ANZ NZ Branch DS 31 March 2019

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




































FOR THE SIX MONTHS ENDED 31 MARCH 2019
NUMBER 40 | ISSUED MAY 2019

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

REGISTERED BANK DISCLOSURE STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2019

CONTENTS

DISCLOSURE STATEMENT
Condensed Consolidated Interim Financial Statements (Interim Financial Statements)
Income Statement 3
Statement of Comprehensive Income 3
Balance Sheet 4
Cash Flow Statement 5
Statement of Changes in Equity 6
Notes to the Interim Financial Statements 7
Registered Bank Disclosures
General Disclosures 14
Additional Financial Disclosures 15
Asset Quality 20
Credit and Market Risk Exposures and Capital Adequacy 22
Insurance Business 22
Directors’ and New Zealand Chief Executive Officer’s Statement 23
Independent Auditor’s Review Report 24

SUPPLEMENTARY INFORMATION
Bank Financial Strength Dashboard 26
Other Information 27



GLOSSARY OF TERMS

In this Registered Bank Disclosure Statement (Disclosure Statement) unless the context otherwise requires:
Bank means ANZ Bank New Zealand Limited.
Banking Group means the Bank and all its controlled entities.
Immediate Parent Company means ANZ Funds Pty Limited, which is the immediate parent company of ANZ Holdings (New Zealand) Limited.
Ultimate Parent Bank means Australia and New Zealand Banking Group Limited.
Overseas Banking Group means the worldwide operations of Australia and New Zealand Banking Group Limited in cluding its controlled entities.
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand identified and treated as if it were
conducted by a company formed and registered in New Zealand.
NZ Branch means the New Zealand business of the Ultimate Parent Bank.
ANZ New Zealand, We or Our means the New Zealand business of the Overseas Banking Group.
OnePath means OnePath Life (NZ) Limited.
Paymark means Paymark Limited.
UDC means UDC Finance Limited.
Registered Office is Level 10, 171 Featherston Street, Wellington, New Zealand, which is also ANZ New Zealand’s address for service.
RBNZ means the Reserve Bank of New Zealand.
APRA means the Australian Prudential Regulation Authority.
the Order means the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014.
Any term or expression which is defined in, or in the manner prescribed by, the Order shall have the meaning given in or prescribed by the Order.

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

INTERIM FINANCIAL STATEMENTS

INCOME STATEMENT


6 months to
31 Mar 19 31 Mar 18

Note

NZ$m NZ$m
Interest income
3,322
3,248
Interest expense
(1,696)
(1,676)
Net interest income 1,626 1,572
Other operating income 2
373
495
Net income from insurance business 12
27
81
Share of associates' profit 4 1
Operating income
2,030
2,149
Operating expenses (745) (747)
Profit before credit impairment and income tax
1,285
1,402
Credit impairment charge 5
(32)
(70)
Profit before income tax 1,253 1,332
Income tax expense
(324)
(368)
Profit for the period

929
964



STATEMENT OF COMPREHENSIVE INCOME


6 months to
31 Mar 19 31 Mar 18

NZ$m NZ$m
Profit for the period

929
964

Other comprehensive income






Items that will not be reclassified subsequently to profit or loss (16) 2



Items that may be reclassified subsequently to profit or loss
Reserve movements:


Unrealised losses recognised directly in equity - (6)
Realised losses transferred to the income statement
4
3



Income tax attributable to the above items 3
-
Other comprehensive income after tax (9) (1)
Total comprehensive income for the period

920
963

The notes appearing on pages 7 to 13 form an integral part of these financial statements

3

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

INTERIM FINANCIAL STATEMENTS

BALANCE SHEET


31 Mar 19 30 Sep 18
As at Note NZ$m NZ$m
Assets

Cash and cash equivalents 2,697 2,407
Settlement balances receivable
630
656
Collateral paid 2,370 1,919
Trading securities
7,543
8,024
Derivative financial instruments
9,118
8,072
Investment securities 6,348 6,502
Net loans and advances 4
131,788
128,677
Assets held for sale 12
-
897
Investments in associates - 6
Current tax assets
32
-
Goodwill and other intangible assets 3,279 3,289
Premises and equipment
340
325
Other assets
807
642
Total assets 164,952 161,416
Liabilities



Settlement balances payable
2,542
2,066
Collateral received 519 845
Deposits and other borrowings 7
115,091
112,920
Derivative financial instruments 9,872 8,133
Current tax liabilities
-
174
Deferred tax liabilities
6
23
Liabilities held for sale 12 - 334
Payables and other liabilities
945
955
Provisions 8
310
196
Debt issuances 9 23,939 24,534
Total liabilities (excluding head office account)

153,224
150,180
Net assets (excluding head office account) 11,728 11,236
Equity



Share capital and initial head office account
11,055
11,055
Reserves 36 33
Retained earnings
637
148
Total equity & head office account

11,728
11,236

The notes appearing on pages 7 to 13 form an integral part of these financial statements

4

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



CASH FLOW STATEMENT


2019 2018
For the six months ended 31 March Note NZ$m NZ$m
Profit after income tax 929 964




Adjustments to reconcile to net cash flows from operating activities:



Depreciation and amortisation 41 41
Loss on sale and impairment of premises and equipment
5
-
Net derivatives/foreign exchange adjustment
(16)
(412)
Proceeds from divestments net of intangibles disposed of, classified as investing activities (646) -
Other non-cash movements
(146)
(13)




Net (increase)/decrease in operating assets:


Collateral paid (451) (219)
Trading securities
481
(753)
Net loans and advances
(3,111)
(1,359)
Other assets 625 (338)



Net increase/(decrease) in operating liabilities:


Deposits and other borrowings (excluding borrowings from Immediate Parent and Ultimate Parent Bank)
2,968
4,365
Settlement balances payable 476 40
Collateral received
(326)
147
Other liabilities
(421)
(67)
Total adjustments

(521)
1,432
Net cash flows from operating activities
1


408
2,396
Cash flows from investing activities
Investment securities:


Purchases
(1,054)
(1,770)
Proceeds from sale or maturity 1,288 1,530
Proceeds from divestments 12
747
-
Other assets
(51)
17
Net cash flows from investing activities

930
(223)
Cash flows from financing activities

Debt issuances
2

Issue proceeds
3,240
2,885
Redemptions
(3,145)
(3,020)
Borrowings from Immediate Parent and Ultimate Parent Bank:
Loans drawn down
512
497
Repayments
(1,280)
(1,352)
Dividends paid (375) (800)
Net cash flows from financing activities (1,048)
(1,790)
Net change in cash and cash equivalents 290 383
Cash and cash equivalents at beginning of period
2,407
2,439
Cash and cash equivalents at end of period

2,697
2,822

1
Net cash provided by operating activities includes income taxes paid of NZ$519 million (2018: NZ$387 million).
2
Movement in debt issuances (Note 9 Debt Issuances) also includes a NZ$942 million decrease (2018: NZ$125 million increase) from the effect of foreign exchange rates, a NZ$341 million
increase (2018: NZ$174 million decrease) from changes in fair value hedging instruments and a NZ$89 million decrease (2018: NZ$5 million increase) from other changes.
3
Movement in borrowings from Immediate Parent and Ultimate Parent Bank (Note 7 Deposit and Other Borrowings) also includes a NZ$83 million decrease (2018: NZ$62 million decrease)
from the effect of foreign exchange rates and a NZ$54 million increase (2018: NZ$32 million decrease) from changes in fair value hedging instruments.

