AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED- ANZ NEW ZEALAND
REGISTERED BANK DISCLOSURE STATEMENTFOR THE SIX MONTHS ENDED 31 MARCH 2021
NUMBER 44 | ISSUED MAY 2021

CONTENTS
Glossary of terms

2

DISCLOSURE STATEMENTInterim Financial Statements
Condensed consolidated interim financial statements
Notes to the interim financial statements
Registered Bank Disclosures
Directors’ and New Zealand Chief Executive Officer’s Statement
Independent Auditor’s Review Report

3
4
8
24
34
35

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 means the Bank and all its controlled entities.
Immediate Parent Company means ANZ Funds Pty Limited, which is the immediate parent company of ANZ Holdings (New Zealand)
Limited.
Ultimate Parent Bank means Australia and New Zealand Banking Group Limited.
Overseas Banking Group means the worldwide operations of Australia and New Zealand Banking Group Limited 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.
ANZ New Zealand, We or Our means the New Zealand business of the Overseas Banking Group.
Registered Office is Level 10, 171 Featherston Street, Wellington, New Zealand, which is also ANZ New Zealand’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 (Overseas 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. Operating expenses

9

4. Segment reporting

10

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

11

6. Allowance for expected credit losses

12

7. Goodwill and other intangible assets

16

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

18

9. Other provisions

18

10. Debt issuances

18

Financial instrument disclosures
11. Credit risk

19

12. Fair value of financial assets and financial liabilities

21

Other disclosures
13. Commitments and contingent liabilities

22

14. Subsequent events

22

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDINTERIM FINANCIAL STATEMENTS
INCOME STATEMENT
For the six months ended 31 March

Note

2021
NZ$m

2020
NZ$m

Interest income

2,338

3,006

Interest expense(677)(1,358)

1,661

1,648

327

507

1,988

2,155

(772)

(836)

1,216

1,319

Net interest income
Other operating income

2

Operating income
Operating expenses

3

Profit before credit impairment and income tax

70

(232)

Profit before income tax

1,286

1,087

Income tax expense

(356)

(298)

Profit for the period

930

789

2021
NZ$m

2020
NZ$m

930

789

43

(17)

Unrealised losses recognised directly in equity

(3)

(65)

Realised losses transferred to the income statement

4

14

Income tax attributable to the above items

(11)

19

Other comprehensive income after tax

33

(49)

Total comprehensive income for the period

963

740

Credit impairment release / (charge)

6

STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 MarchProfit for the period
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:

The notes appearing on pages 8 to 22 form an integral part of these interim financial statements

4

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDBALANCE SHEET
As at

Note

AssetsCash and cash equivalents

31 Mar 21
NZ$m

30 Sep 20
NZ$m

5,579

8,248

447

378

1,380

1,394

Trading securities

9,700

12,797

Derivative financial instruments

12,2209,756

Investment securities

12,046

9,893

137,786

132,984

6-

Settlement balances receivable
Collateral paid

Net loans and advances

5

Investments in associates

371

330

3,088

3,092

Premises and equipment

549

590

Other assets

639

625

Total assets

183,811

180,087

2,830

2,908

Deferred tax assets
Goodwill and other intangible assets

7

Liabilities
Settlement balances payable
Collateral received
Deposits and other borrowings

8

Derivative financial instruments
Current tax liabilities
Payables and other liabilities
Employee entitlements
Other provisions

9

Debt issuances

10

1,202

1,275

131,722

127,997

11,029

8,166

63

237

1,354

1,135

137

143

348

389

20,15323,827

Total liabilities (excluding head office account)

168,838

166,077

Net assets (excluding head office account)

14,97314,01011,055

11,055

119

118

Retained earnings

3,799

2,837

Total equity & head office account

14,97314,010EquityShare capital and initial head office accountReserves

The notes appearing on pages 8 to 22 form an integral part of these interim financial statements

5

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDINTERIM FINANCIAL STATEMENTS
CASH FLOW STATEMENT
For the six months ended 31 MarchProfit after income tax

2021
NZ$m

2020
NZ$m

930

789

63

69

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

1-

Net derivatives/foreign exchange adjustment

(765)

1,203

Other non-cash movements

117

118

Loss on sale and impairment of premises and equipment

Net (increase)/decrease in operating assets:
Collateral paid

14

(203)

Trading securities

3,097(2,737)Net loans and advances(4,802)(2,415)

(124)

(405)

Other assets
Net increase/(decrease) in operating liabilities:

3,810

7,639

Settlement balances payable

(78)

625

Collateral received

(73)

299

Deposits and other borrowings (excluding borrowings from Immediate Parent and Ultimate Parent Bank)

Other liabilities

19

(264)

Total adjustments

1,279

3,929

Net cash flows from operating activities1

2,209

4,718

Purchases(4,046)(1,050)

Proceeds from sale or maturity

Cash flows from investing activities
Investment securities:
1,509

768

Purchases of investments in associates(6)-

Other assets

(17)

(21)

(2,560)(303)

Issue proceeds

-

2,327

Redemptions(2,307)(966)

Loans drawn down

910-

Repayments

(898)

(715)

(23)

(24)

Net cash flows from investing activities
Cash flows from financing activities
Debt issuances2

Borrowings from Immediate Parent and Ultimate Parent Bank:3

Repayment of lease liabilities
Net cash flows from financing activities(2,318)622

Net change in cash and cash equivalents(2,669)5,037

Cash and cash equivalents at beginning of period

8,248

2,709

Cash and cash equivalents at end of period

5,579

7,746

1
2
3

Net cash provided by operating activities includes income taxes paid of NZ$582 million (2020: NZ$485 million).
Movement in debt issuances (Note 10 debt issuances) also includes an NZ$1,077 million decrease (2020: NZ$836 million increase) from the effect of foreign exchange rates, a NZ$336
million decrease (2020: NZ$320 million increase) from changes in fair value hedging instruments and a NZ$46 million increase (2020: NZ$95 million increase) of other changes.
Movement in borrowings from Immediate Parent and Ultimate Parent Bank (Note 8 deposit and other borrowings) also includes an NZ$54 million decrease (2020: NZ$32 million increase)from the effect of foreign exchange rates, a NZ$44 million decrease (2020: NZ$64 million increase) from changes in fair value hedging instruments and a NZ$1 million increase (2020: nil) of
other changes.

The notes appearing on pages 8 to 22 form an integral part of these interim financial statements

6

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

STATEMENT OF CHANGES IN EQUITY

As at 1 October 2019
Impact on transition to NZ IFRS 16 Leases

UNAUDITED

Sharecapitaland initial Investment
securities
head
office revaluationaccount
reserve
NZ$m
NZ$m
11,055(6)

Cash flow
hedging
reserve
NZ$m

Retainedearnings
NZ$m

Total
equity
NZ$m

27

1,523

12,599

-

-

-

(17)

(17)

11,055

(6)

27

1,506

12,582

Profit or loss

-

-

-

789

789

Unrealised losses recognised directly in equity

-

(38)

(27)

-

(65)

Realised losses transferred to the income statement

-

-

14

-

14

Actuarial loss on defined benefit schemes

-

-

-

(17)

(17)

Income tax credit on items recognised directly in equity

-

11

4

4

19

Total comprehensive income for the period

-

(27)

(9)

776

740

As at 31 March 2020

11,055

(33)

18

2,282

13,322As at 1 October 2020

As at 1 October 2019 (adjusted)

11,055

8

110

2,837

14,010

Profit or loss

-

-

-

930

930

Unrealised gains / (losses) recognised directly in equity

-

49

(52)

-

(3)

Realised losses / (gains) transferred to the income statement

-

(2)

6

-

4

Actuarial gain on defined benefit schemes

-

-

-

43

43

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

-

(13)

13

(11)

(11)

Total comprehensive income for the period

-

34

(33)

962

963

11,055

42

77

3,799

14,973As at 31 March 2021

The notes appearing on pages 8 to 22 form an integral part of these interim financial statements

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
1.

