SHAPINGOUR FUTURE
2009 SHAREHOLDER REVIEW

1This year National Bank New Zealand (NBNZ) worked
closely with Simon and Carrie Clarke to help themrealise a life-long dream to own their own farm.
Simon and Carrie originally approached NBNZ todiscuss growing their sharemilking business, thinking
that outright farm ownership was a far-off goal.
NBNZ Rural Manager, Jeff de Malmanche, took theopportunity to look at wider financing options forthem and after visiting a number of properties, helped
them finance the purchase of their first dairy farm.
SImOn AnD CARRIE CLARkE, Dairy Farmers

Tirau, North Island, New ZealandGroundProbe’s provision of precise information to
the mining and civil infrastructure industries forrisk management allows their customer’s operations
to be safer and more profitable.
Since 2004, ANZ Relationship Manager, Peter Goss,has worked closely with Lyle Bruce at GroundProbeto develop a banking solution that meets the needsof this rapidly growing business, including providing
working capital, trade finance to facilitate the exportof its products and services around the world andassisting with interest rate risk management.
LYLE BRUCE, GroundProbe

Brisbane, Australia

2

3

CONTENTS

FRONT COVER // Tim Taylor had been a long standing ANZ customer when he approached ANZ Relationship Manager, Michael
Hubbard, for funding to start a new building company, Millenium Homes, with partner Andrew Quinlan. Since then, ANZ has
worked closely with Tim and Andrew to gain a better understanding of their business and help them grow Millenium Homes
into the highly regarded modern home building company it is today.
TIm TAYLOR & AnDREW QUInLAn, Millenium Homes

Toowoomba, Queensland

04
05
06
09
10
13

// ANZ Operations// Investor Snapshot// Chairman’s Report// Five Year Summary// Chief Executive Officer’s Report// Our Management Board

14
18
22
22
23
24

// Review of Regions// Corporate Responsibility// Your Directors// Directors Remuneration// Executive Remuneration// Information for Shareholders

Group NPAT (Reported) $m

Proud banking heritage spanning 170 years

Australia
new Zealand

A top 10 listed company on the ASX (market
cap ~$60b), with ~390,000 shareholders

Asia
Cambodia
China
Hong Kong
India
Indonesia
Japan
Korea
Laos
Malaysia
Philippines
Singapore
TaiwanThailand
Vietnam

PacificPacificAmerican Samoa
Cook Islands
UnitedEast Timor
kingdom
ingdomFiji
United States Guam
Kiribatiof America
New Caledonia
Papua New Guinea
Samoa
Solomon Islands
Tonga
VanuatuV
anuatuANZOPERATIONS
4-11%Largest listed company in New Zealand,
largest Australian bank in Asia and a leadingbank in the PacificAA
A rated bank on S&P long term ratings

10%

14%

1

3,772
3,426

2009
2008

7,385
6,463

Net Loans and Advances including acceptances $m
31% Australia Retail & Wealth-1%

8% APEA Institutional

5% NZ Commercial

2009
2008

Group Profit Before Provisions (Reported) $m

REVEnUE (UnDERLYInG1)

6% APEA Retail, Wealth& Partnerships

2,943
3,319

Group NPAT (Underlying1) $m~37,000 full time equivalent employees (FTE)

26% Global Institutional ex APEA

2009
2008

2009
2008

345,769
349,851

15% Australia Commercial
9% NZ Retail & Wealth

Adjusted for material items that are not part of the normal ongoing operations of the Group including
one-off gains and losses, gains and losses on the sale of businesses, non-continuing businesses, timing
differences on economic hedges and acquisition related costs.

Customer Deposits $m

14%

2009
2008

233,141
204,729

INVESTORSNAPSHOT2009
Investor Snapshot 2009

All information contained within this document is for the year ended 30 September 2009 unless otherwise stated

5

CHAIRMAN’S REPORTA MESSAGE FROMCHARLES GOODE
ANZ DELIVERED A SOLID RESuLT IN 2009 AGAINST THE BACKDROP OF THE GLOBALFINANCIAL CRISIS AND A MAJOR DOWNTuRN IN THE WORLD ECONOMY.

Our Performance
ANZ’s statutory profit after tax for the year ended
30 September 2009 was $2,943 million, down 11%
reflecting higher provisions. With an increase in
the weighted average number of shares of 16%,
this led to a fall in earnings per share of 23%. The
dividend for the year was $1.02 per share fully
franked, down 25%.
Excluding the impact of $829 million fromone-off items, hedging timing differences andnon-continuing businesses our underlying profit1
for 2009 was $3,772 million, up 10%.

underlying revenue growth of 17% was strong
while costs increased by 12% with our underlying
cost-to-income ratio at 42.2%, down from 44%.
Provisions were at cyclical highs with the total
credit impairment charge up 46% to $3,056 million,
with increases across all regions but mostpronounced in New Zealand.
Importantly, ANZ maintained its AA-credit rating,one of only 11 banks remaining in the world withan AA-rating.

Chairman’s Report

ANZ’s Tier 1 capital ratio was 10.6% at the end of
2009 compared to 7.7% a year earlier. Adjustingfor the acquisitions we made during the year but
which have not yet been completed, the pro-forma
Tier 1 ratio is estimated to be 9.5%.

Capital Management

Expansion and Growth
Our financial performance and strong
capital position allowed ANZ to capitaliseon significant strategic opportunities
that arose during the year and our superregional strategy was advanced throughboth organic growth and acquisitions.

During 2009 ANZ took further steps to manage
its capital position and funding programs toensure we were strongly positioned given the
difficult financial and economic conditions.

In August, we announced an agreement to acquire
certain selected businesses of the Royal Bank of
Scotland (RBS) in East Asia for approximately
uS$550 million (A$626 million).

In May, we undertook a fully underwritten$2.5 billion institutional share placement. In July,
we completed a Share Purchase Plan for retailshareholders which saw us issue $2.2 billion ofordinary equity.

The acquisition includes the RBS Retail, Wealth andCommercial businesses in Taiwan, Singapore,
Indonesia and Hong Kong and the Institutional
businesses in Taiwan, the Philippines and Vietnam.
It creates a new platform for our Retail and Wealthbusinesses in Asia.

These results were achieved at a time the global
financial system and the world economy cameunder extraordinary pressure and they reflect thevery significant efforts of our management andour staff during the year. I thank them for theircontribution.

