2020
THIRD QUARTER UPDATE—INVESTOR DISCUSSION PACK
19 AUGUST 2020
This document should be read in conjunction with ANZ Basel III Pillar 3 Disclosure as atJune 2020 (APS 330: Public disclosure) and ANZ June 2020 Basel III Pillar 3 Chart Pack

Approved for distribution by ANZ’s Continuous Disclosure Committee
Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia
ABN 11 005 357 522

OVERVIEWFINANCIAL INFORMATION AS AT 30 JUNE 2020
(ALL COMPARISONS TO 1H20 QUARTERLY AVG UNLESS OTHERWISE STATED)

3Q20 Profit• Unaudited Statutory Profit $1.3b. For Continuing Operations, unaudited Cash Profit excluding Large / Notable Items $1.6b (including Large /Notable items $1.5b)• Operating expenses down 1% reflecting disciplined cost management for the environment, while also investing record levels this quarter• Revenue increased, benefiting from a stronger markets performance (~60% higher in 3Q20), partly offset by lower margins and transaction
volumes• Net interest margin of 1.59% for 3Q20 (1.69% for 1H20). Key drivers included low interest rates (-6 bps impact net of repricing), higher
liquids, competition and mix (e.g. higher fixed rate mortgages), partially offset by lower funding costs and deposit mix
Capital, Dividend and RWA• Group CET1 ratio (APRA Level 2) 11.1%. Pro Forma Group CET1 ratio (APRA Level 2) 11.3%1• Following strong growth in March, Institutional Credit RWA (ex FX & risk migration) was down $10b in 3Q20 (see page 3)• Dividend of 25 cents per share fully franked declared for 1H20, no DRP discount• Too early to update the 110bp base case capital impact from risk migration
Provision Charge and Credit Quality• 3Q20 total provision charge $500m. Individual provision charge $264m, collective provision charge $236m. Annualised 3Q20 loss rate 31 bps• Group provision balance $4.65b, collective provision coverage ratio 1.25%2 (see page 4)• Regrading wholesale exposures is well progressed, prioritising the segments and customers deemed more susceptible under the current crisis(regrading increased RWA by $4b in 3Q20)
COVID-19 Assistance (at 31 July 2020)• ~84,000 Australian Home Loan accounts (~$31b of home loan balances) on COVID-19 loan repayment deferral (~9% of accounts, ~12% ofhome loan balances) (see page 8)• ~22,000 Australian Commercial lending accounts (~$10b EAD) on COVID-19 loan repayment deferral (see page 9)1.
2.

Including conversion of NZD500m Capital Note & announced sale of UDC
Collective Provision balance as a % of Credit Risk Weighted Assets

1

CAPITAL & DIVIDENDAPRA LEVEL 2 COMMON EQUITY TIER 1 RATIO (CET1)

Earnings 43bp
(ex. credit impacts)%

1H20 DIVIDEND DECLARED
Dividend per share (fully franked) (no discount on DRP)

25c

% of 1H20 statutory profit

46%% of 1H20 statutory profit (adj. for Panin & AmBank impairments)30%

4Q20 CET1 impact of 1H20 dividend

15bps

Credit impacts-21bpsPro Forma
11.33

0.12
Pro Forma
10.93

0.43

-0.08

0.03

-0.03

11.1

-0.10

~$50b CET1
capitalBuffers$14b

10.8

Pro Forma3
~$1b

CCB4
$15b

CET1
min.
$20b

+37bps (+47bps on a Pro Forma basis)Mar-20

1.
2.
3.
4.

