ANZ NZ Branch DS 31 December 2017

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




































FOR THE THREE MONTHS ENDED 31 DECEMBER 2017
NUMBER 37 | ISSUED FEBRUARY 2018

Australia and New Zealand Banking Group Limited - ANZ New Zealand

REGISTERED BANK DISCLOSURE STATEMENT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2017

CONTENTS

Condensed Consolidated Interim Financial Statements
Income Statement 2
Statement of Comprehensive Income 2
Balance Sheet 3
Condensed Cash Flow Statement 4
Statement of Changes in Equity 4
Notes to the Financial Statements 5

Registered Bank Disclosures
General Disclosures 11
Additional Financial Disclosures 12
Asset Quality 13
Credit and Market Risk Exposures and Capital Adequacy 13
Concentration of Credit Risk to Individual Counterparties 14
Insurance Business 14

Directors' and New Zealand Chief Executive Officer's Statement 15





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, We or Our 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

INCOME STATEMENT





31 Dec 17 31 Dec 16
For the three months ended
Note NZ$m NZ$m
Interest income
1,639
1,619
Interest expense
846
846
Net interest income
793
773
Other operating income 2
215
170
Net funds management and insurance income
111
21
Share of associates' profit 1 1
Operating income 1,120 965
Operating expenses 386 369
Profit before credit impairment and income tax 734 596
Credit impairment charge 5 11 37
Profit before income tax 723 559
Income tax expense 203 156
Profit after income tax 520 403



STATEMENT OF COMPREHENSIVE INCOME





31 Dec 17 31 Dec 16
For the three months ended

NZ$m NZ$m
Profit after income tax

520 403
Items that may be reclassified subsequently to profit or loss


Unrealised gains / (losses) recognised directly in equity

2 (15)
Realised losses / (gains) transferred to income statement

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

(1) 3
Total items that may be reclassified subsequently to profit or loss

3 (10)
Total comprehensive income for the period

523 393

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

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

BALANCE SHEET



31 Dec 17 30 Sep 17
As at
Note NZ$m NZ$m
Assets

Cash
3,273
2,338
Settlement balances receivable
270
536
Collateral paid
1,734
1,415
Trading securities
9,625
7,663
Investments backing insurance contract liabilities 135 123
Derivative financial instruments 8,729 9,749
Available-for-sale assets 6,293 6,360
Net loans and advances 4 125,329 121,968
UDC assets held for sale 11 - 3,065
Other assets 752 683
Life insurance contract assets 668 636
Investments in associates 7 7
Premises and equipment 363 367
Goodwill and other intangible assets 3,405 3,275
Total assets

160,583
158,185
Liabilities
Settlement balances payable 1,728 1,687
Collateral received
383
613
Deposits and other borrowings 7
112,294
108,013
Derivative financial instruments
9,403
9,894
Current tax liabilities
74
45
Deferred tax liabilities
208
189
UDC liabilities held for sale 11
-
1,088
Payables and other liabilities
1,361
1,161
Employee entitlements
126
119
Other provisions
61
66
Debt issuances 8 23,109 23,997
Total liabilities (excluding head office account) 148,747 146,872
Net assets (excluding head office account) 11,836 11,313
Equity
Share capital and initial head office account 8,055 8,055
Reserves 51 48
Retained earnings 3,730 3,210
Total equity and initial head office account 11,836 11,313

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

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

CONDENSED CASH FLOW STATEMENT



31 Dec 17 31 Dec 16
For the three months ended

NZ$m NZ$m
Cash flows from operating activities


Interest received 1,637 1,618
Interest paid (784) (825)
Other cash inflows provided by operating activities 225 221
Other cash outflows used in operating activities (599) (544)
Cash flows from operating profits before changes in operating assets and liabilities 479 470
Net changes in operating assets and liabilities 1,530 2,725
Net cash flows provided by operating activities 2,009 3,195
Cash flows from investing activities
Cash outflows used in investing activities (14) (15)
Net cash flows used in investing activities (14) (15)
Cash flows from financing activities
Cash inflows provided by financing activities 375 250
Cash outflows used in financing activities (1,512) (2,448)
Net cash flows used in financing activities (1,137) (2,198)
Net increase in cash and cash equivalents
858
982
Cash and cash equivalents at beginning of the period
2,439
2,315
Cash and cash equivalents at end of the period

