ANZ 2019 Full Year Results Documents

Australia and New Zealand Banking Group Limited

ABN 11 005 357 522







Full Year
30 September 2019






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 2019 Annual Report, and is lodged with the ASX under listing rule
4.2A.

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 2019



Operating Results
1



AUD million


Statutory operating income from continuing operations -6% to 18,785





Statutory profit attributable to shareholders -7% to 5,953





Cash profit
2
6% to 6,161


Cash profit continuing operations
2


0% to 6,470








Dividends
3


Cents

Franked

per

amount

share

per share


Proposed final dividends
4


80

70%





Interim dividend

80

100%


Record date for determining entitlements to the proposed 2019 final dividend 12 November 2019



Payment date for the proposed 2019 final dividend 18 December 2019







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 2019 final dividend. For the 2019 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 15 November 2019, 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 2019 final dividend must be received by ANZ's Share
Registrar by 5.00pm (Australian Eastern Daylight Time) on 13 November 2019. 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 15 November 2019.






1
Unless otherwise noted, all comparisons are to the year ended 30 September 2018.
2
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the core 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 core 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 an increase to statutory profit of $208 million ($174 million on a continuing basis) made up of several items. Refer pages 77 to 81 for further details.
3
The unfranked portion of the dividend will be sourced from ANZ’s conduit foreign income account.
4
It is proposed that the final dividend will be 70% franked per ordinary share for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 9 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 4 November 2019, 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 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.






David M Gonski, AC Shayne C Elliott
Chairman Director

30 October 2019

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 2019



CONTENTS PAGE



Disclosure Summary 7
Summary 9
Group Results 23
Divisional Results 53
Profit Reconciliation 77
Condensed Consolidated Financial Statements 83
Supplementary Information 115
Definitions 128
ASX Appendix 4E Cross Reference Index 131
Alphabetical Index 132


















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 2019.
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 2019 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 https://www.anz.com/shareholder/centre/ within the disclosures for 2019 Full Year Results.

Available on 31 October 2019 – 2019 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 4 November 2019
 2019 Annual Report
 2019 The Company Financial Report
 2019 Corporate Governance Statement
 APS 330 Pillar III Disclosure at 30 September 2019


2019 Climate-Related Financial Disclosures
 United Kingdom Disclosure and Transparency Rules Submission
2019 ESG Supplement

DISCLOSURE SUMMARY


8
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SUMMARY


9
CONTENTS Page

Guide to Full Year Results 10
Statutory Profit Results 12
Cash Profit Results 13
Financial Performance Summary – Total and continuing operations 14
Key Balance Sheet Metrics 15
Large/Notable Items – continuing operations 16
Full Time Equivalent Staff 21
Other Non-Financial Information 21

SUMMARY


10
Guide to Full Year Results

ACCOUNTING STANDARDS ADOPTED
During the September 2019 full year, the Group adopted two new Accounting Standards, AASB 9 Financial Instruments (AASB 9) and AASB 15 Revenue
from Contracts with Customers (AASB 15):
 AASB 9 - the Group implemented an expected credit loss methodology for impairment of financial assets, and revised the classification and
measurement of certain financial assets from 1 October 2018. Consequently, the Group increased its provision for credit impairment by $813 million
through opening retained earnings. Comparative information has not been restated.
 AASB 15 - the main impact of adoption is that certain items previously netted are now presented gross in operating income and operating expenses.
Comparative information has been restated which increased total operating income for the September 2018 full year by $153 million and increased
total operating expenses by the same amount.
For further details on key requirements and impacts of the changes described above refer to Note 1 and 16 of the Condensed Consolidated Financial
Statements.

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 core business activities of the Group, enabling readers to
assess Group and Divisional performance against prior periods and against peer institutions. 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 2019 ANZ Annual Financial Statements (when released).
Cash profit is not subject to audit by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been
determined on a consistent basis across each period presented.
 Adjustments between statutory profit and cash profit - To calculate cash profit, the Group excludes non-core items from statutory profit. Refer to
pages 77 to 81 for adjustments between statutory and cash profit.
 Large/Notable items within cash profit - The Group’s cash profit result from continuing operations includes a number of items collectively referred
to as large/notable items. While these items form part of cash profit, given their nature and significance, they have been presented separately with
comparative information, where relevant, to provide transparency and aid comparison. Refer to pages 16 to 20 for details of large/notable items.
DISCONTINUED OPERATIONS
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 and liabilities
held for sale, as they represent a major line of business.
The Group Income Statement and Statement of Comprehensive Income show discontinued operations separately from continuing operations in a
separate line item ‘Profit/(Loss) from discontinued operations’.
 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) business and Aligned Dealer
Groups (ADGs) businesses to IOOF. The sale of the ADG business completed on 1 October 2018. On 17 October 2019, the Group announced it had
agreed a revised sale price for its OnePath P&I business and ADGs to IOOF of $850 million, being a $125 million reduction from the original sale
price of $975 million announced in October 2017. The new price of $850 million includes approximately $25 million that ANZ has already received for
the sale of ADGs in October 2018. The revised terms reflect changing market conditions and include lower overall warranty caps as well as some
changes to the strategic alliance arrangements. Subject to APRA approval, the Group expects the transaction to complete in the first quarter of
calendar year 2020. The impact of the reduction in price has been reflected in the 2019 financial results.
 Sale to Zurich Financial Services Australia (Zurich)
On 12 December 2017, ANZ announced that it had agreed to sell its life insurance business to Zurich and regulatory approval was obtained on 10
October 2018. The transaction was completed on 31 May 2019.