PBP
(net of tax)1

Underlying RWA
movement

CIC(net of tax)

Net DTA on CIC

Risk Migration

Other2Jun-20Jun-20Excludes large / notable items & one-off items
Includes Capital Deductions (mainly comprises the movement in retained earnings in deconsolidated entities and capitalised software) & other impacts including net RWA imposts/efficiencies
movements in non-cash earnings, net foreign currency translation and other
Including conversion of NZD500m Capital Note (Mar-20 & Jun-20) & announced sale of UDC (Jun-20)
Capital Conservation Buffer

2

CREDIT RISK WEIGHTED ASSETS MOVEMENT
Key credit RWA trends 3Q20

FX
• Reversal of 2Q20 FX impact, primarily driven by USD and NZD rate movements (no material capital impact)
UNDERLYING CRWA MOVEMENT• Following strong growth in March, Institutional’s underlying CRWA declined by $8b in the June quarter (excluding CVA), driven by lower risk intensity andlending volumes as customers adjusted their requirements to reflect the changing environment• Australia Retail & Commercial up $1.8b, including Mortgages up $1.5b driven by new customer lending

RISK MIGRATION• Regrading wholesale exposures is well progressed, prioritising the segments and customers deemed more susceptible under the current crisis (regrading
increased RWA by $4b in 3Q20)

CRWA MOVEMENT – TOTAL GROUP
$b

13.3

2.6

1.9

1.0

386.0

9.1

-9.5

358.1

Sep-19FX impact

Underlying
CRWA
mvmt.

Risk
Methodology
migration

CVA
mvmt.

Mar-20FX impact

4.2

0.8
-1.9

-7.4

Underlying
CRWA
mvmt.

372.2

Risk
Methodology
migration

CVA
mvmt.

Jun-203

PROVISION CHARGE & COVERAGEPROVISION CHARGE•

3Q20 Provision charge $500m included:

$m

%
1,558

o $264m Individual provision charge

1.25
1.17

o $236m Collective provision charge increasing
total CP balance to $4.65b as at 30 June 2020•

CP COVERAGE1

CP
balance$4.50b461

CP charge outcome for 3Q20 reflected:
o the less adverse economic outlook as at 30 June
2020 relative to 31 March 2020, offset by;

3Q20
annualised
loss rate
31bps

o additional downside risk and overlays reflecting
ongoing COVID-19 uncertainties, including
considerations around deferral packages andhigher risk segments in the Commercial
portfolios in Australia and New Zealando the regrading of wholesale exposures,prioritising the segments and customers
deemed more susceptible under the current
crisis1,097

CPbalance$4.65b0.75
CPbalance$2.52b

500
264

116
236

165
-49

1Q20

2Q20

Individual Provision charge

3Q20

Sep-18(Pre AASB 9)

Mar-20Jun-20

Collective Provision charge

Long run provision charge, loss rates and coverage ratios are included in the 3Q20 Basel III Pillar 3 chart pack1.

Collective Provision Balance as a % of Credit RWA

4

AUSTRALIA HOME LOAN PORTFOLIO
LOAN BALANCE & LENDING FLOWS1

HOME LOAN FUM COMPOSITION1,2

LOAN BALANCE & LENDING FLOWS1$b

Reflects actions undertaken in the past year to deliver greater clarity andconsistency in the home loan application and assessment process, while
implementing policy changes (tightening) in response to COVID-19

$b
271
9

269
8

264
7

43

31

22
10

17
29

57

52

268
6
22
9

4

5

10

268

264

-15
Higher level of refinance (v1H20), withlower average LVR vs new sales

58

44

Mar-20

New Sales
excl. Refi-In

Net OFI Refi

Redraw &Interest

Repay / Other

Jun-20ANZ HOME LOAN GROWTH3
168

161

146

173

3 month annualised (%)
10

5
0
-5
Mar-18
OO P&I

1.
2.
3.

Mar-19Inv P&I

OO I/O

Mar-20Inv I/O

Equity Manager

Jun-20-10
Mar-18Jun-18

Sep-18Dec-18Mar-19Jun-19Sep-19APRA System Total Housing

ANZ Owner Occupied

ANZ Total Housing

ANZ Investor

Dec-19Based on Gross Loans and Advances. Includes Non Performing Loans
The current classification of Investor vs Owner Occupied is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s
obligation to advise ANZ of any change in circumstances
Source: APRA Monthly Banking Statistics (MBS) and Monthly Authorised Deposit-taking Institution Statistics (MADIS). Mar-18 to Mar-19 based on MBS, thereafter MADIS

Mar-20Jun-205

AUSTRALIA HOME LOAN CREDIT QUALITY•

For eligible home loans1 receiving COVID-19 assistance, arrears are frozen
for the period of the loan deferral•