3,297
3,297



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 2016
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
8,055 5 47 3,453 11,560




As at 1 October 2017 8,055 5 43 3,210 11,313
Profit after income tax - - - 520 520
Unrealised gains / (losses) recognised directly in equity - 15 (13) - 2
Realised losses transferred to the income statement - - 2 - 2
Income tax credit / (expense) on items recognised directly in equity - (4) 3 - (1)
Total comprehensive income for the period
- 11 (8) 520 523
As at 31 December 2017 8,055 16 35 3,730 11,836

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

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

NOTES TO THE FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance
These interim financial statements for ANZ New Zealand have been prepared in accordance with the requirements of the Reserve Bank of
New Zealand Act 1989, and should be read in conjunction with ANZ New Zealand’s financial statements for the year ended 30 September
2017.
These financial statements comply with:
• New Zealand Generally Accepted Accounting Practice, as defined in the Financial Reporting Act 2013
• NZ IAS 34 Interim Financial Reporting and other applicable Financial Reporting Standards, as appropriate for publicly accountable for-
profit entities
• IAS 34 Interim Financial Reporting.

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.
Changes in accounting policies
The accounting policies adopted by ANZ New Zealand are consistent with those adopted and disclosed in the previous full year financial
statements.
Presentation currency and rounding
The amounts contained in the financial statements are presented in millions of New Zealand dollars, unless otherwise stated.
Comparatives
Certain amounts in the comparative information have been reclassified to ensure consistency with the current period’s presentation.
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.


2. OTHER OPERATING INCOME


31 Dec 17 31 Dec 16
For the three months ended NZ$m NZ$m
i) Net fee and commission income 102 101
ii) Other income
Net trading gains 59 55
Fair value gain / (loss) on hedging activities and financial liabilities designated at fair value 21 (11)
Net foreign exchange earnings and other financial instruments income
80
44
Derivative valuation adjustments
5
17
Insurance proceeds
20
-
Other 8 8
Other income 113 69
Total other operating income
215
170

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

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.
Segment reporting has been updated to reflect 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 a full range of banking and wealth management services to consumer, private banking and small business banking
customers. We deliver our services via our internet and app-based digital solutions and network of branches, mortgage specialists,
relationship managers and contact centres.
Commercial
Commercial provides a full range of banking services including traditional relationship banking and sophisticated financial solutions
(including asset financing) through dedicated managers focusing on privately owned medium to large enterprises and the agriculture
business segment.
Institutional
The Institutional division services global institutional and business customers across three products sets: Transaction Banking, Loans &
Specialised Finance and Markets.
• Transaction Banking provides working capital and liquidity solutions including documentary trade, supply chain financing as well as
cash management solutions, deposits, payments and clearing.
• Loans & Specialised Finance provides loan products, loan syndication, specialised loan structuring and execution, project and export
finance, debt structuring and acquisition finance, structured trade and asset finance, and corporate advisory.
• Markets provide risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets and wealth
solutions in addition to managing ANZ New Zealand’s interest rate exposure and liquidity position.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.


Retail Commercial Institutional Other Total
3 months ended 31 December 2017
NZ$m NZ$m NZ$m NZ$m NZ$m
External revenues 726 452 177 (235) 1,120
Intersegment revenues
1

(94) (206) - 300 -
Total revenues
632 246 177 65 1,120
Profit after income tax
258 133 92 37 520


3 months ended 31 December 2016

External revenues 738 457 181 (411) 965
Intersegment revenues
1
(128) (227) 8 347 -
Total revenues 610 230 189 (64) 965
Profit / (loss) after income tax 256 99 98 (50) 403

Other segment

Other segment profit / (loss) after income tax comprises:



31 Dec 17 31 Dec 16
For the three months ended

NZ$m NZ$m
Central functions
2
15 (2)
Technology and Group Centre (1) 8
Economic hedges 11 (8)
Revaluation of insurance policies 12 (48)
Total 37 (50)
1
Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
2
Central functions’ external revenues for the three months to 31 December 2017 includes the $20 million insurance proceeds (note 2) that were received from a member of the
Overseas Banking Group.

