ANZ Disclosure Statements

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
News Release
For release: 17 February 2017

ANZ New Zealand Disclosure Statement
- three months to December 2016

Australia and New Zealand Banking Group Limited (ANZ) NZ Branch Disclosure Statement
for the three months ended 31 December 2016 was released today, showing unaudited
statutory profit of NZ$403 million for ANZ New Zealand
1
, an increase from NZ$347 million
in the three months ended 31 December 2015.

Unaudited cash profit
2
increased 18% at NZ$459 million compared with NZ$390 million in
the prior comparable period (‘pcp’).

Net interest income increased 3% against pcp, primarily reflecting continued lending
growth.

Net interest margin has contracted due to increased funding costs and demand for fixed rate
home lending.

ANZ New Zealand Chief Executive Officer David Hisco said: “More New Zealanders are
switching from floating to fixed home loans, taking advantage of lower interest rates ahead
of possible changes in market conditions.”

The increase in other operating income reflected higher Global Markets trading income and
valuation gains on derivatives.

Key Points

All comparisons are three months to 31 December 2016 compared with three months to 31 December 2015 unless otherwise noted
 Unaudited statutory profit increased 16% at NZ$403 million.
 Unaudited cash profit increased 18% at NZ$459 million.
 Expenses decreased 3%, or 4% adjusting for charges associated with a change to
the application of ANZ’s software capitalisation policy announced in March 2016
3
,
reflecting ongoing disciplined cost management and productivity gains.
 Provision charge of NZ$37 million reflects a normalising of provision levels in the
portfolios, combined with lower levels of write backs and recoveries than have been
experienced in previous periods.
 Customer deposits increased 7% and gross lending increased 5%.

1
ANZ New Zealand represents all of ANZ’s operations in New Zealand, including ANZ Bank New Zealand Limited, its
parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ.

2
Statutory profit has been adjusted to exclude non-core items to arrive at cash profit, the result for the ongoing
business activities of ANZ New Zealand. All comparisons in Key Points are on a cash profit basis and refer to the
prior comparable period unless otherwise stated. Refer to Summary of Key Financial Information for details of
reconciling items between cash profit and statutory profit.

3
The ANZ 2016 half year results outlined the impact of a number of items referred to as “Specified Items” which
included changes to the application of the Group’s software capitalisation policy effective from 1 October 2015. As
outlined, the higher software capitalisation threshold and direct expensing of more project costs has resulted in
higher software expenses in the three months ended 31 December 2016 compared with the prior comparable
period.

A table of key financial information follows

For media enquiries contact:
Stefan Herrick, 021 749 492

Summary of Key Financial Information
ANZ New Zealand


Profit
3 months
Dec 16
3 months
Dec 15
Dec 16 v
Dec 15
Dec 16 v
Dec 15
Full year
Sep 16
$m$m$m%$m
Net interest income773 748 25 3%3,029
Other operating income266 182 84 46%795
Operating income1,039 930 109 12%3,824
Operating expenses364 374 (10) -3%1,580
Profit before credit impairment and
income tax
675 556 119 21%2,244
Provision for credit impairment37 27 10 37%149
Profit before income tax638 529 109 21%2,095
Income tax expense179 139 40 29%566
Cash profit459 390 69 18%1,529
Reconciliation of cash profit to statutory profit
Cash profit459 390 69 18%1,529
Reconciling items (net of tax):
Economic hedging volatility
1
(8) (31) 23 (29)
Insurance policy asset valuations
2
(48) (12) (36) 42
Statutory profit 403 347 56 16%1,542
Comprising:
Retail256 227 29 13%941
Commercial99 107 (8) -7%413
Operations & Support(3) 10 (13) large3
New Zealand Businesses352 344 8 2%1,357
Institutional99 38 61 large203
Other
8 8 - 0%(31)
Cash profit459 390 69 18%1,529
Reconciling items(56) (43) (13) 13
Statutory profit403 347 56 16%1,542
1. Economic hedging - fair value gains/(losses)
2. Insurance policy assets
ANZ New Zealand enters into economic hedges to manage its interest rate and foreign exchange
risk. Statutory profit includes volatility from fair value gains or losses on economic hedges that
are not designated in accounting hedge relationships under IFRS, as well as ineffectiveness from
designated accounting cash flow and fair value hedges. Fair value gains/(losses) on all of these
economic hedges are excluded from cash profit, as the profit or loss resulting from these
transactions will reverse over time to match the profit or loss from the economically hedged item.
Profit and loss volatility is created by the remeasurement of policyholder assets for changes in
market discount rates, which over time reverses to zero.

---

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
- ANZ NEW ZEALAND
REGISTERED BANK DISCLOSURE STATEMENT




































FOR THE THREE MONTHS ENDED 31 DECEMBER 2016
NUMBER 33 | ISSUED FEBRUARY 2017

Australia and New Zealand Banking Group Limited - ANZ New Zealand


REGISTERED BANK DISCLOSURE STATEMENT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2016


CONTENTS

General Disclosures 2
Income Statement 3
Statement of Comprehensive Income 3
Balance Sheet 4
Condensed Cash Flow Statement 5
Statement of Changes in Equity 6
Notes to the Financial Statements 7
Directors' and New Zealand Chief Executive Officer's Statement 16
















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 in cluding its controlled
entities.
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand identified and treated as if it
were 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 means the New Zealand business of the Overseas Banking Group.
UDC means UDC Finance Limited.
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.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 2


GENERAL DISCLOSURES


This Disclosure Statement has been issued in accordance
with the Order.
Credit Rating Information
The Ultimate Parent Bank has three credit ratings, which are
applicable to its long-term senior unsecured obligations. The
Ultimate Parent Bank’s credit ratings are:
Rating Agency
Current Credit
Rating Qualification
Standard & Poor’s AA- Outlook Negative
Moody’s Investors Service Aa2 Outlook Negative
Fitch Ratings AA- Outlook Stable

Guarantors
No material obligations of the NZ Branch are guaranteed as
at 16 February 2017.
ANZNZ Covered Bond Trust
Certain debt securities (Covered Bonds) issued by the Bank’s
wholly owned subsidiary, ANZ New Zealand (Int’l) Limited,
are guaranteed by ANZNZ Covered Bond Trust Limited (the
Covered Bond Guarantor), solely in its capacity as trustee of
ANZNZ Covered Bond Trust. The Covered Bond Guarantor
has guaranteed the payment of interest and principal of
Covered Bonds with a carrying value as at 31 December 2016
of NZ$4,960 million, pursuant to a guarantee which is
secured over a pool of assets. The Covered Bond Guarantor’s
address for service is Level 9, 34 Shortland Street, Auckland,
New Zealand. The Covered Bond Guarantor is not a member
of the Banking Group and has no credit ratings applicable to
its long term senior unsecured obligations. The Covered
Bonds have been assigned a long term rating of Aaa and
AAA by Moody’s Investors Service and Fitch Ratings
respectively. Details of the pool of assets that secure this
guarantee are provided in note 7.
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 the 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 internet
address anz.com.
Other Matters
APRA has reviewed the level of exposures that can be
provided to the respective New Zealand banking subsidiaries
and branches (New Zealand operations) of the four
Australian parent banks, including the Ultimate Parent Bank.
APRA has confirmed that by 1 January 2021 no more than
5% of the Ultimate Parent Bank’s Level 1 Tier 1 capital can
comprise non-equity exposures to its New Zealand
operations during ordinary times. Exposures in excess of this
limit must be reduced in equal percentages over the five
year transition period and may not increase above the
exposures as at 30 June 2015. This limit does not include
holdings of capital instruments or eligible secured
contingent funding support provided to the Bank during
times of financial stress.
The Ultimate Parent Bank established a New Zealand branch
which was registered on 5 January 2009. The Bank sells, from
time-to-time, residential loans and mortgages into the NZ
Branch to provide funding for the Bank’s business. As at 31
December 2016, the NZ Branch held approximately NZ$5.5
billion of residential loans. To satisfy APRA’s requirements
described above, the Bank intends to repay this funding at
approximately NZ$1.6 billion per annum over the five year
transition period ending 31 December 2020.
APRA has also clarified that contingent funding support by
the Ultimate Parent Bank to the Bank during times of
financial stress must be provided on terms that are
acceptable to APRA and, in aggregate with all other
exposures to its New Zealand operations, must not exceed
50% of the Ultimate Parent Bank’s Level 1 Tier 1 capital. At
present, only covered bonds meet APRA’s criteria for
contingent funding. On this basis, we believe that the
Ultimate Parent Bank will continue to be able to provide
financial support to the Bank.
Directorate
Jane Halton, AO, PSM was appointed as a Non-Executive
Director on 21 October 2016.
Ian Macfarlane retired as a Non-Executive Director on 16
December 2016.
Auditor
ANZ New Zealand’s auditor is KPMG, Chartered Accountants,
Level 9, 10 Customhouse Quay, Wellington, New Zealand.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 3


