ANZ 2018 Full Year Results Documents

Australia and New Zealand Banking Group Limited

ABN 11 005 357 522







Full Year
30 September 2018






Consolidated Financial Report
Dividend Announcement
and Appendix 4E




The Consolidated Financial Report and Dividend Announcement contains information required by Appendix 4E of the Australian Securities
Exchange (ASX) Listing Rules. It should be read in conjunction with ANZ’s 2018 Annual Report, and is lodged with the ASX under listing rule
4.3A.

RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E


2


Name of Company: Australia and New Zealand Banking Group Limited
ABN 11 005 357 522



Report for the year ended 30 September 2018



Operating Results
1



AUD million


Statutory operating income from continuing operations

2% to 19,831





Statutory profit attributable to shareholders

0% to 6,400





Cash profit
2


-16% to 5,805


Cash profit from continuing operations

-5% to 6,487








Dividends
3


Cents

Franked

per

amount
4


share

per share


Proposed Final dividend

80

100%





Interim dividend

80

100%


Record date for determining entitlements to the proposed 2018 final dividend 13 November 2018



Payment date for the proposed 2018 final dividend 18 December 2018







Dividend Reinvestment Plan and Bonus Option Plan

Australia and New Zealand Banking Group Limited (ANZ) has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in
respect of the proposed 2018 final dividend. For the 2018 final dividend, ANZ intends to provide shares under the DRP through an on-market purchase
and BOP through the issue of new shares. The 'Acquisition Price' to be used in determining the number of shares to be provided under the DRP and
BOP will be calculated by reference to the arithmetic average of the daily volume weighted average sale price of all fully paid ANZ ordinary shares sold in
the ordinary course of trading on the ASX and Chi-X during the ten trading days commencing on 16 November 2018, and then rounded to the nearest
whole cent. Shares provided under the DRP and BOP will rank equally in all respects with existing fully paid ANZ ordinary shares. Election notices from
shareholders wanting to commence, cease or vary their participation in the DRP or BOP for the 2018 final dividend must be received by ANZ's Share
Registrar by 5.00pm (Australian Eastern Daylight Time) on 14 November 2018. Subject to receiving effective contrary instructions from the shareholder,
dividends payable to shareholders with a registered address in the United Kingdom (including the Channel Islands and the Isle of Man) or New Zealand
will be converted to Pounds Sterling or New Zealand Dollars respectively at an exchange rate calculated on 16 November 2018.






1
Unless otherwise noted, all comparisons are to the year ended 30 September 2017.
2
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the ongoing business activities of the Group. The non-core
items are calculated consistently period on period so as not to discriminate between positive and negative adjustments, and fall into one of the three categories: gains or losses included
in earnings arising from changes in tax, legal or accounting legislation or other non-core items not associated with the ongoing operations of the Group; treasury shares, revaluation of
policy liabilities, economic hedging and similar accounting items that represent timing differences that will reverse through earnings in the future; and accounting reclassifications between
individual line items that do not impact reported results, such as policyholders tax gross up. Cash profit is not a measure of cash flow or profit determined on a cash basis. The net after
tax adjustment was a reduction to statutory profit of ($595) million made up of several items. Refer pages 73 to 77 for further details.
3
There is no conduit foreign income attributed to the dividends.
4
It is proposed that the final dividend will be fully franked for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 10 cents per ordinary share.

RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E


3




KPMG has audited the financial statements contained within the Australia and New Zealand Banking Group Limited Annual Report and has issued an
unmodified audit report. The Annual Report will be available on 5 November 2018, and will include a copy of the KPMG audit report. The financial
information contained in the Condensed Consolidated Financial Statements section of this preliminary final report includes financial information extracted
from the audited financial statements together with financial information that has not been audited.
Cash profit is not subject to review or audit by the external auditor. The external auditor has informed the Audit Committee that recurring adjustments
have been determined on a consistent basis across each period presented, and the adjustments for the sale impact of Shanghai Rural Commercial Bank
(SRCB) in the March 2018 half and the September 2017 full year are appropriate.






David M Gonski, AC Shayne C Elliott
Chairman Director

30 October 2018

RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E


4
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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522


5

CONSOLIDATED FINANCIAL REPORT, DIVIDEND ANNOUNCEMENT AND APPENDIX 4E
Year ended 30 September 2018



CONTENTS PAGE



Disclosure Summary 7
Summary 9
Group Results 21
Divisional Results 49
Profit Reconciliation 73
Condensed Consolidated Financial Statements 79
Supplementary Information 105
Definitions 117
ASX Appendix 4E Cross Reference Index 120
Alphabetical Index 121


















This Consolidated Financial Report, Dividend Announcement and Appendix 4E has been prepared for Australia and New Zealand Banking Group Limited
(the “Company” or “Parent Entity”) together with its subsidiaries which are variously described as “ANZ”, “Group”, “ANZ Group”, “the consolidated entity”,
“the Bank”, “us”, “we” or “our”.
All amounts are in Australian dollars unless otherwise stated. The Company has a formally constituted Audit Committee of the Board of Directors. The
Condensed Consolidated Financial Statements were approved by resolution of a Committee of the Board of Directors on 30 October 2018.
When used in this Results Announcement the words “estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as
they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. ANZ does not undertake any obligation to publicly release the result of any revisions
to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522


6
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DISCLOSURE SUMMARY


7
SUMMARY OF 2018 FULL YEAR RESULTS AND ASSOCIATED DISCLOSURE MATERIALS

The following disclosure items were lodged separately with the ASX and NZX and can be accessed via the ANZ Shareholder Centre on the Group
website http://www.shareholder.anz.com within the disclosures for 2018 Full Year Results.

Available on 31 October 2018 – 2018 Full Year Results
 Consolidated Financial Report, Dividend Announcement & Appendix 4E
 Results Presentation and Investor Discussion Pack
 News Release
 Key Financial Data Summary
Available on or after 5 November 2018
 2018 Annual Report
 2018 The Company Financial Report
 2018 Annual Review
 2018 Corporate Governance Statement
 APS 330 Pillar III Disclosure at 30 September 2018
 2018 Corporate Sustainability Review
 United Kingdom Disclosure and Transparency Rules Submission

DISCLOSURE SUMMARY


8
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SUMMARY


9
CONTENTS Page

Guide to Full Year Results 10
Statutory Profit Results 11
Cash Profit Results 12
Financial Performance Summary – Total and continuing operations 13
Key Balance Sheet Metrics 14
Large/Notable Items – continuing operations 15
Full Time Equivalent Staff 20
Other Non-Financial Information 20

SUMMARY


10
Guide to Full Year Results

NON-IFRS INFORMATION
Statutory profit is prepared in accordance with recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report &
Dividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian
Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the ongoing business activities of the Group, enabling readers to
assess Group and Divisional performance against prior periods and against peer institutions. The items below are included in statutory profit which is
subject to audit within the context of the external auditor’s audit of the 2018 ANZ Annual Financial Report. Cash profit is not subject to audit by the
external auditor. The external auditor has informed the Audit Committee that recurring adjustments have been determined on a consistent basis across
each period presented, and the adjustments for the sale impact of Shanghai Rural Commercial Bank (SRCB) in the March 2018 half and the September
2017 full year are appropriate.
 Adjustments between statutory profit and cash profit
To calculate cash profit, the Group excludes non-core items from statutory profit (refer to Definitions for further details). Refer to pages 73 to 77 for
adjustments between statutory and cash profit.
 Large/Notable items within cash profit
The Group’s cash profit results from continuing operations include a number of items collectively referred to as Large/Notable items. While these
items form part of cash profit, given the nature and significance of these items, they have been called out separately with comparative information
provided, where relevant, to provide transparency and aid comparison. Refer to pages 15 to 19 for Large/Notable items.
DISCONTINUED OPERATIONS
As a result of the sales outlined below, the financial results of the Wealth Australia businesses being divested and associated Group reclassification and
consolidation impacts are treated as discontinued operations from a financial reporting perspective. These businesses qualify as discontinued operations,
a subset of assets held for sale, as they represent a major line of business.
The comparative Group Income Statements and Statement of Comprehensive Income have been restated to show discontinued operations separately
from continuing operations in a separate line item ‘Profit/(Loss) from discontinued operations’. This impacts the current and comparative financial
information for Wealth Australia and Technology, Services & Operations (TSO) and Group Centre divisions.
 Sale to IOOF Holdings Limited (IOOF)
On 17 October 2017, the Group announced it had agreed to sell its OnePath pensions and investments (OnePath P&I) and aligned dealer groups
(ADG) businesses to IOOF. The aligned dealer groups business consists of aligned advice businesses that operate under their own Australian
Financial Services licences. The sale of the aligned dealer groups business completed on 1 October 2018. The completion of the remaining OnePath
pensions and investment business is planned to occur after the successful completion of the successor fund transfer, which is expected to occur in
the first half of the 2019 financial year.
 Sale to Zurich Financial Services Australia (Zurich)
On 12 December 2017, ANZ announced that it had agreed to the sale of its life insurance business to Zurich and regulatory approval was obtained
on 10 October 2018. The transaction is subject to closing conditions and ANZ expects it to complete in the first half of the 2019 financial year.

Included in the 2018 ‘Loss from discontinued operations’ is:
 A $632 million loss (pre and post-tax) recognised on the reclassification of Wealth Australia businesses to held for sale; and
 Customer remediation of $181 million ($127 million post-tax) for refunds to customers and related remediation costs. These items primarily relate to
compensation to customers for receiving inappropriate advice or services not provided within the Group’s former aligned dealer groups.
Continuing operations includes the retained Wealth Australia division, which is made up of lenders mortgage insurance, share investing, financial
planning and general insurance distribution.
DIVISIONAL PERFORMANCE
As part of the broader simplification strategy for ANZ, there have been several structural changes during the September 2018 full year. Prior period
comparatives have been aligned with these changes, which include:
 the corporate business, formerly part of the Corporate and Commercial Banking business within the Australia division, has been transferred to the
Institutional division;
 the residual Asia Retail and Wealth businesses in Philippines, Japan and Cambodia not sold as part of the Asia Retail and Wealth divestment have
been transferred to the Institutional division; and
 the Group made a further realignment by transferring Group Hub’s divisional specific operations from TSO and Group Centre to the respective
divisions. As these costs were previously recharged, there is no change to previously reported divisional cash profit. Divisional full time equivalent
employees (FTEs) have been restated to reflect this change.

SUMMARY


11
Statutory Profit Results




Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Net interest income 7,164 7,350 -3% 14,514 14,875 -2%
Other operating income
2,492 2,825 -12% 5,317 4,523 18%
Operating income
9,656 10,175 -5% 19,831 19,398 2%
Operating expenses (4,837) (4,411) 10% (9,248) (8,967) 3%
Profit before credit impairment and income tax
4,819 5,764 -16% 10,583 10,431 1%
Credit impairment charge (280) (408) -31% (688) (1,198) -43%
Profit before income tax
4,539 5,356 -15% 9,895 9,233 7%
Income tax expense (1,358) (1,426) -5% (2,784) (2,874) -3%
Non-controlling interests
(9) (7) 29% (16) (15) 7%
Profit attributable to shareholders of the Company from continuing operations
3,172 3,923 -19% 7,095 6,344 12%
Profit/(Loss) from discontinued operations (95) (600) -84% (695) 62 large
Profit attributable to shareholders of the Company
3,077 3,323 -7% 6,400 6,406 0%

Earnings Per Ordinary Share (cents)

Half Year Full Year

Reference
Page
Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Basic
93
107.3 114.2 -6% 221.6 220.1 1%
Diluted 93
103.2 108.6 -5% 212.1 210.8 1%


Half Year Full Year

Reference Page Sep 18 Mar 18 Sep 18 Sep 17
Ordinary Share Dividends (cents)
Interim - 100% franked
1
92 - 80 80 80
Final - 100% franked
1
92 80 - 80 80
Total - 100% franked
1
92 80 80 160 160
Ordinary share dividend payout ratio
2
92 74.6% 69.7% 72.1% 73.4%
Profitability Ratios

Return on average ordinary shareholders' equity
3
10.4% 11.3% 10.9% 11.0%
Return on average assets
4
0.64% 0.71% 0.68% 0.70%
Net interest margin
1.82% 1.93% 1.87% 1.99%
Net interest income to average credit RWAs
4
4.21% 4.35% 4.28% 4.29%
Efficiency Ratios


Operating expenses to operating income 51.6% 46.8% 49.2% 46.6%
Operating expenses to average assets
4
1.08% 1.00% 1.04% 1.03%
Credit Impairment Charge/(Release)


Individual credit impairment charge ($M) 95 343 430 773 1,340
Collective credit impairment charge/(release) ($M) 95
(63) (22) (85) (142)
Total credit impairment charge ($M) 95
280 408 688 1,198
Individual credit impairment charge as a % of average gross loans and advances
4
0.11% 0.15% 0.13% 0.23%
Total credit impairment charge as a % of average gross loans and advances
4
0.09% 0.14% 0.12% 0.21%
1.
Fully franked for Australian tax purposes and carry New Zealand imputation credits of NZD 10 cents per ordinary share for the proposed 2018 final dividend (2018 interim dividend: NZD 9
cents; 2017 final dividend: NZD 10 cents; 2017 interim dividend: NZD 9 cents).
2.
Dividend payout ratio is calculated using the proposed 2018 final, 2018 interim, 2017 final and 2017 interim dividends.
3.
Average ordinary shareholders’ equity excludes non-controlling interests.
4.
Average assets, average gross loans and advances and average credit RWAs include assets held for sale.

