ANZ BANK NEW ZEALAND LIMITEDINTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED 30 JUNE 2018

ANZ Bank New Zealand Limited

INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED 30 JUNE 2018

CONTENTSCONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Income Statement

3Statement of Comprehensive Income

3

Balance Sheet

4

Condensed Cash Flow Statement

5

Statement of Changes in Equity

5

Notes to the Financial Statements

6

SUPPLEMENTARY INFORMATIONBank Financial Strength Dashboard

14

Other Information

16

GLOSSARY OF TERMS
In this Interim Financial Statement unless the context otherwise requires:
Bank means ANZ Bank New Zealand Limited.
Banking Group, We or Our means the Bank and all its controlled entities.
Immediate Parent Company means ANZ Holdings (New Zealand) Limited.
Ultimate Parent Bank means Australia and New Zealand Banking Group Limited.
Overseas Banking Group means the worldwide operations of Australia and New Zealand Banking Group Limited including its controlled
entities.
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand identified and treated as if itwere conducted by a company formed and registered in New Zealand.
NZ Branch means the New Zealand business of the Ultimate Parent Bank.
ANZ New Zealand means the New Zealand business of the Overseas Banking Group.
OnePath means OnePath Life (NZ) Limited.
UDC means UDC Finance Limited.
Registered Office is Ground Floor, ANZ Centre, 23-29 Albert Street, Auckland, New Zealand, which is also the Banking Group’s address forservice.
RBNZ means the Reserve Bank of New Zealand.
APRA means the Australian Prudential Regulation Authority.

ANZ Bank New Zealand Limited

Unaudited

INCOME STATEMENT
3 months to
30 Jun 1830 Jun 17Note

9 months to
30 Jun 1830 Jun 17

NZ$m

NZ$m

NZ$m

NZ$m

Interest income

1,597

1,545

4,767

4,620

Interest expense

801

790

2,415

2,352

796

755

2,352

2,268

139

112

521

413

Net funds management and insurance income

94

105

298

238

Share of associates' profit

6

4

7

5

Operating income

1,035

976

3,178

2,924

Operating expenses

374

371

1,121

1,101

Profit before credit impairment and income tax

661

605

2,057

1,823

6

11

78

53

Profit before income tax

655

594

1,979

1,770

Income tax expense

181

166

547

496

Profit after income tax

474

428

1,432

1,274

Net interest income
Other operating income

Credit impairment charge

2

5

STATEMENT OF COMPREHENSIVE INCOME
3 months to
30 Jun 1830 Jun 17

9 months to
30 Jun 1830 Jun 17

NZ$m

NZ$m

NZ$m

NZ$m

474

428

1,432

1,274

1

-

3

19

Income tax expense relating to items that will not be reclassified

-

-

(1)

(5)

Total items that will not be reclassified to profit or loss

1

-

2

14

Unrealised losses recognised directly in equity

(7)

(3)

(13)

(18)

Realised losses transferred to income statement

1

4

4

10

Income tax credit relating to items that may be reclassified

2

-

3

2

Total items that may be reclassified subsequently to profit or loss

(4)

1

(6)

(6)

471

429

1,428

1,282

Profit after income tax
Items that will not be reclassified to profit or loss
Actuarial gain on defined benefit schemes

Items that may be reclassified subsequently to profit or loss

Total comprehensive income for the period

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

3

ANZ Bank New Zealand Limited

Unaudited

BALANCE SHEET
As at

Note

30 Jun 18

30 Sep 17

NZ$m

NZ$m

3,172

2,338

Assets
Cash

763

536

Collateral paid

1,784

1,415

Trading securities

8,055

7,663

-

123

10,768

9,878

Settlement balances receivable

Investments backing insurance contract liabilities
Derivative financial instruments
Current tax assets
Available-for-sale assets

91

-

6,375

6,360

Net loans and advances4

122,108

117,627

Assets held for sale

11

4,238

3,065

650

683

Life insurance contract assets-

636

Investments in associates-

7

Premises and equipment

348

367

Other assets

Goodwill and other intangible assets
Total assets

3,158

3,275

161,510

153,973

1,966

1,840

Liabilities
Settlement balances payable
Collateral received
Deposits and other borrowings