Over 40% of our retail shareholders participated,making it one of the most successful Share Placement
Plans undertaken by an Australian company. The
new shares were issued at $14.40 compared to
ANZ’s year-end share price of $24.39 representing
a strong return to participating shareholders.

6

Including the underwritten Dividend Reinvestment
Plan in July, ANZ raised $5.7 billion of ordinary
equity and the Group ended 2009 as one of theworld’s best capitalised banks.

ANZ also moved to strengthen its franchise inAustralia and New Zealand with an agreement
to acquire the 51% held by the ING Group in the
ANZ-ING wealth management and life insurance
joint ventures.

7

OPPORTUNITYCONFIDENCE
CONNECTIONSFIVE YEAR SUMMARY
Board Changes
John Morschel, one of Australia’s most respectedbusiness leaders, has agreed to succeed me as
Chairman in February 2010.
John has been a director of ANZ since October 2004
and has made a major contribution since joining
the Board. He has extensive experience as a chief
executive and more recently as a non-executive
director and chairman of major Australian andinternational companies. John also brings to therole a strong background in banking and financial
services. He will make an excellent Chairman for ANZ.
We have also welcomed three new Directors to theBoard during the year – Peter Hay, Alison Watkins
and Lee Hsien Yang – to facilitate a transition withthe planned retirements of some Directors.
Peter Hay has a strong background in company law
and investment banking advisory work, with strong
experience in mergers and acquisitions. Alison
Watkins is an experienced CEO and establisheddirector with a grounding in finance and accounting.
Lee Hsien Yang is one of Asia’s most respectedbusiness leaders and has considerable knowledgeof the region.
I would also like to acknowledge the outstanding
contribution made to ANZ over 15 years by
Margaret Jackson who retired from the Board
in April 2009.

Customers and the Community
While the global financial and economic
conditions have been testing, ANZ has maintained
the momentum established in recent years byfocusing on its customers and contributing to
the community.
In Australia, we maintained the highest level ofcustomer satisfaction of any of the major banks
and we began the roll out of our new global
brand identity and positioning for ANZ.
A number of the communities in which ANZ
operates experienced disasters during the year.
These included natural disasters in Asia and thePacific and the bushfires in Victoria.

8

ANZ contributed to the relief efforts throughdonations, direct grants and the efforts of many
ANZ staff.

2009
$m

2008
$m

2007
$m

2006
$m

2005
$m

Net interest income

9,810

7,855

7,302

6,943

6,371

Other operating income

4,557

4,440

3,765

3,146

2,935

Operating expenses(6,068)(5,406)(4,953)(4,605)(4,340)

Profit before provisions and income tax

8,299

6,889

6,114

5,484

4,966

Provision for credit impairment(3,056)(2,090)

(567)

(407)

(565)

Income tax expense & minority interest(1,471)(1,373)(1,623)(1,490)(1,250)underlying Profit1

3,772

3,426

3,924

3,587

3,151

Adjustments between statutory and underlying profit1

(829)

(107)

256

101

24

Profit attributable to shareholders of the Company

2,943

3,319

4,180

3,688

3,175

Assets476,987

470,293392,773

334,640

300,885

Net Assets

32,42926,552

22,04819,906

19,538Tier 1 capital ratio2

10.6%

7.7%

6.7%

6.8%

6.9%

Return on average ordinary equity3

10.3%

14.5%

20.9%

20.7%

18.3%

Return on average assets

0.6%

0.8%

1.2%

1.1%

1.1%

Cost to income (underlying)1

42.2%

44.0%

44.9%

45.6%

46.6%

Total return to shareholders(share price movement plus dividends)

40.3%-33.5%

15.6%

17.1%

32.6%

Market capitalisation

61,08538,26355,38249,331

43,834102 cents

136 cents

136 cents

125 cents

110 cents$24.39$18.75$29.70$26.86$24.00Financial performance1

During 2009, ANZ was named as the most sustainablebank globally in the Dow Jones Sustainability Index
for the third consecutive year.

Outlook
Looking ahead, the actions taken by governments
around the world have gained traction and are now
moderating the effects of the global economic
downturn.
While it is clear that Australia and Asia have
weathered the crisis better than the uS and Europe,
there is still uncertainty about the shape of therecovery and it is prudent to be cautious. In New
Zealand, there are early signs the economy has
stabilised, however, economic recovery is likely
to be slow.

Financial position

A Message from John Morschel
It will be an honour for me to succeed Charles
as Chairman of ANZ in February 2010.

At ANZ, we are facing some headwinds in 2010
including the strength of the Australian dollar,a less favourable global markets environment
and a 13%2 increase in the number of shares tobe serviced. Our regional growth focus however,puts us in a unique position to capitalise on Asia’s
recovery and growth.

I look forward to leading a well qualified andcommitted Board of Directors and working
closely with Mike Smith and, what I regard tobe, a very strong senior management team.
I am sure that shareholders will join me inthanking Charles for his tireless leadershipas Chairman of ANZ for the last 14 years.

However, we also have some tail winds with therecovery in the economies of Australia, New
Zealand and the region, continued profitable
expansion in East Asia and a moderation in ouroutlook for doubtful debts.

Shareholder Value – Ordinary Shares

Dividend
Share price – 30 September closing priceWe have a strong management team, a strong
capital position, strong liquidity and a well thought
out strategy to be a super regional bank.

Other Information
Points of representation

1,352

1,340

1,327

1,265

1,223

The bank is being managed for the medium term
and the outlook is for an improvement in profits
in 2010 and a strong 2011.

Number of employees (full time equivalent)

37,68736,92534,35332,25630,976

Number of shareholders

396,181

376,813327,703291,262

263,467

John MorschelAdjusted for material items that are not part of the normal
ongoing operations of the Group including one-off gains
and losses, gains and losses on the sale of businesses,
non-continuing businesses, timing differences on economic
hedges and acquisition related costs.
2
Shares on issue at 30 September 2009 divided by theweighted average number of shares during 2009.

