Australia and New Zealand Banking Group Limited- New Zealand Branch
Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2013 | NUMBER 18 ISSUED MAY 2013

Australia and New Zealand Banking Group Limited - New Zealand Branch

Disclosure Statement
For the six months ended 31 March 2013

Contents
General Disclosures
Income Statement
Statement of Comprehensive Income
Statement of Changes in Equity
Balance Sheet
Condensed Cash Flow Statement
Notes to the Financial Statements
Directors' and New Zealand Chief Executive Officer's
Statement
Independent Auditor’s Review Report

2
3
3
4
5
6
7
20
21

Glossary of Terms
In this Disclosure Statement unless the context
otherwise requires:(a) “Bank” means ANZ Bank New Zealand Limited;(b) “Banking Group” means the Bank 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) “Ultimate Parent Bank” means Australia and New
Zealand Banking Group Limited;(e) “Overseas Banking Group” means the worldwide
operations of Australia and New Zealand Banking
Group Limited including its controlled entities;(f) “New Zealand business” means all business,
operations, or undertakings conducted in or fromNew Zealand identified and treated as if it wereconducted by a company formed and registered in
New Zealand;(g) “NZ Branch” means the New Zealand business of
the Ultimate Parent Bank;(h) “ANZ New Zealand” means the New Zealandbusiness of the Overseas Banking Group;(i) “Registered Office” is Level 10, 170-186 Featherston
Street, Wellington, New Zealand, which is also ANZ
New Zealand’s address for service;(j) “RBNZ” means the Reserve Bank of New Zealand;(k) “APRA” means the Australian Prudential Regulation
Authority;(l) “the Order” means the Registered Bank DisclosureStatements (Overseas Incorporated Registered
Banks) Order 2013; and(m) Any term or expression which is defined in, or in themanner prescribed by, the Order shall have themeaning given in or prescribed by the Order.

Australia and New Zealand Banking Group Limited - New Zealand Branch

2

General Disclosures
This Disclosure Statement
accordance with the Order.

has

been

issuedin

Financial Statements of the Ultimate
Parent Bank and Overseas Banking
Group

The Ultimate Parent Bank has three credit ratings, which
are applicable to its long-term senior unsecured
obligations. The Ultimate Parent Bank’s credit ratings
are:Copies of the most recent publicly available financial
statements of the Ultimate Parent Bank and Overseas
Banking Group will be provided immediately, free ofcharge, to any person requesting a copy where therequest is made at the Registered Office. The mostrecent publicly available financial statements for the
Ultimate Parent Bank and Overseas Banking Group canalso be accessed at the internet address anz.com.

Credit Rating Information

Rating Agency
Standard & Poor’s

Current Credit
Rating
Qualification
AAOutlook Stable

Moody’s Investors Service

Aa2

Outlook Stable

Fitch Ratings

AA-

Outlook Stable

Directorate

As at the date of signing of this Disclosure Statement,
no obligations of the NZ Branch are guaranteed.

There have been no changes to the Directors ofAustralia and New Zealand Banking Group Limited since
30 September 2012, the balance date of the last fullyear Disclosure Statement.

New Zealand Guarantee Arrangements

Auditor

The Crown guarantees specific issuances of wholesalefunding of participating New Zealand financial
institutions under the New Zealand Wholesale Funding
Guarantee Facility. The Government closed this scheme
to new debt securities on 30 April 2010. The NZ Branchdoes not have a guarantee under this scheme. However,a member of ANZ New Zealand, ANZ New Zealand (Int’l)Limited, has debt securities with a carrying value of$204 million for which the Crown has issued a
Guarantee Eligibility Certificate.

ANZ New Zealand’s auditor
Accountants,
Level 9,10
Wellington, New Zealand.

Guarantors

Certain debt securities (“Covered Bonds”) issued by the
Bank or its wholly owned subsidiary, ANZ New Zealand(Int’l) Limited, are guaranteed by ANZNZ Covered Bond
Trust Limited (the “Covered Bond Guarantor”), solely in
its capacity as trustee of ANZNZ Covered Bond Trust.
The Covered Bond Guarantor has guaranteed thepayment of interest and principal of Covered Bonds witha carrying value as at 31 March 2013 of $2,926 million,
pursuant to a guarantee which is secured over a pool ofassets.
The Covered Bond Guarantor’s address forservice is Level 10, 141 Willis Street, Wellington, New
Zealand. The Covered Bond Guarantor is not a memberof the Banking Group and has no credit ratings
applicable to its long term senior unsecured obligations
payable in New Zealand dollars. The Covered Bonds
have been assigned a long term rating of Aaa and AAA
by Moody’s Investors Service and Fitch Ratings
respectively. Details of the pool of assets that secure
this guarantee are provided in Note 7.

is KPMG, Chartered
Customhouse Quay,

Australia and New Zealand Banking Group Limited - New Zealand Branch

3

Income Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

Interest income

3,239

3,276

6,568

Interest expense

1,936

1,915

3,859

Net interest income

1,303

1,361

2,709

Net trading gains

112

79

131

Net funds management and insurance income

134

139

298

153

222

472

4

2

4

Operating income

1,706

1,803

3,614

Operating expenses

771

863

1,743

935

940

1,871

44

103

202

Profit before income tax

891

837

1,669

Income tax expense

236

222

404

Profit after income tax

655

615

1,265

Audited$ millions

Note

Other operating income2

Share of associates' profit

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

6

AuditedStatement of Comprehensive Income
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

