ANZ BANK NEW ZEALAND LIMITEDREGISTERED BANK DISCLOSURE STATEMENTFOR THE SIX MONTHS ENDED 31 MARCH 2023

CONTENTS
Glossary of terms

2

DISCLOSURE STATEMENTInterim Financial Statements
Condensed consolidated interim financial statements
Notes to the interim financial statements
Limited Assurance Report on the Interim Financial Statements

3
4
8
21

Registered Bank Disclosures
Directors’ Statement

22
42
43

Limited Assurance Reports on the Registered Bank Disclosures

GLOSSARY OF TERMS
In this Registered Bank Disclosure Statement (Disclosure 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 Non-Bank Holding Company means ANZ Group Holdings Limited.
Ultimate Parent Bank means Australia and New Zealand Banking Group Limited.
Overseas Banking Group means the worldwide operations of the Ultimate Parent Bank 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.
ANZBGL New Zealand means the New Zealand business of the Overseas Banking Group.
Registered Office is Ground Floor, ANZ Centre, 23-29 Albert Street, Auckland, New Zealand, which is also the Bank’s address for service.
RBNZ means the Reserve Bank of New Zealand.
APRA means the Australian Prudential Regulation Authority.
the Order means the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014.
Any term or expression which is defined in, or in the manner prescribed by, the Order shall have the meaning given in or prescribed by
the Order.

2

INTERIM FINANCIAL
STATEMENTS
Condensed consolidated interim financial statements
Income statement

4Statement of comprehensive income

4

Balance sheet

5

Cash flow statement

6

Statement of changes in equity

7

Notes to the condensed consolidated interim financial statements
Basis of preparation
1. About our interim financial statements

8

Financial performance
2. Other operating income

9

3. Segment reporting

10

Financial and non-financial assets
4. Net loans and advances

11

5. Allowance for expected credit losses

12

Financial and non-financial liabilities
6. Deposits and other borrowings

16

7. Debt issuances

16

Financial instrument disclosures
8. Credit risk

17

9. Fair value of financial assets and financial liabilities

19

Other disclosures
10. Commitments and contingent liabilities

20

3

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDINTERIM FINANCIAL STATEMENTS
INCOME STATEMENT
2023
NZ$m

2022
NZ$m

Interest income

4,672

2,454

Interest expense(2,525)

(685)

2,147

1,769

239

561

Operating income

2,386

2,330

Operating expenses

(811)

(826)

1,575

1,504

(121)

20

1,454

1,524

For the six months ended 31 MarchNote

Net interest income
Other operating income

2

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

5

Income tax expense

(408)

(423)

Profit for the period

1,046

1,101

For the six months ended 31 March

2023
NZ$m

2022
NZ$m

Profit for the period

1,046

1,101

-

3

Unrealised losses recognised directly in equity

(28)

(58)

Realised gains transferred to the income statement

(12)

(29)

Income tax attributable to the above items

11

23

Other comprehensive income after tax

(29)

(61)

1,017

1,040

STATEMENT OF COMPREHENSIVE INCOME

Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Reserve movements:

Total comprehensive income for the period

The notes appearing on pages 8 to 20 form an integral part of these interim financial statements

4

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDBALANCE SHEET
As at

Note

AssetsCash and cash equivalents

31 Mar 23
NZ$m

30 Sep 22
NZ$m

12,657

12,575

Settlement balances receivable

516

785

Collateral paid

576

1,672

Trading securities

5,657

7,228

Derivative financial instruments

6,354

15,481

Investment securities

11,211

11,357

147,154

147,067

6-

Net loans and advances

4

Current tax assets
Deferred tax assets
Goodwill and other intangible assets

355

362

3,096

3,099

Premises and equipment

423

450

Other assets

990

1,058

Total assets

188,995

201,134

3,410

4,933

Liabilities
Settlement balances payable
Collateral received
Deposits and other borrowings

6

Derivative financial instruments
Current tax liabilities
Payables and other liabilities

1,056

1,962

139,423

139,642

6,281

13,785

-

310

1,926

1,345

Employee entitlements

122

128

Other provisions

209

222

Debt issuances

18,68821,023

Total liabilities

7

171,115

183,350

Net assets

17,88017,784

12,43812,43819

48

Retained earnings

5,423

5,298

Total shareholders' equity

17,88017,784

Shareholders' equity
Share capital
Reserves

The notes appearing on pages 8 to 20 form an integral part of these interim financial statements

5

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDINTERIM FINANCIAL STATEMENTS
CASH FLOW STATEMENT
For the six months ended 31 March

2023
NZ$m

2022
NZ$m

Profit after income tax

1,046

1,101

60

63

Adjustments to reconcile to net cash flows from operating activities:
Depreciation and amortisation

1

1

Net derivatives/foreign exchange adjustment

684

(106)

Other non-cash movements

(139)

(9)

Collateral paid

1,096

(75)

Trading securities

Loss on sale and impairment of premises and equipment

Net (increase)/decrease in operating assets:
1,571

1,767

Net loans and advances(87)(5,365)

Other assets

338

(666)

Deposits and other borrowings (excluding items included in financing activities)(1,219)5,065

Settlement balances payable(1,523)

1,888

Collateral received

(906)

332

Other liabilities

274

(415)

Total adjustments

150

2,480

1,196

3,581

(2,822)(2,241)

3,348

3,551

Net increase/(decrease) in operating liabilities:

Net cash flows from operating activities1
Cash flows from investing activities
Investment securities:
Purchases2
Proceeds from sale or maturity

2

Other assets

(30)

(58)

Net cash flows from investing activities

496

1,252

1,000

500

Issue proceeds

500

2,680

Redemptions

Cash flows from financing activities
Deposits and other borrowings3
Debt issuances:4(2,166)(3,753)

Repayment of lease liabilities

(23)

(22)

Dividends paid

(921)

(904)

Net cash flows from financing activities(1,610)(1,499)Net change in cash and cash equivalents

82

3,334

Cash and cash equivalents at beginning of period

12,575

7,844

Cash and cash equivalents at end of period

12,657

11,17812
34Net cash provided by operating activities includes income taxes paid of NZ$706 million (2022: NZ$541 million).
Comparative amounts for purchases and proceeds were previously grossed up by NZ$3,328 million, and have been updated accordingly.
Movement in deposits and other borrowings includes repurchase transactions entered into with the RBNZ under the Funding for Lending Programme of NZ$1,000 million (2022: NZ$500
million).
Movement in debt issuances (Note 7 Debt issuances) also includes a NZ$896 million decrease (2022: NZ$705 million decrease) from the effect of foreign exchange rates, a NZ$226 million
increase (2022: NZ$643 million decrease) from changes in fair value hedging instruments and a NZ$1 million increase (2022: NZ$16 million increase) from other changes.

The notes appearing on pages 8 to 20 form an integral part of these interim financial statements

6

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDSTATEMENT OF CHANGES IN EQUITY

As at 1 October 2021

SharecapitalNZ$m11,888Reserves
NZ$m

Retainedearnings
NZ$m

Total
shareholders'equity
NZ$m

70

4,934

16,892

Profit for the period

-

-

1,101

1,101

Other comprehensive income for the period

-

(63)

2

(61)

Total comprehensive income for the period

-

(63)

1,103

1,040

-

-

(900)

(900)

Transactions with equity holders in their capacity as equity owners:
Ordinary dividend paid

-

-

(4)

(4)

As at 31 March 2022

11,8887

5,133

17,028As at 1 October 2022

12,43848

5,298

17,784

Profit for the period

-

-

1,046

1,046

Other comprehensive income for the period

-

(29)

-

(29)

Total comprehensive income for the period

-

(29)

1,046

1,017

Ordinary dividend paid

-

-

(900)

(900)

Preference dividends paid

-

-

(21)

(21)

12,43819

5,423

17,880Preference dividends paid

Transactions with equity holders in their capacity as equity owners:

As at 31 March 2023

The notes appearing on pages 8 to 20 form an integral part of these interim financial statements

7

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
1.

ABOUT OUR INTERIM FINANCIAL STATEMENTS

NEW ULTIMATE NON-BANK HOLDING COMPANY
On 3 January 2023, the Ultimate Parent Bank established, by a scheme of arrangement, a non-operating holding company, ANZ Group Holdings
Limited, as the new listed parent holding company of the ANZ Group and implemented a restructure to separate the Overseas Banking Group’sbanking and certain non-banking businesses into the ANZ bank group and ANZ non-bank group. The ANZ bank group comprises the majority of thebusinesses and subsidiaries that were held in Australia and New Zealand Banking Group Limited prior to the restructure. The ANZ non-bank group
comprises banking-adjacent businesses developed or acquired by the ANZ Group to focus on bringing new technology and banking-adjacentservices to its customers, and a separate service company. The Ultimate Parent Bank is unchanged.
The restructure had no effect on these condensed consolidated interim financial statements (financial statements).

BASIS OF PREPARATION
These financial statements for the Banking Group have been prepared in accordance with the requirements of the Order and should be read in
conjunction with the Banking Group’s financial statements for the year ended 30 September 2022.
On 8 May 2023, the Directors resolved to authorise the issue of these financial statements.
These financial statements comply with:• New Zealand Generally Accepted Accounting Practice (NZ GAAP), 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 for-profit
entities; and• IAS 34 Interim Financial Reporting.
The financial statements consolidate the financial statements of the Bank and its subsidiaries.
We present the financial statements in New Zealand dollars and have rounded values to the nearest million dollars (NZ$m), unless otherwise stated.
The accounting policies adopted by the Banking Group are consistent with those adopted and disclosed in the previous full year financial statements.

BASIS OF MEASUREMENT
We have prepared the financial information in accordance with the historical cost basis except for the following assets and liabilities which we havestated at their fair values:• derivative financial instruments;• financial assets and liabilities held for trading;• financial assets and liabilities designated at fair value through profit and loss (FVTPL); and• financial assets at fair value through other comprehensive income (FVOCI).

KEY JUDGEMENTS AND ESTIMATES
The preparation of these financial statements requires the use of management judgement, estimates and assumptions impacting theapplication of accounting policies and financial outcomes. 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 and judgements
are reviewed on an ongoing basis.
The global economy is facing challenges associated with high inflation, increasing interest rates, labour market constraints, and continuing
geopolitical tensions which contributes to an elevated level of estimation uncertainty involved in the preparation of these financial
statements.
The Banking Group has made various accounting estimates in these financial statements based on forecasts of economic conditions whichreflect expectations and assumptions at 31 March 2023 about future events considered reasonable in the circumstances. Thus there is aconsiderable degree of judgement involved in preparing these estimates. Actual economic conditions are likely to be different from those
forecast since anticipated events frequently do not occur as expected, and the effect of these differences may significantly impact
accounting estimates included in these financial statements. The significant accounting estimates impacted by these forecasts andassociated uncertainties are predominantly related to expected credit losses and recoverable amounts of non-financial assets.
The impact of these uncertainties on each of these accounting estimates is discussed further in the relevant notes of these financial
statements and/or in the relevant notes in the previous full year financial statements. Readers should consider these disclosures in light of theinherent uncertainties described above.

8

ANZ BANK NEW ZEALAND LIMITED2.

UNAUDITEDOTHER OPERATING INCOME

For the six months ended 31 March(i) Fee and commission income
Lending fees
Non-lending fees
Commissions
Funds management income
Fee and commission income
Fee and commission expense
Net fee and commission income(ii) Other income
Net trading gains
Gain on sale of investment securities designated at fair value through other comprehensive income
Fair value gain / (loss) on hedging activities and financial liabilities designated at fair value
Net foreign exchange earnings and other financial instruments income
Release of provisions for UDC Finance Ltd and Paymark Ltd disposal costs
Other
Other income
Other operating income

2023
NZ$m

2022
NZ$m

13
375
15
120
523
(273)
250

13
341
16
130
500
(242)
258

109
13
(136)
(14)
3
(11)
239

75
31
179
285
14
4
303
561

9

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
3.