7

Derivative financial instruments

963

613

107,555

101,657

10,262

9,826

Current tax liabilities-

39

Deferred tax liabilities

24

187

1,367

1,088

Liabilities held for sale

11

1,016

1,151

Employee entitlements

122

119

Other provisions

55

66

24,777

24,606

Total liabilities

148,107

141,192

Net assets

13,403

12,781

11,888

8,888

Payables and other liabilities

Debt issuances

8

EquityShare capital

42

48

Retained earnings

1,473

3,845

Total equity

13,403

12,781

Reserves

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

4

ANZ Bank New Zealand Limited

Unaudited

CONDENSED CASH FLOW STATEMENT
For the nine months ended

30 Jun 1830 Jun 17

NZ$m

NZ$m

Cash flows from operating activities
Interest received

4,807

4,649

Interest paid

(2,341)(2,301)Other cash inflows provided by operating activities

772

689

Other cash outflows used in operating activities(1,679)(1,617)

Cash flows from operating profits before changes in operating assets and liabilities

1,559

1,420

Net changes in operating assets and liabilities
Net cash flows provided by operating activities

445

(140)

2,004

1,280

Cash flows from investing activities
Cash inflows provided by investing activities

35-

Cash outflows used in investing activities

(30)

(41)

5

(41)

Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from debt issuances

3,385

2,943

Redemptions of debt issuances(3,855)(3,499)Proceeds from issue of ordinary shares

3,000

-

Dividends paid

(3,806)(790)

Net cash flows used in financing activities(1,276)(1,346)

Net increase in cash and cash equivalents

733

(107)

Cash and cash equivalents at beginning of the period

2,439

2,315

Cash and cash equivalents at end of the period 1

3,172

2,208

Total
equity1.

Settlement balances due within 3 months have been recognised in cash and cash equivalents on the balance sheet from 30 June 2018.

STATEMENT OF CHANGES IN EQUITY
Share capital

Availablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

As at 1 October 2016

8,888

-

62

3,760

12,710

Profit after income tax

-

-

-

1,274

1,274

Unrealised gains / (losses) recognised directly in equity

-

10

(28)

-

(18)

Realised losses transferred to the income statement

-

-

10

-

10

Actuarial gain on defined benefit schemes

-

-

-

19

19

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

-

(3)

5

(5)

(3)

Total comprehensive income for the period

-

7

(13)

1,288

1,282

Ordinary dividend paid

-

-

-

(785)

(785)

Preference dividend paid

-

-

-

(5)

(5)

As at 30 June 2017

8,888

7

49

4,258

13,202As at 1 October 2017

8,888

5

43

3,845

12,781

Profit after income tax

-

-

-

1,432

1,432

Unrealised gains / (losses) recognised directly in equity

-

8

(21)

-

(13)

Realised losses transferred to the income statement

-

-

4

-

4

Actuarial gain on defined benefit schemes

-

-

-

3

3

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

-

(2)

5

(1)

2

Total comprehensive income for the period

-

6

(12)

1,434

1,428

Ordinary shares issued

3,000

-

-

-

3,000

Ordinary dividend paid

-

-

-

(3,800)(3,800)Preference dividend paid

-

-

-

(6)

(6)

11,888

11

31

1,473

13,403As at 30 June 2018

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

5

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
1.

SIGNIFICANT ACCOUNTING POLICIESStatement of compliance
These interim financial statements for the Banking Group were issued on 13 August 2018 and should be read in conjunction with the
Banking Group’s financial statements for the year ended 30 September 2017.
These financial statements comply with:• New Zealand Generally Accepted Accounting Practice, as defined in the Financial Reporting Act 2013
• NZ IAS 34 Interim Financial Reporting and other applicable Financial Reporting Standards, as appropriate for publicly accountable forprofit entities• IAS 34 Interim Financial Reporting.
There is no requirement for the Bank’s directors to approve these financial statements.
Use of estimates, assumptions and judgements
The preparation of these interim financial statements requires the use of management judgement, estimates and assumptions that affectreported amounts and the application of accounting policies. Discussion of the critical accounting estimates and judgements, which
include complex or subjective decisions or assessments are provided in the previous full year financial statements. Such estimates andjudgements are reviewed on an ongoing basis.
Basis of measurement
These financial statements have been prepared on a going concern basis in accordance with historical cost concepts except that thefollowing assets and liabilities are stated at their fair value:••••

derivative financial instruments
available-for-sale financial assets
financial instruments held for trading
financial instruments designated at fair value through profit and loss.

