Australia and New Zealand Banking Group Limited- New Zealand Branch
Registered Bank Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2014 | NUMBER 22 ISSUED MAY 2014

Australia and New Zealand Banking Group Limited - New Zealand Branch

Registered Bank Disclosure Statement
For the six months ended 31 March 2014

Contents
General Disclosures

2

Income Statement

3Statement of Comprehensive Income

3Statement of Changes in Equity

4

Balance Sheet

5

Condensed Cash Flow Statement

6

Notes to the Financial Statements

7

Directors' and New Zealand Chief Executive Officer's
Statement

22

Independent Auditor’s Review Report

23

Glossary of Terms
In this Registered Bank Disclosure Statement (DisclosureStatement) 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, orundertakings conducted in or from New Zealandidentified and treated as if it were conducted by acompany 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 Zealand business of
the Overseas Banking Group;(i) Registered Office is Level 8, 1 Victoria Street, Wellington,
New Zealand, which is also ANZ New Zealand’s addressfor 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 2014; and(m) Any term or expression which is defined in, or in themanner prescribed by, the Order shall have the meaning
given in or prescribed by the Order.

Australia and New Zealand Banking Group Limited - New Zealand Branch

2

General Disclosures
This Disclosure Statement has been issued in accordancewith the Order.

Financial Statements of the Ultimate Parent Bankand Overseas Banking Group

Credit Rating Information

Copies of the most recent publicly available financial
statements of the Ultimate Parent Bank and Overseas
Banking Group will be provided immediately, free of charge,
to any person requesting a copy where the request is madeat the Registered Office. The most recent publicly available
financial statements for the Ultimate Parent Bank andOverseas Banking Group can also be accessed at the internet
address anz.com.

The Ultimate Parent Bank has three credit ratings, which areapplicable to its long-term senior unsecured obligations. The
Ultimate Parent Bank’s credit ratings are:
Current Credit
RatingAA-

Qualification
Outlook Stable

Moody’s Investors Service

Aa2

Outlook Stable

Fitch Ratings

AA-

Outlook Stable

Rating Agency
Standard & Poor’s

Guarantors
No obligations of the NZ Branch are guaranteed as at 22 May
2014.
ANZNZ Covered Bond Trust
Certain debt securities (Covered Bonds) issued by the Bank’s
wholly owned subsidiary, ANZ New Zealand (Int’l) Limited,
are guaranteed by ANZNZ Covered Bond Trust Limited (theCovered Bond Guarantor), solely in its capacity as trustee of
ANZNZ Covered Bond Trust. The Covered Bond Guarantor
has guaranteed the payment of interest and principal of
Covered Bonds with a carrying value as at 31 March 2014 of$3,828 million, pursuant to a guarantee which is secured overa pool of assets. The Covered Bond Guarantor’s address forservice is Level 35, 48 Shortland Street, Auckland, New
Zealand. The Covered Bond Guarantor is not a member ofthe 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 along term rating of Aaa and AAA by Moody’s InvestorsService and Fitch Ratings respectively. Details of the pool ofassets that secure this guarantee are provided in Note 7.

Changes to Conditions of Registration
The conditions of registration applying to the Ultimate
Parent Bank were amended on 30 March 2014 to reflect the
Financial Reporting Act 2013 coming into force on 1 April
2014.

Directorate
Dr Gregory Clark and David Meiklejohn retired on 18
December 2013.
David Gonski became a Director on 27 February 2014 andChairman on 1 May 2014.
Peter Hay, John Morschel and Alison Watkins retired on 30
April 2014.
John Macfarlane became a Director on 22 May 2014.

Auditor
ANZ New Zealand’s auditor is KPMG, Chartered Accountants,
Level 9, 10 Customhouse Quay, Wellington, New Zealand.

Australia and New Zealand Banking Group Limited - New Zealand Branch

3

Income Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2014

31/03/2013 1

30/09/2013 1

Interest income

3,254

3,239

6,461

Interest expense

1,884

1,936

3,820

Net interest income

1,370

1,303

2,641

Net trading gains

94

112

163

149

134

234

246

153

391

1

4

7

Operating income

1,860

1,706

3,436

Operating expenses

727

773

1,513

1,133

933

1,923

(39)

44

66

1,172

889

1,857

Income tax expense

319

236

488

Profit after income tax

853

653

1,369

Audited$ millions

Note

Net funds management and insurance income
Other operating income2

Share of associates' profit

Profit before credit impairment and income tax
Credit impairment charge / (release)5

Profit before income tax

AuditedStatement of Comprehensive Income$ millions

Profit after income tax

Unaudited

Unaudited

6 months to

6 months toYear to31/03/2014

31/03/2013 1

30/09/2013 1

853

653

1,369

24

20

71

Items that will not be reclassified to profit or loss
Actuarial gain on defined benefit schemes
Income tax expense relating to items that will not be reclassified

(7)

(6)

(20)

Total items that will not be reclassified to profit or loss

17

14

51

Unrealised losses recognised directly in equity

(16)

(39)

(138)

Realised gains transferred to income statement

(22)

(14)

(21)

Items that may be reclassified subsequently to profit or loss

Income tax credit relating to items that may be reclassified

10

15

45

Total items that may be reclassified subsequently to profit or loss

(28)

(38)

(114)

Total comprehensive income for the period

842

629

1,306

1

Comparative amounts have changed. Refer to notes 1 and 16 for details.

