ANZ Bank New Zealand Interim Financial Statements

ANZ BANK NEW ZEALAND LIMITED
INTERIM FINANCIAL STATEMENTS




































FOR THE NINE MONTHS ENDED 30 JUNE 2018

ANZ Bank New Zealand Limited

INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED 30 JUNE 2018

CONTENTS

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Income Statement 3
Statement of Comprehensive Income 3
Balance Sheet 4
Condensed Cash Flow Statement 5
Statement of Changes in Equity 5
Notes to the Financial Statements 6

SUPPLEMENTARY INFORMATION
Bank Financial Strength Dashboard 14
Other Information 16
















GLOSSARY OF TERMS

In this Interim Financial Statement unless the context otherwise requires:
Bank means ANZ Bank New Zealand Limited.
Banking Group, We or Our 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.
OnePath means OnePath Life (NZ) Limited.
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.

ANZ Bank New Zealand Limited Unaudited

INCOME STATEMENT





3 months to

9 months to


30 Jun 18 30 Jun 17

30 Jun 18 30 Jun 17
Note NZ$m NZ$m NZ$m NZ$m
Interest income 1,597 1,545 4,767 4,620
Interest expense
801
790
2,415
2,352
Net interest income
796
755
2,352
2,268
Other operating income 2
139
112
521
413
Net funds management and insurance income
94
105
298
238
Share of associates' profit
6
4
7
5
Operating income
1,035
976
3,178
2,924
Operating expenses
374
371
1,121
1,101
Profit before credit impairment and income tax
661
605
2,057
1,823
Credit impairment charge 5 6 11 78 53
Profit before income tax 655 594 1,979 1,770
Income tax expense 181 166 547 496
Profit after income tax 474 428 1,432 1,274



STATEMENT OF COMPREHENSIVE INCOME





3 months to

9 months to


30 Jun 18 30 Jun 17

30 Jun 18 30 Jun 17


NZ$m NZ$m

NZ$m NZ$m
Profit after income tax

474
428

1,432
1,274
Items that will not be reclassified to profit or loss




Actuarial gain on defined benefit schemes

1 -

3 19
Income tax expense relating to items that will not be reclassified

- -

(1) (5)
Total items that will not be reclassified to profit or loss

1 -

2 14
Items that may be reclassified subsequently to profit or loss




Unrealised losses recognised directly in equity

(7) (3)

(13) (18)
Realised losses transferred to income statement

1 4

4 10
Income tax credit relating to items that may be reclassified

2 -

3 2
Total items that may be reclassified subsequently to profit or loss

(4) 1

(6) (6)
Total comprehensive income for the period

471 429

1,428 1,282

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


3

ANZ Bank New Zealand Limited Unaudited

BALANCE SHEET


30 Jun 18 30 Sep 17
As at Note NZ$m NZ$m
Assets

Cash
3,172
2,338
Settlement balances receivable
763
536
Collateral paid
1,784
1,415
Trading securities
8,055
7,663
Investments backing insurance contract liabilities - 123
Derivative financial instruments 10,768 9,878
Current tax assets 91 -
Available-for-sale assets 6,375 6,360
Net loans and advances 4 122,108 117,627
Assets held for sale 11 4,238 3,065
Other assets 650 683
Life insurance contract assets - 636
Investments in associates - 7
Premises and equipment 348 367
Goodwill and other intangible assets 3,158 3,275
Total assets

161,510
153,973
Liabilities
Settlement balances payable
1,966
1,840
Collateral received
963
613
Deposits and other borrowings 7
107,555
101,657
Derivative financial instruments
10,262
9,826
Current tax liabilities
-
39
Deferred tax liabilities
24
187
Liabilities held for sale 11
1,367
1,088
Payables and other liabilities
1,016
1,151
Employee entitlements
122
119
Other provisions 55 66
Debt issuances 8 24,777 24,606
Total liabilities

148,107
141,192
Net assets 13,403 12,781
Equity
Share capital 11,888 8,888
Reserves 42 48
Retained earnings 1,473 3,845
Total equity 13,403 12,781

