ANZ National Bank Limited
Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2012 | NUMBER 65 ISSUED MAY 2012

ANZ National Bank Limited

Glossary of Terms

For the six months ended 31 March 2012

In this Disclosure Statement unless the context otherwise
requires:

Contents(a) “Bank” means ANZ National Bank Limited;(b) “Banking Group” means ANZ National Bank Limited andall 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 from New Zealandidentified and treated as if it were conducted 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 Zealand businessof the Overseas Banking Group;(i) “Registered Office” is Level 10, 170-186 Featherston
Street, Wellington 6011, 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 2012; and(m) Any term or expression which is defined in, or in themanner prescribed by, the Order shall have the meaning
given in or prescribed by the Order.

General Disclosures
Income Statement and Statementof Comprehensive Income
Statement of Changes in Equity
Balance Sheet
Condensed Cash Flow Statement
Notes to the Financial Statements
Directors’ Statement
Auditors’ Report

2
3
4
5
6
7
26
27

1

Disclosure Statement

ANZ National Bank Limited

General Disclosures
This Disclosure Statement has been issued in accordancewith the Order.

Credit Rating Information
The Bank has three credit ratings, which are applicable to its
long-term senior unsecured obligations which are payable
in New Zealand in New Zealand dollars.
On 24 February 2012, Fitch changed the Outlook on the
Bank’s long-term senior unsecured debt and deposit ratingsfrom negative to stable.
The Bank’s Credit Ratings are:
Current
Credit Rating

Qualification

Standard & Poor’s

AA-

Outlook Stable

Moody’s Investors Service

Aa3

Outlook Stable

Fitch Ratings

AA-

Outlook Stable

Rating Agency

Guarantors
As at the date of signing of this Disclosure Statement the
Bank has debt securities with a carrying value as at 31 March2012 of $331 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 affect debt securities previously issued withthe benefit of Crown Wholesale Guarantee.
Copies of the Wholesale Deed, and any Guarantee Eligibility
Certificate issued by the Crown in respect of the Bank, areavailable 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 is provided
in the Disclosure Statement for the year ended 30 September
2011 which is available at no charge:a) on the Bank’s websites anz.co.nz and nationalbank.co.nz;
andb) within two working days of a request, if a request is
made at the Registered Office or at any branch of ANZ or
The National Bank of New Zealand.

Certain debt securities (“Covered Bonds”) issued by the
Bank or its wholly owned subsidiary, ANZ National (Int’l)Limited, are guaranteed by the ANZNZ Covered Bond Trust
Limited, solely in its capacity as trustee of the ANZNZ
Covered Bond Trust (the “Covered Bond Guarantor”). The
Covered Bond Guarantor has guaranteed the payment ofinterest and principal of Covered Bonds with a carrying
value as at 31 March 2012 of $1,898 million, pursuant to aguarantee which is secured over a pool of assets. The
Covered Bond Guarantor’s address for service is Level 10,
141 Willis Street, Wellington, New Zealand. The Covered
Bond Guarantor is not a member of the Banking Group andhas no credit ratings applicable to its long term seniorunsecured 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 thisguarantee are provided in Note 7.
Other material obligations of the Bank are not guaranteed.

Directorate
As at 11 May 2012 there have been no changes to the
Directors of ANZ National Bank Limited since 30 September
2011, the balance date of the last full year DisclosureStatement.
Mr P R Marriott has announced his intention to resign asa Director of ANZ National Bank on 31 May 2012.
Sir Dryden Spring has announced his intention to retire as
Director and Chairman of ANZ National Bank Limited on
22 June 2012. Mr J F Judge will take over as Chairman on
23 June 2012.

Auditors
The Banking Group’s auditors are KPMG, Chartered
Accountants, Level 9, 10 Customhouse Quay, Wellington,
New Zealand.

ANZ National Bank Limited
2–3

Income Statement
Unaudited
6 months to
31/03/2012

Unaudited
6 months to
31/03/2011

AuditedYear to30/09/2011

Interest income

2,995

3,162

6,179

Interest expense

1,649

1,899

3,620

Net interest income

1,346

1,263

2,559

Net trading gains

79

140

228

139

126

265

269

141

361

$ millions

Note

Net funds management and insurance income
Other operating income2

Share of profit of equity accounted associates and jointly controlled entities
Operating income
Operating expenses

2

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

6

Profit before income tax

1

1

2

1,834

1,671

3,415

863

910

1,686

971

761

1,729

95

78

178

876

683

1,551

Income tax expense

233

192

452

Profit for the period

643

491

1,099

Unaudited
6 months to
31/03/2012

Unaudited
6 months to
31/03/2011

AuditedYear to30/09/2011

Profit for the period

643

491

1,099

Unrealised gains recognised directly in equity

11

7

72

Realised gains transferred to income statement

(7)

(36)

(38)

Actuarial gain / (loss) on defined benefit schemes

(2)

8

(64)

Income tax credit on items recognised directly in equity

5

6

11

650

476

1,080

Statement of Comprehensive Income$ millions

Total comprehensive income for the period

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

ANZ National Bank Limited

Statement of Changes in Equity$ millions

As at 1 October 2010

Ordinary
share
capitalAvailablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

Total equity
attributable toowners of theparent entity

Noncontrolling
entities

6,943

58

Total equity

102

3,342

10,445

1

10,446

Profit after income tax attributable to parent

-

-

-

491

491

-

491

Valuation gain / (losses) recognised in othercomprehensive income

-

11

(4)

-

7

-

7

Losses / (gains) transferred to income statement

-

(42)

6

-

(36)

-

(36)

Actuarial gain on defined benefit schemes

-

-

-

8

8

-

8

Income tax credit / (expense) on items
recognised directly in equity

-

8

-

(2)

6

-

6

Total comprehensive income for the period

-

(23)

2

497

476

-

476

Ordinary dividend paid

-

-

-

(430)

(430)

As at 31 March 2011 (Unaudited)

6,943

35

104

3,409

10,491

1-

10,492(430)

