Australia and New Zealand Banking Group Limited- New Zealand Branch
Registered Bank Disclosure Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2015 | NUMBER 26 ISSUED MAY 2015

Australia and New Zealand Banking Group Limited - New Zealand Branch

Registered Bank Disclosure Statement
For the six months ended 31 March 2015

Contents
General Disclosures

2

Income Statement

3Statement of Comprehensive Income

3Statement of Changes in Equity

4

Balance Sheet

5

Condensed Cash Flow Statement

6

Notes to the Financial Statements

7

Directors' and New Zealand Chief Executive Officer's
Statement

23

Independent Auditor’s Review Report

24

Glossary of Terms
In this Registered Bank Disclosure Statement (DisclosureStatement) unless the context otherwise requires:(a) Bank means ANZ Bank New Zealand Limited;(b) Banking Group means the Bank and all its controlled
entities;(c) Immediate Parent Company means ANZ Funds Pty
Limited, which is the immediate parent company of ANZ
Holdings (New Zealand) Limited;(d) Ultimate Parent Bank means Australia and New Zealand
Banking Group Limited;(e) Overseas Banking Group means the worldwide
operations of Australia and New Zealand Banking Group
Limited including its controlled entities;(f) New Zealand business means all business, operations, orundertakings conducted in or from New Zealandidentified and treated as if it were conducted by acompany formed and registered in New Zealand;(g) NZ Branch means the New Zealand business of the
Ultimate Parent Bank;(h) ANZ New Zealand means the New Zealand business of
the Overseas Banking Group;(i) Registered Office is Level 8, 1 Victoria Street, Wellington,
New Zealand, which is also ANZ New Zealand’s addressfor service;(j) RBNZ means the Reserve Bank of New Zealand;(k) APRA means the Australian Prudential Regulation
Authority;(l) the Order means the Registered Bank DisclosureStatements (Overseas Incorporated Registered Banks)
Order 2014; and(m) Any term or expression which is defined in, or in themanner prescribed by, the Order shall have the meaning
given in or prescribed by the Order.

Australia and New Zealand Banking Group Limited - New Zealand Branch

2

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

Financial Statements of the Ultimate Parent Bankand Overseas Banking Group

Credit Rating Information

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

The Ultimate Parent Bank has three credit ratings, which areapplicable to its long-term senior unsecured obligations. The
Ultimate Parent Bank’s credit ratings are:Rating Agency
Standard & Poor’s

Current Credit
RatingAA-

Qualification
Outlook Stable

Moody’s Investors Service

Aa2

Outlook Stable

Fitch Ratings

AA-

Outlook Stable

Guarantors
No obligations of the NZ Branch are guaranteed as at 28 May
2015.
ANZNZ Covered Bond Trust
Certain debt securities (Covered Bonds) issued by the Bank’s
wholly owned subsidiary, ANZ New Zealand (Int’l) Limited,
are guaranteed by ANZNZ Covered Bond Trust Limited (theCovered Bond Guarantor), solely in its capacity as trustee of
ANZNZ Covered Bond Trust. The Covered Bond Guarantor
has guaranteed the payment of interest and principal of
Covered Bonds with a carrying value as at 31 March 2015 of$4,382 million, pursuant to a guarantee which is secured overa pool of assets. The Covered Bond Guarantor’s address forservice is Level 9, 34 Shortland Street, Auckland, New
Zealand. The Covered Bond Guarantor is not a member ofthe Banking Group and has no credit ratings applicable to its
long term senior unsecured obligations payable in New
Zealand dollars. The Covered Bonds have been assigned along term rating of Aaa and AAA by Moody’s InvestorsService and Fitch Ratings respectively. Details of the pool ofassets that secure this guarantee are provided in Note 7.

Directorate
As at 28 May 2015 there have been no changes to the
Directors of the Ultimate Parent Bank since 30 September
2014, the balance date of the last full year disclosurestatement.

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

3

Income Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2015

31/03/2014

30/09/2014

Interest income

3,707

3,254

6,799

Interest expense

2,285

1,884

4,034

Net interest income

1,422

1,370

2,765

Net trading gains

149

94

210

Net funds management and insurance income

211

149

325

217

246

525

1

1

3

2,000

1,860

3,828

$ millions

Other operating income

Note

2

Share of associates' profit
Operating income
Operating expenses
Profit before credit impairment and income tax
Credit impairment charge / (release)5

Profit before income tax

Audited

756

727

1,490

1,244

1,133

2,338

31

(39)

(9)

2,347

1,213

1,172

Income tax expense

336

319

636

Profit after income tax

877

853

1,711

AuditedStatement of Comprehensive Income$ millions

Profit after income tax

Unaudited

Unaudited

6 months to

6 months toYear to31/03/2015

31/03/2014

30/09/2014

877

853

1,711

(27)

24

35

8

(7)

(10)

(19)

17

25

7

(16)

(2)
(41)

Items that will not be reclassified to profit or loss
Actuarial gain / (loss) on defined benefit schemes
Income tax credit / (expense) relating to items that will not be reclassified
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
Unrealised gains / (losses) recognised directly in equity

(13)

(22)

Income tax credit relating to items that may be reclassified

2

10

12

Total items that may be reclassified subsequently to profit or loss

(4)

(28)

(31)

854

842

1,705

Realised gains transferred to income statement

Total comprehensive income for the period

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

4

Statement of Changes in Equity$ millions

As at 1 October 2013 (Audited)

Share capitaland head
office account

Availablefor-salerevaluation
reserve

Cash flow
hedging
reserve

Retainedearnings

Total equity

6,424

(2)

26

3,294

9,742

Profit after income tax

-

-

-

853

853

Unrealised gains / (losses) recognised directly in equity

-

3

(19)

-

(16)

Realised gains transferred to the income statement

-

-

(22)

-

(22)

Actuarial gain on defined benefit schemes

-

-

-

24

24

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

-

(1)

11

(7)

3

Total comprehensive income for the period

-

2

(30)

870

842

Ordinary dividend paid

-

-

-

(535)

(535)

As at 31 March 2014 (Unaudited)

6,424

-

(4)

3,629

10,049As at 1 October 2013 (Audited)

6,424

(2)

26

3,294

9,742

Profit after income tax

-

-

-

1,711

1,711

Unrealised gains / (losses) recognised directly in equity

-

3

(5)

-

(2)

Realised gains transferred to the income statement

-

-

(41)

-

(41)

Actuarial gain on defined benefit schemes

-

-

-

35

35

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

-

(1)

13

(10)

2

Total comprehensive income for the period

-

2

(33)

1,736

1,705

Ordinary dividend paid

-

-

-

(2,335)(2,335)Preference shares issued

969

-

-

-

969

7,393

-

(7)

2,695

10,081As at 30 September 2014 (Audited)
Profit after income tax

-

-

-

877

877

Unrealised gains recognised directly in equity

-

1

6

-

7

Realised gains transferred to the income statement

-

-

(13)

-

(13)

Actuarial loss on defined benefit schemes

-

-

-

(27)

(27)

Income tax credit on items recognised directly in equity

-

-

2

8

10

Total comprehensive income for the period

-

1

(5)