SUMMARY


12
Cash Profit Results
1





Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Net interest income 7,164 7,350 -3% 14,514 14,875 -2%
Other operating income
2,242 2,458 -9% 4,700 4,941 -5%
Operating income
9,406 9,808 -4% 19,214 19,816 -3%
Operating expenses (4,837) (4,411) 10% (9,248) (8,967) 3%
Profit before credit impairment and income tax
4,569 5,397 -15% 9,966 10,849 -8%
Credit impairment charge (280) (408) -31% (688) (1,199) -43%
Profit before income tax
4,289 4,989 -14% 9,278 9,650 -4%
Income tax expense (1,286) (1,489) -14% (2,775) (2,826) -2%
Non-controlling interests
(9) (7) 29% (16) (15) 7%
Cash profit from continuing operations
2,994 3,493 -14% 6,487 6,809 -5%
Cash profit/(loss) from discontinued operations (65) (617) -89% (682) 129 large
Cash profit
2,929 2,876 2% 5,805 6,938 -16%

Earnings Per Ordinary Share (cents)

Half Year Full Year

Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Basic
101.6 98.3 3% 199.9 237.1 -16%
Diluted
97.9 94.2 4% 192.3 226.4 -15%


Half Year Full Year

Reference Page Sep 18 Mar 18 Sep 18 Sep 17
Ordinary Share Dividends
Ordinary share dividend payout ratio
2
78.4% 80.6% 79.5% 67.7%
Profitability Ratios

Return on average ordinary shareholders' equity
3
9.9% 9.8% 9.8% 11.9%
Return on average assets
4
0.61% 0.62% 0.62% 0.75%
Net interest margin
1.82% 1.93% 1.87% 1.99%
Net interest income to average credit RWAs
4
4.21% 4.35% 4.28% 4.29%
Efficiency Ratios

Operating expenses to operating income 54.0% 49.3% 51.6% 46.1%
Operating expenses to average assets
4
1.07% 1.00% 1.04% 1.03%
Credit Impairment Charge/(Release)

Individual credit impairment charge ($M) 32 343 430 773 1,341
Collective credit impairment charge/(release) ($M) 32
(63) (22) (85) (142)
Total credit impairment charge ($M) 32
280 408 688 1,199
Individual credit impairment charge as a % of average gross loans and advances
4
0.11% 0.15% 0.13% 0.23%
Total credit impairment charge as a % of average gross loans and advances
4
0.09% 0.14% 0.12% 0.21%
Cash Profit/(Loss) By Division Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 1,665 1,915 -13% 3,580 3,616 -1%
Institutional
742 793 -6% 1,535 1,924 -20%
New Zealand
749 726 3% 1,475 1,369 8%
Wealth Australia
8 44 -82% 52 95 -45%
Asia Retail & Pacific
45 106 -58% 151 (157) large
TSO and Group Centre
(215) (91) large (306) (38) large
Discontinued Operations
(65) (617) -89% (682) 129 large
Cash profit
2,929 2,876 2% 5,805 6,938 -16%
1.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the ongoing business activities of the Group. Refer to pages
73 to 77 for the reconciliation between statutory and cash profit. Refer to pages 15 to 19 for information on large/notable items included in continuing cash profit.
2.
Dividend payout ratio is calculated using the proposed 2018 final, 2018 interim and 2017 final and 2017 interim dividends.
3.
Average ordinary shareholders’ equity excludes non-controlling interests.
4.
Average assets, average gross loans and advances and average credit RWAs include assets held for sale.

SUMMARY
13
Financial Performance Summary – Total and continuing operations For financial reporting purposes the results of discontinued operations are shown in a separate line item ‘Profit/(Loss) from d
iscontinued operations’. In the table below we show Total cash profit, inclusive of discontinued operations, and
continuing operations cash profit. For the purpose of comparison, Total - inclusive of discontinued operations is presented suc
h that each Income Statement line item is inclusive of discontinued operations.


Half Year

Full Year











Total - inclusive of
discontinued
operations Movement

Continuing operations
Movement

Total - inclusive of
discontinued operations Movement

Continuing operations Movement


Sep 18
$M
Mar 18
$M
Sep 18
v. Mar 18

Sep 18
$M
Mar 18
$M
Sep 18
v. Mar 18

Sep 18
$M
Sep 17
$M
Sep 18
v. Sep 17

Sep 18
$M
Sep 17
$M
Sep 18
v. Sep 17

Net interest income
7,164
7,350
-3%
7,164
7,350
-3%
14,514
14,872
-2%
14,514
14,875
-2%
Other operating income
2,358
2,090
13%
2,242
2,458
-9%
4,448
5,617
-21%
4,700
4,941
-5%
Operating income
9,522
9,440
1%
9,406
9,808
-4%
18,962
20,489
-7%
19,214
19,816
-3%
Operating expenses
(5,138)
(4,654)
10%
(4,837)
(4,411)
10%
(9,792)
(9,448)
4%
(9,248)
(8,967)
3%
Profit before credit impairment and income tax
4,384
4,786
-8%
4,569
5,397
-15%
9,170
11,041
-17%
9,966
10,849
-8%
Credit impairment charge
(280)
(408)
-31%
(280)
(408)
-31%
(688)
(1,199)
-43%
(688)
(1,199)
-43%
Profit before income tax
4,104
4,378
-6%
4,289
4,989
-14%
8,482
9,842
-14%
9,278
9,650
-4%
Income tax expense
(1,166)
(1,495)
-22%
(1,286)
(1,489)
-14%
(2,661)
(2,889)
-8%
(2,775)
(2,826)
-2%
Non-controlling interests
(9)
(7)
29%
(9)
(7)
29%
(16)
(15)
7%
(16)
(15)
7%
Cash Profit
2,929
2,876
2%

2,994
3,493
-14%

5,805
6,938
-16%

6,487
6,809
-5%

Average interest earning assets
784,501
765,186 3%

784,501
765,186
3%

774,884
748,000 4%

774,884
748,000
4%

Average deposits and other borrowings
621,699
612,291 2%
621,699
612,291 2%
617,008
604,709 2%
617,008
604,543 2%
Funds under management
1

81,122
80,178 1%
30,734
30,596 0%
81,122
77,985 4%
30,734
28,925 6%
Earnings per share (basic)
101.6
98.3 3%

103.9
119.4
-13%

199.9
237.1 -16%

223.4
232.7
-4%

Ordinary share dividend payout ratio
78.4%
80.6%
76.7%
66.3%
79.5%
67.7%
71.1%
69.0%
Profitability Ratios








Return on average ordinary shareholders' equity
2

9.9%
9.8%
10.1%
11.9%
9.8%
11.9%
11.0%
11.7%
Return on average assets
0.61%
0.62%
0.66%
0.79%
0.62%
0.75%
0.72%
0.78%
Net interest margin
1.82%
1.93%

1.82%
1.93%

1.87%
1.99%

1.87%
1.99%

Efficiency Ratios








Operating expenses to operating income
54.0%
49.3%
51.4%
45.0%
51.6%
46.1%
48.1%
45.3%
Operating expenses to average assets
1.07%
1.00%
1.06%
0.99%
1.04%
1.03%
1.03%
1.02%
FTE
3

39,924
41,580 -4%
37,860
39,655 -5%
39,924
44,896 -11%
37,860
43,011 -12%
1.
Funds under management for continuing operations relates to New Zealand Wealth and Private Bank in Australia division.
2.
Average ordinary
shareholders’ equity excludes
non-controlling interests.
3.
The actual FTE that will transfer to IOOF or Zurich on sale co
mpletion or at a later date is currently being determined. Disco
ntinued FTE is based on an estimate using an allocation methodology. Discontinued FTE for the September 2017 full year has been
restated to reflect a more accurate
estimate of the FTEs that will transfer to IOOF or Zurich.

SUMMARY


14
Key Balance Sheet Metrics
1



As at Movement

Reference
Page
Sep 18 Mar 18 Sep 17
Sep 18
v. Mar 18
Sep 18
v. Sep 17
Capital Management


Common Equity Tier 1

- APRA Basel 3 43
11.4% 11.0% 10.6%
- Internationally Comparable Basel 3
2
43 16.8% 16.3% 15.8%
Credit risk weighted assets ($B) 108
337.6 342.8 336.8 -2% 0%
Total risk weighted assets ($B) 43
390.8 395.8 391.1 -1% 0%
Leverage Ratio 46
5.5% 5.4% 5.4%
Balance Sheet: Key Items


Gross loans and advances ($B) 608.4 595.5 584.1 2% 4%
Net loans and advances ($B)
604.9 591.9 580.3 2% 4%
Total assets ($B)
942.6 935.1 897.3 1% 5%
Customer deposits ($B)
487.3 472.8 467.6 3% 4%
Total equity ($B)
59.4 59.5 59.1 0% 1%

As at Movement
Liquidity Risk
Reference
Page
Sep 18 Mar 18 Sep 17
Sep 18
v. Mar 18
Sep 18
v. Sep 17
Liquidity Coverage Ratio 41 142% 134% 135% 8% 7%
Net Stable Funding Ratio 42
115% 115% 114% 0% 1%

As at Movement

Reference
Page
Sep 18 Mar 18 Sep 17
Sep 18
v. Mar 18
Sep 18
v. Sep 17
Impaired Assets


Gross impaired assets ($M) 34
2,013 2,034 2,384 -1% -16%
Gross impaired assets as a % of gross loans and advances
0.33% 0.34% 0.41%
Net impaired assets ($M) 34
1,093 1,018 1,248 7% -12%
Net impaired assets as a % of shareholders' equity
1.8% 1.7% 2.1%
Individual provision ($M) 33 920 1,016 1,136 -9% -19%
Individual provision as a % of gross impaired assets
45.7% 50.0% 47.7%
Collective provision ($M) 33
2,523 2,579 2,662 -2% -5%
Collective provision as a % of credit risk weighted assets
0.75% 0.75% 0.79%
Net Assets
Net tangible assets attributable to ordinary shareholders ($B)
3
53.1 53.0 51.9 0% 2%
Net tangible assets per ordinary share ($)
18.47 18.27 17.66 1% 5%


As at Movement
Net Loans And Advances By Division (Excluding Held for Sale)
Sep 18
$B
Mar 18
$B
Sep 17
$B
Sep 18
v. Mar 18
Sep 18
v. Sep 17
Australia 340.3 339.3 333.6 0% 2%
Institutional
148.8 137.9 131.6 8% 13%
New Zealand
111.3 108.3 104.9 3% 6%
Wealth Australia
0.9 0.9 1.7 0% -47%
Asia Retail & Pacific
2.1 2.2 2.5 -5% -16%
TSO and Group Centre
0.5 0.3 - 67% n/a
Net loans and advances by division
603.9 588.9 574.3 3% 5%
1.
Balance Sheet amounts and metrics include assets and liabilities held for sale unless otherwise stated.
2.
See page 43 for further details regarding the differences between APRA Basel 3 and Internationally Comparable Basel 3 standards.
3.
Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.