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

NOTES TO THE FINANCIAL STATEMENTS

4. NET LOANS AND ADVANCES



31 Dec 17 30 Sep 17

Note NZ$m NZ$m
Overdrafts 778 1,040
Credit cards 1,727 1,638
Term loans - housing 77,383 76,870
Term loans - non-housing 44,251 44,227
Finance lease and hire purchase receivables 1,664 1,577
Subtotal 125,803 125,352
Unearned income
(253)
(222)
Capitalised brokerage/mortgage origination fees
326
336
Gross loans and advances (including assets classified as held for sale)
125,876
125,466
Less: Provision for credit impairment 5
(547)
(586)
Net loans and advances (including assets classified as held for sale)
125,329
124,880
Less: UDC net loans and advances held for sale 11
-
(2,912)
Net loans and advances
125,329
121,968


5. PROVISION FOR CREDIT IMPAIRMENT

Provision for credit impairment - balance sheet



31 Dec 17 30 Sep 17

NZ$m NZ$m
Individual provision 126 154
Collective provision 421 432
Total provision for credit impairment 547 586




Credit impairment charge - income statement



31 Dec 17 31 Dec 16
For the three months ended
NZ$m NZ$m
New and increased provisions
40
74
Write-backs
(12)
(15)
Recoveries of amounts previously written-off
(6)
(6)
Individual credit impairment charge

22 53
Collective credit impairment release (11) (16)
Total credit impairment charge 11 37


6. IMPAIRED AND PAST DUE LOANS



31 Dec 17 30 Sep 17

NZ$m NZ$m
Loans that are at least 90 days past due but not impaired 209 205
Impaired loans 325 361

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

NOTES TO THE FINANCIAL STATEMENTS

7. DEPOSITS AND OTHER BORROWINGS

31 Dec 17 30 Sep 17

Note NZ$m NZ$m
Term deposits 47,445 45,457
On demand and short term deposits 42,000 41,451
Deposits not bearing interest 9,952 8,882
UDC secured investments
972
1,039
Total customer deposits
100,369
96,829
Certificates of deposit
1,585
1,916
Deposits from banks and securities sold under repurchase agreements
952
157
Commercial paper
3,389
3,721
Deposits and other borrowings from Ultimate Parent Bank and Immediate Parent Company
5,999
6,429
Deposits and other borrowings (including liabilities classified as held for sale)
112,294
109,052
Less: UDC secured investments held for sale 11
-
(1,039)
Deposits and other borrowings
112,294
108,013


8. DEBT ISSUANCES



31 Dec 17 30 Sep 17

NZ$m NZ$m
Senior debt 16,223 16,008
Covered bonds
4,196
5,315
Total unsubordinated debt
20,419
21,323
Subordinated debt


- Additional Tier 1 capital
1,553
1,541
- Basel III transitional subordinated bonds 835 835
- Other 302 298
Total subordinated debt 2,690 2,674
Total debt issued 23,109 23,997

Covered bonds are guaranteed by ANZNZ Covered Bond Trust Limited (the Covered Bond Guarantor), solely in its capacity as trustee of
ANZNZ Covered Bond Trust (the Covered Bond Trust). The Covered Bond Trust is a member of ANZ New Zealand, whereas the Covered
Bond Guarantor is not a member of ANZ New Zealand.
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by the Bank
which are security for the guarantee by the Covered Bond Guarantor as trustee of the Covered Bond Trust of issuances of covered bonds
by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The assets of the Covered Bond Trust are
not available to creditors of 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.