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



Unaudited Unaudited Audited

3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Interest income 1,619 1,761 6,770
Interest expense 846 1,013 3,741
Net interest income 773 748 3,029
Net trading gains / (losses) 72 (9) 12
Net funds management and insurance income 21 69 414
Other operating income 2 98 65 401
Share of associates' profit 1 - 5
Operating income 965 873 3,861
Operating expenses 369 378 1,600
Profit before credit impairment and income tax 596 495 2,261
Credit impairment charge 5 37 27 147
Profit before income tax 559 468 2,114
Income tax expense 156 121 572
Profit after income tax 403 347 1,542



STATEMENT OF COMPREHENSIVE INCOME




Unaudited Unaudited Audited


3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Profit after income tax

403 347 1,542
Items that will not be reclassified to profit or loss


Actuarial gain on defined benefit schemes

- - 18
Income tax expense relating to items that will not be reclassified

- - (5)
Total items that will not be reclassified to profit or loss

- - 13
Items that may be reclassified subsequently to profit or loss


Unrealised gains / (losses) recognised directly in equity

(15) - 91
Realised losses transferred to income statement

2 1 9
Income tax credit / (expense) relating to items that may be reclassified

3 - (28)
Total items that may be reclassified subsequently to profit or loss

(10) 1 72
Total comprehensive income for the period

393 348 1,627

Australia and New Zealand Banking Group Limited - ANZ New Zealand 4


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



Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Assets
Cash 3,280 3,023 2,274
Settlement balances receivable 498 235 396
Collateral paid 1,700 2,853 2,310
Trading securities 10,996 12,003 11,979
Investments backing insurance contract liabilities 128 178 119
Derivative financial instruments 14,842 13,949 20,969
Available-for-sale assets 4,892 2,710 2,859
Net loans and advances 4 119,169 115,733 120,651
Other assets 609 700 701
Life insurance contract assets 549 510 630
Investments in associates 7 4 7
Premises and equipment 385 391 387
Goodwill and other intangible assets 3,294 3,500 3,424
UDC assets held for sale 18 2,806 - -
Total assets 163,155 155,789 166,706
Interest earning and discount bearing assets 143,084 136,741 140,524
Liabilities
Settlement balances payable 1,225 1,079 1,554
Collateral received 766 1,280 529
Deposits and other borrowings 8 110,195 105,607 106,908
Derivative financial instruments 15,806 16,078 22,398
Current tax liabilities 32 21 22
Deferred tax liabilities 136 117 147
Payables and other liabilities 1,149 1,503 1,137
Provisions 200 193 206
Debt issuances 9 17,962 16,059 20,014
Subordinated debt 10 2,613 2,644 2,624
UDC liabilities held for sale 18 1,511 - -
Total liabilities (excluding head office account)

151,595 144,581 155,539
Net assets (excluding head office account)

11,560 11,208 11,167
Equity


Share capital and initial head office account 8,055 8,058 8,055
Reserves 52 (9) 62
Retained earnings 3,453 3,159 3,050
Total equity and initial head office account 11,560 11,208 11,167
Interest and discount bearing liabilities 125,332 119,559 123,145

Australia and New Zealand Banking Group Limited - ANZ New Zealand 5


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


Unaudited Unaudited Audited

3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016


NZ$m NZ$m NZ$m
Cash flows from operating activities

Interest received 1,618 1,751 6,794
Interest paid (825) (1,060) (3,753)
Other cash inflows provided by operating activities 221 241 958
Other cash outflows used in operating activities (544) (671) (2,140)
Cash flows from operating profits before changes in operating assets and liabilities 470 261 1,859
Net changes in operating assets and liabilities 2,725 1,950 (3,593)
Net cash flows provided by / (used in) operating activities
3,195 2,211 (1,734)
Cash flows from investing activities
Cash inflows provided by investing activities - 38 40
Cash outflows used in investing activities (15) (38) (100)
Net cash flows used in investing activities (15) - (60)
Cash flows from financing activities
Cash inflows provided by financing activities 250 - 7,380
Cash outflows used in financing activities (2,448) (1,681) (5,797)
Net cash flows provided by / (used in) financing activities
(2,198) (1,681) 1,583
Net increase / (decrease) in cash and cash equivalents 982 530 (211)
Cash and cash equivalents at beginning of the period 2,315 2,526 2,526
Cash and cash equivalents at end of the period 3,297 3,056 2,315

Australia and New Zealand Banking Group Limited - ANZ New Zealand 6


The notes to the financial statements form part of and should be read in conjunction with these financial statements
STATEMENT OF CHANGES IN EQUITY




Share capital
and initial
head office
account
Available-
for-sale
revaluation
reserve
Cash flow
hedging
reserve
Retained
earnings
Total
equity

NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2015 (Audited)
8,058 - (10) 2,812 10,860
Profit after income tax - - - 347 347
Realised losses transferred to the income statement - - 1 - 1
Total comprehensive income for the period - - 1 347 348
As at 31 December 2015 (Unaudited) 8,058 - (9) 3,159 11,208

As at 1 October 2015 (Audited)
8,058 - (10) 2,812 10,860
Profit after income tax - - - 1,542 1,542
Unrealised gains / (losses) recognised directly in equity - (2) 93 - 91
Realised losses transferred to the income statement - 2 7 - 9
Actuarial gain on defined benefit schemes - - - 18 18
Income tax expense on items recognised directly in equity - - (28) (5) (33)
Total comprehensive income for the period - - 72 1,555 1,627
Shares cancelled on amalgamation (3) - - 3 -
Ordinary dividend paid - - - (1,320) (1,320)
As at 30 September 2016 (Audited)
8,055 - 62 3,050 11,167
Profit after income tax - - - 403 403
Unrealised gains / (losses) recognised directly in equity - 7 (22) - (15)
Realised losses transferred to the income statement - - 2 - 2
Income tax credit / (expense) on items recognised directly in equity - (2) 5 - 3
Total comprehensive income for the period - 5 (15) 403 393
As at 31 December 2016 (Unaudited)
8,055 5 47 3,453 11,560

Australia and New Zealand Banking Group Limited - ANZ New Zealand 7


NOTES TO THE FINANCIAL STATEMENTS


1. SIGNIFICANT ACCOUNTING POLICIES

(i) Reporting entity and statement of compliance
These interim financial statements are for ANZ New Zealand
for the three months ended 31 December 2016. They have
been prepared in accordance with New Zealand Generally
Accepted Accounting Practice as appropriate for profit
oriented entities, the requirements of NZ IAS 34 Interim
Financial Reporting, IAS 34 Interim Financial Reporting and the
Order, and should be read in conjunction with ANZ New
Zealand’s financial statements for the year ended 30
September 2016.
(ii) Basis of measurement
These financial statements have been prepared on a going
concern basis in accordance with historical cost concepts
except that the following assets and liabilities are stated at
their fair value:
• derivative financial instruments
• available-for-sale financial assets
• financial instruments held for trading
• financial instruments designated at fair value through
profit and loss.
(iii) Changes in accounting policies
The accounting policies adopted by ANZ New Zealand are
consistent with those adopted and disclosed in the previous
full year Disclosure Statement.
(iv) Presentation currency and rounding
The amounts contained in the financial statements are
presented in millions of New Zealand dollars, unless
otherwise stated.
(v) Comparatives
Certain amounts in the comparative information have been
reclassified to ensure consistency with the current period’s
presentation.
(vi) Principles of consolidation
The consolidated financial statements of ANZ New Zealand
comprise the financial statements of the NZ Branch and all
the New Zealand businesses of all the subsidiaries of the
Ultimate Parent Bank (those entities where it is determined
that the Ultimate Parent Bank has capacity to control).


2. OTHER OPERATING INCOME


Unaudited Unaudited Audited

3 months to 3 months to Year to

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Net fee income 101 101 403
Fair value loss on hedging activities and financial liabilities designated at fair value (11) (45) (41)
Other income 8 9 39
Total other operating income 98 65 401

Australia and New Zealand Banking Group Limited - ANZ New Zealand 8


NOTES TO THE FINANCIAL STATEMENTS


3. SEGMENT ANALYSIS

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.
During the year ended 30 September 2016, Wealth was
integrated with Retail, having been disclosed separately
previously. Segment reporting has been updated to reflect
this change and other minor changes to ANZ New Zealand’s
structure. Comparative data has been adjusted to be
consistent with the current period’s segment definitions.
Retail
Retail provides products and services to Retail, Private
Banking, and Business Banking customers via the branch
network, mortgage specialists, relationship managers, the
contact centre and a variety of self service channels (internet
banking, phone banking, ATMs, website and mobile phone
banking). Retail and Private Banking customers have personal
banking requirements and Business Banking customers
consist primarily of small enterprises with annual revenues of
less than NZ$5 million. Core products and services include
current and savings accounts, unsecured lending (credit
cards, personal loans and overdrafts), home loans secured by
mortgages over property, investment products,
superannuation and insurance services.
Commercial
Commercial provides services to Commercial & Agri
(CommAgri) and UDC customers. CommAgri customers
consist of primarily privately owned medium to large
enterprises. Commercial's relationship with these businesses
ranges from simple banking requirements with revenue from
deposit and transactional facilities, and cash flow lending, to
more complex funding arrangements with revenue sourced
from a wider range of products. UDC is principally involved in
the financing and leasing of plant, vehicles and equipment,
mainly for small and medium sized businesses, as well as
investment products.
Institutional
Institutional provides financial services through a number of
specialised units to large multi-banked corporations, often
global, which require sophisticated product and risk
management solutions. Those financial services include loan
structuring, foreign exchange, wholesale money market
services and transaction banking.
Other
Other includes treasury and back office support functions,
none of which constitutes a separately reportable segment.