Customers who requested assistance but were ineligible for repayment
deferral based on these criteria were considered under ANZ Hardshiparrangements, including payment moratoriums, where delinquency continues
to increase when scheduled repayments are not made•The increase in 90+ delinquency to 1.28% at June 2020 (up 18bps fromMarch 2020) was driven by these customers impacted by COVID-19 but
ineligible for deferral•

As a result of the assistance measures, a reduced number of accounts havemissed scheduled payments in the quarter and 30+ delinquency has reduced
23bps QoQ to Jun-20

DYNAMIC LOAN TO VALUE RATIO5

AUS. HOME LOANS DELINQUENCIES2,3,4
%
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Mar18

Mar19

Mar20

Jun20

%

60

2.5

50

2.0

40

1.5

30

1.0

20

0.5

10

1.
2.
3.
4.
5.
6.

90+ DPD

AUS. HOME LOANS 90+ DAYS PAST DUE6 (BY VINTAGE)% of total Portfolio Accounts

030+ DPD

0-60%

61-75%

76-80%

81-90%

Mar-18Mar-19Mar-20Jun-2091-95%

96-100%

100%+

0.0
6

8
FY15

10

12
FY16

14

16
FY17

18

20
22
24
Month on book
FY18
FY19

26

28

30

32

34

COVID-19 loan deferrals are available to customers if either their Home Loan repayments are less than 30 days past due, or if their repayments are less than 90 days past due and were up to date at 1 March 2020
Includes Non Performing Loans
ANZ delinquencies are calculated on a missed payment basis for amortising and Interest Only loans
30+ and 90+ excludes eligible Home Loans accounts that had requested COVID-19 assistance but due to delays in processing had not had the loan repayment deferral applied to the accountIncludes capitalised LMI premiums. Valuations updated to May-20 where available. Includes Non Performing Loans and excludes accounts with a security guarantee and unknown DLVR. DLVR does not incorporate offset balancesHome loans 90+ DPD vintages represent % ratio of over 90+ delinquent (measured by # accounts), contains at least 6 application months of that fiscal year contributing to each data point

36

6

CUSTOMER BEHAVIOUR•

Increased deposit balances YTD in Retail, Commercial and Institutional

ANZ DEPOSIT ACTIVITY•

Within the Institutional and Corporate customer base, a number ofcustomers have been proactive in managing costs and taking a
conservative approach to capital and distribution

Australia Retail &Commercial$b•Within the Retail portfolio:

208

213

221

New ZealandDivision
NZ$b

Institutional(includes the impact of FX)
$b
259

243

217

o credit card debt has reduced and offset balances increased
90o ~ two thirds of Australia home loan customers with loan repayment
deferrals have increased their “buffer” (offset, redraw and credit intransaction and savings account) over the period February to July 2020
Sep-19 Mar-20 Jun-20$37B IN LARGE CORPORATE EQUITY RAISINGS FOR ASX
AND NZX YTD1

94

95

Sep-19 Mar-20 Jun-20

Sep-19 Mar-20 Jun-20

ANZ AUSTRALIA RETAIL ACCOUNT ACTIVITY$b$b System data

$b
28

8
6

6.3

4

5.7

5.4

5.5

29

30

29

31

5.3

1.