ABOUT OUR INTERIM FINANCIAL STATEMENTS

BASIS OF PREPARATION
These are the condensed consolidated interim financial statements (financial statements) for ANZ New Zealand and should be read in conjunction
with ANZ New Zealand’s financial statements for the year ended 30 September 2020.
On 7 May 2021, 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 consolidated financial statements of ANZ New Zealand comprise the financial statements of the NZ Branch and all of the New Zealand businessesof all the subsidiaries of the Ultimate Parent Bank.
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 ANZ New Zealand are consistent with those adopted and disclosed in the previous full year financial statements.

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 at their fair value:• derivative financial instruments;• financial instruments measured at fair value through other comprehensive income; and• financial instruments designated at fair value through profit and loss.

KEY JUDGEMENTS AND ESTIMATES
The preparation of these financial statements requires the use of management judgement, estimates and assumptions that affect reported
amounts and the application of accounting policies. 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 arereviewed on an ongoing basis.
A brief explanation of the key estimates, assumptions and judgements that have changed during the six months ended 31 March 2021 follows:Coronavirus (COVID-19) pandemic
The COVID-19 pandemic and its effect on the global economy have impacted our customers, operations and ANZ New Zealand‘sperformance. The outbreak necessitated governments to respond at unprecedented levels to protect the health of the population, local
economies and livelihoods. It has affected different regions at different times and at varying degrees and there remains a risk ofsubsequent waves of infection. Thus the pandemic has significantly increased the estimation uncertainty in the preparation of thesefinancial statements including:• the extent and duration of the disruption to business arising from the actions of governments, businesses and consumers to containthe spread of the virus;• the impact, extent and duration of the expected economic downturn (and forecasts for key economic factors including GDP,
employment and house prices). This includes disruption to capital markets, and the impacts on credit quality, liquidity,
unemployment, consumer spending, as well as specific sector impacts and other restructuring activities; and• the efficacy, extent and pace of roll-out of vaccines, as well as the effectiveness of government and central bank measures that havebeen and will be put in place to support businesses and consumers through this disruption.
ANZ New Zealand has made various accounting estimates in these financial statements based on forecasts of economic conditions whichreflect expectations and assumptions as at 31 March 2021 about future events that the Directors believe are reasonable in the circumstances.
There is a considerable degree of judgement involved in preparing these estimates. The underlying assumptions are also subject touncertainties which are often outside the control of ANZ New Zealand. Accordingly, actual economic conditions are likely to be different fromthose forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact
accounting estimates included in these financial statements.
The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit
losses, carrying values of goodwill, fair value measurement, and recoverable amounts of non-financial assets.
The impact of the COVID-19 pandemic on each of these estimates is discussed further in the relevant note in these financial statements and/orin the relevant note in the previous full year financial statements. Readers should consider these disclosures in light of the inherent uncertainty
described above.

8

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

2.

OTHER 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
Fair value gain / (loss) on hedging activities and financial liabilities designated at fair value
Net foreign exchange earnings and other financial instruments income
Other
Other income
Other operating income

3.

UNAUDITED

2021
NZ$m

2020
NZ$m

16
341
18
131
506
(230)
276

17
374
21
133
545
(260)
285

65
(36)
29
22
51
327

69
143
212
10
222
507

2021
NZ$m

2020
NZ$m

421
14
9
444

454
15
24
493

9
40
20
69

12
45
20
77

23
62
18
103

24
60
22
106

17
31
21
53
34
156
772

24
31
21
41
43
160
836

OPERATING EXPENSES

For the six months ended 31 March
Personnel
Salaries and related costs
Superannuation costs
Other
Personnel
PremisesRent
Depreciation
Other
Premises
Technology
Depreciation and amortisation
Subscription licences and outsourced services
Other
Technology (excluding personnel)
Other
Advertising and public relations
Professional fees
Freight, stationery, postage and communication
Charges from Ultimate Parent Bank
Other
Other
Operating expenses

9

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
4. SEGMENT REPORTING
ANZ New Zealand is organised into three major business segments for segment reporting purposes - Retail, Commercial 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.
There were no material changes to ANZ New Zealand’s reportable segments during the six months ended 31 March 2021.
RetailRetail provides a full range of banking and wealth management services to consumer, private banking and small business 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.
Commercial
Commercial provides a full range of banking services including traditional relationship banking and sophisticated financial solutions throughdedicated managers focusing on privately owned medium to large enterprises, the agricultural business segment, government and government
related entities.
Institutional
The Institutional division services governments, global institutional and corporate customers across three product sets: Transaction Banking, Corporate
Finance and Markets.
• Transaction Banking provides working capital and liquidity solutions including documentary trade, supply chain financing as well as cash
management solutions, deposits, payments and clearing.
• Corporate Finance provides loan products, loan syndication, specialised loan structuring and execution, project and export finance, debt
structuring and acquisition finance and corporate advisory.
• Markets provide risk management services on foreign exchange, interest rates, credit, commodities and debt capital markets in addition to
managing ANZ New Zealand’s interest rate exposure and liquidity position.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.
Commercial

Institutional

For the six months
ended 31 March

2021

Retail
2020

2021

2020

2021

2020

2021

Other
2020

2021

Total
2020

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

Net interest income

986

922

503

549

168

176

4

1

1,661

1,648

7

8

-

-

9

9

-

-

16

17

308

343

5

5

28

26

-

-

341

374

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

17

21

-

-

1

-

-

-

18

21

- Funds management income

131

133

-

-

-

-

-

-

131

133

- Fee and commission expense

(230)

(260)

-

-

-

-

-

-

(230)

(260)

Net fee and commission income

233

245

5

5

38

35

-

-

276

285

Other income

15

9

-

1

75

46

(39)

166

51

222

Other operating income

248

254

5

6

113

81

(39)

166

327

507

Operating income

1,234

1,176

508

555

281

257

(35)

167

1,988

2,155

Operating expenses

(547)

(574)

(118)

(147)

(94)

(96)

(13)

(19)

(772)

(836)

Profit before credit impairment
and income tax

687

602

390

408

187

161

(48)

148

1,216

1,319

Credit impairment release /(charge)

32

(82)

31

(106)

7

(44)

-

-

70

(232)

Profit / (loss) before income tax

719

520

421

302

194

117

(48)

148

1,286

1,087

Income tax expense

(198)

(146)

(118)

(85)

(54)

(33)

14

(34)

(356)

(298)

Profit / (loss) after income tax

521

374

303

217

140

84

(34)

114

930

789

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

RetailUNAUDITED

Commercial

Institutional

Other

Total

31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20
As at

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

NZ$m

Financial position
Goodwill

1,011

1,011

926

926

1,069

1,069

-

-

3,006

3,006

Net loans and advances

92,41886,64838,83239,333

6,533

6,993

3

10

137,786

132,984

Customer deposits

81,35879,867

20,172

18,437

21,25622,559--122,786

120,863

2021
NZ$m
1
(3)
(32)
(34)

2020
NZ$m
3
(1)
112
114

31 Mar 21
NZ$m
652
1,287
95,38740,732138,058(23)
368
138,403(617)
137,786

30 Sep 20
NZ$m
659
1,300
89,544
41,882
133,385(25)
319
133,679(695)
132,984

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

5.

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

6

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
6. ALLOWANCE FOR EXPECTED CREDIT LOSSES
This note should be read in conjunction with the estimates, assumptions and judgements relating to COVID-19 included in Note 1.

ALLOWANCE FOR EXPECTED CREDIT LOSSES – BALANCE SHEETNet loans and advances - at amortised cost
Allowance for Expected Credit Losses (ECL) is included in net loans and advances.

