ANZ Bank New Zealand Limited
Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2013 | NUMBER 69 ISSUED MAY 2013

ANZ Bank New Zealand Limited

Disclosure Statement
For the six months ended 31 March 2013

Contents
General Disclosures
Income Statement
Statement of Comprehensive Income
Statement of Changes in Equity
Balance Sheet
Condensed Cash Flow Statement
Notes to the Financial Statements
Directors' Statement
Independent Auditor’s Review Report

2
3
3
4
5
6
7
25
26

Glossary of Terms
In this Disclosure Statement unless the context
otherwise requires:(a) “Bank” means ANZ Bank New Zealand Limited;(b) “Banking Group” means the Bank and all its
controlled entities;(c) “Immediate Parent Company” means ANZ Holdings(New Zealand) Limited;(d) “Ultimate Parent Bank” means Australia and New
Zealand Banking Group Limited;(e) “Overseas Banking Group” means the worldwide
operations of Australia and New Zealand Banking
Group Limited including its controlled entities;(f) “New Zealand business” means all business,
operations, or undertakings conducted in or fromNew Zealand identified and treated as if it wereconducted by a company formed and registered in
New Zealand;(g) “NZ Branch” means the New Zealand business of
the Ultimate Parent Bank;(h) “ANZ New Zealand” means the New Zealandbusiness of the Overseas Banking Group;(i) “Registered Office” is Level 10, 170-186 Featherston
Street, Wellington, New Zealand, which is also the
Banking Group’s address for service;(j) “RBNZ” means the Reserve Bank of New Zealand;(k) “APRA” means the Australian Prudential Regulation
Authority;(l) “the Order” means the Registered Bank DisclosureStatements (New Zealand Incorporated Registered
Banks) Order 2013; and(m) Any term or expression which is defined in, or in themanner prescribed by, the Order shall have themeaning given in or prescribed by the Order.

ANZ Bank New Zealand Limited

2

General Disclosures
This Disclosure Statement
accordance with the Order.

has

been

issuedin

Credit Rating Information
The Bank has three credit ratings, which are applicable
to its long-term senior unsecured obligations.
The
Bank’s credit ratings are:Rating Agency
Standard & Poor’s

Current Credit
Rating
Qualification
AAOutlook Stable

Moody’s Investors Service

Aa3

Outlook Stable

Fitch Ratings

AA-

Outlook Stable

Guarantors

Changes to conditions of registration
The conditions of registration applying to the Bank wereamended on 27 March 2013 to put into effect the
RBNZ’s Basel III enhanced risk coverage policy as set
out in the RBNZ document “Capital Adequacy
Framework (Internal Models Based Approach)” issued in
March 2013. This policy introduces new requirements
affectingcounterparty
creditrisk
andcentralcounterparty exposures.

Directorate
As at 13 May 2013 there have been no changes to the
Directors of the Bank since 30 September 2012, thebalance date of the last full year Disclosure Statement.

As at the date of signing of this Disclosure Statement
the Banking Group has debt securities with a carrying
value as at 31 March 2013 of $204 million for which the
Crown has issued a Guarantee Eligibility Certificate
under the New Zealand Wholesale Funding Guarantee
Facility (“Crown Wholesale Guarantee”). The Crown
closed the Crown Wholesale Guarantee to new debt
securities on 30 April 2010. The closure did not affectdebt securities previously issued with the benefit ofCrown Wholesale Guarantee.

On 11 March 2013 the Bank announced that Joan
Withers would become an independent Director,
effective from 1 July 2013. The appointment has been
approved by the Reserve Bank of New Zealand. Ms
Withers is the former CEO of Fairfax Media and The
Radio Network and is the Chairperson of Auckland
International Airport Ltd and Mighty River Power Ltd,and is Deputy Chairperson of Television New Zealand.
She has an MBA from the University of Auckland.

Copies of the Wholesale Deed, and any Guarantee
Eligibility Certificate issued by the Crown in respect of
the Bank, are available on the Treasury website
treasury.govt.nz. The address for service for any
demand on the Crown under the Crown Wholesale
Guarantee is The Treasurer, New Zealand Debt
Management Office, 1 The Terrace, Wellington. Further
information on the Crown Wholesale Guarantee isprovided in the Disclosure Statement for the year ended
30 September 2012 which is available at no charge:

The Banking Group’s auditor is KPMG, Chartered
Accountants,
Level 9,10
Customhouse Quay,
Wellington, New Zealand.

a)on the Bank’s website anz.co.nz; andb)within two working days of a request, if a request is
made at the Registered Office or at any ANZ
branch.

Certain debt securities (“Covered Bonds”) issued by the
Bank or its wholly owned subsidiary, ANZ New Zealand(Int’l) Limited, are guaranteed by ANZNZ Covered Bond
Trust Limited (the “Covered Bond Guarantor”), solely in
its capacity as trustee of ANZNZ Covered Bond Trust.
The Covered Bond Guarantor has guaranteed thepayment of interest and principal of Covered Bonds witha carrying value as at 31 March 2013 of $2,926 million,
pursuant to a guarantee which is secured over a pool ofassets.
The Covered Bond Guarantor’s address forservice is Level 10, 141 Willis Street, Wellington, New
Zealand. The Covered Bond Guarantor is not a memberof the Banking Group and has no credit ratings
applicable to its long term senior unsecured obligations
payable in New Zealand dollars. The Covered Bonds
have been assigned a long term rating of Aaa and AAA
by Moody’s Investors Service and Fitch Ratings
respectively. Details of the pool of assets that secure
this guarantee are provided in Note 7.

AuditorANZ Bank New Zealand Limited

3

Income Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

Interest income

2,991

2,995

6,017

Interest expense

1,699

1,649

3,335

Net interest income

1,292

1,346

2,682

Net trading gains

112

79

131

Net funds management and insurance income

134

139

298

171

268

573

4

2

4

Operating income

1,713

1,834

3,688

Operating expenses

771

863

1,742

942

971

1,946

40

95

193

Profit before income tax

902

876

1,753

Income tax expense

239

233

428

Profit after income tax

663

643

1,325

Audited$ millions

Note

Other operating income2

Share of associates' profit

Profit before provision for credit impairment and income tax
Provision for credit impairment

6

AuditedStatement of Comprehensive Income
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

663

643

1,325

Actuarial gain / (loss) on defined benefit schemes

16

(2)

(25)

Income tax credit / (expense) relating to items not reclassified

(5)

-

6

Total items that will not be reclassified to profit or loss

11

(2)

(19)

Unrealised gains / (losses) recognised directly in equity

(39)

11

46

Realised gains transferred to income statement

(14)

(7)

(95)

15

5

-

Total items that may be reclassified subsequently to profit or loss

(38)

9

(49)

Total comprehensive income for the period

636

650

1,257

$ millions

Profit after income tax
Items that will not be reclassified to profit or loss

Items that may be reclassified subsequently to profit or loss

Income tax credit relating to items that may be reclassified

The notes to the financial statements form part of and should be read in conjunction with these financial statements

ANZ Bank New Zealand Limited

4

Statement of Changes in Equity
Ordinary sharecapitalAvailablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

Total equity

As at 1 October 2011

6,943

46

141

3,695

10,825

Profit after income tax

-

-

-

643

643

Unrealised gains / (losses) recognised directly in equity

-

26

(15)

-

11

Realised gains transferred to the income statement

-

-

(7)

-

(7)

Actuarial loss on defined benefit schemes
Income tax credit / (expense) on items recognised directly inequity

-

-

-

(2)

(2)

-

(1)

6

-

5

Total comprehensive income for the period

-

25

(16)