The notes appearing on pages 7 to 13 form an integral part of these financial statements

5

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

INTERIM FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN EQUITY

Share
capital
and initial
head
office
account
Investment
securities
revaluation
reserve
Cash flow
hedging
reserve
Retained
earnings
Total
equity
Note NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2017 8,055 5 43 3,210 11,313
Profit or loss - - - 964 964
Unrealised gains / (losses) recognised directly in equity - 9 (15) - (6)
Realised losses transferred to the income statement - - 3 - 3
Actuarial gain on defined benefit schemes - - - 2 2
Income tax credit / (expense) on items recognised directly in equity - (2) 3 (1) -
Total comprehensive income for the period
- 7 (9) 965 963
Transactions with Immediate Parent Company in its capacity as owner:

Ordinary dividends paid - - - (800) (800)
Transactions with Immediate Parent Company in its capacity as owner
- - - (800) (800)
As at 31 March 2018
8,055 12 34 3,375 11,476



As at 1 October 2018 11,055 11 22 148 11,236
NZ IFRS 9 transition adjustment 1
- - - (53) (53)
As at 1 October 2018 (adjusted) 11,055 11 22 95 11,183
Profit or loss - - - 929 929
Unrealised gains / (losses) recognised directly in equity
- (7) 7 - -
Realised losses transferred to the income statement
- - 4 - 4
Actuarial loss on defined benefit schemes - - - (16) (16)
Income tax credit / (expense) on items recognised directly in equity
- 2 (3) 4 3
Total comprehensive income for the period - (5) 8 917 920
Transactions with Immediate Parent Company in its capacity as owner:


Ordinary dividends paid
- - - (375) (375)
Transactions with Immediate Parent Company in its capacity as owner - - - (375) (375)
As at 31 March 2019

11,055 6 30 637 11,728


The notes appearing on pages 7 to 13 form an integral part of these financial statements

6

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
These interim financial statements (financial statements) for ANZ New Zealand were issued on 20 May 2019 and should be read in conjunction with
ANZ New Zealand’s financial statements for the year ended 30 September 2018.
These financial statements comply with:
• New Zealand Generally Accepted Accounting Practice (NZ GAAP), as defined in the Financial Reporting Act 2013;
• NZ IAS 34 Interim Financial Reporting and other applicable Financial Reporting Standards, as appropriate for publicly accountable for-profit
entities; and
• IAS 34 Interim Financial Reporting.
Use of estimates, assumptions and judgements
The preparation of these financial statements requires the use of management judgement, estimates and assumptions that affect reported amounts
and the application of accounting policies. Discussion of the critical accounting estimates and judgements, which include complex or subjective
decisions or assessments, are provided in the previous full year financial statements. Such estimates and judgements are reviewed on an ongoing
basis.
Basis of measurement
These financial statements have been prepared on a going concern basis in accordance with historical cost concepts except that the following assets
and liabilities are stated at their fair value:
• derivative financial instruments;
• financial instruments measured at fair value through other comprehensive income;
• financial instruments held for trading; and
• financial instruments designated at fair value through profit and loss.
Changes in accounting policies
The accounting policies adopted by ANZ New Zealand are consistent with those adopted and disclosed in the previous full year financial statements,
except as disclosed below.
The following new standards relevant to ANZ New Zealand have been adopted from 1 October 2018 and have been applied in the preparation of
these financial statements:
NZ IFRS 9 Financial Instruments (NZ IFRS 9)

NZ IFRS 9 was effective for ANZ New Zealand from 1 October 2018. NZ IFRS 9 stipulates new requirements for the impairment of financial assets,
classification and measurement of financial assets and financial liabilities and general hedge accounting. Details of the key requirements and
estimated impacts on ANZ New Zealand are outlined below.

Impairment
NZ IFRS 9 replaced the incurred loss impairment model under NZ IAS 39: Financial Instruments: Recognition and Measurement (NZ IAS 39) with an
expected credit loss (ECL) model incorporating forward looking information. The ECL model has been applied to all financial assets measured at
amortised cost, debt instruments measured at fair value through other comprehensive income, lease receivables, certain loan commitments and
financial guarantees. Under the ECL model, the following three-stage approach is applied to measuring ECL based on credit migration between the
stages since origination:

• Stage 1: At the origination of a financial asset, a provision equivalent to 12 months ECL is recognised.
•
Stage 2: Where there has been a significant increase in credit risk since origination, a provision equivalent to lifetime ECL is recognised.
•
Stage 3: Similar to the previous NZ IAS 39 requirements for individual impairment provisions, lifetime ECL is recognised for loans where there is
objective evidence of impairment.

Expected credit losses are probability weighted and determined by evaluating a range of possible outcomes, taking into account the time value of
money, past events, current conditions and forecasts of future economic conditions.

Classification and measurement
There are three measurement classifications under NZ IFRS 9: Amortised cost, Fair Value through Profit or Loss and Fair Value through Other
Comprehensive Income. Financial assets are classified into these measurement classifications taking into account the business model within which
they are managed, and their contractual cash flow characteristics.

The classification and measurement requirements for financial liabilities under NZ IFRS 9 are largely consistent with NZ IAS 39 with the exception that
for financial liabilities designated as measured at fair value, gains or losses relating to changes in the entity’s own credit risk are included in other
comprehensive income. This part of the standard was early adopted by ANZ New Zealand on 1 October 2013.

General hedge accounting
NZ IFRS 9 introduces new hedge accounting requirements which more closely align accounting with risk management activities undertaken when
hedging financial and non-financial risks.

NZ IFRS 9 provides ANZ New Zealand with an accounting policy choice to continue to apply the NZ IAS 39 hedge accounting requirements until the
International Accounting Standards Board’s ongoing project on macro hedge accounting is completed. ANZ New Zealand has continued to apply the
hedge accounting requirements of NZ IAS 39.




7

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

NOTES TO THE INTERIM FINANCIAL STATEMENTS

Transition to NZ IFRS 9
Other than as noted above under classification and measurement of financial liabilities, NZ IFRS 9 had a date of initial application for ANZ New Zealand
of 1 October 2018. The classification and measurement, and impairment requirements, are applied retrospectively by adjusting opening retained
earnings at 1 October 2018. ANZ New Zealand has not restated comparatives.

Impact
Impairment
The application of NZ IFRS 9 as at 1 October 2018 resulted in higher aggregate impairment provisions of approximately NZ$73 million, with an
associated decrease in deferred tax liabilities of approximately NZ$20 million. The net impact on total equity is a reduction of approximately NZ$53
million. These remain subject to change until ANZ New Zealand finalises it s financial statements for the year ending 30 September 2019.

Classification and measurement of financial assets
There have been no changes in classification and measurement as a result of the application of the business model and contractual cash flow
characteristics tests.

NZ IFRS 15 Revenue from Contracts with Customers (NZ IFRS 15)
NZ IFRS 15 is effective for ANZ New Zealand from 1 October 2018 and replaces existing guidance on the recognition of revenue from contracts with
customers. The standard re quires identification of distinct performance obligations within a contract, and allocation of the transaction price of the
contract to those performance obligations. Revenue is then recognised as each performance obligation is satisfied. The standard also provides
guidance on whether an entity is acting as a principal or an agent which impacts the presentation of revenue on a gross or net basis.
ANZ New Zealand has assessed all revenue streams existing at the date of transition to the new standard and determined that the impact of NZ IFRS
15 is immaterial given the majority of ANZ New Zealand revenues are outside the scope of the standard. ANZ New Zealand has adopted NZ IFRS 15
retrospectively including restatement of prior period comparatives.
Presentation currency and rounding
The amounts contained in the financial statements are presented in millions of New Zealand dollars, unless otherwise stated.
Comparatives
Certain amounts in the comparative information have been reclassified to ensure consistency with the current period’s presentation.
Principles of consolidation
The financial statements consolidate the financial statements of the NZ Branch and all of the New Zealand businesses of all the subsidiaries of the
Ultimate Parent Bank.