As at 1 October 2010

6,943

58

102

3,342

10,445

1

10,446

Profit after income tax attributable to parent

-

-

-

1,099

1,099

-

1,099

Valuation gain recognised in othercomprehensive income

-

21

51

-

72

-

72

Losses / (gains) transferred to income statement

-

(42)

4

-

(38)

-

(38)

Actuarial loss on defined benefit schemes

-

-

-

(64)

(64)

-

(64)

Income tax credit / (expense) on items
recognised directly in equity

-

9

(16)

18

11

-

11

Total comprehensive income for the period

-

(12)

39

1,053

1,080

-

1,080

Ordinary dividend paid

-

-

-

(700)

(700)

-

(700)

Movement in non-controlling interests

-

-

-

-

-

(1)

(1)

6,943

46

141

3,695

10,825-

10,825

Profit after income tax attributable to parent

-

-

-

643

643

-

643

Valuation gain / (losses) recognised in othercomprehensive income

-

26

(15)

-

11

-

11

Gains transferred to income statement

-

-

(7)

-

(7)

-

(7)

As at 30 September 2011 (Audited)

Actuarial loss on defined benefit schemes

-

-

-

(2)

(2)

-

(2)

Income tax credit / (expense) on items
recognised directly in equity

-

(1)

6

-

5

-

5

Total comprehensive income for the period

-

25

(16)

641

650

-

650

Ordinary dividend paid
As at 31 March 2012 (Unaudited)

-

-

-

(550)

(550)

-

(550)

6,943

71

125

3,786

10,925-

10,925The notes to the financial statements form part of and should be read in conjunction with these financial statements

ANZ National Bank Limited
4–5

Balance Sheet$ millions

Note

Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

AssetsLiquid assets

2,355

1,799

2,455

Due from other financial institutions

1,958

3,257

3,685

Trading securities

10,904

7,373

9,466

Derivative financial instruments

9,959

9,553

14,160Current tax assets

76

61

-

Available-for-sale assets

252

793

411

84,46785,36983,610

165

82

97

Net loans and advances

4

Investments backing insurance policyholder liabilities
Insurance policy assets

231

169

200

Shares in associates and jointly controlled entities

100

145

100

Other assets

935

1,621

854

Deferred tax assets

91

228

139

320

331

325

3,500

3,532

3,510

Total assets

115,313

114,313

119,012Interest earning and discount bearing assets

99,21097,442

98,214

924

1,651

2,236

70,914

68,34969,238

555

11

174

10,318

9,795

14,174

-

-

17

2,040

2,263

2,645

338

377

309

Bonds and notes

17,562

18,94817,406

Loan capital

1,737

2,427

1,988

Total liabilities

104,388

103,821108,187

Net assets

10,925

10,492

10,825

6,943

6,943

6,943

Premises and equipment
Goodwill and other intangible assets

Liabilities
Due to other financial institutions
Deposits and other borrowings

8

Due to Immediate Parent Company
Derivative financial instruments
Current tax liabilities
Payables and other liabilities
Provisions

Represented by:
Share capital

196

139

187

Retained earnings

3,786

3,409

3,695

Parent shareholder’s equity

10,925

10,491

10,825-

1-

Total equity

10,925

10,492

10,825Interest and discount bearing liabilities

86,30386,13985,728Reserves

Non-controlling interests

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

ANZ National Bank Limited

Condensed Cash Flow Statement$ millions

Unaudited
6 months to
31/03/2012

Unaudited
6 months to
31/03/2011

AuditedYear to30/09/2011

Cash flows from operating activities
Interest received

2,964

3,088

6,074

Interest paid

(1,659)(1,842)(3,573)

Other cash inflows provided by operating activities

470

455

913

Other cash outflows used in operating activities(1,094)(996)(1,892)

681

705

1,522

Net changes in operating assets and liabilities(3,215)(1,327)

1,712

Net cash flows provided by / (used in) operating activities(2,534)

(622)

3,234

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

Cash flows from investing activities
Cash inflows provided by investing activities

16

-

69

Cash outflows used in investing activities

(38)

(62)

(119)

Net cash flows used in investing activities

(22)

(62)

(50)

Cash flows from financing activities
Cash inflows provided by financing activities

2,798

3,617

4,172

Cash outflows used in financing activities(2,426)(1,956)(4,793)

372

1,661

(621)

(2,184)

977

2,563

Net cash flows provided by / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period

6,140

3,577

3,577

Cash and cash equivalents at end of the period

3,956

4,554

6,140

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

ANZ National Bank Limited
6–7

Notes to the Financial Statements
1. Significant Accounting Policies(i) Reporting entity and statement of compliance
These financial statements are for the Banking
Group for the six months ended 31 March 2012.
They have been prepared in accordance with therequirements of NZ IAS 34 Interim Financial Reporting
and the Order, and should be read in conjunction
with the Banking Group’s financial statements forthe year ended 30 September 2011.
(ii) Basis of measurement
These financial statements have been prepared on agoing concern basis in accordance with historicalcost 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• financial instruments designated at fair value
through profit and loss.
Insurance policy assets are measured using the
Margin on Services model, 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
have been reclassified to ensure consistency withthe current period’s presentation. This includes
reclassifying certain investment assets that relate to
the insurance business from due from other financial
institutions and available-for-sale assets toinvestments backing insurance policyholder
liabilities to better reflect the purpose for which theassets are held.
(vi) Principles of consolidation
The financial statements consolidate the financial
statements of the Bank and its controlled entities.

2. Other Operating Income and Expenses
Other operating income includes fair value gains of$29 million (31/03/2011 $92 million loss; 30/09/2011$99 million loss) on the revaluation of financial assets andliabilities designated at fair value and on hedging activities.
Other operating income excluding these fair value
adjustments is $240 million (31/03/2011 $233 million;
30/09/2011 $460 million).
Operating expenses include costs for the six months ended
31 March 2012 of $84 million (31/03/2011 $141 million;
30/09/2011 $162 million) incurred in relation to the planned
move to a single banking technology platform whichis expected to deliver further operational efficiencies andimproved service levels and business outcomes.

