earn2 	Put money aside

for a rainy day
3 	Save regularly

Remuneration
overview

Shareholder
information

Supporting employee
capability and wellbeing
ANZ’s strong and inclusive culture, built
over decades, has supported our people tomaintain a strong alignment to our strategy
and purpose while the majority of ourworkforce continued to work flexibly as theimpacts of the pandemic lingered in somegeographies. This strong culture supported
team connectivity and contributed towards
a high level of engagement despite a periodof significant change.
As employees have started to return to theoffice, we’ve evolved and simplified the
behaviours that will continue to build our
future success. Our new behaviour framework
was introduced in February 2022.

Our behaviours:
Create opportunities

towards your goals
4 	Protect what you

can’t aﬀord to lose
5

Deliver what matters

Borrow within your means

6 	Pay your mostSucceed together

expensive debt first7 	Build towards

your retirement
8

Invest in things that grow

9 	Give back to family, friends

and the community
when you can

We play a key role in thecommunity by leading
considerations into what is
influencing financial wellbeing
and applying insights fromresearch to our financial education
programs, Saver Plus andMoneyMinded. These programs
involve close collaboration withpartners from the communityand government sectors.

Peoples’ needs and expectations of when
and where they work have changed, andwe know that our employees are seeking
value from their day-to-day work.
Responding effectively to this is a key
enabler of a stable, future-fit workforce.
For many years, we have successfully
operated a workforce based across multiple
geographies and supported flexibility for all
roles. We are committed to hybrid working
and the pandemic has uplifted our flexible
working capacity and capability. Key to thisis how we support our people leaders andteams to create opportunities, deliver whatmatters and succeed together while working
in a hybrid, flexible manner. We continued
to provide psychological and ergonomic
support to our workforce, who have worked
from home for the majority of the year.
We are future proofing our workforce in theface of a turbulent external environment
and a volatile talent market by focusing on
the most important capabilities that will
drive our strategic agenda. This year wehave continued to invest in key capabilities
such as Engineering, Cloud, Data andDigital, and Customer Coaching.

15

ANZ is well positioned to attract and retain
talent, and our people tell us that they join
and stay because we offer challenging,interesting and complex work that matters.
They are empowered to work in a way thatsuits them and ANZ, and because they want
to belong to a community that celebrates
the value of diversity.
Our focus on employee wellbeing and how
we are future-proofing our workforce builds
on our long history of support for employee
diversity, underpinned by a strong culture.
We help our people thrive in an internal
environment that continues to adapt andevolve to ever-changing external demands.

Fair and responsible banking
Underpinning everything we do is acommitment to fair and responsiblebanking. Keeping pace with the
expectations of customers, employees
and the wider community, while behaving
fairly, responsibly and maintaining highstandards of conduct. We are committed
to supporting customers in times of needand ensuring our products and services
are accessible and inclusive to all.
We continue to make progress implementing
our strategy to assist customers who may
require extra care and those facing financial
difficulty in Australia. We are focused ondelivering better customer outcomes bystrengthening frontline capability andproactive external engagement, as well as
improving product design and data use toimprove accessibility and limit harm.
We have improved support for customers
by changing the way we manage and think
about customer complaints. We have been
embedding a culture where complaints arevalued as an opportunity to learn, improving
products and services, and delivering better
customer outcomes. We strive to deliver
excellent products and services to ourcustomers but if we get things wrong,we want to know, and seek to resolve
complaints with empathy and fairness.
The expanded use of digital and realtime payments has made it easier for
criminals to move funds quickly and easily
through various accounts, and ultimately
offshore, making recall and recovery
increasingly difficult. We are investingin new technology and tools to protect
our customers from scammers looking
to steal their data and money.

16

ANZ 2022 Annual Review

Our approach to climate change
We want to be the leading Australiaand New Zealand-based bank insupporting customers’ transition
to net zero emissions by 2050.
Our environmental sustainability strategy
identifies priority sectors, technologies andfinancing opportunities to help achieve ourambition. Our climate change commitment
provides the framework for our strategy andour commitment to enable the transition byaligning our lending portfolio with net zero
emissions by 2050. We joined the Net-Zero
Banking Alliance (NZBA) in 2021, reflectingthat commitment.
The most important role we can play inmeeting the Paris Agreement goals is tohelp our customers reduce emissions andenhance their resilience to a changing
climate. We support an orderly transition thatrecognises and responds to social impacts.
This aligns with our purpose to shape a worldin which people and communities thrive.
To achieve our environmental sustainability
strategy we are:
• Directing our finance into key priority
areas (as per diagram to the right);• Reducing emissions from our operations
including a target to increase renewableenergy use to 100% by 2025 and setting
updated targets for our environmental
footprint;• Implementing strategic partnerships,
for example with climate advisory andinvestment firm, Pollination;• Actively participating in recognised
industry associations to help shapepolicy development and settings toenable the development of taxonomy
and standards; and• Funding and facilitating $50 billion ofsustainable solutions by 2025, to support
customers in their efforts to achieve
improved environmental outcomes,
including the reduction of theirgreenhouse gas emissions. This year,
140 transactions worth $18.09 billion
have been completed, bringing ourprogress towards our $50 billion target
to $40.04 billion since October 2019;• Equipping our employees with a deeper
understanding of climate risks andopportunities focusing on our Institutional
bankers in key customer segments suchas resources, energy and Agribusiness;

Refer to our ESG Supplement
available at anz.com/annualreportfor an update on our ESG Targets.

Our 2022 Climate-related Financial Disclosures will be released prior to our
Annual General Meeting (AGM). This will be our sixth report using the Task Forceon Climate-related Financial Disclosures, (TCFD) recommendations and will beavailable at anz.com/annualreport. This report will provide a more detailed update
on our approach to climate change including our customer engagement program.

Supporting our customers to transition to net zeroKey priority areas and sectors we’ll pursue• Aligning our lending decisions to
the Paris Agreement goals and havedisclosed metrics and targets forour power generation portfolio andlarge-scale commercial buildings;• Progressively developing metrics andtargets for key sectors, in line with our
NZBA commitment, which is aimed atensuring the majority of our portfolio
emissions are covered by end 2024;• Engaging constructively withstakeholders on our approach throughEnvironmental, Social and Governance(ESG) market briefings, investor
roundtables, civil society engagement
and other avenues.

Supporting sustainability
in resource extraction¹,
basic materials² andnew technologies³
Banking thedecarbonisation andelectrification of
the transportation
value chain

Enabling thetransition towards
lower emissions
buildings⁴

Increasing our
support forcompanies'
transition to
low carbon

Assistingsustainable food,beverage andcommodities
practices andsupply chains

Offering solutions to,and partnering with,sustainability-focusedfinancial institutions⁵

1. Supporting sustainable resource extraction in areas such as iron ore, lithium, nickel, cobalt, rare earths, copper and bauxite. 2. Supporting basic materials production including green
steel and low-carbon aluminium production. 3. Supporting new technology projects focused on upstream hydrogen and carbon capture use and storage. 4. Initial focus on financing
high-efficiency residential buildings and retrofits. 5. Supplying green investment options for environmental sustainability-focused funds/insurers and partnering with financial institutions
to deliver alternative capital.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information17

Our progress on the task force on Climate-related Financial Disclosures
Disclosures on our ESG Targets are outlined in our ESG Supplement and our detailed 2022 Climate-related Financial Disclosures
will be released prior to our AGM and will be available at anz.com/annualreport

Metrics and targets

Risk management

Strategy

Governance

OUR PROGRESS TO DATE

FOCUS AREAS – 2022/23• Board Risk Committee oversees management of climate-related risks• Enhance alignment with Australian Prudential Regulation
Authority (APRA) CPG229 guidance on Climate Change• Board Ethics, Environment, Social and Governance (EESG) Committee
Financial Risks and the New Zealand Financial Sector
approves climate-related objectives, policy and targets(Climate-related Disclosures and Other Matters)• Ethics and Responsible Business Committee (ERBC) consisting of executive
Amendment Act 2021
management oversees our approach to climate-related risks and opportunities• Climate Advisory Forum, chaired by our Group Executive Institutional,
supports execution of our climate-related policy, opportunities anddisclosures, subject to approval by ERBC and EESG
• ANZ’s Environmental Sustainability Strategy and Climate Change
Commitment (available at anz.com.au/about-us/esg/environmentalsustainability/climate-change/) confirms our support for the Paris
Agreement goals, our priority sectors, technologies and financing
opportunities via products and services to help achieve our ambition andour focus in supporting customers’ transition to net zero emissions by 2050

• Continue to engage with 100 of our largest emitting businesscustomers to support them to, by end 2024:– implement and strengthen their low carbon transition plans and– enhance their efforts to protect biodiversity.
• Continue to enhance banker capability to identify climate risks
and opportunities• Extend transition plan engagement with other large emitting
business customers into our regular customer assessments• Pilot the Taskforce on Nature-related Financial Disclosures (TNFD)• Included climate risk in our Risk Appetite Statements for Institutionalbank, and lending criteria in the Australian Retail, Commercial and
New Zealand portfolios• Enhanced credit approval process applied to new Agribusiness customers
and agricultural property purchases in regions of low average rainfall or
measured variability• Reviewed and assessed current and emerging regulatory requirements
across the jurisdictions in which we operate• Developed and piloted Climate Change Risk Assessment methodology
in our Project Finance business (Australia)• Participated in the Australia Prudential Regulation Authority’s (APRA)
climate vulnerability assessment which assessed the potential impactof transition and physical risks to parts of our portfolio• Completed analysis of physical and financial risks of flooding for homeloan customers in a major regional location of Australia and of coastal
flooding (nationwide) and inland flooding (Auckland) for the Reserve
Bank of New Zealand’s climate sensitivity analysis (New Zealand)• Prepare a set of climate risk standards, based on regulatory
obligations to be applied across all jurisdictions where ANZ operates• Extend our Climate Change Risk Assessment methodology beyond
our Project Finance business, starting with Institutional customers
in higher emitting sectors such as resources and energy• Develop a data strategy to inform our approach to sourcing andintegrating climate data into sectoral pathways, scenario analysis,
stress testing and analytics. This will include learning from the
New Zealand climate risk program• Enhance risk assessment capability for our bankers throughextending our Climate Change Risk Assessment• Extend analysis of physical climate risks of fire and flood to segmentsof Australian retail customers• Conduct scenario analysis for key New Zealand sectors• Conduct analysis of drought vulnerability for our Agricultural
portfolio (Australia and New Zealand) and the impacts of achange in carbon price (New Zealand)• Transition Risk: Continued engaging 100 of our largest emitting businesscustomers, to support them towards a ‘well developed’ or ‘advanced’ stageof transition planning; and enhance their efforts to protect biodiversity,
by end 2024
• Capital Deployment: $50 billion target to fund and facilitate sustainable
solutions by 2025, $40.04 billion achieved to date
• Greenhouse gas (GHG) emissions: Develop metrics, pathways and targets
to enable progress tracking as we reduce ‘financed emissions1’. Announced
targets for large-scale commercial property and power generation (November2021) in line with our commitment to the Net Zero Banking Alliance• GHG emissions: Target to procure 100% renewable electricity for ANZ’soperations by 20252, and reduce emissions in line with Paris Agreement goals• Management incentives for delivering our climate change strategy
are in place at the most senior levels of the organisation including ourGroup Executive Committee and senior leaders. Our Group Performance
Framework incorporates whether we have: Strengthened our position
as a leading Sustainability bank in the region, and our performanceagainst the S&P Global corporate sustainability assessment. Refer topage 79 of the Remuneration Report• Expand our metrics, pathways and targets for ‘financed
emissions’ to other key sectors• Develop financed emissions reporting across majority of the
New Zealand portfolio• Consider the use of emerging metrics to track our progressin helping to minimise biodiversity loss

1. Scope 3 emissions attributable to lending. 2. Self-generated renewable electricity, direct procurement from offsite grid-connected generators e.g. Power Purchase Agreement (PPA)
and default delivered renewable electricity from the grid, supported by credible attributes in accordance with RE100 technical guidelines.

18

ANZ 2022 Annual Review

Our divisions
Australia Retail
Financial Performance Cash continuing1
Net Loans & Advances ($b)

Cash profit ($m)
FY22
FY21

Maile Carnegie
Group Executive Australia Retail

Operating environment
Economic activity recovered in 2022,
in part due to a strong housing market
and employment growth, however highinflation and increasing cost-of-livingpressures are front of mind for our Retailcustomers. Competition for home loans
has intensified further with Retail customers
across the sector proactively engaging
with mortgage providers and third-party
originators leading to increased levelsof refinance activity in the industry.
Our Retail customers continue to display
positive financial wellbeing behaviours –offset accounts continue to grow; a large
portion of our home loan customers
remain ahead in their repayments; andsavings have increased for those without amortgage. Faced with a higher interest rateenvironment, support established through

2,316

Growth

FY22

-8%

FY21

290.3
284.0

Return on Avg. RWAs (%)

Customer Deposits ($b)

FY22

FY22

FY21

This year we’ve delivered strong
returns by growing momentum
in our home loans and deposits
business. We’ve invested in thefoundation of our future bank, ANZ
Plus and helped more customers
with simple banking needs switch
to mobile and digital channels.

2,140

1.8%
2.1%

the peak of the COVID pandemic remains inplace for our customers who are navigating
uncertainty or having difficulty managing
their loans. Comfort with and trust of digitaland mobile banking channels continues toincrease among customers.
Looking ahead to 2023, we face a moresubdued lending environment andincreased demands on customer cashflows.
We remain focused on growing revenue
responsibly and committed to our
automation and simplification initiatives
to help reshape our business, deliver easy,
personalised services to our customers
and sustainably grow returns for ourshareholders over the long-term.

Strategy and focus
Our strategy in Australia Retail is to support
our customers to achieve their financial
goals, in a way that also helps improvetheir overall financial wellbeing.
For our one million home loan customers,
this means making sure they are financiallyinformed about their mortgage, that it’s
within their means and they are resilient
to potential future events.
This year we’ve built momentum in
our home loans business by improving
turnaround times, enhancing ourprocessing capacity, and simplifying
our home loan product offering.
We’ve also invested in tools like thehome loan calculator to help our

FY21

150.0
141.4

Growth2%

Growth6%

customers understand how changes tointerest rates will impact their repayments,
and a free home loan check-in to help themfind ways to fine-tune their home loan soit continues to meet their needs.
We’ve invested in building the foundationof our future business, ANZ Plus, with 20
modern cloud-based technology platforms
now in place and working at scale. We havelaunched the first ANZ Plus transaction
and savings product with deposits growth
outpacing any new digital bank in Australia.
Efforts to migrate our current ‘transact andsave’ account customers from ANZ to ANZPlus will continue to be a focus into 2023
and beyond.
We’ve been helping customers makethe move to digital and mobile channels,
so they can bank when and where it ismost convenient for them. We launched
the Message Us feature in the ANZ App –a secure way for our customers to ask
questions regarding their personalaccounts, including Home Loans, inside
the app. Customers can now receive
comprehensive help through a messaging
experience without having to call orvisit a branch. We also introduced Broker
Chat, a real-time ‘live chat’ function via
the ANZ Broker Portal for brokers to easily
obtain an expected credit response dateon an application, check on the assessment
for applications and organise call backs
from assessors.

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 45.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

19

The changing faceof customer service
Ongoing customer remediation work
continues to progress well, and we remaincommitted to growing our revenue
responsibly and reinvigorating our productoffering to ensure we get things right forour customers the first time.
Looking ahead, we want to be the leading
destination for homeowners and for people
who are serious about one day owning ahome. We’ll be the bank customers trust to
better anticipate their needs and help themmake the most of their money throughout
their lives – whether they are just startingto save, ready to purchase their first homeor paying off the family home quicker thanplanned. Progressing our ANZ Plus homeloan offering will be a key factor in this andis a core priority for 2023.

Performance highlights
The Retail and Digital businesses werecombined in Australia this year, creating a
new Australia Retail Division to increase focus
on customers’ needs and better position thebusiness for future opportunities. With anemphasis on responsible growth, amidst
a challenging operating environment,
the Australia Retail Division delivered
Cash Profit of $2.1 billion.
Improvements in operational capacity
and resilience helped restore Home Loan
momentum, with volume growing $5.9
billion in the second half. This was achieved
while balancing margins and returns in
an extremely competitive environment.
Customer deposits were up $8.5 billion
in the year, representing a 6% increaseon the prior year. Many customers are still
demonstrating a cautious approach andincreasing their savings buffers. In therising-rate environment, customers arealso moving their money from at-callproducts back to term deposits.
Disciplined cost management saw a
reduction in run-the-bank expenses, while
the Division continued to invest for the future.
This saw substantial progress on ANZ Plus,as well as the modernisation of the contact
centre and physical branches to bettersupport our digital transformation journey.

Our customers continue to expect convenient, flexible andcomprehensive digital banking options, many shifting towards
higher levels of self-service, with just eight per cent of our customers
relying solely on branches for their everyday banking needs.
Over-the-counter cash and chequetransactions declined 20 per cent
YOY for the past two years and ATM
transactions declined by 18 per centin FY22, while the number of customers
using digital channels increased
steadily – 43 million transactions werecompleted in digital channels anddigital logins increased 15.4 per cent.

We’ve rolled out new branch formats
across 32 locations and are piloting two
ANZ Plus stores to meet the demand
from our customers who now often visit
a branch by appointment when theywant help with more complex needs,
like home loans or improving financial
wellbeing. It is at these times that
relationships and coaching are critical.

This increased uptake of digitalchannels and services has shifted
the expectations of customers whenit comes to face-to-face interactions
with our bankers. The role of bankers
has changed significantly and we’re
responding by adapting our bricks andmortar presence to enable staff andcustomers to focus on digital adoption
and financial wellbeing conversations,rather than just transactions.

We have also built the principle ofself-service into ANZ Plus, with acomprehensive support section housedin the app. Customers can query
suspicious transactions; lock, block,cancel or reorder their card; search
years of transaction history and change
their email address, postal address,
Tax File Number, PIN and more – all in
the app. We will continue to build-in
convenient self-service options as the
ANZ Plus product suite expands.

Image: Open layout in one of ANZ’s award-winning new branches.

Enhancing the branch experience20

ANZ 2022 Annual Review

Our divisions
Australia Commercial
Financial Performance Cash continuing1
Net Loans & Advances ($b)

Cash profit ($m)
FY22
FY21

Shayne Elliott
CEO/Interim Group Executive,
Australia Commercial

Operating environment
Australia’s small-to-medium business(SME) sector experienced moderate
growth against a backdrop of intermittent
COVID-19 related shutdowns, high inflation,
increasing input costs, supply chain issues,
and workforce shortages. Adapting to theoperating conditions, we continued to see
many customers invest, better manage
costs, and pivot their businesses towards
new market opportunities.
With the unemployment rate reachinga 50-year low, employee vacancies werean ongoing issue for many customers
particularly for businesses in regional
Australia. This downward trend is expected
to continue until early 2023 which will likely
put upward pressure on wages, further
increasing costs for some businesses.