2. OTHER OPERATING INCOME


6 months to
31 Mar 19 31 Mar 18
Note
NZ$m NZ$m
(i) Fee and commission revenue
Lending fees 16 15
Non-lending fees 407 398
Commissions 23 21
Funds management income
127
122
Fee and commission income
573
556
Fee and commission expense
(241)
(230)
Net fee and commission income
332
326
(ii) Other income



Net trading gains 73 96
Fair value gain / (loss) on hedging activities and financial liabilities
designated at fair value
(140)
22
Net foreign exchange earnings and other financial instruments income
(67)
118
Gain on UDC terminated transaction
-
20
Insurance proceeds - 20
Sale of OnePath 12 59 -
Sale of Paymark 12 39 -
Other
10
11
Other income
41
169
Other operating income

373
495



8

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



3. SEGMENT REPORTING
ANZ New Zealand is organised into three major business segments for segment reporting purposes - Retail, Commercial and Institutional. Centralised
back office and corporate functions support these segments. These segments are consistent with internal reporting provided to the chief operating
decision maker, being the Bank’s Chief Executive Officer.
Comparative data has been adjusted to reflect a change in the methodology for allocating earnings on capital to each segment. While neutral at the
ANZ New Zealand level, this change has impacted net interest income and profit after income tax at the segment level.
Retail
Retail provides a full range of banking and wealth management services to consumer, private banking and small business banking customers. We
deliver our services via our internet and app-based digital solutions and network of branches, mortgage specialists, relationship managers and contact
centres.
Commercial
Commercial provides a full range of banking services including traditional relationship banking and sophisticated financial solutions through
dedicated managers focusing on privately owned medium to large enterprises and the agricultural business segment.
Institutional
The Institutional division services global institutional and corporate customers across three product sets: Transaction Banking, Loans & Specialised
Finance and Markets.
• Transaction Banking provides working capital and liquidity solutions including documentary trade, supply chain financing as well as cash
management solutions, deposits, payments and clearing.
• Loans & Specialised Finance provides loan products, loan syndication, specialised loan structuring and execution, project and export finance,
debt structuring and acquisition finance and corporate advisory.
• Markets provide risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets in addition to
managing ANZ New Zealand’s interest rate exposure and liquidity position.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.
Operating segment analysis
Retail Commercial Institutional Other Total
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
For the six months ended 31 March NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Net interest income 940 929 517 495 169 158 - (10) 1,626 1,572
Fee and commission revenue










- Lending fees
8
8
-
-
8
7
-
-
16
15
- Non-lending fees 368 353 9 9 30 36 - - 407 398
- Commissions
23
21
-
-
-
-
-
-
23
21
- Funds management fees
127
122
-
-
-
-
-
-
127
122
- Fee and commission expense
(241)
(230)
-
-
-
-
-
-
(241)
(230)
Net fee and commission income
285
274
9
9
38
43
-
-
332
326
Other income 5 4 1 - 75 104 (40) 61 41 169
Net income from insurance business
19
67
-
-
-
-
8
14
27
81
Share of associates' profits
4
1
-
-
-
-
-
-
4
1
Operating income 1,253 1,275 527 504 282 305 (32) 65 2,030 2,149
Profit / (loss) after income tax
510
525
286
279
140
120
(7)
40
929
964

Other segment

The Other segment profit after income tax comprises:


2019 2018
For the six months ended 31 March

NZ$m NZ$m
Central functions
1
- 14
Technology and Group Centre
2, 3
178 3
Economic hedges (104) 13
Revaluation of insurance policies from changes in interest rates
3
(81) 10
Total (7) 40
1
Central functions’ other income for the six months ended 31 March 2018 includes the NZ$20 million insurance proceeds (Note 2 Other Operating Income) that were received from a member
of the Overseas Banking Group.
2
Technology and Group Centre’s other income for the six months ended 31 March 2019 includes the NZ$59 million gain on sale of OnePath and the NZ$39 million gain on sale of Paymark
(Note 2 Other Operating Income).
3
Amounts for the six months ended 31 March 2019 include the transfer of NZ$86 million of accumulated after tax gains previously recognised in revaluation of insurance policies from changes
in interest rates to Technology and Group Centre. These gains were transferred upon the sale of OnePath.



9

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

NOTES TO THE INTERIM FINANCIAL STATEMENTS

4. NET LOANS AND ADVANCES

31 Mar 19 30 Sep 18
Note NZ$m NZ$m
Overdrafts 1,085 905
Credit cards 1,620 1,644
Term loans - housing 82,874 80,609
Term loans - non-housing 44,803 44,169
Finance lease and hire purchase receivables
1,830
1,791
Subtotal

132,212
129,118
Unearned income
(246)
(239)
Capitalised brokerage/mortgage origination fees
309
314
Gross loans and advances 132,275
129,193
Provision for credit impairment 5 (487) (516)
Net loans and advances 131,788 128,677


5. PROVISION FOR CREDIT IMPAIRMENT
PROVISION FOR CREDIT IMPAIRMENT – BALANCE SHEET

Net loans and
advances
Off-balance sheet credit
related commitments
1
Total

31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18
Provision for credit impairment NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Individual provision
2

112
132
-
-
112
132
Collective provision
3

375
312
82
72
457
384
Total provision for credit impairment 487 444 82 72 569 516
1
Collective provision relating to off-balance sheet credit related commitments is included in provisions from 1 October 2018.
2
Individual provision comprises Stage 3 ECL assessed individually from 1 October 2018.
3
Collective provision comprises Stage 1, 2 and 3 ECL assessed collectively from 1 October 2018.

Net loans
and
advances
Off-balance
sheet credit
related
commitments Total
Collective provision reconciliation NZ$m NZ$m NZ$m
As at 30 September 2018 312 72 384
NZ IFRS 9 transition adjustment 60 13 73
As at 1 October 2018
372 85 457
Collective credit impairment charge / (release)
3 (3) -
As at 31 March 2019 375 82 457

CREDIT IMPAIRMENT CHARGE – INCOME STATEMENT


6 months to
31 Mar 19 31 Mar 18
Credit impairment charge NZ$m NZ$m
New and increased provisions 64 132
Write-backs (21) (30)
Recoveries of amounts previously written-off (11) (18)
Individual credit impairment charge
32
84
Collective credit impairment release
-
(14)
Total credit impairment charge

32
70



10

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



6. IMPAIRED AND PAST DUE LOANS


31 Mar 19 30 Sep 18


NZ$m NZ$m
Loans that are at least 90 days past due but not impaired 288 221
Impaired loans
292
323


7. DEPOSITS AND OTHER BORROWINGS
31 Mar 19 30 Sep 18
NZ$m NZ$m
Term deposits 53,109 51,298
On demand and short term deposits 42,800 41,602
Deposits not bearing interest 10,836 10,224
UDC secured investments
783
931
Total customer deposits
107,528
104,055
Certificates of deposit
912
910
Deposits from banks and securities sold under repurchase agreements
256
517
Commercial paper
2,240
2,486
Borrowings from Ultimate Parent Bank and Immediate Parent Company
4,155
4,952
Deposits and other borrowings 115,091 112,920


8. PROVISIONS

31 Mar 19 30 Sep 18
Note NZ$m NZ$m
Employee entitlements
123
120
Collective provision on undrawn commitments 5
82
-
Other
1
105 76
Provisions 310
196
1
Other provisions include provisions relating to customer remediation, make-good of leased premises and restructuring (including OnePath separation).