SUMMARY


15
Large/Notable Items – continuing operations
Large/notable items included in cash profit from continuing operations are described below.
Divestment impacts (continuing operations)
The Group announced the following divestments in line with the Group’s strategy to create a simpler, better capitalised, better balanced and more agile
bank. As these divestments do not qualify as discontinued operations under accounting standards they form part of continuing operations. The financial
impacts from these divestments are summarised below including the business results for those divestments that have completed:


Gain/(Loss) on sale from divestments Completed divestment business results
Half Year Full Year Half Year Full Year
Cash Profit Impact
Sep 18
$M
Mar 18
$M
Sep 18
$M
Sep 17
$M
Sep 18
$M
Mar 18
$M
Sep 18
$M
Sep 17
$M
Asia Retail and Wealth businesses - 99 99 (310) - 30 30 325
SRCB - 2 2 - - - - 58
UDC
(7) 18 11 - - - - -
MCC
121 119 240 - 10 - 10 39
Cambodia JV
(42) - (42) - - - - -
OPL NZ
(3) - (3) - - - - -
PNG Retail, Commercial and SME
(19) - (19) - - - - -
Profit/(Loss) before income tax
50 238 288 (310) 10 30 40 422
Income tax benefit/(expense) and non-controlling interests 3 (100) (97) 40 - (6) (6) (63)
Cash profit/(loss) from continuing operations 53 138 191 (270) 10 24 34 359

 Asia Retail and Wealth businesses
The Group announced that it had agreed to sell its Retail and Wealth businesses in Singapore, Hong Kong, China, Taiwan and Indonesia to
Singapore’s DBS Bank on 31 October 2016, and its Retail business in Vietnam to Shinhan Bank Vietnam on 21 April 2017. The Group recognised
the following impacts:
 During the September 2018 full year, the Group recognised a $99 million gain relating to the completed transition of the Vietnam, Taiwan, and
Indonesia businesses, net of costs associated with the sale. The Group recognised $30 million in respect of the divested business results.
 During the September 2017 full year, the Group recognised a net loss of $310 million. This comprises a $324 million loss on the reclassification
of assets to held for sale in addition to costs associated with the sale, and a $14 million gain on the completed transition of the China, Singapore
and Hong Kong businesses comprising sale premium and recoveries, net of related sale costs. The Group recognised $325 million in respect of
the divested business results.
 Shanghai Rural Commercial Bank (SRCB)
On 3 January 2017, the Group announced it had agreed to sell its 20% stake in Shanghai Rural Commercial Bank (SRCB). The sale was completed
in the September 2018 full year and the Group recognised a net gain of $2 million ($86 million loss after tax). Equity accounted earnings of $58
million were recorded in the September 2017 full year prior to the reclassification to held for sale.
 UDC Finance (UDC)
On 11 January 2017, the Group announced that it had entered into a conditional agreement to sell UDC to HNA Group (HNA). On 21 December
2017, the Group 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 and an $18 million cost recovery was recognised in respect of the terminated
transaction process. The Group incurred transaction costs of $7 million in the September 2018 half. The assets and liabilities of UDC are no longer
classified as held for sale as at 30 September 2018.
 Metrobank Card Corporation (MCC)
On 18 October 2017, the Group announced it had entered into a sale agreement with its joint venture partner Metropolitan Bank & Trust Company
(Metrobank) in relation to its 40% stake in the Philippines based Metrobank Card Corporation (MCC). The Group sold its 40% stake in two equal
tranches in January and September 2018. During the September 2018 full year, the Group recognised a net gain on sale of $240 million and a
dividend of $10 million. Equity accounted earnings of $39 million were recorded in the September 2017 full year prior to the reclassification to held for
sale.
 ANZ Royal Bank (Cambodia) Ltd (Cambodia JV)
On 17 May 2018, the Group announced it had reached an agreement to sell its 55% stake in Cambodia JV to J Trust, a Japanese diversified
financial holding company listed on the Tokyo Stock Exchange. The transaction is subject to closing conditions and regulatory approval and ANZ
expects it to close in the 2019 financial year. During the September 2018 full year, the Group recognised a $42 million loss on the reclassification of
assets to held for sale.
 OnePath Life NZ Ltd (OPL NZ)
On 30 May 2018, the Group announced that it had agreed to sell OnePath Life NZ Limited to Cigna Corporation and the final regulatory approval was
obtained on 29 October 2018. The transaction is subject to closing conditions and ANZ expects it to close in the 2019 financial year. During the
September 2018 full year, the Group incurred $3 million relating to transaction costs.

SUMMARY


16
 Papua New Guinea Retail, Commercial and Small-Medium Sized Enterprise businesses (PNG Retail, Commercial and SME)
On 25 June 2018, the Group announced it had entered into an agreement to sell its Retail, Commercial and Small-Medium Sized Enterprise (SME)
banking businesses in Papua New Guinea to Kina Bank. The transaction is subject to closing conditions and regulatory approval and ANZ expects it
to close by late 2019 calendar year. During the September 2018 full year, the Group recognised a $19 million loss on the reclassification of assets to
held for sale.

Other large/notable items (continuing operations)
 Customer remediation
Customer remediation charges of $419 million have been recognised in the September 2018 full year (Sep 17 full year: $153 million) for refunds to
customers and related remediation costs. $228 million relates to customer remediation impacting operating income (Sep 17 full year: $70 million),
and $191 million relating to remediation costs impacting operating expenses (Sep 17 full year: $83 million). These impacts were primarily identified
from product reviews in the Australia division to date. These reviews remain ongoing.
 Accelerated software amortisation
The Group has accelerated the amortisation of certain software assets, predominantly relating to the Institutional division. This follows a recent
review of the International business in light of recent divestments. An accelerated amortisation expense of $251 million was recognised in the
September 2018 full year.
 Royal Commission legal costs
External legal costs associated with responding to the Royal Commission were $55 million for the September 2018 full year.
 Restructuring
The Group recognised restructuring expenses of $227 million in the September 2018 full year (Sep 17 full year: $62 million), largely relating to the
previously announced move of the Australia and Technology divisions to agile ways of working.
 Gain on sale of 100 Queen Street, Melbourne
The Group sold the 100 Queen Street office tower and former head office in Melbourne, Australia during the September 2017 full year. The
transaction resulted in a net gain on sale of $114 million.

SUMMARY
17
Large/Notable items - continuing operations

Cash Profit Results
Half Year
Full Year

Sep 18
Large/
notables
Sep 18
ex. Large/
notables Mar 18
Large/
notables
Mar 18
ex. Large/
notables
Movt
ex. Large/
notables
Sep 18
Large/
notables
Sep 18
ex. Large/
notables Sep 17
Large/
notables
1

Sep 17
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M $M $M $M
$M
$M
$M $M $M $M
Net interest income
7,164
(86)
7,250
7,350 34 7,316 -1%
14,514
(52)
14,566
14,875 406 14,469 1%
Other operating income
2,242
(40)
2,282
2,458 263 2,195 4%
4,700
223
4,477
4,941 91 4,850 -8%
Operating income
9,406
(126)
9,532
9,808 297 9,511 0%
19,214
171
19,043
19,816 497 19,319 -1%
Operating expenses
(4,837)
(605)
(4,232)
(4,411) (164) (4,247)
0%
(9,248)
(769)
(8,479)
(8,967) (362) (8,605) -1%
Profit before credit impairment and income tax
4,569
(731)
5,300
5,397 133 5,264 1%
9,966
(598)
10,564
10,849 135 10,714 -1%
Credit impairment charge
(280)
-
(280)
(408) (26) (382) -27%
(688)
(26)
(662)
(1,199) (124) (1,075) -38%
Profit/(Loss) before income tax
4,289
(731)
5,020
4,989 107 4,882 3%
9,278
(624)
9,902
9,650 11 9,639 3%
Income tax benefit/(expense) and non-controlling interests
(1,295)
207
(1,502)
(1,496)
(56)
(1,440)
4%
(2,791)
151
(2,942)
(2,841) 35 (2,876) 2%
Cash profit/(loss) from continuing operations
2,994
(524)
3,518
3,493 51 3,442 2%
6,487
(473)
6,960
6,809 46 6,763 3%

Cash Profit/(Loss) By Division
Half Year

Full Year

Sep 18
Large/
notables
Sep 18
ex. Large/
notables Mar 18
Large/
notables
Mar 18
ex. Large/
notables
Movt
ex. Large/
notables
Sep 18
Large/
notables
Sep 18
ex. Large/
notables Sep 17
Large/
notables
1

Sep 17
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M $M $M $M
$M
$M
$M $M $M $M
Australia
1,665
(233)
1,898
1,915 (76) 1,991 -5%
3,580
(309)
3,889
3,616 (69) 3,685 6%
Institutional
742
(210)
952
793 - 793 20%
1,535
(210)
1,745
1,924 (20) 1,944 -10%
New Zealand
749
(19)
768
726 (6) 732 5%
1,475
(25)
1,500
1,369 (13) 1,382 9%
Wealth Australia
8
(44)
52
44 (13) 57 -9%
52
(57)
109
95 (21) 116 -6%
Asia Retail & Pacific
45
-
45
106 109 (3) large
151
109
42
(157) (8) (149) large
TSO and Group Centre
2

(215)
(18)
(197)
(91) 37 (128) 54%
(306)
19
(325)
(38) 177 (215) 51%
Cash profit/(loss) from continuing operations
2,994
(524)
3,518
3,493 51 3,442 2%
6,487
(473)
6,960
6,809 46 6,763 3%
1.
Where applicable, comparative information has been restated for large/notable items included in the 2018 full year. Derivative
valuation adjustments for the September 2018 full year are not considered to be a large/notable item and the September 2017 fu
ll year large/notable items have been
restated accordingly. Refer to page 64 for further information on derivative valuation adjustments.
2.
TSO and Group Centre includes the Gain/(
Loss) on sale from divestment
s including SRCB, UDC, MCC,
Cambodia JV, OPL NZ, PNG Reta
il, Commercial and SME. It also includes the completed MCC and SRCB divestment business results.

SUMMARY
18
Large/Notable items - continuing operations

Within continuing cash profit, the Group has recognised some large/notable items. These items are shown in the tables below.





September 2018 Full Year
September 2017 Full Year
1


Large/notable items included in continuing cash profit
Large/notable items included in continuing cash profit

Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Accelerated
software
amortisation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Restructuring
$M
Gain on sale
of 100 Queen
St, Melbourne
$M
Total
$M
Cash Profit
Net interest income
-
53
(105)
-
-
-
(52)
- 442 (36)
-
-
406
Other operating income
298
48
(123)
-
-
-
223
(310) 321 (34)
- 114
91
Operating income
298
101
(228)
-
-
-
171
(310) 763 (70)
- 114
497
Operating expenses
(10)
(35)
(191)
(251)
(55)
(227)
(769)
- (217) (83) (62)
-
(362)
Profit before credit impairment and income tax
288
66
(419)
(251)
(55)
(227)
(598)
(310) 546 (153) (62) 114
135
Credit impairment charge
-
(26)
-
-
-
-
(26)
- (124) - - -
(124)
Profit before income tax
288
40
(419)
(251)
(55)
(227)
(624)
(310) 422 (153) (62) 114
11
Income tax benefit/(expense) and non-controlling interests
(97)
(6)
124
45
17
68
151
40 (63) 41 19 (2)
35
Cash profit from continuing operations
191
34
(295)
(206)
(38)
(159)
(473)
(270) 359 (112) (43) 112
46

September 2018 Half Year
March 2018 Half Year

Large/notable items included in continuing cash profit
Large/notable items included in continuing cash profit

Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Accelerated
software
amortisation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Cash Profit
Net interest income
-
-
(86)
-
-
-
(86)
- 53 (19) - -
34
Other operating income
60
10
(110)
-
-
-
(40)
238 38 (13) - -
263
Operating income
60
10
(196)
-
-
-
(126)
238 91 (32) - -
297
Operating expenses
(10)
-
(156)
(251)
(39)
(149)
(605)
- (35) (35) (16) (78)
(164)
Profit before credit impairment and income tax
50
10
(352)
(251)
(39)
(149)
(731)
238 56 (67) (16) (78)
133
Credit impairment charge
-
-
-
-
-
-
-
- (26) - -
-
(26)
Profit before income tax
50
10
(352)
(251)
(39)
(149)
(731)
238 30 (67) (16) (78)
107
Income tax benefit/(expense) and non-controlling interests
3
-
102
45
12
45
207
(100) (6) 22 5 23
(56)
Cash profit from continuing operations
53
10
(250)
(206)
(27)
(104)
(524)
138 24 (45) (11) (55)
51
1.
Where applicable, comparative information has been restated for large/notable items included in the 2018 full year. Derivative
valuation adjustments for the September 2018 full year are not considered to be a large/notable item and the September 2017 fu
ll year large/notable items have been
restated accordingly. Refer to page 64 for further information on derivative valuation adjustments.
2.
Relates to business results
for completed divestments.

SUMMARY
19
Large/Notable items - continuing operations

Within continuing cash profit, the Group has recognised some large/notable items. The impact of these items on the divisional r
esults are shown in the tables below.