As at 1 October 2020
Transfer between stages
New and increased provisions (net of collective provision releases)
Write-backs
Bad debts written-off (excluding recoveries)
Discount unwind
As at 31 March 2021

Stage 1
NZ$m
161
22
(33)
150

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
347
80
107
(20)
(3)
1
1
(15)
38
(36)
(28)
(5)
328
62
77

Total
NZ$m
695
(9)
(36)
(28)
(5)
617

Off-balance sheet credit related commitments - undrawn and contingent facilities
Allowance for ECL is included in other provisions.
As at 1 October 2020
Transfer between stages
New and increased provisions (net of collective provision releases)
As at 31 March 2021

79
3
(11)
71

55
(3)
(1)
51

3
3

22
(3)
19

159
(15)
144

2021
NZ$m

2020
NZ$m

(60)
36
(36)
(10)
(70)

188
73
(15)
(14)
232

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)

LOAN DEFERRAL AND RELIEF PACKAGES
From March 2020, ANZ New Zealand offered various forms of assistance to customers to counteract the impact of COVID-19 on the ability ofcustomers to meet their loan obligations. The assistance provided included arrangements such as temporary deferral of principal and interest
repayments, replacing principal and interest with interest only repayments, and extension of loan maturity dates. The loan deferral and relief packages
are considered to be a loan modification under NZ IFRS 9. This either results in the loan being derecognised and replaced with a new loan (substantial
modification) or the existing loan continuing to be recognised (non-substantial modification).
These relief packages were phased out during the six months ended 31 March 2021. In the case of loan deferral packages, 86% of all customers who
took advantage of a deferral package have reverted back to loan repayments, with the remainder having been either restructured or, for less than 2%of customers, transferred to hardship. For those customers who took up loan deferral packages, it is considered that the packages, as well as
government support measures, may have obscured repayment delinquencies that might otherwise have occurred over the loan deferral period andthose that may still occur in the future. Thus ANZ New Zealand has provided a component of ECL for expected delinquencies and increases inSignificant Increase in Credit Risk (SICR) for this population of loans.
Facilities which transitioned to interest-only or took up term extensions offered as a result of COVID-19, are now subsumed within the normal loan
population and are managed accordingly.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDKEY JUDGEMENTS AND ESTIMATES
In estimating individually assessed ECL for Stage 3 exposures, ANZ New Zealand makes judgements and assumptions in relation to expected
repayments, the realisable value of collateral, business prospects for the customer, competing claims and the likely cost and duration of thework-out process. Judgements and assumptions in respect of these matters have been updated to reflect the ongoing and potential impact of
COVID-19.
In estimating collectively assessed ECL, ANZ New Zealand makes judgements and assumptions in relation to:• the selection of an estimation technique or modelling methodology, noting that the modelling of ANZ New Zealand’s ECL estimates arecomplex; and• the selection of inputs for those models, and the interdependencies between those inputs.
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.
The judgements and associated assumptions have been made in the context of the impact of COVID-19, and reflect historical experience andother factors that are considered to be relevant, including expectations of future events that are believed to be reasonable under thecircumstances. ANZ New Zealand’s ECL estimates are inherently uncertain and, as a result, actual results may differ from these estimates.
Judgement /assumption
Determining
when a SICR
has occurred

Description
In the measurement of ECL, judgement is involved insetting the rules and trigger points to determine
whether there has been a SICR since initial recognitionof a loan, which would result in the financial asset
moving from Stage 1 to Stage 2. This is a key area ofjudgement since transition from Stage 1 to Stage 2
increases the ECL from an allowance based on theprobability of default in the next 12 months, to anallowance for lifetime expected credit losses.
Subsequent decreases in credit risk resulting intransition from Stage 2 to Stage 1 may similarly result insignificant changes in the ECL allowance.

Considerations for the six months ended
31 March 2021
The relief packages offered to customers in
response to COVID-19 in 2020 are no longer being
offered, and the majority of customers who took up
the relief have reverted back to their normal loan
repayments.
The relief packages, as well as government support
measures, may have obscured repayment
delinquencies that might otherwise have occurred
and those that may still occur in the future. Thus
ANZ New Zealand has provided a component of
ECL for expected delinquencies and increases in
SICR.

The setting of precise trigger points requires judgement
which may have a material impact upon the size of the
ECL allowance. ANZ New Zealand monitors theeffectiveness of SICR criteria on an ongoing basis.
Measuringboth 12-monthand lifetime
credit losses

The probability of default (PD), loss given default (LGD)
and exposure at default (EAD) credit risk parameters
used in determining ECL are point-in-time measuresreflecting the relevant forward looking information
determined by management. Judgement is involved indetermining which forward-looking information
variables are relevant 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 of a
facility to be used in measuring ECL.

The PD, EAD and LGD models are subject to ANZ
New Zealand’s model risk policy that stipulates
periodic model monitoring, periodic re-validationand defines approval procedures and authorities
according to model materiality.
During the six months ended 31 March 2021 an
adjustment was made to the modelled outcome toaccount for continuing model uncertainties as aresult of COVID-19.
There were no material changes to the policies
during the six months ended 31 March 2021.

13

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS

KEY JUDGEMENTS AND ESTIMATES
Judgement /assumption

Description

Considerations for the six months ended
31 March 2021

Base caseeconomic
forecast

ANZ New Zealand derives a forward looking “base case”
economic scenario which reflects our view of future
macro-economic conditions.

There have been no changes to the types of forward
looking variables (key economic drivers) used asmodel inputs in the current period.
As at 31 March 2021, the base case assumptions havebeen updated to reflect the current phase of COVID19, including containment in key geographies,
government stimulus measures and roll-out ofvaccines. In determining the expected path andtiming out of the current economic downturn,assessments of the impact of central bank policies,
governments’ actions, the response of business, andinstitution specific responses (such as payment
deferrals) were considered.
The expected outcomes of key economic drivers forthe base case scenario as at 31 March 2021 aredescribed below under the heading “Base caseeconomic forecast assumptions”.

Probability
weighting ofeach scenario(base case,upside,downside andseveredownsidescenarios)1,2

Probability weighting of each economic scenario is
determined by management considering the risks anduncertainties surrounding the base case scenario at
each measurement date.

The key consideration for probability weightings in
the current period is the extent and timing ofrecovery from the economic downturn caused by
COVID-19.
ANZ New Zealand considers these weightings toprovide the best estimate of the possible loss
outcomes and has analysed inter-relationships andcorrelations (over both the short and long term)
within ANZ New Zealand’s credit portfolios indetermining them.
In addition to the base case forecast which reflects asignificant improvement as we emerge from an
economic environment heavily influenced by COVID19, greater weighting continues to be applied to thedownside scenario given ANZ New Zealand’s
assessment of downside risks.
The assigned probability weightings are subject to ahigh degree of inherent uncertainty and therefore
the actual outcomes may be significantly different tothose projected.

Management
temporaryadjustments

Management temporary adjustments to the ECL
allowance are used in circumstances where it is judgedthat our existing inputs, assumptions and modeltechniques do not capture all the risk factors relevant toour lending portfolios. Emerging local or global
macroeconomic, microeconomic or political events,
and natural disasters that are not incorporated into ourcurrent parameters, risk ratings, or forward-looking
information are examples of such circumstances. The
use of management temporary adjustments may
impact the amount of ECL recognised.

Management have applied a number of adjustments
to the modelled ECL primarily due to the uncertainty
associated with continuing COVID-19 impacts.
Management overlays (including COVID-19 overlays)
which add to the modelled ECL provision have been
made for risks particular to retail, commercial and agri
banking.

The uncertainty associated with the COVID-19
pandemic, including the roll-out of vaccines, and theextent to which the actions of governments, businesses
and consumers mitigate against potentially adverse
credit outcomes are not fully incorporated into existing
ECL models which are based on historical underlying
data. Accordingly, management overlays have been
applied to ensure credit provisions are appropriate.
1.
2.