4

1

Charles Goode Chairman

1. Adjusted for material items that are not part of the normal ongoing operations of the Group including one-off gains and losses, gains and losses on the sale of businesses, non-continuing businesses, timing differenceson economic hedges and acquisition related costs.
2. Basel II has been applied from 1 January 2008. Prior to that values were calculated using Basel I methodology.
3. Average ordinary shareholders’ equity excludes minority interest and preference share dividend.
4. Excludes employees whose only ANZ shares are held in trust under ANZ employee share schemes.

Five Year Summary

9

Two years ago, we took a decision at ANZ that
although we had great individual businesses inAustralia, New Zealand and Asia Pacific, there
was a unique opportunity to create value forshareholders by becoming a super-regional bank
– a bank of global quality with regional focus.
2009 represents a turning point in deliveringthat aspiration. We’ve worked hard to reposition
ANZ to face up to what we called the ‘new reality’following the global financial crisis and we’ve built
a strong foundation through careful, disciplined
management of our balance sheet, capitaland liquidity.
At the same time, we’ve made significant progressin completing change and remediation in thebusiness in order to place ANZ on a new footing.
Together, that has allowed us to shift our focus
this year to the opportunities that are available
to a strongly capitalised bank and to the growthavailable in our region, which is now the best
performing region in the world economy.

CHIEF EXECUTIVEOFFICER’S REPORTA MESSAGE FROMMICHAEL SMITH
10

Our operating environment
Our 2009 financial year began just weeks after thecollapse of Lehman Brothers, one of the leading
Wall Street investment banks.
In the weeks that followed, some household names
in finance disappeared and as at the end of 2009
financial year over 100 banks in the united States
had failed and many of what were the world’s
largest banks are now effectively in the handsof their respective national governments.
As the financial crisis unfolded, its impact in theworld economy became very clear. As a result
we’ve seen unprecedented action by governments
to save the global financial system and to rescue
the world economy, which entered into the mostglobalised downturn since the Great Depression.

We strongly believe Asia will be an engine for global
growth for many decades to come, and given the
trade and investment flows between Australia and
New Zealand and Asia, it’s an essential part of thelong-term growth strategy for any business.

Our business performance
In this environment, ANZ has remained
financially strong, maintained momentum
in the business and worked hard to position
ANZ for future growth.
underlying profit for the year was $3.8 billion,
up 10%. Taking into account the impact of some
one-off items and non-continuing businesses,
statutory profit decreased 11% to $2.9 billion.

By contrast, in Australia, even with provisions at ornear cyclical highs, banks are in good shape relative
to their international peers. Today, Australia’s four
major banks – including ANZ – are among just 11
AA-rated banks left in the world.

Australia performed well, with underlying profit
after tax up 13% to $2,560 million. The Retail andInstitutional businesses in the region were standout
performers. Commercial produced a credible result,given the difficult year experienced by middlemarket and small business managers.

In this very difficult environment, ANZ has
consistently called the trends early in the economic
cycle and the global financial situation.

Importantly we are also delivering for our customers.
ANZ remains the highest rated of the major banks
when it comes to customer satisfaction.

Today, in Australia and in Asia, the economies
are showing early positive signs of recovery andalthough the economic cycle is still playing out,
there are reasons for optimism.
In the region, China and India are continuing toshow good growth and we believe the urbanisationand fundamental transformation occurring in
those economies will see that growth continue.

WE’VE WORKED HARD TO REPOSITION ANZ TO FACE uP TO WHAT WE CALLED THE‘NEW REALITY’ FOLLOWING THE GLOBAL FINANCIAL CRISIS AND WE’VE BuILT ASTRONG FOuNDATION THROuGH CAREFuL, DISCIPLINED MANAGEMENT OF OuRBALANCE SHEET, CAPITAL AND LIQuIDITY.

Chief Executive Officer’s Report11PROGRESSPERFORMANCE

Part of our strategy is to design ourbusiness around our customers’ needs,
not our product lines.

OUR
MANAGEMENTBOARD
GRAHAm HODGES
Deputy Chief Executive
Officer and Acting
Chief Executive
Officer, Australia
PETER mARRIOTT
Chief Financial Officer

In New Zealand, trading conditions remained
challenging. New Zealand’s economic downturn
has been more pronounced and protracted thanthat in Australia and, while we maintained ourmarket leading position, the economic environment
led to a 34% decline in underlying profit after tax
to $513 million.

The Asia Pacific, Europe and America region
produced an outstanding performancewith underlying profit after tax up 81%
to $699 million, with strong contributions
from our partnerships and the Institutional
business driving much of this growth.
ANZ has continued to invest significantly in theregion, including deepening the Institutional
business and advancing the Retail and Wealthplatforms. We’ve continued to build our branch
networks in Indonesia, Vietnam and China, andacquired businesses in six countries in Asia fromthe Royal Bank of Scotland.
The Institutional Division has turned around its
performance, delivering an underlying profit of$1.4 billion, up 82% on last year. A key feature of
the Institutional result was Global Markets revenue
growth with both customer flow and trading
revenue up strongly. Interest rate and generalmarket volatility coupled with increased customer
penetration drove the significant increase inrevenue within the Global Markets business.
The Institutional team leveraged it’s strong revenue
growth to make investments in improved systems
and processes and to begin to grow frontline
staff numbers.

Strategic growth
During 2009, we’ve been able to take advantage ofthe global financial crisis and ANZ’s strong balance
sheet to advance our super-regional strategy.
In August we reached agreement with the RoyalBank of Scotland Group to acquire selected RBS
businesses in East Asia for approximately uS$550
million (A$626 million) delivering a further steppingstone in our super-regional strategy and creating a
new platform for our retail and wealth businesses
in Asia.
The acquisition, which is still subject to regulatory
approvals, includes the RBS retail, wealth andcommercial businesses in Taiwan, Singapore,
Indonesia and Hong Kong, and the institutional
businesses in Taiwan, the Philippines and Vietnam.
Together, the businesses are an attractive portfolio
of well provisioned banking assets at a reasonable
price which complement our existing businesses
across Greater China, Indochina and South East
Asia and provide our franchise with further growth
momentum.
In September, we signed an agreement with ING
to acquire its 51% shareholding in the ANZ–ING
joint ventures in Australia and New Zealand for$1.76 billion. The transaction brings certainty to
our wealth management position through fullownership of what is an established specialist
wealth management and protection businesswith a 120-year history in Australia.
Importantly for shareholders, it will be cash earnings
accretive in 2010 before some significant revenue
and cost synergies.
In the medium term, it also gives us a foundation
to build a significant wealth business with theflexibility to pursue further growth opportunities
without the constraints of a joint venture structure.
Since acquiring both businesses, integration
planning has progressed well and is on track.