SUMMARY


11
Included in the ‘Cash loss from discontinued operations’ is:
 A $23 million loss ($81 million loss after tax) was recognised in the September 2019 half. This is attributable to sale related adjustments and write-
downs, the reversal of the life-to-date cash profit adjustments on the revaluation of policy liabilities sold to Zurich, partially offset by the recycling of
gains previously deferred in equity reserves on sale completion. A $632 million loss (pre and post-tax) was recognised on the reclassification of
Wealth Australia discontinued operations businesses to held for sale in the September 2018 full year; and
 Customer remediation which includes provisions for expected refunds to customers and related remediation costs associated with inappropriate
advice or services not provided in the pensions and investments and life insurance businesses.


Half Year Full Year

Sep-19 Mar-19

Sep-19 Sep-18
$M $M $M $M
Customer remediation (pre-tax) 166 75

241 181
Customer remediation (post-tax) 154 53

207 127

CONTINUING OPERATIONS
Divisional Performance
The presentation of divisional results has been impacted by a number of methodology and structural changes during the September 2019 full year. Prior
period comparatives have been restated:
 The methodology for allocating earnings on capital at a business unit level changed from Economic Capital to Regulatory Capital. While neutral at a
Group level, this change impacted net interest income at the divisional level;
 The residual Asia Retail and Wealth businesses have been transferred from the former Asia Retail and Pacific division to Technology, Services &
Operations (TSO) and Group Centre division. The remaining segment has been renamed Pacific division; and
 ANZ’s lenders mortgage insurance, share investing, general insurance distribution and financial planning businesses which were previously part of
the continuing operations of Wealth Australia now form part of the Australia Retail and Commercial division (previously named Australia division)
and Wealth Australia ceases to exist as a continuing division.

Other than those described above, there have been no other significant changes impacting divisional performance.
 

SUMMARY


12
Statutory Profit Results




Half Year

Full Year

Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Net interest income 7,040 7,299 -4% 14,339 14,514 -1%
Other operating income
2,452 1,994 23% 4,446 5,470 -19%
Operating income
9,492 9,293 2% 18,785 19,984 -6%
Operating expenses (4,706) (4,365) 8% (9,071) (9,401) -4%
Profit before credit impairment and income tax
4,786 4,928 -3% 9,714 10,583 -8%
Credit impairment charge (402) (392) 3% (794) (688) 15%
Profit before income tax
4,384 4,536 -3% 8,920 9,895 -10%
Income tax expense (1,325) (1,284) 3% (2,609) (2,784) -6%
Non-controlling interests
(6) (9) -33% (15) (16) -6%
Profit attributable to shareholders of the Company from continuing operations
3,053 3,243 -6% 6,296 7,095 -11%
Profit/(Loss) from discontinued operations (273) (70) large (343) (695) -51%
Profit attributable to shareholders of the Company
2,780 3,173 -12% 5,953 6,400 -7%

Earnings Per Ordinary Share (cents)

Half Year Full Year

Reference
Page
Sep 19 Mar 19 Movt Sep 19 Sep 18 Movt
Basic
98
98.3 111.7 -12% 210.0 221.6 -5%
Diluted 98
94.7 106.4 -11% 201.9 212.1 -5%


Half Year Full Year

Reference
Page
Sep 19 Mar 19 Sep 19 Sep 18
Ordinary Share Dividends (cents)
Interim - fully franked
1,2
97 - 80 80 80
Final 97

- fully franked
1,2
97 - - - 80
- partially franked
2,3
97 80 - 80 -
Total 97
80 80 160 160
Ordinary share dividend payout ratio
4
97 81.6% 71.4% 76.2% 72.1%
Profitability Ratios

Return on average ordinary shareholders' equity
5
9.3% 10.8% 10.0% 10.9%
Return on average assets
6
0.56% 0.65% 0.61% 0.68%
Net interest margin
1.72% 1.79% 1.75% 1.87%
Net interest income to average credit RWAs
6
4.03% 4.23% 4.13% 4.28%
Efficiency Ratios


Operating expenses to operating income 51.8% 48.6% 50.2% 49.6%
Operating expenses to average assets
6
1.00% 0.94% 0.97% 1.05%
Credit Impairment Charge/(Release)