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

4

ANZ Bank New Zealand Limited Unaudited

CONDENSED CASH FLOW STATEMENT



30 Jun 18 30 Jun 17
For the nine months ended

NZ$m NZ$m
Cash flows from operating activities


Interest received 4,807 4,649
Interest paid (2,341) (2,301)
Other cash inflows provided by operating activities 772 689
Other cash outflows used in operating activities (1,679) (1,617)
Cash flows from operating profits before changes in operating assets and liabilities 1,559 1,420
Net changes in operating assets and liabilities 445 (140)
Net cash flows provided by operating activities 2,004 1,280
Cash flows from investing activities
Cash inflows provided by investing activities 35 -
Cash outflows used in investing activities (30) (41)
Net cash flows used in investing activities 5 (41)
Cash flows from financing activities
Proceeds from debt issuances 3,385 2,943
Redemptions of debt issuances
(3,855)
(3,499)
Proceeds from issue of ordinary shares
3,000
-
Dividends paid
(3,806)
(790)
Net cash flows used in financing activities

(1,276)
(1,346)
Net increase in cash and cash equivalents
733
(107)
Cash and cash equivalents at beginning of the period
2,439
2,315
Cash and cash equivalents at end of the period
1


3,172
2,208

1.
Settlement balances due within 3 months have been recognised in cash and cash equivalents on the balance sheet from 30 June 2018.


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 2016 8,888 - 62 3,760 12,710
Profit after income tax - - - 1,274 1,274
Unrealised gains / (losses) recognised directly in equity - 10 (28) - (18)
Realised losses transferred to the income statement - - 10 - 10
Actuarial gain on defined benefit schemes - - - 19 19
Income tax credit / (expense) on items recognised directly in equity - (3) 5 (5) (3)
Total comprehensive income for the period - 7 (13) 1,288 1,282
Ordinary dividend paid - - - (785) (785)
Preference dividend paid - - - (5) (5)
As at 30 June 2017
8,888 7 49 4,258 13,202




As at 1 October 2017 8,888 5 43 3,845 12,781
Profit after income tax - - - 1,432 1,432
Unrealised gains / (losses) recognised directly in equity - 8 (21) - (13)
Realised losses transferred to the income statement - - 4 - 4
Actuarial gain on defined benefit schemes - - - 3 3
Income tax credit / (expense) on items recognised directly in equity
- (2) 5 (1) 2
Total comprehensive income for the period
- 6 (12) 1,434 1,428
Ordinary shares issued
3,000 - - - 3,000
Ordinary dividend paid - - - (3,800) (3,800)
Preference dividend paid - - - (6) (6)
As at 30 June 2018 11,888 11 31 1,473 13,403

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


5

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance
These interim financial statements for the Banking Group were issued on 13 August 2018 and should be read in conjunction with the
Banking Group’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.
There is no requirement for the Bank’s directors to approve these financial statements.
Use of estimates, assumptions and judgements
The preparation of these interim financial statements requires the use of management judgement, estimates and assumptions that affect
reported amounts and the application of accounting policies. Discussion of the critical accounting estimates and judgements, which
include complex or subjective decisions or assessments are provided in the previous full year financial statements. Such estimates and
judgements are reviewed on an ongoing basis.
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 the Banking Group 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 financial statements consolidate the financial statements of the Bank and its subsidiaries.


2. OTHER OPERATING INCOME


3 months to

9 months to
30 Jun 18 30 Jun 17 30 Jun 18 30 Jun 17
Note

NZ$m NZ$m

NZ$m NZ$m
i) Net fee and commission income 97 108 300 305
ii) Other income
Net trading gains
48
34
147
143
Fair value gain / (loss) on hedging activities and financial liabilities
designated at fair value

(20)
(41)
4
(90)
Net foreign exchange earnings and other financial instruments income
28
(7)
151
53
Derivative valuation adjustments
6
4
7
31
Loss on sale of mortgages to NZ Branch - - (1) (1)
Gain on UDC terminated transaction 11 - - 20 -
Insurance proceeds - - 20 -
Other 8 7 24 25
Other income 42 4 221 108
Other operating income 139 112 521 413

6

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

3. SEGMENT REPORTING

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.
Segment reporting has been updated to reflect 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 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 product 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 the Banking Group’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
For the nine months ended 30 June 2018
NZ$m NZ$m NZ$m NZ$m NZ$m
External revenues 2,040 1,342 447 (651) 3,178
Intersegment revenues
1