Changes in accounting policies
The accounting policies adopted by the Banking Group are consistent with those adopted and disclosed in the previous full year financial
statements.
Presentation currency and rounding
The amounts contained in the financial statements are presented in millions of New Zealand dollars, unless otherwise stated.
Comparatives
Certain amounts in the comparative information have been reclassified to ensure consistency with the current period’s presentation.
Principles of consolidation
The financial statements consolidate the financial statements of the Bank and its subsidiaries.

2.

OTHER OPERATING INCOME
3 months to
30 Jun 1830 Jun 17Note

9 months to
30 Jun 1830 Jun 17

NZ$m

NZ$m

NZ$m

NZ$m

97

108

300

305

48

34

147

143

(20)

(41)

4

(90)

28

(7)

151

53

6

4

7

31

-

-

(1)

(1)

-

-

20

-

Insurance proceeds

-

-

20

-

Other

8

7

24

25

Other income

42

4

221

108

Other operating income

139

112

521

413

i) Net fee and commission incomeii) Other income
Net trading gains
Fair value gain / (loss) on hedging activities and financial liabilities
designated at fair value
Net foreign exchange earnings and other financial instruments income
Derivative valuation adjustments
Loss on sale of mortgages to NZ BranchGain on UDC terminated transaction

6

11

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
3.

SEGMENT REPORTING

The Banking Group is organised into three major business segments for segment reporting purposes - 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.
Segment reporting has been updated to reflect minor changes to the Banking Group’s structure. Comparative data has been adjusted tobe consistent with the current period’s segment definitions.
RetailRetail provides a full range of banking and wealth management services to consumer, private banking and small business banking
customers. We deliver our services via our internet and app-based digital solutions and network of branches, mortgage specialists,
relationship managers and contact centres.
Commercial
Commercial provides a full range of banking services including traditional relationship banking and sophisticated financial solutions(including asset financing) through dedicated managers focusing on privately owned medium to large enterprises and the agriculturebusiness segment.
Institutional
The Institutional division services global institutional and business customers across three product sets: Transaction Banking, Loans &Specialised Finance and Markets.
•

Transaction Banking provides working capital and liquidity solutions including documentary trade, supply chain financing as well as
cash management solutions, deposits, payments and clearing.

•

Loans & Specialised Finance provides loan products, loan syndication, specialised loan structuring and execution, project and export
finance, debt structuring and acquisition finance, structured trade and asset finance, and corporate advisory.

•

Markets provide risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets and wealthsolutions in addition to managing the Banking Group’s interest rate exposure and liquidity position.

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

Institutional

Other

Total

For the nine months ended 30 June 2018

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

External revenues

2,040

1,342

447

(651)

3,178

Intersegment revenues1

(194)

(608)

6

796

-

Total revenues

1,846

734

453

145

3,178

743

402

193

94

1,432

External revenues

1,979

1,337

511

(903)

2,924

Intersegment revenues1

(202)

(651)

4

849

-

Total revenues

1,777

686

515

(54)

2,924

Profit / (loss) after income tax

718

328

280

(52)

1,274

30 Jun 1830 Jun 17

NZ$m

NZ$m

Profit after income tax
For the nine months ended 30 June 2017

Other segment
Other segment profit / (loss) after income tax comprises:
For the nine months ended
2

Central functions

20

2

Technology and Group Centre

59

36

Economic hedges

7

(65)

Revaluation of insurance policies

8

(25)

Total

94

(52)

1
2

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
Central functions’ external revenues for the nine months to 30 June 2018 includes the $20 million insurance proceeds (note 2) that were received from a member of theOverseas Banking Group.

7

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
4.

NET LOANS AND ADVANCES
30 Jun 18

30 Sep 17

NZ$m

NZ$m

Overdrafts

914

1,040

Credit cards

1,652

1,638

Term loans - housing

76,684

72,524

Term loans - non-housing

44,781

44,227

Note

1,744

1,577

125,775

121,006

Unearned income

(239)

(222)

Capitalised brokerage/mortgage origination fees

319

334

125,855

121,118

Finance lease and hire purchase receivables
Subtotal

Gross loans and advances (including assets classified as held for sale)Less: Provision for credit impairment

5

Net loans and advances (including assets classified as held for sale)Less: UDC net loans and advances held for sale11

Net loans and advances

(577)

(579)

125,278

120,539(3,170)(2,912)

122,108

117,627

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of NZ$3,114 million as at 30 June 2018 (30 September
2017: NZ$4,337 million). These assets qualify for derecognition as the Bank does not retain a continuing involvement in the transferredassets.