September 2018 Full Year
September 2017 Full Year
1


Large/notable items included in continuing cash profit
Large/notable items included in continuing cash profit

Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Accelerated
software
amortisation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Restructuring
$M
Gain on sale
of 100 Queen
St, Melbourne
$M
Total
$M
Profit before income tax
Australia
-
-
(304)
(29)
-
(110)
(443) -
- (94) (6) -
(100)
Institutional
-
-
(7)
(222)
-
(25)
(254) -
- (16) (6) -
(22)
New Zealand
-
-
(27)
-
-
(9)
(36) -
- (15) (3) -
(18)
Wealth Australia
-
-
(81)
-
-
(1)
(82) -
- (28) (1) -
(29)
Asia Retail & Pacific
99
30
-
-
-
-
129
(310) 325 - - -
15
TSO and Group Centre
3

189
10
-
-
(55)
(82)
62
- 97 -
(46) 114
165
Profit before income tax
288
40
(419)
(251)
(55)
(227)
(624)
(310) 422 (153)
(62)
114
11
Income tax benefit/(expense) and non-controlling interests
(97)
(6)
124
45
17
68
151
40 (63) 41 19 (2)
35
Cash profit from continuing operations
191
34
(295)
(206)
(38)
(159)
(473)
(270) 359 (112) (43) 112
46

September 2018 Half Year
March 2018 Half Year

Large/notable items included in continuing cash profit
Large/notable items included in continuing cash profit

Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Accelerated
software
amortisation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
2

$M
Customer
remediation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Profit before income tax
Australia
-
-
(254)
(29)
-
(53)
(336)
- -
(50) - (57)
(107)
Institutional
-
-
(12)
(222)
-
(17)
(251)
- -
5 - (8)
(3)
New Zealand
-
-
(24)
-
-
(4)
(28)
- -
(3) - (5)
(8)
Wealth Australia
-
-
(62)
-
-
-
(62)
- -
(19) - (1)
(20)
Asia Retail & Pacific
-
-
-
-
-
(1)
(1)
99 30 - - 1
130
TSO and Group Centre
3

50
10
-
-
(39)
(74)
(53)
139 - - (16) (8)
115
Profit before income tax
50
10
(352)
(251)
(39)
(149)
(731)
238 30 (67) (16) (78)
107
Income tax benefit/(expense) and non-controlling interests
3
-
102
45
12
45
207
(100) (6) 22 5 23
(56)
Cash profit from continuing operations
53
10
(250)
(206)
(27)
(104)
(524)
138 24 (45) (11) (55)
51
1.
Where applicable, comparative information has been restated for large/notable items included in the 2018 full year. Derivative
valuation adjustments for the September 2018 full year are not considered to be a large/notable item and the September 2017 fu
ll year large/notable items have been
restated accordingly. Refer to page 64 for further information on derivative valuation adjustments.
2.
Relates to business result
s for completed divestments.
3.
TSO and Group Centre includes the Gain/(
Loss) on sale from divestment
s including SRCB, UDC, MCC,
Cambodia JV, OPL NZ, PNG Reta
il, Commercial and SME. It also includes the completed MCC and SRCB divestment business results.

SUMMARY


20
Full Time Equivalent Staff

As at 30 September 2018, ANZ employed 39,924 staff (Mar 18: 41,580; Sep 17: 44,896) on a full-time equivalent (FTE) basis.

Division
Half Year Full Year

Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Australia 12,885 13,701 -6% 12,885 13,885 -7%
Institutional
6,188 6,505 -5% 6,188 6,783 -9%
New Zealand
6,165 6,319 -2% 6,165 6,372 -3%
Wealth Australia
2,314 2,388 -3% 2,314 2,512 -8%
Asia Retail & Pacific
1,131 1,199 -6% 1,131 3,664 -69%
TSO and Group Centre
11,241 11,468 -2% 11,241 11,680 -4%
Total FTE
39,924 41,580 -4% 39,924 44,896 -11%
Continuing operations
1
37,860 39,655 -5% 37,860 43,011 -12%
Discontinued operations
1
2,064 1,925 7% 2,064 1,885 9%
Average FTE
40,760 44,029 -7% 42,388 46,068 -8%

Geography
Half Year Full Year

Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Australia 18,671 19,351 -4% 18,671 19,657 -5%
Asia Pacific, Europe & America
13,742 14,511 -5% 13,742 17,484 -21%
New Zealand
7,511 7,718 -3% 7,511 7,755 -3%
Total FTE
39,924 41,580 -4% 39,924 44,896 -11%
1.
The actual FTE that will transfer to IOOF and Zurich on sale completion or at a later date is currently being determined. The FTE allocated to discontinued operations is based on an
estimate using an allocation methodology. Discontinued FTE for the September 2017 full year has been restated to reflect a more accurate estimate of the FTEs that will transfer to IOOF
and Zurich.

Other Non-Financial Information


Half Year

Full Year
Shareholder value - ordinary shares
Sep 18 Mar 18 Movt

Sep 18 Sep 17 Movt
Share price ($)

- high 30.39 30.80 -1% 30.80 32.95 -7%
- low
26.08 26.81 -3% 26.08 25.78 1%
- closing

28.18 26.86 5% 28.18 29.60 -5%
Closing market capitalisation of ordinary shares ($B)
81.0 77.9 4% 81.0 86.9 -7%
Total shareholder returns (TSR)
8.0% -6.8% large 0.6% 13.1% -95%



As at Sep 18
Credit Ratings

Short-
Term
Long-
Term Outlook

Moody's Investor Services P-1 Aa3 Stable
Standard & Poor's A-1+ AA- Negative
Fitch Ratings F1+ AA- Stable

GROUP RESULTS


21

CONTENTS Page

Cash Profit 22
Group Performance – continuing operations 23
Net Interest Income - continuing operations 24
Other Operating Income - continuing operations 26
Operating Expenses - continuing operations 29
Software Capitalisation - continuing operations 31
Credit Risk - continuing operations 32
Income Tax Expense - continuing operations 36
Impact of Foreign Currency Translation - continuing operations 37
Earnings Related Hedges - continuing operations 38
Earnings per Share - continuing operations 38
Dividends - continuing operations 39
Economic Profit - continuing operations 39
Condensed Balance Sheet - including discontinued operations 40
Liquidity Risk - including discontinued operations 41
Funding - including discontinued operations 42
Capital Management - including discontinued operations 43
Leverage Ratio - including discontinued operations 46
Capital Management - Other Regulatory Developments 46

GROUP RESULTS


22
Non-IFRS Information
Statutory profit is prepared in accordance with recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Consolidated Financial Report &
Dividend Announcement which are prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian
Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents ANZ’s preferred measure of the result of the ongoing business activities of the Group, enabling readers to
assess Group and Divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items
from statutory profit (refer to Definitions for further details). The adjustments made in arriving at cash profit are included in statutory profit which is subject
to audit within the context of the external auditor’s audit of the 2018 ANZ Annual Financial Report. Cash profit is not subject to audit by the external
auditor. The external auditor has informed the Audit Committee that recurring adjustments have been determined on a consistent basis across each
period presented, and the adjustments for the sale impact of Shanghai Rural Commercial Bank (SRCB) in the March 2018 half and the September 2017
full year are appropriate.
The Group Results section is reported on a cash profit basis for continuing operations unless otherwise stated. For continuing operations,
comparatives have been restated for the impact of discontinued operations. For information on discontinued operations please refer to the
Guide to Full Year Results on page 10.

Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Statutory profit attributable to shareholders of the Company from
continuing operations
3,172 3,923 -19% 7,095 6,344 12%


Adjustments between statutory profit and cash profit
1


Revaluation of policy liabilities (4) (10) -60% (14) 25 large
Economic hedges
(124) (124) 0% (248) 209 large
Revenue and expense hedges
(49) 40 large (9) (99) -91%
Structured credit intermediation trades
(1) (3) -67% (4) (3) 33%
Sale of SRCB
- (333) -100% (333) 333 large
Total adjustments between statutory profit and cash profit for continuing
operations
(178) (430) -59% (608) 465 large
Cash profit from continuing operations 2,994 3,493 -14% 6,487 6,809 -5%
1.
Refer to pages 73 to 77 for analysis of the adjustments between statutory profit and cash profit.

Group performance - cash profit
Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Net interest income 7,164 7,350 -3% 14,514 14,875 -2%
Other operating income
2,242 2,458 -9% 4,700 4,941 -5%
Operating income
9,406 9,808 -4% 19,214 19,816 -3%
Operating expenses (4,837) (4,411) 10% (9,248) (8,967) 3%
Profit before credit impairment and income tax
4,569 5,397 -15% 9,966 10,849 -8%
Credit impairment charge (280) (408) -31% (688) (1,199) -43%
Profit before income tax
4,289 4,989 -14% 9,278 9,650 -4%
Income tax expense (1,286) (1,489) -14% (2,775) (2,826) -2%
Non-controlling interests
(9) (7) 29% (16) (15) 7%
Cash profit from continuing operations
2,994 3,493 -14% 6,487 6,809 -5%

Half Year Full Year
Cash profit/(loss) by Division
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 1,665 1,915 -13% 3,580 3,616 -1%
Institutional
742 793 -6% 1,535 1,924 -20%
New Zealand
749 726 3% 1,475 1,369 8%
Wealth Australia
8 44 -82% 52 95 -45%
Asia Retail & Pacific
45 106 -58% 151 (157) large
TSO and Group Centre
(215) (91) large (306) (38) large
Cash profit
2,994 3,493 -14% 6,487 6,809 -5%

GROUP RESULTS


23
Group Performance – continuing operations

Group Cash Profit - September 2018 Full Year v September 2017 Full Year

 September 2018 v September 2017
Cash profit from continuing operations decreased $322 million (-5%) compared with the September 2017 full year.
 Net interest income decreased $361 million (-2%) largely due to a 12 basis point decrease in the net interest margin, partially offset by 4%
growth in average interest earning assets. The lower net interest margin reflects growth in lower margin liquid assets, changes in product mix,
the sale of the Asia Retail and Wealth businesses, the introduction of the major bank levy from July 2017, and the impact of higher customer
remediation charges ($69 million). This was partially offset by higher deposit margins and home loans re-pricing. The increase in average
interest earning assets reflects growth in ANZ’s home loans and Institutional banking portfolios, partially offset by the sale of Asia Retail and
Wealth businesses. Refer to page 24 and 25 for further details on key movements.
 Other operating income decreased $241 million (-5%) largely as a result of a $318 million decrease in Markets income, a $89 million increase in
customer remediation charges, a $30 million reduction in lending fee income, and the $114 million gain on the sale of Queen street recognised
in the September 2017 full year. This was partially offset by a $335 million impact from divestments. Refer to pages 26 to 28 for further details
on key movements.
 Operating expenses increased $281 million (3%) primarily due to an accelerated software amortisation charge ($251 million), higher
restructuring ($165 million) and customer remediation ($108 million), Royal Commission legal costs ($55 million), higher technology and
consulting fees associated with investment in digital and data capabilities, and inflation. This was partially offset by lower personnel costs due to
a reduction in incentives and a 9% reduction in average FTE. Refer to pages 29 to 30 for further details on key movements.
 Credit impairment charges decreased $511 million (-43%) largely due to lower individual credit impairment charges. Refer to page 32 and 33 for
further details on key movements.
Excluding large/notable items, cash profit increased $197 million (3%).

 September 2018 v March 2018
Cash profit from continuing operations decreased $499 million (-14%) compared with the March 2018 half.
 Net interest income decreased $186 million (-3%) largely due to a 11 basis point decrease in the net interest margin, partially offset by 3%
growth in average interest earning assets. The lower net interest margin reflects growth in lower margin liquid assets, changes in product mix,
the impact of higher customer remediation charges ($67 million), asset price competition, higher funding costs, and the sale of the Asia Retail
and Wealth businesses. This was partially offset by higher deposit margins. The increase in average interest earning assets reflects growth in
ANZ’s home loans and Institutional banking portfolios, partially offset by the sale of Asia Retail and Wealth businesses. Refer to page 24 and 25
for further details on key movements.
 Other operating income decreased $216 million (-9%) largely the result of divestment impacts ($206 million) and higher customer remediation
($97 million), partially offset by higher Markets income ($41 million). Refer to pages 26 to 28 for further details on key movements.
 Operating expenses increased $426 million (10%) primarily due to an accelerated software amortisation charge ($251 million), higher customer
remediation ($121 million), restructuring ($71 million), Royal Commission legal costs ($23 million), technology and consulting fees associated
with increased investment in digital and data capabilities, and higher premises expenses. This was partially offset by lower personnel costs due
to a reduction in incentives and a 7% reduction in average FTE. Refer to pages 29 to 30 for further details on key movements.
 Credit impairment charges decreased $128 million (-31%) largely due to lower individual credit impairment charges. Refer to page 32 and 33 for
further details on key movements.
Excluding large/notable items, cash profit increased $76 million (2%).

GROUP RESULTS


24
Net Interest Income - continuing operations


Half Year

Full Year
Group
Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Cash net interest income
1
7,164 7,350 -3% 14,514 14,875 -2%
Average interest earning assets
2
784,501 765,186 3% 774,884 748,000 4%
Average deposits and other borrowings
2,3
621,699 612,291 2% 617,008 604,543 2%
Net interest margin (%) - cash
1.82 1.93 -11 bps 1.87 1.99 -12 bps

Group (excluding Markets business unit)

Cash net interest income
1
6,850 6,981 -2% 13,831 13,955 -1%
Average interest earning assets
2
549,398 538,968 2% 544,212 537,766 1%
Average deposits and other borrowings
2,3
456,936 455,946 0% 456,442 458,162 0%
Net interest margin (%) - cash
2.49 2.60 -11 bps 2.54 2.59 -5 bps


Half Year

Full Year
Cash profit net interest margin by major division
1

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Australia

Net interest margin (%) - cash 2.61 2.78 -17 bps 2.69 2.73 -4 bps
Average interest earning assets
313,895 310,830 1% 312,367 301,096 4%
Average deposits and other borrowings
202,530 203,239 0% 202,884 196,234 3%


Institutional

Net interest margin (%) - cash 0.89 0.91 -2 bps 0.90 1.03 -13 bps
Average interest earning assets
2
349,090 333,919 5% 341,525 316,205 8%
Average deposits and other borrowings
2
269,578 257,874 5% 263,742 246,931 7%


New Zealand

Net interest margin (%) - cash 2.35 2.37 -2 bps 2.36 2.31 5 bps
Average interest earning assets
2
111,092 108,008 3% 109,554 109,212 0%
Average deposits and other borrowings
2
81,214 79,669 2% 80,444 78,968 2%
1.
Includes large/notable items of -$86 million for the September 2018 half (Mar 18 half: $34 million) and -$52 million for the September 2018 full year (Sep 17 full year: $406 million). Refer to
pages 15 to 19 for further details on large/notable items. Also includes the major bank levy of -$178 million for the September 2018 half (Mar 18 half: -$177 million) and -$355 million for the
September 2018 full year (Sep 17 full year: -$86 million).
2.
Average balance sheet amounts include assets and liabilities reclassified as held for sale from continuing operations.
3.
In the March 2018 half, certain instruments were reclassified from average non-deposit interest bearing liabilities to average deposit and other borrowings to better reflect their nature.
Comparatives have been restated accordingly (Sep 17 full year: $4,357 million).

