NEWS RELEASE
2 MAY 2017

ANZ 2017 HALF YEAR RESULTANZ today announced a Statutory Profit after tax for the Half Year ended 31 March 2017 of $2.9 billion up 6%
and a Cash Profit1 of $3.4 billion up 23% on the prior comparable period (PCP). ANZ’s Common Equity Tier 1 Capital
Ratio was 10.1% at 31 March 2017 up 52 basis points (bps) from 30 September 2016. Return on Equity increased
210 bps to 11.8%.
The FY17 interim result reflects further benefits from a significant reshaping of the business driven by ANZ’s strategic
focus to create a simpler, better capitalised and more balanced bank producing better outcomes for customers andshareholders.
The Interim Dividend of 80 cents per share fully franked, is the same as the Interim Dividend in FY16, reflecting apayout ratio of 69% (Pro Forma 65%).

Selected Group Financial Information

Half year

EARNINGS ($M)

1H17

1H16 Movement

Statutory Profit

2,911

2,738

+6%

5,572
3,411
116.7
11.8
2.00

4,837
2,782
95.9
9.7
2.07

+15%
+23%
+22%
+210bps
-7bps

5,838
3,637
124.4
12.5

5,441
3,224
111.1
11.2

+7%+13%+12%+130bpsMAR ‘17MAR ‘16

0.25%

0.32%

46,04648,896

580
397
468
5.3%
10.1%
15.2%

566
388
447
5.1%
9.8%
14.0%

Cash Profit basis
Profit before credit impairment and tax
Cash Profit
Earnings Per Share (cents)
Return on Equity (%)
Net Interest Margin (%)

Adjusted Pro-forma Cash Profit basis

2

Profit before credit impairment and tax
Adjusted Pro-forma Cash Profit
Earnings Per Share (cents)
Return on Equity (%)

Group Financial Information
CREDIT QUALITY
Total credit impairment charge as a % of average GLAs
(Cash Profit basis)OTHER
Full time equivalent staff (FTE)BALANCE SHEET ($B)
Gross Loans and Advances (GLAs)
Total Risk Weighted Assets (RWAs)
Customer Deposits
Leverage Ratio (%)
Common Equity Tier 1 Ratio (%)
Common Equity Tier 1 Ratio Internationally Comparable Basel 3 (%)

CEOCOMMENTARYANZ Chief Executive Officer Shayne Elliott said: “In 2016 we refreshed ANZ’s
strategy to ensure we were on a path to rapidly adapt to the changing
environment and deliver materially better outcomes for our customers, thecommunity and shareholders.
“I am pleased that in the first half of 2017 we delivered further progress. This
included initiatives for customers such as reduced interest rates on some credit
cards, new debit cards to improve accessibility for vision impaired customers,
and plans to improve security through the use of voice biometrics. To support
small businesses, we launched innovative digital solutions such as ANZ
BladePay and ANZ Be Trade Ready.
“We also saw significant financial benefits emerging from the strategic andtactical decisions we took in 2016 to simplify the business, improve productivity
and increase capital efficiency. Particular highlights were our strong organic
capital generation performance that saw Australian Prudential Regulation
Authority (APRA) Common Equity Tier 1 capital ratio above 10% for the first timeand, importantly for shareholders, Return on Equity increased materially for thefirst time since 2010. We are in a very strong position ahead of anticipatedchanges to capital requirements by APRA and this allows us to neutralise thefirst half Dividend Reinvestment Plan (DRP).
“Our strategy involves a significant reshaping of ANZ’s business and I am very
pleased to have made significant progress while also producing good results
across the Group.
“In Retail and Commercial Banking in Australia and New Zealand we arefocussed on being the best bank for home owners and people who want to startand run a business. Both Australia and New Zealand delivered a solid
performance. We are growing prudently in home lending in Australia
concentrating on owner-occupiers, and through a focus on the small businesssegment. We are also moving quickly to meet customer expectations bydelivering more of our services through digital channels, with digital sales inAustralia up 24%.
“The performance of Institutional Banking has been particularly pleasing. We
continued to reshape the business to improve returns through the distinctive
proposition we have supporting trade and capital flows on a smaller group ofcustomers who value our network and capabilities in Australia, New Zealand andAsia. Institutional Total Risk Weighted Assets have reduced by $23 billion during
the past 12 months, expenses have fallen 9% and returns have increased.
“These results show we are creating a very different bank, one that is
consistently producing better outcomes for customers and for shareholders.
These are still early days and I am pleased with the significant momentum wehave now established in the business.
“Our intention is now to accelerate our transformation through wider
implementation of ‘Scaled Agile’ throughout ANZ. This is a completely
different approach to running our business based on a proven model that willallow us to respond much faster to changing customer expectations, engage
our staff and attract new talent, and reduce waste and bureaucracy.
“We have already been evolving in this direction with around 20% oftechnology and digital projects currently delivered using the Agile approach.
The adoption of Agile at scale is a natural fit with our strategy and planning isalready underway to broaden its roll out in early 2018, initially within theAustralia Division,” Mr Elliott said.

