Australia and New Zealand Banking Group Limited– New Zealand Branch
Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2011 | NUMBER 10 ISSUED MAY 2011Australia and New Zealand Banking Group Limited - New Zealand Branch

Disclosure Statement
For the six months ended 31 March 2011

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

2
3
3
5
6
7
22
23

Glossary of Terms
In this Disclosure Statement unless the context otherwise requires:(a) "Bank" means ANZ National Bank Limited;(b) "Banking Group" means ANZ National Bank Limited and all its controlled entities;(c) "Immediate Parent Company" means ANZ Funds Pty Limited, which is the immediate parent company of ANZ Holdings(New Zealand) Limited;(d) "NZ Branch" means the New Zealand branch office of Australia and New Zealand Banking Group Limited;(e) "ANZ New Zealand" means the combined New Zealand operations of Australia and New Zealand Banking Group
Limited;(f) "Ultimate Parent Bank" means Australia and New Zealand Banking Group Limited;(g) "Overseas Banking Group" means the worldwide operations of Australia and New Zealand Banking Group Limited
including its controlled entities;(h) "RBNZ" means the Reserve Bank of New Zealand;(i) "APRA" means the Australian Prudential Regulation Authority;(j) "the Order" means the Registered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order
2011; and(k) Any term or expression which is defined in, or in the manner prescribed by, the Order shall have the meaning given inor prescribed by the Order.

Australia and New Zealand Banking Group Limited - New Zealand Branch

2

General Disclosures
This Disclosure Statement has been issued in accordance with the Order.
The address for service is Level 6, 1 Victoria Street, Wellington, New Zealand.

Credit Rating Information
The Ultimate Parent Bank has three current credit ratings, which are applicable to its long-term senior unsecured
obligations which are payable in New Zealand in New Zealand dollars.
The Ultimate Parent Bank's Credit Ratings are:Rating Agency

Current Credit Rating

Qualification

Standard & Poor’s

AA

Outlook Stable

Moody’s Investors Service

Aa2

Outlook Stable

Fitch Ratings

AA-

Outlook Positive

The Moody’s Investors Service rating was changed from Aa1 (Outlook: Review for possible downgrade) on 18 May 2011.

Guarantors
As at the date of signing of this Disclosure Statement the Ultimate Parent Bank has guarantees from the Commonwealthof Australia under:(a) in the case of deposits and certain other accounts up to A$1 million, a scheme (The "Financial Claims Scheme")
pursuant to the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008 of
the Commonwealth of Australia (The "Financial Claims Scheme Act"); and(b) in the case of wholesale funding, by a Deed of Guarantee executed by the Treasurer (and related scheme rules) (the"Wholesale Funding Guarantee").
The Financial Claims Scheme applies to the NZ Branch, as it is a foreign branch of an eligible Australian Authorised
Deposit-taking Institution. However, from 12 October 2011 the Financial Claims Scheme will apply to Australian dollar
deposits only, and is generally subject to review at that time.
On 31 March 2010 the Australian Government closed the Wholesale Funding Guarantee. Existing guaranteed liabilities willcontinue to be guaranteed to maturity for wholesale funding and term deposits and to October 2015 for at call deposits.
The Wholesale Funding Guarantee may also apply to the NZ Branch. The name of the Guarantor and the address forservice is The Scheme Administrator, Australian Government Guarantee Scheme for Large Deposits and Wholesalefunding, c/- The Secretary, Reserve Bank of Australia, 65 Martin Place, Sydney, New South Wales 2001, Australia.
Further information on the Financial Claims Scheme and the Wholesale Funding Guarantee are available attreasury.gov.au, apra.gov.au, guaranteescheme.gov.au and are provided in the General Disclosure Statement for the year
ended 30 September 2010 which is available at no charge:a) on ANZ New Zealand’s website anz.co.nz; andb) within two working days of a request, if a request is made at Level 6, 1 Victoria Street, Wellington, New Zealand(“the Registered Office”) or at any branch of ANZ or The National Bank of New Zealand.

Financial Statements of the Ultimate Parent Bank and Overseas Banking Group
Copies of the most recent publicly available financial statements of the Ultimate Parent Bank and Overseas Banking Groupwill be provided immediately, free of charge, to any person requesting a copy where the request is made at theRegistered Office. The most recent publicly available financial statements for the Ultimate Parent Bank and Overseas
Banking Group can also be accessed at the internet address anz.com.

Directorate
Since the authorisation date of the previous full year General Disclosure Statement on 23 November 2010, there havebeen no changes to the Directors of Australia and New Zealand Banking Group Limited. On 18 April 2011 F J Brown was
appointed Chief Executive Officer of the Branch to replace S R Peterson in that role.