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

NOTES TO THE FINANCIAL STATEMENTS

9. FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities measured at fair value in the balance sheet
ANZ New Zealand categorises financial assets and liabilities carried at fair value into a fair value hierarchy as required by NZ IFRS 13 Fair
Value Measurement based on the observability of inputs used to measure fair value:
• Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 – valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability,
either directly or indirectly. Modelled valuation techniques are used that incorporate observable market inputs for securities with
similar credit risk, maturity and yield characteristics; and or/current market yields for similar instruments.
• Level 3 – valuations using inputs for the asset or liability that are not based on observable market date (unobservable inputs).
We deem transfers into and out of Level 1 and Level 2 to have occurred as at the beginning of the reporting period in which the transfer
occurred.
The table below summarises the attribution of financial instruments carried at fair value to the fair value hierarchy:



31 Dec 17 30 Sep 17

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
Financial assets
Trading securities 7,163 2,462 - 9,625 7,276 387 - 7,663
Derivative financial instruments 3 8,723 3 8,729 5 9,741 3 9,749
Available-for-sale assets 5,511 781 1 6,293 5,336 1,023 1 6,360
Investments backing insurance contract liabilities
- 135 - 135
- 123 - 123
Total financial assets held at fair value 12,677 12,101 4 24,782 12,617 11,274 4 23,895
Financial liabilities
Deposits and other borrowings - 3,389 - 3,389 - 3,721 - 3,721
Derivative financial instruments 27 9,376 - 9,403 24 9,869 1 9,894
Payables and other liabilities 342 - - 342 151 - - 151
Total financial liabilities held at fair value 369 12,765 - 13,134 175 13,590 1 13,766

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.

31 Dec 17 30 Sep 17

Carrying
amount Fair value
Carrying
amount Fair value

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

Net loans and advances
1, 2

125,329 125,429
124,880 124,930
Liabilities

Deposits and other borrowings
2, 3

108,905 109,170
105,331 105,564
Debt issuances
1

23,109 23,420
23,997 24,260

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
Amounts for 30 September 2017 include UDC items classified as held for sale.
3
Excludes commercial paper (note 7) designated at fair value through profit or loss.

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

NOTES TO THE FINANCIAL STATEMENTS

10. CREDIT RELATED COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES

31 Dec 17 30 Sep 17

NZ$m NZ$m
Contract amount of:

Credit related commitments - facilities provided
Undrawn facilities 27,429 26,520
Guarantees and contingent liabilities
Guarantees and letters of credit 991 1,010
Performance related contingencies 1,769 1,598
Total guarantees and contingent liabilities 2,760 2,608
Total credit related commitments, guarantees and contingent liabilities
30,189
29,128
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.

11. ASSETS AND LIABILITIES HELD FOR SALE

On 11 January 2017, the Bank announced that it had entered into a conditional agreement to sell UDC to HNA Group (HNA). On 21
December 2017, the Bank announced that it had been informed that New Zealand’s Overseas Investment Office had declined HNA’s
application to acquire UDC and the agreement with HNA was terminated in January 2018. As a result, the assets and liabilities of UDC were
not classified as held for sale as at 31 December 2017.

12. SUBSEQUENT EVENTS

On 17 January 2018, the Bank entered into an agreement to sell its 25% shareholding in Paymark Limited (Paymark) to Ingenico Group for
NZ$47.5 million. The carrying amount of the Banking Group’s investment in Paymark at 31 December 2017 was NZ$7 million and is
included in Investments in Associates on the balance sheet. The transaction is subject to regulatory consents.

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

REGISTERED BANK DISCLOSURES

This Disclosure Statement has been issued in accordance with the Order.
B1. GENERAL DISCLOSURES

Guarantors
No material obligations of the NZ Branch are guaranteed as at 28 February 2018.
Covered bonds issued by ANZ New Zealand (Int’l) Limited, a subsidiary of the Bank, are guaranteed. Refer to page 8 for further details.