655

615

1,265

Actuarial gain / (loss) on defined benefit schemes

16

(2)

(25)

Income tax credit / (expense) relating to items not reclassified

(5)

-

6

Total items that will not be reclassified to profit or loss

11

(2)

(19)

Unrealised gains / (losses) recognised directly in equity

(39)

11

46

Realised gains transferred to income statement

(14)

(7)

(95)

15

5

-

Total items that may be reclassified subsequently to profit or loss

(38)

9

(49)

Total comprehensive income for the period

628

622

1,197

$ millions

Profit after income tax
Items that will not be reclassified to profit or loss

Items that may be reclassified subsequently to profit or loss

Income tax credit relating to items that may be reclassified

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
Ordinary sharecapital andhead officeaccount

Availablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

Total equity

As at 1 October 2011

6,424

46

141

1,854

8,465

Profit after income tax

-

-

-

615

615

Unrealised gains / (losses) recognised directly in equity

-

26

(15)

-

11

Realised gains transferred to the income statement

-

-

(7)

-

(7)

Actuarial loss on defined benefit schemes
Income tax credit / (expense) on items recognised directly inequity

-

-

-

(2)

(2)

-

(1)

6

-

5

Total comprehensive income for the period

-

25

(16)

613

622

Preference dividend paid

-

-

-

(85)

(85)

As at 31 March 2012 (Unaudited)

6,424

71

125

2,382

9,002

As at 1 October 2011

6,424

46

141

1,854

8,465

Profit after income tax

-

-

-

1,265

1,265

Unrealised gains recognised directly in equity

-

34

12

-

46

Realised gains transferred to the income statement

-

(83)

(12)

-

(95)

Actuarial loss on defined benefit schemes

-

-

-

(25)

(25)

Income tax credit on items recognised directly in equity

-

-

-

6

6

Total comprehensive income for the period

-

(49)

-

1,246

1,197

Ordinary dividend paid

-

-

-

(400)

(400)

Preference dividend paid

-

-

-

(85)

(85)

6,424

(3)

141

2,615

9,177

$ millions

As at 30 September 2012 (Audited)
Profit after income tax

-

-

-

655

655

Unrealised gains / (losses) recognised directly in equity

-

1

(40)

-

(39)

Realised gains transferred to the income statement

-

-

(14)

-

(14)

Actuarial gain on defined benefit schemes
Income tax credit / (expense) on items recognised directly inequity

-

-

-

16

16

-

-

15

(5)

10

Total comprehensive income for the period

-

1

(39)

666

628

Ordinary dividend paid

-

-

-

(360)

(360)

6,424

(2)

102

2,921

9,445

As at 31 March 2013 (Unaudited)

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

Audited31/03/2013

31/03/2012

30/09/2012

Liquid assets

3,371

2,355

2,831

Due from other financial institutions

2,045

3,051

1,760

10,41910,904

12,338

9,054

10,68012,709

67

92

24

873

252

57

97,39893,817

96,094

Investments backing insurance policy liabilities

161

165

142

Insurance policy assets

313

231

301

Investments in associates

98

100

99

940

938

596

$ millions

Note

AssetsTrading securities
Derivative financial instruments
Current tax assets
Available-for-sale assets
Net loans and advances

4

Other assets
Deferred tax assets

71

84

92

339

320

323

3,499

3,497

3,502

Total assets

128,648

126,486

130,868

Interest earning and discount bearing assets

113,654

109,627

112,783

11,12910,862

11,01275,22470,91473,652

10,34911,507

14,085

1,750

1,819

1,481

272

338

339

17,535

18,541

18,188Term funding

1,766

1,766

1,766

Loan capital

1,178

1,737

1,168

119,203

117,484

121,691

9,445

9,002

9,177

6,424

6,424

6,424

100

196

138

Retained earnings

2,921

2,382

2,615

Total equity and head office account

9,445

9,002

9,177

100,960

98,961

100,543

Premises and equipment
Goodwill and other intangible assets

Liabilities
Due to other financial institutions
Deposits and other borrowings
Derivative financial instruments
Payables and other liabilities

8

Provisions
Bonds and notes

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

Interest and discount bearing liabilities

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

Unaudited

Unaudited

6 months to

6 months to

AuditedYear to31/03/2013

31/03/2012

30/09/2012

Cash flows from operating activities
Interest received
Interest paid

3,212

3,245

6,549

(1,963)(1,939)(3,845)

Other cash inflows provided by operating activities
Other cash outflows used in operating activities

425

427

819

(1,123)(1,147)(2,009)Cash flows from operating profits before changes in operating assets and liabilities

551

586

1,514

Net changes in operating assets and liabilities

1,291(2,597)(2,556)

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

1,842(2,011)(1,042)

Cash flows from investing activities
Cash inflows provided by investing activities

1

16

16

Cash outflows used in investing activities

(56)

(38)

(95)

Net cash flows used in investing activities

(55)

(22)

(79)

Cash flows from financing activities
Cash inflows provided by financing activities

1,105

2,417

5,678

Cash outflows used in financing activities(2,207)(1,961)(6,746)

Net cash flows provided by / (used in) financing activities(1,102)456(1,068)Net increase / (decrease) in cash and cash equivalents

685(1,577)(2,189)Cash and cash equivalents at beginning of the period

3,293

5,482

5,482

Cash and cash equivalents at end of the period

3,978

3,905

3,293

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 interim financial statements are for ANZ New
Zealand for the six months ended 31 March 2013.
They have been prepared in accordance with New
Zealand Generally Accepted Accounting Practice asappropriate
forprofitoriented
entities,therequirements 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 2012.