Business segment analysis
1



Retail Commercial Institutional Other Total

NZ$m NZ$m NZ$m NZ$m NZ$m
Unaudited 3 months to 31/12/2016

External revenues 737 456 173 (401) 965
Intersegment revenues (128) (227) 16 339 -
Total revenues 609 229 189 (62) 965
Profit / (loss) after income tax 256 99 99 (51) 403
Unaudited 3 months to 31/12/2015

External revenues 697 491 91 (406) 873
Intersegment revenues (119) (263) 13 369 -
Total revenues 578 228 104 (37) 873
Profit / (loss) after income tax 227 107 38 (25) 347
Audited year to 30/09/2016

External revenues 2,900 1,885 424 (1,348) 3,861
Intersegment revenues (509) (981) 60 1,430 -
Total revenues 2,391 904 484 82 3,861
Profit / (loss) after income tax 941 413 203 (15) 1,542

1
Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 9


NOTES TO THE FINANCIAL STATEMENTS


4. NET LOANS AND ADVANCES

Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Overdrafts
1
836 1,012 1,133
Credit card outstandings 1,728 1,753 1,663
Term loans - housing
1
73,926 69,078 73,330
Term loans - non-housing 44,429 43,147 43,651
Lease receivables 222 232 226
Hire purchase 1,164 978 1,098
Total gross loans and advances 122,305 116,200 121,101
Less: Provision for credit impairment 5 (648) (623) (632)
Less: Unearned income (218) (217) (211)
Add: Capitalised brokerage/mortgage origination fees 361 342 366
Add: Customer liability for acceptances 31 31 27
Net loans and advances (including assets classified as held for sale) 121,831 115,733 120,651
Less: UDC net loans and advances held for sale 18 (2,662) - -
Net loans and advances 119,169 115,733 120,651

1
Comparative amounts have been changed to reclassify revolving credit facilities secured by residential property provided to corporate customers from Overdrafts to Term
loans – housing (31/12/2015 NZ$405 million).



5. PROVISION FOR CREDIT IMPAIRMENT

Retail
mortgages
Other retail
exposures
Non-retail
exposures Total

NZ$m NZ$m NZ$m NZ$m
Unaudited 31/12/2016

Collective provision 85 126 251 462
Individual provision 35 6 145 186
Total provision for credit impairment 120 132 396 648

Collective credit impairment release - (4) (12) (16)
Individual credit impairment charge / (release) (4) 14 43 53
Credit impairment charge / (release) (4) 10 31 37
Unaudited 31/12/2015

Collective provision 87 124 254 465
Individual provision 55 7 96 158
Total provision for credit impairment 142 131 350 623

Collective credit impairment charge / (release) - (3) 1 (2)
Individual credit impairment charge / (release) (5) 17 17 29
Credit impairment charge / (release) (5) 14 18 27
Audited 30/09/2016

Collective provision 85 130 263 478
Individual provision 40 6 108 154
Total provision for credit impairment 125 136 371 632

Collective credit impairment charge / (release) (2) 3 10 11
Individual credit impairment charge / (release) (12) 70 78 136
Credit impairment charge / (release) (14) 73 88 147

Australia and New Zealand Banking Group Limited - ANZ New Zealand 10


NOTES TO THE FINANCIAL STATEMENTS


6. IMPAIRED ASSETS AND PAST DUE ASSETS

Retail
mortgages
Other retail
exposures
Non-retail
exposures Total

NZ$m NZ$m NZ$m NZ$m
Unaudited 31/12/2016

Total impaired assets 58 23 459 540
Loans that are at least 90 days past due but not impaired 114 30 19 163
Unaudited 31/12/2015

Total impaired assets 92 29 246 367
Loans that are at least 90 days past due but not impaired 116 32 29 177
Audited 30/09/2016
Total impaired assets 64 27 342 433
Loans that are at least 90 days past due but not impaired 103 26 23 152

7. ASSETS CHARGED AS SECURITY FOR LIABILITIES
The carrying amounts of assets pledged as security are as follows. These amounts exclude the amounts disclosed as collateral paid in 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 Agreements.

Carrying Amount Related Liability

Unaudited Unaudited Audited Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

31/12/2016 31/12/2015 30/09/2016
NZ$m NZ$m NZ$m

NZ$m NZ$m NZ$m
Securities sold under agreements to repurchase 344 538 77 344 539 76
Residential mortgages pledged as security for covered bonds 10,749 7,643 10,265 4,960 4,828 6,218
Assets pledged as collateral for UDC secured investments 2,763 2,498 2,665 1,460 1,726 1,592
UDC Secured Investments are secured by a security interest granted under the Trust Deed over all of UDC Finance Limited's (UDC) present
and future assets and undertakings, to Trustees Executors Limited, as supervisor. The assets subject to the security interest comprise
mainly loans to UDC's customers and certain plant and equipment. The security interest secures all amounts payable by UDC on the UDC
Secured Investments and all other moneys payable by UDC under the Trust Deed.
ANZNZ Covered Bond Trust (the Covered Bond Trust)
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by the Bank
which are security for the guarantee by ANZNZ Covered Bond Trust Limited as trustee of the Covered Bond Trust of issuances of covered
bonds by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The assets of the Covered Bond
Trust are not available to creditors of the Bank, although the Bank (or its liquidator or statutory manager) may have a claim against the
residual assets of the Covered Bond Trust (if any) after all prior ranking creditors of the Covered Bond Trust have been satisfied.
ANZ New Zealand continues to recognise the assets of the Covered Bond Trust on its balance sheet as, although they are pledged as
security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8. DEPOSITS AND OTHER BORROWINGS
Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Term deposits 41,371 36,324 39,665
On demand and short term deposits 42,944 42,984 42,323
Deposits not bearing interest 8,562 7,154 7,780
UDC secured investments 7 1,460 1,726 1,592
Total customer deposits 94,337 88,188 91,360
Certificates of deposit 2,106 2,642 2,237
Commercial paper 7,466 5,858 5,364
Securities sold under agreements to repurchase 344 539 76
Borrowings from Ultimate Parent Bank and Immediate Parent Company 7,402 8,380 7,871
Deposits and other borrowings (including liabilities classified as held for sale) 111,655 105,607 106,908
Less: UDC secured investments held for sale 18 (1,460) - -
Deposits and other borrowings 110,195 105,607 106,908

Australia and New Zealand Banking Group Limited - ANZ New Zealand 11


NOTES TO THE FINANCIAL STATEMENTS


9. DEBT ISSUANCES
Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Domestic bonds 3,875 3,525 3,975
U.S. medium term notes
1
7,182 5,253 6,883
Euro medium term notes
1
1,989 2,434 2,792
Covered bonds
1
4,960 4,828 6,218
Index linked notes - 36 -
Total debt issuances 18,006 16,076 19,868
Fair value hedge adjustment (10) 117 192
Less debt issuances held by the Bank (34) (134) (46)
Total debt issuances 17,962 16,059 20,014

1
These debt issuances are issued by ANZ New Zealand (Int’l) Limited and are guaranteed by the Bank.

Debt issuances, other than covered bonds, are unsecured and rank equally with other unsecured liabilities of ANZ New Zealand.

Domestic bonds includes two series of bonds quoted on the NZX Debt Market which mature on 2 September 2021 and 1 September
2023 respectively (the Bonds). NZX Regulation has granted the Bank a waiver in respect of the Bonds from the requirement in Main
Board/Debt Market Listing Rule 5.2.3 (as modified by NZX’s ruling on Rule 5.2.3 issued on 29 September 2015) to enable the Bank to apply
for quotation of the Bonds on the NZX Debt Market even though the Bonds may not initially be held by at least 100 members of the
public holding at least 25% of the Bonds issued. The waiver has been granted for a period of 6 months from the relevant dates of
quotation of the Bonds on the NZX Debt Market. The effect of the waiver from NZX Listing Rule 5.2.3 is that initially the Bonds may not be
widely held and there may be reduced liquidity in the Bonds. To the extent that there is a material reduction in the spread of the Bonds,
the Bank will notify NZX accordingly.


10. SUBORDINATED DEBT

Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
ANZ Capital Notes
1


AUD 970m ANZ Capital Notes 3 (ANZ CN3)
2


997 1,020 1,005
NZD 500m ANZ New Zealand Capital Notes (ANZ NZ CN)
3
496 495 496
Perpetual subordinated debt


NZD 835m perpetual subordinated bond
3
835 835 835
AUD 10m perpetual subordinated floating rate loan 10 11 10
Dated subordinated debt


AUD 265m subordinated floating rate loan 275 283 278
Total subordinated debt 2,613 2,644 2,624

1
These instruments qualify as additional tier 1 capital of the Overseas Banking Group.
2
These instruments are quoted on the Australian Stock Exchange.