9. DEBT ISSUANCES

31 Mar 19 30 Sep 18

NZ$m NZ$m
Senior debt 17,995 18,767
Covered bonds 4,164 3,929
Total unsubordinated debt

22,159
22,696
Subordinated debt


- ANZ Capital Notes
1,503
1,549
- Other
277
289
Total subordinated debt

1,780
1,838
Total debt issued 23,939 24,534
Covered bonds are guaranteed by ANZNZ Covered Bond Trust Limited (the Covered Bond Guarantor), solely in its capacity as trustee of ANZNZ
Covered Bond Trust (the Covered Bond Trust). The Covered Bond Trust is a member of the Banking Group, whereas the Covered Bond Guarantor is not
a member of the Banking Group.
Substantially all of the assets of the Covered Bond Trust are made up of certain housing loans and related securities originated by the Bank which are
security for the guarantee by the Covered Bond Guarantor as trustee of the Covered Bond Trust of issuances of covered bonds by the Bank, or its
wholly owned subsidiary ANZ New Zealand (Int’l) Limited, from time to time. The assets of the Covered Bond Trust are not available to creditors of the
Bank, although the Bank (or its liquidator or statutory manager) may have a claim against the residual assets of the Covered Bond Trust (if any) after all
prior ranking creditors of the Covered Bond Trust have been satisfied.



11

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

NOTES TO THE INTERIM FINANCIAL STATEMENTS

10. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial assets and financial liabilities carried at fair value on the balance sheet
ANZ New Zealand categorises financial assets and financial liabilities carried at fair value into a fair value hierarchy as required by NZ IFRS 13 Fair Value
Measurement based on the observability of inputs used to measure fair value:
• Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical financial instruments;
• Level 2 – valuations using inputs other than quoted prices included within Level 1 that are observable for a similar financial asset or liability,
either directly or indirectly; and
• Level 3 – valuations using inputs for the asset or liability that are not based on observable market date (unobservable inputs).
The table below summarises the attribution of financial instruments carried at fair value to the fair value hierarchy:

Fair value measurements

Quoted market price
(Level 1)
Using observable
inputs
(Level 2)
Using unobservable
inputs (Level 3)
Total
31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18
NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Assets







Trading securities
7,204
6,795
339
1,229
-
-
7,543
8,024
Derivative financial instruments
11
7
9,102
8,062
5
3
9,118
8,072
Investment securities
6,347
6,457
-
44
1
1
6,348
6,502
Investments backing insurance contract liabilities
1
- - - 127 - - - 127
Total 13,562 13,259 9,441 9,462 6 4 23,009 22,725
Liabilities







Deposits and other borrowings
-
-
2,240
2,486
-
-
2,240
2,486
Derivative financial instruments
15
10
9,854
8,122
3
1
9,872
8,133
Other financial liabilities
159
110
-
-
-
-
159
110
Total 174
120
12,094
10,608
3
1
12,271
10,729
1
Including items reclassified as held for sale.

Financial assets and financial liabilities not measured at fair value
Below is a comparison of the carrying amounts as reported on the balance sheet and fair values of financial asset and financial liability categories other
than those categories where the carrying amount is at fair value or considered a reasonable approximation of fair value.
The fair values below have been calculated using discounted cash flow techniques where contractual future cash flows of the instrument are
discounted using discount rates incorporating wholesale market rates or market borrowing rates of debt with similar maturities or a yield curve
appropriate for the remaining term to maturity.

Carrying amount Fair value
31 Mar 19 30 Sep 18 31 Mar 19 30 Sep 18
NZ$m NZ$m NZ$m NZ$m
Financial assets





Net loans and advances
1

131,788
128,677
132,235
128,959
Total 131,788
128,677
132,235
128,959
Financial liabilities



Deposits and other borrowings
2

112,851
110,434
113,052
110,643
Debt issuances
1
23,939 24,534 24,087 24,724
Total 136,790 134,968 137,139 135,367
1
Fair value hedging is applied to certain financial instruments within these categories. The resulting fair value adjustments mean that the carrying value differs from the amortised cost.
2
Excludes commercial paper (Note 7 Deposits and Other Borrowings) designated at fair value through profit or loss.




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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



11. COMMITMENTS AND CONTINGENT LIABILITIES


31 Mar 19 30 Sep 18
Credit related commitments and contingencies NZ$m NZ$m
Contract amount of:
Undrawn facilities
26,653
26,995
Guarantees and letters of credit
1,351
1,531
Performance related contingencies
1,460
1,329
Total 29,464 29,855

ANZ New Zealand guarantees the performance of customers by issuing standby letters of credit and guarantees to third parties, including its Ultimate
Parent Bank. The risk involved is essentially the same as the credit risk involved in extending loan facilities to customers, therefore these transactions
are subjected to the same credit origination, portfolio management and collateral requirements for customers applying for loans. As the facilities may
expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
Other contingent liabilities
There are outstanding court proceedings, claims and possible claims for and against ANZ New Zealand. Where relevant, expert legal advice has been
obtained and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made. In some instances we have not
disclosed the estimated financial impact of the individual items either because it is not practicable to do so or because such disclosure may prejudice
the interests of ANZ New Zealand.
In recent years there has been an increase in the number of matters on which ANZ New Zealand engages with its regulators. There have been
significant increases in the nature and scale of regulatory investigations and reviews, civil and criminal enforcement actions (whether by court action
or otherwise) and the quantum of fines issued by regulators, particularly against financial institutions globally. The nature of these investigations and
reviews can be wide ranging and, for example, may include a range of matters including responsible lending practices, product suitability and
distribution, interest and fees and the entitlement to charge them, wealth advice, insurance distribution, pricing, competition, conduct in financial
markets and capital market transactions, reporting and disclosure obligations and product disclosure documentation. ANZ New Zealand has received
various notices and requests for information from its regulators as part of both industry-wide and ANZ New Zealand-specific reviews and has also
made disclosures to its regulators at its own instigation. There may be exposures to customers which are additional to any regulatory exposures. These
could include class actions, individual claims or customer remediation or compensation activities. The outcomes and total costs associated with such
reviews and
possible exposures remain uncertain.
Warranties and indemnities
ANZ New Zealand has provided warranties, indemnities and other commitments in favour of the purchaser in connection with various disposals of
businesses and assets and other transactions, covering a range of matters and risks. It is exposed to potential claims under those warranties,
indemnities and commitments.