(ii) Basis of measurement
These financial statements have been prepared on agoing concern basis in accordance with historical cost
concepts except that the following assets andliabilities are stated at their fair value:2.

•

derivative financial instruments, including in thecase of fair value hedging, the fair value of any
applicable underlying exposure;•financial instruments held for trading;•financial assets treated as available-for-sale;and•financial instruments designated at fair value
through profit and loss.

Insurance policy assets are measured using Margin on
Services principles, and defined benefit obligations
are measured using the Projected Unit Credit method.
(iii) Changes in accounting policies
The accounting policies adopted by ANZ New Zealandare consistent with those adopted and disclosed in theprevious full year 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
Certain amounts in the comparative information havebeen reclassified to ensure consistency with thecurrent period's presentation.
This includes
reclassifying, in the Balance Sheet as at 31 March
2012, collateral received of $604 million fromderivative financial instruments asset to due to otherfinancial institutions and collateral paid of $1,144
million from derivative financial instruments liability
to due from other financial institutions.
(vi) Principles of consolidation
The consolidated financial statements of ANZ New
Zealand comprise the financial statements of the NZ
Branch and all the New Zealand businesses of all thesubsidiaries of the Ultimate Parent Bank (thoseentities where it is determined that the Ultimate
Parent Bank has capacity to control).

Other Operating Income
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2013

31/03/2012

30/09/2012

Net fee income

207

219

430

Fair value loss on hedging activities and financial liabilities designated at fair value

(61)

(5)

(62)

$millionsAuditedNet gain on available for sale equity securities transferred to income statement

-

-

83

Other income

7

8

21

153

222

472

Total other operating income

Australia and New Zealand Banking Group Limited - New Zealand Branch

8

Notes to the Financial Statements
3.

(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, to more complex funding arrangements withrevenue sourced from a wider range of products. UDC isprincipally involved in the financing and leasing of plant,
vehicles and equipment, mainly for small and medium
sized businesses, as well as investment products.

Segmental Analysis

For segment reporting purposes, ANZ New Zealand isorganised into four major business segments - Retail,Commercial, Wealth and Institutional. Centralised backoffice 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.
Segmental reporting has been updated to reflect minorchanges to ANZ New Zealand’s structure. Comparative
data has been adjusted to be consistent with the current
period’s segment definitions.

WealthWealth includes private banking and investment services
provided to high net worth individuals, the OnePathwealth management and insurance businesses, andother investment products.

RetailRetail provides products and services to personalcustomers via the branch network, mortgage specialists,
the contact centre and a variety of self service channels(internet banking, phone banking, ATMs, website andmobile phone banking). Core products include current
and savings accounts, unsecured lending (credit cards,
personal loans and overdrafts) and home loans securedby mortgages over property.
Retail distributes
insurance and investment products on behalf of the
Wealth segment.

Institutional
Institutional provides financial services through anumber of specialised units to large multi-banked
corporations, often global, who require sophisticatedproduct and risk management solutions. Those financial
services include loan structuring, foreign exchange,wholesale money market services and transaction
banking.

Commercial

Other

Commercial provides services to Business Banking,Commercial & Agri, and UDC customers.
Business
Banking services are offered to small enterprises

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

Business segment analysis1$ millions

Institutional

Other 2

Total

39

453

(847)

1,706

72

(118)

792

-

713

111

335

(55)

1,706

462

42

227

(87)

891

789

1,412

50

383

(831)

1,803

(169)

(677)

70

(43)

819

-

620

735

120

340

(12)

1,803

249

413

45

237

(107)

837

RetailCommercial

WealthExternal revenues

701

1,360

Intersegment revenues

(99)

(647)

Total revenues

602

Profit before income tax

247

External revenues
Intersegment revenues
Total revenues
Profit before income tax

Unaudited 6 months to 31/03/2013

Unaudited 6 months to 31/03/2012

Audited year to 30/09/2012

External revenues

1,531

2,790

111

769

(1,587)3,614Intersegment revenues(295)(1,331)

143

(130)

1,613

-

Total revenues

1,236

1,459

254

639

26

3,614

505

825

108

428

(197)

1,669

Profit before income tax
1
2

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
This segment has negative external revenues as this segment incurs funding costs on behalf of ANZ New Zealand and is reimbursed internally.

Australia and New Zealand Banking Group Limited - New Zealand Branch

9

Notes to the Financial Statements
4.