641

650

Ordinary dividend paid

-

-

-

(550)

(550)

As at 31 March 2012 (Unaudited)

6,943

71

125

3,786

10,925As at 1 October 2011

6,943

46

141

3,695

10,825

Profit after income tax

-

-

-

1,325

1,325

Unrealised gains recognised directly in equity

-

34

12

-

46

Realised gains transferred to the income statement

-

(83)

(12)

-

(95)

Actuarial loss on defined benefit schemes

-

-

-

(25)

(25)

Income tax credit on items recognised directly in equity

-

-

-

6

6

Total comprehensive income for the period

-

(49)

-

1,306

1,257

Ordinary dividend paid

-

-

-

(1,150)(1,150)

6,943

(3)

141

3,851

10,932$ millions

As at 30 September 2012 (Audited)
Profit after income tax

-

-

-

663

663

Unrealised gains / (losses) recognised directly in equity

-

1

(40)

-

(39)

Realised gains transferred to the income statement

-

-

(14)

-

(14)

Actuarial gain on defined benefit schemes
Income tax credit / (expense) on items recognised directly inequity

-

-

-

16

16

-

-

15

(5)

10

Total comprehensive income for the period

-

1

(39)

674

636

Ordinary dividend paid

-

-

-

(465)

(465)

6,943

(2)

102

4,060

11,103As at 31 March 2013 (Unaudited)

The notes to the financial statements form part of and should be read in conjunction with these financial statements

ANZ Bank New Zealand Limited

5

Balance Sheet
Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Liquid assets

3,371

2,355

2,831

Due from other financial institutions

2,045

3,102

1,722

10,41910,904

12,338

9,012

10,56312,753

53

76

15

873

252

57

87,882

84,46786,678Investments backing insurance policy liabilities

161

165

142

Insurance policy assets

313

231

301

Investments in associates

98

100

99

936

935

592

$ millions

Note

AssetsTrading securities
Derivative financial instruments
Current tax assets
Available-for-sale assets
Net loans and advances

4

Other assets
Deferred tax assets

73

91

93

339

320

323

3,502

3,500

3,505

Total assets

119,077

117,061

121,449

Interest earning and discount bearing assets

104,149

100,354

103,341

Premises and equipment
Goodwill and other intangible assets

Liabilities
Due to other financial institutions
Deposits and other borrowings

8

1,795

1,528

1,759

75,22470,91473,652

Due to Immediate Parent Company

709

555

740

10,173

11,462

13,930

2,012

2,040

1,685

272

338

339

16,611

17,562

17,244

1,178

1,737

1,168

107,974

106,136

110,517

11,103

10,925

10,932

6,943

6,943

6,943

100

196

138

4,060

3,786

3,851

Total equity

11,103

10,925

10,932

Interest and discount bearing liabilities

89,63387,42589,299Derivative financial instruments
Payables and other liabilities
Provisions
Bonds and notes
Loan capital
Total liabilities
Net assets
Represented by:
Share capital
Reserves
Retained earnings

The notes to the financial statements form part of and should be read in conjunction with these financial statements

ANZ Bank New Zealand Limited

6

Condensed Cash Flow Statement$ millions

Unaudited

Unaudited

6 months to

6 months to

AuditedYear to31/03/2013

31/03/2012

30/09/2012

Cash flows from operating activities
Interest received
Interest paid

2,960

2,964

5,991

(1,716)(1,659)(3,301)Other cash inflows provided by operating activities
Other cash outflows used in operating activities

436

439

845

(1,123)(1,148)(2,023)

Cash flows from operating profits before changes in operating assets and liabilities

557

596

1,512

Net changes in operating assets and liabilities

1,459(2,524)(2,545)

Net cash flows provided by / (used in) operating activities

2,016(1,928)(1,033)

Cash flows from investing activities
Cash inflows provided by investing activities

1

16

16

Cash outflows used in investing activities

(56)

(38)

(95)

Net cash flows used in investing activities

(55)

(22)

(79)

Cash flows from financing activities
Cash inflows provided by financing activities

1,105

2,798

6,244

Cash outflows used in financing activities(2,343)(2,426)(7,411)

Net cash flows provided by / (used in) financing activities(1,238)372(1,167)

Net increase / (decrease) in cash and cash equivalents

723(1,578)(2,279)Cash and cash equivalents at beginning of the period

3,255

5,534

5,534

Cash and cash equivalents at end of the period

3,978

3,956

3,255

The notes to the financial statements form part of and should be read in conjunction with these financial statements

ANZ Bank New Zealand Limited

7

Notes to the Financial Statements
1.

Significant Accounting Policies(i)Reporting entity and statement of compliance
These interim financial statements are for the
Banking Group for the six months ended 31 March
2013. They have been prepared in accordance withNew Zealand Generally Accepted Accounting Practice
as appropriate for profit oriented entities, therequirements of NZ IAS 34 Interim Financial
Reporting and the Order, and should be read in
conjunction with the Banking Group’s financial
statements for the year ended 30 September 2012.

(ii) Basis of measurement
These financial statements have been prepared on agoing concern basis in accordance with historical cost
concepts except that the following assets andliabilities are stated at their fair value:•

derivative financial instruments, including in thecase of fair value hedging, the fair value of any
applicable underlying exposure;•financial instruments held for trading;•financial assets treated as available-for-sale;
and

•

2.

financial instruments designated at fair value
through profit and loss.

Insurance policy assets are measured using Margin on
Services principles, and defined benefit obligations
are measured using the Projected Unit Credit method.
(iii) Changes in accounting policies
The accounting policies adopted by the Banking
Group are consistent with those adopted anddisclosed in the previous full year DisclosureStatement.
(iv) Presentation currency and rounding
The amounts contained in the financial statements
are presented in millions of New Zealand dollars,
unless otherwise stated.
(v) Comparatives
Certain amounts in the comparative information havebeen reclassified to ensure consistency with thecurrent period's presentation.
This includes
reclassifying, in the Balance Sheet as at 31 March
2012, collateral received of $604 million fromderivative financial instruments asset to due to otherfinancial institutions and collateral paid of $1,144
million from derivative financial instruments liability
to due from other financial institutions.
(vi) Principles of consolidation
The financial statements consolidate the financial
statements of the Bank and its subsidiaries.

Other Operating Income
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

Net fee income

219

232

455

Fair value gain / (loss) on hedging activities and financial liabilities designated at fair value

(46)

29

14

-

-

83

Other income

(2)

7

21

Total other operating income

171

268

573

$millions

Net gain on available for sale equity securities transferred to income statement

AuditedANZ Bank New Zealand Limited

8

Notes to the Financial Statements
3.

(typically with annual revenues of less than $5 million).
Commercial & Agri customers consist of primarily
privately owned medium to large enterprises. The
Banking Group's relationship with these businesses
ranges from simple banking requirements with revenue
from deposit and transactional facilities, and cash flow
lending, to more complex funding arrangements withrevenue sourced from a wider range of products. UDC isprincipally involved in the financing and leasing of plant,
vehicles and equipment, mainly for small and medium
sized businesses, as well as investment products.

Segmental Analysis

For segment reporting purposes, the Banking Group isorganised into four major business segments - Retail,Commercial, Wealth and Institutional. Centralised backoffice and corporate functions support these segments.
These segments are consistent with internal reporting
provided to the chief operating decision maker, being
the Bank’s Chief Executive Officer.
Segmental reporting has been updated to reflect minorchanges to the Banking Group’s structure. Comparative
data has been adjusted to be consistent with the current
period’s segment definitions.

WealthWealth includes private banking and investment services
provided to high net worth individuals, the OnePathwealth management and insurance businesses, andother investment products.