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$ millions

As at 1 October 2012 (Audited)
Restatement (Note 1)
As at 1 October 2012 (Restated, audited)Sharecapital andhead officeaccount

Availablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

Total equity

6,424

(3)

141

2,615

9,177

-

-

-

(21)

(21)

6,424

(3)

141

2,594

9,156

Profit after income tax

-

-

-

653

653

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

-

-

-

20

20

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

-

-

15

(6)

9

Total comprehensive income for the period

-

1

(39)

667

629

Ordinary dividend paid

-

-

-

(360)

(360)

As at 31 March 2013 (Restated, unaudited)

6,424

(2)

102

2,901

9,425

As at 1 October 2012 (Audited)

6,424

(3)

141

2,615

9,177

-

-

-

(21)

(21)

Restatement (Note 1)
As at 1 October 2012 (Restated, audited)

6,424

(3)

141

2,594

9,156

Profit after income tax

-

-

-

1,369

1,369

Unrealised gains / (losses) recognised directly in equity

-

1

(139)

-

(138)

Realised gains transferred to the income statement

-

-

(21)

-

(21)

Actuarial gain on defined benefit schemes

-

-

-

71

71

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

-

-

45

(20)

25

Total comprehensive income for the period

-

1

(115)

1,420

1,306

Ordinary dividend paid

-

-

-

(720)

(720)

6,424

(2)

26

3,294

9,742

As at 30 September 2013 (Restated, audited)
Profit after income tax

-

-

-

853

853

Unrealised gains / (losses) recognised directly in equity

-

3

(19)

-

(16)

Realised gains transferred to the income statement

-

-

(22)

-

(22)

Actuarial gain on defined benefit schemes

-

-

-

24

24

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

-

(1)

11

(7)

3

Total comprehensive income for the period

-

2

(30)

870

842

Ordinary dividend paid

-

-

-

(535)

(535)

6,424

-

(4)

3,629

10,049As at 31 March 2014 (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

Audited31/03/2014

31/03/2013 1

30/09/2013 1

1,717

3,459

2,347

705

701

515

Collateral paid

1,367

1,142

1,002

Trading securities

12,09010,41910,320$ millions

Note

AssetsCash
Settlement balances receivable

Investments backing insurance contract liabilities
Derivative financial instruments

165

161

172

8,709

9,054

9,508

Current tax assets

38

67

1

Available-for-sale assets

667

1,032

942

102,571

97,697100,113

Other assets

607

596

570

Insurance contract assets

431

422

399

Investment in associates

89

98

98

-

79

42

373

339

376

3,449

3,499

3,448

Total assets

132,978

128,765

129,853

Interest earning and discount bearing assets

118,950

113,654

115,297

1,153

1,410

1,114

Net loans and advances

4

Deferred tax assets
Premises and equipment
Goodwill and other intangible assets

Liabilities
Settlement balances payable

452

267

438

91,181

86,82588,013

10,837

10,349

11,208

13

-

-

1,265

1,504

1,260

211

272

229

Bonds and notes

16,405

17,535

16,407

Subordinated debt

1,412

1,178

1,442

Total liabilities (excluding head office account)

122,929

119,340

120,111

Net assets (excluding head office account)

10,049

9,425

9,742

6,424

6,424

6,424

(4)

100

24

3,629

2,901

3,294

Collateral received
Deposits and other borrowings

8

Derivative financial instruments
Deferred tax liabilities
Payables and other liabilities
Provisions

EquityShare capital and head office accountReserves
Retained earnings
Total equity and head office account

10,049

9,425

9,742

Interest and discount bearing liabilities

104,195

100,960

101,4701Comparative amounts have changed. Refer to notes 1 and 16 for details.

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 toYear to31/03/2014

31/03/2013

30/09/2013

AuditedCash flows from operating activities
Interest received

3,215

3,212

6,432

Interest paid

(1,906)(1,963)(3,859)Other cash inflows provided by operating activities

509

425

852

Other cash outflows used in operating activities(1,016)(1,123)(1,932)

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

802

551

1,493

Net changes in operating assets and liabilities

(785)

1,291

1,141

Net cash flows provided by operating activities

17

1,842

2,634

Cash flows from investing activities
Cash inflows provided by investing activities

10

1

69

Cash outflows used in investing activities

(44)

(56)

(142)

Net cash flows used in investing activities

(34)

(55)

(73)

Cash flows from financing activities
Cash inflows provided by financing activities

2,918

1,105

2,479

Cash outflows used in financing activities(3,168)(2,207)(5,331)

Net cash flows used in financing activities(250)(1,102)(2,852)

Net increase / (decrease) in cash and cash equivalents

(267)

685

(291)

Cash and cash equivalents at beginning of the period

3,002

3,293

3,293

Cash and cash equivalents at end of the period

2,735

3,978

3,002

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

Adoption of these standards has not resulted in any
material change to ANZ New Zealand’s reported result or
financial position.

These interim financial statements are for ANZ New
Zealand for the six months ended 31 March 2014. They
have been prepared in accordance with New Zealand
Generally Accepted Accounting Practice as appropriate for
profit oriented entities, the requirements of NZ IAS 34
Interim Financial Reporting, 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 2013.
(ii)

NZ IAS 19 has been applied retrospectively, in accordancewith transitional provisions, with the net impact of initial
application recognised in retained earnings as at 30
September 2012 and shown in the statement of changes
in equity. The balances of payables and other liabilities
and the associated deferred tax asset have been restatedfor subsequent periods.
Amendments to NZ IAS 34 require certain fair value
disclosures which have been included in Note 12, howevercomparative information is not required in the first year of
application.