Net Loans and Advances
Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Overdrafts

1,718

1,986

1,881

Credit card outstandings

1,415

1,410

1,395

Term loans - housing

56,96453,64755,526

Term loans - non-housing

37,64937,32137,749Finance lease receivables

817

800

806

98,563

95,16497,357(978)(1,150)(1,081)

(266)

(259)

(258)

5

62

34

Deferred fee revenue and expenses

(61)

(55)

(60)

Capitalised brokerage/mortgage origination fees

135

55

102

97,39893,817

96,094$ millions

Note

Gross loans and advances
Provision for credit impairment

6

Unearned finance income
Fair value hedge adjustment

Total net loans and advances

5.

Impaired Assets, Past Due Assets and Other Assets Under Administration$ millions

RetailOther retail

Non retailmortgages

exposures

exposures

Total

Balance at the beginning of the period

352

44

1,009

1,405

Transfers from productive

190

58

151

399

Transfers to productive

(2)

(1)

(30)

(33)

Unaudited 31/03/2013

Assets realised or loans repaid

(173)

(15)

(207)

(395)

Write offs

(15)

(40)

(85)

(140)

Total impaired assets

352

46

838

1,236

Other assets under administration

-

-

-

-

Undrawn facilities with impaired customers

-

-

17

17

Balance at the beginning of the period

537

61

1,194

1,792

Transfers from productive

183

61

341

585

Transfers to productive

(34)

(1)

(92)

(127)

Assets realised or loans repaid

(203)

(26)

(243)

(472)

Write offs

(35)

(43)

(47)

(125)

Total impaired assets

448

52

1,153

1,653

Other assets under administration

-

-

9

9

Undrawn facilities with impaired customers

-

-

28

28

Unaudited 31/03/2012

Audited 30/09/2012

Balance at the beginning of the period

537

61

1,194

1,792

Transfers from productive

340

110

572

1,022

Transfers to productive

(73)

(1)

(111)

(185)

Assets realised or loans repaid

(390)

(43)

(515)

(948)

Write offs

(62)

(83)

(131)

(276)

Total impaired assets

352

44

1,009

1,405

Other assets under administration

-

-

-

-

Undrawn facilities with impaired customers

-

-

24

24

Australia and New Zealand Banking Group Limited - New Zealand Branch

10

Notes to the Financial Statements
Other assets under administration
Other assets under administration are any loans, not being impaired or 90 days or more past due, where the customer isin any form of voluntary or involuntary administration, including receivership, liquidation, bankruptcy or statutory
management.
Credit quality of financial assets that are past due but not impaired
A large portion of retail credit exposures, such as residential mortgages, are generally well secured. That is, the fair valueof associated security should be sufficient to ensure that ANZ New Zealand will recover the entire amount owing over thelife of the facility and there is reasonable assurance that collection efforts will result in payment of the amounts due in atimely manner.
Ageing analysis of loans that are past due but not impaired$ millions

RetailOther retail

Non retailmortgages

exposures

exposuresTotal

1 to 5 days

412

133

496

1,041

6 to 29 days

491

111

155

757

1 to 29 days

903

244

651

1,798

30 to 59 days

216

49

82

347

60 to 89 days

87

28

16

131

90 days or over

120

55

55

230

1,326

376

804

2,506

Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Unaudited 31/03/2013

6.

Provision for Credit Impairment

Provision movement analysis$ millions
Unaudited 31/03/2013

New and increased provisions
Write-backs
Recoveries of amounts written off previously

52

46

93

191

(35)

(11)

(58)

(104)

-

(8)

(2)

(10)

Individual provision charge

17

27

33

77

Collective provision credit

-

(13)

(20)

(33)

17

14

13

44

New and increased provisions

68

42

137

247

Write-backs

(46)

(8)

(43)

(97)

Recoveries of amounts written off previously

(1)

(8)

(5)

(14)

Individual provision charge

21

26

89

136

Collective provision credit

(5)

(20)

(8)

(33)

Total charge to income statement

16

6

81

103

Total charge to income statement
Unaudited 31/03/2012

Audited 30/09/2012

New and increased provisions

130

87

267

484

Write-backs

(90)

(15)

(100)

(205)

Recoveries of amounts written off previously

(1)

(17)

(7)

(25)

Individual provision charge

39

55

160

254

Collective provision credit

(10)

(22)

(20)

(52)

Total charge to income statement

29

33

140

202

Australia and New Zealand Banking Group Limited - New Zealand Branch

11

Notes to the Financial Statements
Movement in provision for credit impairment$ millions

Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Unaudited 31/03/2013

Collective provision
Balance at beginning of the period

120

125

375

620

Credit to income statement

-

(13)

(20)

(33)

Balance at end of the period

120

112

355

587

130

25

306

461

17

35

35

87

(15)

(40)

(85)

(140)

Discount unwind

(5)

-

(12)

(17)

Balance at end of the period

127

20

244

391

Total provision for credit impairment

247

132

599

978

Individual provision
Balance at beginning of the period
New and increased provisions net of write-backs
Bad debts written off

Unaudited 31/03/2012

Collective provision
Balance at beginning of the period

130

147

395

672

Credit to income statement

(5)

(20)

(8)

(33)

Balance at end of the period

125

127

387

639

Balance at beginning of the period

165

36

310

511

New and increased provisions net of write-backs

22

34

94

150

Bad debts written off

(35)

(43)

(47)

(125)

Discount unwind

(8)

(1)

(16)

(25)