STRATEGICPRIORITIESFY17 PROGRESS HIGHLIGHTSOver 50% of Group Capital is now allocated to the Retail andCommercial businesses in Australia and New Zealand up from 44%.
Create a simpler, better capitalised,better balanced and more agile bank.
Reduce operating costs and risks byremoving complexity, exiting low returnand non-core businesses and reducing
our reliance on low-returning aspects ofInstitutional banking in particular.

Capital reallocation is evidenced in a $7b net decrease in Credit
Risk Weighted Assets (CRWA) from the end of FY16 on a constantcurrency basis. This includes a $2b increase in Retail andCommercial offsetting a reduction in Institutional CRWAs of $8b.
The Group CET1 ratio was 10.1% at 31 March; net organic capital
generation of 119 bps in the half was primarily driven by earnings
growth along with RWA reduction.
Announced the sale of the Retail/Wealth businesses in six Asian
countries, UDC Finance in New Zealand and ANZ’s 20% holding inShanghai Rural Commercial Bank. Disposal of non-core assets will
deliver an additional 65 - 70 bps of capital by the end of FY17.

Strong customer deposit growth in Australia (up 7%) and New
Zealand Retail and Commercial (up 8%).
Focus our efforts on areas
where we can carve out a winning
position.
Make buying and owning a home orstarting, running and growing a small
business in Australia and New Zealandeasy. Be the best bank in the world forcustomers driven by the movement ofgoods and capital in our region.

Drive a purpose and values led
transformation of the Bank.
Create a stronger sense of core purpose,ethics and fairness, investing in leaders
who can help sense and navigate a
rapidly changing environment.

Build a superior everyday experiencefor our customers and our people tocompete in the digital age.
Build more convenient, engaging
banking solutions to simplify the lives ofcustomers and our people.

Australia home lending up 5%, maintained #3 market share while
improving the portfolio mix, #1 market share in New Zealand.
Small business lending in Australia up 4%, New Zealand up 8%.
The Institutional Payments and Cash Management businessincreased revenue 3%.
ANZ has a clear leadership position in Australia and New Zealand
Lead Institutional Bank Penetration and was a Top 4 Corporate Bankin Asia for the fifth successive year.

Former Commonwealth Ombudsman, Colin Neave appointed as
Customer Fairness Officer.
New balanced scorecard remuneration structure introduced forAustralian front line Retail Banking staff, focussed largely on
customer service outcomes.
Appointment of Kathryn van der Merwe as Group Executive Talentand Culture.