1,107

Growth

FY22

36%

FY21

59.7
57.2

Return on Avg. RWAs (%)

Customer Deposits ($b)

FY22

FY22

FY21

This year we announced Australia
Commercial as a new division tobetter prepare it for future growth
opportunities. Improving thevisibility, focus and accountabilityof Commercial enables us to bettersupport customers striving tostart, run, or grow their businesses.

1,510

2.9%
2.1%

While inflation and interest rate rises
lowered consumer confidence, consumer
spending remained relatively strong
creating buoyancy across the sector. Higher
mortgage payments, and price increases foressential goods and services could inhibit
future spending although savings buffers,
population growth and accelerating wages
should limit any impacts.

Strategy and focus
Australia Commercial provides banking
products and services to ~630,550
Australian small and medium businesses,
as well as high net-worth, private banking
customers across Australia. Our ~2,800
Commercial employees include bankers
and specialists working across all industry
sectors who assist customers manage
working capital, optimise cash-flow andsupport growth with business loans, asset
finance, and transaction banking. Australia
Commercial also works closely with
ANZ’s Retail and Broker teams to delivercustomers’ home lending needs.
Through our direct customer relationships
and a strong broker network, ourCommercial lending increased by 4%during FY22. This result was also driven
by the introduction of several self-service
features and enhancements to bothinternet banking and the ANZ App. Ina first for a major Australian bank, eligible
customers can join ANZ and open a

FY21

112.2
111.1

Growth4%

Growth1%business transaction account in just a few
minutes via ANZ’s app using a driver’s
licence or passport, and an ABN, creatinga fast and simple onboarding experience.
We also expanded our suite of business
management tools and personalised digital
experiences to help our customers befinancially ready. This includes investment
in online business lending platforms such as
ANZ GoBiz which uses customer accounting
data to enable online applications for
unsecured overdrafts up to $300,000 andterm loans up to $500,000, with lending
approvals issued in less than 48-hours.
The platform assists customers with both
cash-flow and investment opportunities.
This work resulted in ANZ being awarded
Canstar’s 2022 Bank of the Year – Small
Business, which recognised our businessbanking products, services, and customer
satisfaction relative to peers.

Aligned with building our digital
capabilities, in April we commenced
ANZ Worldline Payment Solutions, ajoint venture with leading European
payments provider Worldline.
The new joint venture will provide ANZ
Commercial and Institutional customers inAustralia access to market-leading pointof-sale and online payment technology.

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 45.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

21

Building a gem of a businesswith help from ANZ GoBiz
Brisbane jeweller and Managing Director Ashley Portas isfunding the next growth chapter of his successful jewellery
store, Diamondport, with help from an ANZ GoBiz loan.
Founded in 2015 with an initial importfocus, the family business expanded
four years later when it established its
own workshop to enhance its design
and production services. This led to
65% year-on-year growth and opened
the door to new opportunities.
“When you grow this fast, you needmore money to grow. Suddenly,
we found ourselves needing morediamonds, new tools, more rings tomarket and sell,” said Ashley.
As customers refocused and rebuilt
following the COVID-19 pandemic, we
continued to look for ways to further
support investment. This included anincrease in our maximum loan term foreligible small business customers from
15-years to 30-years for facilities secured
by standard commercial property.
In addition, we simplified our refinanceprocess for business lending up to $1m foreligible customers, creating quicker loan
approvals and access to appropriate capital.

Performance highlights
Australia Commercial delivered a strong
first set of financial results as a standalone
division, increasing cash profit by 36%
and revenue by 18% year-on-year. This
result was driven by volume growth anddisciplined margin management, assistedby the rising rate environment. Expenses
were also tightly managed.
Net loans and advances grew 4% driven
by strong lending growth in our specialist
segments which include agribusiness,health, and property. Our larger Commercial
customers had the strongest credit appetite,while smaller business customers continued
to prioritise financial solutions to aid
cash-flow.
Customer deposit growth of 1% was moresubdued this year, following unprecedented
government support during COVID-19 in
the prior year. An improvement in our risk
adjusted returns also demonstrated thecontinued strength in the credit qualityof our Commercial loans.

To support the next growth phase Ashley
decided to apply for a $200,000 businessloan. After approaching an online lenderand his existing bank, Ashley discovered
ANZ GoBiz offered a more convenient
digital-enabled alternative.

“I found the ANZ GoBiz offer online
and really liked what I saw. It only tookme 20 minutes to apply,” said Ashley.
“I applied on a Wednesday and wasapproved by Friday,” Ashley said. “I had
no problems sharing my accounting
details and banking information with
ANZ, and I found it so refreshing to seea bank like ANZ put their trust in us.”Now, with finances in place,Diamondport is expanding its portfolioof engagement rings. Alongside
traditional designs like solitaire andhalo, the team is creating more uniqueand bespoke engagement ring designs
to appeal to a wider customer base.

Customer story

22

ANZ 2022 Annual Review

Our divisions
Institutional
Financial Performance Cash continuing1
Net Loans & Advances ($b)

Cash profit ($m)
FY22
FY21

Mark Whelan
Group Executive Institutional

Operating environment
In 2022, Institutional customers remained
resilient despite economic challenges,
market volatility and geopolitical issues.
In a clear signal that investment isstrengthening, we saw significant demand
for lending even as inflation and interest
rates rose and consumer sentimentdeclined. Our business was well positioned
for the market conditions, underpinning asolid performance in Payments and CashManagement, Trade and Corporate Finance.
A sharp climb in energy prices brought
issues such as climate change andenergy policy to the forefront of the
global economic debate, intensifying ourstrategic focus on supporting customers
in their transition to net zero. Geopolitical

1,887

Growth

FY22

-7%

FY21

196.8
158.2

Return on Avg. RWAs (%)

Customer Deposits ($b)

FY22

FY22

FY21

In the past year, some of theheadwinds facing Institutional
started to pivot to tailwinds, driving
momentum in key businesses.
Customer lending was robust,
and we made significant progressdelivering on our strategy – including
through our digital offering, platforms
and sustainability partnerships.

1,761

0.9%
1.1%

uncertainty continued, highlighting
the importance of a reliable banking
partner with a strong international trade
network and a deep understanding of
global markets.

Strategy and focus
ANZ Institutional Bank is focused on
supporting companies moving goods
and capital around the region. Our pastefforts to build a simpler, more efficient
Division positioned us well to respondquickly to our customers’ needs throughthe pandemic and provide support during
a challenging period.
In 2022, we made significant progress indelivering strategic initiatives, including
growing the Markets' customer-franchisebusiness, maximising benefits from ourinternational network, implementing
an improved customer coverage model,building on our digital self-service offering,rolling out more efficient digital credit
processes and establishing a market-leading
Digital Asset Services Team.
We also focused on extending our platforms
as a service to customers. The volume ofagency payments, processed by financial
institutions for their customers, using ANZ’s
infrastructure, grew 85% year-on-year.
Overall payments volumes grew 52%, as
we continued to invest in digital platforms.

FY21

259.4
239.6

Growth24%

Growth8%

We continued to build our position
as a regional leader in environmental
sustainability, participating in $155 billionof sustainable finance deals in FY22
while rolling out sustainability education
programs internally. Looking ahead,
we see increasing opportunities for ourcustomers as a result of the super cycleof activity that is underway.

Performance highlights
ANZ Institutional delivered a strong
performance, with a cash profit of$1.8 billion while revenues were up 1%
for the year and 10% half-on-half. The
high-quality result was achieved despite
challenging market conditions, reflecting
strong customer momentum and effective
margin management. In addition, lending
momentum remained robust, up 24%
year-on-year.
ANZ also maintained our position as theregion’s leading Institutional bank in key
markets where we operate. In Australia,
we were named #1 Lead Institutional bankfor overall market penetration for the 7thconsecutive year by Peter Lee Associates2.
In New Zealand, Peter Lee Associates
recognised ANZ as #1 for Overall Market
Penetration and Lead Bank Penetration,and #1 for Relationship Strength.3

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 45. 2. Peter Lee Associates, Australia Large Corporate
Relationship Banking 2016–2022. 3. Peter Lee Associates, New Zealand Large Corporate Relationship Banking 2022.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

23

ANZ leads landmark tokenised
carbon credits transaction
In International, we held our top ranking
for overall relationship quality in Asia for
the fifth consecutive year according to the
Coalition Greenwich 2021 Asian Large
Corporate Banking Study.
Our focus on environmental sustainability
was recognised in the market, with ANZ
named market leader in Environmental,
Social and Governance (ESG)/Sustainable
Finance in Australia4 for the second
consecutive year and ESG Bank of Choicein New Zealand5, according to Peter Lee
Associates.
In addition, ANZ formed a strategic
collaboration with INPEX Corporation
and Qantas Airways Limited to enter intoa Memorandum of Understanding, for a
project bringing together carbon farming
and renewable biofuels in the Wheatbelt
region of Western Australia. We also
launched a comprehensive hydrogenguide to support customers in exploring
opportunities associated with the emerging
sector’s rapid commercialisation.

ANZ led the market in our approachto digital assets, successfully
executing the first ever Australianbank issued Australian dollar
stablecoin (A$DC) payment througha public permissionless blockchaintransaction. The team delivered thestablecoin for Victor Smorgon Group,
closely followed by the purchase of
tokenised Australian carbon credits
using the new stablecoin.

4. Peter Lee Associates, Australia Large Corporate
Relationship Banking 2021–2022. 5. Peter Lee Associates,
New Zealand Large Corporate Relationship Banking 2022.

ANZ has taken an important next step in progressing its digitalasset strategy, supporting long-standing customer Victor Smorgon
Group in successfully purchasing tokenised Australian carbon
credits (BCAU) using the ANZ-issued stablecoin A$DC.
This is an important step for ANZ as
the bank explores greater circulationof the stablecoin. In this transaction,
Victor Smorgon Group used A$DC as a
medium of exchange to purchase the
BCAU carbon tokens from Zerocap,
an Australian digital asset investment
platform. Zerocap sourced the BCAU
from BetaCarbon, which tokenises
Australian Carbon Credit Units (ACCUs)
into digital tokens, with each
representing 1kg of carbon captured.
This transaction is also significant as itprovided A$DC/BCAU liquidity, while
offering both Victor Smorgon Group andZerocap redemption rights for A$DC.
This latest A$DC transaction came after
ANZ successfully executed the firstAustralian-bank issued Australian-dollar
stablecoin payment through a public
permissionless blockchain transaction in
March. A$DC remains fully collateralisedby the Australian dollar and isredeemable at par with funds held
in an ANZ-managed reserve account.

Victor Smorgon Group CEO Peter
Edwards said: “Victor Smorgon Groupis one of Australia’s most establishedand successful family offices, operating
across multiple asset classes, including
digital assets. Through the Zerocap
platform and continuing our multigenerational working relationship with
the ANZ Bank, we are excited to now
have an Australian dollar stablecoin
giving us a safe and secure gateway
to the digital economy.”
ANZ Banking Services Lead
Nigel Dobson said: “This milestonetransaction brings together two key
focus areas for ANZ, sustainability anddigital assets. We’re seeing increasing
customer appetite to use A$DC to enter
the digital economy, and will continue
to partner with our clients to explore
how this technology can help themachieve their goals.”

A milestone transaction and partnership

24

ANZ 2022 Annual Review

Our divisions
New ZealandFinancial Performance Cash continuing1
Net Loans & Advances (NZ$b)

Cash profit (NZ$m)
FY22
FY21

With the pace and scale of change
across the world, it will be essential
to continue to adapt and help
our personal and businesscustomers stay focused onlong-term financial wellbeing.
Antonia Watson
CEO of New ZealandOperating environment
Rapidly rising interest rates, inflationand heightened commodity prices havebecome a reality at home and around theglobe. Economic disruption fuelled by
the war in Ukraine and continued supply
chain issues add to the challenges that we
knew would linger as long as COVID-19
was around.
While we successfully navigated the year
alongside our customers, there’s been a
noticeable shift in consumer sentimentand it’s clear the broader environment has
become increasingly challenging for many.
The data tells us many customers are more
resilient than many may think – making
the right moves by prioritising home loan
repayments, savings and paying down

1,607

Growth

FY22

10%

FY21

140.4
134.5

Return on Avg. RWAs (%)

Customer Deposits (NZ$b)

FY22

FY22

FY21

We are proud of our many
achievements over this year and therole we will continue to play to help
Kiwis navigate the months ahead.

1,768

2.3%
2.2%

credit card debt. We continue to workwith our business customers on sustainablefinancing solutions – where borrowing
more is often not the answer. Being wellcapitalised provides important assurance
for our customer base.

Strategy and focus
Despite the onslaught of COVID-19 andbeing required to work from home formuch of the past two years, our accelerated
strategy work has progressed well. In thattime, we’ve delivered a number of projects
beneficial to customers and staff, suchas voice-identity confirming proof of abank account in goMoney, digital multiauthorisation for payments, automatedcustomer communications, and digital
home loan rate refixing among others.
The speed of customers’ adoption of ourdigital banking tools has continued at pace,with an increase of 81,000 active users since
March 2020. The pandemic has accelerated
the decline in over-the-counter branchtransactions by 40%. Technology willcontinue to be central to how we makethings easier for staff and customers.
We’re bringing forward a major project
to install a modern banking platform thatis “cloud-based”, providing us with more
flexibility to quickly add functions for ourcustomers and staff. By moving to a modernbanking platform we will have a new coresystem which can continue to deliver
reliable, efficient and secure services forour customers.

FY21

108.0
102.3

Growth4%

Growth5%That’s why we’ve also lifted this program
above our strategic acceleration workand given it a foundational title: “NgāTapuwae o ANZ – The Footsteps of ANZ”.
Ngā Tapuwae is our statement about
ensuring quickness of feet either in thedepths of our intellectual pursuits orphysical prowess. Ngā Tapuwae calls
for us all to transform as a bank, in afleet footed manner, to serve the needsof an ever-changing customer base andAotearoa New Zealand.

We recently launched our Good
Energy Home Loan, which allows
customers to borrow up to $80,000
at a 3-year fixed rate of 1% to maketheir homes more energy efficient.
This was followed by our ANZ BusinessGreen Loan, the first product of its kind in
the market. Our Business and Corporate
customers with environmental initiatives
that meet eligibility criteria can accessfunding of up to $3 million at a special
floating interest rate for up to five years.
Customers can also re-finance existing
business loans if they meet the criteria.
Importantly, it’s the only advertisedloan in market aligned to internationallyrecognised Green Loan Principles (GLP)
for assets that demonstrate a clear
environmental benefit.

1. On a cash profit (continuing operations) basis. Excludes non-core items included in statutory profit and discontinued operations and is provided to assist readers in understanding the resultof the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 45.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information25

Supporting a more sustainable
and self-sufficient future
ANZ’s People Agenda is critical to theperformance of our bank. This year
saw the launch of Tākiri Ā Rāngi – ANZ
New Zealand’s Te Ao Māori strategy out
to 2040. We are committed to growing
cultural competency and understandingof Te Ao Māori (the Māori world view) with
our staff and enhancing the financial
wellbeing of Māori.
This year we released a report called
Watch Women Win, which examined the
motivations for, and obstacles preventing,
women’s success. A key finding was women
are inspired by seeing other womencelebrated for doing well. We undertooka number of engagements throughout
the year meeting successful women andhearing and sharing their stories.

Changes to the social, physical and financial operating
environment mean businesses must become more sustainable
and energy-efficient.
There is a growing sense that if they
are to survive and thrive in a warmer
world, they must adapt, invest intechnology and become more
self-sufficient and resilient.
One Canterbury business demonstrates
this in spades. Hagley Windows andDoors – set up by builder Geoff Ball – hasgrown from having just two employees
in 1983 to more than 190 today.
In recent years, Hagley has invested
millions of dollars in computercontrolled robotic glass-cutting anddouble-glazing machines, giving it anedge over competitors.

In February we also launched our Equity,
Diversity and Inclusion Strategy, ‘Bringing
EDI to Life’. This supports our business tocreate an equitable and inclusive workplace
where the diversity of our workforce in its
broadest sense can be leveraged to thebenefit of our customers and Aotearoa
New Zealand.

Its high-tech double-glazed window
units are a growing part of its business,
and now help make thousands of homes
and businesses in the South Island
warmer, dryer and more energy efficient.

Performance highlights

It takes considerable power to run afactory the size of two football fields,
dozens of machines and an energyhungry glass-toughening furnace.

New Zealand delivered another strong
year with Cash Profit of NZ$1.77 billion.
Home lending continues to be a key driverfor us. We increased our share of the New
Zealand home loan market over the year,
from 30.38% in September 2021 to 30.51%
in August 2022.
Lending to Business and Institutionalcustomers also grew, increasing by NZ$900
million over the first half. Overall, Businessand Institutional customers managed wellthrough the COVID-19 disruptions in thefirst half of the financial year.
Our Contact Centre is experiencing
increasing demand. We’ve seen an increasein customer calls, particularly related to
an uptick in fraud and scam cases, thewind-up of Bonus Bonds, interest rates
and a surge in home loan rollovers.
Our Staff Foundation distributed over
NZ $1.1 million in donations to 93 charities
across New Zealand.

The company has also made substantial
investments in solar power for its own
premises.

To meet some of these electricity
demands, the company has put
its abundant roof space to work,
installing over 2900 solar panels.
It is one of the largest solar arrays in
the South Island, and now generates
over 20 per cent of the company’s
power requirements.
As the country’s largest bank, we’reseeing our customers increasingly
turning to us for support and help
as they consider how best to adapt
and invest in their future.
As with any investment, making abusiness more sustainable comes ata price, but our Business Green loan
removes some of that cost barrier.
It is currently the only advertised green
loan product in the market available
to business customers and linked to
the Green Loan Principles.
ANZ has led the way with sustainablefinance for our Institutional Businesscustomers and we’re proud to now
offer a Business Green Loan which will
support many more businesses start
down the road of becoming moresustainable, resilient and self-sufficient.

Customer story

26

ANZ 2022 Annual Review

GovernanceCorporate governance framework

SHAREHOLDERS
BOARD OF DIRECTORS
Audit Committee
Ethics, Environment, Socialand Governance Committee
Risk Committee
Human Resources Committee
Digital Business andTechnology Committee
Nomination and Board
Operations Committee
BOARD RESERVED POWERS AND
DELEGATION OF AUTHORITY

CHIEF EXECUTIVE OFFICERGROUP EXECUTIVE COMMITTEEBoard ofDirectors
ANZ’s strong governance frameworkprovides a solid structure for
effective and responsible decisionmaking within the organisation.
The Board is responsible for the oversightof ANZ and its sound and prudent
management, with specific duties
as set out in its charter available atanz.com/corporategovernance.
There are six principal Board Committees –the Audit Committee, the Ethics,
Environment, Social and GovernanceCommittee, the Risk Committee, the
Human Resources Committee, the Digital
Business and Technology Committee andthe Nomination and Board Operations
Committee.
Each Committee has its own chartersetting out its roles and responsibilities. At
management level, the Group Executive
Committee comprises ANZ’s most senior
executives. There is a delegation of
authority framework that clearly outlines
those matters delegated to the CEO andother members of senior management.
For further detail on ANZ’s governanceframework see our 2022 Corporate
Governance Statement available atanz.com/corporategovernance.