12. DIVESTMENTS
OnePath and Paymark
On 30 November 2018, ANZ New Zealand sold OnePath to Cigna Corporation and on 11 January 2019, ANZ New Zealand sold its 25% shareholding in
Paymark to Ingenico Group. ANZ New Zealand recognised net gains on sale of NZ$59 million and NZ$39 million respectively, which are included in
other operating income.
Assets and liabilities sold
NZ$m
Investments backing insurance contract liabilities
101
Other assets, net of amounts payable to the Bank 6
Life insurance contract assets
675
Investments in associates - Paymark
7
Goodwill and other intangible assets 101
Total assets 890
Deposits and other borrowings (deposits with the Bank)
(50)
Current tax liabilities 18
Deferred tax liabilities
178
Payables and other liabilities 146
Provisions
2
Total liabilities 294
Net assets sold 596




13

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

REGISTERED BANK DISCLOSURES

B1. GENERAL DISCLOSURES
Guarantees
No material obligations of the NZ Branch are guaranteed as at 20 May 2019.
Covered bonds issued by ANZ New Zealand (Int’l) Limited, a subsidiary of the Bank, are guaranteed. Refer to page 11 for further details.
Changes in the Ultimate Parent Bank’s Board of Directors
Lee Hsien Yang retired as a Non-Executive Director on 19 December 2018. There have been no other changes to the Directors of the Ultimate Parent
Bank since 30 September 2018, the balance date of the last full year disclosure statement.

Auditors
KPMG, 18 Viaduct Harbour Avenue, Auckland, New Zealand.
Credit rating
As at 20 May 2019 the Ultimate Parent Bank has three credit ratings, which are applicable to its long-term senior unsecured obligations which are
payable in New Zealand in New Zealand dollars.
The Ultimate Parent Bank’s credit ratings are:
Rating Agency Credit Rating Qualification
S&P Global Ratings AA- Outlook Negative
Fitch Ratings AA- Outlook Stable
Moody’s Investors Service Aa3 Outlook Stable
Directors’ and New Zealand Chief Executive Officer’s statements
The Directors' and New Zealand Chief Executive Officer's statement is included on page 23.
Financial statements of the Ultimate Parent Bank and Overseas Banking Group
Copies of the most recent publicly available financial statements of the Ultimate Parent Bank and Overseas Banking Group will be provided
immediately, free of charge, to any person requesting a copy where request is made at the Registered Office. The most recent publicly available
financial statements for the Ultimate Parent Bank and Overseas Banking Group can also be accessed at the website shareholder.anz.com.
Auditor’s review report
The auditor’s review report is included on page 24.




14

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



B2. ADDITIONAL FINANCIAL DISCLOSURES
Additional information on the balance sheet

As at 31 March 2019

NZ$m
Total interest earning and discount bearing assets 150,770
Total interest and discount bearing liabilities 129,656
Total amounts due from related entities
4,202
Total amounts due to related entities
8,738
Total liabilities of the NZ Branch less amounts due to related entities
1,058

Assets charged as security for liabilities
These amounts exclude the amounts disclosed as collateral paid on the balance sheet that relate to derivative liabilities. The terms and conditions of
the collateral agreements are included in the standard Credit Support Annex that forms part of the International Swaps and Derivatives Association
Master Agreement.
Assets charged as security for liabilities include the following types of instruments:
• Securities provided as collateral for repurchase transactions. These transactions are governed by standard industry agreements.
• UDC secured investments are secured by a security interest granted under the trust deed over all of UDC’s present and future assets and
undertakings, to Trustees Executors Limited, as supervisor. The assets subject to the security interest comprise mainly loans to UDC's customers
and certain plant and equipment. The security interest secures all amounts payable by UDC on the UDC secured investments and all other
moneys payable by UDC under the trust deed.
• Specified residential mortgages provided as security for notes and bonds issued to investors as part of the Bank’s covered bond programme.
The carrying amounts of assets pledged as security are as follows:

As at 31 March 2019 NZ$m
Securities sold under agreements to repurchase
151
Assets pledged as collateral for UDC secured investments
3,374
Residential mortgages pledged as security for covered bonds
10,330

Additional information on the income statement
The amounts of net trading gains or losses and other fair value adjustments are included in Note 2 Other Operating Income. ANZ New Zealand does
not have any loans and advances designated at fair value through profit or loss. Other operating income for the purposes of the Order comprises net
fee and commission income, all other items of other income (all in Note 2 Other Operating Income), net income from insurance business and share of
associates’ profit (both shown on the income statement).



15

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

REGISTERED BANK DISCLOSURES

Additional information on concentrations of credit risk
Analysis of financial assets by industry is based on Australian and New Zealand Standard Industrial Classification (ANZSIC) codes. The significant
categories shown are the level one New Zealand Standard Industry Output Categories (NZSIOC), except that Agriculture is shown separately as
required by the Order.

Composition of financial instruments that give rise to credit risk by industry group are presented below:

Loans and
advances
3

Other
financial
assets
Off-balance
sheet credit
related
commitments
4
Total
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m
New Zealand residents
Agriculture 17,907 85 1,502 19,494
Forestry and fishing, agriculture services 1,392 7 261 1,660
Manufacturing 2,936 197 1,709 4,842
Electricity, gas, water and waste services
1,306 437 1,600 3,343
Construction
1,866 28 977 2,871
Wholesale trade
1,496 59 1,736 3,291
Retail trade and accommodation
2,971 31 1,034 4,036
Transport, postal and warehousing
1,336 94 755 2,185
Finance and insurance services
827 5,344 1,396 7,567
Public administration and safety
1

248 8,606 1,070 9,924
Rental, hiring & real estate services
33,157 737 3,466 37,360
Professional, scientific, technical, administrative and support services 1,229 9 582 1,820
Households
60,394 199 11,317 71,910
All other New Zealand residents
2

2,423 195 1,942 4,560
Subtotal 129,488 16,028 29,347 174,863
Overseas

Finance and insurance services
283 13,017 117 13,417
Households
1,595 5 - 1,600
All other non-NZ residents
846 91 - 937
Subtotal 2,724 13,113 117 15,954
Gross subtotal 132,212 29,141 29,464 190,817
Provision for credit impairment
(487) - (82) (569)
Subtotal 131,725 29,141 29,382 190,248
Unearned income
(246) - - (246)
Capitalised brokerage / mortgage origination fees
309 - - 309
Maximum exposure to credit risk 131,788 29,141 29,382 190,311
1
Public administration and safety includes exposures to local government administration and central government administration, defence and public safety.
2
Other includes exposures to mining, information media and telecommunications, education and training, health care and social assistance and arts, recreation and other services.
3
Excludes individual and collective provisions for credit impairment held in respect of off-balance sheet credit related commitments.
4
Off-balance sheet credit related commitments comprise undrawn facilities, customer contingent liabilities and letters of offer.




16

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



Additional information on concentrations of funding
Analysis of funding liabilities by industry is based on ANZSIC codes. The significant categories shown are the level one NZSIOC.

As at 31 March 2019 Note NZ$m
Funding composition


Customer deposits 7 107,528
Wholesale funding

Debt issuances
23,939
Certificates of deposit and commercial paper
3,152
Other borrowings
4,411
Total wholesale funding 31,502
Total funding

139,030
Customer deposits by industry - New Zealand residents
Agriculture, forestry and fishing
3,935
Manufacturing
2,128
Construction 2,128
Wholesale trade
1,573
Retail trade and accommodation
1,618
Financial and insurance services 12,136
Rental, hiring and real estate services
3,058
Professional, scientific, technical, administrative and support services 5,377
Public administration and safety
1,286
Arts, recreation and other services
1,966
Households 57,902
All other New Zealand residents
1

4,043

97,150
Customer deposits by industry - overseas
Households
9,821
All other 557

10,378
Total customer deposits
107,528
Wholesale funding (financial and insurance services industry)
New Zealand
5,514
Overseas
25,988
Total wholesale funding
31,502
Total funding

139,030
Concentrations of funding by geography
New Zealand
102,664
Australia 5,355
United States
13,360
Europe
10,360
Other countries 7,291
Total funding

139,030
1
Other includes mining; electricity, gas, water and waste services; transport, postal and warehousing; information media and telecommunications; education and training; health care and
social assistance.