14

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.
The severe downside scenario is fixed by reference to average economic cycle conditions and accounts for the potentially severe downside impact of less likely extremely adverse economic
conditions.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDKEY JUDGEMENTS AND ESTIMATES
Base case economic forecast assumptions
The uncertain evolution of the COVID-19 pandemic increases the risk to the economic forecast resulting in an understatement oroverstatement of the ECL balance due to uncertainties around:• the extent and duration of measures, including the roll-out of vaccines, to contain the spread of COVID-19;• the extent and duration of the economic downturn, along with the time required for economies to recover; and• the effectiveness of government stimulus measures, in particular their impact on the magnitude of the economic downturn and theextent and duration of the recovery.
The economic drivers of the base case economic forecasts at 31 March 2021 are set out below. These reflect our view of future macroeconomic conditions at 31 March 2021. For years beyond the near term forecasts below, the ECL models project future year economic
conditions including an assumption to eventual reversion to mid-cycle economic conditions.
Actual calendar year

Forecast calendar year

New Zealand

2020

2021

2022

Gross domestic product (GDP)
Unemployment
Residential property prices
Consumer price index (CPI)

-3.0%
4.6%
15.6%
1.7

3.6%
5.4%
17.4%
1.9

3.7%
4.6%
4.1%
1.6

The base case economic forecasts as at 31 March 2021 indicate a significant improvement in current and expected economic conditions fromthe forecasts as at 30 September 2020 reflecting the ongoing progress and actions in responding to the COVID-19 pandemic.
Probability weightings
Probability weighting of each scenario is determined by management considering the risks and uncertainties surrounding the base casescenario. The key consideration for probability weightings in the current period is the effectiveness of actions taken in response to COVID-19
and the ability of vaccines to limit the impact of the virus.
The base case scenario represents a significant improvement in the forecasts since September 2020. Given the uncertainties associated with apotential recovery in the economy, greater weighting continues to be applied to the downside and severe downside scenarios given ANZ New
Zealand’s assessment of downside risks.
The assigned probability weightings are subject to a high degree of inherent uncertainty and therefore the actual outcomes may besignificantly different to those projected. ANZ New Zealand considers these weightings to provide the best estimate of the possible loss
outcomes and has analysed inter-relationships and correlations (over both the short and long term) within ANZ New Zealand’s credit portfolios
in determining them. The average weightings applied are set out below:

Base
UpsideDownside
Severe downside

31 Mar 21

30 Sep 20

50%
8%
32%
10%

50%
8%
32%
10%

ECL - sensitivity analysis
Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future
periods, ECL reported by ANZ New Zealand should be considered as a best estimate within a range of possible estimates.
The table below illustrates the sensitivity of collectively assessed ECL to key factors used in determining it as at 31 March 2021:
Total
NZ$m

Impact
NZ$m

If 1% of Stage 1 facilities were included in Stage 2
If 1% of Stage 2 facilities were included in Stage 1

669
664

4
(1)

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

457
544
802
998

(208)
(121)
137
333

15

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
7.

GOODWILL AND OTHER INTANGIBLE ASSETS
31 Mar 21 30 Sep 20
NZ$m
NZ$m
3,006
3,006
76
76
10
6
3,092
3,088

Goodwill
Funds management rights (indefinite life)
Software
Goodwill and other intangible assets

GOODWILL AND OTHER INTANGIBLE ASSETS ALLOCATED TO CASH-GENERATING UNITS (CGUs)
Goodwill arose on the acquisition of the NBNZ Holdings Limited group on 1 December 2003, and the carrying amount reflects amortisation
recognised before the application of NZ IFRS from 1 October 2004 and subsequent business disposals. Funds management rights, assessed as having
indefinite useful lives, arose on the acquisition of the ING Holdings (NZ) Limited (now ANZ Wealth New Zealand Limited) group on 30 November 2009.
Goodwill and funds management rights are allocated to CGUs as follows:
GoodwillManagement rights
31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20
NZ$m
NZ$m
NZ$m
NZ$m
893
893
118
76
118
76
1,011
76
1,011
76
926
926
1,069
1,069
3,006
76
3,006
76

Cash generating unit
Retail and business banking
WealthRetail segment
Commercial
Institutional
Total
Annual goodwill impairment test

The annual impairment test is performed as at the end of February each year. Goodwill is considered to be impaired if the carrying amount of therelevant CGU exceeds its recoverable amount. The recoverable amount of a CGU is the higher of its fair value less costs of disposal (FVLCOD) and its
value-in use (VIU). We use a value-in-use approach to estimate the recoverable amount of the CGU to which each goodwill component is allocated.
Based on this assessment no impairment was identified for any CGU, and therefore a FVLCOD calculation was not required.
VALUE-IN-USE
These calculations use cash flow projections based on a number of financial budgets within each CGU covering an initial forecast period. These
projections also incorporate economic assumptions including GDP, inflation, unemployment, residential and commercial property prices, the impactof the restriction imposed by the RBNZ on the payment of ordinary dividends by all New Zealand incorporated registered banks, and theimplementation of the RBNZ’s increased capital requirements. Cash flows beyond the forecast period are extrapolated using the terminal growth rate.
These cash flow projections are discounted using a discount rate derived using a capital asset pricing model.
Future changes in the assumptions upon which the calculation is based may materially impact this assessment, resulting in the potential impairmentof part or all of the goodwill balances.
Input / assumption

Values applied in 28 February 2021 impairment test

Forecast period and projections

To 30 September 2028 - an extended forecast period was used to cover the implementation period of the
RBNZ’s increased capital requirements over the period 1 July 2021 to 1 July 2028.

Revenue growth over forecast
periodComprises impacts of net interest margin and volume growth, arising from planned responses to known
regulatory and economic forecasts. Average annual forecast revenue growth rates are shown below.

Credit impairment over forecast
periodVaries by CGU, based on ECL modelling for 2021 to 2023, before returning to long run experience levels for2024 to 2028. Long run experience levels are based on ANZ New Zealand’s bad debts written off, net ofrecoveries, since 2004 of 0.15% of gross loans and advances. Credit impairment for each CGU as apercentage of forecast gross loans and advances for 2024 to 2028 is shown below.

Terminal growth rate

2.0% - based on 2023 forecast inflation from the RBNZ’s February 2021 Monetary Policy Statement.

Discount rate

Post tax: 9.4% (February 2020: 9.3%).
The main variables in the calculation of the discount rate used are the risk free rate, beta and the market risk
premium. The risk free rate was the traded 10 year New Zealand government bond yield as at 28 February
2021 of 1.9%. The market risk premium was estimated using a range of methods incorporating historicaland forward looking market data. Beta was consistent with observable measures applied in the regionalbanking sector.

16

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDThe values of the average revenue growth, credit impairment as a percentage of forecast gross loans and advances, and pre-tax discount rates
assumptions by CGU are shown in the table below. The implied pre-tax discount rates are significantly higher than the post-tax discount rate above
because regulatory capital retention over the forecast period is not tax effected.
Cash generating unit
Retail and business banking
WealthCommercial
Institutional

Revenue growthCredit impairment
Pre-tax discount rate
31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20
5.8%
0.13%
16.7%
6.1%
0.13%
17.5%
2.7%
0.01%
16.0%
3.4%
0.10%
16.4%
4.8%
0.22%
17.1%
4.2%
0.21%
17.8%
0.6%
0.12%
17.0%
4.5%
0.21%
17.3%

We performed stress tests for key sensitivities in each CGU. A change, considered to be reasonably possible by management, in key assumptions
would not cause the recoverable amounts of the Retail & business banking and Wealth CGUs to exceed their carrying amounts, but would do so for
the Commercial and Institutional CGUs.
A summary of the amounts by which key assumptions for Commercial and Institutional must change in order for their recoverable amounts to equal
their carrying amounts is shown below.
Recoverable amounts and carrying amounts are those at the Banking Group level as no further goodwill or other intangible assets with indefinite
useful lives exist in ANZ New Zealand entities outside the Banking Group.