Full biography details can be foundon our website at anz.com/directors
and on pages 31-35 of this report.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

27

Paul O’Sullivan

Shayne Elliott

Ilana Atlas, AO

Chairman, Independent
Non-Executive Director

Chief Executive Officer,
Executive Director

Independent
Non-Executive Director

Jane Halton, AO PSM

RT Hon Sir John Key, GNZM AC

Graeme Liebelt

Independent
Non-Executive Director

Independent
Non-Executive Director

Independent
Non-Executive Director

John Macfarlane

Christine O’Reilly

Jeff Smith

Independent
Non-Executive Director

Independent
Non-Executive Director

Independent
Non-Executive Director

28

ANZ 2022 Annual Review

Directors’ meetings
The number of Board, and Board Committee, meetings held during the year and each Directors’ attendance atthose meetings are set out below:

Board

Risk
Committee

Audit
Committee

Human
Resources
Committee

Ethics,DigitalEnvironment,
Social and Business andGovernance Technology
Committee
Committee

SpecialCommitteeof the Board

Committeeof the Board1

Nominations
and Board
Operations

SharesCommittee1

A

B

A

B

A

B

A

B

A

B

A

B

A

B

A

B

A

B

A

B

Paul O’Sullivan

18

18

8

8

8

8

7

7

6

6

4

4

1

1

1

1

4

4

3

3

Ilana Atlas, AO

18

18

8

8

7

7

6

6

1

1

1

1

4

4

1

1

Paula Dwyer2

4

4

2

2

2

2

Shayne Elliott

18

18

1

1

2

2

2

2

Jane Halton, AO PSM

18

18

RT Hon Sir John Key,GNZM AC

18

17

8

8

Graeme Liebelt

18

18

8

8

8

8

John Macfarlane

18

18

8

8

8

8

Christine O’Reilly3

16

16

6

6

7

7

Jeff Smith4

1

1

2

2

7

7

7

6

6

4

4

6

6

4

4

7
4

5

4

4

4

4

4

4

1

1

1

1

2

2

4

4

1

1

1

1

4

4

1

1

2

2

4

4

1

1

Column A Indicates the number of meetings the Director was eligible to attend as a member. Column B Indicates the number of meetings attended. With respect to Committee
meetings, the table above records attendance of Committee members. 1. The meetings of the Committee of the Board and Shares Committee as referred to in the table above include
those conducted by written resolution. 2. Paula Dwyer ceased as a Non-Executive Director on 16 December 2021. 3. Christine O’Reilly commenced as a Non-Executive Director on
1 November 2021. 4. Jeff Smith commenced as a Non-Executive Director on 1 August 2022.

“The Board continues to focus on immediate and longer-term strategic
matters. The Board closely monitored the rapidly changing operating
environment, including inflation and interest rates and the continuing
impact of COVID-19, together with ANZ’s approach to dealing with thosematters in alignment with ANZ’s purpose.”
Paul O’Sullivan
ChairmanOverview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

29

Executive Committee

Shayne Elliott

Maile Carnegie

Kevin Corbally

Chief Executive Officer (appointed CEO
on 1 January 2016)

Group Executive Australia RetailGroup Chief Risk Officer

Joined the Executive Committee
on 27 June 2016

Joined the Executive Committee
on 19 March 2018

Farhan Faruqui

Gerard Florian

Kathryn van der Merwe

Chief Financial Officer (appointed CFO
on 11 October 2021)

Group Executive Technology

Group Executive Talent & Culture
and Service Centres

Joined the Executive Committee
on 1 June 2009

Joined the Executive Committee
on 1 February 2016

Joined the Executive Committee
on 30 January 2017

Joined the Executive Committee
on 1 May 2017

Full biography details canbe found on our website
at anz.com/exco
Antonia Watson

Mark Whelan

Chief Executive Officer New ZealandGroup Executive Institutional

Joined the Executive Committee
on 17 June 2019

Joined the Executive Committee
on 20 October 2014

30

ANZ 2022 Annual Review

Board areas of focus
The Board and its Committees
engage in key strategic, governanceand oversight activities each year.
The topics below are illustrative
to provide stakeholders with an
insight into some of the key mattersconsidered by the Board and
its Committees during the 2022
financial year and is not intended
to be a comprehensive list.
Strategy and growth
During the financial year, the Boardand its Committees continued to focus
on longer-term strategic matters.
In addition to participating in regularstrategy sessions, the Board regularly
discussed and reviewed ANZ’s strategic
and growth priorities.
At each regular Board meeting, there
continued to be unstructured discussion
with the Chief Executive Officer in relation
to the progress of Management’s key
priorities as agreed with the Board.
The Board also received regular reports
on progress (from both a strategic/
operational viewpoint and a technology
viewpoint) in the design and build andimplementation, including customer
migration strategy, relating to ANZ Plus.
Mergers & Acquisitions was a key topic
of consideration during the year withdiscussions taking place at both regularand specially convened Board meetings
in relation to key potential transactions
that have been disclosed to the market,
including the acquisition of Suncorp Bank.
At the Interim Results in May, ANZ
announced its intention to apply for
approval to implement a non-operatingholding company structure. The Board
received regular reports throughout theyear on the strategic rationale and details of
how such a revised structure would work inpractice, including in relation to governanceand operations. The Board played a key rolein the ultimate design and application of
the proposed revised structure.

Risk, regulation and reputation
The Board Risk Committee and the Board
played a key role in reviewing the Group’s
approach to managing non-financial risk
and the design and implementationof ANZ’s revised operational risk andcompliance framework.
The Board and its Committees continued
their oversight of the Group’s risk
appetite settings.
The Board continued to meet with ANZ’s
key Australian regulators during the courseof the year with the purpose of maintaining
constructive two-way dialogue.
The Board also received regular education andbriefing materials and held education sessions
on key areas such as sanctions, competition
law and cyber security, as well as participatingin Banking Executive Accountability Regime(BEAR) scenario training.

Financial/Operational
While the Board and its Committees have
had a strong focus on the long-term future of
the Group, the Board (and its Committees)
maintained an equally strong focus on thecurrent performance of the Group, including:• reviewing and ultimately approving
ANZ’s revised structure for its Australia
Retail & Commercial businesses.
• having regular and broad discussions
with the heads of each major businessregarding the performance of theirbusiness, key issues being focusedon and the ongoing changes in theoperating environment.
• receiving regular reports on theperformance of the Australian home loans
business against the backdrop of therapidly changing operating environment.
• reviewing, challenging and ultimately
endorsing ANZ’s operating and strategicplans, both annual and longer-term.
• providing oversight of key capitalmanagement matters, including theapproval of the recent renounceable
entitlement offer.

Changing operating environment
The Board and its Committees closely
monitored the rapidly changing operating
environment, including geopolitical matters,
inflation and interest rates and the continuing
impact of COVID-19, together with ANZ’s
approach to dealing with those matters.

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information31

Directors’ qualifications,experience and special
responsibilities
As at the date of this report, the Board comprises eight Non-Executive Directors
and one Executive Director, the Chief Executive Officer. The names of the current
Directors, together with details of their qualifications, experience and special
responsibilities are set out below. Jeff Smith joined the Board on 1 August 2022
as a Non-Executive Director and will stand for election as a Director at ANZ’s
AGM on 15 December 2022. Paula Dwyer ceased as Non-Executive Director
on 16 December 2021, after serving on the Board since 2012. Graeme Liebelt
will cease as a Non-Executive Director at the conclusion of the 2022 AGM.

Paul O’Sullivan
Chair

Audit Committee
Ethics, Environment,
Social and GovernanceCommittee
Risk Committee

MemberPosition
Chairman, Independent
Non-Executive Director

Qualifications
BA (Mod) Economics, Advanced
Management Program of Harvard

Responsibilities
Human Resources
Committee
Digital Business andTechnology Committee
Nomination and Board
Operations Committee

Chairman since October 2020 anda Non-Executive Director sinceNovember 2019.
Paul is an ex-officio member of all Board
Committees and Chair of the Ethics,
Environment, Social and GovernanceCommittee and Nomination and Board
Operations Committee.

CareerPaul has experience in thetelecommunications and oil and gas
sectors, both in Australia and overseas.
He has held senior executive roles with
Singapore Telecommunications (Singtel)

and was previously the CEO of Optus. He
has also held management roles with theColonial Group and the Royal Dutch Shell
Group in Canada, the Middle East, Australia
and United Kingdom.

Relevant other directorships
Chairman: Singtel Optus Pty Limited (from2014, Director from 2004) and Western
Sydney Airport Corporation (from 2017).
Director: St Vincent’s Health Australia (from2019) and Australian Tower Network Pty Ltd(from 2021).

Relevant former directorships
held in last three years include
Former Director: Telkomsel Indonesia(2010–2020), Healthscope Limited (2016–2019), National Disability Insurance Agency(2017–2020) and Coca-Cola Amatil (2017–2021).
Age

62 years

Residence Sydney, Australia

32

ANZ 2022 Annual Review

Shayne Elliott

Ilana Atlas, AO

Position

Chair

MemberChief Executive Officer
and Executive Director

Qualifications

Position

Relevant other directorships

BCom

Independent Non-Executive Director

Responsibilities

Chairman: Jawun (from 2017, Director
from 2014).

Qualifications

Director: Paul Ramsay Foundation (from2017), Scentre Group (from 2021) andOrigin Energy Limited (from 2021).

Chief Executive Officer and Executive
Director since 1 January 2016.

BJuris (Hons), LLB (Hons), LLM

CareerResponsibilities

Shayne has over 30 years’ experience inbanking in Australia and overseas, in all
aspects of the industry. Shayne joined ANZ
as CEO Institutional in June 2009, and was
appointed Chief Financial Officer in 2012.

Non-Executive Director since September
2014. Ilana is Chair of the Human Resources
Committee and is a member of the Audit
Committee, Ethics, Environment, Social andGovernance Committee and Nomination
and Board Operations Committee.

Prior to joining ANZ, Shayne held senior
executive roles at EFG Hermes, the largest
investment bank in the Middle East, which
included Chief Operating Officer. He started
his career with Citibank New Zealand andworked with Citibank/Citigroup for 20 years,
holding various senior positions across the
UK, USA, Egypt, Australia and Hong Kong.
Shayne is a Director of the Financial Markets
Foundation for Children and a member ofthe Australian Banking Association, theBusiness Council of Australia and theAustralian Customs Advisory Board.

Relevant other directorships
Director: ANZ Bank New Zealand Limited(from 2009) and the Financial Markets
Foundation for Children (from 2016).
Member: Business Council of Australia(from 2016), the Australian Banking
Association (from 2016, Chairman
2017–2019) and the Australian
Customs Advisory Board (from 2020).
Age

58 years

Residence Melbourne, Australia

CareerIlana brings a strong financial services
background and legal experience to theBoard. Ilana was a partner at law firm
Mallesons Stephen Jaques (now King
& Wood Mallesons), where in addition
to her practice in corporate law, she held
a number of management roles in the firm
including Executive Partner, People andInformation, and Managing Partner. She
also worked at Westpac for 10 years, where
her roles included Group Secretary andGeneral Counsel and Group Executive,
People, where she was responsible
for human resources, corporate affairs
and sustainability. Ilana has a strong
commitment to the community, inparticular the arts and education.

Member: Panel of Adara Partners (from2015) and Council of the National Galleryof Australia (from 2021).

Relevant former directorships
held in last three years include
Former Chairman: Coca-Cola Amatil
Limited (2017-2021, Director from 2011).
Former Director: OneMarket Limited(2018–2019).
Former Fellow: Senate of the University
of Sydney (2015–2019).
Age

68 years

Residence Sydney, Australia

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

33

Jane Halton, AO PSM

RT Hon Sir John Key, GNZM AC

ChairMemberMemberPosition

Relevant other directorships

PositionIndependent Non-Executive Director

Chairman: Vault Systems (from 2017),
Coalition for Epidemic Preparedness
Innovations (Norway) (from 2018, Member
from 2016) and Council on the Ageing
Australia (from 2017).

Independent Non-Executive Director

Qualifications
BA (Hons) Psychology, FIPAA, Hon. FAAHMS,
Hon. FACHSE, Hon. DLitt, FAIM, FAICD, FAIIA

Responsibilities

Director: Clayton Utz (from 2017).

Non-Executive Director since October 2016.
Jane is Chair of the Digital Business andTechnology Committee and is a member ofthe Human Resources Committee, Ethics,
Environment, Social and GovernanceCommittee and Nomination and Board
Operations Committee.

Member: Executive Board of the Instituteof Health Metrics and Evaluation at the
University of Washington (from 2007).

CareerJane’s 33-year career in the public service
includes the positions of Secretary of theAustralian Department of Finance, Secretaryof the Australian Department of Health,
Secretary for the Department of Healthand Ageing, and Executive Co-ordinator(Deputy Secretary) of the Department of
the Prime Minister and Cabinet.
She brings to the Board extensive
experience in finance, insurance, risk
management, information technology,
human resources, health and ageing andpublic policy. She also has significant
international experience.
Jane has contributed extensively tocommunity health through local andinternational organisations including theWorld Health Organisation and as co-chairof the COVAX coordination mechanism.

Honorary Professor: Australian National
University Research School of Psychology.
Adjunct Professor: University of Sydney
and University of Canberra.
Council Member: Australian Strategic
Policy Institute (from 2016).

Relevant former directorships
held in last three years include
Former Director: Crown Resorts Limited(2018–2022) and Naval Group Australia
Pty Ltd (2021–2022).
Former Member: National COVID-19
Commission Advisory Board (2020–2021).
Age

62 years

Residence Canberra, Australia

Qualifications
BCom, DCom (Honoris Causa)

Responsibilities
Non-Executive Director since February
2018. Sir John is a member of the Ethics,
Environment, Social and GovernanceCommittee, Risk Committee, Digital Businessand Technology Committee and Nomination
and Board Operations Committee.

Career
Sir John was Prime Minister of New Zealandfrom 2008 to 2016, having commenced his
political career in 2002. Sir John had a longcareer in international finance, primarily for
Bankers Trust in New Zealand and Merrill
Lynch in Singapore, London and Sydney.
He was previously a member of the Foreign
Exchange Committee of the Federal Reserve
Bank of New York (from 1999 to 2001).
Sir John was made a Knight Grand
Companion of the New Zealand Order ofMerit in the 2017 Queen’s Birthday Honours.
In 2017 Sir John became a Companion of
the Order of Australia for advancing theAustralia–New Zealand bilateral relationship.

Relevant other directorships
Chairman: ANZ Bank New Zealand Limited(from 2018, Director from 2017).
Director: Palo Alto Networks (from 2019).

Relevant former directorships
held in last three years include
Former Director: Air New Zealand Limited(2017–2020).
Age

61 years

Residence Auckland, New Zealand34

ANZ 2022 Annual Review

Graeme Liebelt

John Macfarlane

Christine O’Reilly

Chair

MemberChair

Position

Position

PositionIndependent Non-Executive Director

Independent Non-Executive Director

Independent Non-Executive Director

Qualifications

Qualifications

Qualifications

BEc (Hons), FAICD, FTSE, FIML

BCom, MCom (Hons)

BBus

Responsibilities

Responsibilities

Responsibilities

Non-Executive Director since July 2013.
Graeme is Chair of the Risk Committee
and is a member of the Audit Committee,
Human Resources Committee andNomination and Board Operations
Committee.

Non-Executive Director since May 2014.
John is a member of the Audit Committee,
Risk Committee, Digital Business andTechnology Committee and Nomination
and Board Operations Committee.

Non-Executive Director since November
2021. Christine is Chair of the Audit
Committee and a member of the Risk
Committee, Human Resources Committee
and Nomination and Board Operations
Committee.

CareerJohn is one of Australia’s most experienced
international bankers having previously
served as Executive Chairman of Deutsche
Bank Australia and New Zealand, and CEO
of Deutsche Bank Australia. John has also
worked in the USA, Japan and PNG, andbrings to the Board a depth of banking
experience in ANZ’s key markets in Australia,
New Zealand and the Asia–Pacific. He iscommitted to community health, andis a Director of the Aikenhead Centre of
Medical Discovery Limited (from 2016).

CareerRelevant other directorships

Director: The Baker Heart & Diabetes
Institute (from 2013), Stockland (from 2018)
and BHP Group Limited (from 2020).

MemberGraeme brings to the Board his experienceof a 23-year executive career with Orica
Limited (including a period as Chief
Executive Officer), a global mining services
company with operations in more than 50
countries. He has extensive international
experience and a strong record ofachievement as a senior executive,
including in strategy development andimplementation. Graeme is committed
to global trade and cooperation, as wellas community education.

Relevant other directorships
Chairman: Amcor Limited (from 2013,
Director from 2012).
Director: Australian Foundation Investment
Company Limited (from 2012) and Carey
Baptist Grammar School (from 2012).

Relevant former directorships
held in last three years include
Former Chairman: DuluxGroup Limited(2018–2019, Director from 2016).

CareerDirector: Colmac Group Pty Ltd (from 2014),
AGInvest Holdings Limited (MyFarm
Limited) (from 2014, Chairman 2014–2016),
Balmoral Pastoral Investments (from 2017)and L1 Long Short Fund (from 2018).

Relevant former directorships
held in last three years include
Former Director: Craigs Investment
Partners Limited (2013–2020).
Age

Age

68 years

Residence Melbourne, Australia  

62 years

Residence Melbourne, Australia  

MemberChristine is one of Australia’s leading
non-executive directors. Christine has
held executive roles in the infrastructureand financial services industries. This
includes being CEO of GasNet Australia
and Co-Head of Unlisted Infrastructure
Investments at Colonial First State Global
Asset Management and follows an early
career including investment banking andaudit experience at Price Waterhouse.

Relevant other directorships

Relevant former directorships
held in last three years include
Former Director: Medibank Private Limited(2014–2021), CSL Limited (2011–2020)and Transurban Group (2012–2020).
Age

61 years

Residence Melbourne, Australia  

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

35

Company Secretaries’
qualifications and experience
Currently there are two people appointed as Company
Secretaries of the Company. Details of their roles arecontained in the Corporate Governance Statement.
Their qualifications and experience are as follows
Jeff Smith
MemberPositionIndependent Non-Executive Director

Qualifications
BAppSc, MBA

Responsibilities
Non-Executive Director since August 2022.
Jeff is a member of the Nomination and
Board Operations Committee.

CareerJeff is an experienced global business andtechnology executive, with over 30 years
corporate experience which includes senior
executive roles in a number of companies
including Telstra, Honeywell and Toyota.
Jeff was previously Chief Information Officer
at IBM Corporation where he was globally
responsible for IT strategy, resources,
systems and infrastructure and also led thecompany’s Agile transformation. Jeff was
also CEO of Suncorp Business Services andSuncorp Chief Information Officer. Since
2017, Jeff has been Chief Operating Officerof World Fuel Services Corporation, a role
he will step down from at the end of 2022.
Jeff also served on the Australian FulbrightCommission awarding Australian postgraduate scholarships to US universities.
He was previously a member of ANZ’s
International Technology and Digital
Business Advisory Panel until 2019.

Relevant other directorships
Director: Sonrai Security Inc (from 2021).
Advisor: Zoom Video Communications,
Inc (from 2018) and Box, Inc. (from 2018).