Basis of measurement
These financial statements have been prepared on a going
concern basis in accordance with historical cost concepts
except that the following assets and liabilities are stated attheir fair value:
•

•
•
•

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; andfinancial instruments designated at fair value
through profit and loss.

(iv) Presentation currency and rounding
The amounts contained in the financial statements arepresented in millions of New Zealand dollars, unlessotherwise stated.
(v)

In addition to restatements resulting from the initial
application of NZ IAS 19, certain amounts in thecomparative information have been reclassified to ensure
consistency with the current year’s presentation. Further
information on changes to comparative information is
included in note 16.

(iii) Changes in accounting policies
ANZ New Zealand has applied the following new
accounting standards and amendments in the preparationof these financial statements:
•
•
•
•
•

2.

Comparatives(vi) Principles of consolidation

NZ IFRS 10 Consolidated Financial Statements;
NZ IFRS 13 Fair Value Measurement;
NZ IAS 19 Employee Benefits (amended 2011);
NZ IAS 28 Investments in Associates and Joint Ventures(amended 2011); andNZ IAS 34 Interim Financial Reporting (consequential
amendments).

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 (those entities
where it is determined that the Ultimate Parent Bank has
capacity to control).

Other Operating Income
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2014

31/03/2013

30/09/2013

Net fee income

194

199

398

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

(48)

(61)

(55)

Insurance settlement relating to ING Diversified Yield Fund and ING Regular Income Fund

91

-

16

$millionsAuditedGain / (loss) on sale of subsidiary and associate-(1)

Other income

9

16

32

246

153

391

Total other operating income

Australia and New Zealand Banking Group Limited - New Zealand Branch

8

Notes to the Financial Statements
3.

Segmental Analysis

ANZ New Zealand is organised into four major businesssegments for segment reporting purposes - Retail,Commercial, Wealth and Institutional. Centralised back officeand corporate functions support these segments. Thesesegments are consistent with internal reporting provided tothe 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.
RetailRetail provides products and services to personal customers
via the branch network, mortgage specialists, the contact
centre and a variety of self service channels (internet
banking, phone banking, ATMs, website and mobile phonebanking). Core products include current and savings
accounts, unsecured lending (credit cards, personal loans
and overdrafts) and home loans secured by mortgages overproperty. Retail distributes insurance and investment
products on behalf of the Wealth segment.

services are offered to small enterprises (typically with annual
revenues of less than $5 million). Commercial & Agricustomers consist of primarily privately owned medium tolarge enterprises. ANZ New Zealand's relationship with thesebusinesses ranges from simple banking requirements withrevenue 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 sizedbusinesses, as well as investment products.
WealthWealth comprises the Private Wealth, Funds Management
and Insurance businesses, which provide private banking,investment, superannuation and insurance products andservices.
Institutional
Institutional provides financial services through a number of
specialised units to large multi-banked corporations, often
global, which require sophisticated product 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

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

Business segment analysis1
RetailCommercial

Wealth2

Institutional

Other 3

Total

External revenues

713

1,406

151

389

(799)

1,860

Intersegment revenues

(77)

(687)

76

(72)

760

-

Total revenues

636

719

227

317

(39)

1,860

Profit / (loss) after income tax

222

377

121

163

(30)

853

External revenues

695

1,359

41

451

(840)

1,706

Intersegment revenues

(99)

(646)

73

(117)

789

-

Total revenues

596

713

114

334

(51)

1,706

Profit / (loss) after income tax

177

332

38

167

(61)

653
3,436

$ millions
Unaudited 6 months to 31/03/2014

Unaudited 6 months to 31/03/2013

Audited year to 30/09/2013

External revenues

1,398

2,757

80

800

(1,599)Intersegment revenues(175)(1,315)

149

(194)

1,535

-

Total revenues

1,223

1,442

229

606

(64)

3,436

379

701

81

284

(76)

1,369

Profit / (loss) after income tax
1
2

3

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
Wealth external revenues for the six months to 31 March 2014 includes the $91 million insurance settlement relating to the Bank’s former involvement in the ING
Diversified Yield fund and the ING Regular Income Fund.
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

Audited31/03/2014

31/03/2013

30/09/2013

Overdrafts

1,789

1,718

1,841

Credit card outstandings

1,525

1,415

1,458

Term loans - housing

60,59256,96958,814

Term loans - non-housing$ millions

Note

38,52137,78238,024

Lease receivables

112

149

128

Hire purchase

768

668

721

Other

125

135

125

103,432

98,836

101,111

Total gross loans and advances
5

(744)

(978)

(849)

Less: Unearned income

(352)

(327)

(342)

Add: Capitalised brokerage/mortgage origination fees

183

135

162

Add: Customer liability for acceptances

52

31

31

102,571

97,697100,113Retailmortgages

Other retail
exposures

Non retail
exposures

Total

New and increased provisions

30

62

45

137

Write-backs

(30)

(10)

(60)

(100)

Recoveries of amounts written off previously

(1)

(9)

(5)

(15)

Individual credit impairment charge / (release)

(1)

43

(20)

22

Collective credit impairment release

(12)

(3)

(46)

(61)

Credit impairment charge / (release)

(13)

40

(66)

(39)

New and increased provisions

52

46

93

191

Write-backs

(35)

(11)

(58)

(104)

-

(8)

(2)

(10)

Individual credit impairment charge

17

27

33

77

Collective credit impairment release

-

(13)

(20)

(33)

17

14

13

44

New and increased provisions

105

113

157

375

Write-backs

(88)

(30)

(104)

(222)

Recoveries of amounts written off previously

(2)

(16)

(5)

(23)

Individual credit impairment charge

15

67

48

130

Collective credit impairment release

(5)

(8)

(51)

(64)

Credit impairment charge / (release)

10

59

(3)

66

Less: Provision for credit impairment

Total net loans and advances

5.