12

Organisational capability
This year we’ve also put a newcustomer focused business model andorganisation structure in place. A newcompetitive era and strategy demanded
a new business model and structure,
one that can support our aspirations
to become a super- regional bank.
We are now organised around three key regions– Australia, New Zealand and Asia Pacific, Europe
and America with Institutional operating as a global
business. We have also put in place a simpler, lesscomplex structure for Operations, Technology,
Human Resources, Finance and Risk.
We’ve continued to reshape our top management
team during the year, with several new
appointments made.
The latest addition, which completes the
management team, is the appointment of Phillip
Chronican to lead the Australia Division. Phillip
joins ANZ after a 27-year career with Westpac,
where he built a reputation as one of Australia’s
leading banking executives.

But we also need to shift our thinking fromselling commoditised product to looking atdifferentiating the way we market ourselves,the way we package and segment our offeringand the way we service our customers.
Part of that involves investing in developing
a great regional brand and so this year we’ve
worked hard to develop a new global brandidentity and positioning for ANZ in supportof our super-regional strategy.
Having one strong, unified brand across all ourgeographies, which tells the world that we are‘One ANZ’ wherever customers choose to deal
with us, is an important part of our future growth.
It identifies who we are as a business and what
we stand for.
The new brand identity and positioning followed
18 months of detailed research involving morethan 1,300 customers and 250 staff in Australia,
New Zealand and Asia Pacific that showed ourcustomers want us to care about them as people
and appreciate how complex life has become.
As part of the launch, we introduced a new global
tagline, ‘We live in your world’.

Also this year, Joyce Phillips joined ANZ as headof Strategy, M&A and Marketing and Innovationfrom GE and Citigroup, and Shayne Elliott, wasappointed as head of Institutional also from
Citigroup and most recently EFG-Hermes.

This aspiration is at the heart of our brand promise– no matter where our customers deal with us, wewant to give them one high standard of experience,
based on understanding their world better thananyone else.

Our customers and brandWe know there’s a lot to do to really deliver on thisand all our people are committed to the task.

Part of our strategy is to design our businessaround our customers’ needs, not our productlines. We made significant progress with thiswith our new organisation structure.

In doing so, I believe we have created real value
for shareholders.
Looking forward to 2010, we are going to have tomanage continuing volatility in financial markets
and the global economy. The recovery in Europe
and the united States is still in a very sensitive
position and there’s going to be good and badnews in between the slow advance forward.
I also want to sound a note of caution. Whilethe inevitable aftermath of the recent failuresin the financial system and in business is going
to be greater regulation, in my view, the real
challenge is for governments to avoid acting on
populist rhetoric. Regulators and business need
to work together to identify how we create theright balance between free markets, which are
the best tool we know for fostering innovationand generating wealth, and ensuring there isa watchful eye from regulators that can help
markets avoid overshooting and spinningout of control.
Against this backdrop, ANZ is clearly established as
one of the best capitalised banks in the world. We
have largely completed much of the remediationand change needed in some parts of the business
and we have taken advantage of opportunities
to grow, as we progress on our journey to build asuper regional bank that delivers performance andgrowth for our shareholders, customers and thecommunities in which we operate.

2009 and the future
In reflecting on what has been a full year of activity
at ANZ, we’ve remained financially very strong,
we have a very clear growth strategy and we havea very experienced team of real bankers to makesure we keep hitting our targets and growing thebank with an acceptable risk profile.

Chief Executive Officer’s Report

CHRIS PAGE
Chief Risk Officer

DAVID CARTWRIGHTGroup Managing
Director, Operations,Technology and Shared
Services (OTSS)SUSIE BABAnIGroup Managing
Director, Human
Resources

ALEx THURSBY
Chief Executive Officer
Asia Pacific, Europe
and America

DAVID HISCO
Group Managing Director
Commercial Banking

JEnnY FAGG
Chief Executive Officer
New Zealand

SHAYnE ELLIOTTGroup Managing
Director, Institutional

JOYCE PHILLIPS
Group Managing
Director, Strategy, M&A,
Marketing and Innovation

Michael Smith
Chief Executive Officer

Full biography details can be found on our website:
http://www.anz.com/about-us/our-company/management/13

35 years ago, Kay Dickerson approached the ANZ
branch in Toowoomba for a loan to start up her own
hairdressing salon. Based on her growing reputationand success at another hair salon, ANZ granted Kay
a loan and Snippettes Hair Salon was born.
Since then, Kay has been a loyal customer of ANZ
Toowoomba and Madonna Cotterell, Kay’s Small
Business Specialist and Lynette Martin, her Home
Loan Specialist have seen her business grow andstrengthen. They have both helped Kay to simplify
and understand her business and personalbanking needs.
kAY DICkERSOn, Snippets Hair Salon

Toowoomba, Australia

AUSTRALIANEW ZEALAND

GRAHAm HODGES ACTInG CHIEF ExECUTIVE OFFICER

JEnnY FAGG CHIEF ExECUTIVE OFFICER

Business Profile

Business Profile

The Australia region caters for the ANZ’s Retail, Commercial, Institutionaland Wealth Management customers in Australia.

ANZ National is New Zealand’s largest financial services provider.
We operate a family of brands including two retail banking franchises(ANZ and The National Bank), uDC Finance, Bonus Bonds, Eftpos New
Zealand and Direct Broking. Nearly one in two New Zealanders have abanking relationship with us.

REGIONREGIONThe Retail businesses are responsible for delivering a range of banking
products and services to retail customers. Commercial includes Esanda andbusinesses which support our rural customers, small to medium enterprises
and smaller corporates. The Wealth Management business includes the
Insurance and Investments business, Private Bank, Etrade and ANZ’sshare of the ING Joint Venture.
InCOmE STATEmEnT ($m)

2009

2008

mOVT %

InCOmE STATEmEnT ($m)

2009

2008

mOVT %

Operating income

9,762

8,526

14%

Operating income

2,638

2,560

3%

Operating expenses

4,034

3,677

10%

Operating expenses

1,182

1,175

1%

Profit before credit impairment and income tax

5,728

4,849

18%

Profit before credit impairment and income tax

1,456

1,385

5%

Provision for credit impairment

2,053

1,663

23%

Provision for credit impairment

727

251

large

Profit before income tax

3,675

3,186

15%

Profit before income tax

729

1,134

-36%

Income tax expense and minority interest

1,115

919

21%

Income tax expense and minority interest

216

361

-40%

underlying Profit after tax

2,560

2,267

13%

underlying Profit after tax

513

773

-34%

324,742

320,5391%

Total assets

1%

68%

66%

20,231

20,278

Total assets% Contribution to group earnings
Employee numbers

0%2009 Performance
13% increase in underlying profit after tax.