3
These instruments are quoted on the NZX Debt Market.


11. RELATED PARTY BALANCES
Unaudited Unaudited Audited


31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Total due from related parties 4,048 3,815 4,903
Total due to related parties 12,242 12,995 13,614

Australia and New Zealand Banking Group Limited - ANZ New Zealand 12


NOTES TO THE FINANCIAL STATEMENTS


12. CAPITAL ADEQUACY

Basel III capital ratios
Overseas Banking Group
Ultimate Parent Bank
(Extended Licensed Entity)

31/12/2016 31/12/2015 30/09/2016 30/09/2016 30/09/2015
Unaudited

Common equity tier 1 capital 9.5% 9.4% 9.6% 9.7% 9.6%
Tier 1 capital 11.4% 11.2% 11.8% 12.1% 11.6%
Total capital 14.0% 13.3% 14.3% 14.7% 13.7%

For calculation of minimum capital requirements under Pillar 1 (Capital Requirements) of the Basel Accord, APRA has accredited the
Overseas Banking Group to use the Advanced Internal Ratings Based (AIRB) methodology for calculation of credit risk weighted assets and
the Advanced Measurement Approach (AMA) for the operational risk weighted asset equivalent.
Under prudential regulations, the Overseas Banking Group is required to maintain a Prudential Capital Ratio (PCR) as determined by APRA.
The Overseas Banking Group exceeded the PCR set by APRA as at 31 December 2016 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 December 2016. The Overseas Banking
Group’s Pillar 3 disclosure document for the quarter ended 31 December 2016, 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 BS2B.
Unaudited 31/12/2016
Implied risk
weighted
exposure
Notional
capital charge

NZ$m NZ$m
Interest rate risk 5,192 415
Foreign currency risk 22 2
Equity risk 1 -
5,215 417

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

On-balance
sheet
Off-balance
sheet Total Unaudited 31/12/2016

NZ$m NZ$m NZ$m
LVR range
Does not exceed 60% 30,996 4,956 35,952
Exceeds 60% and not 70% 15,766 1,419 17,185
Exceeds 70% and not 80% 18,686 1,475 20,161
Does not exceed 80% 65,448 7,850 73,298
Exceeds 80% and not 90% 4,095 175 4,270
Exceeds 90% 1,852 207 2,059
Total 71,395 8,232 79,627

Australia and New Zealand Banking Group Limited - ANZ New Zealand 13


NOTES TO THE FINANCIAL STATEMENTS


Liquidity portfolio management
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.
Unaudited

31/12/2016

NZ$m
Cash and balances with central banks 2,899
Certificates of deposit 809
Government, local body stock and bonds 6,409
Government treasury bills 850
Reserve Bank bills 1,253
Other bonds 6,688
Total liquidity portfolio 18,908

The Bank also held unencumbered internal residential mortgage backed securities which would entitle the Banking Group to enter into
repurchase transactions with a value of NZ$7,305 million at 31 December 2016.


13. FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities not measured at fair value
Below is a comparison of the carrying amounts as reported on the balance sheet and fair values of financial asset and liability categories
other than 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.

Unaudited

Unaudited

Audited

31/12/2016 31/12/2015 30/09/2016

Carrying
amount Fair value
Carrying
amount Fair value
Carrying
amount Fair value

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Assets
Net loans and advances
1
121,831 121,929 115,733 116,299 120,651 120,931
Liabilities

Deposits and other borrowings
2
111,655 111,839 105,607 105,780 106,908 107,106
Debt issuances
1
17,962 18,094 16,059 16,152 20,014 20,148
Subordinated debt 2,613 2,644 2,644 2,638 2,624 2,636

1
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.
2
Includes commercial paper (note 8) designated at fair value through profit or loss.

Financial assets and financial liabilities measured at fair value in the balance sheet
ANZ New Zealand uses a valuation method within the following hierarchy to determine the carrying amount of assets and liabilities held
at fair value, all of which are recurring fair value measurements. There are no assets or liabilities measured at fair value on a non-recurring
basis.
• Level 1 – Financial instruments that have been valued by reference to unadjusted quoted prices in active markets for identical
financial instruments. This category includes financial instruments valued using quoted yields where available for specific debt
securities.
• Level 2 – Financial instruments that have been valued through valuation techniques incorporating inputs other than quoted prices
within Level 1 that are observable for a similar financial asset or liability, either directly or indirectly.
• Level 3 – Financial instruments that have been valued using valuation techniques which incorporate significant inputs that are not
based on observable market data (unobservable inputs).
There have been no substantial changes in the valuation techniques applied to different classes of financial instruments during the period.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 14


NOTES TO THE FINANCIAL STATEMENTS


Valuation hierarchy

Unaudited

Unaudited

Audited

31/12/2016

31/12/2015

30/09/2016

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Financial assets
Trading securities 10,880 116 - 10,996 11,804 199 - 12,003 11,937 42 - 11,979
Derivative financial instruments 25 14,811 6 14,842 19 13,925 5 13,949 3 20,959 7 20,969
Available-for-sale assets 3,981 910 1 4,892 1,384 1,324 2 2,710 1,671 1,187 1 2,859
Investments backing insurance contract
liabilities
5 123 - 128

3 175 - 178 5 114 - 119
Total financial assets held at fair value 14,891 15,960 7 30,858 13,210 15,623 7 28,840 13,616 22,302 8 35,926
Financial liabilities


Deposits and other borrowings - 7,466 - 7,466 - 5,858 - 5,858 - 5,364 - 5,364
Derivative financial instruments 27 15,775 4 15,806 2 16,073 3 16,078 46 22,350 2 22,398
Payables and other liabilities 292 - - 292 467 - - 467 157 - - 157
Total financial liabilities held at fair value 319 23,241 4 23,564 469 21,931 3 22,403 203 27,714 2 27,919


14. CONCENTRATIONS OF CREDIT RISK TO INDIVIDUAL COUNTERPARTIES

ANZ New Zealand measures its concentration of credit risk to bank counterparties on the basis of actual exposures, and to non-bank
counterparties on the basis of limits.

For the three months ended 31 December 2016 there were no individual counterparties, excluding connected parties, governments and
banks with long term credit ratings of A- or above, where ANZ New Zealand’s period end or peak end-of-day credit exposure equalled or
exceeded 10% of the Overseas Banking Group’s equity as at the end of the period.
This credit exposure information does not include exposures to counterparties if they are booked outside New Zealand.


15. INSURANCE BUSINESS

ANZ New Zealand conducts insurance business through its subsidiary OnePath Life (NZ) Limited (OnePath Life).
ANZ New Zealand’s aggregate amount of insurance business comprises the total assets of OnePath Life of NZ$857 million (31/12/2015:
NZ$881 million; 30/09/2016 NZ$926 million), which is 0.5% (31/12/2015: 0.6%; 30/09/2016 0.6%) of the total consolidated assets of ANZ
New Zealand.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 15


NOTES TO THE FINANCIAL STATEMENTS


16. CREDIT RELATED COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES

Unaudited Unaudited Audited
31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Contract amount of:

Credit related commitments - facilities provided
Undrawn facilities
1
27,143 27,040 27,046
Guarantees and contingent liabilities


Guarantees and letters of credit
874 888 850
Performance related contingencies 1,550 1,470 1,611
Total guarantees and contingent liabilities 2,424 2,358 2,461
Total Credit Related Commitments, Guarantees and Contingent Liabilities 29,567 29,398 29,507
¹ The comparative amount for undrawn facilities as at 31 December 2015 has been reduced by NZ$5,353 million following a review of the composition of commitments.
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
ANZ New Zealand has other contingent liabilities in respect of actual and possible claims and court proceedings.
An assessment of ANZ New Zealand’s likely loss in respect of these matters has been made on a case-by-case basis and provision made
where deemed necessary.

17. ADDITIONAL DISCLOSURES

NZ Branch Funding
Unaudited
31/12/2016

NZ$m
Total liabilities of the NZ Branch less amounts due to related parties 1,094

Overseas Banking Group Profitability and Size

Unaudited

30/09/2016

AUDm
Profit for the year ended 30/09/2016
1
5,720
Net profit after tax for the 12 months to 30/09/2016 as a percentage of average total assets 0.63%
Total assets 914,869
Percentage change in total assets in the 12 months to 30/09/2016 2.81%

1
Net profit after tax for the period includes AUD 11 million of profit attributable to non-controlling interests.

Overseas Banking Group asset quality

Unaudited
30/09/2016
AUDm
Gross impaired assets 3,173
Gross impaired assets as a percentage of total assets 0.3%
Individual provision 1,307
Individual provision as a percentage of gross impaired assets 41.2%
Collective provision 2,876

18. SUBSEQUENT EVENTS

On 11 January 2017, the Bank announced that it had entered into a conditional agreement to sell UDC to HNA Group for approximately
NZ$660 million. Completion is expected late in the second half of the 2017 calendar year. The assets and liabilities of UDC are classified as
held for sale as at 31 December 2016.