Relevant former directorships
held in last three years include
Former Member: ANZ International
Technology and Digital Business Advisory
Panel (2016–2019).
Age
60 years
Residence USA

Ken Adams
PositionGroup General Counsel

Qualifications
BA, LLB, LLM

Ken joined ANZ as Group GeneralCounsel in August 2019, having assisted
ANZ with major legal issues for over 10
years. Prior to ANZ, Ken was a Partnerof Freehills and later Herbert Smith
Freehills for 21 years, and for six years
was a member of the Herbert Smith

Freehills Global Board. Ken is one ofAustralia’s leading commercial lawyers
with significant experience in classactions and other complex legal issues.
He holds a Master of Laws from the
University of Melbourne and is a
co-author of Class Actions in Australia.

Simon Pordage
Position
Company Secretary

Qualifications
LLB (Hons), FGIA, FCG (CS, CGP)

Simon joined ANZ in May 2016.
He is a Chartered Secretary andChartered Governance Practitioner
and has extensive company secretarial
and corporate governance experience.
From 2009 to 2016 he was Company
Secretary for Australian Foundation
Investment Company Limited and anumber of other listed investmentcompanies. Other former roles include
being Deputy Company Secretary for
ANZ and Head of Board Support for
Barclays PLC in the United Kingdom.

He is a formal brand ambassador for,and is a former National President andChairman of, Governance Institute ofAustralia. He is also a member of theChartered Governance Institute’s
Global Thought Leadership Committee.
Simon is committed to the promotion
and practice of good corporate
governance, and regularly presents
on governance issues.

36

ANZ 2022 Annual Review

Risk management
The evolving macroeconomic
and geopolitical conditions havecontinued to challenge our operating
environment. Our Risk Management
Framework (RMF) has remainedrobust in the face of these challenges,
enabling the sound managementof our business.
Over the last year we have continued towork towards a stronger and simpler risk
and governance framework. Our ability
to respond to changes in existing risks,
and to deal with emerging risks as theyarise has been strengthened, including
those discussed below.

Macroeconomic andGeopolitical environment
The rising geopolitical tensions including
the conflict in Ukraine, trade tensions,energy security issues in the European
Union accompanied with economic
challenges relating to rising interest rates,
inflation and real cost of living pressures,are creating uncertainty for many of ourcustomers. The Board and management
continually monitor these developing
conditions, and maintain provisions andstrong capital levels for a range of potential
scenarios. In addition, we have focused on
the following to help support our customers
and their financial resilience:

Home Loans and Consumer Lending –We continue to engage with our homeloans customers to help them better
manage their home loan and personal
finances. 70 per cent of our customers
have paid additional funds to reduce
their principal debt with over half of
those more than 2 years ahead on their
repayments. Measures such as interest
rate floors and higher interest rate buffers
when assessing home loans, and higher
household expenditure measures, havecontributed to customers being better
placed to service their loans.
We have proactively communicated withour customers to provide reassurance that
where required, we have options available
to continue to support them.
Data Analytics – Data and analytics play
an important role in early identificationof customers heading towards financial
difficulty. We have invested in our retail risk
systems to provide quality data analytics to
assist our Collections and Hardship teams.
Our analytics have focused on customertransaction data and the identificationof customers that may need additional
support. We are using data analytics tolook at savings, credit, and offset accounts
to better understand customers’ financial
behaviour and potential future outcomes.
The analysis considers interest rate changes,
increases in living expenses and cashflow.
In our Wholesale portfolio, we are using

external (e.g., ASIC’s insolvency register,
ATO arrears) and internal data sources(e.g., stress sensitivities and savings levels)
to identify areas of systemic emerging
risks to proactively manage the portfolio.
Financial health and Wellbeing –We have transformed our retail platformby simplifying and rebuilding products,
systems and processes to improve thefinancial wellbeing of our customers. Our
initial ‘transact and save’ product within the
ANZ Plus App has provided functionality toenable customers to have better visibility
and control over their money.
The lessons we have learnt from COVID-19
and recent natural disasters, have been used
to develop financial hardship assistance
options that can be implemented quickly.
Portfolio management – Our new Headof Geopolitical Risk provides additional
insights to support our customer
management and understand thegeopolitical impacts to our portfolio.
The introduction of this role has provided
focused analysis of global issues whichallows us to better inform and support
our customers and the Board.

Risk Culture
Risk culture is an important component of
our organisational culture and underpins theshared values, behaviours and practices thatdrive how risk is considered in decisions.

Keeping our community safe
As part of ANZ’s ongoing focus on
keeping communities safe, membersof the ANZ financial crime teamhave security clearance to support
intelligence initiatives.
Leveraging lessons from previous
operations involving fugitives andhigh-risk law enforcement targets,the team regularly checks internaland external intelligence sources
for information.

In 2022, a member of the Financial Crime
team proactively reached out to law
enforcement and regulatory partners to
support a live child abduction case. The
alleged perpetrator was on the run andactively being sought by law enforcement
agencies. The team member checked oursystems for the main perpetrators andany known associates, which led to theidentification of accounts with activity
outside of the account holder's normal
spending behavior.

Close examination of those accounts
suggested the alleged perpetrator wasusing the account of a family member
to avoid detection. This information
was then shared with law enforcement.
Law enforcement partners were able tofollow up on ANZ’s leads and locatedthe victim unharmed.

Overview

How wecreate value

Performanceoverview

We have made progress in strengthening
risk culture through achieving greaterawareness of the approach to risk culture
and establishing strong leadership to deliveron our risk culture plans. This will allow us toachieve our defined target state.
We have defined key risk culture principles
that form the foundation of our risk culture
approach and have embedded a framework
for assessing each risk culture principle
across the organisation. This framework
incorporates desired risk behaviours
and business and risk outcomes. We
are monitoring risk culture through our
Risk Culture Dashboard which capturesrisk management and business-related
information. Our annual Risk Culture Survey
informs us on the perceived and actual
effectiveness of our risk behaviours, policies
and processes, and decision making. Our
Board Risk Committee receives half-yearly
updates from management to assist theBoard in forming a view on risk culture
and the effectiveness of plans and actions.
Risk culture is included as a performance
objective for all Group Executives and risk
is a key element of the balanced scorecard
for our people’s performance andremuneration. Behaviours supporting thetarget risk culture are reinforced through theEnterprise Accountability Group (page 90).

Remuneration
overview

Shareholder
information

We acknowledge individuals whorole model outstanding risk behaviours
for their work to manage and mitigate
the organisation’s risks.

Financial crime
We continue to maintain an effective
financial crime risk management programthat anticipates and navigates criminal
threats supported by the right people withthe right tools. The Financial Crime teamcontinues to be responsible for the deliveryof enhanced detection, investigative and/or
intelligence capability that is focused on
identifying, mitigating and managing
financial crime risk and protecting thecommunity via:
• Partnering with AUSTRAC’s Fintel
Alliance, and similar programs globally.
• The development and maintenanceof a central data repository, intelligencesystems and tools.
• The creation and delivery of Dynamic
Algorithms to meet new threats.

Non-financial risk
We have made further inroads in our
non-financial risk management. We continue
to uplift our non-financial RMF (the I.AM –Identify, Act, Monitor framework) to provide

37

a holistic approach to risk managementwith insights that enable us to anticipate
and navigate a changing environment andprotect our customers, shareholders andthe community from harm.
We are improving how we manage
our non-financial risk by updating ourapproach to be more standardised,
integrated, dynamic and automated, sothat it is both more effective and efficient.

Conduct Risk
The interests of our customers andcommunity are fundamental to our strategy.
We continue to responsibly manage ourConduct Risk, including by identifying,
managing, and mitigating instances where
our activities, products and/or services may
result in unfair customer outcomes and/or
damage to market integrity. The articulationof Conduct Risk as a Risk Theme under the
new Compliance and Operational Risk
model will help manage Conduct Risk as
a key material risk for ANZ. To support this,we have developed a global Conduct Risk
Framework and Conduct Risk taxonomy
which facilitate a clear and consistent way
of managing and monitoring the risk, in
conjunction with the Compliance andOperational Risk Framework (I.AM).

38

ANZ 2022 Annual Review

Our 2022 Climate-related Financial
Disclosures will be released prior to our
Annual General Meeting (AGM) and will
be available at anz.com/annualreport

Emerging risks
Risks that continue to evolve and that
we are paying particular attention to are:
Cyber security risk: We take the security ofour bank, our customers and our customers’
information very seriously. Cyber security
threats continue to be significant and ourapproach to mitigating cyber security risk
involves a range of controls relying on
people, technology and process. We arecontinually testing our defences internallyand through independent third parties. We
have a very sophisticated cyber security
protection capability and have invested
heavily in a range of recognised industry
practices and technologies, processes anddefences. We maintain a 24/7 sophisticatedinternal Security Operations Centre,
analysing millions of data events daily
including unusual or infrequently seen
activities identified by our security team.
In addition, we are cooperating with ourcounterparts, governments and associatedentities around the world to protect against
cyber security threats, which have increased
since COVID-19 and the consequent shift
to digital banking and remote working.
We provide continuing staff education andrun customer focused campaigns. We havedeveloped threat intelligence newslettersand a ‘Simplifying Cyber for Business’ guide.
We have continued to sponsor theAustralian Computing Academy’s Schools
Cyber Security Challenges, contributing tocontent and co-producing cyber security
modules for students and teachers as partof the digital curriculum.
Climate change risk: The financial risks
associated with climate change remain a key
focus. Climate-related events can include
severe storms, drought, fires, cyclones,
hurricanes, floods and rising sea levels. The
impact of these events can be widespread.
The impact of these losses on the Group may
be exacerbated by a decline in the value
and liquidity of assets held as collateral,

which may impact the Group’s ability
to recover its funds when loans default.
Recent examples in Australia include severe
drought conditions, bushfires in 2019/2020,and severe flooding in 2021 and 2022. In
addition, geological event impacts haveoccurred in New Zealand in recent years.
We continue to improve our managementof climate risks through workstreams
focused on regulatory monitoring, policy
governance, risk appetite, data and analytics.
We have set a public ESG target to develop
an enhanced RMF that anticipates potential
climate-related impacts, and associatedregulatory requirements, by the end of 2022.

For details on our performanceagainst our ESG Targets refer toour ESG Supplement available
at anz.com/annualreport
Our Climate Advisory Forum, chaired by theGroup Executive, Institutional and includes
the Group Chief Risk Officer, supports
execution of our climate policy, disclosuresand related matters across the Group.
We are focusing on: aligning our lending
portfolio with the goals of the Paris Agreement
and supporting customers to expand in low
or zero emission technologies; and factoringclimate change risk into lending decisions
for large business customers, assessing theircapacity to respond to climate change andthe evolving regulatory landscape.
We participated in APRA’s Climate Vulnerability
Assessment (CVA), which aims to examine
the material exposures and financial risks thatbanks, the financial system and economy
may face due to climate risks. APRA’s CVA
comprised two stress tests, a counterparty
assessment and a data assessment. APRA
intends to disclose the outcomes of the
CVA in late 2022, which may also be used
to inform future supervisory guidance.

Biodiversity risk: Risks associated withbiodiversity loss, including as a result ofspecies extinction or decline, ecosystemdegradation and nature loss, are emerging
risks that we are seeking to understandfurther. We acknowledge biodiversity risks
are closely linked to climate-related risks. In
relation to biodiversity, risks can arise fromlending to customers that are significantly
dependent on biodiversity and ecosystemservices, or who may have negative impacts
on biodiversity. In addition to physical risks
associated with biodiversity loss, risks canalso arise from changing societal preferences
and regulatory or policy changes (including
potential reforms to halt and reverse
forest loss, species extinctions and landdegradation). These changes may impact thebank directly, but the greater impact is likely
to be through the impact of these changes
on some of the bank's customers. We
understand that failure to manage these risks
may lead to financial and non-financial risks
and adverse impacts to the Group’s Position.
Biodiversity and natural capital loss are
addressed in various ways by ANZ's risk
policies and processes. In line with ourSocial and Environmental Risk Policy, we
expect our business customers to useinternationally accepted industry practices
to manage social, environmental andeconomic impacts, including potential
results on biodiversity. This year we alsobroadened our engagement with 100 of ourlargest emitting business customers toinclude a focus on biodiversity, encouraging
and supporting them to identify andmanage their potential impacts.
We welcome the establishment of theTaskforce on Nature-related Financial
Disclosures (TNFD) and have joined the
TNFD Forum to support their work. We
recognise their important role in driving
widespread and improved disclosures of
biodiversity impacts.

Our Risk Management Framework
The Board is ultimately responsible forestablishing and overseeing the Group’s
RMF which is supported by the Group’s
underlying systems, structures, policies,
procedures, processes and people. The
Board has delegated authority to theBoard Risk Committee (BRC) to develop
and monitor compliance with the Group’s

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

39

risk management policies. The Committee
reports regularly to the Board on its
activities. The key pillars of the GroupRMF include:measures, evaluates, monitors, reports
and then either controls or mitigatesmaterial risks and the oversightmechanism and/or committees in place.

• The Risk Management Strategy (RMS),
which describes the approach for
managing risk arising from the Group’s
purpose and strategy. The RMS includes:
how the risk function is structured tosupport the Group’s purpose and strategy,
and the execution of the Group Chief Risk
Officer’s prescribed responsibilities as an
Accountable Person for the Group underthe Banking Executive Accountability
Regime; the values, attitudes andbehaviours required of employees
in delivering on strategic priorities; adescription of each material risk; and an
overview of how the RMF addresses eachrisk, with reference to the relevant policies,
standards and procedures. It also includes
information on how the Group identifies,• The Risk Appetite Statement (RAS),
which sets out the Board’s expectations
regarding, for each material risk, themaximum level of risk that the Groupis willing to accept in pursuing its
strategic objectives and its operatingplans considering its shareholders’,
depositors’ and customers’ interests.

of risks and controls and accountability for
implementation and ongoing maintenanceof the RMF.
The Group Risk (including Compliance)
teams form the second line of defence,
providing independent oversight of theGroup’s risk profile and RMF.
Internal Audit is the third line of defence,
providing independent evaluation andassurance on the appropriateness,
effectiveness and adequacy of theGroup’s RMF.

• The Risk Culture principles, which are asubset of the Group’s organisational culture
and an intrinsic part of the Group’s RMF.

The governance and oversight of risk
management, while embedded in day-to-day
activities, is also the focus of committees andregular forums across the bank (see diagram
next page). The committees and forums
discuss and monitor known and emerging
risks, review management plans andmonitor progress to address known issues.

The Group operates a Three Lines-of-Defence
Model in regard to risk management,
helping to embed a culture where risk
is everyone’s responsibility.
The business has first line of defence
responsibility for day-to-day ownership

Principal Board
Committees

BOARD OF DIRECTORS

Audit
Committee

Ethics, Environment, Risk
Social andCommittee
GovernanceCommittee

Digital Businessand Technology
Committee

Nomination
and Board
Operations
Committee

Executive Committee

Group Performance Execution Committee

ANZ’s most senior executives meet
regularly to discuss performanceand review shared initiatives.

ANZ’s key Management Committee charged with oversightof the Group’s overall operational performance and positionand execution of the operating plan.

Human
Resources
Committee

Enterprise
Accountability
GroupGroup Assetand Liability
Committee

Operational
Risk Executive
Committee

Credit Ratings
System OversightCommittee

Capital and Stress
Testing OversightCommittee

Financial Crime
OREC SubCommittee

Division

Modelling
Ratings Working
Groups andUsage Forums

Divisional
Initiatives Review
Committees/
Project Advisory
Councils

Divisional
Risk Management
Committees

Regional orCountry Risk
Management
Committees

Country Assets
and Liability
Committees

Group

Credit andMarket Risk
Committee

Country

KEY MANAGEMENT COMMITTEES
Ethics andResponsible
Business
Committee

Investment
Committee

Group Executive
PeopleCommittee

Various Divisional SpecificManagement Committees
Operational Risk
Committee

Product
Committee

Risk Governanceand OversightCommittee

Divisional/
Functional
AccountabilityGroups40

ANZ 2022 Annual Review

Key material risks
The material risks facing theGroup per the Group’s RMS, andhow these risks are managed,
are summarised below.
As part of the annual review of our RMS
we have classified Financial Crime Risk
(previously captured under Operational Risk)

Climatechangeas a key material risk to enhance its profile.
We also specified the risk management
approach for: Money Laundering risk,
Terrorism Financing risk, Sanctions risk
and Fraud risk, complying with better
practice and align with the direction of theCompliance and Operational Risk Strategy
to identify significant obligations andmaterial risks that matter to the Group.

Information
security

Innovationand technology

For further information about the
principal risks and uncertainties
that the Group faces, see our “Principal
Risks and Uncertainties” disclosure
available at anz.com/shareholder/centre

Customerexperience

Risk type

Description

Managing the risk

CapitalAdequacy
Risk

The risk of loss arising from the Group failingto maintain the level of capital required by
prudential regulators and other key stakeholders(shareholders, debt investors, depositors,
rating agencies, etc.) to support the Group’s
consolidated operations and risk appetite.

We pursue an active approach to CapitalManagement, which is designed to protect theinterests of depositors, creditors and shareholders
through ongoing review, and Board approval,of the level and composition of our capital baseagainst key policy objectives.

Compliance
Risk

The risk of failure to act in accordance withlaws, regulations, industry standards and codes,
internal policies and procedures and principles
of good governance as applicable to theGroup’s businesses.

Key features of how we manage Compliance Risk
as part of our Operational Risk and Compliance
Framework include:• Centralised management of key obligations via
a Global Obligations Library, enable our change
management capability in relation to new andrevised obligations,• An emphasis on the identification of changing
regulations and the business environment,
to enable proactive assessment of emerging
compliance risks.
• Recognition of incident management as aseparate element to enhance ANZ’s ability
to identify, manage and report on incidents/
breaches in a timely manner.

CreditRisk

The risk of financial loss resulting from:• A counterparty failing to fulfil its
obligations; or• A decrease in credit quality of a counterparty
resulting in a financial loss
Credit Risk incorporates the risks associated with
our lending to business and retail customers
who could be impacted by climate change
or by changes to laws, regulations, or otherpolicies adopted by governments or regulatory
authorities, including carbon pricing and climatechange adaptation or mitigation policies.

Our Credit Risk framework is top down, being
defined by credit principles and policies. Credit
policies, requirements and procedures cover all
aspects of the credit life cycle from initial approval
and risk grading, through ongoing management
and problem debt management.

Employee capability
and wellbeing

Material
ESG issues

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

Risk type

Description

Managing the risk

Liquidity
andFunding
Risk

The risk that the Group is unable tomeet its payment obligations as theyfall due, including:

Key principles in managing our Liquidity and Funding
Risk include:• Repaying depositors or maturingwholesale debt; or• The Group having insufficient
capacity to fund increases in assets.

MarketRisk

The risk stems from our trading andbalance sheet activities and is the risk
to the Group’s earnings arising from:• Changes in any interest rates, foreignexchange rates, credit spreads,
volatility, and correlations; or• Fluctuations in bond, commodity
or equity prices.