101,319

100,311% Contribution to group earnings

14%

23%

Employee numbers

8,879

9,515

-7%

2009 PerformanceStandout performers were Retail, up 13%, and Institutional, up just over 100%.

Strengthened the balance sheet despite challenging local and global
economic conditions.

Revenue up 14%, costs up 10% (excluding institutional revenue up
9% cost up 4%).

Strong performance from Global Markets business somewhat offset
more difficult conditions in Retail and Commercial businesses.

Customer deposits increased 16%.

Net underlying profits declined as a result of reduced net interest margins
in the core Retail and Commercial business and increased provisions.

2009 Achievements
The Retail business had the largest increase in net customer numbersof any bank and remains the highest rated of the major banks forcustomer satisfaction.

Costs well managed with continued investment in the business.

2009 Achievements
Provided over NZ$5 billion in new lending to farms and businesses.

Highest customer satisfaction in Small Business banking.

Awarded “Top Performer Banking Sector” in NZ Contact Centre Awards.

Agreement to move to full ownership of ING Australia.

Direct assistance for 4,700 customers through Financial Wellbeing program.

Awarded Euromoney Magazine’s Best Local Private Bank in Australia 2009.

Leading share of retirement savings enrolments.

Launched new products and services aimed at providing convenient anduncomplicated banking solutions for our customers.

Strengthening of wealth strategy through acquisition of ING’s holdingin the ING NZ business.

unless otherwise stated, all regional and divisional financial information is presented on an underlying basis, adjusted to exclude non-core items and reflect the ongoing business activities of the Group

14

Review of Regions15

In 2008, Cambodia Beverage Company launched an expansion drive to increase
capacity in the region. Paul Popelier worked with the ANZ Royal Bank Cambodia
team, led by Relationship Manager, Saraboth Ea, to put in place a term loan facility
structured to suit the specific requirements of the Company and project. Since
then, ANZ has also structured a revolving short term loan and an overdraft
facility to fund working capital needs for the project.
PAUL POPELIER, Cambodia Beverage Company

Phnom Penh, Cambodia

In late 2007, Chris Salmon and Glenn Rufford spoke totheir ANZ Relationship Manager, Jim Koutsouklakis,
about funding a management buy-out of York Precision
Plastics (YPP). Not only was ANZ able to support the
buy-out, but today also provides a trade facility to fundimportation of raw materials and helps them manage
foreign exchange exposure and interest rate risk.
YPP is now the leading manufacturer of acrylic andthermoplastic sheeting in the southern hemisphere,
serving a customer base throughout Southeast Asiaand the Middle East.
CHRIS SALmOn AnD GLEnn RUFFORDYork Precision Plastics, Sydney, Australia

APEA

INSTITUTIONALASIA PACIFIC EuROPE AND AMERICA
ALEx THURSBY CHIEF ExECUTIVE OFFICER

SHAYnE ELLIOT GROUP mAnAGInG DIRECTOR

Business Profile

Business Profile

The Asia Pacific, Europe and America Region includes businesses in 14 Asianmarkets and 12 countries in the Pacific as well as Europe, America and the
Middle East. Our strategy is focused on building ANZ’s businesses in priority
markets including Vietnam, Indonesia, Malaysia, China and India. We also
continue to grow in the Pacific where we have operated for more than 130 years.

Institutional provides global financial services solutions to around 5,000
corporate and institutional clients. The division delivers transaction banking,specialised lending and markets solutions in Australia, New Zealand, Asia
Pacific, Europe and America.

DIVISIONREGION

InCOmE STATEmEnT ($m)

2009

2008

mOVT %

63%

Operating income

4,948

3,624

37%

554

54%

Operating expenses

1,583

1,245

27%

655

70%

Profit before credit impairment and income tax

3,365

2,379

41%

276

176

57%

Provision for credit impairment

1,408

1,281

10%

Profit before income tax

839

479

75%

Profit before income tax

1,957

1,098

78%

Income tax expense and minority interest

140

93

51%

Income tax expense and minority interest

556

327

70%

InCOmE STATEmEnT ($m)

2009

2008

mOVT %

Operating income

1,967

1,209

Operating expenses

852

Profit before credit impairment and income tax

1,115

Provision for credit impairment

699

386

81%

underlying profit after tax

50,40048,8683%

Total assets% Contribution to group earnings

18%

11%

Employee numbers

8,555

6,769

underlying profit after tax
Total assets

26%

2009 Performance
Profit growth driven primarily by Asia Partnerships and the Institutional
business.
Continued investment in front line staff assisted stronger performancein the Global Markets business.
Grew deposits, invested to deepen the institutional business and advanced
retail and wealth platforms.
Operating expenses while higher, reflecting investment in growth wereoffset by revenue growth.

2009 Achievements
Agreement to acquire certain Royal Bank of Scotland Group businesses
in strategic markets.
Opened eight branches in Indonesia, six outlets in Vietnam and became
the first Australian bank to open a rural bank in China.
Launched 49 Markets products and expanded Asia dealing rooms.
Continued roll-out of core banking platform and invested in internet
banking and a single cash management platform.

1,401

771

82%

183,850

187,342-2%% Contribution to group earnings

37%

23%

Employee numbers

5,149

4,733

9%

2009 Performance
Strong revenue growth across all businesses and geographies, underpinned
by profitable trading on higher market volatility in the Global Markets
business. Global Markets revenue up 77%.
Customer deposits up 19% while repositioning of the loan book, reduced
demand and customer repayment focus drove an 18% decrease in Net
Lending Assets.
Australian exposures in property, securities lending and agribusiness anda limited number of single name exposures were largely responsible for a
10% increase in credit provisions.