858

854

Ordinary dividend paid
As at 31 March 2015 (Unaudited)

-

-

-

(955)

(955)

7,393

1

(12)

2,598

9,980

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

5

Balance Sheet
Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

2,605

1,717

2,248

601

705

855

Collateral paid

2,123

1,367

783

Trading securities

12,215

12,09011,750$ millions

Note

AssetsCash
Settlement balances receivable

Investments backing insurance contract liabilities
Derivative financial instruments

210

165

190

10,851

8,709

11,421

Current tax assets

10

38

-

Available-for-sale assets

903

667

772

109,031102,571

105,485

Other assets

689

607

632

Life insurance contract assets

554

431

470

Investments in associates

89

89

88

Premises and equipment

372

373

380

Net loans and advances

4

Goodwill and other intangible assets
Total assets
Interest earning and discount bearing assets

3,462

3,449

3,454

143,715
127,315

132,978
118,950

138,528
121,539

1,322

1,153

1,992

364

452

800

96,95991,181

94,527

13,204

10,837

10,961--

68

Liabilities
Settlement balances payable
Collateral received
Deposits and other borrowings

8

Derivative financial instruments
Current tax liabilities
Deferred tax liabilities
Payables and other liabilities
Provisions
Debt issuances
Subordinated debt

9

Total liabilities (excluding head office account)
Net assets (excluding head office account)

97

13

59

1,333

1,265

1,352

189

211

204

17,686

16,40517,042

2,581

1,412

1,442

133,735
9,980

122,929
10,049128,447
10,081

7,393

6,424

7,393

(11)

(4)

(7)

2,598

3,629

2,695

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

9,980

10,04910,081

Interest and discount bearing liabilities

112,098

104,195

108,614

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

6

Condensed Cash Flow Statement
Unaudited

Unaudited

6 months to

6 months toYear to31/03/2015

31/03/2014

30/09/2014

Interest received

3,652

3,215

6,724

Interest paid

(3,945)$ millions

AuditedCash flows from operating activities(2,309)(1,906)

Other cash inflows provided by operating activities

448

509

947

Other cash outflows used in operating activities(1,140)(1,016)(1,895)

Cash flows from operating profits before changes in operating assets and liabilities
Net changes in operating assets and liabilities
Net cash flows provided by / (used in) operating activities

651

802

1,831

(1,499)(1,138)

(294)

(848)

(336)

1,537

Cash flows from investing activities
Cash inflows provided by investing activities

-

10

18

Cash outflows used in investing activities

(44)

(44)

(120)

Net cash flows used in investing activities

(44)

(34)

(102)

Cash flows from financing activities
Cash inflows provided by financing activities

3,956

2,918

5,400

Cash outflows used in financing activities(2,697)(3,168)(6,924)

Net cash flows provided by / (used in) financing activities(1,524)

1,259

(250)

Net increase / (decrease) in cash and cash equivalents

367

(620)

(89)

Cash and cash equivalents at beginning of the period

2,256

2,345

2,345

Cash and cash equivalents at end of the period

2,623

1,725

2,256

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

Australia and New Zealand Banking Group Limited - New Zealand Branch

7

Notes to the Financial Statements
1.

Significant Accounting Policies(i)Reporting entity and statement of compliance
These interim financial statements are for ANZ New
Zealand for the six months ended 31 March 2015. They
have been prepared in accordance with New Zealand
Generally Accepted Accounting Practice as appropriate for
profit oriented entities, the requirements of NZ IAS 34
Interim Financial Reporting, IAS 34 Interim Financial
Reporting and the Order, and should be read in
conjunction with ANZ New Zealand’s financial statements
for the year ended 30 September 2014.

(ii)

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

•
•
•

2.

derivative financial instruments, including in thecase of fair value hedging, the fair value of any
applicable underlying exposure;financial instruments held for trading;financial assets treated as available-for-sale; andfinancial instruments designated at fair value
through profit and loss.

(iii) Changes in accounting policies
The accounting policies adopted by ANZ New Zealand areconsistent with those adopted and disclosed in theprevious full year Disclosure Statement.
(iv) Presentation currency and rounding
The amounts contained in the financial statements arepresented in millions of New Zealand dollars, unlessotherwise stated.
(v)

Comparatives
Amounts in the cash flow statement for cash and cash
equivalents and net changes in operating assets andliabilities have been updated for the revised definition of
cash and cash equivalents applied in the previous full year
Disclosure Statement.

(vi) Principles of consolidation
The consolidated financial statements of ANZ New
Zealand comprise the financial statements of the NZ
Branch and all the New Zealand businesses of all thesubsidiaries of the Ultimate Parent Bank (those entities
where it is determined that the Ultimate Parent Bank has
capacity to control).

Other Operating Income$millions

Unaudited

Unaudited

6 months to

6 months toYear to31/03/2015

31/03/2014

30/09/2014

Audited

191

194

382

Fair value gain / (loss) on hedging activities and financial liabilities designated at fair value

3

(48)

15

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

-

91

91

Net fee income

Other income

23

9

37

Total other operating income

217

246

525

Australia and New Zealand Banking Group Limited - New Zealand Branch

8

Notes to the Financial Statements
3.

Segment Analysis

ANZ New Zealand is organised into four major businesssegments for segment reporting purposes - Retail,Commercial, Wealth and Institutional. Centralised back officeand corporate functions support these segments. Thesesegments are consistent with internal reporting provided tothe chief operating decision maker, being the Bank’s Chief
Executive Officer.
Segmental reporting has been updated to reflect minorchanges to ANZ New Zealand’s structure. Comparative data
has been adjusted to be consistent with the current period’s
segment definitions.
RetailRetail provides products and services to personal customers
via the branch network, mortgage specialists, the contact
centre and a variety of self-service channels (internet
banking, phone banking, ATMs, website and mobile phonebanking). Core products include current and savings
accounts, unsecured lending (credit cards, personal loans
and overdrafts) and home loans secured by mortgages overproperty. Retail distributes insurance and investment
products on behalf of the Wealth segment.

services are offered to small enterprises (typically with annual
revenues of less than $5 million). Commercial & Agricustomers consist of primarily privately owned medium tolarge enterprises. ANZ New Zealand's relationship with thesebusinesses ranges from simple banking requirements withrevenue from deposit and transactional facilities, and cash
flow lending, to more complex funding arrangements withrevenue sourced from a wider range of products. UDC isprincipally involved in the financing and leasing of plant,
vehicles and equipment, mainly for small and medium sizedbusinesses, as well as investment products.
WealthWealth comprises the Private Wealth, Funds Management
and Insurance businesses, which provide private banking,investment, superannuation and insurance products andservices.
Institutional
Institutional provides financial services through a number of
specialised units to large multi-banked corporations, often
global, which require sophisticated product and risk
management solutions. Those financial services include loan
structuring, foreign exchange, wholesale money market
services and transaction banking.