SEGMENT REPORTING

The Banking Group is organised into three major business segments for segment reporting purposes - Personal, Business 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 the transfer of certain larger business and property finance customers from Business to Institutional.
The transfer aligns the customer needs with the right support and expertise delivering a better customer experience. Comparative amounts havebeen adjusted to be consistent with the current period’s segment definitions. The change resulted in the movement of NZ$11.9 billion of net loans
and advances, NZ$3.5 billion of customer deposits and NZ$200 million of goodwill as at 30 September 2022, and NZ$88 million of profit after tax forthe six months ended 31 March 2022, from Business to Institutional.
Personal
Personal provides a full range of banking and wealth management services to consumer and private 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.
Business
Business provides a full range of banking services including small business lending, through our digital, branch and contact centres channels, andtraditional relationship banking and sophisticated financial solutions through dedicated managers. These cover privately owned small, medium andlarge enterprises, the agricultural business segment, government and government related entities.
Institutional
The Institutional division services governments, global institutional and corporate customers via the following business units:• Transaction Banking provides customers with working capital and liquidity solutions including documentary trade, supply chain financing,commodity financing as well as cash management solutions, deposits, payments and clearing.
• Corporate Finance provides customers with loan products, loan syndication, specialised loan structuring and execution, project and export
finance, debt structuring and acquisition finance and corporate advisory services.
• Markets provide customers with risk management services on foreign exchange, interest rates, credit, commodities and debt capital markets inaddition to managing the Banking Group’s interest rate exposure and high quality liquid asset portfolio.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.
Personal

Business

Institutional

Other

Total

For the six months
ended 31 March

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

Net interest income

1,219

1,020

496

415

346

318

86

16

2,147

1,769

Net fee and commission income- Lending fees
- Non-lending fees

3

4

-

1

10

8

-

-

13

13

220

196

132

121

23

24

-

-

375

341

- Commissions

15

15

-

-

-

1

-

-

15

16

- Funds management income

120

130

-

-

-

-

-

-

120

130

- Fee and commission expense

(167)

(144)

(106)

(98)

-

-

-

-

(273)

(242)

Net fee and commission income

191

201

26

24

33

33

-

-

250

258

1

1

-

-

147

79

(159)

223

(11)

303

Other income
Other operating income

192

202

26

24

180

112

(159)

223

239

561

Operating income

1,411

1,222

522

439

526

430

(73)

239

2,386

2,330

Operating expenses

(574)

(585)

(109)

(102)

(113)

(125)

(15)

(14)

(811)

(826)

Profit before credit impairment
and income tax

837

637

413

337

413

305

(88)

225

1,575

1,504

Credit impairment release /(charge)

(50)

(26)

(32)

58

(39)

(12)

-

-

(121)

20

Profit / (loss) before income tax

787

611

381

395

374

293

(88)

225

1,454

1,524

Income tax credit / (expense)

(220)

(171)

(107)

(111)

(105)

(82)

24

(59)

(408)

(423)

Profit / (loss) after income tax

567

440

274

284

269

211

(64)

166

1,046

1,101

10

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Personal

Business

Institutional

Other

Total

31 Mar 23 30 Sep 22 31 Mar 23 30 Sep 22 31 Mar 23 30 Sep 22 31 Mar 23 30 Sep 22 31 Mar 23 30 Sep 22
As at

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

1,042

1,042

695

695

1,269

1,269

-

-

3,006

3,006

Net loans and advances

103,240

102,70924,92425,56018,99018,798--147,154

147,067

Customer deposits

86,10885,391

18,506

19,05925,68425,880--130,298

130,330

Financial position
Goodwill

Other segment
The Other segment profit/(loss) after tax comprises:
For the six months ended 31 March
Personal and Business central functions
Group Centre
Economic hedges
Total

2023
NZ$m

2022
NZ$m

2
32
(98)
(64)

20
20
126
166

31 Mar 23
NZ$m
938
1,264
104,324
40,989147,515(32)
421
147,904(750)
147,154

30 Sep 22
NZ$m
968
1,238
103,872
41,234
147,312(32)
433
147,713(646)
147,067

4. NET LOANS AND ADVANCES
Note
Overdrafts
Credit cards
Term loans - housing
Term loans - non-housing
Subtotal
Unearned income
Capitalised brokerage and other origination costs
Gross loans and advances
Allowance for expected credit losses
Net loans and advances

5

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of NZ$269 million as at 31 March 2023 (30 September 2022:
NZ$306 million). These assets qualify for derecognition as the Bank does not retain a continuing involvement in the transferred assets.

11

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
5.

ALLOWANCE FOR EXPECTED CREDIT LOSSES

This note should be read in conjunction with the estimates, assumptions and judgements included in Note 1 About our interim financial statements.

Net loans and advances at amortised cost
Off-balance sheet commitments
Total

31 Mar 23

30 Sep 22

Collectively Individuallyassessedassessed
NZ$m
NZ$m
662
88
105
5
767
93

Total
NZ$m
750
110
860

Collectively Individuallyassessedassessed
NZ$m
NZ$m
569
77
100
5
669
82

Total
NZ$m
646
105
751

Stage 2
NZ$m
311
(20)
107
398

Stage 3
Collectively Individuallyassessedassessed
NZ$m
NZ$m
59
77
1
10
37
(9)
(16)
(1)
70
88

Total
NZ$m
646
130
(9)
(16)
(1)
750

The following tables present the movement in the allowance for expected credit losses (ECL).
Net loans and advances
Allowance for ECL is included in net loans and advances.

As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Bad debts written-off (excluding recoveries)
Discount unwind reversal
As at 31 March 2023

Stage 1
NZ$m
199
19
(24)
194

Off-balance sheet credit related commitments - undrawn and contingent facilities
Allowance for ECL is included in other provisions.
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
As at 31 March 2023

66
2
68

31
(2)
5
34

3
3

5
5

105
5
110

CREDIT IMPAIRMENT CHARGE – INCOME STATEMENT
For the six months ended 31 March
New and increased provisions- Collectively assessed- Individually assessed
Write-backs
Recoveries of amounts previously written-off
Total credit impairment charge / (release)

12

2023
NZ$m

2022
NZ$m

98
37
(9)
(5)
121

(16)
35
(22)
(17)
(20)

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDKEY JUDGEMENTS AND ESTIMATES
Collectively assessed allowance for expected credit losses
In estimating collectively assessed ECL, the Banking Group makes judgements and assumptions in relation to:• the selection of an estimation technique or modelling methodology; and• the selection of inputs for those models, and the interdependencies between those inputs.
The judgements and associated assumptions have been made within the context of the uncertainty of how various factors might impact the
global economy, and reflect historical experience and other factors that are considered relevant, including expectations of future events that are
believed to be reasonable under the circumstances. The Banking Group’s ECL estimates are inherently uncertain and, as a result, actual results may
differ from these estimates.
The following table summarises the key judgements and assumptions in relation to the model inputs and the interdependencies between those
inputs, and highlights significant changes during the current period.
Judgement /assumption

Description

Considerations for the six months ended
31 March 2023

Determining
when asignificant
increase incredit risk
(SICR) has
occurred orreversedIn the measurement of ECL, judgement is involved indetermining whether there has been a SICR sinceinitial recognition of a loan, which would result in thefinancial asset moving from Stage 1 to Stage 2. This isa key area of judgement since transition from Stage 1
to Stage 2 increases the ECL from an allowance basedon the probability of default in the next 12 months, toan allowance for lifetime expected credit losses.
Subsequent decreases in credit risk resulting intransition from Stage 2 to Stage 1 may similarly resultin significant changes in the ECL allowance.
The setting of precise SICR trigger points requires
judgement which may have a material impact upon
the size of the ECL allowance. The Banking Group
monitors the effectiveness of SICR criteria on an
ongoing basis.

The Banking Group has continued to adjust ECL thisperiod to account for expected deterioration in creditworthiness of certain customer segments which areconsidered particularly vulnerable to economic
pressures such as higher interest rates, elevatedinflation and labour market pressures.

Measuringboth 12-monthand lifetime
credit losses

The probability of default (PD), loss given default(LGD) and exposure at default (EAD) factors used indetermining ECL are point-in-time measuresreflecting the relevant forward-looking information
determined by management. Judgement is involved
in determining which forward-looking information isrelevant for particular lending portfolios and for
determining each portfolio’s point-in-time sensitivity.
In addition, judgement is required where behaviouralcharacteristics are applied in estimating the lifetime ofa facility which is used in measuring ECL.

The PD, LGD and EAD models are subject to the
Banking Group’s model risk policy that stipulates
periodic model monitoring and re-validation, anddefines approval procedures and authorities
according to model materiality.
There were no material changes to the policies.

Base caseeconomic
forecast

The Banking Group derives a forward-looking ‘basecase’ economic scenario which reflects our view of
future macroeconomic conditions.

There have been no changes to the types of forwardlooking variables (key economic drivers) used asmodel inputs.
As at 31 March 2023, the base case assumptions havebeen updated to reflect elevated inflation, continuing
high interest rates, continued cost of living pressuresand tightness in the labour market.
The expected outcomes of key economic drivers forthe base case scenario at 31 March 2023 are described
below under the heading ‘Base case economic
forecast assumptions’.

13

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
KEY JUDGEMENTS AND ESTIMATES
Judgement /assumption

1

Description

Considerations for the six months ended
31 March 2023

Probability
weighting ofeach economic
scenario (basecase, upside,
downside andseveredownsidescenarios)1

Probability weighting of each economic scenario is
determined by management considering the risks
and uncertainties surrounding the base caseeconomic scenario at each measurement date.
The assigned probability weightings are subject to ahigh degree of inherent uncertainty and therefore theactual outcomes may be significantly different tothose projected.

The probability weightings for each scenario
remained unchanged from 30 September 2022.
Weightings for current and prior periods are as
detailed in the section below under the heading on‘Probability weightings’.

Management
temporaryadjustments

Management temporary adjustments to the ECL
allowance are used in circumstances where it isjudged that our existing inputs, assumptions andmodel techniques do not capture all the risk factors
relevant to our lending portfolios. Emerging local or
global macroeconomic, microeconomic or politicalevents, and natural disasters that are not incorporated
into our current parameters, risk ratings, or forwardlooking information are examples of suchcircumstances.

Management have continued to apply adjustments toaccommodate uncertainty associated with higher
inflation and interest rates.
In addition, management overlays have been madefor risks particular to business banking.
Management temporary adjustments total NZ$171
million (September 2022: NZ$169 million).

The upside and downside scenarios are fixed by reference to average economic cycle conditions (that is, they are not based on the economic conditions prevailing at balance date) and are
based on a combination of more optimistic (in the case of the upside) and pessimistic (in the case of the downside) economic conditions.

Base case economic forecast assumptions
Continuing uncertainties described above increase the risk of the economic forecast resulting in an understatement or overstatement of the
ECL balance.
The economic drivers of the base case economic forecasts, reflective of our view of future macroeconomic conditions, used at 31 March2023 are set out below. For years beyond the near term forecasts below, the ECL models apply simplified assumptions for the economy tocalculate lifetime loss.
New ZealandGross domestic product (GDP) (annual % change)
Unemployment rate
Residential property prices (annual % change)
Consumer price index (CPI) (annual % change)

Actual calendar year
2022
2.8%
3.3%
-13.0%
7.2%

Forecast calendar year
2023
2024
1.4%
3.9%
-9.7%
6.1%

-0.1%
5.2%
2.2%
2.9%

The base case economic forecasts are for a continuing slowdown in economic activity. Continued high inflation and tight labour markets are
expected to keep interest rates high and dampen growth over the forecast period.

14

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDKEY JUDGEMENTS AND ESTIMATES
Probability weightings
Probability weightings for each scenario are determined by management considering the risks and uncertainties surrounding the base caseeconomic scenario including the uncertainties described above.
Scenario weightings remain the same as those applied in September 2022 as noted in the table below.
The assigned probability weightings are subject to a high degree of inherent uncertainty and therefore the actual outcomes may be significantly
different to those projected. The Banking Group considers these weightings to provide estimates of the possible loss outcomes and taking into
account short and long term inter-relationships within the Banking Group’s credit portfolios. The weightings applied are set out below:

Base
UpsideDownside
Severe downside

31 Mar 23

30 Sep 22

45.0%
0.0%
40.0%
15.0%

45.0%
0.0%
40.0%
15.0%

ECL - Sensitivity analysis
Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future
periods, expected credit losses reported by the Banking Group should be considered as a best estimate within a range of possible estimates. The
table below illustrates the sensitivity of the Banking Group’s allowance for collectively assessed ECL to key factors used in determining it as at 31
March 2023:
Balance
Profit and Loss
Sheet
Impact
NZ$m
NZ$m
If 1% of Stage 1 facilities were included in Stage 2
If 1% of Stage 2 facilities were included in Stage 1

778
766

11
(1)

100% upside scenario
100% base scenario
100% downside scenario
100% severe downside scenario

182
310
598
1,453

(585)
(458)
(170)
686

Individually assessed allowance for expected credit losses
In estimating individually assessed ECL, the Banking Group makes judgements and assumptions in relation to expected repayments, the realisablevalue of collateral, business prospects for the customer, competing claims and the likely cost and duration of the work-out process. Judgements
and assumptions in respect of these matters have been updated to reflect amongst other things, the continuing uncertainties described above
and in Note 1 About our interim financial statements.