(194) (608) 6 796 -
Total revenues
1,846 734 453 145 3,178
Profit after income tax
743 402 193 94 1,432


For the nine months ended 30 June 2017

External revenues 1,979 1,337 511 (903) 2,924
Intersegment revenues
1
(202) (651) 4 849 -
Total revenues 1,777 686 515 (54) 2,924
Profit / (loss) after income tax 718 328 280 (52) 1,274

Other segment

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



30 Jun 18 30 Jun 17
For the nine months ended

NZ$m NZ$m
Central functions
2
20 2
Technology and Group Centre 59 36
Economic hedges 7 (65)
Revaluation of insurance policies 8 (25)
Total 94 (52)
1
Intersegment transfers are accounted for and determined on an arm's length or cost recovery basis.
2
Central functions’ external revenues for the nine months to 30 June 2018 includes the $20 million insurance proceeds (note 2) that were received from a member of the
Overseas Banking Group.

7

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

4. NET LOANS AND ADVANCES




30 Jun 18 30 Sep 17

Note NZ$m NZ$m
Overdrafts 914 1,040
Credit cards 1,652 1,638
Term loans - housing 76,684 72,524
Term loans - non-housing 44,781 44,227
Finance lease and hire purchase receivables 1,744 1,577
Subtotal 125,775 121,006
Unearned income
(239)
(222)
Capitalised brokerage/mortgage origination fees
319
334
Gross loans and advances (including assets classified as held for sale)
125,855
121,118
Less: Provision for credit impairment 5
(577)
(579)
Net loans and advances (including assets classified as held for sale)
125,278
120,539
Less: UDC net loans and advances held for sale 11
(3,170)
(2,912)
Net loans and advances

122,108
117,627

The Bank has sold residential mortgages to the NZ Branch with a net carrying value of NZ$3,114 million as at 30 June 2018 (30 September
2017: NZ$4,337 million). These assets qualify for derecognition as the Bank does not retain a continuing involvement in the transferred
assets.



5. PROVISION FOR CREDIT IMPAIRMENT

Provision for credit impairment - balance sheet



30 Jun 18 30 Sep 17

NZ$m NZ$m
Individual provision 172 152
Collective provision 405 427
Total provision for credit impairment 577 579


Credit impairment charge - income statement
3 months to

9 months to

30 Jun 18 30 Jun 17

30 Jun 18 30 Jun 17
NZ$m NZ$m NZ$m NZ$m
New and increased provisions
33
61

165
177
Write-backs
(11)
(31)

(41)
(65)
Recoveries of amounts previously written-off
(6)
(5)
(24)
(17)
Individual credit impairment charge 16 25

100 95
Collective credit impairment release (10) (14) (22) (42)
Total credit impairment charge 6 11 78 53


6. IMPAIRED AND PAST DUE LOANS


30 Jun 18 30 Sep 17

NZ$m NZ$m
Loans that are at least 90 days past due but not impaired 216 182
Impaired loans 311 357

8

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

7. DEPOSITS AND OTHER BORROWINGS


30 Jun 18 30 Sep 17

Note NZ$m NZ$m
Term deposits 49,605 45,457
On demand and short term deposits 42,059 41,451
Deposits not bearing interest 10,059 8,882
UDC secured investments
933
1,039
Total customer deposits
102,656
96,829
Certificates of deposit
2,721
1,916
Securities sold under repurchase agreements
958
157
Commercial paper
2,114
3,721
Deposits from Immediate Parent Company and NZ Branch
39
73
Deposits and other borrowings (including liabilities classified as held for sale)
108,488
102,696
Less: UDC secured investments held for sale 11
(933)
(1,039)
Deposits and other borrowings

107,555
101,657


8. DEBT ISSUANCES



30 Jun 18 30 Sep 17

NZ$m NZ$m
Senior debt 18,476 16,008
Covered bonds
3,852
5,315
Total unsubordinated debt

22,328
21,323
Subordinated debt


- Additional Tier 1 capital
2,438
2,438
- Other 11 845
Total subordinated debt 2,449 3,283
Total debt issued 24,777 24,606

