News Release
For release: 15 August 2017

ANZ Trading Update – Third Quarter FY2017
ANZ’s unaudited Statutory Profit for the Third Quarter to 30 June 2017 was $1.67 billion.
Cash Profit for the same period was $1.79 billion.1
Financial Performance Summary (Cash Basis)
Comparisons are Cash Profit based and for the third quarter Financial Year 2017 to 30 June comparedto the average of the first two quarters of Financial Year 2017 unless otherwise noted.

3Q17$2.79 billion$243 million$1.79 billion

Profit before provisions
Provisions
Cash ProfitCash Profit of $1.79 billion up 5.3%. Profit before Provisions increased 0.3%.

Customer deposit growth of 2.3% with net lending asset growth of 2.0% during thequarter.

Revenue decreased 0.3% which in part reflected a normalisation of the Markets businessperformance after an unusually strong first half along with the sale of 100 Queen Street.

Expenses reduced 1% and continue to be well managed. As flagged the proceeds of thesale of 100 Queen Street are being reinvested in the business with approximately twothirds occurring in the second half, largely in the final quarter.

The Group Net Interest Margin (NIM) was stable2, up several basis points excluding
Markets. Australia Division NIM improved offsetting a decline in Institutional NIM. The
Australian Bank Levy will impact the NIM in the fourth quarter being reflected within thecost of funds.

The reshaping of the Institutional Division asset base continued with Risk Weighted
Assets (RWA) reducing a further $3 billion to $156 billion, with a cumulative reduction of$12 billion (-7%) during the Financial Year to date. The changing profile of the book has
resulted in a decline in the Division’s provision charge and an improvement in the risk
adjusted return (NII/Average Credit Risk Weighted Assets (CRWA)).

Above system growth in residential mortgages in Australia has been primarily driven by
the Owner Occupier segment. The Division is tracking well in respect of meeting various
macro prudential requirements regarding mortgage growth.

Group Credit Quality
The total provision charge of $243 million was comprised of an Individual Provision (IP)charge of $308 million and a Collective Provision (CP) release. The release of CP was largely
driven by continued reshaping of the Institutional portfolio along with some transfers to IP.
CapitalThe Australian Prudential Regulation Authority Common Equity Tier 1 (CET1) ratio was 9.8%
at 30 June, which incorporates 51 basis points of net organic capital generation offset by theInterim Dividend (59 bps) and adoption of the new RWA models for Australian Residential
Mortgages.3 Proforma CET 1 was 10.5%.4Australia and New Zealand Banking Group Limited

ABN 11 005 357 522

Post the end of the third quarter ANZ completed the sale of the Retail and Wealthbusinesses in China and Singapore to DBS with Hong Kong expected to complete prior tothe end of the second-half. All other transactions remain subject to regulatory approvals andcompletion.
CEO Commentary
ANZ Chief Executive Officer Shayne Elliott said: “This period has seen further progress in
improving returns based on rebalancing our business portfolio, ongoing cost management
discipline and improved capital efficiency. Although we are in period of lower sector revenue
growth with some parts of the economy experiencing challenges, credit quality hasimproved.
“We are seeking to deliver sustainable returns to our shareholders and at the same time tolive up to the expectations of our customers and the community. To do this we are changing
the way we work and thinking differently to ensure we continue to provide a compelling
service to our customers and make a meaningful contribution to the communities in which
we operate,” Mr Elliott said.
For media enquiries contact:

For investor/analyst enquiries contact:

Paul Edwards +61-434070101
Stephen Ries +61-409655551

Jill Campbell+61-412047448
Cameron Davis +61-421613819

A video interview with ANZ Chief Executive Shayne Elliott discussing the Third
Quarter FY17 Trading Update is available at www.bluenotes.anz.com.

M&A & Other Items Included in Cash Profit
1H17Reported

3Q17

Asian Minority pro-forma
Reclassification of Asia Retail & Wealth to held for sale
Total Specified Items

58-284-226

66

Gain on sale of 100 Queen St Melbourne
Institutional Markets - derivative valuation adjustments
Total other items

112
115
227

33
33$m

*All items are post tax impacting the revenue line of the Profit & Loss

Footnotes
11

Cash Profit excludes non-core items included in Statutory profit and is provided to assist withunderstanding the results of the ongoing business activities of the Group.
2Versus Group NIM at 30 March 2017 of 200 basis points (258 basis points excluding Markets) as reported
in the Consolidated Financial Report & Dividend Announcement page 20.
3
In an ASX release on 1 June 2017 ANZ advised the average risk weight for its Australian residential
mortgage lending book would increase following completion of the Australian Prudential Regulation
Authority’s review of ANZ’s mortgage capital model. The average risk weight outcome is a dynamic
calculation.
4Proforma Common Equity Tier 1 (CET1) incorporates the capital benefit arising from the disposal ofassets which have been announced but were not completed as at 30 June 2017.

Financial Performance
Risk Adjusted Returns1

Markets income%
5.0$m

800

4.5

600
400

4.0
3.5

682

418

481

513

200
0

3.0
2.5-200
1H16

2H16

1H17

3Q17

1H16
Qtrly avg
Sales

Adjusting for APRA regulatory changes to housing CRWAs

2H16
Qtrly avg
Trading

1H17
Qtrly avg

3Q17

Balance Sheet

Val’n adj.

Net interest income / Credit RWAsAus. Household lending growth2ANZ Growth x System Owner Occupied(System = 1)
Investor
1.5

Institutional RWAs$b

1.3x system
0.8x system

198182

168

159

156

Mar-16

Sep-16

Mar-17

Jun-171.0
0.50.0
Sep 15
Half Yr

Mar 16
Half Yr

ANZ

Sep 16
Half Yr

Mar 17
Half Yr

June 17QuarterSep-15

SystemCredit Quality

CapitalGROSS IMPAIRED ASSETS ($b)

COMMON EQUITY TIER 1 RATIO (%)

4.26

Sep-132.89

2.72

Sep-14

Sep-15

9.6

3.17

2.95

Sep-16Jun-17

Chart Footnotes
1Excludes Markets income
1 2 Source: ANZ analysis of APRA monthly banking statistics

Australia and New Zealand Banking Group Limited

ABN 11 005 357 522

Sep-16

~0.7

10.1

9.8

Mar-17

Jun-17~10.5

Announced Jun-17
divestments Pro-forma
yet to settle