ANZ National Bank Limited

Notes to the Financial Statements
3. Segmental Analysis

annual revenues of less than $5 million). Commercial & Agricustomers consist of primarily privately owned medium tolarge enterprises. The Banking Group’s relationship withthese businesses ranges from simple banking requirementswith revenue from deposit and transactional facilities, andcash flow lending, to more complex funding arrangementswith revenue sourced from a wider range of products. UDC
is principally involved in the financing and leasing of plant,
vehicles and equipment, mainly for small and medium sizedbusinesses, as well as investment products.

For segment reporting purposes, the Banking Group isorganised into three major business segments – Retail,Commercial and Institutional. Centralised back office andcorporate functions support these segments. Thesesegments are consistent with internal reporting provided tothe 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.

Institutional
Institutional provides financial services to large multi-banked
corporations, often global, who require sophisticatedproduct and structuring solutions. The Institutional business
unit includes the following specialised units:• Markets – provides foreign exchange, interest rate andcommodity trading and sales-related services, origination,
underwriting, structuring, risk management and sale ofcredit and derivative products globally;• Transaction Banking – provides cash management, tradefinance and international payments;• Global Loans – provides origination, credit analysis,
structuring and execution of specific customertransactions.

RetailRetail provides banking products and services to individuals
through separate ANZ and The National Bank of New Zealand
branded distribution channels. Personal banking customers
have access to a wide range of financial services andproducts. Retail contains the Banking Group’s wealthbusinesses which include private banking and investment
services provided to high net worth individuals, the OnePathwealth management and insurance businesses, and otherinvestment products. This segment also includes otherprofit centres supporting the Retail segment.
Commercial
Commercial provides services to Business Banking,Commercial & Agri, and UDC customers. Business Banking
services are offered to small enterprises (typically with

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

Business segment analysis1$ millions

RetailCommercial

Institutional

Other2

Total

Unaudited 6 months to 31/03/2012
External revenues

575

1,393

399

(533)

1,834

Intersegment revenues

107

(654)

(67)

614

-

Total revenues

682

739

332

81

1,834

Profit before income tax

238

419

237

(18)

876

644

1,495

264

(732)

1,671

Unaudited 6 months to 31/03/2011
External revenues
Intersegment revenues

46

(751)

45

660

-

Total revenues

690

744

309

(72)

1,671

Profit before income tax

243

432

233

(225)

683

1,225

2,895

613

(1,318)

3,415

118

(1,424)

27

1,279

-

Total revenues

1,343

1,471

640

(39)

3,415

Profit before income tax

436

838

491

(214)

1,551

Audited year to 30/09/2011
External revenues
Intersegment revenues

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 National Bank Limited
8–9

Notes to the Financial Statements
4. Net Loans and Advances
Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

Overdrafts

1,986

2,083

1,847

Credit card outstandings

1,410

1,386

1,367

Term loans – housing

44,34043,94843,636

Term loans – non-housing

37,321

38,59537,398$ millions

Note

Finance lease receivables

800

749

768

Gross loans and advances

85,85786,76185,016(1,119)(1,264)(1,156)

(259)

(263)

(256)

Fair value hedge adjustment

(8)

153

22

Deferred fee revenue and expenses

(55)

(53)

(51)

Provision for credit impairment

6

Unearned finance income

51

35

35

84,46785,36983,610Capitalised brokerage / mortgage origination fees
Total net loans and advances

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of $9,303 million as at 31 March 2012
(31/03/2011 $9,987 million, 30/09/2011 $9,931 million). These assets qualify for derecognition as the Bank does not retain acontinuing involvement in the transferred assets.

5. Impaired Assets, Past Due Assets and Other Assets Under Administration
Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Balance at the beginning of the period

451

61

1,194

1,706

Transfers from productive

148

61

341

550

$ millions

Unaudited 31/03/2012

Transfers to productive

(28)

(1)

(92)

(121)

Assets realised or loans repaid

(176)

(26)

(243)

(445)

Write offs

(32)

(43)

(47)

(122)

Total individually impaired assets

363

52

1,153

1,568

Balance at the beginning of the period

511

81

1,403

1,995

Transfers from productive

242

71

453

766

Transfers to productive

(30)

-

(16)

(46)

Assets realised or loans repaid

(188)

(30)

(253)

(471)

Write offs

(33)

(51)

(96)

(180)

Total individually impaired assets

502

71

1,491

2,064

Unaudited 31/03/2011

Audited 30/09/2011
Balance at the beginning of the period

511

81

1,403

1,995

Transfers from productive

442

158

774

1,374

Transfers to productive

(77)

(1)

(101)

(179)

Assets realised or loans repaid

(356)

(71)

(691)

(1,118)

Write offs

(69)

(106)

(191)

(366)

Total individually impaired assets

451

61

1,194

1,706

ANZ National Bank Limited

Notes to the Financial Statements
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 the life of
the facility and there is reasonable assurance that collection efforts will result in payment of the amounts due in a timely manner.
Ageing analysis of loans that are past due but not impaired$ millions

Retailmortgages

Other retail
exposures

Non retail
exposures

Total

386

145

525

1,056

Unaudited 31/03/2012
1 to 5 days
6 to 29 days

338

102

77

517

1 to 29 days

724

247

602

1,573

30 to 59 days

180

44

282

506

60 to 89 days

44

19

58

121

90 days or over

100

47

128

275

1,048

357

1,070

2,475

Other assets under administration
Other assets under administration are any loans, not being impaired or 90 days or more past due, where the customer is in any
form of voluntary or involuntary administration, including receivership, liquidation, bankruptcy or statutory management.
Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Other assets under administration

-

-

9

9

Undrawn facilities with impaired customers

-

-

28

28

Other assets under administration

-

-

12

12

Undrawn facilities with impaired customers

-

-

46

46

Other assets under administration

-

-

6

6

Undrawn facilities with impaired customers

-

-

26

26

$ millions

Unaudited 31/03/2012

Unaudited 31/03/2011

Audited 30/09/2011

ANZ National Bank Limited
10 – 11

Notes to the Financial Statements
6. Provision for Credit Impairment
Retailmortgages