Group net interest margin - September 2018 Full Year v September 2017 Full Year
 September 2018 v September 2017
Net interest margin (-12 bps)
 Asset mix and funding mix (-4 bps): unfavourable asset mix from home loan customers switching from interest only to principal and interest
loans, and a lower proportion of business lending in Australia and Institutional divisions.
 Funding costs (-3 bps): mostly the impact of the major bank levy effective from July 2017.
 Deposits (+3 bps): improved deposit margins in Australia and Institutional divisions.

GROUP RESULTS


25
 Asset competition (+3 bps): impact of home loan re-pricing in Australia and New Zealand divisions, partially offset by higher discounting on home
loans.
 Treasury and other (-2 bps): lower earnings on capital as a result of lower interest rates.
 Customer remediation (-1 bps): impact of customer remediation in Australia and New Zealand divisions.
 Markets Balance Sheet activities (-6 bps): growth in lower margin trading and liquid assets and lower earnings from markets activities.
 Asia Retail and Wealth (-2 bps): adverse impact from the sale of Asia Retail and Wealth businesses.
Average interest earning assets (+$26.9 billion or +4%)
 Average net loans and advances (+$9.9 billion or +2%): increase driven by growth in Australia and New Zealand home loans. This was partially
offset by the sale of Asia Retail and Wealth businesses and the impact of foreign currency exchange rate movements.
 Average trading and available-for-sale assets (+$5.0 billion or +5%): increase driven by growth in government securities.
 Average cash and other liquids (+$12.0 billion or +14%): increase driven by higher central bank cash balances and repurchase agreements.
Average deposits and other borrowings (+$12.5 billion or +2%)
 Average deposits and other borrowings (+$12.5 billion or +2%): increase driven by growth in customer deposits in Australia, Institutional and
New Zealand divisions, partially offset by the sale of Asia Retail and Wealth businesses.
Group net interest margin - September 2018 Half Year v March 2018 Half Year

 September 2018 v March 2018
Net interest margin (-11 bps)
 Asset mix and funding mix (-2 bps): unfavourable asset mix from the impacts of customer switching from interest only to principal and interest
home loans, and unfavourable mix from a higher proportion of wholesale funding.
 Funding costs (-1 bps): unfavourable basis risk, partially offset by favourable spreads on wholesale funding.
 Deposit competition (+1 bps): improved deposit margins in Australia and Institutional divisions.
 Asset competition (-2 bps): adverse impact of home loan competition in Australia division, partially offset by improved Institutional margins.
 Treasury (0 bps): broadly flat earnings on capital.
 Customer remediation (-2 bps): impact of customer remediation in Australia and New Zealand divisions.
 Markets Balance Sheet activities (-4 bps): growth in lower margin trading and liquid assets and lower earnings from market activities.
 Asia Retail and Wealth (-1 bps): adverse margin impact from the sale of Asia Retail and Wealth businesses.
Average interest earning assets (+$19.3 billion or +3%)
 Average net loans and advances (+$11.0 billion or +2%): increase driven by growth in home loans in Australia and New Zealand divisions,
growth in Institutional lending and the impact of foreign currency exchange rate movements. This was partially offset by the sale of Asia Retail
and Wealth businesses.
 Average trading and available-for-sale assets (-$2.6 billion or -2%): decrease driven by a reduction in trading securities, partially offset by the
impact of foreign currency exchange rate movements.
 Average cash and other liquids (+$10.9 billion or +12%): increase driven by higher central bank cash balances and repurchase agreements and
the impact of foreign currency exchange rate movements.
Average deposits and other borrowings (+$9.4 billion or +2%)
 Average deposits and other borrowings (+$9.4 billion or +2%): increase driven by growth in New Zealand and Institutional divisions and the
impact of foreign currency exchange rate movements, partially offset by the loss of deposits associated with the sale of Asia Retail and Wealth
businesses.

GROUP RESULTS


26
Other Operating Income - continuing operations


Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Net fee and commission income
1
1,065 1,110 -4% 2,175 2,362 -8%
Net funds management and insurance income
1
263 293 -10% 556 668 -17%
Markets other operating income
576 551 5% 1,127 1,436 -22%
Share of associates' profit
1
95 88 8% 183 300 -39%
Other
1
243 416 -42% 659 175 large
Total cash other operating income from continuing operations
2
2,242 2,458 -9% 4,700 4,941 -5%


Half Year Full Year
Markets income
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Net interest income 314 369 -15% 683 920 -26%
Other operating income
576 551 5% 1,127 1,436 -22%
Total cash Markets income from continuing operations
2

890 920 -3% 1,810 2,356 -23%

Half Year Full Year
Other operating income by division
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 527 559 -6% 1,086 1,217 -11%
Institutional
1,034 1,028 1% 2,062 2,366 -13%
New Zealand
325 338 -4% 663 653 2%
Wealth Australia
120 162 -26% 282 344 -18%
Asia Retail & Pacific
62 184 -66% 246 18 large
TSO and Group Centre
174 187 -7% 361 343 5%
Total cash other operating income from continuing operations
2
2,242 2,458 -9% 4,700 4,941 -5%
1.
Excluding Markets.
2.
Includes large/notable items of -$40 million for the September 2018 half (Mar 18 half: $263 million) and $223 million for the September 2018 full year (Sep 17 full year: $91 million). Refer to
items on pages 15 to 19 for further details on large/notable items.
Other operating income - September 2018 Full Year v September 2017 Full Year


Other operating income (excluding large/notable items) Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Net fee and commission income
1
1,089 1,098 -1% 2,187 2,250 -3%
Net funds management and insurance income
1
294 283 4% 577 591 -2%
Markets other operating income
587 547 7% 1,134 1,452 -22%
Share of associates' profit
1
95 88 8% 183 203 -10%
Other
1
217 179 21% 396 354 12%
Total cash other operating income from continuing operations
2,282 2,195 4% 4,477 4,850 -8%
1.
Excluding Markets.

GROUP RESULTS


27
 September 2018 v September 2017
Other operating income decreased by $241 million (-5%).
Net fee and commission income (-$187 million or -8%)
 $85 million decrease in the Asia Retail & Pacific division primarily as a result of the sale of the Asia Retail and Wealth businesses.
 $81 million decrease in the Australia division primarily due to lower lending fee income, customer remediation ($27 million) and the removal of
ATM fees during the March 2018 half. This was partially offset by higher annual and reward card fees.
Net funds management and insurance income (-$112 million or -17%)
 $66 million decrease in the Asia Retail & Pacific division as a result of the sale of the Asia Retail and Wealth businesses.
 $59 million decrease in the Wealth Australia division primarily due to lower financial planning income, customer remediation ($34 million) and a
reinsurance benefit included in the September 2017 full year.
 $10 million increase in the New Zealand division due to higher funds under management.
Markets income (-$546 million or -23%)
 $444 million decrease in Franchise Trading primarily attributable to a $166 million reduction in the benefit of positive derivative credit and funding
valuation adjustments (net of associated hedges) compared to the September 2017 full year following significant gains from narrowing credit
spreads. In addition, a $287 million reduction due to challenging trading conditions when compared to the September 2017 full year which
benefited from a strengthening USD and rising yield curves post the US election, partially offset by lower customer remediation ($9 million).
 $63 million decrease in Balance Sheet Trading driven by increased funding costs and lower mark-to-market on the liquidity portfolio compared to
the September 2017 full year.
 $39 million decrease in Franchise Sales due to the impact of business transformation initiatives implemented during the September 2017 full
year (client and product rationalisation) and subdued client hedging activity resulting from the ongoing low interest rate environment and low
foreign exchange volatility.
Share of associates’ profit (-$117 million or -39%)
 $97 million decrease due to cessation of equity accounting of SRCB from January 2017 ($58 million) and MCC from October 2017 ($39 million).
 $20 million net decrease in profits from associates of which $6 million relates to AmBank and $12 million to P.T. Bank Pan Indonesia.
Other (+$484 million)
 $409 million increase due to a non-recurring $310 million net charge recognised on reclassification of Asia Retail and Wealth businesses to held
for sale in the September 2017 full year, and a $99 million gain recognised in the September 2018 full year associated with sale completions.
 $240 million increase related to the sale of the Group’s 40% stake in MCC.
 $18 million increase relating to a cost recovery in respect of the UDC terminated transaction process.
 $114 million decrease due to the gain on sale of 100 Queen Street, Melbourne recognised in the September 2017 full year.
 $61 million decrease as a result of the net charge recognised on reclassification of Cambodia JV and PNG Retail, Commercial & SME to held for
sale.
 $37 million decrease as a result of higher customer remediation.
Excluding large/notable items, other operating income decreased $373 million (-8%).

 September 2018 v March 2018
Other operating income decreased by $216 million (-9%).
Net fee and commission income (-$45 million or -4%)
 $19 million decrease in the Australia division primarily due to lower lending fee income and customer remediation ($11 million). This was partially
offset by higher annual and reward card fees.
 $18 million decrease in the Asia Retail & Pacific division following the progressive sale of the Asia Retail and Wealth businesses.
 $10 million decrease in the Institutional division primarily as the result of lower fees in Loans & Specialised Finance.
Net funds management and insurance income (-$30 million or -10%)
 $28 million decrease in the Wealth Australia division primarily due to customer remediation ($29 million).
 $12 million decrease in the Asia Retail & Pacific division following the sale of the Asia Retail and Wealth businesses.
 $7 million increase in the New Zealand division due to higher funds under management.

GROUP RESULTS


28
Markets income (-$30 million or -3%)
 $28 million decrease in Franchise Trading primarily attributable to challenging trading conditions with flattening yield curves, constrained
volatility, higher funding costs, wider corporate credit spreads and higher customer remediation ($15 million).
 $19 million decrease in Balance Sheet Trading attributable to higher cost of funds and flattening yield curves.
 $17 million increase in Franchise Sales primarily attributable to higher client flows in the Australia and Singapore franchises.
Share of associates’ profit (+$7 million or +8%)
 $7 million net increase in profits from associates of which $6 million relates to AmBank.
Other (-$173 million or -42%)
 $99 million decrease as a result of the net gain recognised on the sale of the Asia Retail and Wealth businesses in the March 2018 half.
 $61 million decrease as a result of the net charge recognised on reclassification of Cambodia JV and PNG Retail, Commercial & SME to held for
sale.
 $42 million decrease as result of higher customer remediation.
 $18 million decrease relating to a cost recovery in respect of the UDC terminated transaction process recognised in the March 2018 half.
 $38 million increase due to dividend income received from Bank of Tianjin of $28 million and MCC of $10 million.
Excluding large/notable items, other operating income increased $87 million (4%).

