News Release
For release: 16 August 2019

ANZ release Pillar 3 for June quarter
ANZ today provided an update on credit quality, capital and Australian housing mortgage
flows as part of the scheduled release of its Pillar 3 disclosure statement for quarter ending
30 June 2019 and associated chart pack.
Total provision charge of $209m for the June quarter remained broadly flat compared withthe 1H19 quarterly average, while the individual provision increased $68m to $258m. Total
loss rate was 13bp (consistent with the 1H19 loss rate of 13bp).
Group Common Equity Tier 1 ratio (APRA Level 2) was 11.8% at the end of June 2019, a~30bp increase for the June quarter. On a pro-forma basis, inclusive of announced
divestments and the recently announced capital changes, ANZ’s Level 2 CET1 ratio is11.5%1.
As indicated at ANZ’s first half result presentation, expectation was for home loan volumes
in Australia to decline during the June quarter, with Owner Occupied down 0.2% andInvestor down 1.8% (June 2019 compared with March 2019).
Home loan applications improved in July 2019 with actions taken in recent months to clarifycredit policy and reduce approval turnaround times having a positive impact.
Commenting on home loan application volumes, ANZ Group Executive Australia Retail &Commercial Mark Hand said: “We have taken action to give our customers greater certainty
by improving turnaround times and providing greater clarity to our bankers, mobile lenders
and mortgage brokers about our lending policies.
“We are seeing an increase in application volumes following the policy and process changes,
the next stage is to maintain that and see it translate into settlements over the comingmonths,” Mr Hand said.
For media enquiries contact:
Stephen Ries, +61 409 655 551

Taking into consideration RWA impacts from APRA RWA floor on New Zealand mortgage and farm lending
portfolio (~-20bp), APRA Counterparty Credit Risk (SA-CCR) changes (~-15bp), APRA operational risk capitalchanges (-18bp) and announced divestments (OnePath P&I, Cambodia JV and PNG Retail, Commercial and SMEbusiness) (~20bp)
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Australia and New Zealand Banking Group Limited

ABN 11 005 357 522

JUNE 2019 BASEL III PILLAR 3 /3 RD QUARTER FY19 CHART PACK—16 AUGUST 2019

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITEDCAPITAL & FUNDING

CAPITAL POSITION•APRA Level 2 CET1 ratio was 11.8% (June 2019), ~30bp increase for theJune quarter. On a pro-forma basis, ANZ’s Level 2 CET1 ratio was 11.5%(June 2019)1•

APRA Level 1 CET1 ratio was 11.5% (June 2019), ~30bp increase for theJune quarter•

Awaiting the outcome of APRA and RBNZ regulatory reviews•Sale of OnePath Life to Zurich completed May 2019

APRA LEVEL 2 CET1 RATIO - CAPITAL MOVEMENT%0.4211.49•APRA has announced that it will require D-SIBs, including ANZ, toincrease their Total Capital by 3% of RWA by January 2024. Thisadditional requirement is to be satisfied predominantly with Tier 2 capital•Based on ANZ’s RWA of $396b as at 31 March 2019, the additional 3%
equates to an incremental increase of approximately ~$12b of Tier 2capital•ANZ completed an AUD$1.75b Tier 2 capital issue in July 2019

-0.15

0.20
-0.18

-0.57

Mar-19 Dividends Asset(DRPsalesNeutralised)

TLAC

11.81

0.47

Organic
Cap Gen& OtherJun-19~11.5-0.20

SA-CCR Op. Risk NZ Risk Announced ProWeights divestforma
ments

APRA LEVEL 2 CET1 RATIO%

9.6

9.5

10.1

10.6

10.8

11.0

11.1

11.4

11.3

11.5

11.8

9.8

Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19

1.

Taking into consideration RWA impacts from APRA RWA floor on New Zealand mortgage and farm lending portfolio (~-20bp), APRA Counterparty Credit Risk (SA-CCR) changes (~-15bp), APRA operational risk capitalchanges (-18bp) and announced divestments (OnePath P&I, Cambodia JV and PNG Retail, Commercial and SME business) (~20bp)

2PORTFOLIO MOVEMENTRISK WEIGHTED ASSETSTOTAL RISK WEIGHTED ASSETS BY CATEGORYTOTAL RISK WEIGHTED ASSETS BY DIVISION1$b$b409
3918