15

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
6. DEPOSITS AND OTHER BORROWINGS
Term deposits
On demand and short term deposits
Deposits not bearing interest
Total customer deposits
Certificates of deposit
Commercial paper
Securities sold under repurchase agreements
Deposits from Immediate Parent Company and NZ Branch
Deposits and other borrowings

7.

31 Mar 23
NZ$m
50,83160,133
19,334130,298
1,487
2,771
4,782
85
139,42330 Sep 22
NZ$m
46,746
62,203
21,381
130,330
1,639
2,955
4,642
76
139,642

DEBT ISSUANCESThe Banking Group uses a variety of funding programmes to issue unsubordinated debt (including senior debt and covered bonds) and subordinateddebt. The difference between unsubordinated debt and subordinated debt is that holders of unsubordinated debt take priority over holders ofsubordinated debt owed by the relevant issuer and subordinated debt will be repaid by the relevant issuer only after the repayment of claims ofdepositors, other creditors and the unsubordinated debt holders.
31 Mar 23
30 Sep 22
NZ$m
NZ$m
Senior debt
12,23913,577
Covered bonds
4,151
4,082
17,659Total unsubordinated debt
16,390Subordinated debt
- Additional Tier 1 capital
1,941
938
- Tier 2 capital
1,423
1,360
3,364
Total subordinated debt
2,298
21,023
Total debt issued
18,688Covered 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 nota 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 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 theBank, 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
priority ranking creditors of the Covered Bond Trust have been satisfied.

16

ANZ BANK NEW ZEALAND LIMITED8.

UNAUDITEDCREDIT RISKThis note should be read in conjunction with the estimates, assumptions and judgements included in Note 1 About our interim financial statements
and Note 5 Allowance for expected credit losses.
Maximum exposure to credit risk
For financial assets recognised on the balance sheet, the maximum exposure to credit risk is the carrying amount. In certain circumstances there may
be differences between the carrying amounts reported on the balance sheet and the amounts reported in the tables below. Principally, thesedifferences arise in respect of financial assets that are subject to risks other than credit risk, such as equity instruments which are primarily subject tomarket risk, or bank notes and coins.
For undrawn facilities, this maximum exposure to credit risk is the full amount of the committed facilities. For contingent exposures, the maximum
exposure to credit risk is the maximum amount the Banking Group would have to pay if the instrument is called upon.
The table below shows our maximum exposure to credit risk of on-balance sheet and off-balance sheet positions before taking account of any
collateral held or other credit enhancements.
Reported
31 Mar 23
30 Sep 22
NZ$m
NZ$m
On-balance sheet positions
Net loans and advances
Other financial assets:
Cash and cash equivalents
Settlement balances receivable
Collateral paid
Trading securities
Derivative financial instruments
Investment securities
Other financial assets2
Total other financial assets
Subtotal
Off-balance sheet commitments
Undrawn and contingent facilities3
Total
1
2
3

Excluded1
31 Mar 23
30 Sep 22
NZ$m
NZ$m

Maximum exposure tocredit risk
31 Mar 23
30 Sep 22
NZ$m
NZ$m

147,154

147,067--

147,154

147,067

12,657
516
576
5,657
6,354
11,211835
37,806
184,960

12,575
785
1,672
7,228
15,481
11,357955
50,053
197,120

183
183
183

154
154
154

12,474
516
576
5,657
6,354
11,211
835
37,623
184,777

12,421
785
1,672
7,228
15,481
11,357955
49,899196,966

29,121
214,081

30,187
227,307183

154

29,121
213,898

30,187
227,153

Coins, notes and cash at bank within cash and cash equivalents were excluded as they do not have credit risk exposure.
Other financial assets mainly comprise accrued interest and acceptances.
Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed and individually assessed allowance for expectedcredit losses.

Credit quality
We use the Banking Group’s internal customer credit rating (CCR) to manage the credit quality of financial assets. To enable wider comparisons, theBanking Group’s CCRs are mapped to external rating agency scales as follows:
Credit quality
description

Internal CCR

The Banking Group customer requirements

Moody’s
RatingS&P Global
Ratings

Strong

CCR 0+ to 4-

Demonstrated superior stability in their operating and financial
performance over the long-term, and whose earnings capacity is
not significantly vulnerable to foreseeable events.

Aaa – Baa3

AAA – BBB-

Satisfactory

CCR 5+ to 6-

Demonstrated sound operational and financial stability over the
medium to long-term even though some may be susceptible tocyclical trends or variability in earnings.

Ba1 – B1

BB+ – B+Weak

CCR 7+ to 8=

Demonstrated some operational and financial instability, withvariability and uncertainty in profitability and liquidity projected tocontinue over the short and possibly medium term.

B2 – Caa

B - CCC

Defaulted

CCR 8- to 10

When doubt arises as to the collectability of a credit facility, thefinancial instrument (or ‘the facility’) is classified as defaulted.

n/a

n/a

17

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS

Stage 1
NZ$m
120,743
15,058306
136,107(194)
135,913
0.14%

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
3,807
4,702
2,102
649
148
10,611
649
148
(398)
(70)
(88)
10,213579
60
3.75%
10.79%
59.46%

123,097
16,327257
139,681(199)
139,482
0.14%

2,678
3,018
1,201
6,897
(311)
6,586
4.51%

Net loans and advances

As at 31 March 2023
StrongSatisfactory
Weak
Defaulted
Subtotal
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio
Unearned income
Capitalised brokerage and other origination costs
Net carrying amountAs at 30 September 2022
StrongSatisfactory
Weak
Defaulted
Subtotal
Allowance for ECL
Net loans and advances at amortised cost
Coverage ratio
Unearned income
Capitalised brokerage and other origination costs
Net carrying amountOff-balance sheet commitments - undrawn and contingent facilities

As at 31 March 2023
StrongSatisfactory
Weak
Defaulted
Gross undrawn and contingent facilities
Allowance for ECL included in other provisions
Net undrawn and contingent facilities
Coverage ratio

Stage 1
NZ$m
24,8603,391
828,259(68)
28,191
0.24%

As at 30 September 2022
StrongSatisfactory
Weak
Defaulted
Gross undrawn and contingent facilities
Allowance for ECL included in other provisions
Net undrawn and contingent facilities
Coverage ratio

25,9013,368
8
29,277(66)
29,211
0.23%

18

588
588
(59)
529
10.03%

146
146
(77)
69
52.74%

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
178
678
98
13
5
954
13
5
(34)
(3)
(5)
920
10
3.56%
23.08%
100.00%

224
682
89
995
(31)
964
3.12%

14
14
(3)
11
21.43%

6
6(5)
1
83.33%

Total
NZ$m
124,550
19,7602,408
797
147,515(750)
146,765
0.51%
(32)
421
147,154

125,775
19,345
1,458
734
147,312(646)
146,666
0.44%
(32)
433
147,067

Total
NZ$m
25,0384,069
106
18
29,231(110)
29,121
0.38%

26,1254,050
97
20
30,292(105)
30,187
0.35%

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

9. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIESFair value hierarchy
The Banking Group categorises 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 the 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; and• Level 3 – valuations where significant unobservable inputs are used to measure the fair value of the asset or liability.
The following table presents assets and liabilities carried at fair value in accordance with the fair value hierarchy:
Quoted market price(Level 1)
31 Mar 23
30 Sep 22
NZ$m
NZ$m
AssetsCash and cash equivalents1
Trading securities2
Derivative financial instruments
Investment securities2
Total
Liabilities
Deposits and other borrowings1
Derivative financial instruments
Other financial liabilities
Total
1
2

Fair value measurements
Using observable inputs
Using unobservable(Level 2)
inputs (Level 3)
31 Mar 23
30 Sep 22
31 Mar 23
30 Sep 22
NZ$m
NZ$m
NZ$m
NZ$m

Total
31 Mar 23
NZ$m

30 Sep 22
NZ$m

3,685
24
7,544
11,253

5,565
109
10,895
16,569

1,411
1,972
6,330
3,666
13,3791,663
15,372461
17,496

1
1

1
1

1,411
5,657
6,354
11,211
24,633

7,228
15,481
11,35734,066

11
801
812

8
364
372

3,753
6,259
10,012

2,955
13,765
16,720

11
11

12
12

3,753
6,281
801
10,835

2,955
13,785364
17,104

During the six months ended 31 March 2023, within the trading book in its Markets business, a component of the Institutional division, the Banking Group commenced the management ofrepurchase agreements and associated reverse repurchase agreements on a fair value basis. This resulted in repurchase and associated reverse repurchase agreements being recognised
and measured at fair value through profit and loss.
During the six months ended 31 March 2023, NZ$2,882 million of assets were transferred from Level 1 to Level 2 due to a change of the observability of bond valuation inputs. There wereno other material transfers during the period. Transfers into and out of levels are measured at the beginning of the reporting period in which the transfer occurred.

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 financial liability categories otherthan 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 a yield curve
appropriate for the remaining term to maturity.
Carrying amountFinancial assets
Net loans and advances1
Total
Financial liabilities
Deposits and other borrowings2
Debt issuances1
Total
1
2

Fair value

31 Mar 23
NZ$m

30 Sep 22
NZ$m

31 Mar 23
NZ$m

30 Sep 22
NZ$m147,154
147,154

147,067
147,067

146,012
146,012

145,459
145,459

135,670
18,688154,358

136,687
21,023
157,710

135,547
18,624
154,171

136,493
20,952
157,445

Fair value hedging is applied to certain financial instruments within these categories. The resulting fair value adjustments mean that the carrying value differs from the amortised cost.
Excludes commercial paper and securities sold under repurchase agreements (Note 6 Deposits and other borrowings) designated at fair value through profit or loss.

19

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
10. COMMITMENTS AND CONTINGENT LIABILITIESCredit related commitments and contingencies
Contract amount of:
Undrawn facilities
Guarantees and letters of credit
Performance related contingencies
Total

31 Mar 23
NZ$m

30 Sep 22
NZ$m26,402
1,181
1,648
29,231

27,3101,225
1,757
30,292The 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 to customers, therefore thesetransactions are subjected to the same credit origination, portfolio management and collateral requirements for customers applying for loans. As thefacilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
OTHER CONTINGENT LIABILITIESThere are outstanding court proceedings, claims and possible claims for and against the Banking Group. Where relevant, expert legal advice has beenobtained and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made. In some instances we have notdisclosed the estimated financial impact of the individual items either because it is not practicable to do so or because such disclosure may prejudiceseriously the interests of the Banking Group.
REGULATORY AND CUSTOMER EXPOSURESThe Banking Group regularly engages with its regulators in relation to regulatory investigations, surveillance and reviews, reportable situations, civil
enforcement actions (whether by court action or otherwise), formal and informal inquiries and regulatory supervisory activities both in New Zealandand globally. The Banking Group has received various notices and requests for information from its regulators as part of both industry-wide andBanking Group-specific reviews, and has also made disclosures to its regulators at its own instigation. The nature of these interactions can be wide
ranging and, for example, may include a range of matters including responsible lending practices, regulated lending requirements, product suitability
and distribution, interest and fees and the entitlement to charge them, customer remediation, wealth advice, insurance distribution, pricing,competition, conduct in financial markets and financial transactions, capital market transactions, anti-money laundering and counter-terrorism
financing obligations, privacy obligations and information security, business continuity management, reporting and disclosure obligations andproduct disclosure documentation. There may be exposures to customers which are additional to any regulatory exposures. These could include classactions, individual claims or customer remediation or compensation activities. The outcomes and total costs associated with such reviews andpossible exposures remain uncertain.
In 2021, the Bank self-identified and notified three prescribed transaction reporting (PTR) matters to RBNZ, where transaction reports had not been
filed within the prescribed timeframe. RBNZ has informed the Bank that it considers one of these matters (related to 6,409 transaction reports of acertain SWIFT message type) to be a material breach, and the other two to be minor breaches, of the Anti-Money Laundering and Countering
Financing of Terrorism (AML/CFT) Act 2009 relating to PTR. In April 2023, RBNZ notified the Bank that it had closed its investigations into thesebreaches, and imposed some additional reporting obligations on the Bank, to be provided by no later than 31 October 2023.
LOAN INFORMATION LITIGATIONIn September 2021, representative proceedings were brought against the Bank, alleging breaches of disclosure requirements under consumer credit
legislation in respect of variation letters sent to certain loan customers. The Bank is defending the allegations. The proceedings are still at an earlystage. In July 2022, the High Court ruled that the proceedings shall proceed as an opt-out representative action brought by one representative plaintiff
on behalf of a class, being customers who entered into a home loan or personal loan with the Bank between 6 June 2015 and 28 May 2016 andrequested a variation to that loan during that period. All parties have appealed aspects of that decision.
WARRANTIES AND INDEMNITIESThe Banking Group has provided warranties, indemnities and other commitments in favour of the purchaser in connection with various disposals of
businesses and assets and other transactions, covering a range of matters and risks. It is exposed to potential claims under those warranties,
indemnities and commitments, some of which are currently active. The outcomes and total costs associated with these exposures remain uncertain.