Commercial

Other

Commercial provides services to Business Banking,Commercial & Agri, and UDC customers. Business Banking

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

Business segment analysis1$ millions

RetailCommercial

Wealth2

Institutional

Other 3

Total

Unaudited 6 months to 31/03/2015

External revenues

678

1,602

72

458

(810)

2,000

Intersegment revenues

(22)

(830)

84

(123)

891

-

Total revenues

656

772

156

335

81

2,000

Profit after income tax

238

368

67

167

37

877

External revenues

714

1,405

152

389

(800)

1,860

Intersegment revenues

(75)

(684)

76

(70)

753

-

Total revenues

639

721

228

319

(47)

1,860

Profit / (loss) after income tax

229

374

121

165

(36)

853

Unaudited 6 months to 31/03/2014

Audited year to 30/09/2014

External revenues

1,410

2,941

211

791

(1,525)3,828Intersegment revenues(134)(1,473)

165

(163)

1,605

-

Total revenues

1,276

1,468

376

628

80

3,828

451

723

181

322

34

1,711

Profit after income tax
1
2

3

Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
Wealth external revenues for the six months to 31 March 2014 and year to 30 September 2014 includes the $91 million insurance settlement relating to the Bank’s
former involvement in the ING Diversified Yield fund and the ING Regular Income Fund.
This segment has negative external revenues as this segment incurs funding costs on behalf of ANZ New Zealand and is reimbursed internally.

Australia and New Zealand Banking Group Limited - New Zealand Branch

9

Notes to the Financial Statements
4.

Net Loans and Advances
Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

Overdrafts

1,640

1,789

1,744

Credit card outstandings

1,639

1,525

1,580

Term loans - housing

64,03160,592

61,918Term loans - non-housing

41,01738,521

39,622

Lease receivables

255

112

277

Hire purchase

878

768

837

Other

125

125

125

109,585

103,432

106,103

(659)

(744)

(688)

Less: Unearned income

(216)

(352)

(212)

Add: Capitalised brokerage/mortgage origination fees

259

183

215

Add: Customer liability for acceptances

62

52

67

109,031102,571

105,485

Retailmortgages

Other retail
exposures

Non-retail
exposures

Total

New and increased provisions

19

50

41

110

Write-backs

(21)

(9)

(31)

(61)

Recoveries of amounts written off previously

(1)

(10)

(1)

(12)

Individual credit impairment charge / (release)

(3)

31

9

37

Collective credit impairment release

(1)

(1)

(4)

(6)

Credit impairment charge / (release)

(4)

30

5

31

$ millions

Note

Total gross loans and advances
Less: Provision for credit impairment

5

Total net loans and advances

5.

Provision for Credit Impairment

Credit impairment charge / (release)$ millions
Unaudited 31/03/2015

Unaudited 31/03/2014

New and increased provisions

30

62

45

137

Write-backs

(30)

(10)

(60)

(100)

Recoveries of amounts written off previously

(1)

(9)

(5)

(15)

Individual credit impairment charge / (release)

(1)

43

(20)

22

Collective credit impairment release

(12)

(3)

(46)

(61)

Credit impairment charge / (release)

(13)

40

(66)

(39)

New and increased provisions

68

120

111

299

Write-backs

(54)

(21)

(112)

(187)

Recoveries of amounts written off previously

(2)

(20)

(7)

(29)

Individual credit impairment charge / (release)

12

79

(8)

83

Collective credit impairment charge / (release)

(24)

1

(69)

(92)

Credit impairment charge / (release)

(12)

80

(77)

(9)

Audited 30/09/2014

Australia and New Zealand Banking Group Limited - New Zealand Branch

10

Notes to the Financial Statements
Movement in provision for credit impairment$ millions

Retailmortgages

Other retail
exposures

Non-retail
exposures

Total

464

Unaudited 31/03/2015

Collective provision
Balance at beginning of the period

91

118

255

Release to income statement

(1)

(1)

(4)

(6)

Balance at end of the period

90

117

251

458

Balance at beginning of the period

81

15

128

224

New and increased provisions net of write-backs

(2)

41

10

49

Bad debts written off

(2)

(44)

(21)

(67)

Individual provision

Discount unwind

(2)

-

(3)

(5)

Balance at end of the period

75

12

114

201

Total provision for credit impairment

165

129

365

659

Balance at beginning of the period

115

117

324

556

Release to income statement

(12)

(3)

(46)

(61)

Balance at end of the period

103

114

278

495
293

Unaudited 31/03/2014

Collective provision

Individual provision
Balance at beginning of the period

83

22

188

New and increased provisions net of write-backs

-

52

(15)

37

Bad debts written off

(3)

(55)

(25)

(83)

Discount unwind reversal / (discount unwind)

(3)

-

5

2

Balance at end of the period

77

19

153

249

Total provision for credit impairment

180

133

431

744

Balance at beginning of the year

115

117

324

556

Charge / (release) to income statement

(24)

1

(69)

(92)

Balance at end of the year

91

118

255

464

Balance at beginning of the year

83

22

188

293

New and increased provisions net of write-backs

14

99

(1)

112

Bad debts written off

(10)

(106)

(67)

(183)

Discount unwind reversal / (discount unwind)

(6)

-

8

2

Audited 30/09/2014

Collective provision

Individual provision

Balance at end of the year

81

15

128

224

Total provision for credit impairment

172

133

383

688

Australia and New Zealand Banking Group Limited - New Zealand Branch

11

Notes to the Financial Statements
6.

Impaired Assets and Past Due Assets
Retailmortgages

Other retail
exposures

Non-retail
exposures

Total

Balance at beginning of the period

223

35

410

668

Transfers from productive

56

61

59

176

Transfers to productive

(51)

(4)

(33)

(88)

Assets realised or loans repaid

(69)

(13)

(105)

(187)

$ millions
Unaudited 31/03/2015

(2)

(44)

(21)

(67)

157

35

310

502

1

-

19

20

Balance at beginning of the period

214

49

666

929

Transfers from productive

110

78

129

317

Transfers to productive

(24)

(1)

(60)

(85)

Assets realised or loans repaid

(81)

(19)

(171)

(271)

Write offs
Total impaired assets
Undrawn facilities with impaired customers
Unaudited 31/03/2014

Write offs
Total impaired assets
Undrawn facilities with impaired customers

(3)

(55)

(25)

(83)

216

52

539

807

-

1

34

35

Audited 30/09/2014

Balance at beginning of the year

214

49

673

936

Transfers from productive

218

138

299

655

Transfers to productive

(51)

(4)

(153)

(208)

Assets realised or loans repaid

(148)

(42)

(342)

(532)

Write offs

(10)

(106)

(67)

(183)

Total impaired assets

223

35

410

668

1

-

38

39

Undrawn facilities with impaired customers

Credit quality of financial assets that are past due but not impaired
A large portion of retail credit exposures, such as residential mortgages, are generally well secured. That is, the fair value of
associated security should be sufficient to ensure that ANZ New Zealand will recover the entire amount owing over the life of the
facility and there is reasonable assurance that collection efforts will result in payment of the amounts due in a timely manner.
Ageing analysis of loans that are past due but not impaired
Retailmortgages

Other retail
exposures

Non-retail
exposuresTotal

1 to 5 days

380

116

569

1,065

6 to 29 days

301

99

80

480

1 to 29 days

681

215

649

1,545

30 to 59 days

206

37

103

346

60 to 89 days

86

17

38

141

90 days or over

145

37

50

232

1,118

306

840

2,264

$ millions
Unaudited 31/03/2015

Australia and New Zealand Banking Group Limited - New Zealand Branch

12

Notes to the Financial Statements
7.