Balance at end of the period

144

26

341

511

Total provision for credit impairment

269

153

728

1,150

Balance at beginning of the year

130

147

395

672

Credit to income statement

(10)

(22)

(20)

(52)

Balance at end of the year

120

125

375

620

Balance at beginning of the year

165

36

310

511

New and increased provisions net of write-backs

40

72

167

279

Bad debts written off

(62)

(83)

(131)

(276)

Discount unwind

(13)

-

(40)

(53)

Balance at end of the year

130

25

306

461

Total provision for credit impairment

250

150

681

1,081

Individual provision

Audited 30/09/2012

Collective provision

Individual provision

Australia and New Zealand Banking Group Limited - New Zealand Branch

12

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

Cash collateral given on derivative financial instruments

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

1,256

1,142

1,144

Trading securities encumbered through repurchase agreements

343

23

252

Residential mortgages pledged as security for covered bonds

5,548

3,982

4,977

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

2,125

2,105

2,103

Total financial assets pledged as collateral

9,158

7,254

8,588

ANZNZ Covered Bond Trust (“the Covered Bond Trust”)
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities
originated by the Bank which are security for the guarantee by ANZNZ Covered Bond Trust Limited as trustee of the
Covered Bond Trust of issuances of covered bonds by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l)Limited, from time to time. The assets of the Covered Bond Trust are not available to creditors of the Bank, although the
Bank (or its liquidator or statutory manager) may have a claim against the residual assets of the Covered Bond Trust (ifany) after all prior ranking creditors of the Covered Bond Trust have been satisfied.
ANZ New Zealand continues to recognise the assets of the Covered Bond Trust on its balance sheet as, although they arepledged as security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8.

Deposits and Other Borrowings$ millions

Note

Certificates of deposit

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

1,624

2,277

2,156

Term deposits

33,73233,73833,922

Demand deposits bearing interest

28,34824,19825,815

5,717

4,787

4,838

1,467

1,456

1,476

4,336

4,458

5,445

75,22470,91473,652

Deposits not bearing interest
Secured debenture stock
Commercial paper
Total deposits and other borrowings

9.

7

Related Party Transactions$ millions

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Total due from related parties

2,034

2,279

3,125

Total due to related parties

16,352

18,092

17,153

Australia and New Zealand Banking Group Limited - New Zealand Branch

13

Notes to the Financial Statements
10. Capital Adequacy
Adoption of Basel III capital framework
Effective 1 January 2013, APRA has adopted the majority of Basel III capital reforms in Australia. The Basel III reforms
include: increased capital deductions from common equity tier 1 capital, an increase in capitalisation rates (including
prescribed minimum capital buffers, fully effective 1 January 2016), tighter requirements around new tier 1 and tier 2
securities and transitional arrangements for existing tier 1 and tier 2 securities that do not conform to the new
regulations. Other changes include capital requirements for counterparty credit risk and an increase in the asset value
correlation with respect to exposures to large and unregulated financial institutions.
Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2013

31/03/2012

30/09/2012

31/03/2013

31/03/2012

30/09/2012

Basel III

Basel II

Basel II

Basel III

Basel II

Basel II

Common equity tier one capital

8.2%

n/a

n/a

8.4%

n/a

n/a

Tier one capital

9.8%

11.3%

10.8%

10.3%

11.8%

11.4%

11.7%

12.6%

12.2%

12.2%

12.9%

12.7%

Total capital

For calculation of minimum capital requirements under Pillar 1 (Capital Requirements) of the Basel Accord, APRA has
accredited the Overseas Banking Group to use the Advanced Internal Ratings Based ("AIRB") methodology for calculationof credit risk weighted assets and the Advanced Measurement Approach ("AMA") for the operational risk weighted asset
equivalent.
Under prudential regulations, the Overseas Banking Group is required to maintain a Prudential Capital Ratio ("PCR") as
determined by APRA. The Overseas Banking Group exceeded the PCR set by APRA as at 31 March 2013 and for thecomparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2013. The
Overseas Banking Group’s Pillar 3 disclosure document for the quarter ended 31 March 2013, in accordance with APS 330:
Public Disclosure of Prudential Information, discloses capital adequacy ratios and other prudential information. This
document can be accessed at the website anz.com.
Market risk
ANZ New Zealand’s aggregate market risk exposures below have been calculated in accordance with the RBNZ document
BS2B.

Implied risk weighted exposure
ANZ New ZealandUnaudited 31/03/2013

Interest rate risk
Foreign currency risk
Equity risk

Aggregate capital charge

Peak

Period end

Peak

Period end

Peak

$m

$m

$m

$m

4,222

5,508

338

441

4/02/2013

18

72

1

6

17/01/2013

3

3

-

-

31/10/2012

4,243

occurred on

339

Residential 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. Off balance sheet exposures include
undrawn and partially drawn residential mortgage loans as well as commitments to lend. Commitments to lend are formal
offers for housing lending which may or may not be accepted by the customer.
Unaudited 31/03/2013

On-balancesheet

Off-balance
sheet

Total

0% - 59%

19,994

3,391

23,38560% - 69%

8,647

940

9,587

70% - 79%

12,938

1,191

14,129Less than 80%$ millions

LVR range

41,5795,522

47,10180% - 89%

8,306

915

9,221

Over 90%

4,913

420

5,333

54,7986,857

61,655

Total

Australia and New Zealand Banking Group Limited - New Zealand Branch

14

Notes to the Financial Statements
Reconciliation of mortgage related amounts
Unaudited$ millions