Other retail
exposures

Non retail
exposures

Total

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

$ millions

Unaudited 31/12/2012
Collective provision

Individual provision (individually impaired assets)
Balance at beginning of the period

148

37

309

494

Charge to income statement

20

26

89

135

Recoveries of amounts previously written off
Bad debts written off

1

8

5

14

(32)

(43)

(47)

(122)

(7)

(1)

(16)

(24)

Balance at end of the period

130

27

340

497

Total provision for credit impairment

238

154

727

1,119

Collective provision credit

(12)

(20)

(8)

(40)

Individual provision charge

20

26

89

135

Total charge to income statement

8

6

81

95

Balance at beginning of the period

111

149

533

793

Charge / (credit) to income statement

(5)

1

(62)

(66)

106

150

471

727

207

51

347

605

8

38

98

144

Discount unwind

Unaudited 31/03/2011
Collective provision

Balance at end of the period
Individual provision (individually impaired assets)
Balance at beginning of the period
Charge to income statement
Recoveries of amounts previously written off
Bad debts written off
Discount unwind

-

9

1

10

(33)

(51)

(96)

(180)

(9)

(1)

(32)

(42)

Balance at end of the period

173

46

318

537

Total provision for credit impairment

279

196

789

1,264

Collective provision charge / (credit)

(5)

1

(62)

(66)

Individual provision charge

8

38

98

144

Total charge to income statement

3

39

36

78

111

149

533

793

9

(2)

(138)

(131)

120

147

395

662

Audited 30/09/2011
Collective provision
Balance at beginning of the year
Charge / (credit) to income statement
Balance at end of the year
Individual provision (individually impaired assets)
Balance at beginning of the year

207

51

347

605

Charge to income statement

24

79

206

309

Recoveries of amounts previously written off
Bad debts written off

2

17

3

22

(69)

(106)

(191)

(366)

Discount unwind

(16)

(4)

(56)

(76)

Balance at end of the year

148

37

309

494

Total provision for credit impairment

268

184

704

1,156

Collective provision charge / (credit)

9

(2)

(138)

(131)

Individual provision charge

24

79

206

309

Total charge to income statement

33

77

68

178

ANZ National Bank Limited

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

Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

Trading securities encumbered through repurchase agreements

23

396

1,219

Residential mortgages pledged as security for covered bonds

3,831

-

-

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

2,105

2,164

2,007

Total financial assets pledged as collateral

5,959

2,560

3,226

ANZNZ Covered Bond Trust
The assets of ANZNZ 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 ANZNZ Covered Bond Trust of
issuances of covered bonds by the Bank, or its wholly owned subsidiary ANZ National (Int’l) Limited, from time to time. The
assets of ANZNZ 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 ANZNZ Covered Bond Trust (if any) after all prior ranking creditors of
ANZNZ Covered Bond Trust have been satisfied.
The assets of ANZNZ Covered Bond Trust do not qualify for derecognition from the Banking Group’s financial statements as the
Bank retains substantially all of the risks and rewards of the transferred assets.

8. Deposits and Other Borrowings$ millions

Note

Certificates of deposit

Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

2,277

2,666

2,454

Term deposits

33,73835,67833,799Demand deposits bearing interest

23,68020,095

21,589

5,305

5,455

5,118

1,456

1,584

1,488
-

Deposits not bearing interest
Secured debenture stock

7

-

10

Commercial paper

4,458

2,861

4,790

Total deposits and other borrowings

70,914

68,34969,238Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

Total due from related parties

2,212

3,211

3,000

Total due to related parties

6,839

6,063

8,427

Securities sold under agreement to repurchase

9. Related Party Transactions$ millions

ANZ National Bank Limited
12 – 13

Notes to the Financial Statements
10. Capital Adequacy
Capital ratios under the Basel II internal models based approach (Unaudited)
Tier One Capital

31/03/2012

31/03/2011

30/09/2011

10.85%

9.55%

10.02%

RBNZ minimum Tier One Capital ratio

4.00%

4.00%

4.00%

Total Capital

13.39%

12.87%

12.74%

RBNZ minimum Total Capital ratio

8.00%

8.00%

8.00%

Total capitalrequirement

Capital as at 31 March 2012 (Unaudited)$mTier One Capital
Ordinary share capital

6,943

Revenue and similar reserves

3,339

Current period’s profit after tax

643

Less deductions from Tier One Capital
Goodwill

3,265

Software and other intangible assets

235

Cash flow hedging reserve

125

50% of excess of expected loss over total eligible allowances for impairment

35

Total Tier One Capital

7,265

Tier Two Capital
Upper level – Perpetual subordinated debt

1,172

Lower level – Term subordinated debt

565

Less deductions from Tier Two Capital
50% of expected loss to the extent higher than total eligible allowances for
impairment

35

Total Tier Two Capital

1,702

Total Capital

8,967

Total required capital as at 31 March 2012 (Unaudited)$ millions

Exposureat default

Risk weighted
exposure or implied
risk weighted
exposure1

Exposures subject to internal ratings based approach

121,249

48,233

3,859

7,508

7,497

600

Exposures subject to standardised approach

264

250

20

Equity exposures

217

922

74

Specialised lending exposures subject to slotting approach

Other exposures

2,721

1,072

86

Total credit risk

131,959

57,974

4,639

Operational risk

n/a

5,000

400

Market risk

n/a

4,013

321

131,959

66,987

5,360

Total
1

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

The Banking Group previously recorded a Supervisory adjustment to the risk weighted exposures of its residential mortgage portfolio as required under theConditions of Registration applying at the time. Following RBNZ approval of the Bank’s mortgage capital model this Supervisory adjustment is no longer required.