Financial Assets Pledged as Collateral$ millions

Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

2,123

1,367

783

Trading securities encumbered through repurchase agreements

43

32

47

Residential mortgages pledged as security for covered bonds

7,010

6,780

7,283

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

2,423

2,272

2,354

Total financial assets pledged as collateral

11,59910,451

10,467

Cash collateral given on derivative financial instruments

ANZNZ Covered Bond Trust (the Covered Bond Trust)
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by
the Bank which are security for the guarantee by ANZNZ Covered Bond Trust Limited as trustee of the Covered Bond Trust of
issuances of covered bonds by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The
assets of the Covered Bond Trust are not available to creditors of the Bank, although the Bank (or its liquidator or statutory manager)
may have a claim against the residual assets of the Covered Bond Trust (if any) after all prior ranking creditors of the Covered Bond
Trust have been satisfied.
ANZ New Zealand continues to recognise the assets of the Covered Bond Trust on its balance sheet as, although they are pledged as
security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8.

Deposits and Other Borrowings$ millions

Note

Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

Certificates of deposit

1,462

1,604

1,376

Term deposits

34,85534,86934,758Other deposits bearing interest and other borrowings

37,591

31,83334,027

Deposits not bearing interest

6,263

5,833

6,001

Deposits from banks

43

361

226

Commercial paper

6,273

5,401

6,057

1,629

1,534

1,569

Borrowings from Ultimate Parent Bank and Immediate Parent Company

8,843

9,746

10,513

Total deposits and other borrowings

96,95991,181

94,527

UDC secured investments

7

Australia and New Zealand Banking Group Limited - New Zealand Branch

13

Notes to the Financial Statements
9.

Subordinated Debt

$ millions

Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

973

-

-

494

-

-

ANZ Capital Notes1
ANZ Capital Notes 3 (ANZ CN3)
2

ANZ New Zealand Capital Notes (ANZ NZ CN)
Perpetual subordinated debt

NZD 835,000,000 perpetual subordinated bond2

835

835

835

AUD 265,740,000 perpetual subordinated floating rate loan3

-

283

298

AUD 10,000,000 perpetual subordinated floating rate loan

10

11

11

Dated subordinated debt
AUD 265,017,668 subordinated floating rate loan
Total subordinated debt issued
Less subordinated debt instruments held by the Bank
Total subordinated debt
1
2

3

•

ANZ Capital Notes•

On 5 March 2015, the NZ Branch issued 9.7 million
convertible notes (ANZ CN3) at A$100 each, raising
A$970 million before issue costs.
On 31 March 2015, the Bank issued 500 million
convertible notes (ANZ NZ CN) at $1 each, raising $500
million before issue costs.

ANZ Capital Notes (the notes) are fully paid mandatorily
convertible non-cumulative perpetual subordinated notes.
ANZ CN3 are listed on the Australian Stock Exchange.
As at 31 March 2015 ANZ NZ CN carried a BBB- credit ratingfrom Standard and Poor’s.
The notes are classified as debt given there are circumstanceswhere the principal is converted into a variable number ofshares of the Ultimate Parent Bank beyond ANZ New
Zealand’s control.
Distributions and interest
Distributions on ANZ CN3 and interest on ANZ NZ CN arerecorded as interest expense in the statement ofcomprehensive income. Interest on the notes is noncumulative and payable as follows:
•

283

298

1,412

1,442

(1)

-

-

2,581

1,412

1,442

These instruments qualify as additional tier 1 capital of the Overseas Banking Group.
These instruments are listed on the New Zealand Debt Market (NZDX). The Market Surveillance Panel of the NZX granted the Bank a waiver from the requirements ofListing Rules 10.3 (relating to the provision of preliminary announcements of half yearly and annual results to the NZX) and 10.4 (relating to preparing and providing a
copy of half yearly and annual reports to the NZX).
This loan was repaid on 15 March 2015. Interest was payable half yearly in arrears at BBSW + 0.95% p.a.

Subordinated debt is subordinated in right of payment in theevent of liquidation or wind up to the claims of depositors
and all creditors of the issuer/drawer of the debt.

•

270
2,582

ANZ CN3: payable semi-annually in arrears in March and
September in each year and will be franked in line withthe franking applied to ordinary shares of the Ultimate
Parent Bank. The distributions are be based on a floating
rate equal to the aggregate of the Australian 180 day
bank bill rate plus a 360 basis point margin, multipliedby one minus the Australian company tax rate. Should
the distribution not be fully-franked, the terms of thenotes provide for a cash gross-up for the amount of thefranking benefit not provided.

ANZ NZ CN: payable quarterly in arrears in February,
May, August and November in each year. The interest
rate is fixed at 7.2% per annum until 25 May 2020, andthereafter will be based on a floating rate equal to theaggregate of the New Zealand 3 month bank bill rateplus a 350 basis point margin.

Interest payments are subject to the Ultimate Parent Bank’s(ANZ CN3) and the Bank’s (ANZ NZ CN) absolute discretionand certain payment conditions being satisfied (including
APRA, and RBNZ (ANZ NZ CN only), requirements). If
distributions are not paid on the notes, the Ultimate Parent
Bank (ANZ CN3) and the Bank (ANZ NZ CN) may not, except
in limited circumstances, pay dividends on its ordinary sharesor undertake a share buy-back or other capital reduction
until interest is next paid.
Conversion features
On 24 March 2025 (ANZ CN3) or 25 May 2022 (ANZ NZ CN) or
an earlier date under certain circumstances, the relevant
notes will mandatorily convert into a variable number ofordinary shares of the Ultimate Parent Bank based on the
average market price of the Ultimate Parent Bank’s ordinary
shares over a specified period prior to conversion less a 1%
discount, subject to a maximum conversion number.
The mandatory conversion will be deferred for a specified
period if the conversion tests are not met.
If a common equity capital trigger event, an APRA nonviability trigger event or an RBNZ non-viability trigger event(as defined in the RBNZ document Capital Adequacy
Framework (Internal Models Based Approach) (BS2B)) (ANZNZ CN only) occurs, some or all of the notes will be required
to be immediately converted into ordinary shares of the
Ultimate Parent Bank.
A common equity capital trigger event occurs if the:•Overseas Banking Group’s Level 2 common equity tier 1
capital ratio is equal to or less than 5.125%; orAustralia and New Zealand Banking Group Limited - New Zealand Branch

14

Notes to the Financial Statements•

Banking Group’s common equity tier 1 capital ratio is
equal to or less than 5.125% (ANZ CN only).

An APRA non-viability trigger event occurs if APRA notifies
the Ultimate Parent Bank that, without the conversion or
write-off of certain securities or a public sector injection ofcapital (or equivalent support), it considers that the Ultimate
Parent Bank would become non-viable. An RBNZ nonviability trigger event occurs if the RBNZ directs the Bank toconvert or write off the notes or a statutory manager isappointed to the Bank and decides the Bank must convert or
write off the notes.
On 25 May 2020 the Bank has the right to, subject tosatisfying certain conditions, redeem (subject to receiving
RBNZ’s and APRA’s prior approval), or convert into ordinary
shares of the Ultimate Parent Bank, all or some of the ANZ NZ
CN at its discretion on similar terms as mandatory
conversion.