RetailRetail provides products and services to personalcustomers via the branch network, mortgage specialists,
the contact centre and a variety of self service channels(internet banking, phone banking, ATMs, website andmobile phone banking). Core products include current
and savings accounts, unsecured lending (credit cards,
personal loans and overdrafts) and home loans securedby mortgages over property.
Retail distributes
insurance and investment products on behalf of the
Wealth segment.

Institutional
Institutional provides financial services through anumber of specialised units to large multi-banked
corporations, often global, who require sophisticatedproduct and risk management solutions. Those financial
services include loan structuring, foreign exchange,wholesale money market services and transaction
banking.

Commercial

Other

Commercial provides services to Business Banking,Commercial & Agri, and UDC customers.
Business
Banking services are offered to small enterprises

Other includes treasury and back office support
functions, none of which constitutes a separately
reportable segment.

Business segment analysis1
Institutional

Other 2

Total

39

462

(605)

1,713

72

(128)

595

-

709

111

334

(10)

1,713

458

42

227

(42)

902

524

1,389

50

404

(533)

1,834

41

(652)

70

(66)

607

-

Total revenues

565

737

120

338

74

1,834

Profit before income tax

203

415

45

235

(22)

876

1,019

2,744

111

804

(990)

3,688

126

(1,293)

143

(168)

1,192

-

1,145

1,451

254

636

202

3,688

421

817

108

425

(18)

1,753

$ millions

RetailCommercial

Wealth

486

1,331

83

(622)

Total revenues

569

Profit before income tax

217

External revenues
Intersegment revenues

Unaudited 6 months to 31/03/2013

External revenues
Intersegment revenues

Unaudited 6 months to 31/03/2012

Audited year to 30/09/2012

External revenues
Intersegment revenues
Total revenues
Profit before income tax
1
2

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
This segment has negative external revenues as this segment incurs funding costs on behalf of the Banking Group and is reimbursed internally.

ANZ Bank New Zealand Limited

9Notes to the Financial Statements
4.

Net Loans and Advances
Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Overdrafts

1,718

1,986

1,881

Credit card outstandings

1,415

1,410

1,395

Term loans - housing

47,44544,34046,123

Term loans - non-housing

37,64937,32137,749Finance lease receivables

817

800

806

89,04485,857

87,954(951)(1,119)(1,054)

(266)

(259)

(258)

Fair value hedge adjustment

(15)

(8)

(2)

Deferred fee revenue and expenses

(60)

(55)

(60)

Capitalised brokerage/mortgage origination fees

130

51

98

87,882

84,46786,678$ millions

Note

Gross loans and advances
Provision for credit impairment

6

Unearned finance income

Total net loans and advances

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of $9,491 million as at 31 March 2013
(31/03/2012 $9,303 million, 30/09/2012 $9,396 million). These assets qualify for derecognition as the Bank does notretain a continuing involvement in the transferred assets.

5.

Impaired Assets, Past Due Assets and Other Assets Under Administration$ millions

RetailOther retail

Non retailmortgages

exposures

exposures

Total

Balance at the beginning of the period

313

44

1,009

1,366

Transfers from productive

165

58

151

374

Transfers to productive

(1)

(1)

(30)

(32)

Unaudited 31/03/2013

Assets realised or loans repaid

(151)

(15)

(207)

(373)

Write offs

(12)

(40)

(85)

(137)

Total impaired assets

314

46

838

1,198

Other assets under administration

-

-

-

-

Undrawn facilities with impaired customers

-

-

17

17

Balance at the beginning of the period

471

61

1,194

1,726

Transfers from productive

155

61

341

557

Transfers to productive

(28)

(1)

(92)

(121)

Assets realised or loans repaid

(176)

(26)

(243)

(445)

Write offs

(32)

(43)

(47)

(122)

Total impaired assets

390

52

1,153

1,595

Other assets under administration

-

-

9

9

Undrawn facilities with impaired customers

-

-

28

28

1,726

Unaudited 31/03/2012

Audited 30/09/2012

Balance at the beginning of the period

471

61

1,194

Transfers from productive

285

110

572

967

Transfers to productive

(61)

(1)

(111)

(173)

Assets realised or loans repaid

(327)

(43)

(515)

(885)

Write offs

(55)

(83)

(131)

(269)

Total impaired assets

313

44

1,009

1,366

Other assets under administration

-

-

-

-

Undrawn facilities with impaired customers

-

-

24

24

ANZ Bank New Zealand Limited

10Notes to the Financial Statements
Other assets under administration
Other assets under administration are any loans, not being impaired or 90 days or more past due, where the customer isin any form of voluntary or involuntary administration, including receivership, liquidation, bankruptcy or statutory
management.
Credit quality of financial assets that are past due but not impaired
A large portion of retail credit exposures, such as residential mortgages, are generally well secured. That is, the fair valueof associated security should be sufficient to ensure that the Banking Group will recover the entire amount owing over thelife of the facility and there is reasonable assurance that collection efforts will result in payment of the amounts due in atimely manner.
Ageing analysis of loans that are past due but not impaired$ millions

RetailOther retail

Non retailmortgages

exposures

exposuresTotal

1 to 5 days

370

133

496

999

6 to 29 days

342

111

155

608

1 to 29 days

712

244

651

1,607

30 to 59 days

165

49

82

296

60 to 89 days

66

28

16

110

90 days or over

103

55

55

213

1,046

376

804

2,226

Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Unaudited 31/03/2013

6.

Provision for Credit Impairment

Provision movement analysis$ millions
Unaudited 31/03/2013

New and increased provisions
Write-backs
Recoveries of amounts written off previously

42

46

93

181

(29)

(11)

(58)

(98)

-

(8)

(2)

(10)

Individual provision charge

13

27

33

73

Collective provision credit

-

(13)

(20)

(33)

13

14

13

40

New and increased provisions

59

42

137

238

Write-backs

(38)

(8)

(43)

(89)

Recoveries of amounts written off previously

(1)

(8)

(5)

(14)

Total charge to income statement
Unaudited 31/03/2012

Individual provision charge

20

26

89

135

Collective provision credit

(12)

(20)

(8)

(40)

8

6

81

95

Total charge to income statement
Audited 30/09/2012

New and increased provisions

110

87

267

464

Write-backs

(73)

(15)

(100)

(188)

Recoveries of amounts written off previously

(1)

(17)

(7)

(25)

Individual provision charge

36

55

160

251

Collective provision credit

(16)

(22)

(20)

(58)

Total charge to income statement

20

33

140

193

ANZ Bank New Zealand Limited

11

Notes to the Financial Statements
Movement in provision for credit impairment$ millions

Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Unaudited 31/03/2013

Collective provision
Balance at beginning of the period

104

125

375

604

Credit to income statement

-

(13)

(20)

(33)

Balance at end of the period

104

112

355

571

119

25

306

450

13

35

35

83

(12)

(40)

(85)

(137)

Discount unwind

(4)

-

(12)

(16)

Balance at end of the period

116

20

244

380

Total provision for credit impairment

220

132

599

951

Balance at beginning of the period

120

147

395

662

Credit to income statement

(12)

(20)

(8)

(40)

Balance at end of the period

108

127

387

622

Balance at beginning of the period

148

36

310

494

New and increased provisions net of write-backs

21

34

94

149

Bad debts written off

(32)

(43)

(47)

(122)

Discount unwind

(7)

(1)

(16)

(24)

Balance at end of the period

130

26

341

497

Total provision for credit impairment

238

153

728

1,119

Balance at beginning of the year

120

147

395

662

Credit to income statement

(16)

(22)

(20)

(58)