20

ANZ BANK NEW ZEALAND LIMITEDLIMITED ASSURANCE REPORTINDEPENDENT AUDITOR’S REVIEW REPORTTO THE SHAREHOLDER OF ANZ BANK NEW ZEALAND LIMITEDREPORT ON THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONCLUSION
We have completed a review of the accompanying consolidated interim financial statements of ANZ Bank New Zealand Limited (the Bank) and its
subsidiaries (the Banking Group) on pages 4 to 20 which comprise:• the consolidated statement of financial position as at 31 March 2023;• the consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended; and• notes, including a summary of significant accounting policies and other explanatory information.
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial statements have notbeen prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting (NZ IAS 34) and IAS 34 Interim Financial Reporting(IAS 34).
BASIS FOR CONCLUSION
A review of the consolidated interim financial statements in accordance with NZ SRE 2410 Review of Financial Statements Performed by the Independent
Auditor of the Entity (NZ SRE 2410) is a limited assurance engagement. The auditor performs procedures, consisting of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of the Banking Group, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial
statements.
Our firm has also provided other services to the Banking Group in relation to review of regulatory returns, internal controls reports, prospectus
assurance, agreed upon procedures and other assurance engagements. Subject to certain restrictions, partners and employees of our firm may also
deal with the Banking Group on normal terms within the ordinary course of trading activities of the business of the Banking Group. These mattershave not impaired our independence as reviewer of the Banking Group. The firm has no other relationship with, or interest in, the Banking Group.
USE OF THIS INDEPENDENT REVIEW REPORTThis independent review report is made solely to the Bank’s shareholder. Our review work has been undertaken so that we might state to theshareholder those matters we are required to state to them in the independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the shareholder for our review work, this independent review
report, or any of the opinions we have formed.
RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The Directors, on behalf of the Banking Group, are responsible for:• the preparation and fair presentation of the consolidated interim financial statements in accordance with NZ IAS 34 and IAS 34;• implementing necessary internal control to enable the preparation of a consolidated interim financial statements that are free from material
misstatement, whether due to fraud or error; and• assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE REVIEW OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Our responsibility is to express a conclusion on the consolidated interim financial statements based on our review. We conducted our review inaccordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that theconsolidated interim financial statements are not prepared, in all material respects, in accordance with NZ IAS 34 and IAS 34.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards
on Auditing (New Zealand) and consequently does not enable us to obtain assurance that we might identify in an audit. Accordingly, we do not
express an audit opinion on the Banking Group’s consolidated interim financial statements.
The engagement partner on the review resulting in this independent auditor’s review report is Jamie Munro.

KPMG
Auckland8 May 2023
21

REGISTERED BANKDISCLOSURESThis section contains the additional disclosures required by the Registered Bank Disclosure Statements(New Zealand Incorporated Registered Banks) Order 2014.

22

Section

Order reference

Page

B1.

General disclosures

Schedule 3

23

B2.

Additional financial disclosures

Schedule 5

24

B3.

Asset quality

Schedule 7

29

B4.

Capital adequacy under the internal models based approach,and regulatory liquidity ratios

Schedule 11

34

B5.

Concentration of credit exposures to individual counterparties

Schedule 13

41

B6.

Insurance business

Schedule 16

41

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
B1. GENERAL DISCLOSURES
Details of the ultimate non-bank holding company
On 3 January 2023, the Ultimate Parent Bank established, by a scheme of arrangement, a non-operating holding company, ANZ Group Holdings
Limited, as the new listed parent holding company of the ANZ Group and implemented a restructure to separate the Overseas Banking Group’sbanking and certain non-banking businesses into the ANZ bank group and ANZ non-bank Group. The ANZ bank group comprises the majority of thebusinesses and subsidiaries that were held in Australia and New Zealand Banking Group Limited prior to the restructure. The ANZ non-bank group
comprises banking-adjacent businesses developed or acquired by the ANZ Group to focus on bringing new technology and banking-adjacentservices to its customers, and a separate service company.
The address for service of the Ultimate Non-Bank Holding Company is ANZ Centre, Melbourne, Level 9, 833 Collins Street, Docklands, Victoria 3008,
Australia.
The Ultimate Parent Bank is unchanged.
Guarantees
The Bank has guaranteed the payment of interest and principal of covered bonds issued by its subsidiary ANZ New Zealand (Int’l) Limited. Thisobligation is guaranteed by ANZNZ Covered Bond Trust Limited (the Covered Bond Guarantor), solely in its capacity as trustee of ANZNZ Covered
Bond Trust. The Covered Bond Guarantor’s address for service is Level 16, SAP Tower, 151 Queen Street, Auckland 1010, New Zealand. The Covered
Bond Guarantor is not a member of the Banking Group and has no credit ratings applicable to its long term senior unsecured obligations. The coveredbonds have been assigned a long term rating of Aaa and AAA by Moody’s Investors Service and Fitch Ratings respectively. Refer to page 16 for further
details, and to page 24 for the amount of assets of the ANZ Covered Bond Trust pledged as security for covered bonds.
No other material obligations of the Bank are guaranteed as at 8 May 2023.
Changes in the Bank’s Board of Directors
Mark Verbiest resigned as a Non-Executive Director on 31 December 2022 and Mark Tume was appointed as a Non-Executive Director on 1 January
2023. As at 8 May 2023, there have been no other changes to the Directors of the Bank since 30 September 2022, the balance date of the last full year
disclosure statement.
Auditors
KPMG, 18 Viaduct Harbour Avenue, Auckland, New Zealand.
Pending proceedings or arbitration
A description of any pending legal proceedings or arbitration concerning any member of the Banking Group that may have a material adverse effecton the Bank or the Banking Group is included in Note 10 Commitments and contingent liabilities.
Credit rating
The Bank has three credit ratings, which are applicable to its long-term senior unsecured obligations that are payable in New Zealand in New Zealanddollars.
As at 8 May 2023, the Bank’s credit ratings are:Rating agency
S&P Global Ratings
Fitch Ratings
Moody’s Investors Service

Credit rating
AAA+
A1

Qualification
Outlook Stable
Outlook Stable
Outlook Stable

Other material matters
Climate related disclosures
The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 amended the Financial Markets Conduct Act 2013 witheffect from 27 October 2022. The amendments will require the Banking Group to produce climate statements from the year ending 30 September
2024, in accordance with climate reporting standards issued by the External Reporting Board. The Banking Group is actively preparing to produce
climate statements in accordance with this timetable.
Revised RBNZ capital requirements
RBNZ has revised its bank capital adequacy requirements applying to New Zealand locally incorporated registered banks, which are set out in RBNZ’s
Banking Prudential Requirements documents. The new capital adequacy requirements are being implemented in stages during a transition period
from October 2021 to July 2028. The key requirements still being implemented are:
• The Banking Group’s total capital requirement will increase to 18% of RWA, including tier 1 capital of at least 16% of RWA. Up to 2.5% of the tier 1
capital requirement can be made up of additional tier 1 (AT1) capital, with the remainder of the tier 1 requirement made up of common equity
tier 1 (CET1) capital. The increased capital ratios requirements are being progressively implemented until July 2028. AT1 capital must consist of
perpetual preference shares, which may be redeemable. The total capital requirement can also include tier 2 capital of up to 2% of RWA. Tier 2
capital must consist of long-term subordinated debt.
• The tier 1 capital requirement will include a CET1 prudential capital buffer of 9% of RWA. This will include: a 2% domestic systemically importantbank capital buffer; a 1.5% 'early-set' counter-cyclical capital buffer, which can be temporarily reduced to 0% following a financial crisis, or
temporarily increased; and a 5.5% capital conservation buffer.
• Contingent capital instruments will no longer be treated as eligible regulatory capital. As at 31 March 2023, the Bank had NZ$1,238 million of
AT1 instruments that will progressively lose eligible regulatory capital treatment over the transition period to 1 July 2028.
RBNZ’s reforms will result in a material increase in the level of capital that the Banking Group is required to hold. The reforms could have a material
impact on the Banking Group and its business, including on its capital allocation and business planning.
23

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
B2. ADDITIONAL FINANCIAL DISCLOSURES
Additional information on the balance sheet
As at 31 March 2023
Total interest earning and discount bearing assets
Total interest and discount bearing liabilities
Total amounts due from related entities
Total amounts due to related entities

NZ$m
177,541
142,804
3,986
4,958

Assets charged as security for liabilities
The following disclosure excludes the amounts presented as collateral paid and received on the balance sheet that relate to derivative liabilities andderivative assets respectively. The terms and conditions of those collateral agreements are included in the standard Credit Support Annex that forms
part of the International Swaps and Derivatives Association Master Agreement under which most of our derivatives are executed.
Assets charged as security for liabilities include the following types of instruments:• securities provided as collateral for repurchase transactions. These transactions are governed by standard industry agreements;• specified residential mortgages provided as security for notes and bonds issued to investors as part of the Banking Group’s covered bondprogrammes; and• collateral provided to the RBNZ under the Term Lending Facility (TLF) and Funding for Lending Programme (FLP).
The carrying amounts of assets pledged as security are as follows:
As at 31 March 2023
Securities sold under agreements to repurchase
Residential mortgages pledged as security for repurchase agreements with RBNZ
Total assets of the ANZNZ Covered Bond Trust pledged as security for covered bonds

NZ$m
980
4,844
9,818

Additional information on the income statement
The amounts of net trading gains or losses and other fair value adjustments are included in Note 2 Other operating income. The Banking Group does
not have any loans and advances designated at fair value through profit or loss. Other operating income for the purposes of the Order comprises net
fee and commission income, and all other items of other income (all in Note 2 Other operating income).

24

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Additional information on concentrations of credit risk
Analysis of financial assets by industry is based on Australian and New Zealand Standard Industrial Classification (ANZSIC) codes. The significant
categories shown are the level one New Zealand Standard Industry Output Categories (NZSIOC), except that Agriculture is shown separately as
required by the Order.
Composition of financial instruments that give rise to credit risk by industry group are presented below:
Loans andadvances
NZ$m

Other
financialassets
NZ$m

Off-balance
sheet credit
relatedcommitments
NZ$m

Total
NZ$m

15,422
585
195
2,711
804
1,245
1,628
2,737
899
920
38,076
903
212
1,063
76,806
1,125

64
4
10
140
234
6
51
19
49
14,246
2,024
8
9,496
23
314
91

991
122
257
1,925
1,400
932
1,712
748
749
1,697
2,140
448
806
396
13,516
1,120

16,477
711
462
4,776
2,438
2,183
3,391
3,504
1,697
16,86342,2401,359
10,514
1,482
90,636
2,336

Subtotal
Overseas
Finance and insurance services
Households
All other non-residents

145,331

26,77928,959201,069

151
1,431
602

10,798640

272-

11,221
1,437
642

Subtotal
Gross subtotal
Allowance for ECL
Subtotal
Unearned income
Capitalised brokerage and other origination costs
Maximum exposure to credit risk

2,184
147,515(750)
146,765(32)
421
147,154

10,84437,62337,62337,623272
29,231(110)
29,121
29,121

13,300214,369(860)
213,509(32)
421
213,898

As at 31 March 2023
New Zealand residents
Agriculture
Forestry and fishing, agriculture services
MiningManufacturing
Electricity, gas, water and waste services
Construction
Wholesale trade
Retail trade and accommodation
Transport, postal and warehousing
Finance and insurance services
Rental, hiring & real estate services
Professional, scientific, technical, administrative and support services
Public administration and safety
Health care and social assistance
Households
Other1

1

Other includes exposures to information media and telecommunications, education and training; arts and recreation services; and other services.