NZD 835,000,000 bondThis bond was issued by the Bank on 18 April 2008.
The Bank may elect to redeem the bond on 18 April 2018 (theCall Date) or any interest payment date subsequent to 18
April 2018. Interest is payable half yearly in arrears on 18 April
and 18 October each year, up to and including the Call Dateand then quarterly thereafter. Should the bond not be calledat the Call Date, the Coupon Rate from the Call Date onwards
will be set on a quarterly basis to the three month FRA rateplus 3.00%.
As at 31 March 2015, this bond carried a BBB+ rating byStandard and Poor's and an A3 rating by Moody’s.
The coupon interest on the bond was 9.66% until 18 April
2013 when it reset to 5.28% for the five year period to 18
April 2018.
AUD 10,000,000 loan

On 24 March 2023 the Ultimate Parent Bank has the right to,
subject to satisfying certain conditions, redeem (subject toreceiving APRA’s prior approval), or convert into ordinary
shares of the Ultimate Parent Bank, all or some of the ANZ
CN3 at its discretion on similar terms as mandatory
conversion.

This loan was drawn down by the Bank on 27 March 2013and has no fixed maturity. Interest is payable half yearly inarrears on 15 March and 15 September each year. The Bank
may repay the loan on any interest payment date after the
NZD 835,000,000 bond has been repaid in full.

Rights of holders in event of liquidation

Coupon interest is BBSW + 2.4% p.a., increasing to BBSW +4.4% p.a. from 15 September 2018.

In a liquidation of the Ultimate Parent Bank, ANZ CN3 rank
equally with other additional tier 1 capital instruments issued
by the Ultimate Parent Bank. In a liquidation of the Bank, ANZ
NZ CN rank equally with the Bank’s other additional tier 1
capital instruments, including preference shares, and lower
than the Bank’s perpetual subordinated debt. Holders of thenotes do not have any right to vote in general meetings of
the Ultimate Parent Bank or the Bank.
Perpetual subordinated debt

Dated subordinated debt
AUD 265,017,668 loan
This loan was drawn down by ANZ Holdings (New Zealand)
Limited on 25 September 2013. The loan matures on 1 March
2024, but ANZ Holdings (New Zealand) Limited may elect torepay the loan on any interest payment date from 1 March
2019. Interest is payable half yearly in arrears at BBSW +2.60% p.a., with interest payments due on 1 March and 1
September each year.

Perpetual subordinated debt instruments are classified as
debt reflecting an assessment of the key terms andconditions of the instruments, and an assessment of theability, and likelihood of interest payments being deferred.
Certain of these instruments have interrelationships thathave been considered in this assessment.

10. Related Party Balances$ millions

Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

Total due from related parties

2,975

2,886

4,539

Total due to related parties

13,191

15,861

16,137

Australia and New Zealand Banking Group Limited - New Zealand Branch

15

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

Ultimate Parent Bank
(Extended Licensed Entity)

Overseas Banking Group
31/03/2015

31/03/2014

30/09/2014

31/03/2015

31/03/2014

30/09/2014

Common equity tier 1 capital

8.7%

8.3%

8.8%

8.8%

8.3%

9.1%

Tier 1 capital

10.6%

10.3%

10.7%

10.9%

10.6%

11.3%

Total capital

12.6%

12.1%

12.7%

13.1%

12.5%

13.4%

Unaudited

For calculation of minimum capital requirements under Pillar 1 (Capital Requirements) of the Basel Accord, APRA has accredited theOverseas Banking Group to use the Advanced Internal Ratings Based (AIRB) methodology for calculation of credit risk weighted
assets and the Advanced Measurement Approach (AMA) for the operational risk weighted asset equivalent.
Under prudential regulations, the Overseas Banking Group is required to maintain a Prudential Capital Ratio (PCR) as determined by
APRA. The Overseas Banking Group exceeded the PCR set by APRA as at 31 March 2015 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2015. The Overseas Banking
Group’s Pillar 3 disclosure document for the quarter ended 31 March 2015, in accordance with APS 330: Public Disclosure ofPrudential Information, discloses capital adequacy ratios and other prudential information. This document can be accessed at thewebsite anz.com.
Market risk
ANZ New Zealand’s aggregate market risk exposures below have been calculated in accordance with the RBNZ document BS2B. The
peak end-of-day market risk exposures are for the half-year ended 31 March 2015.
Implied risk weighted exposure$ millions

Notional capital charge

Peak

Period end

Peak

Period end

Peakoccurred on

12/11/2014

Unaudited 31/03/2015

5,393

7,601

431

608

Foreign currency risk

81

132

6

11

9/12/2014

Equity risk

2

2

-

-

28/01/2015

Interest rate risk

5,476

437

Residential mortgages by loan-to-valuation ratio
As required by the RBNZ, LVRs are calculated as the current exposure secured by a residential mortgage divided by ANZ New
Zealand's valuation of the security property at origination of the exposure. Off balance sheet exposures include undrawn andpartially drawn residential mortgage loans as well as commitments to lend. Commitments to lend are formal offers for housing
lending which have been accepted by the customer.
31/03/2015
UnauditedOn-balancesheet

Off-balance
sheet

Total

Does not exceed 60%

23,112

3,846

26,958

Exceeds 60% and not 70%

11,4391,141

12,580Exceeds 70% and not 80%

18,778

1,860

20,638Does not exceed 80%

53,3296,847

60,176

Exceeds 80% and not 90%

5,773

242

6,015

Exceeds 90%

2,861

245

3,106

Total

61,963

7,334

69,297$ millions

LVR range

Australia and New Zealand Banking Group Limited - New Zealand Branch

16

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

Term loans - housing

Note

31/03/2015

464,031(86)

Less: fair value hedging adjustment471

Add: short-term housing loans classified as overdrafts(2,453)

Less: housing loans made to corporate customers
On-balance sheet retail mortgage exposures

11

61,963

11

69,2977,334

Add: off-balance sheet retail mortgage exposures
Total retail mortgage exposures as per LVR analysis

12. Financial Risk Management
Concentrations of credit risk
Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities within thesame geographic region, or when they have similar risk characteristics that would cause their ability to meet contractual obligations
to be similarly affected by changes in economic or other conditions.
Analysis of financial assets by industry sector is based on Australian and New Zealand Standard Industrial Classification (ANZSIC)
codes.
Cash,settlements
receivable andcollateral paid

Tradingsecurities andavailable-forsale assets

Derivative
financial
instruments

Net loans andadvances 3Agriculture

-

-

12

17,71479

1,556

Forestry, fishing and mining

-

-

15

1,087

5

903

2,010

Business and property services

-

1

19

9,750

43

2,815

12,628Construction

-

-

2

1,390

6

931

2,329

Entertainment, leisure and tourism

-

-

32

1,099

5

215

1,351

Finance and insurance

3,376

5,765

9,320

1,154

333

1,164

21,112Government and local authority1

1,953

7,302

605

1,204

5

1,139

12,208Manufacturing

-

-

201

3,415

15

1,733

5,364

Personal lending

-

-

-

66,086257

17,83084,173Retail trade

-

-

37

1,932

9

988

2,966

Transport and storage

-

2

64

1,434

6

653

2,159
2,727

Unaudited 31/03/2015$ millions

Other
financial Credit related
assets commitments 4

Total

Industry
19,361Wholesale trade

-

-

15

1,473

7

1,232

Other2

-

48

529

1,909

8

1,577

4,071

5,329
-

13,118-10,851-

109,647
(578)