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 the Banking Group, whereas the Covered
Bond Guarantor is not a member of the Banking Group.
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by the Bank
which are security for the guarantee by the Covered Bond Guarantor as trustee of the Covered Bond Trust of issuances of covered bonds
by the Bank, or its wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The assets of the Covered Bond Trust are
not available to creditors of 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.
9

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

9. FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities measured at fair value in the balance sheet
The Banking Group 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:



30 Jun 18 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 6,740 1,315 - 8,055 7,276 387 - 7,663
Derivative financial instruments 4 10,761 3 10,768 5 9,870 3 9,878
Available-for-sale assets 6,131 243 1 6,375 5,336 1,023 1 6,360
Investments backing insurance contract liabilities
1

- 130 - 130
- 123 - 123
Total 12,875 12,449 4 25,328 12,617 11,403 4 24,024
Financial liabilities
Deposits and other borrowings - 2,114 - 2,114 - 3,721 - 3,721
Derivative financial instruments 13 10,248 1 10,262 24 9,801 1 9,826
Payables and other liabilities
1
159 - - 159 151 - - 151
Total 172 12,362 1 12,535 175 13,522 1 13,698

1
Amounts include OnePath items classified as held for sale.

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.

30 Jun 18 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

125,278 125,560
120,539 120,588
Liabilities

Deposits and other borrowings
2, 3

106,374 106,442
98,975 99,030
Debt issuances
1

24,777 25,065
24,606 25,018

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 include UDC items classified as held for sale.
3
Excludes commercial paper (note 7) designated at fair value through profit or loss.
10

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

10. CREDIT RELATED COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES

30 Jun 18 30 Sep 17
Credit related commitments and contingencies

NZ$m NZ$m
Contract amount of:

Undrawn facilities 27,802 26,769
Guarantees and letters of credit 1,191 1,010
Performance related contingencies 1,706 1,598
Total 30,699 29,377
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
There are outstanding court proceedings, claims and possible claims for and against the Banking Group. Where relevant, expert legal
advice has been obtained and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made. In some
instances we have not disclosed the estimated financial impact of the individual items either because it is not practicable to do so or
because such disclosure may prejudice the interests of the Banking Group.
In recent years there has been an increase in the number of matters on which the Banking Group engages with its regulators. Globally
there have been significant increases in the nature and scale of regulatory investigations and reviews, enforcement actions (whether by
court action or otherwise) and the quantum of fines issued by regulators and customer claims. The Banking Group also instigates
engagement with its regulators. The nature of these investigations and reviews can be wide-ranging and, for example, may include a
range of matters including responsible lending practices, product suitability, wealth advice and adequacy of product disclosure
documentation. The Banking Group has received various notices and requests for information from its regulators as part of both industry-
wide and Banking Group specific reviews, and has also made disclosures to its regulators at its own instigation. There may be exposures to
customers which are additional to any regulatory exposures. These could include class actions, individual claims or customer remediation
or compensation activities. The outcomes and total costs associated with such reviews and possible exposures remain uncertain.
11

ANZ Bank New Zealand Limited Unaudited

NOTES TO THE FINANCIAL STATEMENTS

11. ASSETS AND LIABILITIES HELD FOR SALE

UDC
On 12 January 2018, the Bank announced that the agreement to sell UDC to HNA Group (HNA) had been terminated and that the
proposed divestment would not be completed following the New Zealand Overseas Investment Office's decision to decline HNA's
application to acquire UDC. The Bank continues to examine a broad range of options for UDC's future. As a result of the ongoing process,
the assets and liabilities of UDC meet the criteria to be classified as held for sale as at 30 June 2018.
OnePath
On 30 May 2018, the Bank announced that it had entered into an agreement to sell OnePath to Cigna Corporation. The sale includes a 20-
year strategic alliance for Cigna Corporation to provide insurance solutions for Banking Group customers. The sale remains subject to
regulatory approval and is expected to complete in 2019.
Paymark Limited (Paymark)
On 17 January 2018, the Bank entered into an agreement to sell its 25% shareholding in Paymark to Ingenico Group. The transaction is
subject to regulatory consents.