Balance at end of the year

104

125

375

604

Balance at beginning of the year

148

36

310

494

New and increased provisions net of write-backs

37

72

167

276

Bad debts written off

(55)

(83)

(131)

(269)

Discount unwind

(11)

-

(40)

(51)

Balance at end of the year

119

25

306

450

Total provision for credit impairment

223

150

681

1,054

Individual provision
Balance at beginning of the period
New and increased provisions net of write-backs
Bad debts written off

Unaudited 31/03/2012

Collective provision

Individual provision

Audited 30/09/2012

Collective provision

Individual provision

ANZ Bank New Zealand Limited

12

Notes to the Financial Statements
7. Financial Assets Pledged as Collateral$ millions

Cash collateral given on derivative financial instruments

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

1,256

1,142

1,144

Trading securities encumbered through repurchase agreements

343

23

252

Residential mortgages pledged as security for covered bonds

5,548

3,982

4,977

Total tangible assets of UDC Finance Limited pledged as collateral for secured stock

2,125

2,105

2,103

Total financial assets pledged as collateral

9,158

7,254

8,588

ANZNZ Covered Bond Trust (“the Covered Bond Trust”)
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities
originated by the Bank which are security for the guarantee by ANZNZ Covered Bond Trust Limited as trustee of the
Covered Bond Trust of issuances of covered bonds by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l)Limited, from time to time. The assets of the Covered Bond Trust are not available to creditors of the Bank, although the
Bank (or its liquidator or statutory manager) may have a claim against the residual assets of the Covered Bond Trust (ifany) after all prior ranking creditors of the Covered Bond Trust have been satisfied.
The Banking Group continues to recognise the assets of the Covered Bond Trust on its balance sheet as, although they arepledged as security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8.

Deposits and Other Borrowings$ millions

Note

Certificates of deposit

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

1,624

2,277

2,156

Term deposits

33,73233,73833,922

Demand deposits bearing interest

28,34824,19825,815

5,717

4,787

4,838

1,467

1,456

1,476

4,336

4,458

5,445

75,22470,91473,652

Deposits not bearing interest
Secured debenture stock
Commercial paper
Total deposits and other borrowings

9.

7

Related Party Transactions
Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Total due from related parties

1,992

2,212

3,131

Total due to related parties

5,134

6,839

5,990

$ millions

ANZ Bank New Zealand Limited

13

Notes to the Financial Statements
10. Capital Adequacy
Adoption of Basel III capital framework
Effective 1 January 2013, RBNZ and APRA have adopted the majority of Basel III capital reforms in New Zealand andAustralia respectively. The Basel III reforms include: increased capital deductions from common equity tier 1 capital, an
increase in capitalisation rates (including prescribed minimum capital buffers, fully effective 1 January 2014 in New
Zealand and 1 January 2016 in Australia), tighter requirements around new tier 1 and tier 2 securities and transitionalarrangements for existing tier 1 and tier 2 securities that do not conform to the new regulations. Other changes include
capital requirements for counterparty credit risk and an increase in the asset value correlation with respect to exposures
to large and unregulated financial institutions.
Capital ratios (unaudited)
Banking GroupBank

31/03/2013

31/03/2012

30/09/2012

31/03/2013

31/03/2012

30/09/2012

Basel III

Basel II

Basel II

Basel III

Basel I

Basel I

Common equity tier one capital

10.2%

n/a

n/a

9.0%

n/a

n/a

Tier one capital

10.2%

10.9%

10.8%

9.0%

9.7%

9.5%

Total capital

11.8%

13.4%

12.5%

10.7%

11.4%

10.3%

Buffer ratio

5.7%

n/a

n/a

RBNZ minimum ratios:
Common equity tier one capital

4.5%

n/a

n/a

Tier one capital

6.0%

4.0%

4.0%

Total capital

8.0%

8.0%

8.0%

Capital of the Banking Group
Unaudited$ millions

31/03/2013

Tier one capital
Common equity tier one capital
Paid up ordinary shares issued by the Bank

6,943

Retained earnings (net of appropriations)

4,060

Accumulated other comprehensive income and other disclosed reserves

100

Less deductions from common equity tier one capital
Goodwill and intangible assets, net of associated deferred tax liabilities(3,502)

Deferred tax assets less deferred tax liabilities relating to temporary differences(136)

Cash flow hedge reserve(102)

Expected losses to extent greater than total eligible allowances for impairment(186)

Common equity tier one capital

7,177

Additional tier one capital
Total tier one capital

7,177

Tier two capital
NZD 835,000,000 perpetual subordinated bond

835

AUD 265,740,000 perpetual subordinated loan

331

Total tier two capital

1,166

Total capital

8,343

ANZ Bank New Zealand Limited

14

Notes to the Financial Statements
Terms of ordinary share capital
All ordinary shares share equally in dividends and any proceeds available to ordinary shareholders on the winding up of
the Bank. On a show of hands every member who is present at a meeting in person or by proxy or by representative isentitled to one vote, and upon a poll every member shall have one vote for each share held.
Terms of tier two capital instruments
Loan capital is subordinated in right of payment in the event of liquidation or wind up to the claims of depositors and all
creditors of the Bank and qualifies as tier two capital under the RBNZ’s transitional rules. The amount eligible to be
included in regulatory capital will reduce by 20% per year from 1 January 2014 and will not be included in regulatory
capital from 1 January 2018.
NZD 835,000,000 bondThis bond was issued by the Bank on 18 April 2008. The Bank did not elect to redeem the bond on 18 April 2013 (the“First Call Date”). The Bank may elect to redeem the bond on 18 April 2018 (the “Second Call Date”) or any interest
payment date subsequent to 18 April 2018. Interest is payable half yearly in arrears on 18 April and 18 October eachyear, up to and including the Second Call Date and then quarterly thereafter. Should the bond not be called at the Second
Call Date, the Coupon Rate from the Second Call Date onwards will be set on a quarterly basis to the three month FRA
rate plus 3.00%.
As at 31 March 2013, this bond carried a BBB+ rating by Standard and Poor's and an A3 rating by Moody’s.
The coupon interest on the bond was 9.66% until 18 April 2013 when it reset to 5.28% for the five year period to 18 April
2018.
This bond is listed on the New Zealand Exchange (“NZX”). The Market Surveillance Panel of the NZX granted the Bank awaiver from the requirements of Listing Rules 10.4 (relating to the provision of preliminary announcements of half yearly
and annual results to the NZX) and 10.5 (relating to preparing and providing a copy of half yearly and annual reports to
the NZX).
AUD 265,740,000 loan
This loan was drawn down by the Bank on 27 September 1996 and has no fixed maturity. Interest is payable half yearlyin arrears based on BBSW + 0.95% p.a., with interest payments due 15 March and 15 September.

Capital requirements of the Banking Group (unaudited)

Exposure atdefault

Risk weighted
exposure or
implied risk
weighted
exposure1

Total capitalrequirement

124,719

51,008

4,081

8,213

7,864

629

Exposures subject to standardised approach

312

287

22

Equity exposures

100

426

34

Other exposures

3,197

1,039

83

Total credit risk

$ millions

Exposures subject to internal ratings based approach
Specialised lending exposures subject to slotting approach

136,541

60,624

4,849

Operational risk

n/a

5,553

444

Market risk

n/a

4,295

343

136,541

70,472

5,636

Total
1

Total credit risk weighted exposures include a scalar of 1.06 in accordance with the Bank's Conditions of Registration.