ANZ National Bank Limited

Notes to the Financial Statements
Bank solo capital adequacy ratios under the Basel I approach (Unaudited)
31/03/2012

31/03/2011

30/09/2011

Tier One Capital

9.74%

9.26%

9.64%

Total Capital

11.38%

11.60%

11.60%

Total risk-weighted exposures ($millions)

72,70873,202

72,923Tier One Capital

4.00%

4.00%

4.00%

Total Capital

8.00%

8.00%

8.00%

RBNZ minimum ratios:Basel I capital adequacy for the Bank has been derived in accordance with the RBNZ document entitled ‘Capital Adequacy
Framework (Basel I Approach)’ (“BS2”), dated October 2010.

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 andexposures, 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 used both atloan 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 consequence ofobligor 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 Groupis required to adopt RBNZ prescribed downturn LVR based LGDs, along with a minimum maturity of 2.5 years and the removalof the firm-size adjustment.
For exposures classified under Specialised Lending, the Banking Group uses slotting tables supplied by the RBNZ rather thaninternal 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
October 2010.

ANZ National Bank Limited
14 – 15

Notes to the Financial Statements
Capital requirements by asset class under the IRB approach (Unaudited)

Unaudited 31/03/2012

Total
exposureor principal
amount$m

Exposureweighted LGD
used for the
Exposure
capitalat default
calculation$m%

Exposureweighted
risk
weight%Riskweighted
exposure$m

Total capitalrequirement$mOn-balance sheet exposures
Corporate

32,65432,40636

64

22,221

1,779

Sovereign

8,477

8,314

5

1

67

6

Bank

4,859

3,695

57

17

659

53

Retail mortgages

42,20142,36021

25

11,276902

Other retail

4,320

4,410

61

74

3,441

275

Total on-balance sheet exposures

92,511

91,18528

39

37,664

3,015

13,177

10,600

48

46

5,229

418

Off-balance sheet exposures
Corporate
Sovereign

145

147

5

1

1

-

Bank

1,121

1,017

52

12

138

11

Retail mortgages

6,504

5,628

18

14

808

65

Other retail

4,728

4,553

74

49

2,352

188

Total off-balance sheet exposures

25,67521,945

46

37

8,528

682

Corporate

72,615

2,112

60

45

1,018

81

Sovereign

8,789

442

5

1

4

-

Market related contracts

Bank664,849

5,565

64

17

1,019

81

Total market related contracts

746,253

8,119

60

24

2,041

162

Total credit risk exposures subject to the IRB approach

864,439

121,24934

38

48,233

3,859

ANZ National Bank Limited

Notes to the Financial Statements
IRB exposures by customer credit rating

Unaudited 31/03/2012

Probabilityof default%

Exposureweighted LGD
used for the
Exposure
capitalat default
calculation$m%

Exposureweighted
risk
weight%Riskweighted
exposure$m

Total capitalrequirement
$m

60

22

1,246

100
721

Corporate
0-2

0.05

5,239

3-4

0.33

21,005

37

40

9,009

5

1.00

10,231

34

60

6,463

517

6

2.24

4,751

38

85

4,300

344

7-8

8.20

2,651

40

143

4,025

322

Default

100.00

1,241

43

260

3,425

274

3.85

45,11839

60

28,4682,278

Total corporate exposures
Sovereign
0

0.01

8,874

5

1

72

6

1-6

0.11

29

5

1

-

-

Total sovereign exposures

0.01

8,903

5

1

72

6

Bank
0

0.03

5,822

65

17

1,023

82

1

0.03

4,054

54

15

663

53

2-4

0.12

387

55

27

110

9

5-8

1.97

14

65

136

20

1

Total bank exposures

0.04

10,277

60

17

1,816

145

Retail mortgages
0-3

0.20

10,279

12

5

528

42

4

0.46

15,375

17

13

2,112

169

5

0.94

15,565

25

30

4,911

393

6

2.13

5,407

29

60

3,438

275

7-8

5.38

706

31

105

784

63

Default

100.00

656

26

45

311

25

2.18

47,98820

24

12,084967

Total retail mortgage exposures
Other retail
0-2

0.09

21

76

18

4

-

3-4

0.30

4,255

72

35

1,591

128

5

1.11

1,975

65

68

1,417

113

6

2.67

1,481

60

82

1,280

102

7-8

10.97

1,112

69

119

1,401

112

Default

100.00

119

62

79

100

8

Total other retail exposures

3.52

8,963

68

61

5,793

463

Total credit risk exposures subject to the IRB approach

2.56

121,24933

38

48,233

3,859

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

ANZ National Bank Limited
16 – 17

Notes to the Financial Statements
Specialised lending subject to the slotting approach
Exposureat default$mUnaudited 31/03/2012

Risk Risk weighted
weightexposure%$m

Total capitalrequirement$mOn-balance sheet exposures
Strong

1,765

Good

3,372

Satisfactory

1,195

Weak

335

250

Default
Total on-balance sheet exposures

70

1,310

105

90

3,217

257

115

1,456

117

888

71

216

-

-

-

6,883

94

6,871

550

Average risk Risk weighted
weightexposure%$m

Total capitalrequirement$m

Exposureamount$m

Exposure atdefault
$m

553

546

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

94

546

44

Market related contracts

1,602

79

95

80

6

Total off-balance sheet exposures

2,155

625

94

626

50

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
Unaudited 31/03/2012

Exposureat default$mRisk weight%

Risk weighted
exposure$m

Total capitalrequirement
$m

62

100

66

5

On-balance sheet exposures
Corporates
Default

1

150

1

-

Total on-balance sheet exposures

63

100

67

5

Average risk Risk weighted
weightexposure%$m

Total capitalrequirement$m

Exposureamount$m

Averagecreditconversion
factor%Exposureat default
$m

482

42

201

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

86

183

15

Risk Risk weighted
weightexposure%$m

Total capitalrequirement$m

Credit exposures subject to the Standardised Approach have been calculated in accordance with BS2A.
Equity Exposures
Unaudited 31/03/2012

All other equity holdings not deducted from capital

Equity exposures have been calculated in accordance with BS2B.