w/e 31-Jul-20

w/e 07-Aug-20

w/e 24-Jul-20

w/e 17-Jul-20

w/e 10-Jul-20

w/e 03-Jul-20

w/e 26-Jun-20

w/e 19-Jun-20

w/e 12-Jun-20

w/e 05-Jun-20

w/e 29-May-20

w/e 22-May-20

w/e 15-May-20

w/e 08-May-20

w/e 24-Apr-20

w/e 01-May-20

w/e 17-Apr-20

w/e 10-Apr-20

w/e 03-Apr-20

w/e 27-Mar-20

w/e 20-Mar-20

w/e 13-Mar-20

w/e 28-Feb-20

w/e 06-Mar-20

w/e 21-Feb-20

w/e 14-Feb-20

w/e 31-Jan-20

w/e 07-Feb-20

w/e 24-Jan-20

w/e 17-Jan-20

w/e 10-Jan-200

w/e 03-Jan-20

2Consumer credit card balances
Mar-20

Apr-20May-20

Offset balancesJun-20Jul-20Source Dealogic, week ending 7 August 2020
7

CUSTOMER SUPPORT – AUSTRALIA (HOME LOANS)COVID-19 RELIEF - HOME LOAN PAYMENT DEFERRALS AT 31 JULY 2020

Home Loan relief at 31 July 2020:•~130k COVID-19 enquiries have been received to date, with 90k of these going
onto COVID-19 relief measures offering payment deferral1:

Loan repayment
deferrals
Total Active deferrals
at 31 July 2020

Total AUS. Home
Loan Portfolio2

o ~6,000 accounts have completed or unwound deferral arrangements overthe period of March to end July 2020

Total number of home loans

84k

986k

o ~84,000 accounts as at 31 July 2020 representing ~$31b of home loanbalances (~81,000 accounts at 30 June 2020) on deferral, ~9% of allhome loan accounts, ~12% of home loan balances

Total $ value of home loan balance

$31b

$268b

Offset balances$1.2b$29.4b

Avg. Dynamic LVR (Ex. offset)3,4

68%

56%

Average Loan Size

$371k

$272k

% Principal & Interest

92%

86%

% Owner Occupied

73%

68%

Deferral cohort observation:•~ two thirds have stable or improved income5•~ one quarter have made at least one payment while on deferral•~ 95% have a ‘savings buffer’ (offset, redraw and credit in savings account)•~ half have at least a 3 month or greater payment ‘buffer’6

3 month check in process:
•

•

1.
2.
3.
4.
5.
6.

Formal processes have been developed to pro-actively identify customers at
risk of being unable to return to full repayments, and put in place appropriate
treatment strategies to minimise any adverse impacts
Contact program is well progressed, prioritised to focus on home loan accountcohorts where internal data suggests a potentially higher risk of difficulty

COVID-19 loan deferrals are available to customers if either their Home Loan repayments are less than 30 days past due, or if their repayments are less than 90 days past due and were up to date at 1 March 2020
Total portfolio statistics as at 30 June 2020
Unweighted based on # accounts
Includes capitalised LMI premiums, valuations for DLVR updated to May-20 where available, includes Non Performing Loans, excludes accounts with a security guarantee, and unknown DLVR
Based on deferral customers where ANZ can identify salary income, this excludes other income types and segments such as self-employed
Buffers are calculated at customer level, incorporating all Retail debts within the customer cluster at ANZ, and all funds available in ANZ redraw, offset and transaction and savings accounts

8

CUSTOMER SUPPORT – AUSTRALIA (HOME LOANS)COVID-19 RELIEF - HOME LOAN PAYMENT DEFERRALS AT 31 JULY 2020

~130,000 COVID-19 ENQUIRIES RECEIVED% of total requests (Mar-20 to Jul-20)

2%

3%

DYNAMIC LOAN TO VALUE RATIO(% of accounts)1,2

986k accounts~84k accounts

986k accounts~84k accounts

9%
11%

16%

13%

9%

17%

14%

13%
18%

18%

26%

27%

34%

30%

32%

Portfolio with loandeferrals (July 20)3

Total Portfolio(June 20)

Portfolio with loandeferrals (July 20)3

29%
26%

PORTFOLIO BY STATE(% of accounts)

33%

69%
51%

Went onto repayment deferral

Total Portfolio(June 20)Chose not to take up deferral

1.
2.
3.