GROUP RESULTS


29
Operating Expenses - continuing operations

Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Personnel expenses 2,356 2,402 -2% 4,758 4,924 -3%
Premises expenses
416 395 5% 811 862 -6%
Technology expenses
1,084 815 33% 1,899 1,602 19%
Restructuring expenses
149 78 91% 227 62 large
Other expenses
832 721 15% 1,553 1,517 2%
Total cash operating expenses from continuing operations
1
4,837 4,411 10% 9,248 8,967 3%
Full time equivalent staff (FTE) from continuing operations 37,860 39,655 -5% 37,860 43,011 -12%
Average full time equivalent staff (FTE) from continuing operations 38,463 41,568 -7% 40,016 44,038 -9%


Half Year Full Year
Expenses by division
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 1,865 1,812 3% 3,677 3,382 9%
Institutional
1,573 1,371 15% 2,944 2,814 5%
New Zealand
608 588 3% 1,196 1,193 0%
Wealth Australia
134 123 9% 257 262 -2%
Asia Retail & Pacific
65 146 -55% 211 614 -66%
TSO and Group Centre
592 371 60% 963 702 37%
Total cash operating expenses from continuing operations
1
4,837 4,411 10% 9,248 8,967 3%



Half Year Full Year
FTE by division
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 12,885 13,701 -6% 12,885 13,885 -7%
Institutional
6,188 6,505 -5% 6,188 6,783 -9%
New Zealand
6,165 6,319 -2% 6,165 6,372 -3%
Wealth Australia
845 972 -13% 845 997 -15%
Asia Retail & Pacific
1,131 1,199 -6% 1,131 3,664 -69%
TSO and Group Centre
10,646 10,959 -3% 10,646 11,310 -6%
Total FTE
37,860 39,655 -5% 37,860 43,011 -12%
Average FTE 38,463 41,568 -7% 40,016 44,038 -9%
1.
Includes large/notable items of $605 million for the September 2018 half (Mar 18 half: $164 million) and $769 million for the September 2018 full year (Sep 17 full year: $362 million). Refer
to items on pages 15 to 19 for further details on large/notable items.
Operating expenses - September 2018 Full Year v September 2017 Full Year



Expenses (excluding large/notable items) Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Personnel expenses 2,270 2,365 -4% 4,635 4,752 -2%
Premises expenses
416 395 5% 811 862 -6%
Technology expenses
830 815 2% 1,645 1,596 3%
Restructuring expenses
- - n/a - - n/a
Other expenses
716 672 7% 1,388 1,395 0%
Total cash operating expenses from continuing operations
4,232 4,247 0% 8,479 8,605 -1%

GROUP RESULTS


30
 September 2018 v September 2017
Operating expenses increased by $281 million (+3%).
 Personnel expenses decreased $166 million (-3%) largely due to a reduction in incentives and a 9% reduction in average FTE, partially offset by
higher customer remediation costs ($75 million) and wage inflation.
 Premises expenses decreased $51 million (-6%) primarily driven by the consolidation of our property portfolio in Asia.
 Technology expenses increased $297 million (+19%) largely due to an accelerated amortisation charge for certain software assets ($251 million)
and higher investment in digital and data capabilities.
 Restructuring expenses increased $165 million associated with the move to agile ways of working in the Australian and Technology divisions and
other transformation activities.
 Other expenses increased $36 million (+2%) largely related to Royal Commission legal costs ($55 million) and a higher customer remediation
costs ($34 million), partially offset by the reduction from the completion of the sale of the Asia Retail and Wealth businesses.
Excluding large/notable items, operating expenses decreased $126 million (-1%).
 September 2018 v March 2018
Operating expenses increased by $426 million (+10%).
 Personnel expenses decreased $46 million (-2%) largely due to a reduction in incentives and a 7% reduction in average FTE, partially offset by a
higher customer remediation costs ($63 million).
 Premises expenses increased $21 million (+5%) primarily driven by rent increases and higher expenditure on property projects.
 Technology expenses increased $269 million (+33%) largely due to an accelerated amortisation charge for certain software assets ($251 million)
and higher investment in digital and data capabilities.
 Restructuring expenses increased $71 million associated with the move to agile ways of working in the Australian and Technology division and
other transformation activities.
 Other expenses increased $111 million (+15%) largely related to higher customer remediation costs ($59 million), consultancy fees associated
with increased investment expenditure, and higher Royal Commission legal costs ($23 million).
Excluding large/notable items, operating expenses decreased $15 million (0%).

GROUP RESULTS


31
Software Capitalisation - continuing operations
As at 30 September 2018, the Group’s intangible assets included $1,421 million of costs incurred to acquire and develop software. Details are set out in
the table below:

Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Balance at start of period 1,775 1,856 -4% 1,856 2,196 -15%
Software capitalised during the period
195 198 -2% 393 404 -3%
- Current period amortisation
(288) (281) 2% (569) (565) 1%
- Accelerated amortisation
1
(251) - n/a (251) - n/a
Software impaired/written-off

- Reclassification of Asia Retail and Wealth to held for sale
2
- - n/a - (154) -100%
- Other
(12) (5) large (17) (17) 0%
Foreign exchange differences
2 7 -71% 9 (8) large
Total capitalised software from continuing operations
1,421 1,775 -20% 1,421 1,856 -23%

Net book value by Division Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Australia 334 413 -19% 334 441 -24%
Institutional
277 542 -49% 277 597 -54%
New Zealand
17 20 -15% 17 24 -29%
Wealth Australia
10 13 -23% 10 14 -29%
TSO and Group Centre
783 787 -1% 783 780 0%
Total from continuing operations
1,421 1,775 -20% 1,421 1,856 -23%
1.
ANZ has accelerated the amortisation of certain software assets, predominantly relating to its Institutional division. This follows a recent review of the International business along with a
number of divestments announced or completed this year. Accelerated amortisation expense of $251 million ($206 million post-tax) has been recorded in the September 2018 half.

2.
Reclassification of Asia Retail & Wealth to held for sale in the September 2017 full year included an impairment to software supporting both the Institutional and Asia Retail and Wealth
businesses. Only components relating to the Asia Retail and Wealth businesses were impaired which were recorded on the Institutional and Asia Retail & Pacific balance sheet. These
impairment charges were recognised as other operating income in the Condensed Consolidated Income Statement.

GROUP RESULTS


32
Credit Risk – continuing operations


Full Year Full Year Movement

Sep 18 Sep 17 Sep 18 v. Sep 17
Division
Individual
charge
$M
Collective
charge
$M
Total
charge
$M
Individual
charge
$M
Collective
charge
$M
Total
charge
$M
Individual
charge
%
Collective
charge
%
Total
charge
%
Australia 712 (14) 698 864 21 885 -18% large -21%
Institutional
(24) (20) (44) 196 (104) 92 large -81% large
New Zealand
49 (43) 6 116 (38) 78 -58% 13% -92%
Asia Retail & Pacific
36 (8) 28 165 (21) 144 -78% -62% -81%
Total 773 (85) 688 1,341 (142) 1,199 -42% -40% -43%


Half Year Half Year Movement

Sep 18 Mar 18 Sep 18 v. Mar 18
Division
Individual
charge
$M
Collective
charge
$M
Total
charge
$M
Individual
charge
$M
Collective
charge
$M
Total
charge
$M
Individual
charge
%
Collective
charge
%
Total
charge
%
Australia 375 11 386 337 (25) 312 11% large 24%
Institutional
(52) (41) (93) 28 21 49 large large large
New Zealand
15 (29) (14) 34 (14) 20 -56% large large
Asia Retail & Pacific
5 (4) 1 31 (4) 27 -84% 0% -96%
Total 343 (63) 280 430 (22) 408 -20% large -31%

Individual credit impairment charge




Half Year Full Year

Sep 18
$M
Mar 18
$M
Movt
Sep 18
$M
Sep 17
$M
Movt
New and increased individual credit impairments
Australia 581 528 10% 1,109 1,220 -9%
Institutional
51 92 -45% 143 438 -67%
New Zealand
76 67 13% 143 211 -32%
Asia Retail & Pacific
8 41 -80% 49 201 -76%
New and increased individual credit impairments
716 728 -2% 1,444 2,070 -30%
Recoveries and write-backs

Australia (206) (191) 8% (397) (356) 12%
Institutional
(103) (64) 61% (167) (242) -31%
New Zealand
(61) (33) 85% (94) (95) -1%
Asia Retail & Pacific
(3) (10) -70% (13) (36) -64%
Recoveries and write-backs
(373) (298) 25% (671) (729) -8%
Total individual credit impairment charge 343 430 -20% 773 1,341 -42%
 September 2018 v September 2017
The individual credit impairment charge decreased by $568 million (-42%) due to a $626 million (-30%) decrease in new and increased individual
credit impairment charges primarily in the Institutional and New Zealand divisions. The Australia division experienced lower provisions on new
impairments in Business & Private Bank, combined with higher recoveries and write-backs in the unsecured Retail portfolios. Asia Retail & Pacific
division decreased $129 million (-78%) due to the sale of the Asia Retail and Wealth businesses.
 September 2018 v March 2018
The individual credit impairment charge decreased by $87 million (-20%) primarily driven by lower new and increased provisions in the Institutional
division combined with higher write-backs. New Zealand division decreased $19 million (-56%) driven by higher write-backs in the Commercial and
Agri portfolio. Asia Retail & Pacific division decreased $26 million (-84%) due to the sale of the Asia Retail and Wealth businesses. This was partially
offset by a $38 million (11%) increase in the Australia division due to increased provisions in Retail lending.

GROUP RESULTS


33
Collective credit impairment charge


Half Year Full Year
Collective credit impairment charge/(release) by source
Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Lending growth - excluding Asia Retail and Wealth businesses (4) 4 large - (36) -100%
Lending growth - Asia Retail and Wealth businesses
- (4) -100% (4) (12) -67%
Risk profile
(108) 2 large (106) (169) -37%
Economic cycle adjustment
49 (24) large 25 75 -67%
Total collective credit impairment charge/(release)
(63) (22) large (85) (142) -40%
 September 2018 v September 2017
The reduction in the collective credit impairment release of $57 million (-40%) was primarily driven by reduced risk profile releases across all
divisions. The collective credit impairment releases for lending growth reduced reflecting growth in the Institutional and New Zealand divisions. The
economic cycle adjustment charge was $25 million for the year, with increased economic cycle adjustments in the Australia division, partially offset
by the part release of economic cycle adjustments in the New Zealand and Institutional divisions.
 September 2018 v March 2018
The increase in the collective credit impairment release of $41 million is primarily driven by risk profile releases across all divisions with the largest
impact in the Institutional and New Zealand divisions. This partially was offset by an increase of $73 million in the economic cycle adjustment which
related to the Australia division.

Provision for credit impairment


As at As at Movement

Sep 18 Sep 17 Sep 18 v. Sep 17
Division
Individual
provision
$M
Collective
provision
$M
1

Total
provision
$M
Individual
provision
$M
Collective
provision
$M
1

Total
provision
$M
Individual
provision
%
Collective
provision
%
Total
provision
%
Australia 569 1,125 1,694 633 1,139 1,772 -10% -1% -4%
Institutional
251 1,073 1,324 353 1,069 1,422 -29% 0% -7%
New Zealand
81 279 360 131 323 454 -38% -14% -21%
Asia Retail & Pacific
19 43 62 19 128 147 0% -66% -58%
TSO and Group Centre
- 3 3 - 3 3 n/a 0% 0%
Total 920 2,523 3,443 1,136 2,662 3,798 -19% -5% -9%


As at As at Movement

Sep 18 Mar 18 Sep 18 v. Mar 18
Division
Individual
provision
$M
Collective
provision
$M
1

Total
provision
$M
Individual
provision
$M
Collective
provision
$M
1

Total
provision
$M
Individual
provision
%
Collective
provision
%
Total
provision
%
Australia 569 1,125 1,694 577 1,113 1,690 -1% 1% 0%
Institutional
251 1,073 1,324 320 1,101 1,421 -22% -3% -7%
New Zealand
81 279 360 104 316 420 -22% -12% -14%
Asia Retail & Pacific
19 43 62 15 46 61 27% -7% 2%
TSO and Group Centre
- 3 3 - 3 3 n/a 0% 0%
Total 920 2,523 3,443 1,016 2,579 3,595 -9% -2% -4%
1.
The collective provision includes amounts for off-balance sheet credit exposures of $500 million as at 30 September 2018 (Mar 18: $522 million; Sep 17: $544 million). The impact on the
Income Statement for the September 2018 half was a $25 million release (Mar 18 half: $26 million release; Sep 17 full year: $66 million release).

GROUP RESULTS


34
Group Expected Loss
Management believe that disclosure of modelled expected loss data for individual provisions assists in assessing the longer term expected loss rates of
the lending portfolio as it removes the volatility of reported earnings created by the use of accounting losses. The expected loss methodology used for
return on equity and economic profit is an internal measure and is not based on the credit loss provision principles of AASB 9 Financial Instruments which
are effective from 1 October 2018.


As at
Expected loss as a % of gross lending assets
Sep 18 Mar 18 Sep 17
Australia division

0.29% 0.31% 0.33%
New Zealand division

0.19% 0.21% 0.22%
Institutional division

0.27% 0.32% 0.30%
Subtotal

0.27% 0.29% 0.30%
Asia Retail and Wealth businesses
1


- - 2.75%
Total Group

0.27% 0.30% 0.32%
1.
September 2018 and March 2018 expected loss is nil given the sale completion of Asia Retail and Wealth businesses. September 2017 expected loss reflects the partial sale completion
of Asia Retail and Wealth businesses, with the countries not completed at September 2017 having high unsecured lending (primarily credit cards).