Auditors
KPMG
Chartered Accountants
10 Customhouse Quay
Wellington, New ZealandAustralia and New Zealand Banking Group Limited - New Zealand Branch

3

Income Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2011

31/03/2010

30/09/2010

Interest income

3,453

3,133

6,447

Interest expense

2,168

1,925

3,952

Net interest income

1,285

1,208

2,495

Net trading gains

140

16

39

Funds management and insurance income

126

91

218

108

217

446

1

36

42

1,660

1,568

3,240

910

748

1,565

750

820

1,675

85

325

456

665

495

1,219

187

109

352

478

386

867

Unaudited

Unaudited

Audited$ millions
Note

Other operating income2

Share of profit of equity accounted associates and joint ventures
Operating income
Operating expenses

2

Profit before provision for credit impairment
Provision for credit impairment

7

Profit before income tax
Income tax expense

3

Profit after income tax

AuditedStatement of Comprehensive Income$ millions

6 months to

6 months toYear to31/03/2011

31/03/2010

30/09/2010

478

386

867

11

59

53

(42)

-

(12)

Profit after income tax
Available-for-sale revaluation reserve
Valuation gain before tax
Cumulative gain transferred to the income statement on sale of financial assets
Cash flow hedging reserve
Valuation gain / (loss) before tax

(4)

2

89

Transferred to income statement

6

21

21

Actuarial gain on defined benefit schemes

8

14

27

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

6

(20)

(48)

Net income / (expense) recognised directly in equity

(15)

76

130

Total comprehensive income for the period

463

462

997

Other items recognised directly in equity

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

4

Statement of Changes in Equity
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2011

31/03/2010

30/09/2010

6,424

6,424

6,424

Balance at beginning of the period

58

25

25

Valuation gain recognised after tax

6

51

42

(29)

-

(9)

35

76

58

Balance at beginning of the period

102

23

23

Valuation gain / (loss) recognised after tax

(2)

1

64

Transferred to income statement after tax

4

14

15

Balance at end of the period

104

38

102

Total reserves

139

114

160

1,236

843

843

478

386

867

6

10

18

Ordinary dividends paid

(215)

-

-

Preference dividends paid

(105)

(393)

(492)

Balance at end of the period

1,400

846

1,236

$ millions

AuditedShare capital and head office accountBalance at beginning and end of period
Available-for-sale revaluation reserve

Transferred to income statement after tax
Balance at end of the period
Cash flow hedging reserve

Retained earnings
Balance at beginning of the period
Profit after income tax attributable to parent
Actuarial gain on defined benefit schemes after tax

Non-controlling interests
Balance at beginning of the period

1

-

-

Acquired in a business combination

-

1

1

Balance at end of the period

1

1

1

7,821

7,315

7,315

463

462

997

(320)

(393)

(492)

-

1

1

7,964

7,385

7,821

Total equity and head office accountBalance at beginning of the period
Total comprehensive income for the period
Transactions with head office
Change in non-controlling interests
Balance at end of the period

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

5

Balance Sheet
Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Liquid assets

1,799

2,520

2,239

Due from other financial institutions

3,267

2,101

3,496

Trading securities

7,373

6,366

6,757

10,283

9,087

10,854$ millions

Note

AssetsDerivative financial instruments
Available-for-sale assets
Net loans and advances

5

841

1,850

2,210

95,395

95,68996,015Investments backing insurance policyholder liabilities

24

38

28

Insurance policy assets

169

106

138

Shares in associates and jointly controlled entities

145

144

144

57

135

18

1,624

1,172

970

Deferred tax assets

222

431

304

Premises and equipment

331

305

311

3,529

3,560

3,545

Total assets

125,059

123,504

127,029

Interest earning and discount bearing assets

107,433

107,958

108,325

Current tax assets
Other assets

Goodwill and other intangible assets

Liabilities
Due to other financial institutions

8

12,293

11,941

12,293

Deposits and other borrowings

9

68,34970,63670,295Derivative financial instruments

9,818

9,109

10,727

Payables and other liabilities

2,046

1,681

1,506

377

341

315

20,01918,004

19,899Term funding

1,766

1,766

1,766

Loan capital

2,427

2,641

2,407

117,095

116,119

119,208

7,964

7,385

7,821

6,424

6,424

6,424

139

114

160

Retained earnings

1,400

846

1,236

Parent shareholder's equity and head office account

7,963

7,384

7,820

1

1

1

Total equity & head office account

7,964

7,385

7,821

Interest and discount bearing liabilities

99,607100,093

100,335

Provisions
Bonds and notes

Total liabilities (excluding head office account)
Net assets (excluding head office account)Represented by:
Share capital and head office accountReserves

Non-controlling interests

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

6

Condensed Cash Flow Statement$ millions

Note

Unaudited

Unaudited

6 months to

6 months to

AuditedYear to31/03/2011

31/03/2010

30/09/2010

Cash flows from operating activities
Interest received
Interest paid

3,384

3,074

6,217

(2,097)(1,962)(3,880)

Other cash inflows provided by operating activities
Other cash outflows used in operating activities
Cash flows from operating profits before changes in operating assets andliabilities
Net changes in operating assets and liabilities
Net cash flows used in operating activities

435

421

911

(958)

(1,311)(2,052)

764

222

1,196

(1,480)(1,586)(2,504)(716)(1,364)(1,308)

14

Cash flows from investing activities
Cash inflows provided by investing activities

-

2

8

Cash outflows used in investing activities

(62)

(317)

(370)

Net cash flows used in investing activities

(62)

(315)

(362)

Cash flows from financing activities
Cash inflows provided by financing activities

3,617

2,791

5,481

(1,863)(2,678)(4,999)

1,754

113

482

Net increase / (decrease) in cash and cash equivalents

976(1,566)(1,188)Cash and cash equivalents at beginning of the period

3,578

4,766

4,766

4,554

3,200

3,578

Cash outflows used in financing activities
Net cash flows provided by financing activities