Australia and New Zealand Banking Group Limited - ANZ New Zealand 16



DIRECTORS' AND NEW ZEALAND CHIEF EXECUTIVE OFFICER'S
STATEMENT

As at the date on which this Disclosure Statement is signed, after due enquiry, each Director of the Ultimate Parent Bank and the Chief
Executive Officer – NZ Branch believes that:
(i) The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements (Overseas
Incorporated Registered Banks) Order 2014
(ii) The Disclosure Statement is not false or misleading.
Over the three months ended 31 December 2016, after due enquiry, each Director of the Ultimate Parent Bank and the Chief Executive
Officer – NZ Branch believes that:
(i) The Ultimate Parent Bank has complied with all Conditions of Registration that applied during that period
(ii) The NZ Branch and the Bank had systems in place to monitor and control adequately the material risks of Relevant Members of ANZ
New Zealand including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk and other
business risks, and that those systems were being properly applied.
This Disclosure Statement is dated 16 February 2017, and has been signed by the Chairman of the Ultimate Parent Bank, on
behalf of all Directors, and by the Chief Executive Officer – NZ Branch.





David Gonski, AC Anthony Bradshaw
Chairman, Chief Executive Officer – NZ Branch
on behalf of the Directors:

Ilana Atlas
Paula Dwyer
Shayne Elliott
David Gonski, AC
Jane Halton, AO, PSM
Lee Hsien Yang
Graeme Liebelt
John Macfarlane

---

ANZ BANK NEW ZEALAND LIMITED
REGISTERED BANK DISCLOSURE STATEMENT




































FOR THE THREE MONTHS ENDED 31 DECEMBER 2016
NUMBER 84 | ISSUED FEBRUARY 2017

ANZ Bank New Zealand Limited


REGISTERED BANK DISCLOSURE STATEMENT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2016


CONTENTS

General Disclosures 2
Income Statement 3
Statement of Comprehensive Income 3
Balance Sheet 4
Condensed Cash Flow Statement 5
Statement of Changes in Equity 6
Notes to the Financial Statements 7
Directors' Statement 16
















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 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 in cluding its controlled
entities.
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand identified and treated as if it
were 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 means the New Zealand business of the Overseas Banking Group.
UDC means UDC Finance Limited.
Registered Office is Ground Floor, ANZ Centre, 23-29 Albert Street, Auckland, New Zealand, which is also the Banking Group’s address for
service.
RBNZ means the Reserve Bank of New Zealand.
APRA means the Australian Prudential Regulation Authority.
the Order means the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014.
Any term or expression which is defined in, or in the manner prescribed by, the Order shall have the meaning given in or prescribed by the
Order.

ANZ Bank New Zealand Limited 2


GENERAL DISCLOSURES


This Disclosure Statement has been issued in accordance
with the Order.
Credit Rating Information
The Bank has three credit ratings, which are applicable to its
long-term senior unsecured obligations. The Bank’s credit
ratings are:
Rating Agency
Current Credit
Rating Qualification
Standard & Poor’s AA- Outlook Negative
Moody’s Investors Service Aa3 Outlook Negative
Fitch Ratings AA- Outlook Stable

Guarantors
No material obligations of the Bank are guaranteed as at 10
February 2017.
ANZNZ Covered Bond Trust
Certain debt securities (Covered Bonds) issued by the Bank’s
wholly owned subsidiary, ANZ New Zealand (Int’l) Limited,
are guaranteed by ANZNZ Covered Bond Trust Limited (the
Covered Bond Guarantor), solely in its capacity as trustee of
ANZNZ Covered Bond Trust. The Covered Bond Guarantor
has guaranteed the payment of interest and principal of
Covered Bonds with a carrying value as at 31 December 2016
of NZ$4,960 million, pursuant to a guarantee which is
secured over a pool of assets. The Covered Bond Guarantor’s
address for service is Level 9, 34 Shortland Street, Auckland,
New Zealand. The Covered Bond Guarantor is not a member
of the Banking Group and has no credit ratings applicable to
its long term senior unsecured obligations. The Covered
Bonds have been assigned a long term rating of Aaa and
AAA by Moody’s Investors Service and Fitch Ratings
respectively. Details of the pool of assets that secure this
guarantee are provided in note 7.
Changes to Conditions of Registration
The conditions of registration applying to the Bank were
amended on 1 October 2016 to refer to a revised version of
the RBNZ document entitled “Framework for Restrictions on
High-LVR Residential Mortgage Lending” (BS19) which includes
changes to the high-LVR restrictions.
Adoption of this amendment has not resulted in any material
change to the Banking Group’s reported result or financial
position.
Other Matters
APRA has reviewed the level of exposures that can be
provided to the respective New Zealand banking subsidiaries
and branches (New Zealand operations) of the four
Australian parent banks, including the Ultimate Parent Bank.
APRA has confirmed that by 1 January 2021 no more than
5% of the Ultimate Parent Bank’s Level 1 Tier 1 capital can
comprise non-equity exposures to its New Zealand
operations during ordinary times. Exposures in excess of this
limit must be reduced in equal percentages over the five
year transition period and may not increase above the
exposures as at 30 June 2015. This limit does not include
holdings of capital instruments or eligible secured
contingent funding support provided to the Bank during
times of financial stress.
The Ultimate Parent Bank established a New Zealand branch
which was registered on 5 January 2009. The Bank sells, from
time-to-time, residential loans and mortgages into the NZ
Branch to provide funding for the Bank’s business. As at 31
December 2016, the NZ Branch held approximately NZ$5.5
billion of residential loans. To satisfy APRA’s requirements
described above, the Bank intends to repay this funding at
approximately NZ$1.6 billion per annum over the five year
transition period ending 31 December 2020.
APRA has also clarified that contingent funding support by
the Ultimate Parent Bank to the Bank during times of
financial stress must be provided on terms that are
acceptable to APRA and, in aggregate with all other
exposures to its New Zealand operations, must not exceed
50% of the Ultimate Parent Bank’s Level 1 Tier 1 capital. At
present, only covered bonds meet APRA’s criteria for
contingent funding. On this basis, we believe that the
Ultimate Parent Bank will continue to be able to provide
financial support to the Bank.
Auditor
The Banking Group’s auditor is KPMG, Chartered
Accountants, Level 9, 10 Customhouse Quay, Wellington,
New Zealand.

ANZ Bank New Zealand Limited 3


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



Unaudited Unaudited Audited

3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Interest income 1,551 1,661 6,423
Interest expense 789 920 3,421
Net interest income 762 741 3,002
Net trading gains / (losses) 72 (9) 12
Net funds management and insurance income 21 69 414
Other operating income 2 96 67 421
Share of associates' profit 1 - 5
Operating income 952 868 3,854
Operating expenses 369 378 1,599
Profit before credit impairment and income tax 583 490 2,255
Credit impairment charge 5 38 28 150
Profit before income tax 545 462 2,105
Income tax expense 152 120 570
Profit after income tax 393 342 1,535



STATEMENT OF COMPREHENSIVE INCOME




Unaudited Unaudited Audited


3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Profit after income tax

393 342 1,535
Items that will not be reclassified to profit or loss


Actuarial gain on defined benefit schemes

- - 18
Income tax expense relating to items that will not be reclassified

- - (5)
Total items that will not be reclassified to profit or loss

- - 13
Items that may be reclassified subsequently to profit or loss


Unrealised gains / (losses) recognised directly in equity

(15) - 91
Realised losses transferred to income statement

2 1 9
Income tax credit / (expense) relating to items that may be reclassified

3 - (28)
Total items that may be reclassified subsequently to profit or loss

(10) 1 72
Total comprehensive income for the period

383 343 1,620

ANZ Bank New Zealand Limited 4


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



Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Assets
Cash 3,280 3,023 2,274
Settlement balances receivable 507 235 396
Collateral paid 1,700 2,853 2,310
Trading securities 10,996 12,003 11,979
Investments backing insurance contract liabilities 128 178 119
Derivative financial instruments 14,929 14,031 21,110
Available-for-sale assets 4,892 2,710 2,859
Net loans and advances 4 113,617 108,231 114,623
Other assets 611 700 701
Life insurance contract assets 549 510 630
Investments in associates 7 4 7
Premises and equipment 385 391 387
Goodwill and other intangible assets 3,294 3,500 3,424
UDC assets held for sale 17 2,806 - -
Total assets 157,701 148,369 160,819
Interest earning and discount bearing assets 137,535 129,231 134,489
Liabilities
Settlement balances payable 1,461 1,408 1,771
Collateral received 766 1,280 529
Deposits and other borrowings 8 102,810 97,264 99,066
Derivative financial instruments 15,326 15,415 21,956
Current tax liabilities 28 24 21
Deferred tax liabilities 134 117 145
Payables and other liabilities 1,128 1,470 1,119
Provisions 200 193 206
Debt issuances 9 17,962 16,059 20,014
Subordinated debt 10 3,282 2,343 3,282
UDC liabilities held for sale 17 1,511 - -
Total liabilities