30 Jun 18 30 Sep 17

UDC OnePath Paymark Total UDC
NZ$m NZ$m NZ$m NZ$m NZ$m
Investments backing insurance contract liabilities - 130 - 130 -
Net loans and advances
3,170 - - 3,170
2,912
Other assets
18 5 - 23
20
Life insurance contract assets
- 673 - 673
-
Investments in associates
- - 7 7
-
Goodwill and other intangible assets
132 103 - 235
133
Total assets held for sale 3,320 911 7 4,238
3,065
Deposits and other borrowings
933 - - 933
1,039
Current tax liabilities
44 29 - 73
24
Deferred tax liabilities
(10) 170 - 160
(9)
Payables and other liabilities 30 169 - 199 33
Employee entitlements - - - - 1
Other provisions 1 1 - 2 -
Total liabilities held for sale 998 369 - 1,367 1,088


12. SUBSEQUENT EVENTS

On 10 August 2018, the Bank’s Board resolved to pay a preference dividend of NZ$5.7 million on or before 6 September 2018 and to pay
an ordinary dividend of NZ$800 million on or before 28 September 2018.
12

ANZ Bank New Zealand Limited Unaudited


































This page has been left blank intentionally



























13

ANZ Bank New Zealand Limited Unaudited

BANK FINANCIAL STRENGTH DASHBOARD

Background
This section does not form part of the Interim Financial
Statements and contains the information in respect of the
Banking Group included on the Bank Financial Strength
Dashboard (Dashboard) published on the RBNZ’s website.
Amounts below may differ slightly from those published by the
RBNZ due to rounding differences. The tables below include
reconciliations to amounts included in the Interim Financial
Statements where there are classification differences between
the financial statements and the Dashboard.
D1. CREDIT RATINGS

As at 30 June 2018

Credit rating
S&P Global

AA-
Fitch

AA-
Moody's

A1

D2. CAPITAL ADEQUACY

Capital ratios

As at 30 June 2018


Total capital ratio
14.8%
Common equity tier 1 (CET1) capital ratio
11.4%
Tier 1 capital ratio
14.8%
Buffer ratio 6.8%
Total capital ratio regulatory minimum 8.0%

Capital



As at 30 June 2018 NZ$m
CET1 capital
13,103
CET1 deductions
(3,738)
Net CET1 capital
9,365
Additional tier 1 instruments 2,779
Total tier 1 capital 12,144
Total capital 12,144
Risk weighted assets

As at 30 June 2018 NZ$m
Sovereign / quasi-sovereign
117
Public sector entities 320
Registered banks 2,303
Corporates 36,322
Residential mortgages 16,856
Problem loans 298
Equity holdings 34
Credit risk supervisory adjustment 2,067
All other assets 13,001
Credit risk 71,318
Market risk 4,827
Operational risk 5,921
Total risk weighted assets 82,066

D3. ASSET QUALITY

Housing Consumer Business Agriculture All other Total
As at 30 June 2018 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Total loans 74,071 3,568 29,077 17,390 1,781 125,887
Impaired loans 36 11 124 69 71 311
Loans 90 days past due but not impaired 158 25 29 3 1 216
Total non-performing loans 194 36 153 72 72 527
Non-performing loans ratio (%) 0.26% 1.01% 0.53% 0.41% 4.04% 0.42%
Individual provisions 8 6 76 26 56 172
Collective provisions 70 66 95 42 132 405
On-balance sheet residential mortgage exposures with LVRs that:
Exceeds 80% and not 90% 3.4%
Exceeds 90% 1.8%


A reconciliation of the amounts in this table to the financial statements is included in the Other Information on page 16.

The Supplementary Information does not form part of the Interim Financial Statements

14

ANZ Bank New Zealand Limited Unaudited

BANK FINANCIAL STRENGTH DASHBOARD

D4. PROFITABILITY / PERFORMANCE

Classification differences
Financial statements
Funds management
income and other
commissions Dashboard
3 months to 30 June 2018

NZ$m NZ$m NZ$m
Interest income 1,597 - 1,597
Interest expense 801 - 801
Net interest income 796 - 796
Gains / losses on trading and hedging 34 - 34
Fee and commission income 97 70 167
All other income 108 (70) 38
Operating expenses 374 - 374
Impaired asset expense 6 - 6
Profit before tax 655 - 655
Tax expense 181 - 181
Profit after tax 474 - 474
Return on assets 1.2%
Return on equity 14.4%
Net interest margin 2.2%