5.

PROVISION FOR CREDIT IMPAIRMENTProvision for credit impairment - balance sheet
30 Jun 18

30 Sep 17

NZ$m

NZ$m

Individual provision

172

152

Collective provision

405

427

Total provision for credit impairment

577

579

Credit impairment charge - income statement

3 months to

9 months to

30 Jun 1830 Jun 1730 Jun 1830 Jun 17

NZ$m

NZ$m

NZ$m

NZ$m

New and increased provisions

33

61

165

177

Write-backs

(11)

(31)

(41)

(65)
(17)

Recoveries of amounts previously written-off

(6)

(5)

(24)

Individual credit impairment charge

16

25

100

95

Collective credit impairment release

(10)

(14)

(22)

(42)

Total credit impairment charge

6

11

78

53

30 Jun 18

30 Sep 17

NZ$m

NZ$m

Loans that are at least 90 days past due but not impaired

216

182

Impaired loans

311

357

6.

8

IMPAIRED AND PAST DUE LOANS

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
7.

DEPOSITS AND OTHER BORROWINGS
30 Jun 18

30 Sep 17

NZ$m

NZ$m

Term deposits

49,60545,457

On demand and short term deposits

42,05941,451

Deposits not bearing interest

10,0598,882

UDC secured investments

933

1,039

Total customer deposits

102,656

96,829Certificates of deposit

2,721

1,916

Note

Securities sold under repurchase agreements
Commercial paper
Deposits from Immediate Parent Company and NZ Branch
Deposits and other borrowings (including liabilities classified as held for sale)

958

157

2,114

3,721

39

73

108,488

102,696(933)(1,039)107,555

101,657

30 Jun 18
NZ$m

30 Sep 17
NZ$m

Senior debt
Covered bonds
Total unsubordinated debt
Subordinated debt

18,476
3,852
22,32816,0085,315
21,323- Additional Tier 1 capital

2,438

2,438

Less: UDC secured investments held for sale
Deposits and other borrowings

8.

11

DEBT ISSUANCES

11

845

Total subordinated debt

2,449

3,283

Total debt issued

24,777

24,606- Other

Covered bonds 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 Trust). The Covered Bond Trust is a member of the Banking Group, whereas the Covered
Bond Guarantor is not a member of the Banking Group.
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 the Covered Bond Guarantor as trustee of the Covered Bond Trust of issuances of covered bondsby 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 (if any) after all prior ranking creditors of the Covered Bond Trust have been satisfied.

9

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
9.

FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities measured at fair value in the balance sheet
The Banking Group categorises financial assets and liabilities carried at fair value into a fair value hierarchy as required by NZ IFRS 13 Fair
Value Measurement based on the observability of inputs used to measure fair value:•

Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

•

Level 2 – valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability,
either directly or indirectly. Modelled valuation techniques are used that incorporate observable market inputs for securities withsimilar credit risk, maturity and yield characteristics; and or/current market yields for similar instruments.

•

Level 3 – valuations using inputs for the asset or liability that are not based on observable market date (unobservable inputs).

We deem transfers into and out of Level 1 and Level 2 to have occurred as at the beginning of the reporting period in which the transfer
occurred.
The table below summarises the attribution of financial instruments carried at fair value to the fair value hierarchy:

Level 1
NZ$m

30 Jun 18
Level 2
Level 3
NZ$m
NZ$m

Total
NZ$m

Level 1
NZ$m

30 Sep 17
Level 2
Level 3
NZ$m
NZ$m

Total
NZ$m

Financial assets
Trading securities
Derivative financial instruments
Available-for-sale assets
Investments backing insurance contract liabilities1
Total

6,740

1,315

-

8,055

7,276

387

-

7,663

4

10,761

3

10,768

5

9,870

3

9,878

6,131

243

1

6,375

5,336

1,023

1

6,360

-

130

-

130

-

123

-

123

12,875

12,4494

25,328

12,617

11,403

4

24,024

Financial liabilities
Deposits and other borrowings

-

2,114

-

2,114

-

3,721

-

3,721

Derivative financial instruments

13

10,2481

10,262

24

9,801

1

9,826

1

Payables and other liabilities

159

-

-

159

151

-

-

151

Total

172

12,362

1

12,535

175

13,522

1

13,698

1

Amounts include OnePath items classified as held for sale.

