Media Release
For release: 17 August 2012

ANZ Trading Update – 9 months to 30 June 2012
- business performance solid despite headwinds from softer economicconditions, continued progress with super regional strategy As part of a third quarter trading update today, ANZ Chief Executive Officer Mike Smith said ANZ had
continued to execute against its super regional strategy with a solid business performance consistent
with the outlook provided at the time of half year results.
“We continue to see growth opportunities in the business from ongoing good performance inInternational and Institutional Banking while also focusing on driving greater cost and capitalefficiency across the Group. We have seen continuing market share gains and some recovery inmargin in the Australia Division and the benefits of productivity initiatives initiated earlier in the year
are beginning to show through. New Zealand has also seen market share gains particularly in Retailand costs continue to be tightly controlled.
“We have managed ongoing funding and competitive pressures well, with Group margins stable
relative to the end of the first half. While the credit environment reflects the pressures in the broader
economy there have been no developments which would lead us to alter our provision outlook,” Mr
Smith said.
Overview11•

Unaudited underlying profit for the nine months to 30 June 2012 increased 5.5% to $4.5billion2. Unaudited statutory profit after tax was $4.4 billion up 10.3%. The Australia, New
Zealand and International and Institutional Banking (IIB) divisions all recorded income
increases, with Wealth division income down slightly.

•Total Global Markets income is tracking up 2% year to date to $1.4 billion3; income
composition is changing in line with strategy with customer sales revenues up strongly.

•ANZ’s productivity program is on track with an expectation of neutral jaws at the Full Year4.

•Group margins (excluding Global Markets) have been stable5 and Australia Division margins
recovered slightly since the end of the half. Initiatives to manage asset pricing across theGroup have been offset by continued funding and deposit pricing pressure and competition
particularly in the Institutional book.

•Credit quality trends are in line with expectations; consequently the Group continues toanticipate that the provision charge for FY12 will be similar to FY11.

•

The June quarter APS330 released today shows that total impaired assets have declined $117
million while new impaired assets were also lower. Provision coverage remains strong with thetotal provision coverage ratio 1.87% and the collective provision coverage ratio at 1.18%.6

All comparisons are financial year to 30 June 2012 relative to financial year to 30 June 2011 (PCP) unless otherwise noted.
Statutory profit is adjusted to exclude certain non-core items to arrive at underlying profit. Underlying profit derived on a consistent basis toprior periods.
3All IIB comparisons including those for Global Markets are FX adjusted.
4Jaws refers to the differential between income growth rates and cost growth rates.
5Comparison to 270 bps second quarter FY12 (per slide 26 ANZ 1H12 Results Presentation and Investor Discussion pack).
6
Total provision coverage is the individual provision plus the collective provision as a percentage of credit risk weighted assets (CRWA).
Collective Provision ratio is the collective provision as a percentage of CRWA.
Australia and New Zealand Banking Group Limited ABN 11 005 357 5222•2Financial year to date customer deposits have increased 8.7% with lending assets up 7.7%7.

•

ANZ is well placed ahead of the introduction of Basel III capital rules which apply in Australia
from 1 January 2013; ANZ’s APRA Basel III CET1 ratio at 30 June was 7.8% (unchanged fromthe half year) which equates to 9.8% on a fully harmonised basis.

•The FY12 term wholesale funding task was completed ahead of schedule.

BUSINESS COMMENTARY8AUSTRALIA DIVISION
Market share in traditional banking, household deposits, household lending and commercial has
increased despite challenging economic conditions. While asset repricing has been largely offset bydeposit pricing pressure the divisional margin has recovered slightly since the end of the first half.
The productivity program announced earlier in the calendar year is on track to deliver a half on half
decline in expenses. Credit quality is sound and within expectations in both the retail and commercial
books including 90 day mortgage arrears which have reduced further from the end of the half.
INTERNATIONAL & INSTITUTIONAL BANKING (IIB) DIVISION9APEA continues to grow with positive second half revenue trends and APEA jaws strongly positive.
While the Global Institutional business is expected to deliver strong revenue growth year on year it islikely to have lower revenue growth in the second half reflecting a very strong first half for Global
Markets and ongoing margin pressure in the loan book.
Year to date, division loan growth has been fully funded from customer deposits. In line withstrategy, the tenor of the deposit portfolio has lengthened, specifically in Australia and Asia/Pacific.
NEW ZEALAND DIVISION10
The business’ focus on business simplification, including the planned move to a single IT platform,
has positively impacted staff engagement, customer satisfaction and cost to income levels. As
flagged at the half year margins appear to have peaked, impacted by competition for deposits and in
business lending. Year to date net loans and advances are up 1.4% with deposits up 6.9%; market
share in retail has grown.
GLOBAL WEALTH & PRIVATE BANKING DIVISIONANZ announced the formation of a global Wealth division in February 2012; disclosures at the FullYear will be updated to reflect this and a Wealth strategy update is scheduled for 28 November
following the results. The business is trading in line with market conditions with revenue slightly
down financial year to date.
For media enquiries contact:
Paul Edwards
Group GM, Corporate Communications
Tel: +61-3-8654 9999 or +61-434-070101
Email: Paul.Edwards@anz.com

Stephen Ries
Senior Manager, Media Relations
Tel: +61-3-8654 3659 or +61-409-655551
Email: Stephen.Ries@anz.com

For investor and analyst enquiries contact:
Jill Craig
Group GM, Investor Relations
Tel: +61-3-8654 7749 or +61-412-047448
Email: Jill.Craig@anz.com

Ben Heath
Senior Manager, Investor Relations
Tel: +61-3-8654 7793 or +61-435-655033
Email: Ben.Heath@anz.com

7FX adjusted.
All comparisons are financial year to 30 June 2012 relative to financial year to 30 June 2011 (PCP) unless otherwise noted.
ANZ announced the formation of the IIB division in February 2012. The division encompasses the Global Institutional and Asia Pacific, Europeand America (APEA) businesses. IIB commentary is made on an FX adjusted basis.
10
Comparisons are NZD based.
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