25

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Additional information on concentrations of funding
Analysis of funding liabilities by industry is based on ANZSIC codes. The significant categories shown are the level one NZSIOC.
As at 31 March 2023

Note

NZ$m

6

130,298

Funding composition
Customer deposits
Wholesale funding
Debt issuances

18,688

Certificates of deposit and commercial paper

4,258

Other borrowings

4,867

Total wholesale funding

27,813

Total deposits and wholesale funding

158,111

Customer deposits by industry - New Zealand residents
Agriculture, forestry and fishing
Mining4,406
236

Manufacturing

2,701

Construction

2,893

Wholesale trade

2,507

Retail trade and accommodation

2,215

Transport, postal and warehousing

1,709

Financial and insurance services

13,237

Rental, hiring and real estate services

3,674

Professional, scientific, technical, administrative and support services

6,881

Public administration and safety

1,521

Health care and social assistance

1,354

Arts, recreation and other services

2,267Households

72,365

Other1

2,714

Subtotal

120,680

Customer deposits by industry - overseas
Households
All other non-residents
Subtotal
Total customer deposits

8,830
788
9,618
130,298

Wholesale funding (financial and insurance services industry)
New Zealand

9,072

Overseas

18,741

Total wholesale funding

27,813

Total deposits and wholesale funding

158,111

Concentrations of funding by geography
New Zealand

129,752

Australia

1,531

United States

10,877

Europe9,092

Other countries

6,859

Total deposits and wholesale funding
1

26

Other includes electricity, gas, water and waste services; information media and telecommunications; and education and training.

158,111

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Additional information on interest rate sensitivity
The following table represents the interest rate sensitivity of the Banking Group's assets, liabilities and off-balance sheet instruments by showing theperiods in which these instruments may reprice, that is, when interest rates applicable to each asset or liability can be changed.

As at 31 March 2023
AssetsCash and cash equivalents
Settlement balances receivable
Collateral paid
Trading securities
Derivative financial instruments
Investment securities
Net loans and advances
Other financial assets
Total financial assets
Liabilities
Settlement balances payable
Collateral received
Deposits and other borrowings
Derivative financial instruments
Debt issuances
Lease liabilities
Other financial liabilities
Total financial liabilities
Hedging instruments
Interest sensitivity gap
1

Total
NZ$m

Up to
3 months
NZ$m

Over 3 to
6 months
NZ$m

Over 6 to
12 months
NZ$m

Over 1 to
2 years
NZ$m

Over
2 years
NZ$m

Not bearing
interest1
NZ$m

12,657
516
576
5,657
6,354
11,211
147,154835
184,960

12,282
576
1,088
202
62,831
76,979208
397
16,461
17,06660
479
26,617
27,156292
306
31,80032,398

4,009
9,826
10,10723,942

375
516
6,354
1
(662)
835
7,419

3,410
1,056
139,423
6,281
18,688207
1,480
170,545
14,4151,963
1,056
87,5002,213
12801
93,545
7,783(8,783)

14,8831,765
11
16,6596,801
7,208

14,2923,226
23
17,541
1,239
10,854

2,103
1,874
43
4,020
(18,006)
10,372

1,311
9,610
118
11,0392,183
15,086

1,447
19,334
6,281
679
27,741(20,322)

Excludes non-coupon bearing discount financial assets and financial liabilities which are shown as repricing on their maturity date.

Additional information on liquidity risk
Maturity analysis of financial liabilities
The table below provides residual contractual maturity analysis of financial liabilities at 31 March 2023 within relevant maturity groupings. All
outstanding debt issuances are profiled on the earliest date on which the Banking Group may be required to pay. The amounts represent principal
and interest cash flows – so they may differ from equivalent amounts reported on the balance sheet.

As at 31 March 2023

On
demand
NZ$m

Settlement balances payable
Collateral received
Deposits and other borrowings

Less than
3 months
NZ$m

3 to 12months
NZ$m

1 to 5
years
NZ$m

After
5 years
NZ$m

Total
NZ$m

2,702

761

-

-

-

3,463

-

1,056

-

-

-

1,056

79,471

23,60730,758

7,686-

141,522

Derivative financial liabilities (trading)

-

6,179

-

-

-

6,179

Debt issuances

-

535

5,655

12,614

2,211

21,015

Lease liabilities

-

13

38

143

30

224

Other financial liabilities

-

76

24

647

449

1,196

- gross inflows

-

1,754

5,894

7,700

838

16,186- gross outflows-(1,720)(5,857)(7,930)(888)(16,395)

1

Derivative financial instruments(balance sheet management)

1

Any callable wholesale debt instruments have been included at their next call date.

At 31 March 2023, NZ$29,231 million of its credit related commitments and contingent liabilities mature in less than 1 year, based on the earliest dateon which the Banking Group may be required to pay.

27

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Liquidity portfolio management
The Banking Group holds a diversified portfolio of cash and high quality liquid securities primarily to support liquidity risk management. The size of the
Banking Group’s liquidity portfolio is determined with consideration of the amount required to meet the requirements of its internal and regulatory
liquidity scenario metrics.
As at 31 March 2023
Central and local government bonds
Government treasury bills
Certificates of deposit
Other bonds
Securities eligible to be accepted as collateral in repurchase transactions
Cash and balances with central banks
Total liquidity portfolio

NZ$m
7,130
1,462
275
7,517
16,384
10,94927,333

Assets held in the Banking Group’s liquidity portfolio are all denominated in New Zealand dollars and include balances held with RBNZ and securities
issued by the New Zealand Government, supranational agencies, highly rated banks state owned enterprises, local authorities (including through afunding authority) and highly rated corporates.
The Bank also held unencumbered internal residential mortgage backed securities (RMBS) which would be accepted as collateral by RBNZ in
repurchase transactions. These holdings would entitle the Bank to enter into repurchase transactions with RBNZ with a value of NZ$10,613 million at
31 March 2023.
RBNZ Term Lending Facility (TLF) and Funding for Lending Programme (FLP)• Between May 2020 and July 2021, RBNZ made funds available under the TLF to promote lending to businesses. The TLF is a five-year secured
funding facility for New Zealand banks at a fixed rate of 0.25%.
•

Between November 2020 and December 2022, RBNZ made funds available under the FLP to lower the cost of borrowing for New Zealandbusinesses and households. The FLP is a three-year secured funding facility for New Zealand banks at a floating rate of the New Zealand Official
Cash Rate (OCR).

As at 31 March 2023, the Bank had drawn NZ$300 million under the TLF and NZ$3,500 million under the FLP. These amounts are included in securities
sold under repurchase agreements in Note 6 Deposits and other borrowings.
Reconciliation of mortgage related amounts
As at 31 March 2023
Term loans - housing1
Less: housing loans made to corporate customers
Add: unsettled re-purchases of mortgages from the NZ BranchOn-balance sheet residential mortgage exposures subject to the IRB approach (per asset quality and LVR analysis)
Add: off-balance sheet residential mortgage exposures subject to the IRB approach (per asset quality and LVR analysis)
Total residential mortgage exposures subject to the IRB approach (per LVR analysis)
128Term loans – housing includes loans secured over residential property for owner-occupier, residential property investment and business purposes.

Note
4

B3, B4B3, B4B4

NZ$m
104,324(1,307)2
103,019
9,273
112,292

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

B3. ASSET QUALITY
This section should be read in conjunction with the estimates, assumptions and judgements included in Note 1 About our interim financial
statements, Note 5 Allowance for expected credit losses and Note 8 Credit risk.
Movements in components of loss allowance – total

Net loans and advances - total
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Recoveries of amounts previously written off
Credit impairment charge / (release)
Bad debts written-off (excluding recoveries)
Add back recoveries of amounts previously written off
Discount unwind
As at 31 March 2023
Off-balance sheet credit related commitments - total
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Credit impairment charge

Stage 1
NZ$m
199
19
(24)
(5)
194

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
311
59
77
(20)
1
107
10
37
(9)
(5)
87
11
23
(16)
5
(1)
398
70
88

Total
NZ$m
646
130
(9)
(5)
116
(16)
5
(1)
750

66
2
-

31
(2)
5

3
-

5
-

105
5

2
68

3
34

3

5

5
110

Gross loans and advances - total
As at 1 October 2022
Net transfers in to each stage
Amounts drawn from new or existing facilities
Additions
Net transfers out of each stage
Amounts repaid
Deletions
Amounts written off
As at 31 March 2023
Loss allowance as at 31 March 2023

139,681
22,55522,555(4,305)(21,824)(26,129)
136,107
194

6,897
4,108
718
4,826
(1,112)(1,112)
10,611
398

588
180
26
206
(145)
(145)
649
70

146
17
53
70
(52)
(52)
(16)
148
88

147,312
4,305
23,352
27,657(4,305)(23,133)(27,438)(16)
147,515
750

Off-balance sheet credit related commitments - total
As at 1 October 2022
Net transfers in to each stage
New and increased facilities and drawn amounts repaid
Additions
Net transfers out of each stage
Reduced facilities and amounts drawn
Deletions
As at 31 March 2023
Loss allowance as at 31 March 2023

29,277
6,023
6,023
(56)
(6,985)(7,041)
28,259
68

995
53
180
233
(274)
(274)
954
34

14
3
3
6
(7)
(7)
13
3

6
15
15
(16)
(16)
5
5

30,292
56
6,221
6,277
(56)
(7,282)(7,338)29,231110

As at 31 March 2023
Impacts of changes in gross financial assets on loss allowances - total

Explanation of how changes in the gross carrying amounts of gross loans and advances contributed to changes in loss allowance
Overall, loss allowances are 0.49% of gross balances as at 31 March 2023, up from 0.42% as at 30 September 2022. The NZ$109 million (14.5%) increasein loss allowances was driven by an increase in the proportion of gross balances in Stage 2, partially offset by changes in the forward-looking
economic scenarios as described in Note 5 Allowance for expected credit losses.

29

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Movements in components of loss allowance - residential mortgages

Net loans and advances - residential mortgages
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Recoveries of amounts previously written off
Credit impairment charge
Bad debts written-off (excluding recoveries)
Add back recoveries of amounts previously written off
Discount unwind
As at 31 March 2023
Off-balance sheet credit related commitments - residential mortgages
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Credit impairment charge
As at 31 March 2023

Stage 1
NZ$m
63
12
(2)
10
73

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
81
32
10
(13)
1
50
12
2
(1)
37
13
1
118
45
11

Total
NZ$m
186
62
(1)
61
247

-

-

-

-

-

-

-

-

-

-

Impacts of changes in gross financial assets on loss allowances - residential mortgages
Gross loans and advances - residential mortgages
As at 1 October 2022
Net transfers in to each stage
Amounts drawn from new or existing facilities
Additions
Net transfers out of each stage
Amounts repaid
Deletions
Amounts written off
As at 31 March 2023
Loss allowance as at 31 March 2023

99,2039,286
9,286(1,880)(8,707)(10,587)
97,902
73

2,963
1,712
147
1,859
(286)
(286)
4,536
118

392
161
8
169
561
45

15
7
3
10
(5)
(5)
20
11

102,573
1,880
9,444
11,324(1,880)(8,998)(10,878)
103,019247

Off-balance sheet credit related commitments - residential mortgages
As at 1 October 2022
Net transfers in to each stage
New and increased facilities and drawn amounts repaid
Additions
Net transfers out of each stage
Reduced facilities and amounts drawn
Deletions
As at 31 March 2023
Loss allowance as at 31 March 2023

9,049
1,800
1,800
(19)
(1,631)(1,650)
9,199
-

58
19
7
26
(11)
(11)
73
-

1
1
-

-

9,108
19
1,807
1,826
(19)
(1,642)(1,661)
9,273-

Explanation of how changes in the gross carrying amounts of residential mortgages contributed to changes in loss allowance
The NZ$61 million (32.8%) increase in loss allowances on residential mortgage exposures is primarily driven by an increase in the proportion of grossbalances in Stage 2 and Stage 3. Overall loss allowances and individually impaired exposures remain low, reflecting that approximately 94% of onbalance sheet residential mortgage exposures have loan to valuation ratios not exceeding 80% (refer to page 38).