Amount by which recoverable amount exceeds carrying amount (NZ$m)
Value of assumption and change (in basis points) required to reduce recoverable amount to nil:
Average annual revenue growth over forecast period
Average annual credit impairment FY24-FY28
Discount rate
Terminal growth rate

Commercial
Forecast
ChangeValue required
513
n/a
4.2%
0.21%
9.4%
2.0%

-87 bp+17 bp+63 bp-106 bp

Institutional
Forecast
ChangeValue required
386
n/a
4.5%
0.21%
9.4%
2.0%

-113 bp+73 bp+80 bp-140 bp

KEY JUDGEMENTS AND ESTIMATESManagement judgement is used to assess the recoverable value of goodwill and other intangible assets, and the useful economic life ofan asset, or if an asset has an indefinite life. We reassess the recoverability of the carrying value at each reporting date.
Goodwill
A number of key judgements are required in the determination of whether or not a goodwill balance is impaired:• the level at which goodwill is allocated – consistent with prior periods the CGUs to which goodwill is allocated are ANZ New Zealand’s
four revenue generating segments that benefit from relevant historical business combinations generating goodwill.
• determination of the carrying amount of each CGU which includes an allocation, on a reasonable and consistent basis of corporate
assets and liabilities that are not directly attributable to the CGUs to which goodwill is allocated.
• assessment of the recoverable amount of each CGU used to determine whether the carrying amount of goodwill is supported isbased on judgements including the selection of the model and key assumptions used to calculate the recoverable amount.
The assessment of the recoverable amount of each CGU has been made within the context of the ongoing impact of COVID-19, andreflects expectations of future events that are believed to be reasonable under the circumstances. The rapidly evolving consequences of
COVID-19 and government, business and consumer responses create heightened uncertainty in these estimates and any variations could
have a positive or adverse impact on the determination of recoverable amounts.

17

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
8.

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
Borrowings from Ultimate Parent Bank and Immediate Parent Company
Deposits and other borrowings

31 Mar 21
NZ$m
43,264
59,24020,282
122,786
1,407
3,543
1,113
2,873
131,72230 Sep 20
NZ$m
50,06953,91016,884
120,863
1,782
1,748
646
2,958
127,997

31 Mar 21
NZ$m
144
121
31
23
29
348

30 Sep 20
NZ$m
159
141
36
23
30
389

9. OTHER PROVISIONSECL allowance on undrawn facilities
Customer remediation
Restructuring costs
Leasehold make good
Other1
Total other provisions

Note
6

1 Other provisions comprise various other provisions including losses arising from other legal action, operational issues, and warranties and indemnities provided in connection with various
disposals of businesses and assets.

10. DEBT ISSUANCESANZ New Zealand 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 senior debt holders.
31 Mar 21
30 Sep 20
NZ$m
NZ$m
Senior debt
17,476
14,066
Covered bonds
4,522
4,245
21,998
Total unsubordinated debt
18,311
Subordinated debt
- ANZ Capital Notes
1,543
1,553
- Other
286
289
1,829
Total subordinated debt
1,842
23,827
Total debt issued
20,153Covered 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
prior ranking creditors of the Covered Bond Trust have been satisfied.

18

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED

11. CREDIT RISKThis note should be read in conjunction with the estimates, assumptions and judgements relating to COVID-19 in Note 1 and ECL in Note 6.
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 ANZ New Zealand 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.
ReportedOn-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

Maximum exposure tocredit risk

Excluded1

31 Mar 21
NZ$m

30 Sep 20
NZ$m

31 Mar 21
NZ$m

30 Sep 20
NZ$m

31 Mar 21
NZ$m

30 Sep 20
NZ$m137,786

132,984--

137,786

132,984

5,579
447
1,380
9,700
12,22012,046551
41,923
179,709

8,248
378
1,394
12,797
9,756
9,893
547
43,013
175,997

211
211
211

187
187
187

5,368
447
1,380
9,700
12,22012,046551
41,712
179,498

8,061
378
1,394
12,797
9,756
9,893
547
42,826
175,810

30,206
209,915

30,607
206,604

211

187

30,206
209,704

30,607
206,417

Bank notes and coins and cash at bank within cash and cash equivalents.
Other financial assets mainly comprise accrued interest and acceptances.
Undrawn facilities and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed and individually assessed allowance for
expected credit losses.

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

Internal CCR

ANZ New Zealand 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

19

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
Net loans and advances

Stage 1
NZ$m
106,841
21,990523
129,354(150)
129,204
0.12%

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
2,096
3,920
1,687
685
316
7,703
685
316
(328)
(62)
(77)
7,375
623
239
4.26%
9.05%
24.37%

98,495
21,470406
120,371(161)
120,210
0.13%

5,524
4,581
1,736
11,841(347)
11,4942.93%

As at 31 March 2021
StrongSatisfactory
Weak
Defaulted
Gross undrawn and contingent facilities
Allowance for ECL included in other provisions (refer to Note 9)
Net undrawn and contingent facilities
Coverage ratio

Stage 1
NZ$m
24,9233,848
19
28,790(71)
28,7190.25%

Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
194
1,160
140
31
35
1,494
31
35
(51)
(3)
(19)
1,443
28
16
3.41%
9.68%
54.29%

As at 30 September 2020
StrongSatisfactory
Weak
Defaulted
Gross undrawn and contingent facilities
Allowance for ECL included in other provisions (refer to Note 9)
Net undrawn and contingent facilities
Coverage ratio

25,275
3,949
27
29,251(79)
29,1720.27%

As at 31 March 2021
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 2020
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 amount

810
810
(80)
730
9.88%

363
363
(107)
256
29.48%

Total
NZ$m
108,937
25,9102,210
1,001
138,058(617)
137,441
0.45%
(23)
368
137,786

104,019
26,051
2,142
1,173
133,385(695)
132,690
0.52%
(25)
319
132,984

Off-balance sheet commitments - undrawn and contingent facilities

20

302
974
179
1,455
(55)
1,400
3.78%

19
19
(3)
16
15.79%

41
41
(22)
19
53.66%

Total
NZ$m
25,1175,008
159
66
30,350(144)
30,2060.47%

25,5774,923
206
60
30,766(159)
30,607
0.52%

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED12. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIESFinancial assets and financial liabilities carried at fair value on the balance sheet
ANZ New Zealand categorises financial assets and financial 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 table below summarises the attribution of financial instruments carried at fair value to the fair value hierarchy:
Quoted market price(Level 1)
31 Mar 21 30 Sep 20
NZ$m
NZ$m
AssetsTrading securities
Derivative financial instruments
Investment securities
Total
Liabilities
Deposits and other borrowings
Derivative financial instruments
Other financial liabilities
Total

Fair value measurements
Using observable inputs
Using unobservable(Level 2)
inputs (Level 3)
31 Mar 21 30 Sep 20 31 Mar 21 30 Sep 20
NZ$m
NZ$m
NZ$m
NZ$m

Total
31 Mar 21
NZ$m

30 Sep 20
NZ$m

8,854
10
12,04520,909

8,848
8
9,892
18,748846
12,20813,054

3,949
9,745
13,694

2
1
3

3
1
4

9,700
12,22012,04633,966

12,797
9,756
9,893
32,446

19
598
617

4
158
162

3,543
11,01014,553

1,748
8,162
9,910

-

-

3,543
11,029598
15,170

1,748
8,166
158
10,072Financial 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 21
NZ$m

30 Sep 20
NZ$m

31 Mar 21
NZ$m

30 Sep 20
NZ$m137,786
137,786

132,984
132,984

138,202138,202

133,592
133,592

128,179
20,153
148,332

126,249
23,827150,076

128,436
20,421
148,857

126,498
24,049150,547

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 (Note 8 deposits and other borrowings) designated at fair value through profit or loss.