17

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

REGISTERED BANK DISCLOSURES

Additional information on interest rate sensitivity
The following tables represent the interest rate sensitivity of ANZ New Zealand's assets, liabilities and off balance sheet instruments by showing the
periods in which these instruments may reprice, that is, when interest rates applicable to each asset or liability can be changed.

Total
Up to
3 months
Over 3 to
6 months
Over 6 to
12 months
Over 1 to
2 years
Over
2 years
Not bearing
interest
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Assets
Cash and cash equivalents
2,697 2,355 - - - - 342
Settlement balances receivable
630 - - - - - 630
Collateral paid
2,370 2,370 - - - - -
Trading securities
7,543 503 107 388 928 5,617 -
Derivative financial instruments
9,118 - - - - - 9,118
Investment securities
6,348 253 15 149 1,210 4,720 1
Net loans and advances
131,788 64,605 11,602 25,373 22,724 7,851 (367)
Other financial assets
728 - - - - - 728
Total financial assets
161,222 70,086 11,724 25,910 24,862 18,188 10,452
Liabilities
Settlement balances payable 2,542 784 - - - - 1,758
Collateral received
519 519 - - - - -
Deposits and other borrowings
115,091 74,763 14,102 10,602 2,469 2,319 10,836
Derivative financial instruments
9,872 - - - - - 9,872
Debt issuances
23,939 2,325 2,018 443 4,969 14,184 -
Other financial liabilities
700 159 - - - - 541
Total financial liabilities
152,663 78,550 16,120 11,045 7,438 16,503 23,007
Hedging instruments - 21,534 (8,670) (7,689) (12,226) 7,051 -
Interest sensitivity gap
8,559 13,070 (13,066) 7,176 5,198 8,736 (12,555)

Additional information on liquidity risk
Maturity analysis of financial liabilities
The table below provides residual contractual maturity analysis of financial liabilities at 31 March 2019 within relevant maturity groupings. All
outstanding debt issuances are profiled on the earliest date on which ANZ New Zealand may be required to pay. The amounts represent principal and
interest cash flows – so they may differ from equivalent amounts reported on the balance sheet.


On demand
Less than
3 months
3 to 12
months
1 to 5
years
After
5 years Total
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Settlement balances payable
1,470 1,087 - - - 2,557
Collateral received
- 519 - - - 519
Deposits and other borrowings 53,845 28,976 28,623 4,652 1,120 117,216
Derivative financial liabilities (trading)
- 7,623 - - - 7,623
Debt issuances
1

- 58 2,318 19,948 3,227 25,551
Other financial liabilities
- 95 6 138 22 261
Derivative financial instruments
(balance sheet management)

- gross inflows
- 1,453 3,134 9,145 937 14,669
- gross outflows
- (1,572) (3,540) (9,870) (994) (15,976)
1
Any callable wholesale debt instruments have been included at their next call date.

At 31 March 2019, NZ$67 million of ANZ New Zealand’s NZ$409 million of non-credit related commitments and all NZ$29,464 million of its credit
related commitments and contingent liabilities mature in less than 1 year, based on the earliest date on which ANZ New Zealand may be required to
pay.




18

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



Liquidity portfolio
ANZ New Zealand holds a diversified portfolio of cash and high quality liquid securities to support liquidity risk management. The size of ANZ New
Zealand’s liquidity portfolio is based on the amount required to meet its internal and regulatory liquidity scenario metrics.
As at 31 March 2019 NZ$m
Cash and balances with central banks
2,273
Certificates of deposit
144
Government, local body stock and bonds
7,645
Reserve Bank bills 55
Other bonds 5,663
Total liquidity portfolio 15,780

The Bank also held unencumbered internal residential mortgage backed securities which would entitle ANZ New Zealand to enter into repurchase
transactions with a value of NZ$7,434 million at 31 March 2019.

Reconciliation of mortgage related amounts

As at 31 March 2019

Note NZ$m
Term loans - housing
1
4 82,874
Less: fair value hedging adjustment (8)
Less: housing loans made to corporate customers
(2,179)
On-balance sheet residential mortgage exposures B4
80,687
Add: off-balance sheet residential mortgage exposures B4
8,242
Total residential mortgage exposures as per LVR analysis
B4
88,929
1
Term loans – housing includes loans secured over residential property for owner-occupier, residential property investment and business purposes.

Overseas Banking Group Profitability and Size



31 Mar 19
Net Profit for the six months ended 31 March 2019 (AUDm)
1
3,182
Net profit after tax for the year ended 31 March 2019 as a percentage of average total assets
0.65%
Total assets (AUDm)
980,244
Percentage change in total assets in the 12 months to 31 March 2019
4.76%
1
Net profit after tax for the period includes AUD 9 million of profit attributable to non-controlling interests.




19

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

REGISTERED BANK DISCLOSURES

B3. ASSET QUALITY
Movements in components of loss allowance - total



Stage 3

Stage 1 Stage 2
Collectively
assessed
Individually
assessed Total
Net loans and advances - total NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2018 160 171 41 132 504
Transfer between stages
19 (20) 2 (1) -
New and increased provisions (net of collective provision releases) (22) 22 2 65 67
Write-backs - - - (21) (21)
Recoveries of amounts previously written off
- - - (11) (11)
Credit impairment charge / (release)
(3) 2 4 32 35
Bad debts written-off (excluding recoveries)
- - - (58) (58)
Add back recoveries of amounts previously written off
- - - 11 11
Discount unwind
- - - (5) (5)
As at 31 March 2019 157 173 45 112 487


Off-balance sheet credit related commitments - total
As at 1 October 2018 60 23 2 - 85
Transfer between stages
3 (3) - - -
New and increased provisions (net of collective provision releases)
(8) 5 - - (3)
Write-backs
- - - - -
Recoveries of amounts previously written off
- - - - -
Credit impairment charge / (release)
(5) 2 - - (3)
Bad debts written-off (excluding recoveries) - - - - -
Add back recoveries of amounts previously written off - - - - -
Discount unwind - - - - -
As at 31 March 2019 55 25 2 - 82

Impacts of changes in gross financial assets on loss allowances - total



Stage 3

Stage 1 Stage 2
Collectively
assessed
Individually
assessed Total
Gross loans and advances - total NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2018 120,971 7,550 349 323 129,193
Additions 11,485 1,298 202 129 13,114
Deletions (9,252) (551) (69) (102) (9,974)
Amounts written off
- - - (58) (58)
As at 31 March 2019 123,204 8,297 482 292 132,275
Loss allowance as at 31 March 2019 157 173 45 112 487


Off-balance sheet credit related commitments - total
As at 1 October 2018 28,632 1,198 11 14 29,855
Additions 282 1,284 60 7 1,633
Deletions (1,933) (80) (3) (8) (2,024)
Amounts written off - - - - -
As at 31 March 2019 26,981 2,402 68 13 29,464
Loss allowance as at 31 March 2019 55 25 2 - 82

Explanation of how changes in the gross carrying amounts of gross loans and advances contributed to changes in loss allowance
Overall, loss allowances on gross loans and advances have remained stable at approximately 0.4% of gross loans and advances. Loss allowances have
decreased by NZ$17 million (3%) driven by NZ$58 million of amounts written off. The remaining NZ$41 million in crease in loss allowances is driven by
an increase in past due but not impaired assets, which have increased from 1.5% to 1.8% of gross exposures.