Operational
Risk

The risk of loss and/or non-compliancewith laws resulting from inadequate or
failed internal processes, people and/or
systems, or from external events. Thisdefinition includes legal risk, and therisk of reputation loss, but excludes
strategic risk.

• ANZ’s short-term liquidity scenario modelling stresses
cash flow projections against multiple survival horizons’over which the Group is required to remain cash
flow positive;• Longer term scenarios are in place that measure
the structural liquidity position of the balance sheet.
We have a detailed market risk management and control
framework to support our trading and balance sheet
activities, which incorporates an independent risk
measurement approach to quantify the magnitudeof market risk within the trading and balance sheet
portfolios. This approach, along with related analysis,
identifies the range of possible outcomes, that can be
expected over a given period of time, and establishes thelikelihood of those outcome and allocates an appropriate
amount of capital to support these activities.
We manage Compliance and Operational Risk in thebest interests of our customers and the community andto meet expectations of the regulators. The Complianceand Operational Risk Principles (Level 1) establish thefundamental requirements at ANZ which inform policies,
processes, and procedure development of ANZ’smanagement of Compliance and Operational Risk,
through timely and appropriate identification, action
and monitoring. It is part of ANZ’s RMF and ANZ’s I.AM
(Identify, Act, Monitor) Framework (Level 2). We take arisk-based approach to the management of operationalrisk and obligations. This enables the Group to beconsistent in proactively identifying, assessing, managing,reporting and escalating operational risk-related risk
exposures, while respecting the specific obligationsof each jurisdiction in which the Group operates.
Day-to-day management of operational risk is the
responsibility of business unit line management and staff.
Risk management, supported by a strong Risk Culture, helps
to seek to ensure all staff are thinking about and managing
risk on a daily basis – “Risk is Everyone’s Responsibility”.

Strategic
Risk

Risks that affect or are created by anorganisation’s business strategy andstrategic objectives. A possible sourceof loss might arise from the pursuit of an
unsuccessful business plan. For example,
Strategic risk might arise from making
poor strategic business decisions, fromthe sub-standard execution of decisions,from inadequate resource allocation, orfrom a failure to respond well to changes
in the business environment.

Strategic risks are discussed and managed through ourannual strategic planning process, managed by the
Executive Committee and approved by the Board. Where
the strategy leads to an increase in other Key Material
Risks (e.g. Credit Risk, Market Risk, Operational Risk) therisk management strategies associated with these risks
form the primary controls.

41

Material
ESG issues

42

ANZ 2022 Annual Review

Material
ESG issues

Risk type

Description

Managing the risk

Technology
Risk

The risk of loss and/or non-compliance with laws
from inadequate or failed internal processes,
people or systems that deliver Technology assets
and services to customers and staff. This risk
includes Technology assets and services deliveredor managed by third parties, and external events.

Our approach to manage Technology Risk is to
manage our operational risks caused by the use oftechnology, including risks associated with cybersecurity and third party providers, in a manner thatseeks to ensure customer information is secureand service disruption is within acceptable levels.

The risk specifically includes Information
Security and Cyber Security and how
information held by the Group needs to beprotected from inappropriate modification,
loss, disclosure and unavailability.
Conduct
Risk

The risk of loss or damage arising from thefailure of the Group, its employees or agents
to appropriately consider the interests ofcustomers, the integrity of the financial markets
and the expectations of the community inconducting its business activities.
The Risk may arise not only from deliberateor negligent actions of individual employees
but may also be inadvertent and caused byinadequacies in the Group’s systems, processes
and procedures.

Financial
Crime
Risk

Financial Crime Risk covers the following risks
at ANZ:• Money Laundering (ML) Risk – the risk that
we may reasonably face from our products
and/or services being misused to facilitate
the processing of the proceeds of crime toconceal their illegal origins and make themappear legitimate.
• Terrorism Financing (TF) Risk – the risk that
we may reasonably face from our products
and/or services being misused to facilitate
the provision or collection of funds with theintention or knowledge that they be used
to carry out acts associated in support ofterrorists or terrorist organisations.

Approach to manage Conduct Risk is to seek toensure that risks to customers, community andmarket integrity are identified, assessed, measured,
evaluated, treated, monitored and reported withappropriate governance and oversight.
The articulation of Conduct Risk as a Level 1 Risk
Theme under the new NFR model will help manage
Conduct Risk as a key material risk for ANZ. To
support the NFR model (and our obligations underPrudential Standard CPS 220 Risk Management), ANZ
has developed a global Conduct Risk Framework
and Conduct Risk taxonomy which facilitate a clear
and consistent way of managing and monitoring therisk, and the risk is managed in conjunction with theCompliance and Operational Risk Framework (I.AM).
Financial Crime Risk at ANZ is managed using
a risk-based approach in accordance with theConduct Risk Framework, and in conjunction
with the Compliance and Operational Risk
Framework (I.AM) and a three lines of defence
model. In additional to a risk-based approach
to risk management, for Sanctions there is arules-based lens to ensure compliance with
Sanctions legislation. For the Business to identify
and manage Financial Crime Risk, it must identify
its regulatory obligations and impacted businessactivities and maintain and monitor key controls.

• Sanctions Risk – the risk of failing tocomply with laws and regulations relating
to sanctions imposed by governments
and multinational bodies as a result of our
products and services being misused tofacilitate prohibited sanctions activities.
• Fraud Risk – the risk that we may reasonably
face from our products and/or services being
misused to facilitate intentional acts by one ormore individuals, involving the use of deception
to obtain an unjust or illegal advantage
arising from internal or external sources.

ClimatechangeInformation
security

Innovationand technology

Customerexperience

Employee capability
and wellbeing

Overview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

43

44

ANZ 2022 Annual Review

Performance overview
OUR PERFORMANCE (continued)

GROUP PERFORMANCEThe results of the Group’s operations and financial position are set out on pages 44-59. Page 13 outlines the Group’s strategy and pages
11-25 describe in further detail the Group’s prospects in terms of future financial position and performance. Discussion of our approach
to risk management, including a summary of our key material risks, is outlined on pages 36-42.

GROUP PROFIT RESULTS
2022

2021

Income Statement

Statutory
$m

Cash
$m

Statutory
$m

Cash
$m

Net interest income

14,874

14,874

14,161

14,161Other operating income

4,552

3,673

3,259

3,286

Operating income

19,426(9,579)18,547(9,579)17,420(9,051)

17,447(9,051)Credit impairment (charge)/release

9,847
232

8,968
232

8,369
567

8,396
567

Profit before income tax

10,079

9,200

8,936

8,963

Income tax expense
Non-controlling interests(2,940)(1)(2,684)(1)(2,756)(1)(2,764)(1)

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

7,138
(19)

6,515
(19)

6,179
(17)

6,198
(17)

Profit for the year

7,119

6,496

6,162

6,181

Operating expenses
Profit before credit impairment and income tax

Statutory profit after tax for the year ended 30 September 2022 increased 16% on the prior year to $7,119 million. Statutory return on equity is
11.4% and statutory earnings per share is 250.0 cents, an increase of 16% on prior year.
The Group uses cash profit, a non-IFRS measure, to assess the performance of its business activities. It is an industry-wide measure whichenables comparison with our peer group. We calculate cash profit by adjusting statutory profit for non-core items. In general, it represents thefinancial performance of our core business activities. We use cash profit internally to set targets and incentivise our Senior Executives andleaders through our remuneration plans. Refer to page 45 for adjustments between statutory and cash profit. The adjustments made inarriving at cash profit are included in statutory profit which is subject to audit within the context of the external auditor’s audit of the 2022
Financial Report. Cash profit is not subject to audit by the external auditor. Our external auditor has informed the Audit Committee that
adjustments between statutory and cash profit have been determined on a consistent basis across each of the periods presented.
DISCONTINUED OPERATIONS
We completed the sale of our aligned dealer groups business and our OnePath pensions and investment business to IOOF Holdings Limited(IOOF, now known as Insignia Financial Limited), and our life insurance business to Zurich Financial Services Australia (Zurich) across the 2020
and 2019 financial years. The financial results of these divested businesses are treated as discontinued operations from a financial reporting
perspective. The financial results after transaction completion primarily relate to residual operational costs on separation and partial recoveryof certain costs based on the respective Transition Service Agreements. The separation of the business sold to Zurich completed in early April
2022, and the businesses sold to IOOF completed in early October 2022. There were no material financial impacts from the discontinued
operations in each of the periods presented.
PENDING ORGANISATIONAL CHANGES WITH IMPACT TO FUTURE REPORTING PERIODS
Non-Operating Holding Company
On 4 May 2022, the Group announced its intention to lodge a formal application with APRA, the Federal Treasurer and other applicableregulators to establish a non-operating holding company and create distinct bank and non-bank groups within the organisation to assist ANZ
to better deliver its strategy to strengthen and grow its core business further.
Should the proposed restructure proceed, ANZ will establish a non-operating holding company, ANZ Group Holdings Limited, as the newlisted parent holding company of the ANZ Group by a scheme of arrangement and to separate ANZ’s banking and certain non-banking
businesses into the ANZ Bank Group and ANZ Non-Bank Group. The ANZ Bank Group would comprise the current Australia and New Zealand
Banking Group Limited and the majority of its present-day subsidiaries. The ANZ Non-Bank Group would house banking-adjacent businesses
developed or acquired by ANZ Group, as we continue to seek ways to bring the best new technology and banking-adjacent services to ourcustomers.
The Explanatory Memorandum has been registered with the Australian Securities and Investments Commission and ANZ shareholders will be
asked to vote on the scheme on 15 December 2022. A copy of the Explanatory Memorandum will be made available on ANZ’s website

regulators to establish a non-operating holding company and create distinct bank and non-bank groups within the organisation to assist ANZ
to better deliver its strategy to strengthen and grow its core business further.
Overview

Performance

How weRemuneration

Shareholder

45

create value
overview
information
Should the proposed
restructure
proceed, ANZoverview
will establish a non-operatingholding company, ANZ Group Holdings Limited, as the newlisted parent holding company of the ANZ Group by a scheme of arrangement and to separate ANZ’s banking and certain non-banking
businesses into the ANZ Bank Group and ANZ Non-Bank Group. The ANZ Bank Group would comprise the current Australia and New Zealand
Banking Group Limited and the majority of its present-day subsidiaries. The ANZ Non-Bank Group would house banking-adjacent businesses
developed or acquired by ANZ Group, as we continue to seek ways to bring the best new technology
andPERFORMANCE
banking-adjacent services
to ourOUR(continued)
customers.

OUR PERFORMANCE (continued)

The Explanatory Memorandum has been registered with the Australian Securities and Investments Commission and ANZ shareholders will be
asked to vote on the scheme on 15 December 2022. A copy of the Explanatory Memorandum will be made available on ANZ’s website(www.anz.com/schememeeting).
Suncorp Bank Acquisition

Suncorp
On 18 JulyBank
2022,Acquisition
the Group announced an agreement to purchase 100% of the shares in SBGH Limited, the immediate non-operating holding
company of Suncorp Bank. The acquisition is subject to a minimum completion period of 12 months and to certain conditions, being Federal
On 18 July 2022, the Group announced an agreement to purchase 100% of the shares in SBGH Limited, the immediate non-operating holding
Treasurer
approval,
AustralianCompetition and Consumer Commission authorisation or approval and certain amendments to the State44
ANZ 2022
ANNUALREPORT
company of Suncorp Bank. The acquisition is subject to a minimum completion period of 12 months and to certain conditions, being Federal
Financial Institutions and Metway Merger Act 1996 (Qld). Unless the parties agree otherwise, the last date for satisfaction of these conditions is
Treasurer approval, Australian Competition and Consumer Commission authorisation or approval and certain amendments to the State24 months after signing (after which either party may terminate the agreement). The final purchase price is subject to completion adjustments
Financial Institutions and Metway Merger Act 1996 (Qld). Unless the parties agree otherwise, the last date for satisfaction of these conditions isand may be more or less than $4.9 billion. In addition, ANZ will also acquire Suncorp Bank’s Additional Tier I capital notes at face value ($0.6
24 months after signing (after which either party may terminate the agreement). The final purchase price is subject to completion adjustmentsbillion as at June 2022). Completion is expected in the second half of calendar year 2023.
and may be more or less than $4.9 billion. In addition, ANZ will also acquire Suncorp Bank’s Additional Tier I capital notes at face value ($0.6
billion as at June 2022). Completion is expected in the second half of calendar year 2023.

CONTINUING OPERATIONSCONTINUINGOPERATIONS
Key measures of our
financial performance are set out below.
Key measures of our financial performance are set out below.

1.63

Operating expenses tooperating income –in)g expenses tocOapsehr1a(t%operating income –1
c2022
as h ( % )51.6

Credit impairment charge/(release) – cash1 ($m)
Credit impairment charge/2022(release) – cash1 ($(232)
m)

2021
2022

1.64
1.63

2021
2022

51.9
51.6

2021
2022 (567)

2021

1.64

2021

51.9
228.8

2021 (567)Common equityti er 1 (%)
Common equityt2022
i er 1 (%)

12.3

Dividend per share(cents)Dividend per share(2022
cents)

12.3

2021
2022

142
146

12.3

2021

142

Net interest margin –cash1 (%)
Net interest margin –c2022
ash1 (%)

Return on equity –c a s h1 ( % )Return on equity –c2022
a s h1 ( % )10.4

Earnings per share –cash1 (cents)
Earnings per share –2022
cash1 (cents)

2021
2022

9.9
10.4

2021
2022

216.5
228.8

2021
2022

2021

9.9

2021

216.5

2021

1.

Information has been presented on a cash profit from continuing operations basis.

1.

Information has been presented on a cash profit from continuing operations basis.

(232)

Cash profit1($m)
Cash profit1
(2022
$m)

6,515

2021
2022

6,198
6,515

2021

6,198
146

ADJUSTMENTS BETWEEN STATUTORY PROFIT AND CASH PROFIT ($m)
ADJUSTMENTS BETWEEN STATUTORY PROFIT AND CASH PROFIT ($m)
7,138
7,138

(569)
(569)

2022 Statutory
profit continuing
2022
Statutory
operations
profit continuing
operations

Economic
hedgesEconomic
hedges

6,515
(54)

6,515

(54)

Revenue andexpense hedges
Revenue andexpense hedges

Adjustments between continuing operations statutory profit and cash profit are summarised below:

2022 Cashprofit continuing
2022
Cash
operations
profit continuing
operations

Adjustments between continuing operations statutory profit and cash profit are summarised below:
Adjustment
Reason for the adjustment
Economic hedges
The
Group
into economic hedges to manage its interest rate and foreign exchange risk which, in
Adjustment
Reasonfor enters
the adjustment
2022: ($569) million
accordance with accounting standards, result in fair value gains and losses being recognised within the Income
Economic hedges
The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in
2021: ($77) million
Statement. We remove the fair value adjustments from cash profit since the profit or loss resulting from the hedge
2022: ($569) million
accordance with accounting standards, result in fair value gains and losses being recognised within the Income
transactions will reverse over time to match with the profit or loss from the economically hedged item as part of2021: ($77) million
Statement. We remove the fair value adjustments from cash profit since the profit or loss resulting from the hedge
Revenue andcash profit. This includes gains and losses arising from derivatives not designated in accounting hedgetransactions will reverse over time to match with the profit or loss from the economically hedged item as part ofexpense hedges
relationships but which are considered to be economic hedges, including hedges of foreign currency debt
Revenue andcash profit. This includes gains and losses arising from derivatives not designated in accounting hedge
issuances and foreign exchange denominated revenue and expense streams, primarily NZD and USD (and USD
2022: ($54) million
expense hedges
relationships but which are considered to be economic hedges, including hedges of foreign currency debt
correlated), as well as ineffectiveness from certain designated accounting hedges.
2021: $96 million
issuances and foreign exchange denominated revenue and expense streams, primarily NZD and USD (and USD
2022: ($54) million
correlated), as well as ineffectiveness from certain designated accounting hedges.
2021: $96 million

46

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

GROUP CASH PROFIT PERFORMANCE FROM CONTINUING OPERATIONSCash profit performance and the analysis thereof has been presented on a cash profit from continuing operations basis.
CASH PROFIT FROM CONTINUING OPERATIONS ($m)

387

713
(528)

6,515

Income tax
expense &non-controllinginterests

2022 Cashprofit continuing
operations

(335)

6,198

2021 Cashprofit continuing
operations

80

Net interest
incomeOther
operatingincomeOperatingexpensesCreditimpairment

2022
$m

2021
$m

Movt

Net interest income
Other operating income

14,874
3,673

14,161
3,286

5%
12%

Operating income

18,547(9,579)17,447(9,051)

6%
6%

8,968
232

8,396
567

7%
-59%

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

9,200

8,963

3%

Income tax expense
Non-controlling interests(2,684)(1)(2,764)
(1)

-3%
0%

Cash profit from continuing operations

6,515

6,198

5%

Cash profit from continuing operations increased $317 million (5%) compared with the 2021 financial year.
Net interest income increased $713 million (5%) driven by a $46.3 billion (5%) increase in average interest earning assets, partially offset by a 1
bps decrease in net interest margin. The increase in average interest earning assets was driven by higher central bank balances, higher average
net loans and advances, partially offset by lower trading assets and investment securities. The decrease of 1 bps was driven by home loan
pricing competition in the Australia Retail and New Zealand divisions, growth in lower yielding liquid assets, unfavourable asset and funding
mix, and lower average yield in Markets averages earning assets. This was partially offset by improvement in deposit margins from a risinginterest rate environment, and higher earnings on capital and replicating deposits.
Other operating income increased $387 million (12%) driven by a $326 million increase from business divestments/closures, including a $307
million gain on completion of the ANZ Worldline partnership, a $251 million loss on divestment of ANZ Share Investing business in the prioryear, and an increase in share of associates’ profit of $353 million. This was partially offset by a decrease of $270 million in Markets otheroperating income as Balance Sheet and Derivative Valuation Adjustments were impacted by high volatility and yield curve movements, and a$156 million decrease in net fee and commission income primarily driven by Breakfree package changes in the Australia Retail division.
Operating expenses increased $528 million (6%) driven by investment spend to develop digital capabilities, meet regulatory and complianceobligations and drive volume growth. The inclusion of Cashrewards Limited (Cashrewards) after obtaining control in December 2021 andwage inflation also contributed to the increase.
Credit impairment release decreased $335 million (-59%) driven by a decrease in the collectively assessed credit impairment release, partially
offset by a decrease in the individually assessed credit impairment charge.
Income tax expense decreased $80 million (-3%). The effective tax rate decreased by 160 bps to 29.2% primarily from the non-tax assessablegain on completion of the Worldline partnership.