Note

Term loans - housing

31/03/2013

456,964

Plus: short-term housing loans classified as overdrafts

488

Less: housing loans made to corporate customers(2,654)On-balance sheet retail mortgage exposures subject to the IRB approach

10

54,798

Plus: off-balance sheet retail mortgage exposures subject to the IRB approach

6,857

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

10

61,655

11. Financial risk management
Concentrations of credit risk
Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities
within the same geographic region, or when they have similar risk characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or other conditions.
Analysis of financial assets by industry sector is based on Australian and New Zealand Standard Industrial Classification(“ANZSIC”) codes.

Unaudited 31/03/2013$ millions

Trading
Liquid assets
and due from securities andother financial available-forinstitutions
sale assets

Derivative
financial
instruments

Net loans andadvancesOtherfinancial Credit related
assets commitments3

Total

Industry
Agriculture

-

-

34

17,301137

1,935

Forestry, fishing and mining

17

-

9

861

7

496

19,407
1,390

Business and property services

19

-

39

8,947

71

2,525

11,601

Construction

-

-

-

1,017

8

1,042

2,067

Entertainment, leisure and tourism

-

-

33

1,110

9

448

1,600

Finance and insurance

3,125

4,671

7,797

741

310

961

17,605Government and local authority1

11,308

2,014

6,522

376

1,319

10

1,067

Manufacturing

43

-

75

2,903

23

2,410

5,454

Personal lending

-

-

-

58,541388

10,431

69,360Retail trade

85

5

28

1,682

13

1,231

3,044

Transport and storage

25

33

65

1,493

12

568

2,196

Wholesale trade

52

-

15

1,214

10

1,470

2,761

Other2

36

61

583

1,434

11

2,855

4,980

5,416

11,292

9,054

98,563

1,009

27,439152,773

Provision for credit impairment

-

-

-

(978)

-

-

(978)

Fair value hedge adjustment
Unearned finance income anddeferred / capitalised fees

-

-

-

5

-

-

5

-

-

-

(192)

-

-

(192)

5,416

11,292

9,054

97,3981,009

27,439151,608

5,399

8,390

2,673

95,535996

27,439140,432

17

2,902

6,381

1,863

13

-

11,176

5,416

11,292

9,054

97,3981,009

27,439151,608

Total financial assets
Geography
New ZealandOverseas
Total financial assets
1
2
3

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.
Credit related commitments comprise undrawn facilities, customer contingent liabilities and letters of offer.

Australia and New Zealand Banking Group Limited - New Zealand Branch

15

Notes to the Financial Statements
Interest rate sensitivity gap
The following tables represent the interest rate sensitivity of ANZ New Zealand's assets, liabilities and off balance sheet
instruments by showing the periods in which these instruments may reprice (that is, when interest rates applicable toeach asset or liability can be changed).

Unaudited 31/03/2013
Total

Less than
3 months

3 to 6months6 to 12months1 to 2years

Beyond2 years

Not bearing
interest

Liquid assets

3,371

3,138

-

-

-

-

233

Due from other financial institutions

2,045

1,760

-

-

-

-

285

10,419

1,871

155

510

1,083

6,800

-

9,054

-

-

-

-

-

9,054

$ millions

AssetsTrading securities
Derivative financial instruments
Available-for-sale assets

873

275

379

205

-

11

3

Net loans and advances

97,39867,753

4,107

9,582

10,8804,984

92

Other financial assets

1,009

133

8

18

2

-

848

Total financial assets

124,169

74,9304,649

10,315

11,965

11,795

10,515Due to other financial institutions

11,12910,639

-

-

-

122

368

Deposits and other borrowings

75,22449,477

9,157

8,019

1,753

1,101

5,717

Derivative financial instruments

10,349

-

-

-

-

-

10,349Bonds and notes

17,535

4,741

2,392

943

1,235

8,224

-

Term funding

1,766

1,766

-

-

-

-

-

Loan capital

1,178

835

343

-

-

-

-

Other financial liabilities

1,366

62

-

-

-

151

1,153

Total financial liabilities

118,547

67,52011,892

8,962

2,988

9,598

17,587

Hedging instruments

-

(966)

1,274

3,810

(5,418)1,300-

Interest sensitivity gap

5,622

6,444

(5,969)

5,163

3,559

3,497

(7,072)

Liabilities

Liquidity portfolio
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 and includes both items classified as cash and cash equivalents and those classified as operating assets in theCondensed Cash Flow Statement.
Unaudited$ millions

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

31/03/2013

1,999
160
5,939
836
4,628
13,562

Australia and New Zealand Banking Group Limited - New Zealand Branch

16

Notes to the Financial Statements
Funding Composition
ANZ New Zealand actively uses balance sheet disciplines to prudently manage the funding mix. ANZ New Zealandemploys 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 term exceeding one year) and equity.
Analysis of funding liabilities by industry sector is based on ANZSIC codes.