2009 Achievements
Strategic realignment organisational restructure as part of the “Rebuild
and Refocus” program.
Substantial progress with remediation programs.
Tighter regional focus and improved global client management delivered
a number of landmark cross-border deals increasing ANZ’s profile in
the region.

Innovative new product highlights: ‘Fast Saver Account’ in nine countries
and WING mobile banking in Cambodia.
unless otherwise stated, all regional and divisional financial information is presented on an underlying basis, adjusted to exclude non-core items and reflect the ongoing business activities of the Group

16

Review of Regions

17

CORPORATE RESPONSIBILITY
Greater confidence, better financial management
and organisational skills are just some of the benefits
Kodey and Darcy have experienced during theirtime on the two-year ANZ Indigenous School
Based Traineeship Program.
ANZ has recruited over 250 Indigenous trainees
since 2003 and has committed to recruiting another180 school-based and full-time trainees under thisinitiative in 2010.
kODEY AnD DARCY, Trainees

ANZ’s Charlestown branch in Newcastle

THE GLOBAL FINANCIAL CRISIS HAS BROuGHT INTO FOCuS HOW ECONOMIES AND
THE COMMuNITY ARE BEST SERVED WHEN THE BANKING SECTOR uNDERSTANDS
AND ACCEPTS RESPONSIBILITY FOR THE BROADER ROLE IT PLAYS IN SOCIETY.

A significant priority this year has been supporting
customers feeling the effects of the volatile economic
environment - particularly those who have lost theirjobs or faced reduced hours of employment as aresult. In a practical sense, this meant providing
flexible, fast and helpful assistance to customers
and small businesses facing hardship, while
continuing to play our role in encouraging andsupporting economic growth.
We also strengthened governance across ourbusiness, introducing policies and guidelines tohelp ensure all our interactions with customers andthe broader community are consistent, responsible
and ethical wherever we operate. For example
around 96% of employees globally completed
training on our new Code of Conduct and Ethics.
We introduced a new set of priorities for our
corporate responsibility activities and investmentsthat will be implemented in the coming years.
In developing these priorities, we listened to over
500 staff, customers, government representatives
and community groups from across our region
to understand their concerns for their lives andcommunities, and their expectations of a bankthat shares their world.
Our long-term commitment to responsible businesspractice saw ANZ assessed as the leading bankglobally on the Dow Jones Sustainability Index
for the third consecutive year.
TOTAL COmmUnITY InVESTmEnT

05 Aust $8,261,025
06 Aust/NZ
08 Global
09 Global

18

Corporate Responsibility

Support for customers in difficulty
A toll-free hotline was introduced giving personaland small business customers facing financial
hardship fast access to our dedicated “Customer
Connect team”.

$17,810,087$18,926,714$22,250,345

As we continue to invest in our India operations,
we recognise our responsibility to treat Australia
and New Zealand-based employees whose jobs
are impacted by offshoring with compassion
and respect.

The team of specially trained staff is on hand tooffer flexible relief packages for our customers
which might include, for example, deferring
or reducing home loan repayments for three,
six or twelve months depending on individual
circumstances.

A $10 million New Career Training Fund wasestablished to support vocational training andincrease future career prospects for affected
employees unable to find an alternative position
at ANZ. A Past Employees Care Fund provides
financial support for those who may experience
severe financial difficulty after leaving ANZ.

An independent review recommended additional
improvements we can make to the support weoffer customers in financial difficulty, which
we will implement throughout 2010.

Being there for disaster-affected
communities

Better decisions
A new Code of Conduct and Ethics was introduced
in 2009 to help employees understand and deal
with ethical challenges they may face at work.
The Code and training provided to all ANZ staff
covers issues such as avoiding corrupt practices;
recognising and preventing harassment andbullying in the workplace; and managing potential
conflicts of interest.
A new Reputation Risk Policy provides employeeswith guidance on how to identify and navigate
challenging economic, social and environmental
issues and, where necessary, escalate concerns
to senior management for decision.

Support for employees impacted
by offshoring$13,849,925

07 Global

SOmE ExAmPLES OF OUR PROGRESS In 2009

Since 2003, ANZ has grown its technology andoperations centre in Bangalore which necessarily
involves relocating some roles from Australia
and New Zealand.

Many ANZ people joined together to support
those who faced significant hardship as a resultof natural disasters occurring throughout our
region this year.
Following the devastating Victorian bushfires,for example, ANZ staff established a makeshift
branch at the crisis centre; and provided callcentre expertise and facilities for fundraisingtelethons; and organised donations, cash grants
and loan deferrals for hundreds of fire victims.
ANZ also distributed over $1 million in relief
grants to impacted customers.
We are now working with the Victorian Bushfire
Reconstruction and Recovery Authority on themost appropriate forms of long-term support
ANZ can provide to recovering communities.
This includes financial and management
mentoring provided by ANZ staff for small
businesses seeking to re-establish operations
in fire-affected communities.

19

Over seven months and multiple countries, we
listened carefully in conversations with our employees,
customers, community organisations and government
representatives to better understand the economic,
social and environmental issues facing thecommunities we serve.
Our aim was to develop one consistent and unifying
approach to corporate responsibility that supports
our ambition to become a significant financial services
provider in the region.

We have identified five priorities that will guide our corporate responsibility
programs, initiatives and investments in every country where we operate.

INDIVIDUAL PROSPERITYEDUCATION AND
EMPLOYMENTRURALDEVELOPMENTFINANCIALCAPABILITYRESPONSIBLE
PRACTICESURBANSUSTAINABILITY

We will strengthen andexpand our programs
to create education andemployment opportunities
for disadvantaged
communities, building
long-term careers andlivelihoods.

We will support ruraldevelopment in selectedmarkets in Asia and thePacific by working withgovernments, multi-lateralorganisations and NGOs topilot and share the mosteffective ways to bringbanking services to ruralcommunities.

We will strengthen andexpand our programs tobuild financial capability
so that more low-income
earners benefit.

We will make responsible
practices the foundationof our business strategy.

We will seek to better
understand the social andenvironmental pressureson the built environment
and identify ways tohelp to improve urban
sustainability.