Overview

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Performanceoverview

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overview

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47

OUR PERFORMANCE (continued)

LARGE/NOTABLE ITEMS INCLUDED IN CASH PROFIT FROM CONTINUING OPERATIONS
Within continuing cash profit, the Group recognised a number of large/notable items. The impact of these items on a post-tax basis is
as follows:
Gain/(Loss) from divestments/closures
ANZ Worldline partnership

2022
$m

2021
$m

335

-

-

(251)

Financial planning and advice business

(60)

-

Legal entity rationalisation

(65)

-

Other divestments

(13)

13

42
4

86
6

Customer remediation

(166)

(221)

Litigation settlements
Restructuring
Withholding tax

(10)
(68)

(48)
(92)

(126)
(17)

-

ANZ Share Investing business

Completed divestment business results
ANZ Worldline partnership
Financial planning and advice business
Other large/notable items

Lease modification
Merger and acquisition related costs
Asian associate items

(10)

-

-

(347)

48

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

Description of large/notable items:
Item

Description

Gain/(Loss) fromdivestments/closures

The 2022 financial year included a gain on completion of the ANZ Worldline partnership, a loss on disposal of thefinancial planning and advice business, and losses associated with legal entity rationalisation from release offoreign currency translation reserves, and impacts from other divestments.
The 2021 financial year included a loss on divestment of ANZ Share Investing business, and a gain on sale of alegacy insurance portfolio.

Completeddivestment businessresults

Completed divestment business results relate to the ANZ Worldline partnership and financial planning and advice
business, which completed during the 2022 financial year.

Merger andacquisition (M&A)
related costs

During the 2022 financial year, the Group incurred transaction related external legal and advisor costs of $10
million after tax associated with M&A activities during the period, including the Suncorp Bank acquisition.

Customer
remediation

Customer remediation includes provisions for expected refunds to customers, remediation project costs andrelated customer and regulatory claims, penalties and litigation costs and outcomes.

Litigation
settlements

During the 2022 financial year, the Group entered into an agreement to settle a United States class action related
to the trading of products based on certain benchmark reference rates and recognised expenses of $10 million
after tax in relation to the proposed settlement and related costs. The settlement is without admission of liability
and remains subject to negotiation and execution of complete settlement terms as well as court approval.
During the 2021 financial year, the Group reached an agreement to settle a separate United States class action
related to other benchmark-based products and activities and recognised expenses of $48 million after tax. The
settlement is without admission of liability and remains subject to court approval.

Restructuring

In addition to the restructuring expenses of $18 million after tax included within business divestments/closures(2021: nil), the Group recognised restructuring expenses of $68 million after tax in 2022 (2021: $92 million) relating
to operational changes across multiple divisions.

Withholding tax

During the 2022 financial year, a dividend payment of $714 million (net of withholding tax) was made by ANZ
Papua New Guinea (ANZ PNG) to Australia and New Zealand Banking Group Limited (ANZBGL) in order torebalance capital positions within the Group in response to APRA’s changes in the capital requirements for
subsidiaries. ANZBGL made a capital injection into ANZ PNG equivalent to the dividend, net of withholding tax. As
a result of the dividend payment, a dividend withholding tax expense of $126 million was recognised during theperiod.

Lease modification

During the 2022 financial year, the Group early terminated the head lease on the 55 Collins Street Melbourne
building and recognised a net loss after tax of $17 million. The loss comprised a $31 million gain in Other
operating income on lease modification arising from remeasurement of the lease liability and right-of-use asset
net of a $8 million lease termination payment, a $47 million loss in Operating expenses associated with lease exit
costs including accelerated depreciation and asset write-offs, and an income tax benefit of $7 million.

Asian associate items

During the 2021 financial year, the Group recognised a $347 million reduction in equity accounted earnings aftertax, comprising $212 million reflecting its share of the settlement provision following AMMB Holdings Berhad’s(AmBank) agreement with the Malaysian Ministry of Finance to resolve potential claims relating to its involvementwith 1Malaysia Development Berhad (1MDB), and $135 million reflecting its share of the impairment of AmBank
goodwill.

48

ANZ 2022 ANNUAL REPORTOverview

How wecreate value

Performanceoverview

Remuneration
overview

Shareholder
information

49

OUR PERFORMANCE (continued)

ANALYSIS OF CASH PROFIT PERFORMANCE
Net interest income
GROUP NET INTEREST MARGIN (bps)

12
164

3

(2)

164

1

163

Large/
notableitems

2022 Cashnet interest
margin

(2)

(5)
(8)

2021 Cashnet interest
margin1.

Assetpricing

Depositpricing &wholesalefunding

Asset andfunding mix

Liquidity

Capital andreplicating
portfolio

2022 Cashnet interest
marginsubtotalMarkets
Balance
Sheet
activities 1

Markets Balance Sheet activities includes the impact of discretionary liquid asset holdings and other Balance Sheet activities.

2022
$m

2021
$m

Movt

14,874

14,161

5%

Net interest margin (%) - cash
Average interest earning assets

1.63
910,037

1.64
863,691-1 bps5%

Average deposits and other borrowings

780,373712,540

10%

Net interest income

1
1

1.

Includes the major bank levy of -$340 million (2021: -$346 million).

Net interest income increased $713 million (5%) driven by a $46.3 billion (5%) increase in average interest earning assets, partially offset by 1
bps decrease in net interest margin.
Net interest margin decreased 1 bps driven by home loan pricing competition in the Australia Retail and New Zealand divisions, growth inlower yielding liquid assets to replace Committed Liquidity Facility (CLF) which, consistent with APRA requirements, will reduce to $0 on 1
January 2023, unfavourable asset and funding mix primarily from customers switching from variable to fixed home loans and lower unsecured
lending, and lower average yield in Markets averages earning assets as a results of portfolio rebalancing in the prior year. This was partially
offset by improvement in deposit margins from a rising interest rate environment, favourable deposit mix with growth in at-call deposits, andhigher earnings on capital and replicating deposits.
Average interest earning assets increased $46.3 billion (5%) driven by higher central bank balances, lending growth in the Institutional andAustralia Commercial divisions, and home loan growth in the New Zealand division. This was partially offset by lower trading assets andinvestment securities, lower reverse repurchase agreements, and decline in the Australia Retail division.
Average deposits and other borrowings increased $67.8 billion (10%) driven by growth in at-call deposits across all divisions and increases incommercial paper, partially offset by lower term deposits and certificates of deposit.

50

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

Other operating income
OTHER OPERATING INCOME ($m)

3,286

460

3,673

Other 12022 Cashother
operatingincome

353
(156)
(270)

2021 Cashother
operatingincomeNet fee andcommission
income 1

MarketsotheroperatingincomeShare ofassociates’
profit/(loss)

2022
$m

2021
$m

Movt

Net fee and commission income
Markets other operating income

1,907
860

2,063
1,130

-8%
-24%

Share of associates' profit/(loss)
Other1

177
729

(176)
269

large
large

3,673

3,286

12%

1

Total cash other operating income
1.

Excluding the Markets business unit.

Net fee and commission income decreased $156 million (-8%) driven by Breakfree package fee changes in the Australia Retail division, lower
divested business results, and removal or reduction of funds under management fees in the New Zealand division. This was partially offset bylower customer remediation, higher cards revenue due to recovery in consumer spending, and higher volume-related fees in the Institutional
division.
Markets other operating income decreased $270 million (-24%) as Balance Sheet and Derivative Valuation Adjustments were impacted byhigh volatility and yield curve movements, and lower income in Credit and Capital Markets was driven by less favourable credit trading
conditions and lower levels of customer issuances amid more volatile market conditions. This was partially offset by higher Foreign Exchange,
Rates and Commodities income driven by customer demand and more favourable trading conditions.
Share of associates' profit increased $353 million driven by the Group’s equity accounted share of AmBank 1MDB settlement and goodwill
impairment of $347 million in 2021 and increase in other equity accounted share of profits.
Other increased $460 million primarily driven by a gain on completion of the ANZ Worldline partnership and a loss on divestment of the ANZ
Share Investing business in 2021, partially offset by a loss on sale of the financial planning and advice business.

Overview

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Performanceoverview

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overview

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51

OUR PERFORMANCE (continued)

Operating expenses
OPERATING EXPENSES ($m)

350

16

Personnel

Premises

155

9,579

Other

2022 Cashoperatingexpenses

33
(26)

9,051

2021 Cashoperatingexpenses

Personnel
Premises
Technology
Restructuring
Other
Total cash operating expenses
Full time equivalent staff from continuing operations1
Average full time equivalent staff from continuing operations1
1.

Technology

Restructuring

2022
$m
5,296
721
1,621
101
1,840
9,579
38,98739,546

2021
$m
4,946
705
1,588
127
1,685
9,051
39,68438,043

Movt
7%
2%
2%
-20%
9%
6%
-2%
4%

Excludes FTE of the consolidated investments managed by 1835i Group Pty Ltd.

Personnel expenses increased $350 million (7%) driven by higher average resourcing supporting investments to develop digital capabilities,
meet regulatory and compliance obligations and drive volume growth. The inclusion of Cashrewards after obtaining control in December
2021 and wage inflation also contributed to the increase. This was partially offset by benefits from customers continuing to embrace digitalchannels, productivity improvements arising from technology and back-office optimisation, higher employee leave utilisation and lower
customer remediation.
Premises expenses increased $16 million (2%) driven by the modification of a significant lease arrangement, partially offset by ongoing
optimisation of property footprint.
Technology expenses increased $33 million (2%) driven by higher software licence costs and increased spend on investment initiatives,
partially offset by lower amortisation.
Restructuring expenses decreased $26 million (-20%) primarily driven by lower charges in the Group Centre and Australia Retail divisions.
Other expenses increased $155 million (9%) driven by increased spend on investment initiatives to develop digital capabilities and meet
regulatory and compliance obligations.

52

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

Credit impairment
2022
(311)
79
(232)
1,445
359.4
4,395
37.5%
1.07%

Collectively assessed credit impairment charge/(release) ($m)
Individually assessed credit impairment charge/(release) ($m)
Credit impairment charge/(release) ($m)
Gross impaired assets ($m)
Credit risk weighted assets ($b)
Total allowance for expected credit losses (ECL) ($m)
Individually assessed as % of gross impaired assets
Collectively assessed as % of credit risk weighted assets

2021
(823)
256
(567)
1,965
342.5
4,882
35.0%
1.22%

Movt
-62%
-69%
-59%
-26%
5%
-10%

COLLECTIVELY ASSESSED CREDIT IMPAIRMENT CHARGE/(RELEASE) ($m)

96
172

(34)

(4)

(311)

Pacific

Group Centre

2022 Collectively
assessed credit
impairment
release

102
180

(823)
2021 Collectively
assessed credit
impairment
releaseAustralia
RetailAustralia
Commercial

Institutional

New Zealand

The collectively assessed impairment release of $311 million for the 2022 financial year was driven by improvements in credit risk, favourable
changes in portfolio composition, and a net release of management temporary adjustments. This was partially offset by an increase for thedownside risks associated with the economic outlook. The collectively assessed impairment release of $823 million for the 2021 financial year
was driven by improving economic outlook, lower lending volumes, favourable changes in portfolio composition, and improvements in credit
risk. This was partially offset by an increase in management temporary adjustments.
INDIVIDUALLY ASSESSED CREDIT IMPAIRMENT CHARGE/(RELEASE) ($m)
256

(82)
(36)

16

19

79

Group Centre

2022 Individuallyassessed credit
impairment
charge7(101)2021 Individuallyassessed credit
impairment
chargeAustralia
RetailAustralia
Commercial

Institutional

New ZealandPacific

The individually assessed credit impairment charge decreased by $177 million (-69%) driven by decreases in the Institutional division with nomaterial impairments during the 2022 financial year, and the Australia Retail and Australia Commercial divisions with underlying delinquency
and impairment flows remaining subdued with the benefit from previous government and bank COVID-19 support packages persisting.

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OUR PERFORMANCE (continued)

GROSS IMPAIRED ASSETS BY DIVISION ($m)

1,965

13

(304)

(319)

2021 Gross
impaired assets

Australia
RetailAustralia
Commercial

Institutional

121

0

1,445

Pacific

Group Centre

2022 Gross
impaired assets(31)

New ZealandGross impaired assets decreased $520 million (-26%) driven by decreases in the Institutional division driven by the upgrade and repayments ofseveral single name exposures, and the Australia Commercial division due to underlying delinquency flows remaining subdued with thebenefit from previous government and bank COVID-19 support packages persisting and the upgrade and repayments of several single nameexposures. This was partially offset by the Pacific division driven by exposures rolling off local COVID-19 support packages being classified as
restructures.
TOTAL ALLOWANCE FOR EXPECTED CREDIT LOSSES ($m)

4,882

(210)

16

0

(283)
2021 Total
allowance
for expectedcredit losses

Australia
RetailAustralia
Commercial

Institutional

New Zealand

4,395
(8)

(2)

Pacific

Group Centre

2022 Total
allowance
for expectedcredit losses

The decrease in total allowance for expected credit losses was driven by a $342 million decrease in the collectively assessed expected credit
loss, and a $145 million decrease in the individually assessed allowance for expected credit losses.
The decrease in collectively assessed allowance for expected credit losses was driven by reduction of $344 million from improvements incredit risk, $258 million from changes in portfolio composition, $24 million in lower management temporary adjustments, and $31 million
from foreign currency translation and other impacts. This was partially offset by an increase of $315 million for the downside risks associatedwith the economic outlook.
The decrease in individually assessed allowance for expected credit losses was driven by decreases in the Institutional division with no material
impairments during the 2022 financial year, and the Australia Retail and Australia Commercial due to underlying delinquency and impairment
flows remaining subdued with the benefit from previous government and bank COVID-19 support packages persisting.

54

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

DIVISIONAL PERFORMANCE
On 1 March 2022, the Group announced a structural change to the existing Australia Retail and Commercial division, and the digitalbusinesses in the Group Centre division (formerly known as the Technology, Services & Operations (TSO) and Group Centre division). This
involved the integration of the Australian retail and digital businesses, and the separation of the Australian commercial business into a newdivision to improve productivity and accountability within the organisation. As a result of these changes there are now six divisions: Australia
Retail, Australia Commercial, Institutional, New Zealand, Pacific and Group Centre, aligned to distinct strategies and opportunities within theGroup. Comparative information has been restated accordingly.
Other than those described above, there have been no other significant changes.
Australia
RetailAustralia
Commercial

Institutional

New
Zealand

Pacific

Group
CentreGroup

Net interest margin
Operating expenses to operating income

2.25%
52.2%

2.10%
41.8%

0.85%
49.6%

2.47%
36.5%

2.82%
93.3%

n/a
n/a

1.63%
51.6%

Cash profit from continuing
operations ($m)

2,140

1,510

1,761

1,633

9

(538)

6,515

Net loans and advances ($b)1
Customer deposits ($b)
Number of FTE

290.3
150.0
11,846

59.7
112.2
2,799

196.8
259.4
6,236

123.7
95.1
6,873

1.8
3.8
1,086

0.1
(0.1)
10,147672.4
620.4
38,9872021

Australia
RetailAustralia
Commercial

Institutional

New
Zealand

Pacific

Group
CentreGroup

Net interest margin
Operating expenses to operating income

2.27%
48.0%

1.98%
49.4%

0.81%
49.1%

2.33%
39.7%

2.98%
89.4%

n/a
n/a

1.64%
51.9%

Cash profit from continuing
operations ($m)

2,316

1,107

1,887

1,508

(3)

(617)

6,198

Net loans and advances ($b)
Customer deposits ($b)
Number of FTE

284.0
141.4
11,764

57.2
111.1
3,095

158.2
239.6
6,196

128.5
97.7
7,060

1.8
3.8
1,089

10,480629.7
593.6
39,6842022

1.

During 2022, the Group revised its treatment of ongoing trail commission payable to mortgage brokers to recognise a liability within Payables and other liabilities equal to the present value of
expected future trail commission payments and a corresponding increase in capitalised brokerage costs in Net loans and advances. The balance at 30 September 2022 was $1,226 million for theAustralia Retail division and $94 million for the Australia Commercial division. Comparative information has not been restated.

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55

OUR PERFORMANCE (continued)

DIVISIONAL PERFORMANCE
Australia Retail
Lending volumes increased driven by home loan growth, partially offset by lower unsecured lending. Net interest margindecreased driven by asset margin contraction from competitive pressure and unfavourable lending mix from stronger growth inlower margin fixed rate home loans. This was partially offset by improvement in deposit margins from rising interest rateenvironment and favourable deposit mix. Other operating income increased driven by the loss on divestment of ANZ ShareInvesting business in the prior year and higher cards revenue due to recovery in consumer spending, partially offset by Breakfree
package fee changes. Operating expenses increased driven by higher investment spend on ANZ Plus and home loans momentum,
partially offset by lower restructuring expenses. Credit impairment release decreased driven by a lower collectively assessed credit
impairment release, partially offset by lower individually assessed credit impairment charge with underlying delinquency andimpairment flows remaining subdued with the benefit from previous government and bank COVID-19 support packages persisting.
Australia Commercial
Lending volumes increased driven by Specialist Business lending growth. Net interest margin increased driven by improvement indeposit margins from a rising interest rate environment and favourable deposit mix. This was partially offset by unfavourable lending
mix with stronger growth in lower margin large commercial customers, and asset margin contraction from competitive pressure.
Other operating income increased driven by the gain on sale relating to the ANZ Worldline partnership. This was partially offset by
the loss on sale of the financial planning and advice business and divested business results impact following ANZ Worldline
partnership. Operating expenses decreased driven by lower restructuring expenses and lower impact of divested business results.
Credit impairment release decreased driven by a lower collectively assessed credit impairment release, partially offset by lower
individually assessed credit impairment charge with underlying delinquency and impairment flows remaining subdued with thebenefit from previous government and bank COVID-19 support packages persisting.
Institutional
Lending volumes increased across Corporate Finance, Markets and Transaction Banking following strong core lending andcustomer flows during the period. Customer deposits increased predominantly in Transaction Banking. Net interest margin exMarkets increased primarily driven by improvement in deposit margins from a rising interest rate environment. Other operating
income decreased driven by lower Markets revenues as Balance Sheet and Derivative Valuation Adjustments were impacted by highvolatility and yield curve movements. Operating expenses increased driven by higher technology costs, partially offset by lower
litigation settlements. Credit impairment release decreased driven by collectively assessed credit impairment release in the priorperiod, partially offset by release of individually assessed credit impairment charges in Transaction Banking. Income tax expense
increased driven by the dividend withholding tax on the dividend payment from ANZ PNG to ANZBGL, partially offset by tax rate
differentials on profits earned in International, and tax refunds and write-backs.
New ZealandLending volumes increased driven by home loan growth. Net interest margin increased driven by improvement in deposit margins
from a rising interest rate environment, partially offset by lower home loan margins due to competition, and a higher mix of fixed
rate home loans. Other operating income is flat as gains on sale of government securities was offset by lower fees from the removalor reduction of funds under management fees. Operating expenses increased driven by higher investment spend and inflation
impacts, partially offset by productivity gains and other savings. Credit impairment charge increased primarily driven by collectively
assessed credit impairment charge in the current year as opposed to a release in the prior year.
Pacific
Financial performance for the Pacific division is largely consistent with the prior year.
Group Centre
The 2022 financial year included the recycling of foreign currency translation reserves from Other comprehensive income to profit orloss on dissolution of Minerva Holdings Limited and ANZ Asia Limited, and a net charge on lease modification impacts of asignification lease arrangement.
The 2021 financial year included the losses from the Group’s share of AmBank 1MDB settlement and goodwill impairment.