Unaudited$ millions

31/03/2013

Funding composition
Customer deposits1
New Zealand

61,574

Overseas

7,690

Total customer deposits

69,264Wholesale funding
Bonds and notes

17,535

Loan capital

1,178

Certificates of deposit

1,624

Commercial paper

4,336

Term funding

1,766

Due to other financial institutions

11,129Total wholesale funding

37,568

Total funding

106,832

Concentrations of funding by industry
Households

44,166

Agriculture

2,488

Forestry, fishing and mining

553

Manufacturing

1,524Entertainment, leisure and tourism

756

Finance and insurance

46,008Retail trade

917

Wholesale trade

1,774

Business and property services

3,744

Transport and storage

755

Construction

885

Government and local authority

2,098

Other2

1,164

Total funding
Concentrations of funding by geography

106,832
3

New Zealand

67,016Australia

13,482

United States

11,937

Europe8,660

Other countries

5,737

Total funding
1
2
3

106,832

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 via ANZ New Zealand (Int’l) Limited is classified as either from the United States or Europe, as the company conducts overseas funding activities
through its London branch which is passed through to the Bank.

Australia and New Zealand Banking Group Limited - New Zealand Branch

17

Notes to the Financial Statements
Contractual maturity analysis of financial assets and liabilities
The following tables present ANZ New Zealand's financial assets and liabilities within relevant contractual maturity
groupings, based on the earliest date on which the ANZ New Zealand may be required to realise an asset or settle aliability. The amounts disclosed in the tables represent undiscounted future principal and interest cash flows and may
differ to the amounts reported on the balance sheet.
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 this basis.

Unaudited 31/03/2013

Less than
3 months

3 to 12months1 to 5years

Beyond5 years

No maturity
specified

2,566

811

-

-

-

-

607

1,439

-

-

-

-

11,539

-

632

1,139

8,308

1,460

-

8,155

-

8,155

-

-

-

-

Available-for-sale assets

889

-

283

557

46

-

3

Net loans and advances$ millions

Total

At callLiquid assets

3,377

Due from other financial institutions

2,046

Financial assets

Trading securities
Derivative financial assets (trading)

133,732-

16,757

16,10941,30059,566-

Other financial assets

619

-

591

26

2

-

-

Total financial assets

160,357

3,173

28,668

17,83149,65661,026

3

Financial liabilities
Due to other financial institutions

11,997

884

1,895

2,361

6,739

118

-

Deposits and other borrowings
Derivative financial liabilities(trading)

76,55333,677

21,56518,055

3,256

-

-

9,456

-

9,456

-

-

-

-

Bonds and notes

18,536

-

138

5,252

12,478668-

Term funding

1,836

-

18

1,818

-

-

-

Loan capital

1,842

-

24

71

474

95

1,178

Other financial liabilities

902

-

671

7

44

180

-

Total financial liabilities

121,122

34,561

33,76727,56422,991

1,061

1,178

39,235(31,388)(5,099)(9,733)

26,66559,965(1,175)

Net financial assets / (liabilities)

Derivative financial instruments used for balance sheet management- gross inflows

25,717

-

2,581

7,611

15,223302-- gross outflows(25,399)-(2,474)(7,563)(15,059)(303)-

39,553(31,388)(4,992)(9,685)26,82959,964(1,175)

Net financial assets / (liabilities)
after balance sheet management

Contractual maturity of off-balance sheet commitments and contingent liabilities
Unaudited 31/03/2013$ millions

Non-credit related commitments
Credit related commitments
Contingent liabilities
Total

Total

Less than

Beyond1 year

1 year

426

117

309

25,682

25,682

-

1,757

1,757

-

27,86527,556309

Australia and New Zealand Banking Group Limited - New Zealand Branch

18

Notes to the Financial Statements
12. 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 six months ended 31 March 2013 there were no individual counterparties (excluding connected parties,
governments and banks with long term credit ratings of A- or above) where ANZ New Zealand’s period end or peak endof-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.

13. 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 $602 million (31/03/2012: $525
million; 30/09/2012 $564 million), which is 0.5% (31/03/2012: 0.4%; 30/09/2012 0.4%) of the total consolidated assetsof ANZ New Zealand.

14. Credit Related Commitments, Guarantees and Contingent Liabilities
Face or contract value$ millions

Unaudited

Unaudited

Audited31/03/2013

31/03/2012

30/09/2012

Credit related commitments
Commitments with certain drawdown due within one year

859

904

742

Commitments to provide financial services

24,82322,921

24,551

Total credit related commitments

25,682

23,82525,293

650

1,752

731

53

55

44

Transaction related contingent items

976

829

913

Trade related contingent liabilities

78

96

117

1,757

2,732

1,805

Guarantees and contingent liabilities
Financial guarantees
Standby letters of credit

Total guarantees and 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 as for customers that apply for loans. The
contract amount represents the maximum potential amount that could be lost if the counterparty fails to meet its financial
obligations. As the facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future
cash requirements.
Other contingent liabilities
In October 2012 the Commerce Commission commenced an investigation, under the Fair Trading Act 1986, into thepromotion and sale of interest rate swaps by certain banks (including the Bank) to rural customers. The investigation is at
an early stage and the possible outcome of the investigation cannot be determined with any certainty.
On 11 March 2013, litigation funder Litigation Lending Services (NZ) announced plans for a representative action againstbanks in New Zealand for certain fees charged to New Zealand customers over the past six years. As at 28 May 2013, theBank is not aware of any proceedings being issued against it or any other bank in New Zealand.
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.