Improving the quality andaccessibility of financial
services in rural China will
be an important focus of
ANZ’s first rural bank in
Liangping in Western China
which opened in October
this year. The ANZ team
there is supporting a 12month development project
for local citrus farmers,
co-ordinating workshops tohelp improve their farming
and marketing practices
and providing them withaccess to financial literacy
programs to encourage
best practice financial
management.

The Saver Plus matchedsavings and financial
literacy program, jointly
developed by ANZ and The
Brotherhood of St Laurence
and delivered with ourcommunity partners, gives
people on low incomes anopportunity to improvetheir financial skills andbuild a long-term savings
habit. Research shows 70
per cent or participants
continue saving the sameamount or more long after
completing the program.
The program has received
Federal Government
funding to help double its
reach to an additional 7000
low income people by 2011.

Helping to create pathways to security and prosperity
through our products and services and innovativeeducation and employment programs for the
disadvantaged.

We will share our experience
with other employers toencourage more private
sector jobs for the mostvulnerable.

THRIVING COMMUNITIESChampioning the development of local leaders andcontributing our skills and resources to help create
solutions to important community issues.

NAVIGATING RESPONSIBLE GROWTH
Making decisions that balance economic, social andenvironmental considerations in every market acrossour super-region.

20

OuR COMMITMENT

This year we developed a new approach tocorporate responsibility to support and strengthen
our business strategy, brand and values and ensure
we are making a significant and focused contribution
to the world we live in.

Our new approach focuses on demonstrating theimportant role we play in society at three levels:

THE ROLE WE PLAY In SOCIETY

CuRRENT INITIATIVESONE
APPROACH TOCORPORATERESPONSIBILITYOUR PRIORITIESOver 250 young Aboriginal
and Torres Strait Island
Australians have gained
valuable workplace andbanking experience inbranches across Australia
through our school-based
traineeship program. Sixty
per cent of trainees so far
have secured a permanent
job at ANZ after theirtraineeship and we haveset a goal to recruit afurther 180 trainees into
this successful programin 2010.

Corporate Responsibility

We will take our mostsuccessful approaches
and adapt them for use inmarkets outside Australia.

We will train our people tomore deeply understandglobal trends relevant toour clients so that together
we can effectively manage
the risks, and make themost of the opportunities
these trends present.

Over seventy senior ANZ
bankers participated in
education sessions led
by WWF-Australia onsustainability ‘mega-trends’
in our region, such as
poverty in developing
economies and transitioning
to a lower carbon economy.
The sessions also focused on
the practical ways to help
our large Corporate andInstitutional clients manage
these issues and at thesame time take advantageof the substantial business
opportunities. The sessions
will be extended to more
staff in our Institutional
business throughout 2010.

By early 2010, around 6,500
ANZ employees will have
moved to ANZ Centre, ournew global headquarters,
designed to provide ourpeople with a vibrant andhealthy workplace in one of
the most environmentallyprogressive workplaces in
the world. Features include
the use of river water for
air conditioning; on-site
generation of electricity
using natural gas and black
water recycling. It is estimatedthe building will produce
70% less greenhouse gas
emissions than a standard
commercial office building.

21

YOUR DIRECTORSThe Board is responsible to shareholders for the governance of ANZ,
and oversees ANZ’s operations and financial performance. It approves thestrategic direction, financial objectives and appropriate risk appetite
for the organisation, and monitors operational performance.

Other grants/
benefits($)

Chief Executive Officer(m SmITH)4

Fixed Pay
($)

STI
($)

LTI5
($)

Amounts paid or granted in respect of 2008/09 year

3,000,000

4,500,000

01,594,0002,3

9,094,000

02,100,000

02

1,589,000

3,689,000

3,000,000

2,400,000

05,0003

5,405,000

less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

TOTAL
($)

0

Amount received – related to prior year allocations

1

Chairman
CHARLES GOODE, AC

Chairman of Risk Committee
JOHn mORSCHEL

Chairman of Technology Committee
DR GREG CLARk

BCom (Hons), MBA (Colombia),
Hon LLD (Melb), Hon LLD (Monash)

DipQS, FAICD

Director since July 1991
Chairman since August 1995
Ex officio member allcommittees

Director since October 2004
Member of the Human
Resources Committee

JERRY ELLISPETER HAY

MA Oxon, FAICD, FAus IMM, FTSE,
Hon LLD (Monash), Hon DR ENG (C.Q.u),
Hon FIE AuST

LLB (Melb)

BSc (Hons), PhD, FAPS, FTSE

Director since February 2004
Member of the Governance andHuman Resources Committees

Director since October
1995 Member of the Audit
and Technology Committees

Director since November
2008 Member of the Risk andGovernance Committees

1. Includes prior year deferred STI/LTI components and/or equity grants which first became payable in the 2008/09 year.
2. Special equity grant – Dec 08 – 700,000 options valued @ $2.27 per option.
3. Provision of Australian taxation return services by PwC.
4. On commencement with ANZ, M Smith was granted three tranches of equity valued at $3 million each. The first of these tranches of deferred shares became available on 2 October 08 – price at vesting $19.0610(based on 1 day VWAP as at 2 Oct 08). Therefore the value of this tranche at date of vesting was $2,096,920. This amount is not reflected in the table above as it relates to a specific equity arrangement associatedwith his commencement and is not a part of his standard remuneration arrangements.
5. LTI grants covering the CEO’s first three years in the role were granted on his commencement and, therefore, no further grant was made in the 2008/09 year – details of the LTI grants are provided in the LTI section
above. No value was received from these LTI grants in the current year. Accordingly, no value for LTI is provided in the table as having been awarded or received in 2008/09.