152

398

391

396

396

37

38

38

38

16

16

13

12391

396

39

37

1717

143

133

141

139

144

409
24
60

398
22
57

391
15
56

396
12
58

391
1157

396
10
60

168

159

159

166

164

167

170

157

160

161

161

159

159

158

Sep-16

Mar-17

Sep-17Mar-18

Sep-18Mar-19Jun-19147

Australia

Institutional

New Zealand

396959Other

CREDIT RWA MOVEMENT DRIVERS
$b0.9

345.5
200

199

204

202

198

201

199

Sep-16

Mar-17

Sep-17Mar-18

Sep-18Mar-19Jun-19CRWA (ex. Insto)

CRWA (Insto)

Mkt. & IRRBB RWA

Mar-19346.1

0.5

FX

Risk

-0.8

0.0

Lending Mvmt.

Data /Methodology
changes

Op-RWA

Jun-19

1. Institutional RWAs are inclusive of Corporate Banking, transferred from Australia Division to Institutional in October 2017 and backdated to September 2016 for the purposes of chart time series

3

PORTFOLIO MOVEMENTCREDIT RISK WEIGHTED ASSETS & EXPOSURE AT DEFAULT (EAD)EXPOSURE AT DEFAULT (EAD) & CRWA/EAD1

CREDIT RWA & EAD MOVEMENT BY ASSET CLASS$b$b (Jun-19 vs Mar-19) FX Adjusted

894899

930

903

944

968

971
Other

2.3

QRR & Other RetailResidential Mortgage

39.4

RWA drivers include
reduction from lower
volume & increase
from growth in 90+
days past due

1.2
0.5

0.0
36.9

38.0
37.3

0.2

0.1
-0.2

35.8

35.7

35.6

Sovereign & Banks

Includes volume
growth in lower risk
exposures and net
improvement inportfolio risk profileCorporate-3.1
Sep-16

Mar-17

CRWA/EAD %Sep-17Mar-18

Sep-18Mar-19Jun-19Jun-19EAD

ResidentialMortgage (Housing)
Credit RWA

CorporateSovereign & Bank

OtherEAD

1. EAD excludes Securitisation and Other assets whereas CRWA is inclusive as per APS 330

4

CREDIT QUALITY

IP Charge by segment ($m)

PROVISION CHARGE$m

Individual Provision charge

Resi. Mortgage (Adv)

482
283

573
319

243

599

448

43
1Q16-1734

2Q16

3Q16

3Q anualised loss rate

236

462
325

308-43-42-25-65

4Q16

1Q17

2Q17

3Q1732bp

40148

134

158

1Q192Q193Q19237

209

194

258

8

Retail (Adv)43736235311614

Corporate (Adv)556556

1050

186

Other

Collective Provision charge

258
194202

206

246

220-10
4Q17

121

159

156

210

160

183

186-18-4-39-24-30

1Q18

2Q18

3Q18

4Q18

1Q1922bp

GROSS IMPAIRED ASSETS1-6

43
2Q19

12bp

-49
3Q1913bp90+ DAYS PAST DUE LOANS3%

$m
4,000
3,000

3,172

2,940

2,384

2,000

2,034

2,013

2,022

1,972

Sep-16Australia

Mar-17
New ZealandSep-17Mar-18Institutional

Sep-18Mar-19Jun-19Other20.59

0.55
0.391,00000.56

Sep-16

0.44

Mar-170.620.50

Sep-17

Total Group Residential Mortgage

0.56

Mar-180.61 0.62

Sep-180.70 0.67

Mar-190.79

0.70

Jun-19Retail (Pillar 3 QRR & Other Retail categories)

ANZ has commenced implementing revised processes for the identification of impaired assets and a more market responsive collateral valuation methodology for the home loan portfolio in Australia.
From July, this will increase the number of home loans being classified as Impaired rather than Past due >= 90 days.
1. Excluding unsecured 90 days past due;

2. Other includes Retail Asia & Pacific and Australia Wealth;

3. As a % of Exposure at Default

5AUSTRALIA HOME LOANSPORTFOLIOANZ MORTGAGE LENDING1% (12 month rolling growth)
10.0•

Housing portfolio reduced 0.7% in 3Q19 with owner occupied loans down
0.2% and investor loans down 1.8%2 (June 2019 vs March 2019)•Since 1H19 results, actions have been implemented to deliver greater
clarity and consistency in the home loan application and assessment
process. Improved clarity and communication of our credit policies andappetite - internally and to brokers - is delivering better application input
quality and volumes•ANZ ‘Home loan offer so good’ campaign launched July 2019