ANZ 2022 ANNUAL REPORT

55

56

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

FINANCIAL POSITION OF THE GROUP
Condensed balance sheet
As at
2022
$b

2021
$b

Movt

Cash / Settlement balances owed to ANZ / Collateral paid
Trading assets and investment securities

185.6
121.4

168.0
127.8

10%
-5%

Derivative financial instruments
Net loans and advances

90.2
672.4

38.7
629.7

large
7%

Other

16.0

14.7

9%

1,085.6

978.9

11%

Settlement balances owed by ANZ / Collateral received
Deposits and other borrowings

30.0
797.3

23.1
743.1

30%
7%

Derivative financial instruments
Debt issuances

85.1

36.0

large

93.7
13.2

101.1
11.9

-7%
11%

Total liabilities

1,019.3

915.2

11%

Total equity

66.4

63.7

4%

AssetsTotal assets
Liabilities

Other

Cash / Settlement balances owed to ANZ / Collateral paid increased $17.6 billion (10%) driven by increases in balances with central banks.
Trading assets and investment securities decreased $6.4 billion (-5%) primarily driven by lower revaluations in Markets as a result of interest
rate increases.
Derivative financial assets and liabilities increased $51.5 billion and $49.1 billion respectively driven by the impact of market rate
movements, primarily the significant strengthening of the USD.
Net loans and advances increased $42.7 billion (7%) driven by higher lending volumes in the Institutional ($34.6 billion) and Australia
Commercial ($2.5 billion) divisions and increased home loan growth in the Australia Retail ($6.4 billion) and New Zealand ($5.2 billion)
divisions, partially offset by the impact of foreign currency translation movements.
Settlement balances owed by ANZ / Collateral received increased $6.9 billion (30%) driven by higher collateral received, partially offset bylower cash clearing account balances.
Deposits and other borrowings increased $54.2 billion (7%) driven by increases in customer deposits across the Institutional ($11.6 billion),
Australia Retail ($8.5 billion) and New Zealand ($5.0 billion) divisions, increases in deposits from banks and repurchase agreements ($14.5
billion) and commercial paper ($13.9 billion), and the impact of foreign currency translation movements. This was partially offset by decreases
in certificates of deposit ($3.9 billion).
Debt issuances decreased $7.4 billion (-7%) primarily driven by the maturity of unsubordinated debt and movement in hedge revaluations.
Total equity increased $2.7 billion (4%) primarily driven by a share entitlement offer of $3.5 billion.

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57

OUR PERFORMANCE (continued)

Liquidity

Total liquid assets ($b)
Liquidity Coverage Ratio (LCR) 1
1

1.

Average
2022

2021

241.7
131%

225.9
137%

Full year average, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.

The Group holds a portfolio of high quality unencumbered liquid assets in order to protect the Group’s liquidity position in a severely stressed
environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions consistent
with Basel III LCR: Highest-quality liquid assets: cash, highest credit quality government, central bank or public sector securities eligible for repurchase withcentral banks to provide same-day liquidity.
 High-quality liquid assets: high credit quality government, central bank or public sector securities, high quality corporate debt securities
and high quality covered bonds eligible for repurchase with central banks to provide same-day liquidity.
 Alternative liquid assets: assets qualifying as collateral for the CLF and other eligible securities listed by the RBNZ.
The Group monitors and manages the size and composition of its liquid assets portfolio on an ongoing basis in line with regulatory
requirements and the risk appetite set by the Board.
Committed Liquidity Facility
As part of meeting LCR requirements, the Group has a CLF with the Reserve Bank of Australia (RBA). The CLF was established to offset the
shortage of available High Quality Liquid Assets (HQLA) in Australia and provides an alternative form of contingent liquidity. The CLF iscollateralised by assets, including internal residential mortgage backed securities, that are eligible to be pledged as security with the RBA. In
September 2021, APRA wrote to ADI’s to advise that APRA and the RBA consider there to be sufficient HQLA for ADI’s to meet their LCR
requirements, and therefore the use of the CLF should no longer be required beyond 2022 calendar year.
Consistent with APRA’s requirement to reduce the $10.7 billion CLF with four equal reductions during the 2022 calendar year to $0 on 1
January 2023, ANZ’s CLF was $2.7 billion as at 30 September 2022 (2021: $10.7 billion).
The LCR remained above the regulatory minimum of 100% throughout this period.

Funding

Customer liabilities (funding)
Wholesale funding
Shareholders’ equity

2022
$b

2021
$b

628.4
300.3

601.7
274.3

66.4

63.7

Total funding

995.1

939.7

Net Stable Funding Ratio

119%

124%

The Group targets a diversified funding base, avoiding undue concentration by investor type, maturity, market source and currency.
Net Stable Funding Ratio remained above the regulatory minimum of 100% throughout this period.
$15.7 billion of term wholesale debt funding (excluding Additional Tier 1 Capital) with a remaining term greater than one year as at 30
September 2022 was issued during the year. In addition, the Group issued $1.3 billion of Additional Tier 1 Capital during the year (excluding
ANZ Bank New Zealand Limited perpetual preference shares, which is classified as a non-controlling interest in the Group).
RBA Term Funding Facility
As an additional source of funding, in March 2020, the RBA announced a Term Funding Facility (TFF) for the banking system to support
lending to Australian businesses. The TFF is a three-year secured funding facility to ADIs at a fixed rate of 0.25% for drawdowns up to 4
November 2020, and reduced to 0.10% for new drawdowns from 4 November 2020 onwards. The TFF was closed to drawdowns on 30 June2021.
As at 30 September 2022, ANZ had drawn $20.1 billion under the RBA’s TFF.

58

ANZ 2022 Annual Review / Performance overview

OUR PERFORMANCE (continued)

RBNZ Funding for Lending Programme and Term Lending Facility
Between May 2020 and July 2021, the RBNZ made funds available under a Term Lending Facility (TLF) to promote lending to businesses. The
TLF is a five-year secured funding facility for New Zealand banks at a fixed rate of 0.25%.
In November 2020 the RBNZ announced a Funding for Lending Programme (FLP) which aimed to lower the cost of borrowing for New
Zealand businesses and households. The FLP is a three-year secured funding facility for New Zealand banks at a floating rate of the New
Zealand Official Cash Rate (OCR). New Zealand banks were able to obtain initial funding of up to 4% of their lending to New Zealand resident
households, non-financial businesses and non-profit institutions serving households as at 31 October 2020 (eligible loans). The initial allocation
closed on 6 June 2022. An additional allocation of up to 2% of eligible loans is available, subject to certain conditions until 6 December 2022.
As at 30 September 2022, ANZ Bank New Zealand Limited had drawn $0.3 billion under the TLF and $2.3 billion under the FLP.
Capital management
2022

2021

Movt

- APRA Basel III

12.3%

12.3%

Credit risk weighted assets ($b)

359.4

342.5

5%

Total risk weighted assets ($b)

454.7

416.1

9%

APRA Leverage Ratio

5.4%

5.5%

Common Equity Tier 1 (Level 2)

APRA, under the authority of the Banking Act 1959, sets minimum regulatory requirements for banks including what is acceptable asregulatory capital and provides methods of measuring the risks incurred by the Bank.
The Group’s Common Equity Tier 1 ratio was 12.29% based on APRA Basel III standards, exceeding APRA’s minimum requirements. It
decreased 5 bps driven by the impact of dividends paid during the year, higher underlying CRWA and non-CRWA usage and the impact of thecompleted share buy-back. This was partially offset by cash earnings and the equity raising to support the acquisition of Suncorp Bank.
At 30 September 2022, the Group’s APRA leverage ratio was 5.4% which is above the 3.5% proposed minimum for internal ratings-based
approach ADI (IRB ADI), which includes ANZ.
Dividends
Our financial performance allowed us to propose that a final dividend of 74 cents be paid on each eligible fully paid ANZ ordinary share,bringing the total dividend for the year ended 30 September 2022 to 146 cents per share. This represents a dividend payout ratio of 64.9% ofcash profit from continuing operations.
The proposed 2022 final dividend of 74 cents per share will be fully franked for Australian taxation purposes, and carry New Zealand
imputation credits of NZD 9 cents per ordinary share. It will be paid on 15 December 2022 to owners of ordinary shares at the close of businesson 8 November 2022 (record date).
ANZ has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2022 final dividend.
For the 2022 final dividend, ANZ intends to provide shares under the DRP and BOP through the issue of new shares.
Further details on dividends provided for or paid during the year ended 30 September 2022 are set out in Note 6 Dividends in the Financial
Report.
Shareholders returns
E a r n in g s p e r s h a r e –cash 1 ( c ent s)

1.

Total shareh old er
return (%)

Di v id e n d p a yo u t
r a t io 1 ( % )D i v id e n d p e r s h a r e( c ent s)

2022

228.8

2022

146

2022

64.8

2022 (14.0)

2021

216.5

2021

142

2021

64.9

2021

Information has been presented on a cash profit from continuing operations basis.

70.7

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59

OUR PERFORMANCE (continued)

FIVE YEAR SUMMARY
2022
$m

2021
$m

2020
$m

2019
$m

2018
$m

Financial performance - cash1
Net interest income
Other operating income
Operating expenses

14,874
3,673(9,579)14,161
3,286(9,051)

14,0493,703(9,383)

14,3394,690(9,071)

14,514
4,853(9,401)

Profit before credit impairment and income tax
Credit impairment charge
Income tax expense
Non-controlling interests

8,968
232
(2,684)
(1)

8,396
567
(2,764)(1)

8,369(2,738)(1,872)
(1)

9,958
(795)
(2,678)
(15)

9,966
(688)
(2,775)(16)

Cash profit from continuing operations1
Cash profit/(loss) from discontinued operations1

6,515
(19)

6,198
(17)

3,758
(98)

6,470
(309)

6,487
(682)

Cash profit1
Adjustments to arrive at statutory profit1

6,496
623

6,181
(19)

3,660
(83)

6,161
(208)

5,805
595

Profit attributable to shareholders of the Company

7,119

6,162

3,577

5,953

6,400

1,085,729
66,401
12.3%
19.2%

978,857
63,67612.3%
18.3%

1,042,286
61,29711.3%
16.7%

981,137
60,794
11.4%
16.4%

943,182
59,405
11.4%
16.8%

11.4%
0.7%
52.0%

9.9%
0.6%
52.2%

5.9%
0.3%
53.8%

10.0%
0.6%
49.5%

10.9%
0.7%
52.0%

-14.0%

70.7%-36.9%

9.2%

0.6%

68,170
146
100%
100%
$28.98$20.95$22.8079,483
142
100%
100%
$29.64$16.97$28.1548,83960
100%
100%$28.67$14.10$17.2280,842
160
100%
70%$29.30$22.98$28.5280,979
160
100%
100%
$30.80$26.08$28.18250.0
59.3%$20.75
2,990

215.3
65.3%
$21.09
2,824

125.3
47.6%
$20.04
2,840

208.2
76.2%
$19.59
2,835

219.7
72.1%
$18.472,874$25.52-$27.91$27.68$18.06$22.19$27.79$25.03$27.76$26.0339,196
541,788

40,221
534,166

38,579553,171

39,060506,847

39,924509,238

Financial position
AssetsNet assets
Common Equity Tier 1
Common Equity Tier 1 – Internationally
Comparable Basel III2
Return on average ordinary equity (statutory)3
Return on average assets (statutory)
Cost to income ratio (cash)1
Shareholder value – ordinary shares
Total return to shareholders (share price movement
plus dividends)
Market capitalisation
Dividend (cents)
Franked portion– interim– finalShare price– high (dollars)– low (dollars)– closing (dollars)
Share information(per fully paid ordinary share)
Earnings per share (cents) (statutory)4
Dividend payout ratio (statutory)
Net tangible assets per ordinary share5
No. of fully paid ordinary shares issued (millions)
Dividend reinvestment plan (DRP) issue price– interim– finalOther information
No. of employees (full time equivalents)
No. of shareholders
1.

Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the ongoing business activities of the Group. Cash profit is not
audited; however, the external auditor has informed the Audit Committee that the adjustments have been determined on a consistent basis across each period presented.

2.

Internationally Comparable Methodology aligns with APRA’s information paper entitled ‘International Capital Comparison Study’ (13 July 2015). Basel Internationally Comparable ratios do notinclude an estimate of the Basel l capital floor requirement.

3.

Average ordinary equity excludes non-controlling interests.

4.

Earnings per share has been restated to reflect the bonus element of the share entitlement issue made in 2022, in accordance with AASB 133 Earnings per Share.

5.

Equals shareholders’ equity less total non-controlling interests, goodwill and other intangible assets, divided by the number of ordinary shares.

60

ANZ 2022 Annual Review

FIVE YEAR SUMMARY (CONTINUED)

2022

2021

2020

2019

2018

Australia Retail1

4

4

3

4

3

Australia Commercial2

4

4

4

3

3

Australia Institutional3

2

2

1

1

1

New Zealand Retail4

4

4

4

4

4

New Zealand Commercial and Agricultural5

5

5

5

5

5

New Zealand Institutional6

1

1

1

1

1

Breaches

518

573

569

784

1,114

Investigations resulting in termination

95

114

93

151

226

Whistleblower reports

142

157

157

156

137

>58,000>67,600>61,352>90,850>88,224

Fair and responsible banking
Net Promoter Score Ranking (relative to peers)

Code of Conduct

Financial wellbeing
People reached by our financial inclusion programs7
Employees
Employee Engagement (%)

84

81

86

77

73

Total Women in Leadership (%)8

35.9

35.3

33.4

32.5

32.0

Recruitment of people from under-represented groups9

320

255

185

224

260

Total community investment ($million)10

136.4

139.7

139.5

142.2

136.9

Volunteer hours

52,44454,64566,402

134,930

124,113

13.8

15.5

20.5

42.4

34.6

Environmentally sustainable solutions (AU$ billion)

16.18

9.18

7.57

7.60

4.65

Housing (AU$ billion)11

0.53

1.40

1.45

Other social (AU$ billion)12

1.37

2.29

0.06

Total scope 1 & 2 (tCO2e)

101,879

111,409

134,093

156,568

171,012

Total scope 1, 2 & 3 GHG emissions (tCO2e)140,514

153,697

203,700

250,857

266,906

Renewables (%)

90

88

87

83

76

Coal (%)

2

3

5

9

13

Gas (%)

8

9

7

8

10

1,505

1,425

1,501

1,371

1,076

Community

Employee volunteering participation rate (%)

Sustainable financeTotal funded or facilitated towards:

Environmental sustainability
Environmental footprint

Project finance portfolio13

Project finance commitment to renewable energy ($million)

1. Roy Morgan Single Source, Australian population aged 14+, Main Financial Institution, six-month rolling average to Sep’18, Sep’19, Sep’20, Sep’21 & Sep’22. Ranking based on the four
major Australian banks. 2. DBM Atlas (Business). Base: Commercial (<$100 million annual turnover) Main Financial Institution customers. Six-month average to Sep’18, Sep’19, Sep’20, Sep’21& Sep’22. Ranking based on the four major Australian banks. 3. Peter Lee Associates, 2018–2022 Large Corporate and Institutional Relationship Banking surveys, Australia. Ranking based on
the four major Australian banks. 4. Retail Market Monitor, Camorra Research, six month rolling average to Sep’18, Sep’19, Sep’20, Sep’21 & Sep’22. 5. Business Finance Monitor, Kantar Research.
Base: Commercial ($3 million–$150 million annual turnover) and Agricultural (>500K annual turnover) customers. Four quarter rolling average to Q3’18, Q3’19, Q3’20, Q3’21 & Q2’22. 6. Peter Lee
Associates Large Corporate Relationship Banking Survey, New Zealand 2018–2022. 7. Includes individuals who have participated in more than one program or product (for example, people
who have participated in MoneyMinded as part of Saver Plus are counted twice as they are included in both the MoneyMinded and Saver Plus totals. 8. Measures representation at the Senior
Manager, Executive and Senior Executive levels. Includes all employees regardless of leave status but not contractors (which are included in FTE). 9. Including Aboriginal and Torres Strait
Islander peoples, people with disability and refugees. Total may have duplicates as employees can identify with more than one under-represented group. 10. Figure includes forgone revenue,
being the cost of providing low or fee free accounts to a range of customers such as government benefit recipients, not-for-profit organisations, students and the elderly. International transfer
fees were waived for funds sent from Australia and New Zealand to the Pacific to support communities impacted by COVID-19. 11. Commenced reporting in 2020. 12. Commenced reportingin 2020. Includes transactions eligible for inclusion in $50 billion target but unable to be allocated to environmentally sustainable solutions, housing or financial wellbeing. 13. Breakdowns for2020 and 2018 do not total to 100% due to rounding.

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61

62

ANZ 2022 Annual Review

Remuneration overview
The following pages provide a summary of
the remuneration for our Key Management
Personnel (KMP): Non-Executive Directors(NEDs), Chief Executive Officer (CEO) andDisclosed Executives. In this section we
have included the remuneration tables that
feedback from shareholders has told us areof the most interest. The full Remuneration
Report is contained in the Annual Reportfrom page 62 onwards – it includes
discussion of the Board’s decisions
concerning executive remuneration
outcomes, with particular reference to theCEO, together with outlining ourremuneration strategy and framework –including changes to the remuneration
structure in 2022. The report can beaccessed via the ANZ website atanz.com/annualreport.

Non-Executive Director (NED)
remuneration

fees increased for the Chairman, andfor the chairs and members of the Risk
Committee, HR Committee, Digital Business& Technology Committee, and Ethics,
Environment, Social & GovernanceCommittee. See section 7 of the fullRemuneration Report contained in the
Annual Report for details on the NED
fee increases.

NEDs receive a fee for being a Director of
the Board, and additional fees for either
chairing, or being a member of a Board
Committee. The Chairman of the Board
does not receive additional fees for serving
on a Board Committee.
The Human Resources (HR) Committee
and Board reviewed NED fees for 2022 anddetermined that the NED member fee andCommittee fees for the Audit Committee
chair and members would remainunchanged (noting that the Chairman,
NED and Committee fees have remained
unchanged since 2016 with the exceptionof the Digital Business & Technology
Committee Chair fee which has remained
unchanged since 2020). From 1 April 2022

2022 statutory remuneration – NEDS
The following table outlines the statutory
remuneration of NEDs disclosed inaccordance with Australian AccountingStandards.
In addition to the fee shown below, Sir
John Key received NZD 422,050 in 2022 and
NZD 391,000 in 2021 for his role as Chairman
for ANZ Bank New Zealand Limited.