Gross Impaired Assets
1



As at

Movement

Sep 18
$M
Mar 18
$M
Sep 17
$M

Sep 18
v. Mar 18
Sep 18
v. Sep 17
Impaired loans 1,676 1,863 2,118 -10% -21%
Restructured items
2
269 76 167 large 61%
Non-performing commitments and contingencies
68 95 99 -28% -31%
Gross impaired assets
2,013 2,034 2,384 -1% -16%
Individual provisions
Impaired loans
(894) (990) (1,118) -10% -20%
Non-performing commitments and contingencies
(26) (26) (18) 0% 44%
Net impaired assets
1,093 1,018 1,248 7% -12%

Gross impaired assets by division

Australia 1,285 1,114 1,180 15% 9%
Institutional
442 626 757 -29% -42%
New Zealand
236 244 307 -3% -23%
Asia Retail & Pacific
50 50 140 0% -64%
TSO and Group Centre
- - - n/a n/a
Gross impaired assets
2,013 2,034 2,384 -1% -16%

Gross impaired assets by size of exposure
Less than $10 million 1,489 1,487 1,622 0% -8%
$10 million to $100 million
335 547 655 -39% -49%
Greater than $100 million
189 - 107 n/a 77%
Gross impaired assets
2,013 2,034 2,384 -1% -16%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
2.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer. Restructuring may consist of
reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities with similar risk.
 September 2018 v September 2017
Gross impaired assets decreased $371 million (-16%) primarily driven by repayments and upgrades in the Institutional division (-$315 million),
repayments in the New Zealand division (-$71 million) and a reduction in the Asia Retail & Pacific division (-$90 million) following the sale of the Asia
Retail and Wealth businesses. This was offset by an increase in the Australia division ($105 million) primarily driven by a single name restructured
loan. The Group’s individual provision coverage ratio on impaired assets was 45.7% at 30 September 2018 (Sep 17: 47.7%).
 September 2018 v March 2018
Gross impaired assets decreased $21 million (-1%) primarily driven by the Institutional division (-$184 million) with repayments and upgrades to a
number of large impaired assets. This is offset by an increase in the Australia division ($171 million) primarily driven by a single name restructured
loan. The Group’s individual provision coverage ratio on impaired assets was 45.7% at 30 September 2018 (Mar 18: 50.0%).

GROUP RESULTS


35
New Impaired Assets
1



Half Year Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Impaired loans 929 917 1% 1,846 2,952 -37%
Restructured items
203 21 large 224 109 large
Non-performing commitments and contingencies
13 25 -48% 38 151 -75%
Total new impaired assets
1,145 963 19% 2,108 3,212 -34%
New impaired assets by division
Australia 905 699 29% 1,604 1,535 4%
Institutional
45 124 -64% 169 943 -82%
New Zealand
191 101 89% 292 512 -43%
Asia Retail & Pacific
4 39 -90% 43 222 -81%
Total new impaired assets
1,145 963 19% 2,108 3,212 -34%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
 September 2018 v September 2017
New impaired assets decreased $1,104 million (-34%) primarily driven by the Institutional division as the result of an improved risk profile due to
portfolio rebalancing, combined with a benign credit environment, along with improvements in portfolio credit quality in the Commercial and Agri
business in New Zealand in the March 2018 half. In addition, new impaired assets decreased due to lending reductions associated with the sale of
the Asia Retail and Wealth businesses.
 September 2018 v March 2018
New impaired assets increased by $182 million (19%) driven by the Australia division primarily due to a single name restructured loan, combined with
increases in the New Zealand Commercial and Agri business off a low base in the March 2018 half. This was partially offset by Institutional division
as the result of an improved risk profile due to portfolio rebalancing, combined with a benign credit environment, and lending reductions associated
with the sale of the Asia Retail and Wealth businesses.

Ageing analysis of net loans and advances that are past due but not impaired
1



As at Movement

Sep 18
$M
Mar 18
$M
Sep 17
$M
Sep 18
v. Mar 18
Sep 18
v. Sep 17
1-29 days 8,958 8,974 8,790 0% 2%
30-59 days
2,240 2,576 2,143 -13% 5%
60-89 days
1,268 1,233 1,148 3% 10%
>90 days
2,998 3,038 2,953 -1% 2%
Total
15,464 15,821 15,034 -2% 3%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
 September 2018 v September 2017
Net loans and advances past due but not impaired increased $430 million (3%) driven by Australia division home loans including portfolio
deterioration in New South Wales, Victoria and Western Australia.
 September 2018 v March 2018
Net loans and advances past due but not impaired decreased $357 million (-2%) driven by the Australia division home loan portfolio due to a
combination of seasonality, revised collection processes, and the impact of tightened underwriting strategies.

GROUP RESULTS


36
Income Tax Expense - continuing operations


Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt

Sep 18
$M
Sep 17
$M Movt
Income tax expense on cash profit 1,286 1,489 -14% 2,775 2,826 -2%
Effective tax rate (cash profit)
30.0% 29.8% 29.9% 29.3%
 September 2018 v September 2017
The effective tax rate has increased from 29.3% to 29.9%. The increase of +60 bps is primarily due to the non-tax deductible net loss on completion
of the sale of Shanghai Rural Commercial Bank (+95 bps), non-tax deductible losses on the sale of Cambodia JV and PNG Retail, Commercial &
SME (+22 bps), provision for foreign tax on dividend repatriation (+19 bps) and a reduction in equity accounted earnings (+34 bps). This was partially
offset by non-taxable profit on the disposal of the Group’s stake in Metrobank Card Corporation (-84 bps) and higher offshore earnings which attract
a lower average tax rate (-17 bps).
 September 2018 v March 2018
The effective tax rate has increased from 29.8% to 30.0%. The March 2018 half included a non-tax deductible net loss on completion of the sale of
Shanghai Rural Commercial Bank (-176 bps). The September 2018 half includes lower offshore earnings which attract a lower average tax rate (+73
bps), non-tax deductible losses on the sale of Cambodia JV and PNG Retail, Commercial & SME (+48 bps), and a net increase in the provision for
foreign tax on dividend repatriation (+53 bps).

GROUP RESULTS


37
Impact of Foreign Currency Translation - continuing operations
The following tables present the Group’s cash profit results and net loans and advances neutralised for the impact of foreign currency translation.
Comparative data has been adjusted to remove the translation impact of foreign currency movements by retranslating prior period comparatives at
current period foreign exchange rates.

Cash Profit - September 2018 Full Year vs September 2017 Full Year

Full Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Sep 18
$M
Sep 17
$M
Sep 17
$M
Sep 17
$M
Sep 18
v. Sep 17
Sep 18
v. Sep 17
Net interest income 14,514 14,875 (61) 14,814 -2% -2%
Other operating income
4,700 4,941 40 4,981 -5% -6%
Operating income
19,214 19,816 (21) 19,795 -3% -3%
Operating expenses (9,248) (8,967) 24 (8,943) 3% 3%
Profit before credit impairment and income tax
9,966 10,849 3 10,852 -8% -8%
Credit impairment charge (688) (1,199) 4 (1,195) -43% -42%
Profit before income tax
9,278 9,650 7 9,657 -4% -4%
Income tax expense (2,775) (2,826) (1) (2,827) -2% -2%
Non-controlling interests
(16) (15) - (15) 7% 7%
Cash profit
6,487 6,809 6 6,815 -5% -5%
Balance Sheet
Net loans and advances
1
604,937 580,293 3,637 583,930 4% 4%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.

Cash Profit- September 2018 Half Year vs March 2018 Half Year
Half Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Sep 18
$M
Mar 18
$M
Mar 18
$M
Mar 18
$M
Sep 18
v. Mar 18
Sep 18
v. Mar 18
Net interest income 7,164 7,350 33 7,383 -3% -3%
Other operating income
2,242 2,458 12 2,470 -9% -9%
Operating income
9,406 9,808 45 9,853 -4% -5%
Operating expenses (4,837) (4,411) (27) (4,438) 10% 9%
Profit before credit impairment and income tax
4,569 5,397 18 5,415 -15% -16%
Credit impairment charge (280) (408) (1) (409) -31% -32%
Profit before income tax
4,289 4,989 17 5,006 -14% -14%
Income tax expense (1,286) (1,489) (3) (1,492) -14% -14%
Non-controlling interests
(9) (7) (1) (8) 29% 13%
Cash profit
2,994 3,493 13 3,506 -14% -15%
Balance Sheet
Net loans and advances
1
604,937 591,947 (685) 591,262 2% 2%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.

GROUP RESULTS


38
Earnings Related Hedges – continuing operations
Where it is considered appropriate, the Group takes out economic hedges against larger foreign exchange denominated revenue streams (primarily New
Zealand Dollar, US Dollar and US Dollar correlated). New Zealand Dollar exposure relates to the New Zealand geography and USD exposures relate to
Asia Pacific, Europe & America. Details of these hedges are set out below.


Half Year Full Year
NZD Economic hedges
Sep 18
$M
Mar 18
$M
Sep 18
$M
Sep 17
$M
Net open NZD position (notional principal)
1

2,076 2,669 2,076 3,036
Amount taken to income (pre-tax statutory basis)
2

63 (50) 13 91
Amount taken to income (pre-tax cash basis)
3

(2) 7 5 (46)
USD Economic hedges
Net open USD position (notional principal)
1

174 - 174 -
Amount taken to income (pre-tax statutory basis)
2

2 - 2 -
Amount taken to income (pre-tax cash basis)
3

- - - -
1.
Value in AUD at contracted rate.
2.
Unrealised valuation movement plus realised revenue from matured or closed out hedges.
3.
Realised revenue from closed out hedges.
As at 30 September 2018, the following hedges were in place to partially hedge future earnings against adverse movements in exchange rates:
 NZD 2.2 billion at a forward rate of approximately NZD 1.08 /AUD.
 USD 0.1 billion at a forward rate of approximately USD 0.72/AUD.
During the September 2018 full year:

 NZD 1.8 billion of economic hedges matured and a realised gain of $5 million (pre-tax) was recorded in cash profit.
 An unrealised gain of $10 million (pre-tax) on the outstanding NZD and USD economic hedges were recorded in the statutory Income Statement
during the year. This unrealised gain has been treated as an adjustment to statutory profit in calculating cash profit as these are hedges of future
NZD and USD revenues.

Earnings per Share - continuing operations


Half Year Full Year

Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Cash earnings per share (cents) from continuing operations
Basic

103.9 119.4 -13% 223.4 232.7 -4%
Diluted
100.0 113.4 -12% 213.9 222.4 -4%
Cash weighted average number of ordinary shares (M)
1

Basic 2,882.2 2,924.6 -1% 2,903.3 2,926.4 -1%
Diluted
3,132.3 3,204.3 -2% 3,163.7 3,191.7 -1%
Cash profit from continuing operations ($M) 2,994 3,493 -14% 6,487 6,809 -5%
Cash profit used in calculating diluted cash earnings per share ($M)
3,132 3,634 -14% 6,766 7,097 -5%
1.
Cash weighted average number of ordinary shares includes treasury shares held in Wealth Australia which will no longer be eliminated post disposal of discontinued operations.

GROUP RESULTS


39
Dividends - continuing operations


Half Year Full Year
Dividend per ordinary share (cents) - continuing operations
Sep 18 Mar 18 Movt Sep 18 Sep 17 Movt
Interim (fully franked) - 80 n/a 80 80 0%
Final (fully franked)
1
80 - n/a 80 80 0%
Ordinary share dividends used in payout ratio ($M)
2
2,296 2,317 -1% 4,613 4,699 -2%
Cash profit from continuing operations ($M)
2,994 3,493 -14% 6,487 6,809 -5%
Ordinary share dividend payout ratio (cash basis)
2
76.7% 66.3% 71.1% 69.0%
1.
Final dividend for 2018 is proposed.
2.
Dividend payout ratio is calculated using proposed 2018 final dividend of $2,296 million, which is based on the forecast number of ordinary shares on issue at the dividend record date.
Dividend payout ratios for the March 2018 half and September 2017 full year were calculated using actual dividend paid of $2,317 million and $4,699 million respectively.
The Directors propose a final dividend of 80 cents be paid on each eligible fully paid ANZ ordinary share on 18 December 2018. The proposed 2018 final
dividend will be fully franked for Australian tax purposes. New Zealand imputation credits of NZD 10 cents per ordinary share will also be attached.

Economic Profit - continuing operations


Half Year

Full Year

Sep 18
$M
Mar 18
$M Movt
Sep 18
$M
Sep 17
$M Movt
Statutory profit attributable to shareholders of the Company from continuing
operations
3,172 3,923 -19% 7,095 6,344 12%
Adjustments between statutory profit and cash profit from continuing operations
(178) (430) -59% (608) 465 large
Cash Profit from continuing operations
2,994 3,493 -14% 6,487 6,809 -5%
Economic credit cost adjustment (434) (369) 18% (803) (564) 42%
Imputation credits
529 600 -12% 1,129 1,394 -19%
Economic return from continuing operations
3,089 3,724 -17% 6,813 7,639 -11%
Cost of capital (2,684) (2,624) 2% (5,308) (5,214) 2%
Economic profit from continuing operations
405 1,100 -63% 1,505 2,425 -38%

Economic profit is a risk adjusted profit measure used to evaluate business unit performance and is considered in determining the variable component of
remuneration packages. This is used for internal management purposes and is not subject to audit.
Economic profit is calculated via a series of adjustments to cash profit. The economic credit cost adjustment replaces the actual credit loss charge with
internal expected loss based on the average loss per annum on the portfolio over an economic cycle. The benefit of imputation credits is recognised,
measured at 70% of Australian tax. The cost of capital is a major component of economic profit. At an ANZ Group level, this is calculated using average
ordinary shareholders’ equity (excluding non-controlling interests), multiplied by the cost of capital rate (currently 9.5% and applied across comparative
periods). At a business unit level, capital is allocated based on economic capital, whereby higher risk businesses attract higher levels of capital. This
method is designed to help drive appropriate risk management and ensure business returns align with the level of risk. Key risks covered include credit
risk, operating risk, market risk and other risks.
Economic profit decreased $920 million (-38%) against the September 2017 full year driven by lower cash profit, higher economic credit costs and lower
imputation credits on lower Australian profits.
Economic profit decreased $695 million (-63%) against the March 2018 half driven by lower cash profit and higher economic credit costs and lower
imputation credits on lower Australian profits.