Cash and cash equivalents at end of the period

14

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

7

Notes to the Financial Statements
1. Significant Accounting Policies(i) Reporting entity and statement of compliance
These financial statements are for ANZ New Zealand for the six months ended 31 March 2011. They have been preparedin accordance with the requirements of NZ IAS 34 Interim Financial Reporting, and the Order, and should be read in
conjunction with ANZ New Zealand’s financial statements for the year ended 30 September 2010.
(ii) Basis of measurement
These financial statements have been prepared on a going concern basis in accordance with historical cost concepts
except that the following assets and liabilities are stated at their fair value:•
derivative financial instruments, including in the case 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 basis, and defined benefit obligations are measured
using the Projected Unit Credit method.
(iii) Changes in accounting policies
The accounting policies adopted by ANZ New Zealand are consistent with those adopted and disclosed in the previous fullyear General Disclosure Statement.
(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
Prior to 30 September 2010 some fee income integral to the effective interest rate of financial assets was presented inother operating income. Since this date this income has been classified to interest income, to more accurately reflect thenature of the income.
Comparative data has been restated accordingly. For the period ended 31 March 2010 this reclassification has for ANZ
New Zealand, increased interest income by $61 million and reduced other operating income by a corresponding amount.
There was no impact on total operating income or profit after income tax.
Certain other amounts in the comparative information have been reclassified to ensure consistency with the current
period's presentation.
(vi)
Basis of aggregation
The basis of aggregation is an addition of individual financial statements of the entities in ANZ New Zealand.
transactions between entities within ANZ New Zealand have been eliminated.

All

2. Operating Income and Expenses
Other operating income includes a fair value loss for the six months ended 31 March 2011 of $114 million (six months
ended 31/03/2010 $49 million gain; year ended 30/09/2010 $61 million gain) on the revaluation of financial assets andliabilities designated at fair value and on hedging activities. Other operating income excluding these fair value
adjustments is $222 million (six months ended 31/03/2010 $168 million; year ended 30/09/2010 $385 million).
Operating expenses include a one-off cost for the six months ended 31 March 2011 of $141 million incurred in relation to
the planned move to a single banking technology platform and a simplified regional management structure, which is
expected to deliver further operational efficiencies and improved service levels and business outcomes.

3. Income Tax Expense
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2011

31/03/2010

30/09/2010

Income tax expense before tax provisions and the effect of changes in tax
legislation

194

153

361

Change in tax provisions

(4)

(44)

(54)

Effect of changes in tax legislation

(3)

-

45

Income tax expense recognised in the income statement$ millions

Audited

187

109

352

Effective tax rate (%) before change in tax provisions and the effect of changes in tax
legislation

29.2%

30.9%

29.6%

Effective tax rate (%)

28.1%

22.0%

28.9%

Australia and New Zealand Banking Group Limited - New Zealand Branch

8

Notes to the Financial Statements
4. Segmental Analysis
For segment reporting purposes, ANZ New Zealand is organised into three major business segments - Retail, Commercial
and Institutional. Centralised back office 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.
During the six months ended 31 March 2011 a specialist standalone business banking unit was created within theCommercial segment. Segmental reporting has been updated to reflect this and other minor changes to ANZ New
Zealand’s structure. Comparative data has been adjusted to be consistent with the current period’s segment definitions.
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. ANZ New Zealand's wealth businesses include private banking and investment services provided to high net
worth individuals, the OnePath wealth management and insurance businesses, and other investment products. This
segment also includes other profit centres supporting the Retail Banking segment.
Commercial
Commercial provides services to Business Banking, Commercial & Agri, and UDC customers. Business Banking services
are offered to small enterprises (typically with annual revenues of less than $5 million). Commercial & Agri customers
consist of primarily privately owned medium to large enterprises. ANZ New Zealand's relationship with these businesses
ranges from simple banking requirements with revenue from deposit and transactional facilities, and cash flow lending, tomore complex funding arrangements with revenue sourced from a wider range of products. UDC is principally involved in
the financing and leasing of plant, vehicles and equipment, mainly for small and medium sized businesses, as well as
investment products.
Institutional
Institutional provides financial services to large multi-banked corporations, often global, who require sophisticated productand structuring solutions. The Institutional business unit includes the following specialised units:• Markets - provides foreign exchange, interest rate and commodity trading and sales-related services, origination,
underwriting, structuring, risk management and sale of credit and derivative products globally;• Transaction Banking - provides cash management, trade finance and international payments;• Specialised Lending - provides origination, credit analysis, structuring and execution of specific customer transactions.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.
Business segment analysis1$ millions

Retail2

Commercial

Institutional

Other 3

Total

Unaudited 6 months to 31/03/2011
External revenues

970

1,496

242

(1,048)

1,660

(202)

(791)

64

929

-

Total revenues

768

705

306

(119)

1,660

Profit before income tax

295

409

230

(269)

665

External revenues

978

1,484

(45)

(849)

1,568

Intersegment revenues

(390)

(837)

368

859

-

Total revenues

588

647

323

10

1,568

Profit before income tax

82

145

273

(5)

495

Intersegment revenues

Unaudited 6 months to 31/03/2010

Audited year to 30/09/2010
External revenues

1,954

2,976

53

(1,743)3,240Intersegment revenues(672)(1,629)

548

1,753

-

Total revenues

1,282

1,347

601

10

3,240

248

510

496

(35)

1,219

Profit before income tax
1
2
3

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
The comparative periods’ results include a loss on acquisition of ING (NZ) Holdings Limited of $82 million.
This segment has negative external revenues as this segment incurs funding costs on behalf of ANZ New Zealand and is reimbursed internally.