2022 statutory remuneration – NEDS
Short-term NED benefits

Post-employment

Non monetary
benefits2$

Super
contributions1$

Total
remuneration3$

813,501

6,128

23,999843,628764,033

19,931

22,163806,1272022

330,751–

23,999354,7502021

322,337–

22,163

344,500

2022

318,001–

23,999342,000

2021

306,837–

22,163

329,000

J Key

2022

290,251–

23,999314,2502021

278,837–

22,163301,000

G Liebelt

2022

360,427–

6,323

366,7502021

341,337–

22,163

363,500

2022

301,501–

23,999325,500

2021

296,337–

22,163

318,500

C O’Reilly4

2022

302,863–

22,579325,442

J Smith5

2022

36,003–

3,780

39,7832022

76,372

4,944–

81,3162021

365,000––

365,000

2022

2,829,670

11,072

152,677

2,993,419

2021

2,674,718

19,931

132,9782,827,627

Financial
year

Fees1
$

2022
2021

Current Non-Executive Directors
P O’Sullivan
I AtlasJ Halton

J Macfarlane

Former Non-Executive Directors
P Dwyer6
Total of all Non-Executive Directors

1. Year-on-year differences in fees relate to changes to the NED fees and also to the superannuation Maximum Contribution Base. From 1 October 2021 to 30 June 2022, G Liebelt, and from
1 October 2020 to the date of retirement P Dwyer, elected to receive all payments in fees and therefore did not receive superannuation contributions during this period. 2. Non monetary benefits
generally consist of company-funded benefits (and the associated Fringe Benefits Tax) such as car parking and gifts provided upon retirement. 3. Long-term benefits and share-based payments
do not apply for the NEDs. 4. C O’Reilly’s 2022 remuneration reflects a partial service year as she commenced as a NED on 1 November 2021. 5. J Smith’s 2022 remuneration reflects a partial
service year as he commenced as a NED on 1 August 2022. 6. P Dwyer’s 2022 remuneration reflects a partial service year as she retired as a NED on 16 December 2021.

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63

CEO and Disclosed Executives’ remuneration
2022 actual remuneration received
This table shows the remuneration the CEO and Disclosed Executives actually received in relation to the 2022 financial year as cash, or in
the case of prior equity awards, the value which vested in 2022. The final column also shows the value of prior equity awards which lapsed/
were forfeited in 2022 (these are the 2018 performance rights awards which partially met their performance hurdles when tested in
November 2021).
Fixed remuneration was increased for the Chief Risk Officer on 1 October 2021 from $1.1m to $1.2m to improve alignment with the market.
There were no other market adjustments to fixed remuneration for Disclosed Executives in 2022.
Actual remuneration received in 2022 – CEO and Disclosed Executives:
Received value includes the value of prior equity awards which vested in that year
Fixed
remuneration$

Cash variable
remuneration$

Deferred variable
remuneration which
Total cash vested during the year1,2$$

Actualremuneration
received3$

Deferred variable
remuneration which lapsed/
forfeited during the year1,4$

CEO and Current Disclosed Executives
S Elliott

2,500,000

930,000

3,430,000

2,570,069

6,000,069(1,476,258)

M Carnegie

1,200,000

460,000

1,660,000

1,213,496

2,873,496(557,157)

K Corbally

1,200,000

442,500

1,642,500

775,8022,418,302–

F Faruqui5

1,164,000

579,575

1,743,575

1,747,173

3,490,748(731,262)

G Florian

1,100,000

442,500

1,542,500

788,778

2,331,278(348,210)

K van der Merwe

1,000,000

400,000

1,400,000

831,518

2,231,518(383,026)

A Watson6

1,062,629

422,742

1,485,371

426,037

1,911,408(40,188)

M Whelan

1,400,000

535,000

1,935,000

1,697,449

3,632,449(757,400)

Former Disclosed Executives
S Buggle5

33,000n/a

33,000–33,000–

M Hand5

492,000

n/a

492,000

770,215

1,262,215(348,210)

1. The point in time value of previously deferred remuneration granted as deferred shares/deferred share rights and/or performance rights is based on the one day Volume Weighted Average
Price (VWAP) of the Company’s shares traded on the ASX on the date of vesting or lapsing/forfeiture multiplied by the number of deferred shares/deferred share rights and/or performance rights.
2. The vested value includes 51.6% of the performance rights awarded in November/December 2018 which vested in November/December 2021, noting that for the CEO they were settled
by delivery of shares, which remain subject to a further one-year restriction period. 3. The sum of fixed remuneration, cash variable remuneration and deferred variable remuneration which
vested during the year. 4. The lapsed/forfeited values relate to 48.4% of the performance rights awarded in November/December 2018 which lapsed in November/December 2021 due to theperformance hurdles not being fully met. 5. Fixed remuneration prorated for time as a Disclosed Executive. 6. Paid in NZD and converted to AUD. Year to date average exchange rate used toconvert NZD to AUD as at 30 September for the relevant year.

64

ANZ 2022 Annual Review / Remuneration overview

Year-on-year STVR awarded
These tables show a year-on-year comparison of Short Term Variable Remuneration (STVR) awarded to the CEO (previously referred to as
Annual Variable Remuneration (AVR)), and Disclosed Executives for the 2021 and 2022 performance periods (noting that for Disclosed
Executives the STVR equivalent in previous periods relates to the cash and deferred shares component of variable remuneration). See thefull Remuneration Report contained in the Annual Report for details on changes to the remuneration structure in 2022 for the CEO and
Disclosed Executives.
2022 remuneration outcomes reflect both the overall performance of the Group and the performance of each individual/Division.
Note there was no 2022 Long Term Variable Remuneration (LTVR) award made as we transition awarding LTVR at the beginning of thefinancial year rather than the end. The CEO’s proposed 2023 LTVR of $3.375m ($3.5m in 2021) will be subject to a shareholder vote at theupcoming Annual General Meeting.
CEO

Year-on-year comparisons of maximum opportunity on a percentage basis (as shown in the below table) are notcomparable – as the maximum opportunity has been reduced from 150% to 125% of STVR target in 2022. However whencomparing outcomes as a percentage of target, the table highlights that despite the CEO’s 2022 STVR outcome being
higher as a % of target than 2021 (reflecting his better performance in 2022), his actual 2022 STVR dollar outcome is lower
due to the reduced STVR opportunity in the new remuneration structure.
Year-on-year STVR awarded in the relevant financial year – CEO
Actual STVR

STVR as % of

Financial
year

STVR
maximum
opportunity$

Total STVR$

STVR cash$

STVR deferredshares$Targetopportunity

Maximum
opportunity

2022

2,500,000

1,860,000

930,000

930,000

93%

74%

2021

3,750,000

2,000,000

1,000,000

1,000,000

80%

53%

CEO
S Elliott

Disclosed Executives• The average STVR outcome for current Disclosed Executives is 78% of maximum opportunity, reflecting the overall ANZ Group
performance assessment of ‘slightly below expectations’. Outcomes as a percentage of maximum opportunity range from 71% to 96%.
See Remuneration Report for further details.
• For the 2022 Disclosed Executives who were in role for full year 2021 and 2022, the year-on-year STVR dollar outcome has reduced on
average by 31%, primarily due to the lower STVR opportunity in the new structure. For example as shown below, even where performance
as a percentage of target is similar year-on-year, Disclosed Executives are receiving substantially reduced dollar outcomes. However, theoutcomes as a percentage of maximum opportunity appear higher year-on-year because the maximum opportunity has been reduced
from 150% to 125% of target in the new structure.
• Variable remuneration continues to differ both year-on-year and between different executives demonstrating the at risk nature of thiselement of remuneration and the variability in Group and individual performance year-on-year.
Year-on-year comparisons of maximum opportunity on a percentage basis (as shown in the below table) are not comparable – as the
maximum opportunity has been reduced from 150% of the combined variable remuneration target under the previous structure, to 125% ofjust the STVR target under the new structure. The 2022 STVR opportunity is significantly lower in 2022 due to the changes in the
remuneration structure.

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65

Year-on-year STVR awarded in the relevant financial year – Disclosed Executives
Actual STVR

STVR as % of

(STVR equivalent for 2021)

Financial
year

STVR
maximum
opportunity1$

Total STVR$

STVR cash$

STVR deferredshares$Targetopportunity

Maximum
opportunity

2022

1,250,000

920,000

460,000

460,000

92%

74%

2021

2,376,000

1,138,500

569,250569,250

72%

48%

2022

1,250,000

885,000

442,500

442,500

89%

71%

2021

1,960,200

1,227,600

613,800

613,800

94%

63%

Current Disclosed Executives
M Carnegie
K Corbally
F Faruqui2

2022

1,212,500

1,159,150

579,575

579,575

120%

96%

G Florian2022

1,150,000

885,000

442,500

442,500

96%

77%

2021

2,147,310

1,353,000

676,500

676,500

95%

63%

2022

1,040,000

800,000

400,000

400,000

96%

77%

2021

1,795,860

1,188,000

594,000

594,000

99%

66%

2022

1,108,830

845,483

422,742422,742

95%

76%

2021

2,135,790

1,374,335

687,167

687,167

97%

64%

2022

1,460,000

1,070,000

535,000

535,000

92%

73%

2021

2,526,480

1,620,300

810,150

810,150

96%

64%

2022

41,250

n/a

n/a

n/a

n/a

n/a

2021

1,393,920

924,000

462,000

462,000

99%

66%

2022

615,000

n/a

n/a

n/a

n/a

n/a

2021

2,376,000

1,089,000

544,500

544,500

69%

46%

K van der Merwe
A Watson3
M Whelan
Former Disclosed Executives
S Buggle2,4
M Hand2

1. The 2022 maximum STVR opportunity is based on the Disclosed Executive’s new fixed remuneration. A ~4% fixed remuneration structural increase for Disclosed Executives (excluding CEO)was determined so as to not materially disadvantage Disclosed Executives as a result of the structural changes. The Board decided to defer the payment of this increase to 2023, and that the2022 STVR opportunity would be based on the fixed remuneration had the structural increase been effective for 2022. 2. STVR prorated for time as a Disclosed Executive. 3. Paid in NZD andconverted to AUD. Year to date average exchange rate used to convert NZD to AUD as at 30 September for the relevant year. 4. S Buggle’s 2021 and 2022 STVR reflects the period he acted as
Chief Financial Officer.

66

ANZ 2022 Annual Review

Independent Limited Assurance Reportto the Directors of Australia and
New Zealand Banking Group Limited
Conclusion
Based on the evidence we obtained
from the procedures performed,
we are not aware of any material
misstatements in the specified ESG
Information in the ANZ 2022 Annual
Report and ANZ 2022 Annual Review
which has been prepared by ANZ in
accordance with the Criteria for theyear ended 30 September 2022.
Information Subject to Assurance
Australia and New Zealand Banking Group
Limited (ANZ) engaged KPMG to perform
a limited assurance engagement in relation
to the ESG Information in the ANZ 2022
Annual Report and ANZ 2022 Annual
Review. The scope of work comprised
limited assurance over the material text anddata claims as specified in the table below:
ESG Information

Page

2022 Performance Snapshot

3

What matters mostto our stakeholders

10

Our approach to societal
challenges

14-15

Our approach toclimate change

16-17

Performance overview(Five year summary)60

The ANZ 2022 Annual Report andANZ 2022 Annual Review covers ANZ’s
global operations for the year ended
30 September 2022 unless otherwise
indicated.

Criteria
The ESG Information has been extracted
from and prepared by ANZ on a consistentbasis with the information in the ANZ 2022
ESG Supplement and accompanying ANZ

2022 ESG Supplement Data Pack, copies ofwhich are available at anz.com/annualreport(the criteria). The ANZ 2022 ESG Supplement
and ANZ 2022 ESG Supplement Data Packhas been prepared in accordance with
the GRI Standards published by the Global
Reporting Initiative, version dated 2016
and management’s basis of reporting,a summary of which is included in the
Explanatory Notes section in the ANZ
2022 ESG Supplement.

Basis of our Conclusion
We conducted our work in accordancewith International Standard on Assurance
Engagements ISAE 3000 (Standard). In
accordance with the Standard we have:• Used our professional judgement toplan and perform the engagement toobtain limited assurance that we are
not aware of any material misstatementsin the ESG Information, whether due tofraud or error;• Considered relevant internal controls
when designing our assurance
procedures, however we do not express
a conclusion on their effectiveness; and• Ensured that the engagement teampossess the appropriate knowledge,
skills and professional competencies.

Summary of Procedures Performed
Our limited assurance conclusion is basedon the evidence obtained from performing
the following procedures:• Interviews with relevant employees
responsible for developing the content(text and data) within the ESG
Information to understand the approachfor monitoring, collation and reportingof such information and the accuracy,completeness and existence of reported
text and data;• Undertaking analytical review
procedures to support thereasonableness of the data;• Identifying and testing assumptions
supporting the calculations;• Comparing text and data (on a sample
basis) presented to underlying
sources; and• Reviewing the ANZ 2022 Annual Report,
ANZ 2022 Annual Review and ANZ 2022
ESG Supplement and ANZ 2022 ESG
Supplement Data Pack in their entirety
for consistency with the ESG Informationand our knowledge obtained throughour assurance engagement.

How the Standard Defines
Limited Assurance andMaterial Misstatement
A limited assurance engagement is restrictedprimarily to enquiries and analyticalprocedures. The procedures performed
in a limited assurance engagement varyin nature and timing from, and are less inextent than for a reasonable assurance
engagement. Consequently the level ofassurance obtained in a limited assurance
engagement is substantially lower than theassurance that would have been obtained
had a reasonable assurance engagement
been performed. The Standard requires ourreport to be worded around what we havenot found, rather than what we have found.
Misstatements, including omissions, areconsidered material if, individually or in
the aggregate, they could reasonably be
expected to influence relevant decisionsof the Directors of ANZ.

Use of this Assurance Report
This report has been prepared for the
Directors of ANZ Banking Group Limited
for the purpose of providing an assurance
conclusion on the ESG Information within
the ANZ 2022 Annual Report and ANZ 2022
Annual Review and may not be suitable
for another purpose. We disclaim any
assumption of responsibility for any relianceon this report, to any person other than the
Directors of ANZ, or for any other purpose
than that for which it was prepared.

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ANZ’s responsibility

Our responsibility• Determining that the criteria isappropriate to meet their needs;

Our responsibility is to perform a limited
assurance engagement in relation
to the ESG Information for the year
ended 30 September 2022, and toissue an assurance report that includes
our conclusion.

• Preparing and presenting the ESG
Information in accordance with thecriteria; and• Establishing internal controls that enable
the preparation and presentation of
the ESG Information that is free frommaterial misstatement, whether due
to fraud or error.

KPMG

Our Independence and Quality
Control
We have complied with our independence
and other relevant ethical requirementsof the Code of Ethics for Professional
Accountants (including IndependenceStandards) issued by the AustralianProfessional and Ethical Standards Board, andcomplied with the applicable requirementsof Australian Standard on Quality Control
1 to maintain a comprehensive system of
quality control. We have also complied with
ANZ’s Stakeholder Engagement Model for
Relationship with External Auditor (available
on anz.com).

Adrian King
Partner
KPMG Melbourne
26 October 2022

©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
Liability limited by a scheme approved under Professional Standards Legislation.

67

68

ANZ 2022 Annual Review

Important dates
for shareholders
1

MAY 2023

JULY 2023

NOVEMBER 2023

4 May	Half Year Results Announcement

3 July Interim Dividend Payment Date

TBC Final Dividend Ex-Date

9 May Interim Dividend Ex-Date
10 May Interim Dividend Record Date
11 May	DRP/BOP/Foreign
Currency Election Date

TBC Final Dividend Record Date

OCTOBER 2023

TBC	DRP/BOP/Foreign
Currency Election Date

TBC	Closing date for receipt
of Director Nominations
TBC	Annual Results Announcement

DECEMBER 2023
TBC Final Dividend Payment Date
TBC Annual General Meeting

Our international presence and earning composition by geography2

International$779 million

Australia$3,829 million

New Zealand$1,907 million

International
Asia
China
Hong Kong
India
Indonesia
Japan
Laos
Malaysia

Pacific
Myanmar
The Philippines
Singapore
South Korea
TaiwanThailand
VietnamAmerican Samoa
Cook Islands
Fiji
Guam
Kiribati
Papua New Guinea

Samoa
Solomon Islands
Timor-Leste
Tonga
Vanuatu

EuropeMiddle East

FranceGermany
United Kingdom

United ArabEmirates (Dubai)

United Statesof America

1. If there are any changes to these dates, the Australian Securities Exchange will be notified accordingly. 2. On a Cash profit (continuing operations) basis. Excludes non-core items
included in statutory profit and discontinued operations included in cash profit. It is provided to assist readers in understanding the result of the ongoing business activities of theGroup. For further information on adjustments between statutory and cash profit refer to page 45.

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69

Contacts
Registered office
ANZ Centre Melbourne
Level 9, 833 Collins Street
Docklands VIC 3008 Australia
Telephone: +61 3 9273 5555
Facsimile: +61 3 8542 5252
Company Secretary: Simon Pordage

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
Web: shareholder.anz.com
Group General Manager Investor
Relations: Jill Campbell

Communications
and public affairs
Level 10, 833 Collins Street
Docklands VIC 3008 Australia
Telephone: +61 2 6198 5001
Email: Tony.Warren@anz.com
Group General Manager Communications
and Public Affairs: Tony Warren

Share and securities
registrar Australia
Australia
Computershare Investor
Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001 Australia

Japan
Japan Securities Depository
Center, Incorporated
1-1, Nihombashi Kayabacho 2-chome,
Chuo-ku, Tokyo 103-0025 Japan

Telephone: +49 69 910 00

Telephone: +81 3 3661 0295
Luxembourg
Deutsche Bank Luxembourg S.A.
2, Boulevard Konrad Adenauer
L-1115 Luxembourg, Luxembourg

MORE INFORMATIONNew ZealandComputershare Investor
Services Limited
Private Bag 92119
Auckland 1142 New Zealand

General information on ANZ can beobtained from our website at anz.com.
Shareholders can visit our Shareholder
Centre at anz.com/shareholder/centre.
ANZ Corporate Governance: for information
about ANZ’s approach to Corporate Governanceand to obtain copies of ANZ’s Constitution,
Board/Board Committee Charters, Code of
Conduct and summaries of other ANZ policies
of interest to shareholders and stakeholders,
visit anz.com/corporategovernance.

Telephone: 0800 174 007
Facsimile: +64 9 488 8787

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

Telephone: +352 4 21 22 1

United Kingdom
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ UK
Telephone: +44 870 702 0000
Facsimile: +44 870 703 6101

This Annual Report has been prepared forAustralia and New Zealand Banking Group
Limited (the Company) together with its
subsidiaries which are variously described
as: “ANZ”, “Group”, “ANZ Group”, “the Bank”,“us”, “we” or ”our”.

United States
The Bank of New York Mellon
240 Greenwich St, Floor 7E
New York, NY 10286 USA
Telephone: +1 212 495 1784
BNY Mellon Shareowner Services
P.O. Box 43006
Providence RI 02940-3078 USA

Telephone within Australia: 1800 11 33 99
International Callers: +61 3 9415 4010
Facsimile: +61 3 9473 2500
Email:
anzshareregistry@computershare.com.au

USA Toll Free Telephone: 1888 269 2377
Telephone for International
Callers: 1201 680 6825
Web: www-us.computershare.com/investor
Email: shrrelations@bnymellon.com

Austraclear Services Limited
20 Bridge Street
Sydney NSW 2000 Australia

Deutsche Bank Trust
Company Americas
1 Columbus Circle
New York, NY 10019-8735 USA

Telephone: 1300 362 257

Germany
Deutsche Bank AG
Taunusanlage 1260262 Frankfurt am Main Germany

Telephone: +1 212 250 2500

Founding Signatory of:

DISCLOSURE INSIGHT ACTION

shareholder.anz.com

Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.
ANZ’s colour blue is a trade mark of ANZ.