Provision for Credit Impairment

Credit impairment charge / (release)$ millions
Unaudited 31/03/2014

Unaudited 31/03/2013

Recoveries of amounts written off previously

Credit impairment charge
Audited 30/09/2013

Australia and New Zealand Banking Group Limited - New Zealand Branch

10

Notes to the Financial Statements
Movement in provision for credit impairment
Retailmortgages

Other retail
exposures

Non retail
exposures

Total

Balance at beginning of the period

115

117

324

556

Release to income statement

(12)

(3)

(46)

(61)

Balance at end of the period

103

114

278

495
293

$ millions
Unaudited 31/03/2014

Collective provision

Individual provision
83

22

188

New and increased provisions net of write-backs

-

52

(15)

37

Bad debts written off

(3)

(55)

(25)

(83)

Discount unwind reversal / (discount unwind)

(3)

-

5

2

Balance at beginning of the period

Balance at end of the period

77

19

153

249

Total provision for credit impairment

180

133

431

744

620

Unaudited 31/03/2013

Collective provision
Balance at beginning of the period

120

125

375

Release to income statement

-

(13)

(20)

(33)

Balance at end of the period

120

112

355

587

Balance at beginning of the period

130

26

305

461

New and increased provisions net of write-backs

17

35

35

87

Bad debts written off

(15)

(40)

(85)

(140)

Discount unwind

(5)

-

(12)

(17)

Balance at end of the period

127

21

243

391

Total provision for credit impairment

247

133

598

978

Balance at beginning of the year

120

125

375

620

Release to income statement

(5)

(8)

(51)

(64)

Balance at end of the year

115

117

324

556

Balance at beginning of the year

130

26

305

461

New and increased provisions net of write-backs

17

83

53

153

Bad debts written off

(55)

(87)

(150)

(292)

Individual provision

Audited 30/09/2013

Collective provision

Individual provision

Discount unwind

(9)

-

(20)

(29)

Balance at end of the year

83

22

188

293

Total provision for credit impairment

198

139

512

849

Australia and New Zealand Banking Group Limited - New Zealand Branch

11

Notes to the Financial Statements
6.

Impaired Assets and Past Due Assets
Retailmortgages

Other retail
exposures

Non-retail
exposures

Total

Balance at the beginning of the period

214

49

666

929

Transfers from productive

110

78

129

317

Transfers to productive

(24)

(1)

(60)

(85)

Assets realised or loans repaid

(81)

(19)

(171)

(271)

Write offs

(3)

(55)

(25)

(83)

Total impaired assets

216

52

539

807

-

1

34

35

Balance at the beginning of the period

352

44

1,009

1,405

Transfers from productive

190

58

151

399

$ millions
Unaudited 31/03/2014

Undrawn facilities with impaired customers
Unaudited 31/03/2013

Transfers to productive

(2)

(1)

(30)

(33)

(173)

(15)

(207)

(395)

Write offs

(15)

(40)

(85)

(140)

Total impaired assets

352

46

838

1,236

-

-

17

17
1,405

Assets realised or loans repaid

Undrawn facilities with impaired customers
Audited 30/09/2013

Balance at the beginning of the period

352

44

1,009

Transfers from productive

315

134

401

850

Transfers to productive

(93)

(5)

(194)

(292)

Assets realised or loans repaid

(305)

(37)

(400)

(742)

Write offs

(55)

(87)

(150)

(292)

Total impaired assets

214

49

666

929

-

1

24

25

Undrawn facilities with impaired customers

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 value of
associated security should be sufficient to ensure that ANZ New Zealand will recover the entire amount owing over the life of the
facility and there is reasonable assurance that collection efforts will result in payment of the amounts due in a timely manner.
Ageing analysis of loans that are past due but not impaired
Retailmortgages

Other retail
exposures

Non retail
exposuresTotal

1 to 5 days

389

135

559

1,083

6 to 29 days

300

102

84

486

1 to 29 days

689

237

643

1,569

30 to 59 days

203

38

240

481

60 to 89 days

71

19

18

108

90 days or over

131

39

66

236

1,094

333

967

2,394

$ millions
Unaudited 31/03/2014

Australia and New Zealand Banking Group Limited - New Zealand Branch

12

Notes to the Financial Statements
7.

Financial Assets Pledged as Collateral$ millions

Unaudited

Unaudited

Audited31/03/2014

31/03/2013

30/09/2013

1,367

1,142

1,002

Trading securities encumbered through repurchase agreements

32

343

108

Residential mortgages pledged as security for covered bonds

6,780

5,548

5,857

Total assets of UDC Finance Limited pledged as collateral for UDC secured investments

2,272

2,125

2,162

Total financial assets pledged as collateral

10,451

9,158

9,129

Cash collateral given on derivative financial instruments

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 (if any) 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 are pledged as
security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8.