Exposureat default
$m

217

400

922

74

ANZ National Bank Limited

Notes to the Financial Statements
Other exposures
Exposureat default$mUnaudited 31/03/2012

Risk Risk weighted
weightexposure%$m

Total capitalrequirement
$m

196

-

-

New Zealand dollar denominated claims on the Crown and the RBNZ

1,513

-

-

-

Other assets

1,012

100

1,072

86

Total other IRB credit risk exposures

2,721

37

1,072

86

Cash

-

Other exposures have been calculated in accordance with BS2B.
A risk weight of 100% applies to premises and equipment and all other exposures not otherwise defined in BS2B, except for
cash, gold, New Zealand dollar denominated claims on the Crown and the RBNZ, which receive a 0% risk weight.
Credit risk mitigation
As at 31 March 2012, under the IRB approach, the Banking Group had $1,521 million of Corporate exposures covered byguarantees and $nil of Corporate exposures covered by credit derivatives, where the presence of the guarantees or credit
derivatives was judged to reduce the underlying credit risk of the exposures. Information on the total value of exposurescovered by financial guarantees and eligible financial collateral is not disclosed, as the effect of these guarantees and collateralon the underlying credit risk exposures is not considered to be material.
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 2012 the Banking Group had an implied risk weighted
exposure of $5,000 million for operational risk and an operational risk capital requirement of $400 million.
Market risk
The aggregate market risk exposures below have been calculated in accordance with BS2B.
The peak end-of-day market risk exposures for the period are calculated separately for each category of exposure.
Implied risk weighted
exposure

Aggregate
capital charge

As at
$m

Peak
$m

As at
$m

Peak
$m

Peak
occurred on

Unaudited 31/03/2012
3,858

4,112

309

329

21/11/2011

Foreign currency risk

37

57

3

5

25/11/2011

Equity risk

118

119

9

10

15/03/2012

Interest rate risk

4,013

321

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 that are notexplicitly 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 andequipment risk and capitalised origination fees risk.
The Banking Group’s internal capital allocation for these other material risks is $493 million (31/03/2011 $455 million; 30/09/2011$457 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 insurance and funds management risks) were applied in February
2012 and prior periods have been restated accordingly.

ANZ National Bank Limited
18 – 19

Notes to the Financial Statements
Retail 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 andpartially 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 31/03/2012$ millions

On-balancesheet

Off-balance
sheet

Total

0% - 59%

17,135

3,249

20,38460% - 69%

6,991

935

7,926

70% - 79%

9,613

1,143

10,756

Less than 80%

33,7395,327

39,066
5,907

LVR range

80% - 89%

5,014

893

Over 90%

3,448

284

3,732

Total

42,201

6,504

48,705

Note

Unaudited
31/03/2012

4

44,340Reconciliation of mortgage related amounts$ millions

Term loans – housing
Plus: short term housing loans classified as overdrafts
Less: housing loans made to corporate customers
Plus: unsettled re-purchases of mortgages from the NZ BranchOn-balance sheet retail mortgage exposures subject to the IRB approach481(2,669)49
42,201Off-balance sheet retail mortgage exposures subject to the IRB approach

6,504

Total retail mortgage exposures subject to the IRB approach (as per LVR analysis)

48,705

Terms of Ordinary Share Capital
All ordinary shares share equally in dividends and any proceeds available to ordinary shareholders on 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 is entitled 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. The perpetual subordinated debt qualifies as Upper Level Tier Two Capital for capital adequacy purposes.
All other subordinated debt qualifies as Lower Level Tier Two Capital.

ANZ National Bank Limited

Notes to the Financial Statements
Loan capital
Unaudited
31/03/2012$ millions

337

AUD 265,740,000 perpetual subordinated floating rate loan
AUD 169,520,000 term subordinated floating rate loan215

NZD 350,000,000 term subordinated fixed rate bond

350
835

NZD 835,000,000 perpetual subordinated bond

1,737

Total loan capital

AUD 265,740,000 loan
This loan has no fixed maturity. Interest is payable half yearly in arrears based on BBSW + 0.95% p.a., with interest payments
due 15 March and 15 September.
AUD 169,520,000 loan
This loan has an ultimate maturity date of 18 September 2017. The Bank may elect to repay the loan on 17 September each year
commencing from 2012 through to 2016. All interest is payable half yearly in arrears, with interest payments due 17 March and
17 September. Interest is based on BBSW + 0.68% p.a. to 17 September 2012 and increases to BBSW + 1.18% p.a. thereafter.
NZD 350,000,000 bondThis bond has an ultimate maturity date of 23 July 2017. The Bank may elect to redeem the bond on 23 July 2012. If the bond is
not called, the Bank will continue to pay interest to maturity at the five year interest rate swap rate plus 0.62% p.a. Interest is
payable half yearly in arrears at the fixed coupon rate of 8.23%.
As at 31 March 2012, these bonds carried an A- rating by Standard & Poor’s.
NZD 835,000,000 bond
The Bank may elect to redeem the bond on 18 April 2013, 18 April 2018 or any interest payment date subsequent to 18 April
2018. Interest is payable half yearly in arrears on 18 April and 18 October each year, up to and including the Second Call Dateand then quarterly thereafter. If the bond is not called at the First Call Date, the coupon rate will reset to the five year interest
swap rate plus 2.00%. Should the bond not be called at the Second Call Date, the Coupon Rate from the Second Call Dateonwards will be set on a quarterly basis to the three month FRA rate plus 3.00%.