GmD, Operations, Technology and Shared Services(D CARTWRIGHT)
Amounts paid or granted in respect of 2008/09 year

STI
($)

LTI
($)

850,000

730,000

350,0000

265,000

350,000

0615,000

850,000

465,000

0

128,977

1,443,977

less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

Other grants/
benefits($)

Fixed Pay($)

128,9773,4

Chairman of Audit Committee
DAVID mEIkLEJOHn

BEc (Hons), MEc, Hon DSc (Syd),
Hon DSc (uNSW), Hon DCom (Melb),
Hon DLitt (Macq), Hon LLD (Monash)

BCom, DipEd, FCPA, FAICD, FAIM

Director since February 2007
Member of the Risk andTechnology Committees

Director since October 2004
Member of the Governanceand Risk Committees

Chairman of Human
Resources Committee
ALISOn WATkInSExECUTIVE DIRECTOR
Chief Executive Officer
mICHAEL SmITH, OBE

mR LEE HSIEn YAnG
MSc, BA

BCom, FCA, F Fin, MAICD

Director since November
2008 Member of the Audit
Committee

BSc (Hons)

Director since February 2009
Member of the Technology
Committee

Chief Executive Officer since
1 October 2007

Short-term
Employee Benefits

Post
Employment

Termination
Benefits

Total

Current non-Executive Directors
C Goode Independent Non-Executive Director, Chairman

Deputy CEO and Acting CEO Australia(G HODGES)

Fixed Pay
($)

STI
($)

LTI
($)

Other grants/
benefits
($)

TOTAL
($)

Amounts paid or granted in respect of 2008/09 year

1,000,000

860,000

500,000

145,9404

2,505,6300330,000

500,000

0830,000

1,000,000

530,000

0145,940

1,675,940

less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

0

Amount received – related to prior year allocations

1

Full biography details can be found on our website: http://www.anz.com/about-us/our-company/corporate-governance/board-directors/

DIRECTORS’ REmUnERATIOn 2008/2009

2,058,977

134,810Amount received – related to prior year allocations1
Chairman of Governance Committee
IAn mACFARLAnE, AC

TOTAL
($)

Chief Financial Officer(P mARRIOTT)

Fixed Pay
($)

STI
($)

LTI
($)

Other grants/
benefits
($)

TOTAL
($)

Amounts paid or granted in respect of 2008/09 year

1,000,000

850,000

500,00002,350,0000

325,000

500,000

0825,000

1,000,000

525,00000

1,525,000

less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

0

Amount received – related to prior year allocations1
783,000

13,924–

796,924

G Clark Independent Non-Executive Director

251,083

13,924–265,007

J Ellis Independent Non-Executive Director

253,014

13,924–

266,938

P Hay Independent Non-Executive Director

207,973

13,343–

221,316

Chief Risk Officer(C PAGE)
Amounts paid or granted in respect of 2008/09 year

Fixed Pay
($)

STI
($)

LTI
($)

Other grants/
benefits
($)

TOTAL
($)

850,000

1,600,000

425,000

301,9884

3,176,9880

700,000

425,0000

1,125,000

850,000

900,0000301,988

2,051,988

less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

0

Amount received – related to prior year allocations1

H Lee Independent Non-Executive Director

139,412

10,149–149,561

I macfarlane Independent Non-Executive Director

265,000

13,924–

278,924

CEO, Asia Pacific, Europe and America(A THURSBY)2

Fixed Pay
($)

STI
($)

LTI
($)

D meiklejohn Independent Non-Executive Director

287,000

13,924–300,924

Amounts paid or granted in respect of 2008/09 year

1,000,000

2,600,000

550,000

J morschel Independent Non-Executive Director

272,987

13,924–

286,91101,200,000

550,00001,750,000

1,000,000

1,400,000

088,351

2,488,351

A Watkins Independent Non-Executive Director

231,943

13,477–

245,420

Former non-Executive Directors
m Jackson (Retired March 2009) Independent Non-Executive Director
Total non Executive Directors

22

128,916

6,872

604,392

740,180

2,820,328

127,385

604,392

3,552,105less amounts which must be deferred in respect of 2008/09 year
Amount received – 2008/09 year

Other grants/
benefits($)
88,3513,4

TOTAL
($)
4,238,351

Amount received – related to prior year allocations

10

1. Includes prior year deferred STI/LTI grants which first became payable in the 2008/09 year.
2. In addition to remuneration shown above, A Thursby received an equity grant in 2008/09 in accordance with his employment arrangements on joining ANZ. ANZ agreed to provide A Thursby with 3 separate
tranches of deferred shares to the value of $1 million per annum. The first grant was made on 3 September 2007, the second on 28 August 2008 and the final tranche was granted on 22 September 2009. The
shares are restricted and held in trust for three years from the date of allocation.
3. Taxation services provided by PricewaterhouseCoopers.
4. Relocation expenses.
The above table covers those disclosed Executives who were employed at the Executive level for the full year.

23

Share Registrar

ANZ

AuSTRALIA

Company Secretary’s Office
Level 14 100 Queen Street
Melbourne VIC 3000 Australia
Telephone +613 9273 6141
Facsimile +613 9273 6142
Company Secretary: Bob Santamaria

GPO Box 2975 Melbourne
VIC 3001 Australia
Telephone 1800 11 33 99+613 9415 4010
Facsimile +613 9473 2500
anzshareregistry@computershare.com.au

INVESTOR RELATIONSNEW ZEALAND

Level 22 100 Queen Street
Melbourne VIC 3000 Australia
Telephone +613 9273 6466Facsimile +613 9273 4899
investor.relations@anz.com
Group General Manager:
Jill Craig

Our International
Presence

Important Dates For Shareholders*
DATE

EVENT

Australia

29 April 2010

Half Year Results Announcement

New Zealand

6 May 2010

Interim Dividend Ex-Date

Asia Cambodia, China,
Hong Kong, India, Indonesia,
Japan, Korea, Laos, Malaysia,
Philippines, Singapore, Taiwan
Thailand, Vietnam

12 May 2010

Interim Dividend Record Date

4 November 2010

Final Dividend Ex-Date

Private Bag 92119 Auckland 1142
New Zealand
Telephone 0800 174 007
Facsimile +649 488 8787

Pacific American Samoa, Cook
Islands, East Timor, Fiji, Guam,
Kiribati, New Caledonia, Papua
New Guinea, Samoa, Solomon
Islands, Tonga, Vanuatu

10 November 2010

Final Dividend Record Date

17 December 2010

Final Dividend Payment Date

17 December 2010

Annual General MeetinguNITED KINGDOMEuropeThe Pavilions
Bridgwater Road Bristol BS99 6ZY
Telephone +44 870 702 0000
Facsimile +44 870 703 6101

Middle East

anz.com
Australia and new Zealand Banking Group Limited
ABN 11 005 357 522

united Kingdom
united States of America

1 July 2010

Interim Dividend Payment Date

28 October 2010

Annual Results Announcement* If there are any changes to these dates, the Australian Securities
Exchange will be notified accordingly.

Design and production erd.net.au

Handy Contacts