Deposits and Other Borrowings$ millions

Note

Unaudited

Unaudited

Audited31/03/2014

31/03/2013

30/09/2013

Certificates of deposit

1,604

1,624

2,364

Term deposits

34,86933,73233,862Other deposits bearing interest and other borrowings

31,833

28,347

29,687

Deposits not bearing interest

5,833

5,717

5,526

361

491

180

5,401

4,336

4,765

1,534

1,467

1,492

Borrowings from Ultimate Parent Bank and Immediate Parent Company

9,746

11,111

10,137

Total deposits and other borrowings

91,181

86,82588,013

Unaudited

Unaudited

Audited31/03/2014

31/03/2013

30/09/2013

Deposits from banks
Commercial paper
UDC secured investments

9.

7

Related Party Transactions$ millions

Total due from related parties

2,886

2,034

2,325

Total due to related parties

15,861

16,352

16,247

Australia and New Zealand Banking Group Limited - New Zealand Branch

13

Notes to the Financial Statements
10. Capital Adequacy
Basel III capital ratios

Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2014

31/03/2013

30/09/2013

Common equity tier 1 capital

8.3%

8.2%

8.5%

8.3%

8.4%

8.5%

Tier 1 capital

10.3%

9.8%

10.4%

10.6%

10.3%

10.6%

Total capital

12.1%

11.7%

12.2%

12.5%

12.2%

12.5%

31/03/2014

31/03/2013

30/09/2013

Unaudited

For calculation of minimum capital requirements under Pillar 1 (Capital Requirements) of the Basel Accord, APRA has accredited theOverseas Banking Group to use the Advanced Internal Ratings Based (AIRB) methodology for calculation of 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 2014 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2014. The Overseas Banking
Group’s Pillar 3 disclosure document for the quarter ended 31 March 2014, in accordance with APS 330: Public Disclosure ofPrudential Information, discloses capital adequacy ratios and other prudential information. This document can be accessed at thewebsite anz.com.
Market risk
ANZ New Zealand’s aggregate market risk exposures below have been calculated in accordance with the RBNZ document BS2B. The
peak end-of-day market risk exposures are for the half-year ended 31 March 2014.
Implied risk weighted exposure$ millions

Notional capital charge

Peak

Period end

Peak

Period end

Peakoccurred on

4,281

5,405

342

432

30/12/2013

135

168

11

13

20/03/2014

2

2

-

-

1/10/2013

Unaudited 31/03/2014

Interest rate risk
Foreign currency risk
Equity risk

4,418

353

Residential mortgages by loan-to-valuation ratio
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 andpartially drawn residential mortgage loans as well as commitments to lend. Commitments to lend are formal offers for housing
lending which have been accepted by the customer. For this financial period, ANZ New Zealand has altered the banding of
exposures in the LVR table below to align presentation with the new RBNZ LVR commitment reporting. Updated corresponding
amounts as at 30 September 2013 have been provided for comparative purposes.
31/03/2014
Unaudited

30/09/2013

On-balancesheet

Off-balance
sheet

Total

On-balancesheet

Off-balance
sheet

Total

Does not exceed 60%

20,636

3,278

23,914

19,7783,117

22,895

Exceeds 60% and not 70%

10,196905

11,101

9,354

788

10,142

Exceeds 70% and not 80%

16,315

1,436

17,751

14,566

1,179

15,745

Does not exceed 80%

47,147

5,619

52,766

43,698

5,084

48,782

Exceeds 80% and not 90%

7,079

182

7,261

8,110

277

8,387

Exceeds 90%

4,282

282

4,564

4,773

342

5,115

Total

58,508

6,083

64,591

56,581

5,703

62,284$ millions

LVR range

Australia and New Zealand Banking Group Limited - New Zealand Branch

14

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

Term loans - housing

Note

31/03/2014

30/09/2013

460,59258,814

Add: fair value hedging adjustment78

35

Add: short-term housing loans classified as overdrafts

486

499

(2,648)(2,767)58,50856,581

Less: housing loans made to corporate customers
10

On-balance sheet retail mortgage exposures
Add: off-balance sheet retail mortgage exposures

10

Total retail mortgage exposures as per LVR analysis

6,083

5,703

64,591

62,284

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 thesame 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.
Cash,settlements
receivable andcollateral paid

Tradingsecurities andavailable-forsale assets

Derivative
financial
instruments

Net loans andadvances 3Agriculture

-

-

22

17,072

Forestry, fishing and mining

-

-

13

Business and property services

-

-

18

Construction

-

-

-

Entertainment, leisure and tourism

-

-

22

Finance and insurance

2,494

5,015

Government and local authority1

Unaudited 31/03/2014$ millions

Other
financial Credit related
assets commitments 4

Total

Industry
72

2,124

19,290

983

4

1,133

2,133

9,170

38

2,617

11,843

1,125

5

849

1,979

1,049

4

351

1,426

7,663

910

288

1,082

17,452
11,644

1,295

7,595

244

1,185

5

1,320

Manufacturing

-

35

70

3,039

13

2,273

5,430

Personal lending

-

-

-

62,744224

12,31075,278Retail trade

-

-

38

1,928

8

948

2,922

Transport and storage

-

7

48

1,473

6

875

2,409

Wholesale trade

-

-

11

1,227

5

1,275

2,518

2

-

105

560

1,579

7

1,855

4,106

3,789
-

12,757-

8,709-

103,484
(652)