Went onto other assistance

0-60%

81% - 90%

VIC

QLD

Being processed at 31 July

61% - 80%

>90%

NSW

WA

Includes capitalised LMI premiums, valuations for DLVR updated to May-20 where available, includes Non Performing Loans, excludes accounts with a security guarantee, and unknown DLVRDLVR does not incorporate offset balances
Active (outstanding) deferrals as at 31 July 2020

Other

9

CUSTOMER SUPPORT – AUSTRALIA (COMMERCIAL)
COVID-19 RELIEF – COMMERCIAL BANKING1 AT 31 JULY 2020

ANZ Commercial Banking:•~485k customers in Commercial Banking of which ~165k have lending across~240k accounts•

Small Business Banking segment, ~91% of total Commercial lending customers,
is weighted to deposits (currently ~3x deposit to lending)

Assistance Provided at 31 July 2020

Accounts

EAD
at 30 June 2020

Total Commercial lending

~240k

$69b

Business loan deferrals

~22k

$9.5b

Asset Finance loan deferrals

~13k

$0.9b

Temporary overdraft increases

~11k

$1.2b

JobKeeper and SME Guarantee Scheme

~3k

$151m

Commercial customer relief at 31 July 2020:•

Deferrals are on an opt-in basis for the Commercial Banking portfolio•

All Commercial customers were spoken to prior to being processed for assistanceto ensure they understood the terms of the assistance being offered•

As at 31 July ~22k accounts representing $9.5b EAD (~21.5k accounts at 30June) are receiving business loan deferrals•~3% of business loan deferrals have been partially or fully unwound at thecustomer’s request

Deferred cohort observations2:•~45% have recorded stable or higher cash inflow vs same time last year•

~30% have reduced cash outflows by >30%•

~60% have higher cash balances vs March 2020•~50% are receiving JobKeeper payments

1.
2.

Commercial is made up Small Business Banking (lending <$1m) & Business Banking (typically lending <$10m)
For Small Business Banking and Business Banking only, via ANZ transactional banking data
10

CUSTOMER SUPPORT – AUSTRALIA (COMMERCIAL)
COVID-19 RELIEF – COMMERCIAL BANKING1 AT 31 JULY 2020

BUSINESS LOAN DEFERRALS PROVIDED2BY SECURITY PROFILE (% OF EAD)3

$69b
7%

$9.5b
5%

15%

6%

0%

20%

BY STATE (% OF EAD)4

$69b

$9.5b

9%

6%

13%
17%

30%
73%

1.
2.
3.
4.

12%
16%

30%

Business loandeferrals

$69b

$9.5b

27%

26%

5%
6%
9%

9%

9%

74%

19%
31%

Total
Commercial

BY INDUSTRY (% OF EAD)

Total
Commercial

25%

Business loandeferrals

Unsecured

VIC/TAS

QLD

Partially Secured

OthersNSW/ACT

WA

10%
14%
4%

36%

Fully Secured

18%

Total
Commercial

19%

Other Industries
Health & Community Services
Accom. Cafes & Restaurants
Other Property & Business Services
Retail Trade
Agriculture, Forestry & Fishing
Commercial Property & Construction

Business loandeferrals

SA/NT

Commercial is made up Small Business Banking (lending <$1m) & Business Banking (typically lending <$10m). Note excludes Private Banking
Active deferrals as at 31 July 2020, EAD as at 30 June 2020
Fully Secured on a market value basis. Other includes loans secured by cash or via sovereign backing
States based on primary postcode and excludes where none recorded in system. Some postcodes occur across two states

11

CUSTOMER SUPPORT – NEW ZEALAND
COVID-19 RELIEF AT 31 JULY 2020•

Financial support provided to ~39,000 personal, home and business loancustomers through repayment deferrals or adjustments covering lending of~NZ$23b

LOAN REPAYMENTDEFERRALS(31-Jul 20)1

Total NZ Home Loan
Portfolio1

24k

414k

Total number of home loans•

Deferred repayments on ~24,000 home loans and moved ~20,000 homeloans to interest only

Total $ value of home loan balance

NZ$6b

NZ$85b•Granted 2,730 temporary overdraft facilities to businesses needing moreworking capital, worth ~NZ$46m

Median Indexed LVR

56.2%

46.8%

Average Loan Size

NZ$252k

NZ$204k

ANZ NZ HOME LOAN REPAYMENTS DEFERREDNUMBER OF HOME LOANS REPAYMENTS DEFERRED (CUMULATIVE)

VALUE OF HOME LOAN BALANCES ON LOAN REPAYMENT DEFERRAL (CUMULATIVE)
NZ$ b

16,464

18,87121,06623,9184.0

276
Mar-20

1.