As at 31 March 2012, this bond carried a BBB rating by Standard and Poor’s and an A3 rating by Moody’s.
Coupon interest of 9.66% may not necessarily be paid on each interest payment date as under the terms of the bonds, the Bank
has a general right and in certain specified circumstances an obligation, to defer payment of interest on the bonds.
Capital adequacy of the Ultimate Parent Bank under the Basel II approach
Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2012

31/03/2011

30/09/2011

31/03/2011

Tier One Capital

11.3%

10.5%

10.9%

11.4%

11.5%

Total Capital

12.6%

12.1%

12.1%

12.6%

12.3%

30/09/2011

For calculation of minimum capital requirements under Pillar I of the Basel II Accord, APRA has accredited the Ultimate Parent
Bank to use the Advanced Internal Ratings Based (“AIRB”) methodology for calculation of credit risk weighted assets and theAdvanced Measurement Approach (“AMA”) for the operational risk weighted asset equivalent.
Under prudential regulations, the Ultimate Parent Bank is required to hold a minimum Prudential Capital Ratio (“PCR”) as
determined by APRA. The APRA minimum PCR is at least equal to the levels specified under the Basel II (internal models based)
approach. The Ultimate Parent Bank exceeded the minimum capital adequacy requirements set by APRA as at 31 March 2012
and for the comparative prior periods.
The Ultimate Parent Bank is required to publicly disclose Pillar III financial information as at 31 March 2012. The Ultimate Parent
Bank’s Consolidated Financial Report, Dividend Announcement and Appendix 4E, for the six months ended to 31 March 2012,
discloses capital adequacy ratios calculated under the Basel II methodology. The Ultimate Parent Bank also prepares a quarterly
Basel II Pillar III disclosure document, the APS 330. All these documents can be accessed at the website anz.com.

ANZ National Bank Limited
20 – 21

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.
Concentrations of credit risk analysis
Liquidassets anddue fromotherfinancial
institutions

Tradingsecurities
andavailablefor-saleassetsDerivative
financial
instruments

Netloans andadvancesOtherfinancialassetsCreditrelatedcommitments

Total

-

-

66

16,944

99

1,989

19,098Forestry, fishing and mining

37

-

6

714

4

343

1,104

Business and property services

15

-

49

8,424

49

2,446

10,983

-

-

2

864

5

1,018

1,889

Unaudited 31/03/2012$ millions

Industry
Agriculture

Construction

-

-

31

1,101

6

462

1,600

Finance and insurance

2,255

4,079

8,655

761

270

1,372

17,392Government and local authority1

11,861Entertainment, leisure and tourism

1,865

6,943

356

1,221

251

1,225

Manufacturing

27

5

106

2,967

17

3,181

6,303

Personal lending

-

-

36

46,226270

9,637

56,1692,606

Retail trade

22

3

45

1,573

9

954

Transport and storage

26

57

78

1,631

10

617

2,419

Wholesale trade

50

-

17

1,273

7

1,418

2,765

Other2

16

69

512

2,158

15

2,048

4,818

4,313

11,156

9,959

85,857

1,012

26,710139,007

Provisions for credit impairment

-

-

-

(1,119)--(1,119)Fair value hedge adjustment

-

-

-

(8)

-

-

(8)

Unearned finance income anddeferred/capitalised fees
Total

-

-

-

(263)

-

-

(263)

4,313

11,156

9,959

84,467

1,012

26,710137,617

4,079

9,080

3,001

82,947904

26,710126,721

234

2,076

6,958

1,520

108

-

10,896

4,313

11,156

9,959

84,467

1,012

26,710137,617

Geography
New ZealandOverseas
Total
1
2

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.

ANZ National Bank Limited

Notes to the Financial Statements
Interest rate sensitivity gap
The following table shows the interest rate sensitivity of the Banking Group’s assets, liabilities and off balance sheet instruments
by disclosing the repricing periods for these instruments (that is, when interest rates applicable to each asset or liability canbe changed).
Unaudited 31/03/2012$ millions

Total

Less than
3 months

3 to 6months6 to 12months1 to 2years

Beyond2 years

Notbearing
interest

2,355

2,159

-

-

-

-

196

AssetsLiquid assets
Due from other financial institutions

1,958

1,829

-

-

-

-

129

Trading securities

10,904

1,532

458

212

3,569

5,133

-

Derivative financial instruments

9,959

9,959

-

-

-

-

-

Available-for-sale assets

252

30

3

60

-

41

118

Net loans and advances

84,46764,792

4,043

5,557

6,275

3,352

448

Other financial assets

1,012

79

48

30

5

3

847

Total financial assets

110,907

70,421

4,552

5,859

9,849

8,529

11,697

Liabilities
Due to other financial institutions

924

562

-

-

-

95

267

Deposits and other borrowings

70,91445,603

11,313

5,851

1,201

1,641

5,305

555

555

-

-

-

-

-

Due to Immediate Parent Company
Derivative financial instruments

10,318

-

-

-

-

-

10,318

Payables and other financial liabilities

1,689

45

-

-

6

132

1,506

Bonds and notes

17,562

7,573

147

1,526

2,582

5,734

-

Loan capital

1,737

-

902

-

835

-

-

103,699

54,33812,362

7,377

4,624

7,602

17,396

Total financial liabilities
Hedging instruments-(1,297)(2,896)

3,041

216

936

-

Interest sensitivity gap

7,208

14,786(10,706)

1,523

5,441

1,863

(5,699)ANZ National Bank Limited
22 – 23

Notes to the Financial Statements
Funding Composition
The Banking Group actively uses balance sheet disciplines to prudently manage its 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 terms exceeding one year) and equity.
$ millions

Unaudited
31/03/2012

Funding composition
Customer deposits1
New Zealand

56,761

Overseas

7,418

Total customer deposits

64,179Wholesale funding
Bonds and notes

17,562

Loan capital

1,737

Certificates of deposit

2,277

Commercial paper

4,458

Due to parent company

555

Due to other financial institutions

924

Total wholesale funding

27,513

Total funding

91,692Concentrations of funding by industry
Households

41,247

Agriculture

2,449

Forestry, fishing and mining
ManufacturingEntertainment, leisure and tourism
Finance and insurance

571
2,371
725
34,715Retail trade819

Wholesale trade

837

Business and property services
Transport and storage

3,554
529

Construction

728

Government and local authority

1,812

Other2

1,335

Total funding

91,692Concentrations of funding by geography3
New Zealand1
2
3

63,393Australia

1,667

United States

13,457

Europe7,912

Other countries

5,263

Total funding

91,692

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 of the Banking Group via ANZ National (Int’l) Limited is classified as either from the United States or Europe, as the company conducts overseas
funding activities through its London branch.