30

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Movements in components of loss allowance - other retail exposures

Net loans and advances - other retail exposures
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Recoveries of amounts previously written off
Credit impairment charge
Bad debts written-off (excluding recoveries)
Add back recoveries of amounts previously written off
Discount unwind
As at 31 March 2023
Off-balance sheet credit related commitments - other retail exposures
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Credit impairment charge
As at 31 March 2023

Stage 1
NZ$m
10
3
(1)
2
12

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
43
17
5
(3)
5
3
15
(2)
(4)
2
3
9
(14)
4
45
20
4

Total
NZ$m
75
22
(2)
(4)
16
(14)
4
81

13
2
(2)

10
(2)
2

3
-

-

26
-

13

10

3

-

26

Impacts of changes in gross financial assets on loss allowances - other retail exposures
Gross loans and advances - other retail exposures
As at 1 October 2022
Net transfers in to each stage
Amounts drawn from new or existing facilities
Additions
Net transfers out of each stage
Amounts repaid
Deletions
Amounts written off
As at 31 March 2023
Loss allowance as at 31 March 2023

2,194
244
244
(24)
(262)
(286)
2,152
12

111
14
7
21
(7)
(7)
125
45

31
9
2
11
42
20

8
1
15
16
(2)
(2)
(14)
8
4

2,344
24
268
292
(24)
(271)
(295)
(14)
2,327
81

Off-balance sheet credit related commitments - other retail exposures
As at 1 October 2022
Net transfers in to each stage
New and increased facilities and drawn amounts repaid
Additions
Net transfers out of each stage
Reduced facilities and amounts drawn
Deletions
As at 31 March 2023
Loss allowance as at 31 March 2023

4,759
456
456
(9)
(552)
(561)
4,654
13

27
6
5
11
(8)
(8)
30
10

10
3
1
4
(4)
(4)
10
3

-

4,796
9
462
471
(9)
(564)
(573)
4,694
26

Explanation of how changes in the gross carrying amounts of other retail exposures contributed to changes in loss allowance
The NZ$6 million (5.9%) increase in loss allowances is primarily driven by an increase in the proportion of gross balances in Stage 2 and Stage 3,
partially offset by changes in the forward-looking economic scenarios as described in Note 5 Allowance for expected credit losses.

31

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Movements in components of loss allowance - corporate exposures1

Net loans and advances - corporate exposures
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Recoveries of amounts previously written off
Credit impairment charge / (release)
Bad debts written-off (excluding recoveries)
Add back recoveries of amounts previously written off
Discount unwind
As at 31 March 2023
Off-balance sheet credit related commitments - corporate exposures
As at 1 October 2022
Transfer between stages
New and increased provisions (net of collective provision releases)
Credit impairment charge
As at 31 March 2023

Stage 1
NZ$m
126
4
(21)
(17)
109

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
187
10
62
(4)
52
(5)
20
(6)
(1)
48
(5)
13
(2)
1
(1)
235
5
73

Total
NZ$m
385
46
(6)
(1)
39
(2)
1
(1)
422

53
2

21
3

-

5
-

79
5

2
55

3
24

-

5

5
84

Impacts of changes in gross financial assets on loss allowances - corporate exposures
Gross loans and advances - corporate exposures
As at 1 October 2022
Net transfers in to each stage
Amounts drawn from new or existing facilities
Additions
Net transfers out of each stage
Amounts repaid
Deletions
Amounts written off
As at 31 March 2023
Loss allowance as at 31 March 2023

38,284
13,02513,025(2,401)(12,855)(15,256)
36,053
109

3,823
2,382
564
2,946
(819)
(819)
5,950
235

165
10
16
26
(145)
(145)
46
5

123
9
35
44
(45)
(45)
(2)
120
73

42,3952,401
13,64016,041(2,401)(13,864)(16,265)(2)
42,169422

Off-balance sheet credit related commitments - corporate exposures
As at 1 October 2022
Net transfers in to each stage
New and increased facilities and drawn amounts repaid
Additions
Net transfers out of each stage
Reduced facilities and amounts drawn
Deletions
As at 31 March 2023
Loss allowance as at 31 March 2023

15,469
3,767
3,767
(28)
(4,802)(4,830)14,406
55

910
28
168
196
(255)
(255)
851
24

3
2
2
(3)
(3)
2
-

6
15
15
(16)
(16)
5
5

16,388
28
3,952
3,980
(28)
(5,076)(5,104)
15,264
84

1

Also includes all other non-retail exposure classes in net loans and advances and off balance sheet credit related commitments to reconcile to the respective totals for the Banking Group.

Explanation of how changes in the gross carrying amounts of corporate exposures contributed to changes in loss allowance
The NZ$42 million (9.1%) increase in loss allowances is driven by an increase in the proportion of gross balances in Stage 2, partially offset by changes
in the forward-looking economic scenarios as described in Note 5 Allowance for expected credit losses.

32

ANZ BANK NEW ZEALAND LIMITED

Past due assets and other asset quality information
As at 31 March 2023
Past due assets
Less than 30 days past due
At least 30 days but less than 60 days past due
At least 60 days but less than 90 days past due
At least 90 days past due
Total past due but not individually impaired
Other asset quality information
Undrawn facilities with individually impaired customers
Other assets under administration

UNAUDITED

Residential Other retailmortgages exposures
NZ$m
NZ$m

Corporate
exposures
NZ$m

Total
NZ$m

610
345
155
462
1,572

91
13
6
21
131

354
210
5
17
586

1,055
568
166
500
2,289

3

1

5
-

5
4

The Banking Group does not have any loans and advances designated at fair value.

33

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
B4. CAPITAL ADEQUACY UNDER THE INTERNAL MODELS BASED APPROACH, AND REGULATORYLIQUIDITY RATIOSRBNZ capital ratios
As at 31 March
Common equity tier 1 capital
Tier 1 capital
Total capital
Prudential capital buffer ratio

RBNZ minimum
2023
2022
4.5%
4.5%
6.0%
6.0%
8.0%
8.0%
3.5%
2.5%

Banking Group
2023
2022
12.2%
12.4%
13.8%
14.5%
15.2%
15.1%
7.2%
7.1%

Bank
(Solo Consolidated)
2023
2022
12.0%
12.2%
13.6%
14.3%
15.0%
14.9%
n/a
n/a

Capital
As at 31 March 2023
Tier 1 capital
Common equity tier 1 (CET1) capital
Paid up ordinary shares issued by the Bank
Retained earnings (net of appropriations)1
Accumulated other comprehensive income and other disclosed reserves2
Less deductions from common equity tier 1 capital
Goodwill and intangible assets, net of associated deferred tax liabilities
Deferred tax assets less deferred tax liabilities relating to temporary differences
Cash flow hedge reserve
Defined benefit superannuation plan surplus
Expected losses to the extent greater than total eligible allowances for impairment
Common equity tier 1 capital
Additional tier 1 (AT1) capital
NZD 550m preference shares3
Transitional AT1 capital instruments
NZD 300m preference shares3
NZD 938m ANZ New Zealand Internal Capital Notes (ANZ NZ ICN2)4
Additional tier 1 capital
Total tier 1 capital
Tier 2 capital
NZD 600m subordinated notes4
USD 500m subordinated notes4
Eligible impairment allowance in excess of expected loss
Tier 2 capital
Total capital
1
2
3
4

34

NZ$m

11,5885,416
19(3,096)
(378)
(26)
(15)
(42)
13,466
550
300
938
1,788
15,254
600
796
125
1,521
16,775

Includes a deduction for dividends on AT1 capital instruments approved by the Bank’s board, but not yet paid as at 31 March 2023, as required by BPR110 Capital Definitions. These
dividends are not recognised under NZ GAAP because the payment of the dividends remains at the Bank’s discretion until payment is made.
Includes the cash flow hedging reserve of NZ$26 million less the FVOCI reserve of NZ$7 million as at 31 March 2023.
Classified as equity on the balance sheet under NZ GAAP.
Classified as a liability on the balance sheet under NZ GAAP.

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Capital requirements of the Banking GroupAs at 31 March 2023
Exposures subject to internal ratings based approach
Specialised lending exposures subject to slotting approach
Exposures subject to standardised approach
Credit risk supervisory adjustment
Output floor balancing item
Total credit risk
Market risk
Operational risk, calculated using the standardised approach
Total

Total
exposure
after credit
risk
mitigation
NZ$m
165,158
13,11135,008n/an/a
213,277
n/a
n/a
n/a

Risk
weighted
exposure or
implied risk
weighted
exposure
NZ$m52,36013,912
4,357
22,616
93,245
5,605
11,565
110,415

Total capitalrequirement
NZ$m
4,189
1,113
349
1,809
7,460
448
925
8,833

Capital structure
Ordinary shares– CET1 capital
Ordinary shares have no par value. They entitle holders to receive dividends, or proceeds available on winding up of the Bank, in proportion to thenumber of fully paid ordinary shares held. They are recognised at the amount paid per ordinary share net of directly attributable costs. Every holder offully paid ordinary shares present at a meeting in person, or by proxy, is entitled to: on a show of hands, one vote; and on a poll, one vote, for eachshare held.
Preference shares – AT1 capital instruments
Preference shares do not carry any voting rights. They are wholly classified as equity instruments as there is no contractual obligation for the Bank toeither deliver cash or another financial instrument or to exchange financial instruments on a potentially unfavourable basis.
In the event of liquidation, holders of preference shares are entitled to available subscribed capital per share, pari passu with all holders of existing
preference shares and AT1 capital notes, in priority to all holders of ordinary shares. They have no entitlement to participate in further distribution of
profits or assets.
There are two classes of preference shares: preference shares issued in 2013 and perpetual preference shares issued in 2022.
2022 preference shares – NZD 550 million
Perpetual preference shares (PPS) are issued to parties outside of the Overseas Banking Group. As at 31 March 2023, the PPS carried a BBB credit ratingfrom S&P Global Ratings. The key terms of the PPS are as follows:
PPS dividends are payable at the discretion of the Directors of the Bank and are non-cumulative. The Bank must not authorise or pay a dividend on its
ordinary shares, acquire its ordinary shares or otherwise undertake a capital reduction in respect of its ordinary shares until the next PPS dividend
payment date if a PPS dividend is not paid.
Should the Bank elect to pay a PPS dividend, the PPS dividend is 6.95% per annum until 18 July 2028 and a floating rate equal to the aggregate of the
New Zealand 3 month bank bill rate plus 3.25%, multiplied by one minus the New Zealand company tax rate (where the PPS dividend is fully imputed)
thereafter, with PPS dividend payments scheduled to be paid on 18 January, 18 April, 18 July and 18 October each year.
Holders of PPS have no right to require that the PPS be redeemed. The Bank may at its option redeem all of the PPS on an optional redemption date(each PPS dividend payment date from 18 July 2028); or at any time following the occurrence of a tax event or regulatory event, in each case subject
to prior written approval of RBNZ and other conditions being met.
Transitional AT1 capital instruments
RBNZ has revised its capital adequacy requirements for New Zealand banks, which are being implemented from October 2021 to July 2028. Under therevised requirements, the AT1 capital notes and 2013 preference shares are subject to a progressive reduction in their regulatory capital recognition.
Fixing the base at the aggregate nominal amount of such instruments outstanding as at 30 September 2021 (NZ$2,741 million), their aggregate
recognition is capped at 75% from 1 January 2023; 62.5% from 1 January 2024; 50% from 1 January 2025; 37.5% from 1 January 2026; 25% from 1
January 2027; 12.5% from 1 January 2028; and from 1 July 2028 onwards these instruments will not be included in regulatory capital.
The Bank has determined that a regulatory event has occurred in respect of these transitional AT1 capital instruments. The occurrence of a regulatory
event means that the Bank may choose to redeem the transitional AT1 capital instruments at its discretion. Any redemption of the transitional AT1
capital instruments is subject to certain conditions, including prior written approval of RBNZ. As at 8 May 2023, no decision has been made onwhether the Bank will redeem the transitional AT1 capital instruments that were outstanding at 31 March 2023.
2013 preference shares – NZD 300 million
The 2013 preference shares (PS) are issued to the Immediate Parent Company. The key terms of the PS are as follows:

35

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURESPS dividends are payable at the discretion of the Directors of the Bank and are non-cumulative. The Bank must not resolve to pay any dividend or
make any other distribution on its ordinary shares until the next PS dividend payment date if a PS dividend is not paid.
Should the Bank elect to pay a PS dividend, the PS dividend is based on a floating rate equal to the aggregate of the New Zealand 6 month bank billrate plus 3.25%, multiplied by one minus the New Zealand company tax rate (where the PS dividend is fully imputed), with PS dividend payments dueon 1 March and 1 September each year.
The PS are redeemable, subject to prior written approval of RBNZ. The PS may be redeemed for nil consideration should a non-viability trigger event
occur.
AT1 capital notes
AT1 capital notes are fully paid convertible non-cumulative perpetual subordinated notes. Holders of AT1 capital notes do not have any right to votein general meetings of the Bank.
AT1 capital notes are classified as debt given there are circumstances beyond the Bank’s control where the principal is converted into a variable
number of ordinary shares of the Bank.
Interest payments on the AT1 capital notes are non-cumulative and subject to the issuer’s absolute discretion and certain payment conditions(including regulatory requirements).
Where specified, AT1 capital notes provide the Bank with a redemption option on specified dates and a redemption or conversion option in certain
other circumstances. Redemption is subject to RBNZ’s prior written approval.
The AT1 capital notes will immediately convert into a variable number of ordinary shares of the Bank (based on the net assets per share in the Bank’s
most recently published Disclosure Statement) if:••

the Banking Group’s common equity tier 1 capital ratio is equal to or less than 5.125% - known as a Common Equity Capital Trigger Event; or
RBNZ directs the Bank to convert or write-off the notes or a statutory manager is appointed to the Bank and decides that the Bank must convert
or write-off the notes.