ANZ Bank New Zealand Limited

15

Notes to the Financial Statements
Implementation of the advanced internal ratings based approach to credit risk measurement
The Banking Group adheres to the standards of risk grading and risk quantification as set out for Internal Ratings Based(“IRB”) banks in the RBNZ document BS2B.
Under this IRB Framework banks use their own measures for calculating the level of credit risk associated with customers
and exposures, by way of the primary components of:
Probability of Default (“PD”): An estimate of the level of risk of borrower default graded by way of rating models usedboth at loan origination and for ongoing monitoring;
Exposure at Default (“EAD”): The expected facility exposure at default. Total credit risk-weighted exposures include a
scalar of 1.06 in accordance with the Bank’s Conditions of Registration; andLoss Given Default (“LGD”): An estimate of the potential economic loss on a credit exposure, incurred as a consequenceof obligor default and expressed as a percentage of the facility’s EAD. For Retail Mortgage exposures the Bank is required
to apply the downturn LGDs according to loan to value (“LVR”) bands as set out in BS2B. For farm lending exposures the
Banking Group is required to adopt RBNZ prescribed downturn LVR based LGDs, along with a minimum maturity of 2.5
years and the removal of the firm-size adjustment.
For exposures classified under Specialised Lending, the Banking Group uses slotting tables supplied by the RBNZ rather
than internal estimates.
The exceptions to IRB treatment are three minor portfolios where, due to systems constraints, determining these IRB risk
estimates is not currently feasible or appropriate. Risk weights for these exposures are calculated under a separate
treatment as set out in the RBNZ document entitled ‘Capital Adequacy Framework (Standardised Approach)’ (“BS2A”),
dated March 2013.
Capital requirements by asset class under the IRB approach

Total exposure or
principal amountExposure atdefault

Exposureweighted LGD
used for thecapitalcalculation

$m

$m

%

%

$m

$m

Corporate

32,49832,03736

59

19,911

1,592

Sovereign

8,817

8,886

5

1

101

8

Bank

4,120

3,954

58

21

880

71

45,32545,56022

26

12,549

1,004

4,443

4,545

64

83

3,991

320

95,203

94,98229

37

37,4322,995

Corporate

13,501

10,291

51

49

5,371

430

Sovereign

45

45

5

1

1

-

Bank

1,154

1,053

48

15

172

14

Retail mortgages

6,790

5,957

18

15

945

76

Other retail

4,744

4,713

75

51

2,565

204

26,23422,059

47

39

9,054

724

Corporate

68,919

2,154

60

90

2,045

164

Sovereign

11,294

358

5

2

6

1

Bank

657,572

5,166

64

45

2,471

197

Total market related contracts

737,785

7,678

60

56

4,522

362

Total credit risk exposures subject tothe IRB approach

859,222

124,71934

39

51,008

4,081

Banking GroupAs at 31/03/2013 (Unaudited)

Exposureweighted risk
weightRisk weighted
exposure

Total capitalrequirement

On-balance sheet exposures

Retail mortgages
Other retail
Total on-balance sheet exposures
Off-balance sheet exposures

Total off-balance sheet exposures
Market related contracts

ANZ Bank New Zealand Limited

16

Notes to the Financial Statements
IRB exposures by customer credit rating

Banking GroupAs at 31/03/2013 (Unaudited)

Probability ofdefault

Exposure atdefault

Exposureweighted LGD
used for thecapitalcalculation

%

$m

%

%

Exposureweighted risk
weightRisk weighted
exposure

Total capitalrequirement$m$m

Corporate
0-2

0.05

5,065

62

32

1,726

138

3-4

0.31

23,29038

43

10,527

842

5

1.01

8,766

36

64

5,957

477

6

2.23

4,102

39

90

3,922

314

7-8

7.77

2,177

43

152

3,501

280

100.00

1,082

42

148

1,694

135

3.39

44,48241

58

27,327

2,186

0

0.01

9,284

5

1

108

9

1-8

0.17

5

5

1

-

-

Total sovereign exposures

0.01

9,289

5

1

108

9

0

0.03

4,492

65

29

1,393

111

1

0.03

5,118

56

35

1,877

150

2-4

0.13

553

58

41

241

19

5-8

1.49

10

60

114

12

2

Total bank exposures

0.04

10,173

60

33

3,523

282

0-3

0.20

10,608

11

5

523

42

4

0.46

16,411

18

14

2,381

190

5

0.93

17,730

26

31

5,830

466

6

2.12

5,507

30

62

3,594

287

7-8

5.33

635

31

105

704

56

100.00

626

29

70

462

39

2.02

51,51721

25

13,494

1,080

Default
Total corporate exposures
SovereignBank

Retail mortgages

Default
Total residential mortgages exposures
Other retail
0-2

0.10

661

77

48

338

27

3-4

0.30

4,407

72

51

2,375

190

5

1.14

1,474

64

68

1,057

85

6

2.69

1,482

65

83

1,302

104

7-8

12.00

1,090

71

114

1,312

105

Default

100.00

144

70

113

172

13

Total other retail exposures

3.73

9,258

70

67

6,556

524

Total credit risk exposures subject tothe IRB approach

2.32

124,71934

39

51,008

4,081

Credit risk exposures subject to the IRB approach have been derived in accordance with BS2B and other relevantcorrespondence with RBNZ setting out prescribed credit risk estimates.

ANZ Bank New Zealand Limited

17

Notes to the Financial Statements
Specialised lending subject to the slotting approach
Exposure atdefault

Risk weight

Risk weighted
exposure

Total capitalrequirement

$m

%

$m

$m

Strong

2,224

70

1,650

132

Good

3,898

90

3,719

298

Satisfactory

941

115

1,148

92

Weak

189

250

499

39

Default

195

-

-

-

7,447

89

7,016

561

Exposure amountExposure atdefault

Average risk
weightRisk weighted
exposure

Total capitalrequirement

$m

$m

%

$m

$m

Banking GroupAs at 31/03/2013 (Unaudited)On-balance sheet exposures

Total on-balance sheet exposures

Off-balance sheet exposures
Undrawn commitments and other off balance sheet
exposures

868

689

96

702

56

Market related contracts

1,597

77

179

146

12

Total off-balance sheet exposures

2,465

766

111

848

68

Specialised lending exposures subject to the slotting approach have been calculated in accordance with BS2B.
The supervisory categories of specialised lending above are associated with specific risk-weights. These categories
broadly correspond to the following external credit assessments using Standard & Poor's rating scale, Strong: BBB- or
better, Good: BB+ or BB, Satisfactory: BB- or B+ and Weak: B to C-.
Credit risk exposures subject to the standardised approach
Exposure atdefault

Risk weight

Risk weighted
exposure

Total capitalrequirement

$m

%

$m

$m

50

100

53

4

-

150

1

-

50

100

54

4

Exposure atdefault

Average risk
weightRisk weighted
exposure

Total capitalrequirement

%

$m

%

$m

$m

Banking GroupAs at 31/03/2013 (Unaudited)On-balance sheet exposures
Corporates
Default
Total on-balance sheet exposures

Average credit
Exposure amount conversion factor$mOff-balance sheet exposures
Undrawn commitments and other offbalance sheet exposures

520

47

246

88

230

18

Market related contracts

1,934

n/a

16

20

3

-

Total off balance sheet

2,454

n/a

262

84

233

18

Credit exposures subject to the Standardised Approach have been calculated in accordance with BS2A.
Equity exposures
Banking GroupAs at 31/03/2013 (Unaudited)All equity holdings not deducted from capital

Equity exposures have been calculated in accordance with BS2B.