679
-

29,012(92)

158,430
(744)

-

-

-

(352)

-

-

(352)

-

-

-

183

-

-

183

3,789

12,757

8,709

102,663679

28,920157,517

New Zealand

2,756

9,240

2,001

100,178670

28,757

143,602

Overseas

1,033

3,517

6,708

2,485

9

163

13,915

Total financial assets

3,789

12,757

8,709

102,663679

28,920157,517

Other

Less: Provision for credit impairment
Less: Unearned income
Add: Capitalised brokerage / mortgage
origination fees
Total financial assets
Geography

12
3
4

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.
Excludes individual and collective provisions for credit impairment held in respect of credit related commitments.
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 to each asset or liability canbe changed.
Unaudited 31/03/2014
Total

Up to
3 months

Over 3 to
6 months

Over 6 to
12 months

Over 1 to
2 yearsOver
2 years

Not bearing
interest

1,717

1,511

-

-

-

-

206

705

86

-

-

-

-

619

Collateral paid

1,367

1,367

-

-

-

-

-

Trading securities

12,090

1,007

556

512

3,271

6,744

-

Derivative financial instruments

8,709

-

-

-

-

-

8,709

$ millions

AssetsCash
Settlement balances receivable

Available-for-sale assets

667

129

-

30

258

248

2

Net loans and advances

102,571

62,426

6,994

12,14013,325

8,181

(495)

Other financial assets

679

134

14

14

3

-

514

Total financial assets

128,505

66,6607,564

12,696

16,857

15,173

9,555

1,153

305

-

-

-

-

848

452

452

-

-

-

-

-

Deposits and other borrowings

91,18164,287

10,619

7,583

1,667

1,192

5,833

Derivative financial instruments

10,837

-

-

-

-

-

10,837

Bonds and notes

16,405

4,964

15

1,019

4,394

6,013

-

Subordinated debt

1,412

-

577

-

-

835

-

Liabilities
Settlement balances payable
Collateral received

829

98

-

-

5

170

556

Total financial liabilities

122,269

70,106

11,211

8,602

6,066

8,210

18,074

Hedging instruments-

10,971

11,122(13,784)(7,020)(1,289)-Interest sensitivity gap

6,236

7,525

7,475

(9,690)

3,771

5,674

(8,519)

Payables and other 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 those classified as operating assets in the Condensed Cash Flow Statement.
Unaudited 31/03/2014$ millions

Cash

Trading
Securities

Available-forsale securities

Total

1,295

-

-

1,295

14

-

-

14

Certificates of deposit

-

-

100

100

Government, local body stock and bonds

-

6,948

526

7,474

Government treasury bills

-

-

1

1

Other bonds

-

4,891

-

4,891

1,309

11,839627

13,775

Balances with central banks
Securities purchased under agreement to resell

Total liquidity portfolio

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 Zealand employs funding
metrics to ensure that an appropriate proportion of its assets are funded from stable sources, including customer liabilities, longerdated wholesale debt (with remaining term exceeding one year) and equity.
Analysis of funding liabilities by industry sector is based on ANZSIC codes.
Unaudited$ millions

31/03/2014

Funding composition
Customer deposits1
New Zealand

65,442

Overseas

8,627

Total customer deposits

74,069Wholesale funding
Bonds and notes

16,405Subordinated debt

1,412

Certificates of deposit

1,604

Commercial paper

5,401

Settlement balances payable

1,153

Collateral received

452

Other borrowings

10,107

Total wholesale funding

36,534

Total funding

110,603

Concentrations of funding by industry
Households

45,160Agriculture

2,729

Forestry, fishing and mining
ManufacturingEntertainment, leisure and tourism
Finance and insurance
Retail trade

644
1,550
909
46,062906

Wholesale trade

1,048

Business and property services

5,660

Transport and storage

668

Construction

933

Government and local authority
Other2
Total funding

2,547
1,787
110,603

Concentrations of funding by geography3
New Zealand

71,456Australia

11,333

United States

9,216

Europe12,357

Other countries

6,241

Total funding

110,6031
2
3

Comprises term deposits, other deposits bearing interest and other borrowings, deposits not bearing interest and UDC secured investments
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, basedon the earliest date on which ANZ New Zealand may be required to realise an asset or settle a liability. The amounts disclosed in thetables 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 31/03/2014
Total

At callUp to
3 months

Over 3 to
12 months

Over 1 to
5 yearsOver
5 years

No maturity
specified

1,717

1,501

216

-

-

-

-

705

84

621

-

-

-

-

Collateral paid

1,367

-

1,367

-

-

-

-

Trading securities

13,614

-

378

1,680

10,1001,456-

Derivative financial assets (trading)

7,789

-

7,789

-

-

-

-

Available-for-sale assets

729

-

117

18

592

-

2

Net loans and advances

144,765-

16,624

17,71944,304

66,118-$ millions

Financial assets
Cash
Settlement balances receivable

Other financial assets

284

-

253

28

3

-

-

Total financial assets

170,970

1,585

27,365

19,44554,99967,574

2

1,153

584

569

-

-

-

-

452

-

452

-

-

-

-

Deposits and other borrowings

93,222

27,19633,704

23,126

9,193

3

-

Derivative financial liabilities (trading)