21

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS
13. COMMITMENTS AND CONTINGENT LIABILITIESCredit related commitments and contingencies
Contract amount of:
Undrawn facilities
Guarantees and letters of credit
Performance related contingencies
Total

31 Mar 21
NZ$m

30 Sep 20
NZ$m27,4671,298
1,585
30,35028,0231,309
1,434
30,766

ANZ New Zealand 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 these transactions
are subjected to the same credit origination, portfolio management and collateral requirements for customers applying for loans. As the facilities may
expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
Other contingent liabilities
There are outstanding court proceedings, claims and possible claims for and against ANZ New Zealand. Where relevant, expert legal advice has beenobtained and, in the light of such advice, provisions (refer to Note 9 other provisions) and/or disclosures as deemed appropriate have been made. In
some instances we have not disclosed the estimated financial impact of the individual items either because it is not practicable to do so or becausesuch disclosure may prejudice seriously the interests of ANZ New Zealand.
Regulatory and customer exposures
In recent years there has been an increase in the number of matters on which ANZ New Zealand engages with its regulators. There have also beensignificant increases in the nature and scale of regulatory investigations and reviews, civil and criminal enforcement actions (whether by court action
or otherwise), formal and informal inquiries, regulatory supervisory activities and the quantum of fines issued by regulators, particularly against
financial institutions both in New Zealand and globally. ANZ New Zealand has received various notices and requests for information from its regulators
as part of both industry-wide and ANZ New Zealand-specific reviews, and has also made disclosures to its regulators at its own instigation. The natureof these interactions can be wide ranging and, for example, may include a range of matters including responsible lending practices, regulated lending
financial transactions, 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 launderingand counter-terrorism financing obligations, reporting and disclosure obligations and product disclosure documentation. There may be exposures tocustomers which are additional to any regulatory exposures. These could include class actions, individual claims or customer remediation orcompensation activities. The outcomes and total costs associated with such reviews and possible exposures remain uncertain.
Reviews under section 95 of the Reserve Bank of New Zealand Act 1989 (RBNZ Act)
On 5 July 2019, the RBNZ issued a notice under section 95 of the RBNZ Act requiring the Bank to obtain two external reviews: the first on the Bank’s
compliance with certain aspects of the RBNZ Banking Supervision Handbook document Capital Adequacy Framework (Internal Models Based Approach)(BS2B) (Capital Adequacy Review); and the second on the effectiveness of the Bank’s directors’ attestation and assurance framework (Attestation Review).
The Attestation Review and the Capital Adequacy Review were completed in December 2019 and April 2020, respectively. The Bank is committed to
implementing the recommendations and addressing the issues raised by these reviews.
Due to the impacts of the COVID-19 pandemic, the RBNZ extended the time period for addressing the Attestation Review recommendations, subject
to the Bank obtaining external interim reviews of the remediation activities being undertaken in respect of the Attestation Review and the Capital
Adequacy Review, assessed as at March 2021, with final reviews being assessed as at September 2021 for the Attestation review and December 2021
for the Capital Models review. The interim review of the Attestation Review is in the process of being finalised. The interim review of the Capital
Adequacy Review has been completed. The external reviewer has reported that the Bank has made significant progress to address non-complianceissues and improvement areas identified by the Capital Adequacy Review, and the programme of work is expected to be completed by December
2021.
The Attestation Review and the Capital Adequacy Review have highlighted the need for a broader programme of improving the Bank's processes
covered by those reviews, and this programme is now in its implementation phase.
Warranties and indemnities
ANZ New Zealand 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.

14. SUBSEQUENT EVENTSOn 31 March 2021, the RBNZ announced that it was easing the restrictions preventing banks from paying any dividends on ordinary shares andredeeming non-common equity tier 1 capital instruments that were put in place in April 2020. The changes to the dividend restrictions allow the Bank
to pay up to a maximum of 50% of its earnings as dividends. The 50% dividend restriction will remain in place until 1 July 2022 at which point the
RBNZ intends to remove the restrictions entirely, subject to no significant worsening in economic conditions. The Bank’s conditions of registration
were amended on 29 April 2021 to bring the 50% dividend restriction into effect.

22This page has been left blank intentionally

23

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

24

Section

Order reference

Page

B1.

General disclosures

Schedule 3

25

B2.

Additional financial disclosures

Schedule 5

26

B3.

Asset quality

Schedule 7

31

B4.

Credit and market risk exposures and capital adequacy

Schedule 9

33

B5.

Insurance business

Schedule 12

33

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDREGISTERED BANK DISCLOSURES
B1. GENERAL DISCLOSURES
Guarantees
No material obligations of the NZ Branch are guaranteed as at 7 May 2021.
Covered bonds issued by ANZ New Zealand (Int’l) Limited, a subsidiary of the Bank, are guaranteed. Refer to page 18 for further details.
Changes in the Ultimate Parent Bank’s Board of Directors and the New Zealand Chief Executive Officer – NZ BranchDavid Gonski retired as an Independent Non-Executive Director of the Ultimate Parent Bank on 28 October 2020. There have been no other changes
to the Directors of the Ultimate Parent Bank since 30 September 2020, the balance date of the last full year disclosure statement.
Chris O’Neale was appointed as the New Zealand Chief Executive Officer – NZ Branch on 25 April 2021, following Penny Dell’s appointment as
Treasurer of the Bank.
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 ANZ New Zealand that may have a material adverse effecton the NZ Branch or ANZ New Zealand is included in Note 13 commitments and contingent liabilities.
Credit rating
As at 7 May 2021 the Ultimate Parent Bank has three credit ratings, which are applicable to its long-term senior unsecured obligations which arepayable in New Zealand in New Zealand dollars.
The Ultimate Parent Bank’s credit ratings are:Rating agency
S&P Global Ratings
Fitch Ratings
Moody’s Investors Service

Credit rating
AAA+
Aa3

Qualification
Outlook Negative
Outlook Stable
Outlook Stable

Other material matters
RBNZ review of capital requirements
Between May 2017 and December 2019, the RBNZ conducted a comprehensive review of the capital adequacy framework applying to New Zealand
locally incorporated registered banks. The RBNZ's final decisions on the capital review as they relate to the Bank are set out below. In response to the
COVID-19 pandemic, the RBNZ delayed the start date for the increased capital requirements to support credit availability. The new regime is expected
to be implemented in stages from 1 July 2021.
• 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 requirement will be implemented progressively from 1 July 2022 to 1 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 to prevent asset price bubbles from developing; and a 5.5% capital conservation buffer.
• Contingent capital instruments will no longer be treated as eligible regulatory capital. As at 31 March 2021, the Bank had approximately
NZ$2,741 million of AT1 instruments that will progressively lose eligible regulatory capital treatment over a seven year transition period from 1
July 2021 to 1 July 2028.
• As an internal ratings based approach accredited bank, the Banking Group’s RWA outcomes will be increased to approximately 90% of what
would be calculated under the standardised approach. This will be achieved by applying an 85% output floor from 1 January 2022, andincreasing the credit RWA scalar from 1.06 to 1.20 from 1 October 2022.
• The Banking Group will be required to report RWA, and resulting capital ratios, using both the internal models and the standardised approaches
from 1 January 2022.
The RBNZ’s reforms will result in a material increase in the level of capital that the Banking Group is required to hold, although the amount of theincrease is currently uncertain. The reforms could have a material impact on the Banking Group and its business, including on its capital allocation andbusiness planning.
Since 30 September 2018, CET1 capital has increased by NZ$3.8 billion to NZ$12.9 billion at 31 March 2021 and total capital has increased by NZ$3.8
billion to NZ$15.7 billion, in preparation for these changes and due to the RBNZ’s COVID-19 related dividend restrictions.
Financial statements of the Ultimate Parent Bank and Overseas Banking Group
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 request is made at the Registered Office. The most recent publicly available
financial statements for the Ultimate Parent Bank and Overseas Banking Group can also be accessed at the website shareholder.anz.com.

25

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDREGISTERED BANK DISCLOSURES
B2. ADDITIONAL FINANCIAL DISCLOSURES
Additional information on the balance sheet
As at 31 March 2021
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
Total liabilities of the NZ Branch less amounts due to related entities

NZ$m
166,775
135,300
4,376
7,620
1,081

Assets charged as security for liabilities
These amounts exclude the amounts disclosed as collateral paid on the balance sheet that relate to derivative liabilities. The terms and conditions of
the collateral agreements are included in the standard Credit Support Annex that forms part of the International Swaps and Derivatives Association
Master Agreement.
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 Bank’s covered bond programme.
The carrying amounts of assets pledged as security are as follows:
As at 31 March 2021
Securities sold under agreements to repurchase
Residential mortgages pledged as security for covered bonds

NZ$m
1,113
11,696

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. ANZ New Zealand 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).