4.6

5.0

5.6
6% of NZ
home loan
portfolio

0.1
Apr-20May-20Jun-20Jul-20Mar-20

Apr-20May-20Jun-20Jul-20Total portfolio statistics as at 30 June 2020
12

MARGIN CONSIDERATIONSKEY MARGIN CONSIDERATIONSCAPITAL & REPLICATING DEPOSITS PORTFOLIO (AUSTRALIA)%• Low rate environment in all geographies

3.0• Strong growth in at-call deposits

2.5• Increase in liquid assets

2.0

1.5

• Shifting customer preferences(e.g. home loan switching to fixed rates)

1.0
0.5
0.0

• Competition and retention pricing• Reduction in unsecured retail lending

Oct18

Jan19

Apr19

3mth BBSW (Monthly Average)

LOW RATE ENVIRONMENTBILLS / OIS SPREAD

Net impact of previously announced AUD, NZD & USD rate cuts cuts
2H20 impact (net of repricing)

~6bps

bps

Jul19

Oct19

Jan20

~163

~203

40

~53

30

Sensitivity of 10bp change in Bills/OIS~110
Sep-19Low rate deposits <25bps~150

Mar-20Capital (excluding intangibles) and other non-interest bearing liabilities

NIM impact

As at 30 Sep-19

1 bp

As at 31 Mar-20

0.5 bp

As at 30 Jun-20<0.5 bp

Change in sensitivity
due to stronger
deposit growth andgrowth in fixed rate
lending

20

~53

Jun20

Portfolio Earnings Rate

50

$b

Mar20

10
0
-10
OctNovDecJan19
19
19
20
Spot 3mth Bills / OIS Spread

FebMar20
20
Rolling 90 days

Apr20

May20

Jun20

Jul20

13

FURTHER INFORMATIONRoyal Commission &COVID-19 update

Corporate Overview & Sustainability

Latest commentaryon implementation of
Hayne
recommendations
and response to
COVID-19 pandemic

https://www.anz.com/shareholder/centre/invest
or-toolkit/

AASB 9Progress against ourEnvironment, Social &Governance (ESG)
targets

https://www.anz.com/shareholder/centre/report
ing/sustainability/

DISCLAIMER & IMPORTANT NOTICE: The material in this presentation is general backgroundinformation about the Bank’s activities current at the date of the presentation. It is information
given in summary form and does not purport to be complete. It is not intended to be relied uponas advice to investors or potential investors and does not take into account the investment
objectives, financial situation or needs of any particular investor. These should be considered, withor without professional advice when deciding if an investment is appropriate.
This presentation may contain forward-looking statements including statements regarding ourintent, belief or current expectations with respect to ANZ’s business and operations, market
conditions, results of operations and financial condition, capital adequacy, specific provisions andrisk management practices. When used in this presentation, the words “estimate”, “project”,“intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ
and its management, are intended to identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the datehereof. Such statements constitute “forward-looking statements” for the purposes of the UnitedStates Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to
publicly release the result of any revisions to these forward-looking statements to reflect events orcircumstances after the date hereof to reflect the occurrence of unanticipated events.

Our Shareholder information

AASB 9overview andstageshttps://www.anz.com/shareholder/centre/invest
or-toolkit/
anz.com/shareholder/centre/

Equity Investors

Jill Campbell

Cameron Davis

Retail Investors

Debt Investors

Michelle Weerakoon

Scott Gifford

Group General Manager
Investor Relations+61 3 8654 7749
+61 412 047 448
jill.campbell@anz.com

Manager Shareholder
Services & Events+61 3 8654 7682
+61 411 143 090
michelle.weerakoon@anz.com

Executive Manager
Investor Relations+61 3 8654 7716
+61 421 613 819
cameron.davis@anz.com

Harsh Vardhan

Manager
Investor Relations+61 3 8655 0878
+61 466 848 027
harsh.vardhan@anz.com

Head of Debt Investor
Relations+61 3 8655 5683
+61 434 076 876
scott.gifford@anz.com
14