20

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED



Past due assets and other asset quality information

Total
As at 31 March 2019 NZ$m
Past due assets
Less than 30 days past due 1,647
At least 30 days but less than 60 days past due 340
At least 60 days but less than 90 days past due 165
At least 90 days past due
288
Total past due but not impaired 2,440
Other asset quality information
Undrawn facilities with impaired customers 13
Other assets under administration
11

ANZ New Zealand does not have any loans and advances designated at fair value.

Overseas Banking Group asset quality


As at 31 March 2019

Gross impaired assets (AUDm)
2,022
Gross impaired assets as a percentage of total assets
0.2%
Individual provision (AUDm)
891
Individual provision as a percentage of gross impaired assets
44.1%
Collective provision (AUDm)
3,378




21

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

REGISTERED BANK DISCLOSURES

B4. CREDIT AND MARKET RISK EXPOSURES AND CAPITAL ADEQUACY
APRA Basel III capital ratios

Overseas Banking Group
Ultimate Parent Bank
(Extended Licensed Entity)
As at 31 March 2019 2018 2019 2018
Common equity tier 1 capital
11.5%
11.0%
11.2%
10.9%
Tier 1 capital 13.4% 12.9% 13.2% 12.9%
Total capital 15.3% 14.9% 15.3% 15.1%

The Ultimate Parent Bank and the Overseas Banking Group are required to hold minimum capital as determined by APRA, which is at least equal to
that specified under the Basel III capital framework.
APRA has authorised the Ultimate Parent Bank and the Overseas Banking Group to use:
• the Advanced Internal Ratings Based (AIRB) methodology for calculation of credit risk weighted assets. There are however small portfolios
(mainly retail and local corporates in Asia Pacific) where the Overseas Banking Group applies the standardised approach.
• the Advanced Measurement Approach (AMA) for the operational risk weighted asset equivalent.
The Overseas Banking Group exceeded the minimum capital requirements set by APRA as at 31 March 2019 and for the comparative prior periods.
The Overseas Banking Group is required to publicly disclose Pillar 3 financial information as at 31 March 2019. The Overseas Banking Group’s Pillar 3
disclosure document for the quarter ended 31 March 2019, in accordance with APS 330: Public Disclosure of Prudential Information, discloses capital
adequacy ratios and other prudential information. This document can be accessed at the website anz.com.
Market risk
The aggregate market risk exposures below have been calculated in accordance with the RBNZ Banking Supervision Handbook document Capital
Adequacy Framework (Standardised Approach) BS2A. The peak end-of-day market risk exposures are for the six months ended 31 March 2019.

Implied risk weighted
exposure Notional capital charge
Period end Peak Period end Peak
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m
Interest rate risk
4,586 6,605 367 528
Foreign currency risk 111 157 9 13
Equity risk 1 1 - -
Additional mortgage information
As required by RBNZ, loan-to-valuation-ratios (LVR) are calculated as the current exposure secured by a residential mortgage divided by ANZ New
Zealand's valuation of the security property at origination of the exposure. Off balance sheet exposures include undrawn and partially drawn
residential mortgage loans as well as commitments to lend. Commitments to lend are formal offers for housing lending which have been accepted by
the customer.

On-balance
sheet
Off-balance
sheet Total
As at 31 March 2019 NZ$m NZ$m NZ$m
LVR range
Does not exceed 60% 40,201 5,623 45,824
Exceeds 60% and not 70%
18,309 1,339 19,648
Exceeds 70% and not 80%
17,933 969 18,902
Does not exceed 80%
76,443 7,931 84,374
Exceeds 80% and not 90%
2,993 139 3,132
Exceeds 90%
1,251 172 1,423
Total 80,687 8,242 88,929


B5. INSURANCE BUSINESS
ANZ New Zealand previously conducted insurance business through its subsidiary OnePath. OnePath was sold to Cigna Corporation on 30 November
2018, and as at 31 March 2019, ANZ New Zealand does not conduct any insurance business. ANZ New Zealand continues to market and distribute life
insurance products provided by OnePath.




22

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

DIRECTORS' AND NEW ZEALAND CHIEF EXECUTIVE OFFICER'S STATEMENT

As at the date on which this Disclosure Statement is signed, after due enquiry, each Director of the Ultimate Parent Bank and the Chief Executive
Officer – NZ Branch believes that:
• The Disclosure Statement contains all the information that is required by the Registered Bank Disclosure Statements (Overseas Incorporated
Registered Banks) Order 2014; and
• The Disclosure Statement is not false or misleading.
Over the six months ended 31 March 2019, after due enquiry, each Director of the Ultimate Parent Bank and the Chief Executive Officer – NZ Branch
believes that:
• The Ultimate Parent Bank has complied with all Conditions of Registration that applied during that period; and
• The NZ Branch and the Bank had systems in place to monitor and control adequately the material risks of Relevant Members of ANZ New
Zealand including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk and other business risks, and that
those systems were being properly applied.

Signed by the Chief Executive Officer – NZ Branch





Penny Dell
Chief Executive Officer – NZ Branch
20 May 2019


Signed on behalf of all the Directors of the Ultimate Parent Bank





David Hisco
Responsible Person
20 May 2019

on behalf of the Directors of the Ultimate Parent Bank:
Ilana Atlas
Paula Dwyer
Shayne Elliott
David Gonski, AC
Jane Halton, AO, PSM
Rt Hon Sir John Key, GNZM AC
Graeme Liebelt
John Macfarlane













23

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

INDEPENDENT AUDITOR’S REVIEW REPORT



TO THE DIRECTORS OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

REPORT ON THE HALF YEAR DISCLOSURE STATEMENT




























BASIS FOR CONCLUSION
A review of the half year disclosure statement in accordance with NZ SRE 2410 Review of Financial Statements Performed by the Independent Auditor of
the Entity (NZ SRE 2410) is a limited assurance engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of ANZ New Zealand, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial
statements.
Our firm has also provided other services to ANZ New Zealand in relation to review and other assurance engagements. Subject to certain restrictions,
partners and employees of our firm may also deal with ANZ New Zealand on normal terms within the ordinary course of trading activities of the
business of ANZ New Zealand. These matters have not impaired our independence as reviewer of ANZ New Zealand. The firm has no other
relationship with, or interest in, ANZ New Zealand.


USE OF THE INDEPENDENT REVIEW REPORT
This independent review report is made solely to the directors as a body of ANZ New Zealand. Our review work has been undertaken so that we might
state to the directors those matters we are required to state to them in the independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the directors as a body for our work, this independent review
report, or any of the opinions we have formed.