Australia and New Zealand Banking Group Limited - New Zealand Branch

9

Notes to the Financial Statements
5. Net Loans and Advances
Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Overdrafts

1,933

2,014

2,131

Credit card outstandings

1,386

1,417

1,388

Term loans - housing

54,03253,47153,892

Term loans - non-housing

38,59539,382

39,179Finance lease receivables

749

692

726

$ millions

Note

Gross loans and advances

96,69596,976

97,316(1,290)(1,475)(1,420)

(263)

(252)

(273)

Fair value hedge adjustment

263

426

386

Deferred fee revenue and expenses

(54)

(51)

(50)

44

65

56

95,395

95,68996,015

Provision for credit impairment

7

Unearned finance income

Capitalised brokerage/mortgage origination fees
Total net loans and advances

6. Impaired Assets, Past Due Assets and Other Assets Under Administration
Individually impaired assets$ millions

RetailOther retail

Non retailmortgages

exposures

exposures

Total

Balance at beginning of the period

554

81

1,403

2,038

Transfers from productive

287

71

453

811

Transfers to productive

(30)

-

(16)

(46)

Unaudited 31/03/2011

Assets realised or loans repaid

(210)

(30)

(253)

(493)

Write offs

(36)

(51)

(96)

(183)

Total impaired assets

565

71

1,491

2,127

Unaudited 31/03/2010
Balance at beginning of the period

387

59

740

1,186

Transfers from productive

307

132

666

1,105

Transfers to productive

(10)

(1)

(52)

(63)

Assets realised or loans repaid

(178)

(32)

(169)

(379)

Write offs

(38)

(63)

(20)

(121)

Total impaired assets

468

95

1,165

1,728

Audited 30/09/2010
Balance at beginning of the year

387

59

740

1,186

Transfers from productive

591

258

1,282

2,131

Transfers to productive

(24)

(2)

(73)

(99)

Assets realised or loans repaid

(338)

(110)

(454)

(902)

Write offs

(62)

(124)

(92)

(278)

Total impaired assets

554

81

1,403

2,038

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 is sufficient to ensure that ANZ New Zealand 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.

Australia and New Zealand Banking Group Limited - New Zealand Branch

10

Notes to the Financial Statements
Ageing analysis of loans that are past due but not impaired
Unaudited 31/03/2011
Retail mortgages

Other retail
exposures

Non retail
exposuresTotal

1 to 5 days

403

112

491

1,006

6 to 29 days

692

113

103

908

1 to 29 days

1,095

225

594

1,914

30 to 59 days

310

45

312

667

60 to 89 days

95

21

193

309

90 days or over

184

45

106

335

1,684

336

1,205

3,225

$ millions

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

RetailOther retail

Non retailmortgages

exposures

exposures

Total

Other assets under administration

-

-

12

12

Undrawn facilities with impaired customers

-

-

46

46

Other assets under administration

-

-

1

1

Undrawn facilities with impaired customers

-

-

100

100

Other assets under administration

-

-

4

4

Undrawn facilities with impaired customers

-

-

32

32

Unaudited 31/03/2011

Unaudited 31/03/2010

Audited 30/09/2010

Australia and New Zealand Banking Group Limited - New Zealand Branch

11

Notes to the Financial Statements
7. Provision for Credit Impairment
RetailOther retail

Non retailmortgages

exposures

exposures

Balance at beginning of the period

122

149

533

804

Charge / (credit) to income statement

(5)

1

(62)

(66)

Balance at end of the period

117

150

471

738

218

50

348

616

15

38

98

151

-

9

1

10

(36)

(51)

(96)

(183)

Discount unwind

(9)

(1)

(32)

(42)

Balance at end of the period

188

45

319

552

Total provision for credit impairment

305

195

790

1,290

Collective provision charge / (credit)

(5)

1

(62)

(66)

Individual provision charge

15

38

98

151

Total charge to income statement

10

39

36

85

$ millions

Total

Unaudited 31/03/2011
Collective provision

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

Unaudited 31/03/2010
Collective provision
Balance at beginning of the period

127

159

518

804

Charge to income statement

1

2

60

63

Balance at end of the period

128

161

578

867

Balance at beginning of the period

156

40

281

477

Charge to income statement

101

60

101

262

1

8

1

10

Bad debts written off

(38)

(63)

(20)

(121)

Discount unwind

(7)

(1)

(12)

(20)

Balance at end of the period

213

44

351

608

Total provision for credit impairment

341

205

929

1,475

Individual provision (individually impaired assets)

Recoveries of amounts previously written off

Collective provision charge

1

2

60

63

Individual provision charge

101

60

101

262

Total charge to income statement

102

62

161

325

127

159

518

804

(5)

(10)

15

-

122

149

533

804

Audited 30/09/2010
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

156

40

281

477

Charge to income statement

139

120

197

456

2

17

2

21

Bad debts written off

(62)

(124)

(92)

(278)

Discount unwind

(17)

(3)

(40)

(60)

Balance at end of the year

218

50

348

616

Total provision for credit impairment

340

199

881

1,420

Recoveries of amounts previously written off

Collective provision charge / (credit)

(5)

(10)

15

-

Individual provision charge

139

120

197

456

Total charge to income statement

134

110

212

456

Australia and New Zealand Banking Group Limited - New Zealand Branch

12

Notes to the Financial Statements
8. Repurchase Agreements
Included in due to other financial institutions, and deposits and other borrowings, are liabilities which are secured by
securities with a carrying amount of $390 million (31/03/2010 $36 million; 30/09/2010 $222 million) which were soldunder agreements to repurchase.