26

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED

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:

As at 31 March 2021
New Zealand residents
Agriculture
Forestry and fishing, agriculture services
Manufacturing
Electricity, gas, water and waste services
Construction
Wholesale trade
Retail trade and accommodation
Transport, postal and warehousing
Finance and insurance services
Public administration and safety1
Rental, hiring & real estate services
Professional, scientific, technical, administrative and support services
Households
All other New Zealand residents2

Loans andadvances
NZ$m

Off-balance
Othersheet credit
relatedfinancialassets commitments
NZ$m
NZ$m

Total
NZ$m

16,743
652
2,437
1,066
1,168
1,207
2,380
817
893
315
37,252872
68,278
1,987

57
6
167
486
16
86
22
131
8,625
14,506
1,360
8
165
112

1,107
145
2,138
1,838
864
1,790
865
712
1,589
836
2,324
458
13,6801,898

17,907
803
4,742
3,390
2,048
3,083
3,267
1,660
11,107
15,65740,936
1,338
82,123
3,997

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

136,067

25,74730,244

192,058

123
1,192
676

15,948314

106-16,177
1,195
690

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

1,991
138,058(617)
137,441(23)
368
137,786

15,96541,712
41,712
41,712

106
30,350(144)
30,20630,206

18,062
210,120(761)
209,359(23)
368
209,704

1
2

Public administration and safety includes exposures to local government administration and central government administration, defence and public safety.
Other includes exposures to mining, information media and telecommunications, education and training, health care and social assistance and arts, recreation and other services.

27

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDREGISTERED 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 2021

Note

NZ$m

8

122,786

Funding composition
Customer deposits
Wholesale funding
Debt issuances

20,153

Certificates of deposit and commercial paper

4,950

Other borrowings

3,986

Total wholesale funding

29,089Total funding

151,875

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

4,264

Manufacturing

2,764

Construction

2,951

Wholesale trade

2,487

Retail trade and accommodation

2,287

Financial and insurance services

12,958

Rental, hiring and real estate services

4,365

Professional, scientific, technical, administrative and support services

6,331

Public administration and safety

1,916

Arts, recreation and other services

2,179Households

65,697All other New Zealand residents1

5,072
113,271

Customer deposits by industry - overseas
Households
All other non-NZ residents

8,803
712
9,515

Total customer deposits

122,786

Wholesale funding (financial and insurance services industry)
New Zealand

4,342

Overseas

24,747

Total wholesale funding

29,089Total funding

151,875

Concentrations of funding by geography
New Zealand

117,613Australia

4,432

United States

11,836

Europe11,170

Other countries

6,824

Total funding

151,875

1

28

Other includes mining; electricity, gas, water and waste services; transport, postal and warehousing; information media and telecommunications; education and training; health care andsocial assistance.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED

Additional information on interest rate sensitivity
The following table represents the interest rate sensitivity of ANZ New Zealand'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 2021
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 Not bearing
2 years
interest1
NZ$m
NZ$m

5,579
447
1,380
9,700
12,22012,046
137,786551
179,709

5,327
1,380
1,331
439
64,90573,382

133
19,71019,843

175
486
33,721
34,382782
595
15,35916,736

7,279
10,525
4,628
22,432252
447
12,2201(537)
551
12,934

2,830
1,202
131,722
11,02920,153277
891
168,104
11,605

1,630
1,202
84,7272,630
12598
90,79962,91945,502

13,8722,616
1216,500(66,171)(62,828)

7,247
3,102
23
10,372
1,978
25,988

2,986
1,350
86
4,422
(2,985)
9,329

2,608
10,455
144
13,207
4,259
13,484

1,200
20,282
11,029293
32,804(19,870)

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 2021 within relevant maturity groupings. All
outstanding debt issuances are profiled on the earliest date on which ANZ New Zealand may be required to pay. The amounts represent principal andinterest cash flows – so they may differ from equivalent amounts reported on the balance sheet.

As at 31 March 2021

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

2,510

322

-

-

-

2,832

-

1,202

-

-

-

1,202

On demand
NZ$m

Settlement balances payable
Collateral received

79,522

24,52522,028

5,733

964

132,772

Derivative financial liabilities (trading)

-

8,890

-

-

-

8,890

Debt issuances

Deposits and other borrowings

-

1,038

5,438

10,826

3,639

20,941

Lease liabilities

-

13

39

169

81

302

Other financial liabilities

-

42

7

226

492

767

1

Derivative financial instruments(balance sheet management)- gross inflows

-

1,381

2,946

4,232

313

8,872

- gross outflows-(1,400)(2,960)(4,302)(276)(8,938)1

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

At 31 March 2021, NZ$10 million of ANZ New Zealand’s NZ$14 million of non-credit related commitments and all NZ$30,350 million of its credit
related commitments and contingent liabilities mature in less than 1 year, based on the earliest date on which ANZ New Zealand may be required to
pay.

29

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDREGISTERED BANK DISCLOSURES
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 internal and regulatory liquidity scenario metrics.
As at 31 March 2021
Cash and balances with central banks
Certificates of deposit
Central and local government bonds
Government treasury bills
Other bonds
Total liquidity portfolio

NZ$m
4,939
380
11,997329
7,853
25,498Assets held in ANZ New Zealand’s liquidity portfolio include short term cash held with the RBNZ, New Zealand Government securities, securities
issued by supranational agencies, securities issued by highly rated banks and securities issued by State Owned Enterprises, Local Authorities andhighly rated New Zealand domestic corporates. These assets would be accepted as collateral by the RBNZ in repurchase transactions. At 31 March
2021, ANZ New Zealand would be eligible to enter into repurchase transactions with a value of NZ$20,559 million. The Bank also held unencumberedinternal residential mortgage backed securities (RMBS) which would entitle ANZ New Zealand to enter into repurchase transactions with a value of
NZ$8,629 million at 31 March 2021.
Overseas Banking Group Profitability and Size
31 Mar 21
2,943
0.47%
1,018,339-11.45%

Net profit for the six months ended 31 March 2021 (AUDm)
Net profit after tax for the 12 months ended 31 March 2021 as a percentage of average total assets
Total assets (AUDm)
Percentage change in total assets in the 12 months to 31 March 2021
Reconciliation of mortgage related amounts
As at 31 March 2021
Term loans - housing1
Less: fair value hedging adjustment
Less: housing loans made to corporate customers
On-balance sheet residential mortgage exposures (per LVR analysis)
Add: off-balance sheet residential mortgage exposures (per LVR analysis)
Total residential mortgage exposures (per LVR analysis)
130Term loans – housing includes loans secured over residential property for owner-occupier, residential property investment and business purposes.

Note
5

B4
B4
B4

NZ$m
95,387(3)(1,682)93,702
8,925
102,627

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED

B3. ASSET QUALITY
This section should be read in conjunction with the estimates, assumptions and judgements relating to COVID-19 and ECL included in Note 1, Note 6
and Note 11 to the financial statements.
Movements in components of loss allowance – total
Stage 3
Collectively IndividuallyStage 2
assessedassessed
NZ$m
NZ$m
NZ$m
347
80
107
(20)
(3)
1
1
(15)
38
(36)
(10)
(19)
(18)
(7)
(28)
10
(5)
328
62
77

Net loans and advances - total
As at 1 October 2020
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 2021

Stage 1
NZ$m
161
22
(33)
(11)
150

Total
NZ$m
695
(9)
(36)
(10)
(55)
(28)
10
(5)
617

Off-balance sheet credit related commitments - total
As at 1 October 2020
Transfer between stages
New and increased provisions (net of collective provision releases)
Credit impairment charge
As at 31 March 2021

79
3
(11)
(8)
71

55
(3)
(1)
(4)
51

3
3

22
(3)
(3)
19

159
(15)
(15)
144

Gross loans and advances - total
As at 1 October 2020
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 2021
Loss allowance as at 31 March 2021

120,371
3,156
22,63825,794(189)(16,622)(16,811)
129,354150

11,841
147
535
682(3,101)(1,719)(4,820)
7,703
328

810
35
61
96
(55)
(166)
(221)
685
62

363
8
62
70
(1)
(88)
(89)
(28)
316
77

133,385
3,346
23,296
26,642(3,346)(18,595)(21,941)(28)
138,058
617

Off-balance sheet credit related commitments - total
As at 1 October 2020
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 2021
Loss allowance as at 31 March 2021

29,251
15
4,656
4,671
(129)
(5,003)(5,132)
28,790
71

1,455
121
173
294
(15)
(240)
(255)
1,494
51

19
7
9
16
(4)
(4)
31
3

41
1
3
4
(10)
(10)
35
19

30,766
144
4,841
4,985
(144)
(5,257)(5,401)30,350144

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 0.45% of gross balances as at 31 March 2021, down from 0.52% as at 30 September 2020. The NZ$93 million (10.9%)
decrease in loss allowances was driven by a decrease in the proportion of gross balances in Stage 2 and Stage 3, and changes in the forward looking
economic scenarios as described in Note 6 to the financial statements.