9,142

-

9,142

-

-

-

-

Bonds and notes

17,325

-

1,482

1,898

13,334

611-

Subordinated debt

1,689

-

14

41

178

44

1,412

Financial liabilities
Settlement balances payable
Collateral received

Other financial liabilities

489

-

181

10

139

159

-

Total financial liabilities

123,472

27,78045,54425,07522,844817

1,412

Derivative financial instruments used for balance sheet management- gross inflows

22,804

-

1,226

6,263

14,569746-- gross outflows
Net financial assets / (liabilities) after balance
sheet management(23,515)-(1,214)(6,401)(15,163)(737)-

46,787(26,195)(18,167)(5,768)31,561

66,766(1,410)Contractual maturity of off-balance sheet commitments and contingent liabilities
Unaudited 31/03/2014$ millions

Non-credit related commitments
Credit related commitments
Contingent liabilities
Total

Less than

BeyondTotal

1 year

1 year472
26,6792,333
29,484122
26,6792,333
29,134350350

Australia and New Zealand Banking Group Limited - New Zealand Branch

18

Notes to the Financial Statements
12. Fair Value Measurements
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 value of financial asset and liability
categories other than those categories where the carrying amount is at fair value or considered a reasonable approximation of fairvalue:

Unaudited

31/03/2014$ millions

Carrying amount

Fair value

102,571

102,582

Deposits and other borrowings2

91,18191,301

Bonds and notes1

16,405

16,583

Subordinated debt

1,412

1,389

AssetsNet loans and advances1
Liabilities

1

2

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.
Includes commercial paper designated at fair value through profit or loss of $5,401 million.

Financial assets and financial liabilities measured at fair value in the balance sheet
ANZ New Zealand uses a valuation method within the following hierarchy to determine the carrying amount of assets and liabilities
held at fair value, all of which are recurring fair value measurements. There are no assets or liabilities measured at fair value on a nonrecurring basis.
Level 1 - Quoted market price
Where an active market exists fair value is based on quoted market prices for identical financial instruments. The quoted market
price is not adjusted for any potential impact that may be attributed to a large holding of the financial instrument.
Level 2 - Valuation technique using observable inputs
In the event that there is no quoted market price for the instruments, fair values are based on present value estimates or othermarket accepted valuation techniques which include data, including interest and exchange rates, from observable markets wherever
possible.
Level 3 - Valuation technique with significant non observable inputs
ANZ New Zealand holds units in an unlisted fund which does not trade in an active market. The fair value of these units is based on
the estimated cashflows from the realisation of the underlying assets.
ANZ New Zealand recognises transfers between Level 1, Level 2 and Level 3 as of the beginning of the reporting period during which
the transfer has occurred. There have been no transfers between levels during the period.
Valuation hierarchy
Unaudited 31/03/2014$ millions

Level 1

Level 2

Level 3

Total

12,06228-

12,090

7

8,702

-

8,709

Available-for-sale assets

665

-

2

667

Investments backing insurance policy liabilities

114

51

-

165

12,8488,781

2

21,631

-

5,401

-

5,401

Derivative financial instruments

4

10,833-

10,837

Payables and other liabilities

222

-

-

222

Total financial liabilities held at fair value

226

16,234-

16,460Financial assets
Trading securities
Derivative financial instruments

Total financial assets held at fair value
Financial liabilities
Deposits and other borrowings

Australia and New Zealand Banking Group Limited - New Zealand Branch

19

Notes to the Financial Statements
13. 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 andin respect to non-bank counterparties on the basis of limits.
For the six months ended 31 March 2014 there were no individual counterparties, excluding connected parties, governments andbanks with long term credit ratings of A- or above, where ANZ New Zealand’s period end or peak end-of-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.

14. Insurance business
ANZ New Zealand conducts insurance business through its subsidiaries OnePath Life (NZ) Limited and OnePath Insurance Services(NZ) Limited. The aggregate amount of insurance business in this group comprises assets totalling $787 million (31/03/2013 $793
million; 30/09/2013 $779 million), which is 0.6% (31/03/2013 0.6%; 30/09/2013 0.6%) of the total consolidated assets of ANZ New
Zealand.

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

Unaudited

Unaudited

Audited31/03/2014

31/03/2013

30/09/2013

Credit related commitments
Commitments with certain drawdown due within one year

1,073

859

817

Commitments to provide financial services

25,60624,82324,250Total credit related commitments

26,67925,68225,067

Financial guarantees

985

650

997

Standby letters of credit

60

53

32

Transaction related contingent items

1,222

976

1,059

Trade related contingent liabilities

66

78

113

2,333

1,757

2,201

Guarantees and contingent liabilities

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 to the same credit
origination, portfolio management and collateral requirements as for customers that apply for loans. The contract amountrepresents the maximum potential amount that could be lost if the counterparty fails to meet its financial obligations. As thefacilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
Other contingent liabilities
In December 2013, the Commerce Commission announced that it intended to file proceedings against the Bank (and two otherbanks) under the Fair Trading Act 1986 in relation to the sale of interest rate swaps to rural customers. On 2 April 2014, theCommission stated that it anticipates making a further announcement in mid-2014 after it has progressed discussions with eachbank. The potential outcome of any proceedings which may be issued cannot be determined with any certainty at this stage.
In June 2013, litigation funder Litigation Lending Services (NZ) Limited filed a representative action against the Bank regarding
certain fees charged to New Zealand customers. The potential outcome of this litigation cannot be determined with any certainty at
this stage.
The Banking Group has other contingent liabilities in respect of actual and possible claims and court proceedings. An assessment of
the Banking Group’s likely loss in respect of these matters has been made on a case-by-case basis and provision made where
deemed necessary.