Exposure atdefault

Risk weight

Risk weighted
exposure

Total capitalrequirement

$m

%

$m

$m

100

400

426

34

ANZ Bank New Zealand Limited

18

Notes to the Financial Statements
Other exposures

Banking GroupAs at 31/03/2013 (Unaudited)Cash
New Zealand dollar denominated claims on the Crown and the RBNZ
Other assets
Total other IRB credit risk exposures

Exposure atdefault

Risk weight

Risk weighted
exposure

Total capitalrequirement

$m

%

$m

$m

218

-

-

-

1,999

-

-

-

980

100

1,039

83

3,197

31

1,039

83

Other exposures have been calculated in accordance with BS2B.
Credit risk mitigation
The Banking Group assesses the integrity and ability of counterparties to meet their contractual financial obligations for
repayment. The Banking Group generally takes collateral security in the form of real property or a security interest in
personal property, except for major government, bank and corporate counterparties of strong financial standing. Longer
term consumer finance, in the form of housing loans, is generally secured against real estate while short term revolving
consumer credit is generally unsecured.
As at 31 March 2013, under the IRB approach, the Banking Group had $1,628 million of Corporate exposures covered byguarantees where the presence of the guarantees was judged to reduce the underlying credit risk of the exposures.
Information on the total value of exposures covered by financial guarantees and eligible financial collateral is notdisclosed, as the effect of these guarantees and collateral on the underlying credit risk exposures is not considered to bematerial.
Operational risk
The Banking Group uses the Advanced Measurement Approach for determining its regulatory capital requirement for
operational risk calculated in accordance with BS2B. As at 31 March 2013 the Banking Group had an implied risk
weighted exposure of $5,553 million for operational risk and an operational risk capital requirement of $444 million.
Market risk
The aggregate market risk exposures below have been calculated in accordance with BS2B.
The peak end-of-day market risk exposures are for the half-year ended 31 March 2013.

Banking Group
31/03/2013 (Unaudited)

Interest rate risk
Foreign currency risk
Equity risk

Implied risk weighted exposure

Aggregate capital charge

Peak

Period end

Peak

Period end

Peak

$m

$m

$m

$m

4,275

5,594

342

448

4/02/2013

17

72

1

6

17/01/2013

3

3

-

-

31/10/2012

4,295

occurred on

343

Pillar II capital for other material risks
The Banking Group has an Internal Capital Adequacy Assessment Process ("ICAAP") which complies with the requirementsof the Bank's Conditions of Registration.
Under the Banking Group's ICAAP it identifies and measures all "other material risks", which are those material risks thatare not explicitly captured in the calculation of the Banking Group's tier one and total capital ratios. The other material
risks identified by the Banking Group include business risk, pension risk, insurance risk, funds management risk, lapse
risk, premises and equipment risk and capitalised origination fees risk.
The Banking Group's internal capital allocation for these other material risks is $405 million (31/03/2012 $325 million;
30/09/2012 $338 million).
The Banking Group regularly reviews the methodologies used to calculate the economic capital allocated to other material
risks. Updated capital methodologies (particularly relating to fixed asset risk and business risk) were applied in November
2012 and the prior period restated accordingly.

ANZ Bank New Zealand Limited

19

Notes to the Financial Statements
Capital adequacy of the Ultimate Parent Bank
Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2013

31/03/2012

30/09/2012

31/03/2012

30/09/2012

Basel III

Basel II

Basel II

Basel II

Basel II

Common equity tier one capital

8.2%

n/a

n/a

n/a

n/a

Tier one capital

9.8%

11.3%

10.8%

11.3%

11.4%

11.7%

12.6%

12.2%

12.9%

12.7%

Total capital

For calculation of minimum capital requirements under Pillar 1 (Capital Requirements) of the Basel Accord, APRA has
accredited the Overseas Banking Group to use the Advanced Internal Ratings Based ("AIRB") methodology for calculationof credit risk weighted assets and the Advanced Measurement Approach ("AMA") for the operational risk weighted asset
equivalent.
Under prudential regulations, the Overseas Banking Group is required to maintain a Prudential Capital Ratio ("PCR") as
determined by APRA. The Overseas Banking Group exceeded the PCR set by APRA as at 31 March 2013 and for thecomparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2013. The
Overseas Banking Group’s Pillar 3 disclosure document for the quarter ended 31 March 2013, in accordance with APS 330:
Public Disclosure of Prudential Information, discloses capital adequacy ratios and other prudential information. This
document can be accessed at the website anz.com.
Residential mortgages by loan-to-valuation ratio (“LVR”)
As required by the RBNZ, LVRs are calculated as the current exposure secured by a residential mortgage divided by the
Banking Group's valuation of the security property at origination of the exposure. Off balance sheet exposures include
undrawn and partially drawn residential mortgage loans as well as commitments to lend. Commitments to lend are formal
offers for housing lending which may or may not be accepted by the customer.
Unaudited 31/03/2013

On-balancesheet

Off-balance
sheet

Total

0% - 59%

16,816

3,335

20,151

60% - 69%

7,300

934

8,234

70% - 79%

10,882

1,187

12,069Less than 80%$ millions

LVR range

34,9985,456

40,45480% - 89%

6,409

914

7,323

Over 90%

3,918

420

4,338

45,325

6,790

52,115

Total

Reconciliation of mortgage related amounts
Unaudited$ millions

Term loans - housing

Note

4

Plus: short-term housing loans classified as overdrafts(2,654)

Plus: Unsettled re-purchases of mortgages from the NZ Branch

46
10

Plus: off-balance sheet retail mortgage exposures subject to the IRB approach
Total retail mortgage exposures subject to the IRB approach (as per LVR analysis)

47,445488

Less: housing loans made to corporate customers

On-balance sheet retail mortgage exposures subject to the IRB approach

31/03/2013

45,3256,790

10

52,115ANZ Bank New Zealand Limited

20

Notes to the Financial Statements
11. Financial risk management
Concentrations of credit risk
Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities
within the same geographic region, or when they have similar risk characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or other conditions.
Analysis of financial assets by industry sector is based on Australian and New Zealand Standard Industrial Classification(“ANZSIC”) codes.

Unaudited 31/03/2013$ millions

Liquid assets
Tradingand due from securities andother financial available-forinstitutions
sale assets

Derivative
financial
instruments

Net loans andadvancesOtherfinancial Credit related
assets commitments3

Total

Industry
Agriculture

-

-

34

17,300137

1,935

Forestry, fishing and mining

17

-

9

861

7

496

19,406
1,390

Business and property services

19

-

39

8,943

71

2,525

11,597

Construction

-

-

-

1,016

8

1,042

2,066

Entertainment, leisure and tourism

-

-

33

1,109

9

448

1,599

Finance and insurance

3,125

4,671

7,755

728

306

1,211

17,796

Government and local authority1

11,307

2,014

6,522

376

1,318

10

1,067

Manufacturing

43

-

75

2,902

23

2,410

5,453

Personal lending

-

-

-

49,048388

10,36459,800Retail trade

85

5

28

1,680

13

1,231

3,042

Transport and storage

25

33

65

1,493

12

568

2,196

Wholesale trade

52

-

15

1,214

10

1,470

2,761

Other2

36

61

583

1,432

11

2,855

4,978

5,416

11,292

9,012

89,044

1,005

27,622

143,391

Provision for credit impairment

-

-

-

(951)

-

-

(951)

Fair value hedge adjustment
Unearned finance income anddeferred / capitalised fees

-

-

-

(15)

-

-

(15)

-

-

-

(196)

-

-

(196)

5,416

11,292

9,012

87,882

1,005

27,622

142,229

5,399

8,390

2,710

86,220992

27,622

131,333

17

2,902

6,302

1,662

13

-

10,896

5,416

11,292

9,012

87,882

1,005

27,622

142,229

Total financial assets
Geography
New ZealandOverseas
Total financial assets
1
2
3

Government and local authority includes exposures to government administration and defence, education and health and community services.
Other includes exposures to electricity, gas and water, communications and personal services.
Credit related commitments comprise undrawn facilities, customer contingent liabilities and letters of offer.