9. Deposits and Other Borrowings$ millions

Note

Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Amortised cost
Certificates of deposit

2,666

3,950

3,245

Term deposits

35,67833,39434,687

Demand deposits bearing interest

20,095

19,62318,714

Deposits not bearing interest

5,455

4,895

4,964

Secured debenture stock

1,584

1,358

1,378

10

-

-

65,48863,22062,988Commercial paper

2,861

7,416

7,307

Total deposits and other borrowings recognised at fair value

2,861

7,416

7,307

68,34970,63670,295

2,164

1,898

2,111

Securities sold under agreement to repurchase8

Total deposits and other borrowings recognised at amortised cost
Fair value through profit or loss

Total deposits and other borrowings

Secured debenture stock is secured over:Carrying value of total tangible assets of UDC Finance Limited

Registered secured debenture stock is constituted and secured by a trust deed between UDC Finance Limited and its
independent trustee, Trustees Executors Limited. The trust deed creates floating charges over all the assets, primarilyloans and advances, of UDC Finance Limited.

10. Related Party Transactions
Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Total due from related parties

3,941

2,441

4,423

Total due to related parties

18,26018,21919,331

11. Capital Adequacy
Overseas Banking Group Basel II capital adequacy ratio (unaudited)
Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2011

31/03/2010

30/09/2010

31/03/2011

31/03/2010

30/09/2010

Tier One Capital

10.5%

10.7%

10.1%

11.4%

11.9%

11.0%

Total Capital

12.1%

13.0%

11.9%

12.6%

13.7%

12.3%

For calculation of minimum capital requirements under Pillar I of the Basel II Accord, APRA has accredited the Overseas
Banking Group to use the Advanced Internal Ratings Based ("AIRB") methodology for calculation of credit risk weighted
assets and the Advanced 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 Overseas Banking Group met the minimum capital adequacy requirements set by APRA as at
31 March 2011 and for the comparative prior period.
The Overseas Banking Group is required to publicly disclose Pillar III financial information as at 31 March 2011. The
Overseas Banking Group's Consolidated Financial Report, Dividend Announcement and Appendix 4E, for the six months
ended 31 March 2011, discloses capital adequacy ratios calculated under the Basel II methodology. These documents canbe accessed at the website anz.com.

Australia and New Zealand Banking Group Limited - New Zealand Branch

13

Notes to the Financial Statements
Risk weighted credit risk exposures
Risk weighted exposures for ANZ New Zealand and NZ Branch have been derived in accordance with the RBNZ document
entitled 'Capital Adequacy Framework (Basel I Approach)' ("BS2") dated October 2010. The credit equivalent amounts formarket related contracts are calculated using the current exposure method.
Total Risk Weighted Exposures of ANZ New Zealand as at 31 March 2011 (Unaudited)
Principal
amountOn-balance sheet exposures

Risk weight

Risk weighted
exposure$m$mCash and short term claims on Government

3,200

0%

-

Long term claims on Government

4,458

10%

446

Claims on banks

4,818

20%

964

743

20%

149

Residential mortgages

53,63950%

26,820Other

44,395100%

44,395

Non risk weighted assets

13,806n/a-Claims on public sector entities

125,059

72,773Creditconversion
factorCreditequivalentamountAveragecounterparty Risk weighted
risk weight
exposure

1,956

100%

1,956

44%

859

Commitments with certain drawdown

567

100%

567

62%

353

Transaction related contingent items

732

50%

366

59%

217

60

20%

12

100%

12

4,856

50%

2,428

100%

2,428

17,009

0%

-

n/a

-

Off-balance sheet exposures

Principal
amount$m

Direct credit substitutes

Short term, self liquidating trade related contingencies
Other commitments to provide financial services whichhave an original maturity of 1 year or more
Other commitments with an original maturity of lessthan 1 year or which can be unconditionally cancelled
at any time$m$mMarket related contracts- Foreign exchange

162,351

7,649

22%

1,673

- Interest rate

564,834

9,002

23%

2,093

434

65

55%

36

752,799

22,045- Other

7,671

Market risk
The aggregate market risk exposures below have been calculated in accordance with the RBNZ document ‘Capital
Adequacy Framework (Standardised Approach)’ dated October 2010 (“BS2A”).
The peak end-of-day market risk exposures for the period are calculated separately for each category of exposure andmay not have occurred at the same time.

Implied risk weighted
exposure

Aggregate capital charge

Unaudited

As at

Peak

As at

Peak

31/03/2011

$m

$m

$m

$m

Interest rate risk

3,706

5,381

296

430

Foreign currency risk

67

85

5

7

Equity risk

75

82

6

7

3,848

307

Australia and New Zealand Banking Group Limited - New Zealand Branch

14

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 ANZ
New Zealand's valuation of the security property at origination of the exposure and commitments to lend include formal
offers for housing lending which may or may not be accepted by the customer.
Retail mortgages by LVR for ANZ New Zealand as at 31 March 2011
(Unaudited)$ millions