NZ$1,003 million of AT1 capital notes were redeemed on 24 March 2023.
The table below shows the key details of the AT1 capital notes on issue at 31 March 2023:

ANZ NZ ICN2
15 June 2016
NZ$938 million
NZ$100Semi-annually in arrears
Floating rate: (New Zealand 6 month Bank Bill rate + 6.29%)
15 June 2026 and each 5th anniversary
n/a
Yes
Yes

Issue dateIssue amount
Face value
Interest frequency
Interest rate
Issuer's early redemption option
Mandatory conversion dateCommon equity capital trigger event
Non-viability trigger event
Tier 2 capital

Tier 2 capital notes are fully paid unsecured subordinated notes. Interest payments are subject to the Bank being solvent at the time of, andimmediately following, the payment. Unpaid interest accumulates, and will be paid at the earlier of when the Bank is solvent again or at maturity. The
Bank may repay the notes early on the dates specified below, or in certain other circumstances (such as a tax or regulatory event). Early repayment issubject to certain conditions, including approval from RBNZ.
Currency Face value Issue date Maturity
NZD
600m
Sep 2021 Sep 2031
USD
500m
Aug 2022 Aug 2032
Total Tier 2 capital11
2

36

Next optional call date subject to RBNZ's approvalSep 2026
Aug 2027

Carrying amounts are net of issuance costs and fair value hedging adjustments.
Credit rating assigned by S&P Global Ratings.

Interest
rate
2.999%
5.548%

Interest
reset date
Sep 2026
Aug 2027

Creditrating2AA-

31 Mar 23
NZ$m
595
765
1,360

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

Credit risk subject to the Internal Ratings Based (IRB) approach
IRB credit exposures by exposure class and customer credit rating

As at 31 March 2023
Corporate
0-2
3-4
5
6
7-8
Default
Total corporate exposures1
Residential mortgages
0-3
4
5
6
7-8
Default
Total residential mortgages exposures2
Other retail
0-2
3-4
5
6
7-8
Default
Total other retail exposures
Total credit risk exposures subject
to the IRB approach3
123

Exposureweighted
LGD used
for thecapitalcalculation%

Exposureweighted
risk weight%Riskweighted
assetsNZ$m

Minimum
capitalrequirement
NZ$m

Probabilityof default%

Total value
NZ$m

Exposureat default
NZ$m

0.05
0.32
1.01
2.21
14.88
100.001.25

67,32355,058
10,975
3,075
2,791
187
139,409

7,812
23,907
9,466
2,841
900
189
45,115

59
37
32
34
39
36
39

29
40
54
75
164
94
46

2,698
11,611
6,112
2,573
1,768
211
24,973

216
929
489
206
141
17
1,998

0.20
0.45
0.90
1.99
4.82
100.000.95

42,22945,536
21,198
2,663
126
540
112,292

42,63145,66021,264
2,667
126
540
112,888

12
19
23
25
26
15
18

5
16
31
59
94
6
16

2,672
8,509
8,009
1,897
142
39
21,268

214
681
641
152
11
2
1,701

0.10
0.26
1.11
2.81
8.22
100.00
2.00

516
4,195
1,030
548
686
46
7,021

519
4,272
1,034
573
712
45
7,155

77
78
78
83
87
81
79

49
56
84
108
135
37
71

308
2,857
1,039
744
1,152
19
6,119

25
229
83
59
92
2
490

1.08

258,722

165,15826

26

52,3604,189

The credit risk supervisory adjustment on page 35 includes NZ$6,555 million of RWA for corporate exposures. This increases the pre-scalar IRB exposure–weighted risk weight to 58% andthe minimum capital requirement to NZ$2,522 million.
The credit risk supervisory adjustment on page 35 includes NZ$16,061 million of RWA for residential mortgage exposures. This increases the pre-scalar IRB exposure-weighted risk weight to
28% and the minimum capital requirement to NZ$2,986 million.
The credit risk supervisory adjustment on page 35 totals NZ$22,616 million of RWA. This increases the pre-scalar IRB exposure-weighted risk weight to 38% and the related minimum capitalrequirement to NZ$5,998 million.

IRB credit exposures include the following undrawn commitments and other off-balance sheet contingent liabilities:

As at 31 March 2023
Undrawn commitments and other off-balance sheet contingent liabilities
Corporate
Residential mortgages
Other retailCounterparty credit risk on derivatives and securities financing transactions
Corporate
Total

Total value
NZ$m

Exposureat default
NZ$m

12,133
9,273
4,694

11,451
9,723
4,768

94,495120,595

1,292
27,23437

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Additional mortgage information
As required by RBNZ, LVRs are calculated as the current exposure secured by a residential mortgage divided by the Banking Group's valuation of the
security property at origination of the exposure. Off-balance sheet exposures include undrawn and partially drawn residential mortgage loans as wellas commitments to lend. Commitments to lend are formal offers for housing lending which have been accepted by the customer.
On-balance Off-balance
sheet
sheet
NZ$m
NZ$m

As at 31 March 2023
LVR range
Does not exceed 60%
Exceeds 60% and not 70%
Exceeds 70% and not 80%
Does not exceed 80%
Exceeds 80% and not 90%
Exceeds 90%
Total

57,11819,52019,96396,601
4,783
1,635
103,019

6,983
1,034
964
8,981
112
180
9,273

Total
NZ$m
64,101
20,55420,927
105,5824,895
1,815
112,292

Specialised lending subject to the slotting approach

As at 31 March 2023
On-balance sheet exposures
StrongGood
Satisfactory
Weak
Default
Off-balance sheet exposures by average risk weight
Undrawn commitments and other off-balance sheet exposures
Total exposures subject to the slotting approach

Exposures
after
credit risk
mitigation
NZ$m

Risk
weight%Riskweighted
assetsNZ$m

Minimum
capitalrequirement
NZ$m

6,230
4,245
892
612
54

70
90
115
250
-

5,233
4,585
1,231
1,836
-

419
367
98
147
-

1,078
13,111

79
88

1,027
13,91282
1,113

The supervisory categories of specialised lending above are associated with specific risk-weights. These categories broadly correspond to thefollowing external credit assessments using S&P Global Ratings' rating scale, Strong: BBB- or better, Good: BB+ or BB, Satisfactory: BB- or B+ and Weak:
B to C-.

38

ANZ BANK NEW ZEALAND LIMITED

Credit risk exposures subject to the standardised approach

UNAUDITED

Average
Exposure
Exposurecredit after credit
or principal conversion
risk
Averageamountfactor mitigation risk weight
NZ$m
%
NZ$m
%

As at 31 March 2023
On-balance sheet exposures
Cash and gold bullion
Sovereign and central banks
Multilateral development banks and other international organisations
Public sector entities
Banks
Corporate
Past due assets
Other assets
Equity exposures
Unlisted equity holdings
Off-balance sheet exposures
Total off-balance sheet exposures
2,017
Counterparty credit risk
Foreign exchange contracts
219,561Interest rate contracts
1,208,703
Other
3,053
Credit valuation adjustmentn/aTotal exposures subject to the standardised approach

Risk
Minimum
weighted
capitalexposure requirement
NZ$m
NZ$m

183
20,530
4,359
1,350
1,539
78
1,272

20
47
107
100

270
730
83
1,272

22
58
7
102

1

400

5

-

55

1,106

51

569

46

n/a
n/a
n/a
n/a

2,912
1,309
369
n/a
35,008

23
9
30
n/a
12

678
122
111
517
4,357

54
10
9
41
349

Credit valuation adjustment
The IRB and standardised tables above include an aggregate Credit Valuation Adjustment (CVA) capital charge of NZ$71 million, and aggregate
implied risk weighted exposures for the CVA of NZ$888 million.
Credit risk mitigation
As at 31 March 2023, under the IRB approach, the Banking Group had NZ$355 million of corporate exposures covered by guarantees where thepresence of the guarantees was judged to reduce the underlying credit risk of the exposures. Information on the value of other exposures covered byfinancial guarantees and eligible financial collateral is not disclosed, as the effect of these guarantees and collateral on the underlying credit risk
exposures is not considered to be material.
Effect of standardised floor on total risk-weighted exposures for credit risk
Risk weighted assets

As at 31 March 2023
Exposures subject to the IRB or slotting approaches1
Credit risk supervisory adjustment1
Subtotal1
Standardised floor at 85% of standardised RWA
Output floor adjusting item
IRB and slotting RWA with standardised floor applied
Exposures subject to the standardised approach
Total credit risk
1

Calculated forcompliancepurposes
NZ$m
66,272
22,616
88,888n/a
88,888
4,357
93,245

Calculated using
standardised
approach
NZ$m
96,998n/a
96,99882,448n/a
82,448RWA calculated for compliance purposes includes a scalar of 1.2 as required by BPR 130 Credit Risk RWAs Overview.

In accordance with BPR 130 Credit Risk RWAs Overview, IRB and slotting RWA with standardised floor applied is calculated as the greater of RWA forcompliance purposes, and 85% of the total RWA for such exposures calculated using the standardised approach.

39

ANZ BANK NEW ZEALAND LIMITEDUNAUDITEDREGISTERED BANK DISCLOSURES
Market risk
The aggregate market risk exposures below have been calculated in accordance with BPR140: Market Risk. The peak end-of-day market risk exposures
are for the six months ended 31 March 2023.
Implied risk weighted
exposure
Aggregate capital charge
Period end
Peak Period end
Peak
As at 31 March 2023
NZ$m
NZ$m
NZ$m
NZ$m
Interest rate risk
5,565
6,577
445
526
Foreign currency risk
39
94
3
8
Equity risk
1
1Capital for other material risks
The Banking Group has an Internal Capital Adequacy Assessment Process (ICAAP) which complies with the requirements of the Bank's Conditions ofRegistration. Under the Banking Group's ICAAP it identifies and measures all "other material risks", which are those material risks that are not explicitly
captured in the calculation of the Banking Group's tier 1 and total capital ratios. The other material risks identified by the Banking Group include fixed
asset risk and deferred acquisition cost risk. As at 31 March 2023, the Banking Group's internal capital allocation for these other material risks is NZ$292
million (March 2022: NZ$326 million).
Information about Ultimate Parent Bank and Overseas Banking Group
APRA Basel III capital ratios

As at 31 March
Common equity tier 1 capital
Tier 1 capital
Total capital

Ultimate Parent Bank
Overseas Banking Group (Extended Licensed Entity)
2023
2022
2023
2022
11.5%
11.1%
13.2%
12.9%
13.2%
13.1%
15.1%
15.2%
16.6%
17.1%
20.6%
21.6%