Changes in the Ultimate Parent Bank’s Board of Directors
As at 28 February 2018 there has been one change to the Directors of the Ultimate Parent Bank since 30 September 2017, the balance
date of the last full year disclosure statement. The Rt Hon. Sir John Phillip Key, GNZM, AC was appointed as a Non-Executive Director on 28
February 2018.
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 Aa3 Outlook Stable
Fitch Ratings AA- Outlook Stable
Financial support
APRA has reviewed the level of financial 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 base can comprise non-
equity exposures to its New Zealand operations during ordinary times. Exposures in excess of this limit as at 1 January 2016 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 mortgages into the NZ Branch to provide funding for the Bank’s business. As at 31 December 2017, the NZ Branch held
approximately NZ$3.9 billion of residential mortgages. To satisfy APRA’s requirements described above, the Bank intends to repay this
funding at approximately NZ$1.6 billion per annum over the transition period ending 31 December 2020.
APRA has also stated 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 the Ultimate Parent Bank’s exposures to the Bank and its other New Zealand
operations must not exceed 50% of the Ultimate Parent Bank’s Level 1 Tier 1 capital base. At present, only covered bonds meet APRA’s
criteria for contingent funding. On this basis, the Ultimate Parent Bank believes it will be able to continue to provide financial support to
the Bank.
Further, from 1 July 2017, APRA’s Level 3 Conglomerates regulations became effective which limit the financial and operational assistance
the Ultimate Parent Bank can provide the Bank. These requirements are not expected to place additional restrictions on the Ultimate
Parent Bank’s ability to provide financial or operational support to the Bank.
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
website anz.com.

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

REGISTERED BANK DISCLOSURES

B2. ADDITIONAL FINANCIAL DISCLOSURES

Additional information on the balance sheet

As at 31 December 2017

NZ$m
Total interest earning and discount bearing assets 146,574
Total interest and discount bearing liabilities 126,773
Total amounts due from related entities
3,661
Total amounts due to related entities
9,455
Total liabilities of the NZ Branch less amounts due to related entities
1,098

Assets charged as security for liabilities
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 Agreement.
Assets charged as security for liabilities include the following types of instruments:
• Securities provided as collateral for repurchase transactions. These transactions are governed by standard industry agreements.
• UDC secured investments are secured by a security interest granted under the trust deed over all of UDC’s 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.
• Specified residential mortgages provided as security for notes and bonds issued to investors as part of the Bank’s covered bond
programme.
The amortised cost of assets pledged as security are as follows:
As at 31 December 2017
Note NZ$m
Securities sold under agreements to repurchase 933
Residential mortgages pledged as security for covered bonds 8
10,592
Assets pledged as collateral for UDC secured investments
3,086

Additional information on the income statement
The amounts of net trading gains or losses and other fair value adjustments are included in note 2 to the financial statements. ANZ New
Zealand does not have any loans and advances designated at fair value through profit or loss. Other operating income for the purposes of
the Order comprises Net fee and commission income, Insurance proceeds and Other (all in note 2), Net funds management and insurance
income and Share of associates’ profit (both shown on the income statement).
Additional information on liquidity risk
ANZ New Zealand holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk management. The size of
ANZ New Zealand’s liquidity portfolio is based on the amount required to meet its internal and regulatory liquidity scenario metrics.
As at 31 December 2017
NZ$m
Cash and balances with central banks 2,222
Certificates of deposit 419
Government, local body stock and bonds 5,961
Government treasury bills 1,015
Reserve Bank bills
1,542
Other bonds
6,163
Total liquidity portfolio 17,322

The Bank also held unencumbered internal residential mortgage backed securities which would entitle ANZ New Zealand to enter into
repurchase transactions with a value of NZ$6,683 million at 31 December 2017.

Overseas Banking Group profitability and size


30 Sep 17
Net profit after tax for the year ended 30 September 2017 (AUDm)
1
6,421
Net profit after tax for the year ended 30 September 2017 as a percentage of average total assets 0.70%
Total assets (AUDm) 897,326
Percentage change in total assets in the 12 months to 30 September 2017 -1.92%
1
Net profit after tax for the year includes AUD 15 million of profit attributable to non-controlling interests.

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

REGISTERED BANK DISCLOSURES

B3. ASSET QUALITY

End of period balances

As at 31 December 2017 NZ$m
Total impaired assets
325
Individual provision 126
Collective provision 421
Loans that are at least 90 days past due but not impaired 209

Charges to the income statement

3 months ended 31 December 2017
NZ$m
Individual credit impairment charge 22
Collective credit impairment release (11)
Credit impairment charge 11

Asset quality for assets designated at fair value
ANZ New Zealand does not have any loans and advances designated at fair value through profit or loss.