D5. FINANCIAL POSITION
Classification differences

Financial
statements
Other bank
deposits and
other assets
Securities
purchased under
agreements
to re-sell
Subordinated
debt issued to
related parties Dashboard
As at 30 June 2018
NZ$m NZ$m NZ$m NZ$m NZ$m
Cash and bank deposits
1
4,956 72 (560) - 4,468
Debt securities held
2
14,560 (76) - - 14,484
Net loans and advances 125,278 - - - 125,278
Derivatives in an asset position 10,768 - - - 10,768
All other assets 5,948 4 560 - 6,512
Total assets

161,510 - - - 161,510
Deposits 102,656 - - - 102,656
Debt securities issued
3

29,612 - - (1,951) 27,661
Other borrowings
4

1,960 1,124 - 1,951 5,035
Derivatives in a liability position
10,262 - - - 10,262
All other liabilities
3,617 (1,124) - - 2,493
Total liabilities 148,107 - - - 148,107
Equity

13,403 - - - 13,403

1
Comprises cash and cash equivalents and collateral paid

2
Comprises trading securities, investments backing insurance contract liabilities and available-for-sale assets
3
Comprises debt issuances plus certificates of deposit and commercial paper from deposits and other borrowings
4
Comprises collateral received and the remaining items of deposits and other borrowings

D6. LIQUIDITY

3 months to 30 June 2018


Quarterly average core funding ratio
89.6%
Quarterly average 1-month mismatch ratio
4.5%
Quarterly average 1-week mismatch ratio
4.7%

D7. LARGE EXPOSURES

As at 30 June 2018


Top 5 credit exposures to non-bank counterparties
(ie corporates) as a ratio of CET1 capital
30.5%
Credit exposures to non-bank counterparties
(ie corporates) that are greater than 10% of CET1 capital
-
Top 5 credit exposures to banks as a ratio of
CET1 capital
69.0%
Credit exposures to banks that are greater than
10% of CET1 capital
3


The Supplementary Information does not form part of the Interim Financial Statements

15

ANZ Bank New Zealand Limited Unaudited

OTHER INFORMATION

Reconciliation of total loans by purpose and sector
The financial statements and Dashboard include amounts for total loans which are based on different definitions. The table below
reconciles the various amounts. This information does not form part of the Interim Financial Statements.
Housing loans and residential mortgage definitions
Housing loans comprise loans for owner occupier property use and residential investor property use. Owner occupiers are borrowers who
own or are in the process of buying or building the house or flat they will live in as their principal place of residence. An owner can occupy
more than one property e.g. a family home and a holiday home. Only households can have owner occupier property use loans. Investors
are entities or persons borrowing for the purpose of building or purchasing residential property to rent. This includes ‘Mum and dad’
investor loans and any person(s) that have a separate residential investor property use loan which is not for their normal business purpose.
Residential mortgage exposures used in the loan-to-valuation ratio analysis are based on the definition of residential mortgage loans as
defined in the Banking Supervision Handbook document Capital Adequacy Framework (internal models based approach) (BS2B). This metric
is based on a collateral definition and may include some other lending that is not defined as Housing lending in the asset quality section
of the Dashboard. See the Banking Supervision Handbook for a more detailed definition.

Housing Consumer Business Agriculture All other Total
As at 30 June 2018 Note NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Total loans per Balance Sheet 4
76,684 n/a n/a n/a 49,091 125,775
Fair value hedge adjustment
(14) - - - - (14)
Business loans secured by residential property (2,599) - - 329 2,270 -
Unearned income on finance leases - - - - (201) (201)
Deposit components of overdraft product - - - - 327 327
Consumer, business and agriculture lending - 3,568 28,708 17,390 (49,666) -
Loans by purpose (RBNZ series S31) 74,071 3,568 28,708 17,719 1,821 125,887
Business loans secured by residential property - - 369 (329) (40) -
Total loans per Dashboard D3 74,071 3,568 29,077 17,390 1,781 125,887

The Supplementary Information does not form part of the Interim Financial Statements

16