ANZ National Bank Limited

Notes to the Financial Statements
Liquidity portfolio management
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 the Statement of Cash Flows.
Liquidity Portfolio
31/03/2012
Unaudited$ millions

Balances with central banks

1,513

Securities purchased under agreement to resell

1,256
368

Certificates of deposit

6,899

Government, local body stock and bonds

63

Government treasury bills
Other bonds

3,727

Total liquidity portfolio

13,826

Contractual maturity analysis of financial assets and liabilities
The table below presents the Banking Group’s financial assets and liabilities within relevant contractual maturity groupings,
based on the earliest date on which the Banking Group may be required to realise an asset or settle a liability. 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.
Derivatives (other than those designated in a hedging relationship) and trading portfolio assets and liabilities are included attheir fair value, since they will frequently be settled before contractual maturity at fair value.
The contractual maturity analysis for off-balance sheet commitments and contingent liabilities has been prepared using theearliest date at which the Banking Group can be called upon to pay. The liquidity risk of credit related commitments andcontingent 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 the basis of the information below.
Unaudited 31/03/2012$ millions

Less than
3 months

3 to 12months1 to 5years

Beyond No maturity
5 years
specifiedTotal

At callLiquid assets

2,355

2,012

343

-

-

-

-

Due from other financial institutions

1,960

509

1,451

-

-

-

-

Trading securities

11,806

-

412

1,036

9,184

1,174

-

Derivative financial assets (trading)

8,655

-

8,655

-

-

-

-

Available-for-sale assets

262

-

31

64

49

-

118

Net loans and advances

Financial assets

114,878-

11,76920,68334,60347,823-

Other financial assets

660

-

560

78

18

1

3

Total financial assets

140,576

2,521

23,221

21,861

43,854

48,998121

Due to other financial institutions

948

560

258

4

20

106

-

Deposits and other borrowings

Financial liabilities
72,17528,612

22,255

18,159

3,139

10

-

Due to Immediate Parent Company

560

-

560

-

-

-

-

Derivative financial liabilities (trading)

9,349

-

9,349

-

-

-

-

Other financial liabilities

1,192

-

980

7

78

127

-

Bonds and notes

18,735

-

2,782

2,427

12,514

1,012-

Loan capital

2,726

-

35

104

691

724

1,172

Total financial liabilities

105,685

29,172

36,21920,701

16,442

1,979

1,172

Net financial assets / (liabilities)

34,891(26,651)(12,998)

1,160

27,41247,019(1,051)– gross inflows

17,522

-

2,197

3,891

10,971463-– gross outflows(16,953)-(2,316)(3,684)(10,497)(456)-

Net financial assets / (liabilities) after
balance sheet management

35,460(26,651)(13,117)

1,367

27,88647,026(1,051)

Derivative financial instruments
used for balance sheet management

ANZ National Bank Limited
24 – 25

Notes to the Financial Statements
Contractual maturity of off-balance sheet commitments and contingent liabilities$ millions

Total

Less than
1 yearBeyond1 year

237

89

148

Unaudited 31/03/2012
Non-credit related commitments
Credit related commitments

23,97823,978-Contingent liabilities

2,732

2,732

-

Total

26,947

26,799148

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 2012 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 end-of-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) Limited group.
The aggregate amount of insurance business in this group comprises assets totalling $525 million (31/03/2011: $353 million;
30/09/2011 $438 million), which is 0.5% (31/03/2011: 0.3%; 30/09/2011 0.4%) of the total consolidated assets of the
Banking Group.

14. Credit Related Commitments and Contingent Liabilities
Face or contract value
Unaudited
31/03/2012

Unaudited
31/03/2011

Audited30/09/2011

904

567

527

Commitments to provide financial services

23,07422,03022,526

Total credit related commitments

23,97822,597

23,053
1,753$ millions

Credit related commitments
Commitments with certain drawdown due within one year

Contingent liabilities
1,752

1,888

Standby letters of credit

55

68

60

Transaction related contingent items

829

957

882

Financial guarantees

Trade related contingent liabilities
Total contingent liabilities

96

60

110

2,732

2,973

2,805

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 to the 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
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 National Bank Limited

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 2012; and(ii) The Disclosure Statement is not false or misleading.
Over the six months ended 31 March 2012, after due enquiry, each Director believes that:(i) ANZ National Bank 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 National Bank 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, operationalrisk 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, 11 May 2012.
On that date, the Directors of the Bank were:A J Carter

S C Elliott

N M T Geary, CBE

D D Hisco

J F Judge

P R Marriott

M R P Smith, OBE

Sir Dryden Spring, Kt

ANZ National Bank Limited
26 – 27

Independent Auditors’ Review Report
To the Shareholder of ANZ National Bank Limited
We have reviewed pages 3 to 25 of the interim financial statements of ANZ National Bank Limited (the ‘Bank’) and its subsidiarycompanies (the ‘Banking Group’) prepared and disclosed in accordance with the Registered Bank Disclosure Statements (New Zealand
Incorporated Registered Banks) Order 2012 (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 March 2012.
Directors’ responsibilities
The Directors of ANZ National Bank 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 2012 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 they determine are necessary to enable thepreparation 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.
Reviewers’ responsibilities
We are responsible for reviewing the interim financial statements and the supplementary information, disclosed in accordancewith 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
to you 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 withNew Zealand Equivalent to International Accounting Standard 34 (“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 2012 and its financial performance and cash
flows for the 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 hascome to our attention that would cause us to believe that the supplementary information does not fairly state the matters towhich 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 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 Banking
Group. These matters have not impaired our independence as auditors of the Banking Group. We have no other relationshipwith, 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 2012 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; and(c) 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, with the Reserve Bank of New Zealand document
Capital Adequacy Framework (Internal Models Based Approach) (BS2B), and with the Banking Group’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.
Our review was completed on 11 May 2012 and our review opinion is expressed as at that date.

Wellington

ANZ National Bank Limited ANZ12772 05/12

anz.co.nz