GROUP RESULTS


40
Condensed Balance Sheet - including discontinued operations


As at

Movement
Assets
Sep 18
$B
Mar 18
$B
Sep 17
$B

Sep 18
v. Mar 18
Sep 18
v. Sep 17
Cash / Settlement balances owed to ANZ / Collateral paid
1
98.0 98.0 82.5 0% 19%
Trading and available-for-sale assets
1
112.0 115.3 113.0 -3% -1%
Derivative financial instruments
1
68.4 70.9 62.5 -4% 9%
Net loans and advances
1
603.9 588.9 574.3 3% 5%
Investments backing policy liabilities
1
- - 38.0 n/a -100%
Assets held for sale
45.2 45.3 8.0 0% large
Other
1
15.1 16.7 19.0 -10% -21%
Total assets
942.6 935.1 897.3 1% 5%
Liabilities
Settlement balances owed by ANZ / Collateral received 18.3 20.0 15.8 -9% 16%
Deposits and other borrowings
1
618.2 616.2 595.6 0% 4%
Derivative financial instruments
1
69.7 70.6 62.3 -1% 12%
Debt issuances
121.2 114.9 108.0 5% 12%
Policy liabilities and external unit holder liabilities
1
- - 41.9 n/a -100%
Liabilities held for sale
47.2 44.8 4.7 5% large
Other
1
8.6 9.1 9.9 -5% -13%
Total liabilities
883.2 875.6 838.2 1% 5%
Total equity 59.4 59.5 59.1 0% 1%
1.
Balances exclude assets and liabilities held for sale.
 September 2018 v September 2017
 Cash / Settlement balances owed to/by ANZ / Collateral paid/received increased $13.0 billion (+19%) primarily driven by higher liquid asset
holdings in Markets, increase in collateral paid, and the impact of foreign currency exchange rate movements.
 Derivative financial assets and liabilities increased $5.9 billion (+9%) and $7.4 billion (+12%) respectively as foreign exchange rate and interest
rate movements resulted in higher derivative fair values.
 Net loans and advances increased $29.6 billion (+5%) primarily driven by growth in home loans across the Australia and New Zealand divisions
(+$10.9 billion), lending growth in the Institutional division (+$12.9 billion), UDC net loans and advances no longer being classified as held for
sale (+$3.0 billion) and the impact of foreign currency exchange rate movements.
 Assets and liabilities held for sale increased $37.2 billion and $42.5 billion respectively, primarily driven by the reclassification of Wealth Australia
businesses and other smaller divestments to held for sale, partially offset by the sale completion of the Asia Retail and Wealth businesses, and
UDC no longer being classified as held for sale.
 Deposits and other borrowings increased $22.6 billion (+4%) primarily driven by growth in customer deposits across Institutional, New Zealand
and Australia divisions (+$9.3 billion), and a $11.4 billion increase in deposits from banks and repurchase agreements, and the impact of foreign
currency exchange rate movements. This was partially offset by a reduction of $12.7 billion in certificates of deposit.
 Debt issuances increased $13.2 billion (+12%) primarily driven by senior debt issuances and the impact of foreign currency exchange rate
movements.
 September 2018 v March 2018
 Trading and available-for-sale assets decreased $3.3 billion (-3%) primarily driven by decreased liquid assets in Markets, partially offset by the
impact of foreign currency exchange rate movements.
 Net loans and advances increased $15.0 billion (+3%) primarily driven by growth in home loans across the Australia and New Zealand divisions
(+3.6 billion), lending growth in Institutional division (+$9.2 billion), and UDC net loans and advances no longer being classified as held for sale
(+$3.0 billion). This was partially offset by the impact of foreign currency exchange rate movements.
 Assets and liabilities held for sale decreased $0.1 billion and increased $2.4 billion respectively, primarily driven by the reclassification of
Cambodia JV, OPL NZ, PNG Retail, Commercial & SME to held for sale, partially offset by UDC no longer being classified as held for sale and
the sale completion of MCC.
 Debt issuances increased $6.3 billion (+5%) primarily driven by senior debt issuances and the impact of foreign currency exchange rate
movements.

The investments backing policy liabilities, policy liabilities and external unit holder liabilities nil balances as at September and March 2018 reflect the
reclassification of assets and liabilities to held for sale. Refer to Note 10 to the financial statements for details of assets and liabilities held for sale.

GROUP RESULTS


41
Liquidity Risk - including discontinued operations
Liquidity risk is the risk that the Group is unable to meet its payment obligations as they fall due, including repaying depositors or maturing wholesale
debt, or that the Group has insufficient capacity to fund increases in assets. The timing mismatch of cash flows and the related liquidity risk is inherent in
all banking operations and is closely monitored by the Group and managed in accordance with the risk appetite set by the Board.
The Group’s approach to liquidity risk management incorporates two key components:
 Scenario modelling of funding sources
ANZ’s liquidity risk appetite is defined by the ability to meet a range of regulatory requirements and internal liquidity metrics mandated by the Board.
The metrics cover a range of scenarios of varying duration and level of severity. The objective of this framework is to:
 Provide protection against shorter-term extreme market dislocation and stress.
 Maintain structural strength in the balance sheet by ensuring that an appropriate amount of longer-term assets are funded with longer-term
funding.
 Ensure that no undue timing concentrations exist in the Group’s funding profile.
A key component of this framework is the Liquidity Coverage Ratio (LCR), which is a severe short term liquidity stress scenario mandated by banking
regulators including APRA. As part of meeting LCR requirements, ANZ has a Committed Liquidity Facility (CLF) with the Reserve Bank of Australia
(RBA). The CLF has been established to offset the shortage of available High Quality Liquid Assets (HQLA) in Australia and provides an alternative
form of contingent liquidity. The total amount of the CLF available to a qualifying ADI is set annually by APRA.
From 1 January 2018, ANZ’s CLF is
$46.9 billion (2017 calendar year end: $43.8 billion).
 Liquid assets
The Group holds a portfolio of high quality unencumbered liquid assets in order to protect the Group’s liquidity position in a severely stressed
environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions consistent with
Basel 3 LCR:
 Highest-quality liquid assets (HQLA1): Cash, highest credit quality government, central bank or public sector securities eligible for repurchase
with central banks to provide same-day liquidity.
 High-quality liquid assets (HQLA2): High credit quality government, central bank or public sector securities, high quality corporate debt securities
and high quality covered bonds eligible for repurchase with central banks to provide same-day liquidity.
 Alternative liquid assets (ALA): Assets qualifying as collateral for the CLF and other eligible securities listed by the Reserve Bank of New
Zealand (RBNZ).
The Group monitors and manages the size and composition of its liquid assets portfolio on an ongoing basis in line with regulatory requirements and
the risk appetite set by the Board.



Half Year Average

Movement


Sep 18
$B
Mar 18
$B
Sep 17
$B

Sep 18
v. Mar 18
Sep 18
v. Sep 17
Market Values Post Discount
1



HQLA1
2


137.0 131.8 128.7

4% 6%
HQLA2

5.1 4.9 4.7

4% 9%
Internal Residential Mortgage Backed Securities (Australia)
2


33.4 31.6 30.3

6% 10%
Internal Residential Mortgage Backed Securities (New Zealand)
3


5.5 6.2 1.1

-11% large
Other ALA
4


13.1 13.8 14.9

-5% -12%
Total Liquid Assets
194.1 188.3 179.7 3% 8%


Cash flows modelled under stress scenario

Cash outflows 177.5 180.5 174.5 -2% 2%
Cash inflows
41.2 40.4 41.3 2% 0%
Net cash outflows
136.3 140.1 133.2 -3% 2%
Liquidity Coverage Ratio
5
142% 134% 135% 8% 7%
1.
Half year average basis, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.
2.
RBA open repo arrangement netted down from CLF, with a corresponding increase in HQLA.
3.
Includes ANZ Bank New Zealand Limited LCR surplus, capped at Level 1 all currency LCR for Mar 18 and Sep 18 half year averages.
4.
Comprised of assets qualifying as collateral for the CLF, excluding internal RMBS, up to approved facility limit; and any liquid assets contained in the RBNZ's Liquidity Policy - Annex:
Liquidity Assets - Prudential Supervision Department Document BS13A12.
5.
All currency Level 2 LCR.

GROUP RESULTS


42
Funding - including discontinued operations
ANZ targets a diversified funding base, avoiding undue concentrations by investor type, maturity, market source and currency.
$21.8 billion of term wholesale debt with a remaining term greater than one year as at 30 September 2018 was issued during the year ended 30
September 2018.
The following table shows the Group’s total funding composition:
As at Movement

Sep 18
$B
Mar 18
$B
Sep 17
$B

Sep 18
v. Mar 18
Sep 18
v. Sep 17
Customer deposits and other liabilities
1

Australia 202.7 204.2 201.3 -1% 1%
Institutional
205.8 190.7 189.0 8% 9%
New Zealand
79.8 79.2 75.3 1% 6%
Asia Retail & Pacific
3.5 3.4 7.0 3% -50%
TSO and Group Centre
1
(4.5) (4.7) (5.0) -4% -10%
Customer deposits
487.3 472.8 467.6 3% 4%
Other funding liabilities
2,3
8.1 8.0 8.5 1% -5%
Total customer liabilities (funding)
495.4 480.8 476.1 3% 4%
Wholesale funding
3,4

Debt issuances 105.3 97.5 90.3 8% 17%
Subordinated debt
15.9 17.2 17.7 -8% -10%
Certificates of deposit
42.7 50.3 55.2 -15% -23%
Commercial paper
17.0 24.1 18.0 -29% -6%
Other wholesale borrowings
4,5
86.8 84.4 69.2 3% 25%
Total wholesale funding
267.7 273.5 250.4 -2% 7%
Shareholders' equity 59.4 59.5 59.1 0% 1%
Total funding 822.5 813.8 785.6 1% 5%
1.
Includes term deposits, other deposits and an adjustment recognised in Group Centre to eliminate Wealth Australia investments in ANZ deposit products.
2.
Includes interest accruals, payables and other liabilities, provisions and net tax provisions, excluding other liabilities in Wealth Australia.
3.
Excludes liability for acceptances as they do not provide net funding.
4.
Includes borrowings from banks, securities sold under repurchase agreements, net derivative balances, special purpose vehicles and other borrowings.
5.
Includes RBA open repo arrangement netted down by the exchange settlement account cash balance.

Net Stable Funding Ratio
The following table shows the Level 2 Net Stable Funding Ratio (NSFR) composition:
As at Movement

Sep 18
$B
Mar 18
$B
Sep 17
$B

Sep 18
v. Mar 18
Sep 18
v. Sep 17
Required Stable Funding
1

Retail & small and medium enterprises, corporate loans <35% risk weight
2
183.9 184.0 181.7 0% 1%
Retail & small and medium enterprises, corporate loans >35% risk weight
2
182.6 177.2 176.2 3% 4%
Other lending
3
23.2 19.1 17.2 21% 35%
Liquid assets
9.8 9.7 9.3 1% 5%
Other assets
4
36.6 38.4 39.1 -5% -6%
Total Required Stable Funding
436.1 428.4 423.5 2% 3%
Available Stable Funding
1

Retail & small and medium enterprise customer deposits 231.7 233.4 230.7 -1% 0%
Corporate, public sector entities & operational deposits
91.8 83.4 80.8 10% 14%
Central bank & other financial institution deposits
5.3 4.2 4.2 26% 26%
Term funding
96.3 94.0 87.6 2% 10%
Short term funding & other liabilities
1.3 2.7 5.3 -52% -75%
Capital
73.3 74.4 73.9 -1% -1%
Total Available Stable Funding
499.7 492.1 482.5 2% 4%
Net Stable Funding Ratio 115% 115% 114% 0% 1%
1.
NSFR factored balance as per APRA Prudential Regulatory Standard APS 210 Liquidity.
2.
Risk weighting as per APRA Prudential Regulatory Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk.
3.
Includes financial institution and central bank loans.
4.
Includes off-balance sheet items, net derivatives and other assets.