144,608 135,573 148,109
Net assets

13,093 12,796 12,710
Equity


Share capital 8,888 8,888 8,888
Reserves 52 (9) 62
Retained earnings 4,153 3,917 3,760
Total equity 13,093 12,796 12,710
Interest and discount bearing liabilities 118,616 110,916 115,961

ANZ Bank New Zealand Limited 5


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


Unaudited Unaudited Audited

3 months to 3 months to Year to


31/12/2016 31/12/2015 30/09/2016


NZ$m NZ$m NZ$m
Cash flows from operating activities

Interest received 1,549 1,650 6,443
Interest paid (772) (931) (3,416)
Other cash inflows provided by operating activities 221 245 976
Other cash outflows used in operating activities (543) (668) (2,143)
Cash flows from operating profits before changes in operating assets and liabilities 455 296 1,860
Net changes in operating assets and liabilities 2,740 1,970 (4,434)
Net cash flows provided by / (used in) operating activities

3,195 2,266 (2,574)
Cash flows from investing activities
Cash inflows provided by investing activities - 38 40
Cash outflows used in investing activities (15) (38) (100)
Net cash flows used in investing activities (15) - (60)
Cash flows from financing activities
Cash inflows provided by financing activities 250 - 8,318
Cash outflows used in financing activities (2,448) (1,681) (5,840)
Net cash flows provided by / (used in) financing activities

(2,198) (1,681) 2,478
Net increase / (decrease) in cash and cash equivalents 982 585 (156)
Cash and cash equivalents at beginning of the period 2,315 2,471 2,471
Cash and cash equivalents at end of the period 3,297 3,056 2,315

ANZ Bank New Zealand Limited 6


The notes to the financial statements form part of and should be read in conjunction with these financial statements
STATEMENT OF CHANGES IN EQUITY



Share capital
Available-
for-sale
revaluation
reserve
Cash flow
hedging

reserve
Retained
earnings
Total
equity

NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2015 (Audited)
8,888 - (10) 3,575 12,453
Profit after income tax - - - 342 342
Realised losses transferred to the income statement - - 1 - 1
Total comprehensive income for the period - - 1 342 343
As at 31 December 2015 (Unaudited) 8,888 - (9) 3,917 12,796

As at 1 October 2015 (Audited) 8,888 - (10) 3,575 12,453
Profit after income tax - - - 1,535 1,535
Unrealised gains / (losses) recognised directly in equity - (2) 93 - 91
Realised losses transferred to the income statement - 2 7 - 9
Actuarial gain on defined benefit schemes - - - 18 18
Income tax expense on items recognised directly in equity - - (28) (5) (33)
Total comprehensive income for the period - - 72 1,548 1,620
Ordinary dividend paid - - - (1,350) (1,350)
Preference dividend paid - - - (13) (13)
As at 30 September 2016 (Audited)
8,888 - 62 3,760 12,710
Profit after income tax - - - 393 393
Unrealised gains / (losses) recognised directly in equity - 7 (22) - (15)
Realised losses transferred to the income statement - - 2 - 2
Income tax credit / (expense) on items recognised directly in equity - (2) 5 - 3
Total comprehensive income for the period - 5 (15) 393 383
As at 31 December 2016 (Unaudited) 8,888 5 47 4,153 13,093

ANZ Bank New Zealand Limited 7


NOTES TO THE FINANCIAL STATEMENTS


1. SIGNIFICANT ACCOUNTING POLICIES

(i) Reporting entity and statement of compliance
These interim financial statements are for the Banking Group
for the three months ended 31 December 2016. They have
been prepared in accordance with New Zealand Generally
Accepted Accounting Practice as appropriate for profit
oriented entities, the requirements of NZ IAS 34 Interim
Financial Reporting, IAS 34 Interim Financial Reporting and the
Order, and should be read in conjunction with the Banking
Group’s financial statements for the year ended 30
September 2016.
(ii) Basis of measurement
These financial statements have been prepared on a going
concern basis in accordance with historical cost concepts
except that the following assets and liabilities are stated at
their fair value:
• derivative financial instruments
• available-for-sale financial assets
• financial instruments held for trading
• financial instruments designated at fair value through
profit and loss.
(iii) Changes in accounting policies
The accounting policies adopted by the Banking Group are
consistent with those adopted and disclosed in the previous
full year Disclosure Statement.
(iv) Presentation currency and rounding
The amounts contained in the financial statements are
presented in millions of New Zealand dollars, unless
otherwise stated.
(v) Comparatives
Certain amounts in the comparative information have been
reclassified to ensure consistency with the current period’s
presentation.
(vi) Principles of consolidation
The financial statements consolidate the financial statements
of the Bank and its subsidiaries.


2. OTHER OPERATING INCOME


Unaudited Unaudited Audited

3 months to 3 months to Year to

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Net fee income 105 106 422
Fair value loss on hedging activities and financial liabilities designated at fair value (16) (48) (40)
Gain / (loss) on sale of mortgages to NZ Branch (1) - 1
Other income 8 9 38
Total other operating income 96 67 421

ANZ Bank New Zealand Limited 8


NOTES TO THE FINANCIAL STATEMENTS


3. SEGMENT ANALYSIS

The Banking Group 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.
During the year ended 30 September 2016, Wealth was
integrated with Retail, having been disclosed separately
previously. Segment reporting has been updated to reflect
this change and other minor changes to the Banking Group’s
structure. Comparative data has been adjusted to be
consistent with the current period’s segment definitions.
Retail
Retail provides products and services to Retail, Private
Banking, and Business Banking customers via the branch
network, mortgage specialists, relationship managers, the
contact centre and a variety of self service channels (internet
banking, phone banking, ATMs, website and mobile phone
banking). Retail and Private Banking customers have personal
banking requirements and Business Banking customers
consist primarily of small enterprises with annual revenues of
less than NZ$5 million. Core products and services include
current and savings accounts, unsecured lending (credit
cards, personal loans and overdrafts), home loans secured by
mortgages over property, investment products,
superannuation and insurance services.
Commercial
Commercial provides services to Commercial & Agri
(CommAgri) and UDC customers. CommAgri customers
consist of primarily privately owned medium to large
enterprises. Commercial's relationship with these businesses
ranges from simple banking requirements with revenue from
deposit and transactional facilities, and cash flow lending, to
more complex funding arrangements with revenue sourced
from a wider range of products. UDC is principally involved in
the financing and leasing of plant, vehicles and equipment,
mainly for small and medium sized businesses, as well as
investment products.
Institutional
Institutional provides financial services through a number of
specialised units to large multi-banked corporations, often
global, which require sophisticated product and risk
management solutions. Those financial services include loan
structuring, foreign exchange, wholesale money market
services and transaction banking.
Other
Other includes treasury and back office support functions,
none of which constitutes a separately reportable segment.

Business segment analysis
1



Retail Commercial Institutional Other Total

NZ$m NZ$m NZ$m NZ$m NZ$m
Unaudited 3 months to 31/12/2016

External revenues 668 456 181 (353) 952
Intersegment revenues (70) (227) 8 289 -
Total revenues 598 229 189 (64) 952
Profit / (loss) after income tax 247 99 99 (52) 393
Unaudited 3 months to 31/12/2015

External revenues 593 491 101 (317) 868
Intersegment revenues (27) (263) 2 288 -
Total revenues 566 228 103 (29) 868
Profit / (loss) after income tax 217 107 37 (19) 342
Audited year to 30/09/2016

External revenues 2,540 1,885 462 (1,033) 3,854
Intersegment revenues (198) (981) 19 1,160 -
Total revenues 2,342 904 481 127 3,854
Profit after income tax 903 413 201 18 1,535

1
Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.

ANZ Bank New Zealand Limited 9


NOTES TO THE FINANCIAL STATEMENTS


4. NET LOANS AND ADVANCES

Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Overdrafts
1
836 1,012 1,133
Credit card outstandings 1,728 1,753 1,663
Term loans - housing
1
68,372 61,567 67,298
Term loans - non-housing 44,429 43,147 43,651
Lease receivables 222 232 226
Hire purchase 1,164 978 1,098
Total gross loans and advances 116,751 108,689 115,069
Less: Provision for credit impairment 5 (640) (607) (622)
Less: Unearned income (218) (216) (211)
Add: Capitalised brokerage/mortgage origination fees 355 334 360
Add: Customer liability for acceptances 31 31 27
Net loans and advances (including assets classified as held for sale) 116,279 108,231 114,623
Less: UDC net loans and advances held for sale 17 (2,662) - -
Net loans and advances 113,617 108,231 114,623

1
Comparative amounts have been changed to reclassify revolving credit facilities secured by residential property provided to corporate customers from Overdrafts to Term
loans – housing (31/12/2015 NZ$405 million).

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of NZ$5,546 million as at 31 December 2016
(31/12/2015 NZ$7,496 million, 30/09/2016 NZ$6,020 million). These assets qualify for derecognition as the Bank does not retain a
continuing involvement in the transferred assets.