Drawn andundrawn retail Commitments
mortgages
to lendTotal

LVR range
0% - 80%

43,1591,289

44,44880% - 90%

6,648

372

7,020

Over 90%

5,411

38

5,449

55,218

1,699

56,917

Total

Reconciliation of mortgage related amounts
Unaudited$ millions

Note

Total residential mortgage exposures (Basel I approach)31/03/2011

53,639Adjustments between Basel I approach and financial reporting presentation:
Less: fair value hedge adjustment(263)

Less: accrued interest on housing loans(233)

Plus: impaired housing loans

625

Plus: other adjustments

264

Term loans - housing
Plus: short-term housing loans classified as overdrafts

5

54,032332

Less: housing loans made to corporate customers(3,095)

Plus: off-balance sheet retail mortgage exposures

5,648

Total retail mortgage exposures as per LVR analysis

56,917

Australia and New Zealand Banking Group Limited - New Zealand Branch

15

Notes to the Financial Statements
12. 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
Unaudited 31/03/2011$ millions

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

Derivative
financial
instruments

Net loans and Other financial
advances
assetsCredit related
commitments

Total

19,830Industry
Agriculture

1

-

89

18,078116

1,546

Forestry and fishing

15

-

9

474

3

78

579

Business & property services

11

1

52

8,757

56

2,100

10,977

Construction

-

-

2

1,009

6

889

1,906

Entertainment, leisure and tourism

1

-

35

1,099

7

540

1,682

Finance and insurance

3,594

3,025

9,047

1,150

979

1,335

19,130Government and local authority1

8,696

1,403

4,951

324

1,142

7

869

Manufacturing

14

16

128

3,147

20

3,525

6,850

Personal lending

9

-

28

55,686293

9,498

65,514Retail trade

-

1

79

1,581

10

1,035

2,706

Transport and storage

-

30

130

1,638

10

622

2,430

Wholesale trade

9

-

19

1,207

8

1,400

2,643

Other2

9

190

341

1,727

11

1,968

4,246

5,066

8,214

10,283

96,695

1,526

25,405

147,189

Provisions for credit impairment

-

-

-

(1,290)--(1,290)Fair value hedge adjustment
Unearned finance income anddeferred/capitalised fees

-

-

-

263

-

-

263

-

-

-

(273)

-

-

(273)

5,066

8,214

10,283

95,395

1,526

25,405

145,889

New Zealand

3,603

6,348

2,421

93,727

1,181

25,405

132,685

Overseas

1,463

1,866

7,862

1,668

345

-

13,204

Total financial assets

5,066

8,214

10,283

95,395

1,526

25,405

145,889

Total financial assets
Geography

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.

Australia and New Zealand Banking Group Limited - New Zealand Branch

16

Notes to the Financial Statements
Interest rate sensitivity gap
The following table shows the interest rate sensitivity of ANZ New Zealand'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 can be changed).
Unaudited 31/03/2011

Less than

3 to 6

6 to 12

1 to 2Over

Not bearing

Total

3 months

monthsmonthsyears

2 years

interest

Liquid assets

1,799

1,613

-

-

-

-

186

Due from other financial institutions

3,267

3,096

4

-

-

-

167

Trading securities

7,373

701

23

1,146

656

4,847

-

10,283

-

-

-

-

-

10,283$ miilions

AssetsDerivative financial instruments
Available-for-sale assets

841

570

133

56

3

2

77

Net loans and advances

95,39565,768

5,722

9,000

9,438

4,631

836

Other financial assets

1,526

15

4

-

1

4

1,502

Total financial assets

120,484

71,763

5,886

10,202

10,0989,484

13,051

Non-financial assets

4,575

-

-

-

-

-

4,575

125,059

71,763

5,886

10,202

10,0989,484

17,626

Due to other financial institutions

12,293

12,176

-

-

-

-

117

Deposits and other borrowings

68,34943,957

10,327

6,461

1,019

1,130

5,455

Derivative financial instruments
Payables and other financial
liabilities

9,818

-

-

-

-

-

9,818

Total assets

Liabilities

1,676

27

-

-

-

297

1,352

20,019

8,134

445

-

3,767

7,673

-

Term funding

1,766

1,766

-

-

-

-

-

Loan capital

2,427

-

992

250

350

835

-

116,348

66,06011,764

6,711

5,136

9,935

16,742

Bonds and notes

Total financial liabilities
Non-financial liabilities

747

-

-

-

-

-

747

7,964

-

-

-

-

-

7,964

Total liabilities and equity

125,059

66,06011,764

6,711

5,136

9,935

25,453On-balance sheet interest
sensitivity gap

-

5,703

(5,878)

3,491

4,962

(451)

(7,827)

Hedging instruments

-

(843)

5,275

(10,755)

1,644

4,679

-

Interest sensitivity gap - net
Interest sensitivity gap cumulative

-

4,860

(603)

(7,264)

6,606

4,228

(7,827)

-

4,860

4,257

(3,007)

3,599

7,827

-

EquityAustralia and New Zealand Banking Group Limited - New Zealand Branch

17

Notes to the Financial Statements
Funding Composition
ANZ New Zealand actively uses balance sheet disciplines to prudently manage its funding mix. ANZ New Zealand 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.
31/03/2011$ millions

Unaudited

Funding composition
Customer deposits1
New ZealandOverseas
Total customer deposits

55,0097,803
62,812Wholesale funding
Bonds and notes

20,019Loan capital

2,427

Certificates of deposit

2,666

Commercial paper

2,861

Term funding

1,766

Securities sold under agreement to repurchase10

Due to other financial institutions

12,293

Total wholesale funding

42,042

Total funding

104,854

Concentrations of funding by industry
Households

39,866

Agriculture, forestry and fishing

2,874

Manufacturing

2,740Entertainment, leisure and tourism
Finance and insurance

817
49,153Retail trade

766

Wholesale trade
Business and property services

682
3,980

Transport and storage

607

Construction

706

Government and local authority

1,572

Other2

1,091

Total concentrations of funding by industry

104,854

Concentrations of funding by geography3
New Zealand

62,007Australia

14,703

United States

14,036

Europe7,978

Other countries

6,130

Total concentrations of funding by geography
12
3

104,854

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 ANZ New Zealand 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.