ANZ Bank New Zealand Limited

21

Notes to the Financial Statements
Interest rate sensitivity gap
The following tables represent the interest rate sensitivity of the Banking Group's assets, liabilities and off balance sheet
instruments by showing the periods in which these instruments may reprice (that is, when interest rates applicable toeach asset or liability can be changed).

Unaudited 31/03/2013
Total

Less than
3 months

3 to 6months6 to 12months1 to 2years

Beyond2 years

Not bearing
interest

Liquid assets

3,371

3,138

-

-

-

-

233

Due from other financial institutions

2,045

1,760

-

-

-

-

285

10,419

1,871

155

510

1,083

6,800

-

9,012

-

-

-

-

-

9,012

$ millions

AssetsTrading securities
Derivative financial instruments
Available-for-sale assets

873

275

379

205

-

11

3

Net loans and advances

87,882

61,797

3,607

8,262

9,505

4,630

81

Other financial assets

1,005

133

8

18

2

-

844

Total financial assets

114,607

68,974

4,149

8,995

10,59011,441

10,458

Liabilities
Due to other financial institutions

1,795

1,293

-

-

-

122

380

Deposits and other borrowings

75,22449,477

9,157

8,019

1,753

1,101

5,717

Due to Immediate Parent Company

709

709

-

-

-

-

-

Derivative financial instruments

10,173

-

-

-

-

-

10,173

Bonds and notes-

16,611

4,714

2,392

46

1,235

8,224

Loan capital

1,178

835

343

-

-

-

-

Other financial liabilities

1,631

62

-

-

-

151

1,418

Total financial liabilities

107,32157,09011,892

8,065

2,988

9,598

17,688

Hedging instruments-(3,750)

1,859

4,191

(3,955)

1,655-Interest sensitivity gap

7,286

8,134

(5,884)

5,121

3,647

3,498

(7,230)Liquidity portfolio
The Banking Group holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk
management. The size of the Banking Group’s liquidity portfolio is based on the amount required to meet its liquidity
policy and includes both items classified as cash and cash equivalents and those classified as operating assets in theCondensed Cash Flow Statement.
Unaudited$ millions

Balances with central banks
Certificates of deposit
Government, local body stock and bonds
Government treasury bills
Other bonds
Total liquidity portfolio

31/03/2013

1,999
160
5,939
836
4,628
13,562

ANZ Bank New Zealand Limited

22

Notes to the Financial Statements
Funding Composition
The Banking Group actively uses balance sheet disciplines to prudently manage the funding mix. The Banking Group
employs funding metrics to ensure that an appropriate proportion of its assets are funded from stable sources, including
customer liabilities, longer-dated wholesale debt (with remaining term exceeding one year) and equity.
Analysis of funding liabilities by industry sector is based on ANZSIC codes.

Unaudited$ millions

31/03/2013

Funding composition
Customer deposits1
New Zealand

61,574

Overseas

7,690

Total customer deposits

69,264Wholesale funding
Bonds and notes

16,611

Loan capital

1,178

Certificates of deposit

1,624

Commercial paper

4,336

Due to Immediate Parent Company

709

Due to other financial institutions

1,795

Total wholesale funding

26,253

Total funding

95,517

Concentrations of funding by industry
Households

44,166

Agriculture

2,488

Forestry, fishing and mining

553

Manufacturing

1,524Entertainment, leisure and tourism

756

Finance and insurance

34,693Retail trade

917

Wholesale trade

1,774

Business and property services

3,744

Transport and storage

755

Construction

885

Government and local authority

2,098

Other2

1,164

Total funding
Concentrations of funding by geography
New ZealandAustralia
United States

95,517
3

67,725
1,458
11,937

Europe8,660

Other countries

5,737

Total funding

95,5171
2
3

Represents term deposits, demand deposits bearing interest, deposits not bearing interest and secured debenture stock.
Other includes exposures to electricity, gas and water, communications and personal services.
Funding via ANZ New Zealand (Int’l) Limited is classified as either from the United States or Europe, as the company conducts overseas funding activities
through its London branch which is passed through to the Bank.

ANZ Bank New Zealand Limited

23

Notes to the Financial Statements
Contractual maturity analysis of financial assets and liabilities
The following tables present the Banking Group's financial assets and liabilities within relevant contractual maturity
groupings, based on the earliest date on which the the Banking Group may be required to realise an asset or settle aliability. The amounts disclosed in the tables represent undiscounted future principal and interest cash flows and may
differ to the amounts reported on the balance sheet.
The contractual maturity analysis for off-balance sheet commitments and contingent liabilities has been prepared using
the earliest date at which the Banking Group can be called upon to pay. The liquidity risk of credit related commitments
and contingent liabilities may be less than the contract amount, and does not necessarily represent future cash
requirements as many of these facilities are expected to be only partially used or to expire unused.
The Banking Group does not manage its liquidity risk on this basis.

Unaudited 31/03/2013

Less than
3 months

3 to 12months1 to 5years

Beyond5 years

No maturity
specified

2,566

811

-

-

-

-

607

1,439

-

-

-

-

11,539

-

632

1,139

8,308

1,460

-

8,159

-

8,159

-

-

-

-

Available-for-sale assets

889

-

283

557

46

-

3

Net loans and advances$ millions

Total

At callLiquid assets

3,377

Due from other financial institutions

2,046

Financial assets

Trading securities
Derivative financial assets (trading)

118,224-

16,482

15,41337,63048,699-Other financial assets

616

-

588

26

2

-

-

Total financial assets

144,850

3,173

28,394

17,13545,98650,1593

Financial liabilities
Due to other financial institutions

1,824

884

772

5

45

118

-

Deposits and other borrowings

76,55333,677

21,56518,055

3,256

-

-

709

-

709

-

-

-

-

Due to Immediate Parent Company
Derivative financial liabilities(trading)

9,462

-

9,462

-

-

-

17,590

-

126

4,318

12,478668-

Loan capital

1,842

-

24

71

474

95

1,178

Other financial liabilities

1,188

-

957

7

44

180

-

Total financial liabilities

109,168

34,561

33,61522,456

16,297

1,061

1,178

35,682(31,388)(5,221)(5,321)

29,68949,098(1,175)

Bonds and notes

Net financial assets / (liabilities)

Derivative financial instruments used for balance sheet management- gross inflows

16,139

-

1,646

5,413

8,778

302

-

- gross outflows(15,760)-(1,547)(5,376)(8,534)(303)-

36,061(31,388)(5,122)(5,284)29,93349,097(1,175)

Net financial assets / (liabilities)
after balance sheet management

Contractual maturity of off-balance sheet commitments and contingent liabilities
Unaudited 31/03/2013$ millions

Non-credit related commitments
Credit related commitments
Contingent liabilities
Total

Total

Less than

Beyond1 year

1 year

426

117

309

25,86525,865

-

1,757

1,757

-

28,04827,739309

ANZ Bank New Zealand Limited

24

Notes to the Financial Statements
12. Concentrations of Credit Risk to Individual Counterparties
The Banking Group measures its concentration of credit risk in respect to bank counterparties on the basis of approved
exposures, and in respect to non bank counterparties on the basis of limits.
For the six months ended 31 March 2013 there were no individual counterparties (excluding connected parties,
governments and banks with long term credit ratings of A- or above) where the Banking Group’s period end or peak endof-day credit exposure equalled or exceeded 10% of the Banking Group’s equity (as at the end of the period).