Australia and New Zealand Banking Group Limited - New Zealand Branch

19

Notes to the Financial Statements
15. Additional Disclosures
NZ Branch Funding$ millions

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

Overseas Banking Group Profitability and Size
AUD millions

Unaudited

31/03/2013

28
Unaudited

31/03/2013

Profit for the six months ended 31/03/20131

2,945

Net profit after tax for the 12 months to 31/03/2013 as a percentage of average total assets

0.86%

Total assets
Percentage change in total assets in the 12 months to 31/03/2013
1

672,625
9.87%

Net profit after tax for the period includes $5 million of profit attributable to non-controlling interests.

Overseas Banking Group asset quality
AUD millions

Gross impaired assets

Unaudited
31/03/2013

4,685

Gross impaired assets as a percentage of total assets

0.7%

Individual provision

1,543

Individual provision as a percentage of gross impaired assets

32.9%

Collective provision

2,769

Australia and New Zealand Banking Group Limited - New Zealand Branch

Directors’ andStatement

New

Zealand

Chief

Executive

20

Officer’s

As at the date on which this Disclosure Statement is signed, after due enquiry, each Director of the Ultimate Parent Bankand the Chief Executive Officer – NZ Branch believes that:(i)

The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements(Overseas Incorporated Registered Banks) Order 2013; and(ii)

The Disclosure Statement is not false or misleading.

Over the six months ended 31 March 2013, after due enquiry, each Director of the Ultimate Parent Bank and the Chief
Executive Officer – NZ Branch believes that:(i)

The Ultimate Parent Bank has complied with all Conditions of Registration that applied during that period;(ii)

The NZ Branch had systems in place to monitor and control adequately ANZ New Zealand’s material risks, including
credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk and other businessrisks, and that those systems were being properly applied.

This Disclosure Statement is dated 28 May 2013, and has been signed by the Chairman of the Ultimate Parent
Bank, on behalf of all Directors, and by the Chief Executive Officer – NZ Branch.

John MorschelChairman,on behalf of the Directors:
Dr Gregory Clark
Paula Dwyer
Peter Hay
Lee Hsien Yang
Ian Macfarlane, ACDavid Meiklejohn, AM
Michael Smith, OBE
Alison Watkins

Anthony Bradshaw
Chief Executive Officer – NZ BranchAustralia and New Zealand Banking Group Limited - New Zealand Branch

21

Independent Auditor’s Review Report
To the Directors of Australia and New Zealand Banking Group Limited – New Zealand Branch
We have reviewed pages 3 to 19 of the interim 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 2013 (the ‘Order’) and the supplementary informationprescribed in Schedules 3, 5, 7, 9, 10, 12 and 14 of the Order. The interim 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 2013.
Directors' responsibility for the disclosure statement
The Directors of Australia and New Zealand Banking Group Limited - New Zealand Branch are responsible for the preparation andpresentation of the Disclosure Statement, which includes interim financial statements prepared in 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 2013 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 the preparation of the Disclosure Statement that is free from material
misstatement, whether due to fraud or error.
They are also responsible for the preparation of supplementary information in the Disclosure Statement which fairly states thematters to which it relates in accordance with Schedules 3, 5, 7, 9, 10, 12 and 14 of the Order.
Reviewer’s responsibility
We are responsible for reviewing the interim financial statements and the supplementary information, disclosed in accordance with
Clause 26, Schedules 3, 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 order to report toyou whether, in our opinion on the basis of the procedures described below, anything has come to our attention that would cause
us to believe that the interim financial statements have not been prepared, in all material respects, in accordance with New
Zealand Equivalent to International Accounting Standard 34 (“NZ IAS 34”): Interim Financial Reporting and do not present a trueand fair view of the financial position of ANZ New Zealand as at 31 March 2013 and its financial performance and cash flows forthe six months ended on that date.
We are responsible for reviewing the supplementary information (excluding the supplementary information relating to capital
adequacy) in order to report to you whether, in our opinion on the basis of the procedures described below, anything has come toour 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 and capital adequacy
in order to state whether, on the basis of the procedures described below, anything has come to our attention that would cause us
to believe that the information disclosed in accordance with Schedule 9 is not in all material respects prepared in accordance with
the Capital Adequacy Framework (Standardised Approach) (BS2A); and disclosed in accordance with Schedule 9 of the Order.
We have performed our review in accordance with the review engagement standard RS-1 Statement of Review Engagement
Standards issued by the External Reporting Board. A review is limited primarily to enquiries of ANZ New Zealand personnel andanalytical review procedures applied to the financial data, and thus provides less assurance than an audit. We have not performed
an audit and, accordingly, we do not express an audit opinion.
KPMG has also provided other audit related services to ANZ New Zealand. In addition, certain partners and employees of our firm
may also deal with ANZ New Zealand on normal terms within the ordinary course of trading activities of ANZ New Zealand. These
matters have not impaired our independence as auditors of ANZ New Zealand. We have 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 (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 2013 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 the matters towhich it relates in accordance with those Schedules; andc.

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

Our review was completed on 28 May 2013 and our review opinion is expressed as at that date.

Wellington