Australia and New Zealand Banking Group Limited - New Zealand Branch

18

Notes to the Financial Statements
Liquidity portfolio management
ANZ New Zealand holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk
management. The size of ANZ New Zealand’s liquidity portfolio is based on the amount required to meet its liquidity
policy.
Liquidity Portfolio
31/03/2011$ millions

Unaudited

Balances with central banks

1,285

Securities purchased under agreement to resell

1,991

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

618
4,151
709
3,104
11,858

Australia and New Zealand Banking Group Limited - New Zealand Branch

19

Notes to the Financial Statements
Contractual maturity analysis of financial assets and liabilities
The table below presents ANZ New Zealand's financial assets and liabilities within relevant contractual maturity groupings,
based on the earliest date on which ANZ New Zealand 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 theamounts reported on the balance sheet.
Derivatives (other than those designated in a hedging relationship) and trading portfolio assets and liabilities are included
at their 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
the earliest date at which ANZ New Zealand 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.
ANZ New Zealand does not manage its liquidity risk on the basis of the information below.
Less than

3 to 12

Beyond No maturity

3 months

months 1 to 5 years

5 years

specified

-

-

-

-

-

-

1,446

6,186

212

-

7,934

-

-

-

-

-

607

123

9

31

77

$ millions

Unaudited 31/03/2011

Total

On demand

Liquid assets

1,809

1,809

-

-

Due from other financial institutions

3,269

184

3,081

4

Trading securities

8,576

-

732

Derivative financial assets (trading)

7,934

-

Available-for-sale assets

847

Net loans and advances

Financial assets

132,545-

10,737

18,51334,186

68,281

828

Other financial assets

1,526

-

1,509

-

12

5

-

Total financial assets

156,506

1,993

24,60020,08640,393

68,529905

Financial liabilities
Due to other financial institutions

13,747

1,138

2,359

2,069

8,181

-

-

Deposits and other borrowings
Derivative financial liabilities(trading)

70,042

18,89729,367

19,267

2,471

40

-

8,318

-

8,318

-

-

-

-

1,735

-

1,379

11

287

58

-

21,672

-

463

3,417

17,570222-

Term funding

1,849

-

21

1,828

-

-

-

Loan capital

3,790

-

48

143

951

1,452

1,196

121,153

20,03541,955

26,73529,460

1,772

1,196

35,353(18,042)(17,355)(6,649)10,93366,757(291)- gross inflows

32,516

-

3,397

7,234

21,82560-- gross outflows(30,645)-(3,295)(6,893)(20,396)(61)-

37,224(18,042)(17,253)(6,308)12,362

66,756(291)

Other financial liabilities
Bonds and notes

Total financial liabilities
Net financial assets
Derivative financial instruments
used for balance sheet
management

Net financial assets after balance
sheet management

Contractual maturity of off-balance sheet commitments and contingent liabilities
ANZ New ZealandLess than

Beyond31/03/2011

Total

1 year

1 yearNon-credit related commitments

302

91

211

22,432

22,432

-

2,973

2,973

-

25,70725,496211$ millions

Credit related commitments
Contingent liabilities
Total

Australia and New Zealand Banking Group Limited - New Zealand Branch

20

Notes to the Financial Statements
13. Concentrations of Credit Risk to Individual Counterparties
ANZ New Zealand 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 period ended 31/03/2011 there were no individual counterparties (excluding connected parties, governments andbanks with long term credit ratings of A- or above) where ANZ New Zealand’s period end or peak end-of-day credit
exposure equalled or exceeded 10% of the Overseas Banking Group’s equity (as at the end of the period).
This credit exposure information does not include exposures to counterparties if they are booked outside New Zealand.

14. Notes to the Condensed Cash Flow Statement$ millions

Unaudited

Unaudited

6 months to

6 months to

AuditedYear to31/03/2011

31/03/2010

30/09/2010

867

Reconciliation of profit after income tax to net cash flows used in operating activities
Profit after income tax

478

386

Non-cash items

165

346

588

(1,379)(2,152)(2,819)

20

56

56

(716)

(1,364)(1,308)Deferrals or accruals of past or future operating cash receipts or payments
Items classified as investing/financing
Net cash flows used in operating activities

Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Liquid assets

1,799

2,520

2,239

Due from other financial institutions - less than 90 days

2,755

680

1,339

Total cash and cash equivalents

4,554

3,200

3,578

$ millions

Reconciliation of cash and cash equivalents to the balance sheet

15. Insurance business
ANZ New Zealand 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 $353 million (31/03/2010 $333
million; 30/09/2010 $337 million), which is 0.3% (31/03/2010 0.3%; 30/09/2010 0.3%) of the total consolidated assetsof ANZ New Zealand.