778
-

32,736(81)

172,459(659)

Less: Unearned income

-

-

-

(216)

-

-

(216)

Add: Capitalised brokerage / mortgage
origination fees

-

-

-

259

-

-

259

5,329

13,11810,851109,112778

32,655

171,843

New Zealand

3,309

8,681

2,300

106,808769

32,492

154,359

Overseas

2,020

4,437

8,551

2,304

9

163

17,484

Total financial assets

5,329

13,11810,851109,112778

32,655

171,843

Less: Provision for credit impairment

Total financial assets
Geography

12
3
4

Government and local authority includes exposures to government administration and defence, education and health and community services.
Other includes exposures to electricity, gas and water, communications and personal services.
Excludes individual and collective provisions for credit impairment held in respect of credit related commitments.
Credit related commitments comprise undrawn facilities, customer contingent liabilities and letters of offer.

Australia and New Zealand Banking Group Limited - New Zealand Branch

17

Notes to the Financial Statements
Interest rate sensitivity gap
The following tables represent the interest rate sensitivity of ANZ New Zealand's assets, liabilities and off balance sheet instruments
by showing the periods in which these instruments may reprice, that is, when interest rates applicable to each asset or liability canbe changed.

Unaudited 31/03/2015
Total

Up to
3 months

Over 3 to
6 months

Over 6 to
12 months

Over 1 to
2 yearsOver
2 years

Not bearing
interest

2,605

2,334

-

-

-

-

271

601

43

-

-

-

-

558

Collateral paid

2,123

2,123

-

-

-

-

-

Trading securities

12,215

1,285

1,056

564

620

8,690

-

Derivative financial instruments

10,851$ millions

AssetsCash
Settlement balances receivable

10,851

-

-

-

-

-

Available-for-sale assets

903

586

10

57

-

248

2

Net loans and advances

109,031

58,493

7,590

11,114

22,285

10,007(458)

Other financial assets

778

175

23

7

-

5

568

Total financial assets

139,107

65,0398,679

11,742

22,905

18,95011,792

1,322

488

-

-

-

-

834

364

364

-

-

-

-

-

Deposits and other borrowings

96,95969,129

9,466

7,733

2,698

1,669

6,264

Derivative financial instruments

13,204

-

-

-

-

-

13,204

Debt issuances

17,686

4,218

2,000

2,866

1,083

7,519

-

Subordinated debt

2,581

-

1,254

-

-

1,327

-

842

42

-

-

2

240

558

Total financial liabilities

132,958

74,241

12,72010,5993,783

10,755

20,860Hedging instruments-

33,938(13,636)(553)(18,327)(1,422)-

Interest sensitivity gap

6,149

24,736(17,677)

590

795

6,773

(9,068)

Liabilities
Settlement balances payable
Collateral received

Payables and other liabilities

Liquidity portfolio
ANZ New Zealand holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk management. The
size of ANZ New Zealand’s liquidity portfolio is based on the amount required to meet its liquidity policy and includes both items
classified as cash and those classified as operating assets in the Condensed Cash Flow Statement.
Unaudited 31/03/2015$ millions

Cash and balances with central banks
Securities purchased under agreement to resell

CashTrading
Securities

Available-forsale securities

Total

2,235

-

-

2,235

186

-

-

186

Certificates of deposit

-

17

263

280

Government, local body stock and bonds

-

4,896

524

5,420

Government treasury bills

-

1,390

26

1,416

Other bonds

-

5,460

-

5,460

2,421

11,763813

14,997

Total liquidity portfolio

The Bank also held unencumbered internal residential mortgage backed securities which would entitle the Banking Group to enter
into repurchase transactions with a value of $5,731 million at 31 March 2015.

Australia and New Zealand Banking Group Limited - New Zealand Branch

18

Notes to the Financial Statements
Funding Composition
ANZ New Zealand actively uses balance sheet disciplines to prudently manage the funding mix. ANZ New Zealand employs funding
metrics to ensure that an appropriate proportion of its assets are funded from stable sources, including customer liabilities, longerdated wholesale debt (with remaining term exceeding one year) and equity.
Analysis of funding liabilities by industry sector is based on ANZSIC codes.

Unaudited$ millions

31/03/2015

Funding composition
Customer deposits1
New Zealand

71,294

Overseas

9,044

Total customer deposits

80,338Wholesale funding
Debt issuances

17,686

Subordinated debt

2,581

Certificates of deposit

1,462

Commercial paper

6,273

Other borrowings

8,886

Total wholesale funding

36,888

Total funding

117,226

Concentrations of funding by industry
Households

51,025Agriculture

3,025

Forestry, fishing and mining
ManufacturingEntertainment, leisure and tourism

625
1,439
985

Finance and insurance

45,629Retail trade

1,025

Wholesale trade

1,423

Business and property services

5,922

Transport and storage735

Construction

1,114

Government and local authority

2,748

Other

2

Total funding

1,531
117,226

Concentrations of funding by geography3
New Zealand

77,040Australia

11,182

United States

13,036

Europe9,357

Other countries

6,611

Total funding

117,226

1
2
3

Comprises term deposits, other deposits bearing interest and other borrowings, deposits not bearing interest and UDC secured investments
Other includes exposures to electricity, gas and water, communications and personal services.
Funding via ANZ New Zealand (Int’l) Limited is classified as either from the United States or Europe, as the company conducts overseas funding activities through its
London branch which is passed through to the Bank.

Australia and New Zealand Banking Group Limited - New Zealand Branch

19

Notes to the Financial Statements
Contractual maturity analysis of financial assets and liabilities
The following tables present ANZ New Zealand's financial assets and liabilities within relevant contractual maturity groupings, basedon the earliest date on which ANZ New Zealand may be required to realise an asset or settle a liability. The amounts disclosed in thetables represent undiscounted future principal and interest cash flows and may differ to the amounts reported on the balance sheet.
The contractual maturity analysis for off-balance sheet commitments and contingent liabilities has been prepared using the earliest
date at which ANZ New Zealand can be called upon to pay. The liquidity risk of credit related commitments and contingent liabilities
may be less than the contract amount, and does not necessarily represent future cash requirements as many of these facilities are
expected to be only partially used or to expire unused.
ANZ New Zealand does not manage its liquidity risk on this basis.