The Ultimate Parent Bank and the Overseas Banking Group are required to hold minimum capital as determined by APRA’s capital framework, which is
at least equal to that specified under the internationally agreed Basel III framework.
APRA has authorised the Ultimate Parent Bank and the Overseas Banking Group to use:
• the Internal Ratings Based (IRB) methodology for calculation of credit risk weighted assets. Where the Overseas Banking Group is not accredited
to use the IRB methodology the Overseas Banking Group applies the standardised approach.
• the Standardised Measurement Approach (SMA) for the operational risk weighted asset equivalent.
The Overseas Banking Group exceeded the minimum capital requirements set by APRA as at 31 March 2023 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2023. The Overseas Banking Group’s Pillar 3
disclosure document for the quarter ended 31 March 2023, in accordance with APS 330: Public Disclosure of Prudential Information, discloses capital
adequacy ratios and other prudential information. This document can be accessed at the website anz.com.
Regulatory liquidity ratios
RBNZ requires banks to hold minimum amounts of liquid assets to help ensure that they are effectively managing their liquidity risks. The mismatch
ratio is a measure of a bank’s liquid assets, adjusted for expected cash inflows and outflows during a 1-month or 1-week period of stress. It is expressed
as a ratio over the bank’s total funding. The Banking Group must maintain its 1-month and 1-week mismatch ratios above zero on a daily basis. The 1month and 1-week mismatch ratios are averaged over the quarter.
RBNZ requires banks to get a minimum amount of funding from stable sources called core funding. The minimum amount of core funding is 75% of abank’s total loans. The Banking Group must maintain its core funding ratio above the regulatory minimum on a daily basis. This measure of the corefunding ratio is averaged over the quarter.
For the three months ended
Quarterly average 1-week mismatch ratio
Quarterly average 1-month mismatch ratio
Quarterly average core funding ratio

40

31 Mar 23
9.3%
7.7%
91.4%

31 Dec 22
9.2%
8.1%
92.0%

ANZ BANK NEW ZEALAND LIMITEDUNAUDITED

B5. CONCENTRATION OF CREDIT EXPOSURES TO INDIVIDUAL COUNTERPARTIESThe Banking Group measures its concentration of credit exposures to individual counterparties at the reporting date on the basis of actual exposures.
Peak end-of-day aggregate credit exposures are measured on the basis of internal limits that were not materially exceeded between the reporting
date for the previous disclosure statement and the reporting date for the Disclosure Statement.
The exposure information in the table below excludes exposures to:• connected persons (i.e. other members of the Overseas Banking Group and Directors of the Bank);• the central government or central bank of any country with a long-term credit rating of A- or A3 or above, or its equivalent; and• any supranational or quasi-sovereign agency with a long-term credit rating of A- or A3 or above, or its equivalent.

Exposures to banks
Total number of exposures to banks that are greater than 10% of CET1 capitalwith a long-term credit rating of A- or A3 or above, or its equivalent
with a long-term credit rating of at least BBB- or Baa3, or its equivalent, and at most BBB+ or Baa1, or its equivalent
Exposures to non-banks
Total number of exposures to non-banks that are greater than 10% of CET1 capitalwith a long-term credit rating of A- or A3 or above, or its equivalent- 10% to less than 15% of CET1 capitalwith a long-term credit rating of at least BBB- or Baa3, or its equivalent, and at most BBB+ or Baa1, or its equivalent

As at
31 Mar 23

Peak end of
day over 6
months to
31 Mar 23

-

-

1
1
1
-

2
2
2
-

B6. INSURANCE BUSINESSAs at 31 March 2023, the Banking Group does not conduct any insurance business.

41

ANZ BANK NEW ZEALAND LIMITED

DIRECTORS’ STATEMENT
As at the date on which this Disclosure Statement is signed, after due enquiry, each Director believes that:•

The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements (New Zealand Incorporated
Registered Banks) Order 2014; and•The Disclosure Statement is not false or misleading.

Over the six months ended 31 March 2023, after due enquiry, each Director believes that:•

The Bank has complied in all material respects with each condition of registration that applied during that period1;•

Credit exposures to connected persons were not contrary to the interests of the Banking Group; and•The Bank had systems in place to monitor and control adequately the Banking Group’s material risks, including credit risk, concentration of credit
risk, interest rate risk, currency risk, equity risk, liquidity risk, operational risk and other business risks, and that those systems were being properly
applied.

1.

In accordance with the Order, the Bank has complied in all material respects with each of its conditions of registration that applied during the period if the RBNZ has not published any
information about a breach on its website, and has not notified the Bank of any material breach.

This Disclosure Statement is dated, and has been signed by all Directors of the Bank on, 8 May 2023.

Shayne Elliott

Gerard Florian

Alison GerryRt Hon Sir John Key, GNZM AC

Scott St JohnMark Tume

Antonia Watson

Joan Withers

42

ANZ BANK NEW ZEALAND LIMITEDLIMITED ASSURANCE REPORTS

INDEPENDENT AUDITOR’S REPORTS ON THE REGISTERED BANK DISCLOSURESTO THE SHAREHOLDER OF ANZ BANK NEW ZEALAND LIMITEDREVIEW REPORT ON THE REGISTERED BANK DISCLOSURES IN SECTIONS B2, B3, B5 AND B6CONCLUSION
We have completed a review of the accompanying registered bank disclosures of ANZ Bank New Zealand Limited (the Bank) and its subsidiaries(the Banking Group) in sections B2, B3, B5 and B6 on pages 24 to 33 and 41. These comprise the information that is required to be disclosed inaccordance with schedules 5, 7, 13, 16 and 18 of the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order2014 (the Order).
Based on our review, nothing has come to our attention that causes us to believe that the registered bank disclosures in sections B2, B3, B5 and B6:• do not present fairly, in all material respects, the matters to which they relate; or• are not disclosed, in all material respects, in accordance with schedules 5, 7, 13, 16 and 18 of the Order.

BASIS FOR CONCLUSION
A review of the registered bank disclosures in sections B2, B3, B5 and B6 in accordance with NZ SRE 2410 Review of Financial Statements Performed by
the Independent Auditor of the Entity (NZ SRE 2410) is a limited assurance engagement. The auditor performs procedures, consisting of making
enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of the Banking Group, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial
statements.
Our firm has also provided other services to the Banking Group in relation to review of regulatory returns, internal controls reports, prospectus
assurance, agreed upon procedures and other assurance engagements. Subject to certain restrictions, partners and employees of our firm may also
deal with the Banking Group on normal terms within the ordinary course of trading activities of the business of the Banking Group. These mattershave not impaired our independence as reviewer of the Banking Group. The firm has no other relationship with, or interest in, the Banking Group.
USE OF THIS INDEPENDENT REVIEW REPORTThis independent review report is made solely to the Bank’s shareholder. Our review work has been undertaken so that we might state to theshareholder those matters we are required to state to them in the independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the shareholder for our review work, this independent review
report, or any of the opinions we have formed.
RESPONSIBILITIES OF THE DIRECTORS FOR THE REGISTERED BANK DISCLOSURES IN SECTIONS B1, B2, B3, B5 AND
B6The Directors, on behalf of the Banking Group, are responsible for:• the preparation and fair presentation of the registered bank disclosures in accordance with schedules 3, 5, 7, 13, 16 and 18 of the Order; and• implementing necessary internal control to enable the preparation of registered bank disclosures that free from material misstatement, whether
due to fraud or error.
AUDITOR’S RESPONSIBILITIES FOR THE REVIEW OF THE REGISTERED BANK DISCLOSURES IN SECTIONS B2, B3, B5
AND B6
Our responsibility is to express a conclusion on the registered bank disclosures in sections B2, B3, B5 and B6 based on our review. We conducted ourreview in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believethat the registered bank disclosures in sections B2, B3, B5 and B6:• do not present fairly, in all material respects, the matters to which they relate; or• are not disclosed, in all material respects, in accordance with schedules 5, 7, 13, 16 and 18 of the Order; or• if applicable, have not been prepared, in all material respects, in accordance with any conditions of registration relating to disclosure
requirements, imposed under section 74(4)(c) of the Banking (Prudential Supervision) Act 1989 (the Bank does not have any such conditions).
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards
on Auditing (New Zealand) and consequently does not enable us to obtain assurance that we might identify in an audit. Accordingly, we do not
express an audit opinion on the registered bank disclosures in sections B2, B3, B5 and B6.

KPMG
Auckland8 May 2023
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ANZ BANK NEW ZEALAND LIMITEDLIMITED ASSURANCE REPORTS
LIMITED ASSURANCE REPORT ON THE CAPITAL ADEQUACY AND REGULATORY LIQUIDITY RATIOS DISCLOSURESIN SECTION B4
CONCLUSION
We have reviewed the capital adequacy and regulatory liquidity ratios disclosures in section B4 on pages 34 to 40 (the Capital Adequacy and
Liquidity Disclosures), which comprise the information that is required to be disclosed in accordance with schedule 11 of the Order.
Based on our limited assurance conclusion, which is not a reasonable assurance engagement or audit, nothing has come to our attention thatwould lead us to believe that the Capital Adequacy and Liquidity Disclosures are not, in all material respects disclosed in accordance withschedule 11 of the Order.
STANDARDS WE FOLLOWED
We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements (New Zealand) 3000
(Revised) Assurance Engagements other than audits or reviews of historical financial information and Standard on Assurance Engagements 3100
(Revised) Assurance Engagements on Compliance. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis forour conclusion. In accordance with those standards we:• used our professional judgement to plan and perform the engagement to obtain limited assurance that the Capital Adequacy and Liquidity
Disclosures are free from material misstatement and non-compliance, whether due to fraud or error;• considered relevant internal controls when designing our assurance procedures, however we do not express a conclusion on the effectiveness ofthese controls; and• ensured that the engagement team possess the appropriate knowledge, skills and professional competencies.
HOW TO INTERPRET LIMITED ASSURANCE AND MATERIAL MISSTATEMENT AND NON-COMPLIANCE
In a limited assurance engagement, the assurance practitioner performs procedures, primarily consisting of discussion and enquiries ofmanagement and others within the entity, as appropriate, and observation and walk-throughs, and evaluates the evidence obtained. The
procedures selected depend on our judgement, including identifying areas where the risk of material misstatement and non-compliance withschedule 11 of the Order is likely to arise.
The procedures performed in a limited assurance engagement vary in nature and timing from and are less in extent than for a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would
have been obtained had a reasonable assurance engagement been performed.
Misstatements, including omissions, within the Capital Adequacy and Liquidity Disclosures and non-compliance are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the relevant decisions of the intended users taken on the basis of
the Capital Adequacy and Liquidity Disclosures.
INHERENT LIMITATIONS
Because of the inherent limitations of an assurance engagement, together with the internal control structure it is possible that fraud, error or noncompliance with compliance requirements may occur and not be detected.
USE OF THIS INDEPENDENT LIMITED ASSURANCE REPORTThis independent limited assurance report is made solely to the Bank’s shareholder. Our assurance work has been undertaken so that we might state
to the shareholder those matters we are required to state to them in the assurance report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume any responsibility to anyone other than the shareholder for our assurance work, for this independent limited
assurance report, and/or for any of the conclusions we have reached.
DIRECTOR’S RESPONSIBILITY FOR THE CAPITAL ADEQUACY AND LIQUIDITY DISCLOSURESThe Directors are responsible for the preparation of the Capital Adequacy and Liquidity Disclosures that are required to be disclosed in accordancewith schedule 11 of the Order, which the Directors have determined to meet the needs of the recipients. This responsibility includes such internal
control as the Directors determine is necessary to enable the preparation of the Capital Adequacy and Liquidity Disclosures that are free frommaterial misstatement and non-compliance whether due to fraud or error.
OUR RESPONSIBILITY FOR THE CAPITAL ADEQUACY AND LIQUIDITY DISCLOSURESOur responsibility is to express a conclusion on whether anything has come to our attention that the Capital Adequacy and Liquidity Disclosures
have not, in all material respects, been disclosed in accordance with schedule 11 of the Order for the six-month period ended 31 March 2023.

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ANZ BANK NEW ZEALAND LIMITEDLIMITED ASSURANCE REPORTS

OUR INDEPENDENCE AND QUALITY CONTROL
We have complied with the independence and other ethical requirements of Professional and Ethical Standard 1 International Code of Ethics for
Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards
Board, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behaviour.
The firm applies Professional and Ethical Standard 3 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements and accordingly maintains a comprehensive system of quality control including documented policies andprocedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our firm has also provided other services to the Banking Group in relation to review of regulatory returns, internal controls reports, prospectus
assurance, agreed upon procedures and other assurance engagements. Subject to certain restrictions, partners and employees of our firm may also
deal with the Banking Group on normal terms within the ordinary course of trading activities of the business of the Banking Group. These mattershave not impaired our independence as assurance providers of the Banking Group for this engagement. The firm has no other relationship with, orinterest in, the Banking Group.

KPMG
Auckland8 May 2023

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