Australia and New Zealand Banking Group Limited - New Zealand Branch

20

Notes to the Financial Statements
16. Changes to comparatives
Certain amounts in the comparative information have been reclassified to conform with current period financial statement
presentations.
During the period, the classification of the balance sheet has been changed to reflect the nature of the financial assets and liabilities
reported. Prior to the reclassification, the balance sheet was classified according to counterparty. This has resulted in the followingchanges to previously reported balance sheet classifications. Minor changes in the overall total assets and total liabilities have also
occurred due to the adoption of IAS19 Employee Benefits and to gross up net insurance assets for the present value of reinsurance
premiums payable.
Associated amounts in the income statement, statement of comprehensive income and cash flow statement have been restatedaccordingly, and the impact of the changes to these statements is not material.
31/03/2013
Unaudited$ millions

Previously
reported

Liquid assets
Due from other financial institutions

30/09/2013

ChangeCurrently
reported

Previously
reported

ChangeCurrently
reported

3,371(3,371)-

2,496(2,496)-2,045(2,045)-

1,711(1,711)

-

Cash

-

3,459

3,459

-

2,347

2,347

Settlement balances receivable

-

701

701

-

515

515

Collateral paid

-

1,142

1,142

-

1,002

1,002

Available-for-sale assets

873

159

1,032

782

160

942

Net loans and advances

97,398299

97,697

99,765348

100,113

Insurance policy assets

313

109

422

399

-

399

Other assets

940

(344)

596

735

(165)

570

Deferred tax assets

71

8

79

36

6

42

All other assets

23,637-

23,63723,923-23,923

Total assets

128,648

117

128,765

129,8476

129,853

11,129(11,129)-

9,871(9,871)-

Settlement balances payable

-

1,410

1,410

-

1,114

1,114

Collateral received

-

267

267

-

438

438

75,224

11,601

86,82577,696

10,31788,013

AssetsLiabilities
Due to other financial institutions

Deposits and other borrowings
Due to immediate parent company

-

-

-

1,766

(1,766)

-

1,750

(246)

1,504

1,473

(213)

1,260

Term funding

1,766(1,766)

-

-

-

-

All other liabilities

29,334-29,33429,286-29,286

Total liabilities

119,203137

119,340

120,092

19

120,111

9,445

(20)

9,425

9,755

(13)

9,742

Payables and other liabilities

EquityAustralia and New Zealand Banking Group Limited - New Zealand Branch

21

Notes to the Financial Statements
17. Additional Disclosures
NZ Branch Funding

Unaudited$ millions

31/03/2014

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

28

Overseas Banking Group Profitability and Size

Unaudited

AUD millions

31/03/2014

Profit for the six months ended 31/03/20141
Net profit after tax for the 12 months to 31/03/2014 as a percentage of average total assets
Total assets
Percentage change in total assets in the 12 months to 31/03/2014
1

3,387
0.94%

737,815
9.69%

Net profit after tax for the period includes $6 million of profit attributable to non-controlling interests.

Overseas Banking Group asset quality

Unaudited

AUD millions

31/03/2013

Gross impaired assets

3,620

Gross impaired assets as a percentage of total assets

0.5%

Individual provision

1,470

Individual provision as a percentage of gross impaired assets

40.6%

Collective provision

2,843

Australia and New Zealand Banking Group Limited - New Zealand Branch

22

Directors’ and New Zealand Chief Executive Officer’s Statement
As at the date on which this Disclosure Statement is signed, after due enquiry, each Director of the Ultimate Parent Bank and theChief 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 2014; and(ii)

The Disclosure Statement is not false or misleading.

Over the six months ended 31 March 2014, 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 and the Bank had systems in place to monitor and control adequately the material risks of Relevant Members of
ANZ New Zealand including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk andother business risks, and that those systems were being properly applied.

This Disclosure Statement is dated 22 May 2014, 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.

David Gonski, AC
Chairman,on behalf of the Directors:
Paula Dwyer
Lee Hsien Yang
Graeme Liebelt
Ian Macfarlane, ACJohn Macfarlane
Michael Smith, OBE

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

23

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 21 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 2014 (the Order) and the supplementary information prescribed 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 2014.
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 Orderwhich give a true and fair view of the financial position of ANZ New Zealand as at 31 March 2014 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 arenecessary 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 the matters towhich 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 to you
whether, in our opinion on the basis of the procedures described below, anything has come to our attention that would cause us to believethat the interim financial statements have not been prepared, in all material respects, in accordance with New Zealand Equivalent toInternational Accounting Standard 34 (NZ IAS 34): Interim Financial Reporting and do not present a true and fair view of the financial positionof ANZ New Zealand as at 31 March 2014 and its financial performance and cash flows for the six months ended on that date.
We are responsible for reviewing the supplementary information (excluding the supplementary information relating to capital adequacy) inorder to report to you whether, in our opinion on the basis of the procedures described below, anything has come to our attention thatwould 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 orderto state whether, on the basis of the procedures described below, anything has come to our attention that would cause us to believe thatthe 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 and analytical 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 anaudit, 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, inaccordance 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 2014 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 to which it
relates in accordance with those Schedules; andc.

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

Our review was completed on 22 May 2014 and our review opinion is expressed as at that date.

Wellington