Financial assets and financial liabilities not measured at fair value
Below is a comparison of the carrying amounts as reported on the balance sheet and fair values of financial asset and liability categories
other than those categories where the carrying amount is at fair value or considered a reasonable approximation of fair value.
The fair values below have been calculated using discounted cash flow techniques where contractual future cash flows of the instrument
are discounted using discount rates incorporating wholesale market rates or market borrowing rates of debt with similar maturities or ayield curve appropriate for the remaining term to maturity.
30 Jun 18
Carrying
amount
NZ$m

30 Sep 17
Fair value
NZ$m

Carrying
amountNZ$mFair value
NZ$m

125,278

125,560

120,539

120,588

106,374

106,442

98,97599,03024,77725,06524,60625,018AssetsNet loans and advances1, 2Liabilities
Deposits and other borrowings2, 3
1

Debt issuances
1

2
3

10

Fair value hedging is applied to certain financial instruments within these categories. The resulting fair value adjustments mean that the carrying value differs from theamortised cost.
Amounts include UDC items classified as held for sale.
Excludes commercial paper (note 7) designated at fair value through profit or loss.

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
10. CREDIT RELATED COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIESCredit related commitments and contingencies

30 Jun 18
NZ$m

30 Sep 17
NZ$m

Contract amount of:
Undrawn facilities

27,802

26,769

Guarantees and letters of credit

1,191

1,010

Performance related contingencies

1,706

1,598

Total

30,69929,377The Banking Group guarantees the performance of customers by issuing standby letters of credit and guarantees to third parties,
including its Ultimate Parent Bank. The risk involved is essentially the same as the credit risk involved in extending loan facilities tocustomers, therefore these transactions are subjected to the same credit origination, portfolio management and collateral requirements
for customers applying for loans. As the facilities may expire without being drawn upon, the notional amounts do not necessarily reflect
future cash requirements.
Other contingent liabilities
There are outstanding court proceedings, claims and possible claims for and against the Banking Group. Where relevant, expert legal
advice has been obtained and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made. In someinstances we have not disclosed the estimated financial impact of the individual items either because it is not practicable to do so or
because such disclosure may prejudice the interests of the Banking Group.
In recent years there has been an increase in the number of matters on which the Banking Group engages with its regulators. Globally
there have been significant increases in the nature and scale of regulatory investigations and reviews, enforcement actions (whether bycourt action or otherwise) and the quantum of fines issued by regulators and customer claims. The Banking Group also instigatesengagement with its regulators. The nature of these investigations and reviews can be wide-ranging and, for example, may include a
range of matters including responsible lending practices, product suitability, wealth advice and adequacy of product disclosure
documentation. The Banking Group has received various notices and requests for information from its regulators as part of both industrywide and Banking Group specific reviews, and has also made disclosures to its regulators at its own instigation. There may be exposures tocustomers which are additional to any regulatory exposures. These could include class actions, individual claims or customer remediationor compensation activities. The outcomes and total costs associated with such reviews and possible exposures remain uncertain.

11

ANZ Bank New Zealand Limited

Unaudited

NOTES TO THE FINANCIAL STATEMENTS
11.

ASSETS AND LIABILITIES HELD FOR SALE

UDC
On 12 January 2018, the Bank announced that the agreement to sell UDC to HNA Group (HNA) had been terminated and that the
proposed divestment would not be completed following the New Zealand Overseas Investment Office's decision to decline HNA's
application to acquire UDC. The Bank continues to examine a broad range of options for UDC's future. As a result of the ongoing process,the assets and liabilities of UDC meet the criteria to be classified as held for sale as at 30 June 2018.
OnePath
On 30 May 2018, the Bank announced that it had entered into an agreement to sell OnePath to Cigna Corporation. The sale includes a 20year strategic alliance for Cigna Corporation to provide insurance solutions for Banking Group customers. The sale remains subject toregulatory approval and is expected to complete in 2019.
Paymark Limited (Paymark)On 17 January 2018, the Bank entered into an agreement to sell its 25% shareholding in Paymark to Ingenico Group. The transaction is
subject to regulatory consents.
30 Jun 18