5. PROVISION FOR CREDIT IMPAIRMENT

Retail
mortgages
Other retail
exposures
Non-retail
exposures Total

NZ$m NZ$m NZ$m NZ$m
Unaudited 31/12/2016
Collective provision 79 126 251 456
Individual provision 33 6 145 184
Total provision for credit impairment 112 132 396 640

Collective credit impairment charge / (release) 1 (4) (12) (15)
Individual credit impairment charge / (release) (4) 14 43 53
Credit impairment charge / (release) (3) 10 31 38
Unaudited 31/12/2015

Collective provision 78 124 254 456
Individual provision 48 7 96 151
Total provision for credit impairment 126 131 350 607

Collective credit impairment charge / (release) 1 (3) 1 (1)
Individual credit impairment charge / (release) (5) 17 17 29
Credit impairment charge / (release) (4) 14 18 28
Audited 30/09/2016

Collective provision 78 130 263 471
Individual provision 37 6 108 151
Total provision for credit impairment 115 136 371 622

Collective credit impairment charge 1 3 10 14
Individual credit impairment charge / (release) (12) 70 78 136
Credit impairment charge / (release) (11) 73 88 150

ANZ Bank New Zealand Limited 10


NOTES TO THE FINANCIAL STATEMENTS


6. IMPAIRED ASSETS AND PAST DUE ASSETS

Retail
mortgages
Other retail
exposures
Non-retail
exposures Total

NZ$m NZ$m NZ$m NZ$m
Unaudited 31/12/2016

Total impaired assets 54 23 459 536
Loans that are at least 90 days past due but not impaired 93 30 19 142
Unaudited 31/12/2015

Total impaired assets 73 29 246 348
Loans that are at least 90 days past due but not impaired 93 32 29 154
Audited 30/09/2016
Total impaired assets 57 27 342 426
Loans that are at least 90 days past due but not impaired 81 26 23 130

7. ASSETS CHARGED AS SECURITY FOR LIABILITIES
The carrying amounts of assets pledged as security are as follows. These amounts exclude the amounts disclosed as collateral paid in 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 Agreements.

Carrying Amount Related Liability

Unaudited Unaudited Audited Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

31/12/2016 31/12/2015 30/09/2016
NZ$m NZ$m NZ$m

NZ$m NZ$m NZ$m
Securities sold under agreements to repurchase 344 538 77 344 539 76
Residential mortgages pledged as security for covered bonds 10,749 7,643 10,265 4,960 4,828 6,218
Assets pledged as collateral for UDC secured investments 2,763 2,498 2,665 1,460 1,726 1,592
UDC Secured Investments are secured by a security interest granted under the Trust Deed over all of UDC Finance Limited's (UDC) present
and future assets and undertakings, to Trustees Executors Limited, as supervisor. The assets subject to the security interest comprise
mainly loans to UDC's customers and certain plant and equipment. The security interest secures all amounts payable by UDC on the UDC
Secured Investments and all other moneys payable by UDC under the Trust Deed.
ANZNZ Covered Bond Trust (the Covered Bond Trust)
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by the Bank
which are security for the guarantee by ANZNZ Covered Bond Trust Limited as trustee of the Covered Bond Trust of issuances of covered
bonds by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The assets of the Covered Bond
Trust are not available to creditors of the Bank, although the Bank (or its liquidator or statutory manager) may have a claim against the
residual assets of the Covered Bond Trust (if any) after all prior ranking creditors of the Covered Bond Trust have been satisfied.
The Banking Group continues to recognise the assets of the Covered Bond Trust on its balance sheet as, although they are pledged as
security for covered bonds, the Bank retains substantially all the risks and rewards of ownership.

8. DEPOSITS AND OTHER BORROWINGS
Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

Note NZ$m NZ$m NZ$m
Term deposits 41,371 36,324 39,665
On demand and short term deposits 42,944 42,984 42,323
Deposits not bearing interest 8,562 7,154 7,780
UDC secured investments 7 1,460 1,726 1,592
Total customer deposits 94,337 88,188 91,360
Certificates of deposit 2,106 2,642 2,237
Commercial paper 7,466 5,858 5,364
Securities sold under agreements to repurchase 344 539 76
Deposits from other members of ANZ New Zealand 17 37 29
Deposits and other borrowings (including liabilities classified as held for sale) 104,270 97,264 99,066
Less: UDC secured investments held for sale 17 (1,460) - -
Deposits and other borrowings 102,810 97,264 99,066

ANZ Bank New Zealand Limited 11


NOTES TO THE FINANCIAL STATEMENTS


9. DEBT ISSUANCES
Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Domestic bonds 3,875 3,525 3,975
U.S. medium term notes
1
7,182 5,253 6,883
Euro medium term notes
1
1,989 2,434 2,792
Covered bonds
1
4,960 4,828 6,218
Index linked notes - 36 -
Total debt issuances 18,006 16,076 19,868
Fair value hedge adjustment (10) 117 192
Less debt issuances held by the Bank (34) (134) (46)
Total debt issuances 17,962 16,059 20,014

1
These debt issuances are issued by ANZ New Zealand (Int’l) Limited and are guaranteed by the Bank.

Debt issuances, other than covered bonds, are unsecured and rank equally with other unsecured liabilities of the Banking Group.

Domestic bonds includes two series of bonds quoted on the NZX Debt Market which mature on 2 September 2021 and 1 September
2023 respectively (the Bonds). NZX Regulation has granted the Bank a waiver in respect of the Bonds from the requirement in Main
Board/Debt Market Listing Rule 5.2.3 (as modified by NZX’s ruling on Rule 5.2.3 issued on 29 September 2015) to enable the Bank to apply
for quotation of the Bonds on the NZX Debt Market even though the Bonds may not initially be held by at least 100 members of the
public holding at least 25% of the Bonds issued. The waiver has been granted for a period of 6 months from the relevant dates of
quotation of the Bonds on the NZX Debt Market. The effect of the waiver from NZX Listing Rule 5.2.3 is that initially the Bonds may not be
widely held and there may be reduced liquidity in the Bonds. To the extent that there is a material reduction in the spread of the Bonds,
the Bank will notify NZX accordingly.


10. SUBORDINATED DEBT

Unaudited Unaudited Audited

31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
ANZ Capital Notes
1


NZD 500m ANZ New Zealand Capital Notes (ANZ NZ CN)
2
496 495 496
NZD 1,003m ANZ New Zealand Internal Capital Notes (ANZ NZ ICN)

1,003 1,002 1,003
NZD 938m ANZ New Zealand Internal Capital Notes (ANZ NZ ICN2) 938 - 938
Perpetual subordinated debt


NZD 835m perpetual subordinated bond
2,3
835 835 835
AUD 10m perpetual subordinated floating rate loan 10 11 10
Total subordinated debt 3,282 2,343 3,282

1
These instruments qualify as additional tier 1 capital.
2
These instruments are quoted on the NZX Debt Market.
3
These instruments qualify as tier 2 capital under RBNZ’s Basel III transitional rules, subject to the RBNZ’s Basel III transition adjustment.


11. RELATED PARTY BALANCES
Unaudited Unaudited Audited


31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Total due from related parties 4,091 3,896 4,929
Total due to related parties 6,258 4,994 7,154

ANZ Bank New Zealand Limited 12


NOTES TO THE FINANCIAL STATEMENTS


12. CAPITAL ADEQUACY

Basel III capital ratios
RBNZ
minimum
ratios
Banking Group

31/12/2016 31/12/2015 30/09/2016
Unaudited
Common equity tier 1 capital 4.5% 10.5% 10.7% 10.0%
Tier 1 capital 6.0% 13.7% 13.0% 13.2%
Total capital 8.0% 14.3% 13.8% 13.7%
Buffer ratio 2.5% 6.0% 5.8% 5.5%

Capital of the Banking Group
Unaudited

31/12/2016

NZ$m
Common equity tier 1 capital before deductions 12,793
Less deductions from common equity tier 1 capital (3,765)
Common equity tier 1 capital 9,028
Additional tier 1 capital 2,779
Total tier 1 capital 11,807
Tier 2 capital
468
Total capital 12,275

Capital requirements of the Banking Group

Exposure at
default
Risk weighted
exposure or
implied risk
weighted
exposure
1

Total capital
requirement Unaudited 31/12/2016




NZ$m NZ$m NZ$m
Corporate exposures
2


49,638 31,932 2,555
Sovereign exposures

12,899 303 24
Bank exposures

12,354 3,544 284
Retail mortgage exposures

74,706 17,515 1,401
Other retail exposures

10,816 8,639 691
Exposures subject to internal ratings based approach 160,413 61,933 4,955
Specialised lending exposures subject to slotting approach 11,351 10,523 842
Exposures subject to standardised approach 2,031 373 30
Equity exposures 7 31 2
Other exposures 3,681 1,697 136
Total credit risk 177,483 74,557 5,965
Operational risk n/a 6,052 484
Market risk n/a 5,279 422
Total 177,483 85,888 6,871

1
Total credit risk weighted exposures include a scalar of 1.06 in accordance with the Bank's Conditions of Registration.
2
Includes an adjustment to the risk weight of the Banking Group’s farm lending portfolio as specified by the RBNZ, resulting in an additional capital requirement of NZ$101
million.