13. Insurance business
The Banking Group conducts insurance business through companies in the OnePath Insurance Holdings (NZ) Limitedgroup. The aggregate amount of insurance business in this group comprises assets totalling $602 million (31/03/2012:$525 million; 30/09/2012 $564 million), which is 0.5% (31/03/2012: 0.4%; 30/09/2012 0.5%) of the total consolidated
assets of the Banking Group.

14. Credit Related Commitments, Guarantees and Contingent Liabilities
Face or contract value$ millions

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Credit related commitments
Commitments with certain drawdown due within one year

859

904

742

Commitments to provide financial services

25,006

23,074

24,698

Total credit related commitments

25,86523,97825,440

650

1,752

731

53

55

44

Transaction related contingent items

976

829

913

Trade related contingent liabilities

78

96

117

1,757

2,732

1,805

Guarantees and contingent liabilities
Financial guarantees
Standby letters of credit

Total guarantees and contingent liabilities

The Banking Group guarantees the performance of customers by issuing standby letters of credit and guarantees to third
parties, including its Ultimate Parent Bank. To reflect the risk associated with these transactions, they are subjected tothe same credit origination, portfolio management and collateral requirements as for customers that apply for loans. The
contract amount represents the maximum potential amount that could be lost if the counterparty fails to meet its financial
obligations. As the facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future
cash requirements.
Other contingent liabilities
In October 2012 the Commerce Commission commenced an investigation, under the Fair Trading Act 1986, into thepromotion and sale of interest rate swaps by certain banks (including the Bank) to rural customers. The investigation is at
an early stage and the possible outcome of the investigation cannot be determined with any certainty.
On 11 March 2013, litigation funder Litigation Lending Services (NZ) announced plans for a representative action againstbanks in New Zealand for certain fees charged to New Zealand customers over the past six years. As at 13 May 2013, theBank is not aware of any proceedings being issued against it or any other bank in New Zealand.
The Banking Group has other contingent liabilities in respect of actual and possible claims and court proceedings. An
assessment of the Banking Group’s likely loss in respect of these matters has been made on a case-by-case basis andprovision made where deemed necessary.

ANZ Bank New Zealand Limited

25

Directors’ Statement
As at the date on which this Disclosure Statement is signed, after due enquiry, each Director believes that:(i) The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements(New Zealand Incorporated Registered Banks) Order 2013; and(ii) The Disclosure Statement is not false or misleading.
Over the six months ended 31 March 2013, after due enquiry, each Director believes that:(i) ANZ Bank New Zealand Limited has complied with all Conditions of Registration that applied during that period;(ii) Credit exposures to connected persons were not contrary to the interests of the Banking Group;(iii) ANZ Bank New Zealand Limited had systems in place to monitor and control adequately the Banking Group’s material
risks, including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk,
operational risk and other business risks, and that those systems were being properly applied.
This Disclosure Statement is dated, and has been signed by or on behalf of all Directors of the Bank on, 13
May 2013.

Antony Carter

Norman Geary, CBEJohn Judgealso on behalf of Shayne Elliott, David Hisco and Michael Smith, OBEANZ Bank New Zealand Limited

26--

Independent Auditor’s Review Report
To the Shareholder of ANZ Bank New Zealand Limited
We have reviewed pages 3 to 24 of the interim financial statements of ANZ Bank New Zealand Limited (the ‘Bank’) and its
subsidiary companies (the ‘Banking Group’) prepared and disclosed in accordance with the Registered Bank Disclosure Statements(New Zealand Incorporated Registered Banks) Order 2013 (the ‘Order’) and the supplementary information prescribed in
Schedules 3, 5, 7, 11, 13, 16 and 18 of the Order. The interim financial statements, and supplementary information, provide
information about the past financial performance and cash flows of the Banking Group and its financial position as at 31 March2013.
Directors' responsibility for the disclosure statement
The Directors of ANZ Bank New Zealand Limited are responsible for the preparation and presentation of the Disclosure Statement,
which includes interim financial statements prepared in accordance with Clause 25 of the Order which give a true and fair view ofthe financial position of the Banking Group as at 31 March 2013 and its financial performance and cash flows for the six months
ended on that date. The Directors are also responsible for such internal controls as the Directors determine are necessary toenable the preparation of the Disclosure Statement that is free from material misstatement whether due to fraud or error.
They are also responsible for the preparation of supplementary information in the Disclosure Statement which fairly states thematters to which it relates in accordance with Schedules 3, 5, 7, 11, 13, 16 and 18 of the Order.
Reviewer’s responsibility
We are responsible for reviewing the interim financial statements and the supplementary information, disclosed in accordance with
Clause 25, Schedules 3, 5, 7, 11, 13, 16 and 18 of the Order and presented to us by the Directors.
We are responsible for reviewing the interim financial statements (excluding the supplementary information) in order to report toyou whether, in our opinion on the basis of the procedures described below, anything has come to our attention that would cause
us to believe that the interim financial statements have not been prepared, in all material respects, in accordance with New
Zealand Equivalent to International Accounting Standard 34 (“NZ IAS 34”): Interim Financial Reporting and do not present a trueand fair view of the financial position of the Banking Group as at 31 March 2013 and its financial performance and cash flows forthe six months ended on that date.
We are responsible for reviewing the supplementary information (excluding the supplementary information relating to capital
adequacy) in order to report to you whether, in our opinion on the basis of the procedures described below, anything has come toour attention that would cause us to believe that the supplementary information does not fairly state the matters to which it
relates in accordance with Schedules 5, 7, 13, 16 and 18 of the Order.
We are responsible for reviewing the supplementary information relating to capital adequacy in order to state whether, on thebasis of the procedures described below, anything has come to our attention that would cause us to believe that the information
disclosed in accordance with Schedule 11 is not in all material respects prepared in accordance with the Bank’s Conditions ofRegistration and with the Bank’s internal models for credit risk and operational risk as accredited by the Reserve Bank of New
Zealand and disclosed in accordance with Schedule 11 of the Order.
We have performed our review in accordance with the review engagement standard RS-1 Statement of Review Engagement
Standards issued by the External Reporting Board. A review is limited primarily to enquiries of Banking Group personnel andanalytical review procedures applied to the financial data, and thus provides less assurance than an audit. We have not performed
an audit and, accordingly, we do not express an audit opinion.
KPMG has also provided other audit related services to the Banking Group. In addition, certain partners and employees of ourfirm may also deal with the Banking Group on normal terms within the ordinary course of trading activities of the business of the
Banking Group. These matters have not impaired our independence as auditors of the Banking Group. We have no otherrelationship with, or interest in, the Banking Group.
Review opinion
We have examined the interim financial statements including the supplementary information and based on our review, which is
not an audit, nothing has come to our attention that causes us to believe that:a.

the interim financial statements (excluding the supplementary information) have not been prepared, in all material respects,
in accordance with NZ IAS 34: Interim Financial Reporting and do not present a true and fair view of the financial position of
the Banking Group as at 31 March 2013 and its financial performance and cash flows for the six months ended on that date;b.

the supplementary information prescribed by Schedules 5, 7, 13, 16 and 18 of the Order does not fairly state the matters towhich it relates in accordance with those Schedules; andc.

the supplementary information relating to capital adequacy as required by Schedule 11 of the Order, is not in all material
respects prepared in accordance with the Bank’s Conditions of Registration and with the Bank’s internal models for credit risk
and operational risk as accredited by the Reserve Bank of New Zealand, and disclosed in accordance with Schedule 11 of theOrder.

Our review was completed on 13 May 2013 and our review opinion is expressed as at that date.

Wellington