Unaudited 31/03/2015
Total

At callUp to
3 months

Over 3 to
12 months

Over 1 to
5 yearsOver
5 years

No maturity
specified

2,606

2,224

382

-

-

-

-

601

43

558

-

-

-

-

Collateral paid

2,123

-

2,123

-

-

-

-

Trading securities

13,592

-

626

1,992

9,096

1,878

-

Derivative financial assets (trading)$ millions

Financial assets
Cash
Settlement balances receivable

10,223-

10,223----Available-for-sale assets

942

-

518

49

373

-

2

Net loans and advances-

153,417223

16,641

15,31752,502

68,734

Other financial assets

328

-

293

30

5

-

-

Total financial assets

183,832

2,490

31,364

17,38861,97670,612

2

1,322

729

593

-

-

-

-

364

-

364

-

-

-

-

Deposits and other borrowings

99,11844,132

22,123

22,627

10,236--

Derivative financial liabilities (trading)

10,062-

10,062----

Debt issuances

18,420

-

368

5,588

11,167

1,297-

Subordinated debt

2,311

Financial liabilities
Settlement balances payable
Collateral received

4,192

-

38

115

635

1,093

Other financial liabilities

478

-

125

14

213

126

-

Total financial liabilities

133,956

44,861

33,673

28,344

22,251

2,516

2,311

Derivative financial instruments used for balance sheet management- gross inflows

21,930

-

1,323

4,935

13,962

1,710-- gross outflows
Net financial assets / (liabilities) after balance
sheet management(24,358)-(1,401)(5,398)(15,763)(1,796)-47,448(42,371)(2,387)(11,419)

37,92468,010(2,309)Contractual maturity of off-balance sheet commitments and contingent liabilities
Less than

BeyondTotal

1 year

1 year472
30,4402,296
33,20863
30,4402,296
32,799409
409

Unaudited 31/03/2015$ millions

Non-credit related commitments
Credit related commitments
Contingent liabilities
Total

Australia and New Zealand Banking Group Limited - New Zealand Branch

20

Notes to the Financial Statements
13. Fair Value Measurements
Financial assets and financial liabilities not measured at fair value
Below is a comparison of the carrying amounts as reported on the balance sheet and fair value of financial asset and liability
categories other than those categories where the carrying amount is at fair value or considered a reasonable approximation of fairvalue.
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.
Unaudited
31/03/2015
Carrying
Fair value
amount$ millions

Unaudited

Audited31/03/2014
Carrying
amountFair value

30/09/2014
Carrying
amountFair value

AssetsNet loans and advances1

109,031

109,395

102,571

102,582

105,485

105,600

Deposits and other borrowings2

96,95997,136

91,18191,301

94,527

94,5501

Debt issuances

17,686

17,862

16,405

16,583

17,042

17,225Subordinated debt

2,581

2,606

1,412

1,389

1,442

1,443

Liabilities

1

2

Fair value hedging is applied to certain financial instruments within these categories. The resulting fair value adjustments mean that the carrying value differs from theamortised cost.
Includes commercial paper (note 8) designated at fair value through profit or loss.

Financial assets and financial liabilities measured at fair value in the balance sheet
ANZ New Zealand uses a valuation method within the following hierarchy to determine the carrying amount of assets and liabilities
held at fair value, all of which are recurring fair value measurements. There are no assets or liabilities measured at fair value on a nonrecurring basis.
•

Level 1 – Financial instruments that have been valued by reference to unadjusted quoted prices in active markets for identicalfinancial instruments. This category includes financial instruments valued using quoted yields where available for specific debt
securities.

•

Level 2 – Financial instruments that have been valued through valuation techniques incorporating inputs other than quoted
prices within Level 1 that are observable for a similar financial asset or liability, either directly or indirectly.

•

Level 3 – Financial instruments that have been valued using valuation techniques which incorporate significant inputs that are
not based on observable market data (unobservable inputs).

There have been no substantial changes in the valuation techniques applied to different classes of financial instruments during theperiod.
Valuation hierarchy
Unaudited 31/03/2015$ millions

Level 1

Unaudited

Unaudited

Audited31/03/2015
Level 2 Level 3

31/03/2014
Level 2 Level 3

30/09/2014
Level 2 Level 3

Total

Level 1

Total

Level 1

Total

Financial assets
Trading securities

12,15362- 12,215 12,062

Derivative financial instruments

12 10,839- 10,851

Available-for-sale assets1

581

321

1

Investments backing insurance contract
liabilities1

3

207

-

Total financial assets held at fair value

12,749 11,429

28- 12,090 11,659

91

2 11,419- 11,750

7

8,702

-

8,709

903

665

-

2

667

712

58

2

- 11,421
772

210

114

51

-

165

129

61

-

190

1 24,179 12,848

8,781

2 21,631 12,502 11,629

2 24,133

-

5,401

-

-

Financial liabilities
Deposits and other borrowings
Derivative financial instruments

-

6,273

6 13,198

Payables and other liabilities

221

Total financial liabilities held at fair value

227 19,471

1

-

6,273

- 13,204-221- 19,698-

4 10,833
222-

226 16,234

5,401- 10,837-

222- 16,460-

6,057

4 10,957
226-

230 17,014

6,057- 10,961-

226- 17,244

During the period, available-for-sale assets of $159 million and Investments backing insurance contract liabilities of $126 million were reclassified from Level 1 to Level
2 following a reassessment of available pricing information. Transfers into and out of Level 1 and Level 2 are deemed to have occurred as of the beginning of thereporting period in which the transfer occurred.

Australia and New Zealand Banking Group Limited - New Zealand Branch

21

Notes to the Financial Statements
14. Concentrations of Credit Risk to Individual Counterparties
ANZ New Zealand measures its concentration of credit risk in respect to bank counterparties on the basis of approved exposures,and in respect to non-bank counterparties on the basis of limits.
For the six months ended 31 March 2015 there were no individual counterparties, excluding connected parties, governments andbanks with long term credit ratings of A- or above, where ANZ New Zealand’s period end or peak end-of-day credit exposure
equalled or exceeded 10% of the Overseas Banking Group’s equity as at the end of the period.
This credit exposure information does not include exposures to counterparties if they are booked outside New Zealand.

15. Insurance Business
ANZ New Zealand conducts insurance business through its subsidiary OnePath Life (NZ) Limited. OnePath Insurance Services (NZ)
Limited, which was a subsidiary of OnePath Life (NZ) Limited, also conducted insurance business until it amalgamated with OnePath
Life (NZ) Limited on 30 November 2014.
ANZ New Zealand’s aggregate amount of insurance business comprises the total consolidated assets of OnePath Life (NZ) Limited of$958 million (31/03/2014: $787 million; 30/09/2014 $850 million), which is 0.7% (31/03/2014: 0.6%; 30/09/2014 0.6%) of the total
consolidated assets of ANZ New Zealand.