31

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITEDREGISTERED BANK DISCLOSURES
Past due assets and other asset quality information
As at 31 March 2021
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 impaired customers
Other assets under administration

Total
NZ$m
801
356
112
390
1,659
35
4

ANZ New Zealand does not have any loans and advances designated at fair value.
Overseas Banking Group asset quality
As at 31 March 2021
Gross impaired assets (AUDm)
Gross impaired assets as a percentage of total assets
Individual provision (AUDm)
Individual provision as a percentage of gross impaired assets
Collective provision (AUDm)

32

2,473
0.2%
809
32.7%
4,285

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

UNAUDITED

B4. CREDIT AND MARKET RISK EXPOSURES AND CAPITAL ADEQUACYAPRA 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)
2021
2020
2021
2020
10.8%
10.6%
12.4%
12.2%
12.5%
12.6%
14.3%
14.2%
15.5%
15.8%
18.3%
18.6%

The Ultimate Parent Bank and the Overseas Banking Group are required to hold minimum capital as determined by APRA, which is at least equal tothat specified under the Basel III capital framework.
APRA has authorised the Ultimate Parent Bank and the Overseas Banking Group to use:
• the Advanced Internal Ratings Based (AIRB) methodology for calculation of credit risk weighted assets. There are however small portfolios(mainly retail and local corporates in Pacific, and local corporates in Asia) where the Overseas Banking Group applies the standardised approach.
• the Advanced Measurement Approach (AMA) for the operational risk weighted asset equivalent.
The Overseas Banking Group exceeded the minimum capital requirements set by APRA as at 31 March 2021 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2021. The Overseas Banking Group’s Pillar 3
disclosure document for the quarter ended 31 March 2021, 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.
Market risk
ANZ New Zealand’s aggregate market risk exposures below have been calculated in accordance with the RBNZ document BS2A. The peak end-of-day
market risk exposures are for the six months ended 31 March 2021.

As at 31 March 2021
Interest rate risk
Foreign currency risk
Equity risk

Implied risk weighted
exposure
Period end
Peak
NZ$m
NZ$m
5,759
11,14172
113
1
1

Notional capital charge
Period end
Peak
NZ$m
NZ$m
461
891
6
9
-

Additional mortgage information
As required by 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 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.

As at 31 March 2021
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

On-balance Off-balance
sheet
sheet
NZ$m
NZ$m
46,06019,66821,96387,691
4,336
1,675
93,702

6,261
1,218
1,063
8,542
148
235
8,925

Total
NZ$m
52,321
20,88623,02696,233
4,484
1,910
102,627

B5. INSURANCE BUSINESSAs at 31 March 2021, ANZ New Zealand does not conduct any insurance business.

33

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALANDDIRECTORS' 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 the Chief Executive
Officer – NZ Branch believes that:•

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

Over the six months ended 31 March 2021, after due enquiry, each Director of the Ultimate Parent Bank and the Chief Executive Officer – NZ Branchbelieves that:•

The Ultimate Parent Bank has complied in all material respects with each condition of registration that applied during that period1; and•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 and other business risks, and thatthose systems were being properly applied.

1.

In accordance with the Order, Australia and New Zealand Banking Group Limited - ANZ New Zealand has complied in all material respects with each of its conditions of registration thatapplied during the period if the RBNZ has not published any information about a breach on its website, and has not notified Australia and New Zealand Banking Group Limited - ANZ New
Zealand of any material breach.

Signed by the Chief Executive Officer – NZ Branch

Chris O‘Neale
Chief Executive Officer – NZ Branch
7 May 2021
Signed on behalf of all the Directors of the Ultimate Parent Bank

Antonia Watson
Responsible Person
7 May 2021
on behalf of the Directors of the Ultimate Parent Bank:
Ilana Atlas, AO
Paula Dwyer
Shayne ElliottJane Halton, AO PSM
Rt Hon Sir John Key, GNZM AC
Graeme Liebelt
John Macfarlane
Paul O’Sullivan

34

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

INDEPENDENT AUDITOR’S REVIEW REPORTTO THE DIRECTORS OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDREPORT ON THE HALF YEAR DISCLOSURE STATEMENTCONCLUSION
Based on our review of the interim financial statements and registered bank disclosures (together referred to as ‘the half year disclosurestatement’) of the New Zealand business of Australia and New Zealand Banking Group Limited and its subsidiaries (ANZ New Zealand) on pages 4
to 33, nothing has come to our attention that causes us to believe that:•••the interim financial statements on pages 4 to 22 do not present fairly in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34
Interim Financial Reporting, in all material respects, ANZ New Zealand’s financial position as at 31 March 2021 and its financial performanceand cash flows for the six month period ended on that date;
the registered bank disclosures in sections B2, B3 and B5 disclosed in accordance with Schedules 5, 7, 12 and 14 of the Registered Bank
Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (as amended) (the Order) respectively, do not fairly state, in allmaterial respects, the matters to which they relate in accordance with those schedules; andthe registered bank disclosures relating to credit and market risk exposures and capital adequacy in section B4 is not, in all material respects,
disclosed in accordance with Schedule 9 of the Order.

We have completed a review of the accompanying half year disclosure statement which comprises:••

the interim financial statements formed of:• the consolidated balance sheet as at 31 March 2021;• the consolidated income statement, 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.
the registered bank disclosures prescribed in Schedules 5, 7, 9, 12 and 14 of the Order.

BASIS FOR CONCLUSION
A review of the half year disclosure statement 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 ANZ New Zealand, 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 ANZ New Zealand 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 ANZ New Zealand on normal terms within the ordinary course of trading activities of the business of ANZ New Zealand. These matters havenot impaired our independence as reviewer of ANZ New Zealand. The firm has no other relationship with, or interest in, ANZ New Zealand.
RESPONSIBILITIES OF THE DIRECTORS FOR THE HALF YEAR DISCLOSURE STATEMENTThe Directors, on behalf of ANZ New Zealand, are responsible for:• the preparation and fair presentation of the half year disclosure statement in accordance with IAS 34, NZ IAS 34 and Schedules 3, 5, 7, 12 and 14of the Order;• the preparation and fair presentation of ANZ New Zealand’s disclosures in regards to credit and market risk exposures and capital adequacy inaccordance with Schedule 9 of the Order;• implementing necessary internal controls to enable the preparation of a half year disclosure statement that is fairly presented and free frommaterial 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 HALF YEAR DISCLOSURE STATEMENT
Our responsibility is to express a conclusion on the half year disclosure statement based on our review. We conducted our review in accordance with
NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything has come to attention that causes us to believe that:• the interim financial statements do not present fairly, in all material respects, ANZ New Zealand’s financial position as at 31 March 2021 and its
financial performance and cash flows for the six month period ended on that date;• the interim financial statements do not, in all material respects, comply with IAS 34 and NZ IAS 34;• the registered bank disclosures in sections B2, B3, and B5 do not, fairly state, in all material respects, the matters to which it relates in accordance
35

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

INDEPENDENT AUDITOR’S REVIEW REPORT•with Schedules 5, 7, 12 and 14 of the Order; andthe registered bank disclosures relating to credit and market risk exposures and capital adequacy in section B4 is not, in all material respects,
disclosed in accordance with Schedule 9 of the Order.

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 the half year disclosure statement. This description forms part of our
independent review report.
USE OF THE INDEPENDENT REVIEW REPORTThis independent review report is made solely to the Directors of ANZ New Zealand. Our review work has been undertaken so that we might state to
the Directors 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 Directors as a body for our work, this independent review
report, or any of the opinions we have formed.

KPMG
Auckland7 May 2021

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