30 Sep 17

UDC

OnePathPaymark

Total

UDC

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

-

130

-

130

-

3,170

-

-

3,170

2,912

18

5

-

23

20

Life insurance contract assets

-

673

-

673

-

Investments in associates

-

-

7

7

-

132

103

-

235

133

Investments backing insurance contract liabilities
Net loans and advances
Other assets

Goodwill and other intangible assets
Total assets held for sale

3,320

911

7

4,238

3,065

Deposits and other borrowings

933

-

-

933

1,039

Current tax liabilities

44

29

-

73

24

Deferred tax liabilities

(10)

170

-

160

(9)

Payables and other liabilities

30

169

-

199

33

Employee entitlements

-

-

-

-

1

Other provisions

1

1

-

2

-

998

369

-

1,367

1,088

Total liabilities held for sale

12. SUBSEQUENT EVENTSOn 10 August 2018, the Bank’s Board resolved to pay a preference dividend of NZ$5.7 million on or before 6 September 2018 and to pay
an ordinary dividend of NZ$800 million on or before 28 September 2018.

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BANK FINANCIAL STRENGTH DASHBOARD
D1. CREDIT RATINGS

Background
This section does not form part of the Interim Financial
Statements and contains the information in respect of the
Banking Group included on the Bank Financial Strength
Dashboard (Dashboard) published on the RBNZ’s website.
Amounts below may differ slightly from those published by the
RBNZ due to rounding differences. The tables below include
reconciliations to amounts included in the Interim Financial
Statements where there are classification differences between
the financial statements and the Dashboard.

As at 30 June 2018

Credit rating

S&P Global

AA-

Fitch

AA-

Moody's

A1

D2. CAPITAL ADEQUACY
Capital ratios

Risk weighted assets

As at 30 June 2018

As at 30 June 2018

NZ$m

Total capital ratio

14.8%

Sovereign / quasi-sovereign

117

Common equity tier 1 (CET1) capital ratio

11.4%

Public sector entities

320

Tier 1 capital ratio

14.8%

Registered banks

2,303

Buffer ratio

6.8%

Corporates

36,322

Total capital ratio regulatory minimum

8.0%

Residential mortgages

16,856298

Problem loans

Capital34

Equity holdings

As at 30 June 2018

NZ$m

CET1 capital

13,103

CET1 deductions(3,738)Net CET1 capital

9,365

Additional tier 1 instruments

Credit risk supervisory adjustment

2,067

All other assets

13,001Credit risk

71,318Market risk

4,827

2,779

Operational risk

5,921

Total tier 1 capital

12,144

Total risk weighted assets

82,066

Total capital

12,144

D3. ASSET QUALITY
As at 30 June 2018

Housing
NZ$m

Consumer
NZ$mBusiness
NZ$m

Agriculture
NZ$m

All other
NZ$m

Total
NZ$m

Total loans

74,071

3,568

29,077

17,3901,781

125,887

Impaired loans

36

11

124

69

71

311

Loans 90 days past due but not impaired

158

25

29

3

1

216

Total non-performing loans

194

36

153

72

72

527

Non-performing loans ratio (%)

0.26%

1.01%

0.53%

0.41%

4.04%

0.42%

Individual provisions

8

6

76

26

56

172

Collective provisions

70

66

95

42

132

405

On-balance sheet residential mortgage exposures with LVRs that:
Exceeds 80% and not 90%

3.4%

Exceeds 90%

1.8%

A reconciliation of the amounts in this table to the financial statements is included in the Other Information on page 16.