Overseas Banking Group asset quality




As at 30 September 2017


Gross impaired assets (AUDm) 2,384
Gross impaired assets as a percentage of total assets 0.3%
Individual provision (AUDm) 1,136
Individual provision as a percentage of gross impaired assets 47.7%
Collective provision (AUDm) 2,662


B4. CREDIT AND MARKET RISK EXPOSURES AND CAPITAL ADEQUACY

Additional mortgage information
As required by the RBNZ, loan-to-valuation ratios (LVR) 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
As at 31 December 2017 NZ$m NZ$m NZ$m
LVR range
Does not exceed 60% 36,267 5,394 41,661
Exceeds 60% and not 70% 16,941 1,361 18,302
Exceeds 70% and not 80%
17,594 1,146 18,740
Does not exceed 80%
70,802 7,901 78,703
Exceeds 80% and not 90%
2,779 126 2,905
Exceeds 90% 1,471 185 1,656
Total retail mortgage exposures 75,052 8,212 83,264

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

REGISTERED BANK DISCLOSURES

Market risk
ANZ New Zealand’s aggregate market risk exposures below have been calculated in accordance with the RBNZ Banking Supervision
Handbook document Capital Adequacy Framework (Standardised Approach) (BS2A).

Implied risk
weighted
exposure
Notional
capital charge
As at 31 December 2017 NZ$m NZ$m
Interest rate risk
4,181 334
Foreign currency risk
109 9
Equity risk
1 -
Total
4,291 343

APRA Basel III capital ratios
Overseas Banking Group
Ultimate Parent Bank
(Extended Licensed Entity)
As at 31 Dec 17 31 Dec 16 30 Sep 17 30 Sep 16
Common equity tier 1 capital
10.8%
9.5% 10.5% 9.7%
Tier 1 capital
12.9%
11.4% 12.7% 12.1%
Total capital
15.1%
14.0% 14.8% 14.7%

The Ultimate Parent Bank and the Overseas Banking Group are required to hold minimum capital as determined by APRA, which is at least
equal to that specified under the Basel III capital framework.
APRA has authorised the Ultimate Parent Bank and the Overseas Banking Group to use:
• the Advanced Internal Ratings Based (AIRB) methodology for calculation of credit risk weighted assets. There are however several small
portfolios (mainly retail and local corporates in Asia Pacific) where the Overseas Banking Group applies the standardised approach
• the Advanced Measurement Approach (AMA) for the operational risk weighted asset equivalent.
The Overseas Banking Group exceeded the minimum capital requirement set by APRA as at 31 December 2017.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 December 2017. The Overseas Banking
Group’s Pillar 3 disclosure document for the quarter ended 31 December 2017, 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.

B5. CONCENTRATIONS OF CREDIT RISK TO INDIVIDUAL COUNTERPARTIES
ANZ New Zealand measures its concentration of credit risk to individual counterparties at the reporting date on the basis of actual
exposures. Peak end-of-day aggregate credit exposures are measured on the basis of internal limits that were not materially exceeded
between the reporting date for the previous disclosure statement and the reporting date for the Disclosure Statement. As required by the
Order, this credit exposure information relates only to exposures held in the financial records of ANZ New Zealand and excludes exposures
to the central government of any country and any bank with a long term credit rating of A- or A3 or above, or its equivalent.
For the three months ended 31 December 2017 there were no individual counterparties 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.

B6. 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$966 million, which is 0.6% of the total
consolidated assets of ANZ New Zealand.

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

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 2017, 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 28 February 2018, and has been signed by the Chairman of the Ultimate Parent Bank, on
behalf of all Directors, and by the Acting Chief Executive Officer – NZ Branch, on behalf of the Chief Executive Officer – NZ
Branch.





David Gonski, AC Penny Dell
Chairman, Acting Chief Executive Officer – NZ Branch,
on behalf of the Directors: on behalf of Anthony Bradshaw
Chief Executive Officer – NZ Branch
Ilana Atlas
Paula Dwyer
Shayne Elliott
David Gonski, AC
Jane Halton, AO, PSM
Lee Hsien Yang
The Rt Hon. Sir John Key, GNZM, AC
Graeme Liebelt
John Macfarlane