•These actions have delivered improved turnaround times and higher
application volume in July; this will take time to flow into home loan FUM
growthNote: ANZ’s portfolio
in July 2019 moved-0.4% vs June 2019

7.5
5.0
2.5

0.0
-2.5
Dec16

Mar17

Jun17

Sep17

ANZ total housing

Dec17

Mar18

Jun18

Sep18

Dec18

Mar19

Jun19

System total housing

SWITCHING INTEREST ONLY TO PRINCIPAL & INTEREST

84261H173Q19343779828873
2H17Contractual conversions

1H182H18

Early conversions

1H192H19

1H202H20

1H2164432H21

1H222H22

1H23+Contractual (still to convert)

1. Source: APRA Monthly banking statistics. 2. Source: ANZ internal portfolio analysis, excluding Equity Manager accounts

6

AUSTRALIA HOME LOANS
CREDIT QUALITY

HOME LOANS – 30+ DAYS & 90+ DAYS PAST DUE1HOME LOAN - 90+ DAYS PAST DUE (DPD) TRENDS1(90+ days past due calculated as percentage of Residential Mortgage GLAs, including NonPerforming Loans, consistent with First Half and Full Year reporting)%•In 3Q19, 90+ DPD increased 14bp to 114bp•On a geographic basis, ~9bp of the movement came from NSW andVIC in aggregate

1.5

On a product basis, ~1/3 of the movement came from Interest Only
home loan conversion to Principal & Interest

0.5•

1.00.0%

FY17 & FY18 vintages continue to perform better than FY15 & FY16
Note: New home loan volume3 in FY17 & FY18 was $103b compared with FY15 & FY16 $111b
NSW increased from 27% to 30% of total Australian portfolio across FY15 & FY16

3.0
2.5

2.0

Sep
12Sep
13Sep
14Sep
15Sep
16Sep
17Sep
18Jun
1990 DPD performance inNSW and VIC is tracking
more in line with their
proportion of the portfolio

While delinquency in WA
remains high, WA contribution
to the 90 DPD increase has
reduced this quarter

2.0

1.5

1.5

1.0

1.0
0.5

0.5

0.0

0.0
68
FY15

2.
3.

90+ Investor

HOME LOANS – 90+ DAYS PAST DUE1 (BY STATE)%

1.

90+ Owner Occupied

2.0

HOME LOANS – 90+ DAYS PAST DUE2 (BY VINTAGE)
2.530+ DPD %

2.5

1012
FY161416
FY17182022

Month on book
FY1824262830

323436

VIC & TASNSW & ACTQLD

Mar-12Mar-14Mar-16

Mar-18Mar-13Mar-15Mar-17Mar-19WASA & NT

Portfolio

Jun-19As a percentage of Residential Mortgage GLAs. Includes Non Performing Loans. ANZ delinquencies calculated on a missed payment basis. The current classification of Investor vs Owner Occupier, as reported to regulators and themarket, is based on the classification at origination (as advised by the customer) and the ongoing precision relies on the customers obligation to advise ANZ, and ANZ targeted activity to identify, any change in circumstancesHome loans 90+ dpd vintages % ratio of ever delinquent (measured by # accounts) contains at least 6 application months of that fiscal year contributing to each data point.
New Home loan volume includes New sales and net Other financial institution refinances

7

FURTHER INFORMATIONOur Shareholder information

shareholder.anz.com

Equity Investors

Jill Campbell

Cameron Davis

Retail Investors

Debt Investors

Michelle Weerakoon

Scott Gifford

Group General Manager
Investor Relations+61 3 8654 7749
+61 412 047 448
jill.campbell@anz.com

Manager Shareholder
Services & Events+61 3 8654 7682
+61 411 143 090
michelle.weerakoon@anz.com

Executive Manager
Investor Relations+61 3 8654 7716
+61 421 613 819
cameron.davis@anz.com

Head of Debt Investor
Relations+61 3 8655 5683
+61 434 076 876
scott.gifford@anz.com

Harsh Vardhan

Manager
Investor Relations+61 3 8655 0878
+61 466 848 027
harsh.vardhan@anz.com

Mary Karavias

Associate DirectorDebt Investor Relations+61 3 8655 4318
maria.karavias@anz.com

DISCLAIMER & IMPORTANT NOTICE: The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given insummary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial
situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriateThis presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ’s business and operations, market conditions,results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words “estimate”, “project”, “intend”, “anticipate”,“believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance onthese forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation
Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof toreflect the occurrence of unanticipated events.
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