The Supplementary Information does not form part of the Interim Financial Statements

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ANZ Bank New Zealand Limited

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BANK FINANCIAL STRENGTH DASHBOARD
D4. PROFITABILITY / PERFORMANCEClassification differences

Financial statements

Funds management
income and othercommissions

3 months to 30 June 2018

NZ$m

NZ$m

NZ$m

Interest income

1,597

-

1,597

Interest expense

801

-

801

Net interest income

796

-

796

Gains / losses on trading and hedging

34

-

34
167

Dashboard

Fee and commission income

97

70

All other income

108

(70)

38

Operating expenses

374

-

374

Impaired asset expense

6

-

6

Profit before tax

655

-

655

Tax expense

181

-

181

Profit after tax

474

-

474

Return on assets

1.2%

Return on equity

14.4%

Net interest margin

2.2%

D5. FINANCIAL POSITIONClassification differences

Financialstatements
NZ$m

As at 30 June 2018

Other bankdeposits andother assets
NZ$m

Securities
purchased underagreements
to re-sell
NZ$m

Subordinateddebt issued torelated parties
NZ$m

Dashboard
NZ$m

Cash and bank deposits1

4,956

72

(560)

-

4,468

Debt securities held2

14,560(76)--

14,484

Net loans and advances

125,278---

125,278

Derivatives in an asset position

10,768---

10,768All other assets

5,948

4

560

-

6,512

Total assets

161,510---

161,510

Deposits

102,656---

102,656

Debt securities issued3

29,612--(1,951)

27,661Other borrowings

1,960

1,124

-

1,951

5,035

Derivatives in a liability position

10,262---

10,262All other liabilities
Total liabilities

3,617
148,107(1,124)
-

-

-

2,493
148,107

Equity13,403---

13,403

Top 5 credit exposures to non-bank counterparties(ie corporates) as a ratio of CET1 capital

30.5%

4

Comprises cash and cash equivalents and collateral paid
Comprises trading securities, investments backing insurance contract liabilities and available-for-sale assets
Comprises debt issuances plus certificates of deposit and commercial paper from deposits and other borrowings
4
Comprises collateral received and the remaining items of deposits and other borrowings
1

2

3

D6. LIQUIDITY

D7. LARGE EXPOSURES

3 months to 30 June 2018

As at 30 June 2018

Quarterly average core funding ratio

89.6%

Quarterly average 1-month mismatch ratio

4.5%

Quarterly average 1-week mismatch ratio

4.7%

Credit exposures to non-bank counterparties(ie corporates) that are greater than 10% of CET1 capital
Top 5 credit exposures to banks as a ratio of
CET1 capital
Credit exposures to banks that are greater than
10% of CET1 capital

69.0%
3

The Supplementary Information does not form part of the Interim Financial Statements

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ANZ Bank New Zealand Limited

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OTHER INFORMATION
Reconciliation of total loans by purpose and sector
The financial statements and Dashboard include amounts for total loans which are based on different definitions. The table below
reconciles the various amounts. This information does not form part of the Interim Financial Statements.
Housing loans and residential mortgage definitions
Housing loans comprise loans for owner occupier property use and residential investor property use. Owner occupiers are borrowers who
own or are in the process of buying or building the house or flat they will live in as their principal place of residence. An owner can occupy
more than one property e.g. a family home and a holiday home. Only households can have owner occupier property use loans. Investors
are entities or persons borrowing for the purpose of building or purchasing residential property to rent. This includes ‘Mum and dad’investor loans and any person(s) that have a separate residential investor property use loan which is not for their normal business purpose.
Residential mortgage exposures used in the loan-to-valuation ratio analysis are based on the definition of residential mortgage loans as
defined in the Banking Supervision Handbook document Capital Adequacy Framework (internal models based approach) (BS2B). This metricis based on a collateral definition and may include some other lending that is not defined as Housing lending in the asset quality sectionof the Dashboard. See the Banking Supervision Handbook for a more detailed definition.
Note

Housing
NZ$m

Consumer
NZ$mBusiness
NZ$m

Agriculture
NZ$m

All other
NZ$m

Total
NZ$m

4

76,684

n/a

n/a

n/a

49,091

125,775

(14)

-

-

-

-

(14)

(2,599)

-

-

329

2,270

-

Unearned income on finance leases

-

-

-

-

(201)

(201)

Deposit components of overdraft product

-

-

-

-

327

327

Consumer, business and agriculture lending

-

3,568

28,70817,390(49,666)-

74,071

3,568

28,70817,7191,821

125,887

-

-

369

(329)

(40)

-

74,071

3,568

29,077

17,3901,781

125,887

As at 30 June 2018

Total loans per Balance Sheet
Fair value hedge adjustment
Business loans secured by residential property

Loans by purpose (RBNZ series S31)
Business loans secured by residential property
Total loans per Dashboard

D3

The Supplementary Information does not form part of the Interim Financial Statements

16