CONCLUSION
Based on our review of the interim financial statements and registered bank disclosures (together referred to as ‘the disclosure statement’) of the
New Zealand business of Australia and New Zealand Banking Group Limited and its subsidiaries (ANZ New Zealand) on pages 3 to 22, nothing has
come to our attention that causes us to believe that:
• the interim financial statements on pages 3 to 13 do not present fairly in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34
Interim Financial Reporting, in all material respects, ANZ New Zealand’s financial position as at 31 March 2019 and its financial performance
and cash flows for the 6 month period ended on that date;
• the registered bank disclosures in sections B2, B3 and B5 disclosed in accordance with schedules 5, 7, 12 and 14 of the Registered Bank
Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (as amended) (the Order) respectively, do not fairly state, in all
material respects, the matters to which they relate in accordance with those schedules; and
• the registered bank disclosures relating to credit and market risk exposures and capital adequacy in section B4 are not, in all material
respects, disclosed in accordance with schedule 9 of the Order.
We have completed a review of the accompanying half year disclosure statement which comprises:
• the interim financial statements formed of:
• the consolidated balance sheet as at 31 March 2019;
• the consolidated income statement, statements of comprehensive income, changes in equity and cash flows for the year then 6
month period then ended; and
• notes, including a summary of significant accounting policies and other explanatory information.
• the registered bank disclosures prescribed in Schedules 5, 7, 9, 12 and 14 of the Order.



24

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND

INDEPENDENT AUDITOR’S REVIEW REPORT

RESPONSIBILITIES OF THE DIRECTORS FOR THE HALF YEAR DISCLOSURE STATEMENT
The Directors, on behalf of ANZ New Zealand, are responsible for:
• the preparation and fair presentation of the half year disclosure statement in accordance with IAS 34, NZ IAS 34 and Schedules 3, 5, 7, 12 and 14
of the Order;
• the preparation and fair presentation of ANZ New Zealand’s disclosures in regards to credit and market risk exposures and capital adequacy in
accordance with Schedule 9 of the Order;
• implementing necessary internal controls to enable the preparation of a half year disclosure statement that is fairly presented and free from
material misstatement, whether due to fraud or error; and
• assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE REVIEW OF THE HALF YEAR DISCLOSURE STATEMENT
Our responsibility is to express a conclusion on the half year disclosure statement based on our review. We conducted our review in accordance with
NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything has come to attention that causes us to believe that:
• the interim financial statements do not present fairly in all material respects ANZ New Zealand’s financial position as at 31 March 2019 and its
financial performance and cash flows for the 6 month period ended on that date;
• the interim financial statements do not, in all material respects, comply with IAS 34 and NZ IAS 34;
• the registered bank disclosures in sections B2, B3, and B5 do not, fairly state, in all material respects, the matters to which it relates in accordance
with Schedules 5, 7, 12 and 14 of the Order; and
• the registered bank disclosures relating to credit and market risk exposures and capital adequacy in section B4 is not, in all material respects,
disclosed in accordance with Schedule 9 of the Order.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards
on Auditing (New Zealand). Accordingly we do not express an audit opinion on the half year disclosure statement. This description forms part of our
independent review report.





KPMG
Auckland
20 May 2019





25

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

BANK FINANCIAL STRENGTH DASHBOARD

Background
This section does not form part of the Disclosure Statement. It contains information in respect of ANZ New Zealand included on the Bank Financial
Strength Dashboard (Dashboard) published on RBNZ’s website. There is no requirement for the Directors to review or approve this information.

Amounts below may differ slightly from those published by RBNZ due to rounding differences. The tables include reconciliations to amounts included
in the Disclosure Statement where there are classification differences between the financial statements and the Dashboard.



D1. ASSET QUALITY
Housing Consumer Business Agriculture All other Total
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Total loans
80,432 3,524 29,533 17,483 1,306 132,278
Impaired loans
36 12 44 156 44 292
Loans 90 days past due but not impaired
200 25 50 13 - 288
Total non-performing loans
236 37 94 169 44 580
Non-performing loans ratio (%)
0.29% 1.05% 0.32% 0.97% 3.37% 0.44%
Individual provisions
11 6 29 31 35 112
Collective provisions
54 68 188 61 4 375
On-balance sheet residential mortgage exposures with LVRs that:

Exceeds 80% and not 90%
3.7%
Exceeds 90%
1.6%


A reconciliation of the amounts in this table to the financial statements is included in the Other Information on page 27.


D2. PROFITABILITY / PERFORMANCE

Financial statements

Dashboard

For the
6 months ended
31 March 2019
Less: for the
3 months ended
31 December 2018
For the
3 months ended
31 March 2019

NZ$m NZ$m NZ$m
Interest income
3,322 (1,675) 1,647
Interest expense
1,696 (854) 842
Net interest income
1,626 (821) 805
Gains/losses on trading and hedging (67) 62 (5)
Fee and commission income 332 (162) 170
All other income 139 (89) 50
Operating expenses
745 (385) 360
Impaired asset expense 32 (13) 19
Profit before tax 1,253 (612) 641
Tax expense 324 (156) 168
Profit after tax 929 (456) 473
Return on assets (%) 1.2%
Return on equity (%) 16.3%
Net interest margin (%) 2.2%
The Supplementary Information does not form part of the Disclosure Statement

26

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ANZ NEW ZEALAND UNAUDITED

BANK FINANCIAL STRENGTH DASHBOARD

D3. FINANCIAL POSITION

Classification differences


Financial
statements
Other bank
deposits and
other assets
Securities
purchased under
agreements
to re-sell
Subordinated
loan from
related party Dashboard
As at 31 March 2019 NZ$m NZ$m NZ$m NZ$m NZ$m
Cash and bank deposits
1

5,067 (83) (336) - 4,648
Debt securities held
2

13,891 - - - 13,891
Net loans and advances
131,788 - - - 131,788
Derivatives in an asset position
9,118 - - - 9,118
All other assets
5,088 83 336 - 5,507
Total assets

164,952 - - - 164,952
Deposits
107,528 - - - 107,528
Debt securities issued
3

27,091 - - (277) 26,814
Other borrowings
4
4,930 1,469 - 277 6,676
Derivatives in a liability position 9,872 - - - 9,872
All other liabilities 3,803 (1,469) - - 2,334
Total liabilities (excluding head office account)

153,224 - - - 153,224
Equity 11,728 - - - 11,728
1
Comprises cash and cash equivalents and collateral paid

2
Comprises trading securities and investment securities
3
Comprises debt issuances plus certificates of deposit and commercial paper from deposits and other borrowings
4
Comprises collateral received and the remaining items of deposits and other borrowings

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

Housing Consumer Business Agriculture All other
1
Total
As at 31 March 2019 Note NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Total loans per Balance Sheet 4
82,874 n/a n/a n/a 49,338 132,212
Fair value hedge adjustment
(8) - - - 8 -
Business loans secured by residential property
(2,434) - - 326 2,108 -
Residential investor property (21,967) - - 53 21,914 -
Other household and agriculture industry loans - 3,524 - 17,528 (21,052) -
Concentration of loans by industry
2
B2 58,465 3,524 - 17,907 52,316 132,212
Fair value hedge adjustments - - - - (8) (8)
Unearned income on finance leases - - - - (203) (203)
Deposit components of overdraft product - - - - 277 277
Residential investor property 21,967 - - (53) (21,914) -
Business lending
- - 29,166 (45) (29,121) -
Loans by purpose (RBNZ series S31)
80,432 3,524 29,166 17,809 1,347 132,278
Other business loans secured by residential property
- - 367 (326) (41) -
Total loans per Dashboard D1
80,432 3,524 29,533 17,483 1,306 132,278
1
All other in RBNZ series S31 and the Dashboard comprises: Depository and other financial institutions, Central and Local Government, Non-profit institutions serving households.

2
Household exposures (resident and non-resident) in Note B2 comprise Housing and Consumer.

The Supplementary Information does not form part of the Disclosure Statement

27