Australia and New Zealand Banking Group Limited - New Zealand Branch

21

Notes to the Financial Statements
16. Credit Related Commitments and Contingent Liabilities
Face or contract value$ millions

Unaudited

Unaudited

Audited31/03/2011

31/03/2010

30/09/2010

Credit related commitments
Commitments with certain drawdown due within one year

567

566

493

Commitments to provide financial services

21,865

21,344

20,352

Total credit related commitments

22,432

21,91020,845

1,888

1,716

1,686

68

62

60

Transaction related contingent items

957

977

898

Trade related contingent liabilities

60

84

97

2,973

2,839

2,741

Contingent liabilities
Financial guarantees
Standby letters of credit

Total contingent liabilities

ANZ New Zealand 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 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
ANZ New Zealand has other contingent liabilities in respect of actual and possible claims and court proceedings. An
assessment of ANZ New Zealand’s likely loss in respect of these matters has been made on a case-by-case basis andprovision made where deemed necessary.

17. Additional Disclosures
NZ Branch Funding
Unaudited$ millions

Total liabilities of the NZ Branch less amounts due to related parties

31/03/2011

62

Overseas Banking Group Profitability and Size
Unaudited$AUD millions

31/03/2011

Net profit after tax for the 6 months ended 31/03/2011

2,669

Net profit after tax for the 12 months ended 31/03/2011 as a percentage of average total assets

1.00%

Total assets as at 31/03/2011
Percentage change in total assets in the 12 months ended 31/03/2011

537,478
6.07%

Overseas Banking Group asset quality
Unaudited$AUD millions

31/03/2011

Gross impaired assets

6,221

Gross impaired assets as a percentage of total assets

1.16%

Total individually assessed provisions for impairment
Individually assessed provisions for impairment as a percentage of gross impaired assets
Collective provision for credit impairment

1,717
27.60%
3,177

Independent Auditors’ Review Report
To the Directors of Australia and New Zealand Banking Group Limited - New Zealand Branch
We have reviewed pages 3 to 21 of the half year financial statements of Australia and New Zealand Banking Group
Limited - New Zealand Branch and its related entities („ANZ New Zealand‟) prepared and disclosed in accordance with
the Registered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2011 (the „Order‟) and the
supplementary information prescribed in Schedules 5, 7, 9, 10, 12 and 14 of the Order. The half year financial
statements, and supplementary information, provide information about the past financial performance and cash flows of
ANZ New Zealand and its financial position as at 31 March 2011.
Directors’ responsibilities
The Directors of Australia and New Zealand Banking Group Limited - New Zealand Branch are responsible for the
preparation and presentation of the half year Disclosure Statement, which includes interim financial statements preparedin accordance with Clause 26 of the Order which give a true and fair view of the financial position of ANZ New
Zealand as at 31 March 2011 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 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 half year Disclosure Statement which
fairly states the matters to which it relates in accordance with Schedules 3, 5, 7, 9, 10, 12, and 14 of the Order.
Reviewers’ responsibilities
We are responsible for reviewing the interim financial statements and the supplementary information, disclosed inaccordance with Clause 26, Schedules 5, 7, 9, 10, 12, and 14 of the Order and presented to us by the Directors.
We are responsible for reviewing the interim financial statements (excluding the supplementary information) in orderto report to you whether, in our opinion on the basis of the procedures described below, anything has come to ourattention 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 true and fair view of the financial position of the Banking Group as
at 31 March 2011 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 tocapital adequacy) 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 supplementary information does not fairly
state the matters to which it relates in accordance with Schedules 5, 7, 10, 12 and 14 of the Order.
We are responsible for reviewing the supplementary information relating to credit and market risk exposures andcapital adequacy in order to state whether, on the basis of the procedures described below, anything has come to ourattention that would cause us to believe that the information disclosed in accordance with Schedule 9 is not in allmaterial respects prepared in accordance with the Capital Adequacy Framework (Basel I Approach) (BS2) and Capital
Adequacy Framework (Standardised Approach) (BS2A); and disclosed in accordance with Schedule 9.
We have performed our review in accordance with the review engagement standard RS-1 Statement of Review
Engagement Standards issued by the New Zealand Institute of Chartered Accountants. A review is limited primarily toenquiries of ANZ New Zealand personnel and analytical 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.
Our firm has also provided other services to ANZ New Zealand in relation to other audit related services. Partners andemployees of our firm may also deal with ANZ New Zealand on normal terms within the ordinary course of trading
activities of the business of ANZ New Zealand. There are, however, certain restrictions on borrowings which thepartners and employees of our firm can have with ANZ New Zealand. These matters have not impaired our
independence as auditors of ANZ New Zealand. The firm has no other relationship with, or interest in, ANZ New
Zealand.

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 on pages 3 to 21 (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 ANZ New Zealand as at 31 March 2011 and its financial
performance and cash flows for the six months ended on that date;b.

the supplementary information prescribed by Schedules 5, 7, 10, 12, and 14 of the Order does not fairly state thematters to which it relates in accordance with those Schedules; andc.

the supplementary information relating to credit and market risk exposures and capital adequacy prescribed by
Schedule 9 of the Order, is not in all material respects prepared in accordance with Capital Adequacy
Framework (Basel 1 Approach) (BS2) and Capital Adequacy Framework (Standardised Approach) (BS2A), anddisclosed in accordance with Schedule 9 of the Order.

Our review was completed on 30 May 2011 and our review opinion is expressed as at that date.

Wellington