Improving the customer experience – introduced card replacement
for lost or stolen cards within 15 minutes via the digital wallet.
60% of customers in Australia and 64% in New Zealand are now
digitally active.
Australia Retail and Commercial customer numbers up 4%; 60% of
Retail customers holding multiple products. Service improvements
along with products like ApplePay have driven net customer growth.
Launch of Home Loan Online Application in Australia driving easierloan approvals. Expanded support to Small Business customers inAustralia; new banker tools accelerate origination and assessment.

CAPITAL,DIVIDEND AND
FUNDING

The APRA CET1 capital ratio at 31 March was 10.1% (15.2% on an
Internationally Comparable basis). Organic capital generation of 119 bps in
the half was almost double the first half average of the past five years. We
intend to neutralise the impact of shares allocated under the DRP byacquiring an equivalent number of shares on market.

ASSET
DISPOSALS

Since the start of FY2017, ANZ has signed agreements to sell its 20% stakein Shanghai Rural Commercial Bank, the UDC Finance business in
New Zealand and ANZ’s Retail and Wealth businesses in six Asian countries.
The transactions are expected to complete during FY2017 and 1H2018
subject to regulatory approvals.

CREDITQUALITY

The total provision charge of $720 million ($787 million individual provision
charge and a $67 million collective provision release) equates toa loss rate of 25 bps, a decline of 11 bps from the end of 2H16. Gross
impaired assets over the same period decreased 7% to $2.94 billion withnew impaired assets down 3%.

The Group has a strong funding and liquidity position with the Net Stable
Funding Ratio at 113% up 5% from 30 September 2016. The improvement
was largely attributable to strong Retail deposit growth in Australia.

The credit environment while demonstrating pockets of weakness appears
broadly stable. Improved soft and hard commodity prices are beginning
to provide flow through benefits, however it is anticipated sluggish
consumer spending off the back of flat real income growth could continue
to see the economy perform below trend.

OUTLOOK

Commenting on the outlook Mr Elliott said: “The reshaping of our businessover the past year has delivered strong outcomes for customers andshareholders, and has established a foundation for future growth and better
returns.
“The environment for banking remains constrained with intense competitionand pressure on margins, subdued lending growth, rapidly changing
customer expectations and increasing regulation. The provision charge
has improved and the outlook for the second half remains broadly neutral.
We are responding decisively to these continuing pressures through afinancial, digital and cultural transformation of ANZ.
“Our strategy and the momentum we have established through consistent
performance and execution positions us well to continue delivering strong
outcomes for customers and for shareholders in 2017,” Mr Elliott said.
Video interviews with Shayne Elliott and Chief Financial Officer Michelle
Jablko discussing the 2017 Half Year result and the adoption of the Agile
approach to working are available at www.bluenotes.anz.com.

FOR MEDIA ENQUIRIES CONTACT:Paul Edwards+61-434-070-101

FOOTNOTESFOR INVESTOR AND ANALYST ENQUIRIES CONTACT:Stephen Ries

Jill Campbell

Cameron Davis+61-409-655-551+61-412-047-448+61-421- 613-819

Cash Profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the ongoing business activities of theGroup. The net after tax adjustment was an addition to statutory profit of $500 million comprised of several items including the loss on the reclassification of theSRCB investment as a held for sale asset. All comparisons are half year 31 March 2017 compared to the half year ended 31 March 2016 unless otherwise noted.
2Adjusted Pro forma is Cash Profit adjusted to remove the impact of ‘Specified items’ this includes the pro forma impact on the results of Asian minority investmentson cessation of equity accounting, the reclassification of Asia Retail and Wealth as a held for sale asset and, in the prior year, restructuring expenses, software
capitalisation changes, the derivative valuation methodology changes, the gain on sale and pro forma impact of the sale of the Esanda Dealer Finance business, andvaluation adjustments for Asian minority interests. Adjusted Pro forma Cash Profit is presented to assist readers to understand the estimated growth rates of theongoing business performance of the Group.
3
CET1 Internationally Comparable Basel 3 aligns with APRA’s Information Paper: International Capital Comparison Study, 13 July 20151