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

Unaudited

Unaudited

Audited31/03/2015

31/03/2014

30/09/2014

Credit related commitments
Commitments with certain drawdown due within one year

1,348

1,073

764

Commitments to provide financial services

29,09225,60627,166

Total credit related commitments

30,44026,67927,930Financial guarantees

906

985

925

Standby letters of credit

52

60

79

1,245

1,222

1,321

Guarantees and contingent liabilities

Transaction related contingent items
Trade related contingent liabilities
Total guarantees and contingent liabilities

93

66

111

2,296

2,333

2,436

ANZ New Zealand guarantees the performance of customers by issuing standby letters of credit and guarantees to third parties,
including its Ultimate Parent Bank. To reflect the risk associated with these transactions, they are subjected to the same credit
origination, portfolio management and collateral requirements as for customers that apply for loans. The contract amountrepresents the maximum potential amount that could be lost if the counterparty fails to meet its financial obligations. As thefacilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
Other contingent liabilities
On 11 March 2013, litigation funder Litigation Lending Services (NZ) Limited announced plans for a representative action againstbanks in New Zealand for certain fees charged to New Zealand customers over the past six years. Proceedings were filed against the
Bank on 25 June 2013. The potential outcome of this litigation cannot be determined with any certainty at this stage.
ANZ New Zealand has other contingent liabilities in respect of actual and possible claims and court proceedings.
On 3 December 2014, the Commerce Commission and the Financial Markets Authority (FMA) announced settlements with the Bank
relating to the Commission's and the FMA's investigations into the promotion, sale and offer of interest rate swaps to rural customers
from 2005 to 2009; the settlement includes a payment fund of $18.5 million and a contribution to the Commission’s and the FMA's
costs.
An assessment of ANZ New Zealand’s likely loss in respect of these matters has been made on a case-by-case basis and provision
made where deemed necessary.

Australia and New Zealand Banking Group Limited - New Zealand Branch

22

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

Unaudited$ millions

31/03/2015

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

1,039

Overseas Banking Group Profitability and Size

Unaudited

AUD millions

31/03/2015

Profit for the six months ended 31/03/20151
Net profit after tax for the 12 months to 31/03/2015 as a percentage of average total assets

3,514
0.93%

Total assets

860,087

Percentage change in total assets in the 12 months to 31/03/2015

16.57%

1

Net profit after tax for the period includes $8 million of profit attributable to non-controlling interests.

Overseas Banking Group asset quality

Unaudited

AUD millions

31/03/2015

Gross impaired assets

2,708

Gross impaired assets as a percentage of total assets

0.3%

Individual provision

1,114

Individual provision as a percentage of gross impaired assets

41.1%

Collective provision

2,914

Australia and New Zealand Banking Group Limited - New Zealand Branch

23

Directors' and New Zealand Chief Executive Officer's Statement
As at the date on which this Disclosure Statement is signed, after due enquiry, each Director of the Ultimate Parent Bank and theChief Executive Officer – NZ Branch believes that:(i)

The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements (Overseas
Incorporated Registered Banks) Order 2014; and(ii)

The Disclosure Statement is not false or misleading.

Over the six months ended 31 March 2015, after due enquiry, each Director of the Ultimate Parent Bank and the Chief Executive
Officer – NZ Branch believes that:(i)

The Ultimate Parent Bank has complied with all Conditions of Registration that applied during that period;(ii)

The NZ Branch and the Bank had systems in place to monitor and control adequately the material risks of Relevant Members of
ANZ New Zealand including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk andother business risks, and that those systems were being properly applied.

This Disclosure Statement is dated 28 May 2015, and has been signed by the Chairman of the Ultimate Parent Bank, on behalf of
all Directors, and by the Chief Executive Officer – NZ Branch.

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

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

24

Independent Auditor’s Review Report
To the Directors of Australia and New Zealand Banking Group Limited – New Zealand Branch
We have reviewed pages 3 to 22 of the interim financial statements of Australia and New Zealand Banking Group Limited – New Zealand
Branch and its related entities (ANZ New Zealand) prepared and disclosed in accordance with the Registered Bank Disclosure Statements(Overseas Incorporated Registered Banks) Order 2014 (the Order) and the supplementary information prescribed in Schedules 3, 5, 7, 9, 10,
12 and 14 of the Order. The interim financial statements, and supplementary information, provide information about the past financial
performance and cash flows of ANZ New Zealand and its financial position as at 31 March 2015.
Directors' responsibility for the disclosure statement
The Directors of Australia and New Zealand Banking Group Limited - New Zealand Branch are responsible for the preparation andpresentation of the Disclosure Statement, which includes interim financial statements prepared in accordance with Clause 26 of the Orderwhich give a true and fair view of the financial position of ANZ New Zealand as at 31 March 2015 and its financial performance and cash
flows for the six months ended on that date. The Directors are also responsible for such internal controls as the Directors determine arenecessary to enable the preparation of the Disclosure Statement that is free from material misstatement, whether due to fraud or error.
They are also responsible for the preparation of supplementary information in the Disclosure Statement which fairly states the matters towhich it relates in accordance with Schedules 3, 5, 7, 9, 10, 12 and 14 of the Order.
Reviewer’s responsibility
We are responsible for reviewing the interim financial statements and the supplementary information, disclosed in accordance with Clause
26, Schedules 5, 7, 9, 10, 12 and 14 of the Order and presented to us by the Directors.
Our responsibility is to express a conclusion on the interim financial statements (excluding the supplementary information) based on ourreview. We conducted our review in accordance with NZ SRE 2410: Review of Financial Statements Performed by the Independent Auditor of the
Entity. NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in accordance with NZ IAS 34: Interim Financial Reporting. As the auditor of ANZ New
Zealand, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.
We are responsible for reviewing the supplementary information (excluding the supplementary information relating to capital adequacy) inorder to report to you whether, in our opinion on the basis of the procedures described below, anything has come to our attention thatwould cause us to believe that the supplementary information does not fairly state the matters to which it relates in accordance with
Schedules 5, 7, 10, 12 and 14 of the Order.
We are responsible for reviewing the supplementary information relating to credit and market risk exposures and capital adequacy in orderto state whether, on the basis of the procedures described below, anything has come to our attention that would cause us to believe thatthe information disclosed in accordance with Schedule 9 is not in all material respects prepared in accordance with the Capital Adequacy
Framework (Standardised Approach) (BS2A); and disclosed in accordance with Schedule 9 of the Order.
A review of interim financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs
procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. 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). Accordingly we do not express an audit opinion on thosefinancial statements.
KPMG has also provided other audit related services to ANZ New Zealand. In addition, certain partners and employees of our firm may also
deal with ANZ New Zealand on normal terms within the ordinary course of trading activities of ANZ New Zealand. These matters have not
impaired our independence as auditors of ANZ New Zealand. We have no other relationship with, or interest in, ANZ New Zealand.
Review opinion
We have examined the interim financial statements including the supplementary information and based on our review, which is not anaudit, nothing has come to our attention that causes us to believe that:a.
the interim financial statements (excluding the supplementary information) do not present fairly, in all material respects, the financial
position of ANZ New Zealand as at 31 March 2015 and its financial performance and cash flows for the six months ended on that datein accordance with NZ IAS 34: Interim Financial Reporting;b.
the supplementary information prescribed by Schedules 5, 7, 10, 12 and 14 of the Order does not fairly state the matters to which it
relates in accordance with those Schedules; andc.
the supplementary information relating to credit and market risk exposures and capital adequacy prescribed by Schedule 9 of theOrder, is not in all material respects prepared in accordance with Capital Adequacy Framework (Standardised Approach) (BS2A), anddisclosed in accordance with Schedule 9 of the Order.
Our review was completed on 28 May 2015 and our review opinion is expressed as at that date.

28 May 2015
Wellington

Australia and New Zealand Banking Group Limited - New Zealand Branch25