ANZ Bank New Zealand Limited 13


NOTES TO THE FINANCIAL STATEMENTS


Capital for other material risks
The Banking Group has an Internal Capital Adequacy Assessment Process (ICAAP) which complies with the requirements of the Bank's
Conditions of Registration.
Under the Banking Group's ICAAP it identifies and measures all "other material risks", which are those material risks that are not explicitly
captured in the calculation of the Banking Group's tier 1 and total capital ratios. The other material risks identified by the Banking Group
include pension risk, insurance risk, strategic equity risk, fixed asset risk, deferred acquisition cost risk, value in -force risk, business retention
risk and software risk.
The Banking Group's internal capital allocation for these other material risks is NZ$439 million (31/12/2015 NZ$504 million; 30/09/2016
NZ$441 million).
The Banking Group regularly reviews the methodologies used to calculate the economic capital allocated to other material risks.

Residential mortgages by loan-to-valuation ratio
As required by the RBNZ, LVRs are calculated as the current exposure secured by a residential mortgage divided by the Banking Group's
valuation of the security property at origination of the exposure. Off balance sheet exposures in clude undrawn and partially drawn
residential mortgage loans as well as commitments to lend. Commitments to lend are formal offers for housing lending which have been
accepted by the customer.

On-balance
sheet
Off-balance
sheet Total Unaudited 31/12/2016

NZ$m NZ$m NZ$m
LVR range
Does not exceed 60% 28,808 4,956 33,764
Exceeds 60% and not 70% 14,698 1,419 16,117
Exceeds 70% and not 80% 17,210 1,475 18,685
Does not exceed 80% 60,716 7,850 68,566
Exceeds 80% and not 90% 3,466 175 3,641
Exceeds 90% 1,676 207 1,883
Total 65,858 8,232 74,090


Liquidity portfolio management
The Banking Group holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk management. The size of
the Banking Group’s liquidity portfolio is based on the amount required to meet its internal and regulatory liquidity scenario metrics.
Unaudited

31/12/2016

NZ$m
Cash and balances with central banks 2,899
Certificates of deposit 809
Government, local body stock and bonds 6,409
Government treasury bills 850
Reserve Bank bills 1,253
Other bonds 6,688
Total liquidity portfolio 18,908

The Bank also held unencumbered internal residential mortgage backed securities which would entitle the Banking Group to enter into
repurchase transactions with a value of NZ$7,305 million at 31 December 2016.

ANZ Bank New Zealand Limited 14


NOTES TO THE FINANCIAL STATEMENTS


13. FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities not measured at fair value
Below is a comparison of the carrying amounts as reported on the balance sheet and fair values of financial asset and liability categories
other than 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.

Unaudited

Unaudited

Audited

31/12/2016 31/12/2015 30/09/2016

Carrying
amount Fair value
Carrying
amount Fair value
Carrying
amount Fair value

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Assets

Net loans and advances
1
116,279 116,372 108,231 108,698 114,623 114,891
Liabilities
Deposits and other borrowings
2
104,270 104,320 97,264 97,396 99,066 99,169
Debt issuances
1
17,962 18,094 16,059 16,152 20,014 20,148
Subordinated debt 3,282 3,392 2,343 2,326 3,282 3,351

1
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.
2
Includes commercial paper (note 8) designated at fair value through profit or loss.

Financial assets and financial liabilities measured at fair value in the balance sheet
The Banking Group uses a valuation method within the following hierarchy to determine the carrying amount of assets and liabilities held
at fair value, all of which are recurring fair value measurements. There are no assets or liabilities measured at fair value on a non-recurring
basis.
• Level 1 – Financial instruments that have been valued by reference to unadjusted quoted prices in active markets for identical
financial instruments. This category includes financial instruments valued using quoted yields where available for specific debt
securities.
• Level 2 – Financial instruments that have been valued through valuation techniques incorporating inputs other than quoted prices
within Level 1 that are observable for a similar financial asset or liability, either directly or indirectly.
• Level 3 – Financial instruments that have been valued using valuation techniques which incorporate significant inputs that are not
based on observable market data (unobservable inputs).
There have been no substantial changes in the valuation techniques applied to different classes of financial instruments during the period.


Valuation hierarchy

Unaudited

Unaudited

Audited

31/12/2016

31/12/2015

30/09/2016

Level 1 Level 2 Level 3 Total
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Financial assets


Trading securities 10,880 116 - 10,996 11,804 199 - 12,003 11,937 42 - 11,979
Derivative financial instruments 25 14,898 6 14,929 19 14,007 5 14,031 3 21,100 7 21,110
Available-for-sale assets 3,981 910 1 4,892 1,384 1,324 2 2,710 1,671 1,187 1 2,859
Investments backing insurance contract
liabilities
5 123 - 128

3 175 - 178 5 114 - 119
Total financial assets held at fair value 14,891 16,047 7 30,945 13,210 15,705 7 28,922 13,616 22,443 8 36,067
Financial liabilities
Deposits and other borrowings - 7,466 - 7,466 - 5,858 - 5,858 - 5,364 - 5,364
Derivative financial instruments 27 15,295 4 15,326 2 15,410 3 15,415 46 21,908 2 21,956
Payables and other liabilities 292 - - 292 467 - - 467 157 - - 157
Total financial liabilities held at fair value 319 22,761 4 23,084 469 21,268 3 21,740 203 27,272 2 27,477

ANZ Bank New Zealand Limited 15


NOTES TO THE FINANCIAL STATEMENTS


14. CONCENTRATIONS OF CREDIT RISK TO INDIVIDUAL COUNTERPARTIES

The Banking Group measures its concentration of credit risk to bank counterparties on the basis of actual exposures, and to non-bank
counterparties on the basis of limits.

For the three months ended 31 December 2016 there were no individual counterparties, excluding connected parties, governments and
banks with long term credit ratings of A- or above, where the Banking Group’s period end or peak end-of-day credit exposure equalled or
exceeded 10% of the Banking Group’s equity as at the end of the period.
This credit exposure information does not include exposures to counterparties if they are booked outside New Zealand.

15. INSURANCE BUSINESS

The Banking Group conducts insurance business through its subsidiary OnePath Life (NZ) Limited (OnePath Life).
The Banking Group’s aggregate amount of insurance business comprises the total assets of OnePath Life of NZ$857 million (31/12/2015:
NZ$881 million; 30/09/2016 NZ$926 million), which is 0.5% (31/12/2015: 0.6%; 30/09/2016 0.6%) of the total consolidated assets of the
Banking Group.

16. CREDIT RELATED COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES

Unaudited Unaudited Audited
31/12/2016 31/12/2015 30/09/2016

NZ$m NZ$m NZ$m
Contract amount of:


Credit related commitments - facilities provided
Undrawn facilities
1
27,393 27,290 27,296
Guarantees and contingent liabilities


Guarantees and letters of credit
874 888 850
Performance related contingencies 1,550 1,471 1,611
Total guarantees and contingent liabilities 2,424 2,359 2,461
Total Credit Related Commitments, Guarantees and Contingent Liabilities 29,817 29,649 29,757
¹ The comparative amount for undrawn facilities as at 31 December 2015 has been reduced by NZ$5,353 million following a review of the composition of commitments.
The Banking Group guarantees the performance of customers by issuing standby letters of credit and guarantees to third parties,
including its Ultimate Parent Bank. The risk involved is essentially the same as the credit risk involved in extending loan facilities to
customers, therefore 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
The Banking Group has other contingent liabilities in respect of actual and possible claims and court proceedings.
An assessment of the Banking Group’s likely loss in respect of these matters has been made on a case-by-case basis and provision made
where deemed necessary.

17. SUBSEQUENT EVENTS

On 11 January 2017, the Bank announced that it had entered into a conditional agreement to sell UDC to HNA Group for approximately
NZ$660 million. Completion is expected late in the second half of the 2017 calendar year. The assets and liabilities of UDC are classified as
held for sale as at 31 December 2016.
On 10 February 2017, the Bank’s Board resolved to pay a preference dividend of NZ$5.9 million on 1 March 2017 and to pay an ordinary
dividend of NZ$785 million no later than 31 March 2017.

ANZ Bank New Zealand Limited 16



DIRECTORS' STATEMENT

As at the date on which this Disclosure Statement is signed, after due enquiry, each Director believes that:
(i) The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements (New Zealand
Incorporated Registered Banks) Order 2014
(ii) The Disclosure Statement is not false or misleading.
Over the three months ended 31 December 2016, after due enquiry, each Director believes that:
(i) ANZ Bank New Zealand Limited has complied with all Conditions of Registration that applied during that period
(ii) Credit exposures to connected persons were not contrary to the interests of the Banking Group
(iii) ANZ Bank New Zealand Limited had systems in place to monitor and control adequately the Banking Group’s material risks, including
credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk, operational risk and other business risks,
and that those systems were being properly applied.
This Disclosure Statement is dated, and has been signed by or on behalf of all Directors of the Bank on, 10 February 2017.




Antony Carter




Shayne Elliott




David Hisco




John Judge




Mark Verbiest




Nigel Williams




Joan Withers