Shareholder Update 2018

Australia and New Zealand Banking Group Limited ABN 11 005 357 522


29 June 2018

Company Announcements
ASX Limited
Level 4
20 Bridge Street
SYDNEY NSW 2000






Shareholder Update 2018


The attached Shareholder Update is being made available to ANZ shareholders in
conjunction with the despatch of the 2018 Interim Dividend statements.



Yours faithfully




Simon Pordage
Company Secretary
Australia and New Zealand Banking Group Limited










Company Secretary’s Office
ANZ Centre Melbourne, Level 9, 833 Collins Street, Docklands Vic 3008
GPO Box 254, MELBOURNE VIC 3001 AUSTRALIA
www.anz.com

CHAIRMAN’S REPORT
A message from David Gonski AC
I am pleased to enclose with this Shareholder Update the advice of your 2018 Interim
Dividend payment of 80 cents per share fully franked.
We posted a solid result with statutory profit for the six months ending 31 March 2018 up
14% to $3.32 billion, compared with the first half of 2017. Cash Profit on a continuing basis
- providing a better comparison of our ongoing businesses - was up 4% to $3.49 billion.
The payout ratio of our interim dividend is broadly
in-line with our preferred payout range of 60-65% of cash
profit, while also maintaining a tier-one capital position
above the Australian Prudential Regulation Authority’s
‘unquestionably strong’ benchmark well ahead of the
2020 implementation.
I’m pleased with the progress we have made in building
a simpler, better capitalised, better balanced bank despite
the continued headwinds impacting the sector.
As we promised, we have continued to simplify our
business. During the half we announced the sale of
both our Australian Pensions and Investments and Life
Insurance businesses to IOOF and Zurich respectively. We
also completed the sale of our minority stake in Shanghai
Rural Commercial Bank and announced the sale of our
share in the Philippines based Metrobank Card Corporation
joint venture.
A particular highlight was completing the complex
separation of six retail and wealth businesses in Asia on
time and under budget. The successful transfer of these
assets allows us to further increase our focus on our
institutional business in Asia, where we remain a top-four
corporate bank.
The progress of our transformation combined with our
peer leading capital position meant we were also able to
return surplus capital to shareholders with the purchase of
more than 40 million shares on-market during the half.
We continued our disciplined approach in the way we
manage costs and allocate shareholders’ funds with
expenses down for the fourth consecutive half. Return
on Equity of our continuing business increased 32 basis
points to 11.9%, while earnings-per-share grew 4%
versus a year ago.
Our retail markets in Australia and New Zealand
continued to perform well with both lending and deposits
in our targeted segments growing strongly. In Australia
we launched a new mobile banking app that is currently
the top rated app in the Australian Apple store and
attracting over 15,000 new users each day.
In New Zealand the introduction of home loan coaches
helped grow our home lending by 5%, while we
maintained market leadership across our key products.
The difficult trading conditions impacting institutional
banking globally persisted during the half and we continue
to rebalance our portfolio by focusing on customers that
value our differentiated international network. This will see
returns in institutional banking continue to improve.
The credit environment remains benign with our total
provision charge of $408 million, down from $720 million
the previous year. This has been driven by both positive
macro-economic factors impacting the sector as well as
the strategic changes made to improve the composition
of our loan portfolio.
Looking ahead, we expect the difficult trading conditions to
continue into the foreseeable future and this reinforces our
strategy to simplify our business remains appropriate for
the times. Moreover I’m confident we have an executive
team in place, led by our Chief Executive Officer Shayne
Elliott, with the necessary experience to manage our
business into the future.
Finally, the Royal Commission into the Banking,
Superannuation and Financial Services Industry is rightly
having a significant impact on the sector. We have engaged
with the Commission in an open and constructive manner
and we will continue to support its work as well as making
the meaningful changes the community, our customers
and our shareholders expect. It is in all of our interests.
DAVID GONSKI AC
CHAIRMAN
234780_0230RB
2018 HALF YEAR HIGHLIGHTS
4.1%flat 4.0%
$3,493 million
CASH PROFIT
(Continuing operations)
80 cents
DIVIDEND PER SHARE
119.4 cents
CASH EARNINGS PER ORDINARY SHARE
(Continuing operations)
1H17 $3,355 million1H17 80 cents1H17 114.8 cents
Note:
All financials are on a Cash Profit Continuing Operations basis with growth rates compared to First Half 2017 unless otherwise stated. Cash Profit
Continuing Operations excludes non-core items from Statutory Profit and excludes the financial results of the Wealth Australia businesses being divested
and associated Group reclassification and consolidation impacts.