Individually assessed credit impairment charge ($M) 398 379 777 773
Collectively assessed credit impairment charge/(release) ($M)
4 13 17 (85)
Total credit impairment charge ($M) 102
402 392 794 688
Individually assessed credit impairment charge as a % of average gross loans and advances
6,7
0.13% 0.12% 0.13% 0.13%
Total credit impairment charge as a % of average gross loans and advances
6,7
0.13% 0.13% 0.13% 0.12%
1.
Fully franked for Australian tax purposes (30% tax rate).
2.
Carry New Zealand imputation credits of NZD 9 cents per ordinary share for the proposed 2019 final dividend (2019 interim dividend: NZD 9 cents; 2018 final dividend: NZD 10 cents; 2018
interim dividend: NZD 9 cents).
3.
Partially franked at 70% for Australian tax purposes (30% tax rate).
4.
Dividend payout ratio is calculated using the proposed 2019 final, 2019 interim, 2018 final and 2018 interim dividends.
5.
Average ordinary shareholders’ equity excludes non-controlling interests.
6.
Average assets, average gross loans and advances and average credit RWAs include assets held for sale.
7.
Credit impairment charge used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

SUMMARY


13
Cash Profit Results
1





Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Net interest income 7,040 7,299 -4% 14,339 14,514 -1%
Other operating income
2,243 2,447 -8% 4,690 4,853 -3%
Operating income
9,283 9,746 -5% 19,029 19,367 -2%
Operating expenses (4,706) (4,365) 8% (9,071) (9,401) -4%
Profit before credit impairment and income tax
4,577 5,381 -15% 9,958 9,966 0%
Credit impairment charge (402) (393) 2% (795) (688) 16%
Profit before income tax
4,175 4,988 -16% 9,163 9,278 -1%
Income tax expense (1,263) (1,415) -11% (2,678) (2,775) -3%
Non-controlling interests
(6) (9) -33% (15) (16) -6%
Cash profit from continuing operations
2,906 3,564 -18% 6,470 6,487 0%
Cash profit/(loss) from discontinued operations (259) (50) large (309) (682) -55%
Cash profit
2,647 3,514 -25% 6,161 5,805 6%

Earnings Per Ordinary Share (cents)

Half Year Full Year

Sep 19 Mar 19 Movt Sep 19 Sep 18 Movt
Basic
93.6 123.0 -24% 216.7 199.9 8%
Diluted
90.3 116.8 -23% 208.1 192.3 8%


Half Year Full Year

Reference
Page
Sep 19 Mar 19 Sep 19 Sep 18
Ordinary Share Dividends
Ordinary share dividend payout ratio
2
85.7% 64.5% 73.6% 79.5%
Profitability Ratios

Return on average ordinary shareholders' equity
3
8.9% 11.9% 10.4% 9.8%
Return on average assets
4
0.53% 0.72% 0.63% 0.61%
Net interest margin
1.72% 1.79% 1.75% 1.87%
Net interest income to average credit RWAs
4
4.03% 4.23% 4.13% 4.28%
Efficiency Ratios

Operating expenses to operating income 52.9% 46.4% 49.5% 52.0%
Operating expenses to average assets
4
1.00% 0.94% 0.97% 1.05%
Credit Impairment Charge/(Release)

Individually assessed credit impairment charge ($M) 34 398 380 778 773
Collectively assessed credit impairment charge/(release) ($M) 34
4 13 17 (85)
Total credit impairment charge ($M) 34
402 393 795 688
Individually assessed credit impairment charge as a % of average gross loans and advances
4,5
0.13% 0.12% 0.13% 0.13%
Total credit impairment charge as a % of average gross loans and advances
4,5
0.13% 0.13% 0.13% 0.12%
Cash Profit/(Loss) By Division Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 1,492 1,703 -12% 3,195 3,626 -12%
Institutional
816 1,012 -19% 1,828 1,480 24%
New Zealand
646 753 -14% 1,399 1,521 -8%
Pacific
26 33 -21% 59 72 -18%
TSO and Group Centre
(74) 63 large (11) (212) -95%
Discontinued Operations
(259) (50) large (309) (682) -55%
Cash profit
2,647 3,514 -25% 6,161 5,805 6%
1.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the core business activities of the Group. Refer to pages 77 to
81 for the reconciliation between statutory and cash profit. Refer to pages 16 to 20 for information on large/notable items included in continuing cash profit.
2.
Dividend payout ratio is calculated using the proposed 2019 final, 2019 interim, 2018 final and 2018 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.
5.
Credit impairment charge used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

SUMMARY
14
Financial Performance Summary – Total and continuing operations

For financial reporting purposes the results of discontinued op
erations are shown in a separate line item ‘Profit/(Loss) from
discontinued operations’. In the table below, Total cash profit
- inclusive of discontinued operations and Cash
profit - continuing operations are shown. For the purpose of understanding the impact of discontinued operations across variou
s Income Statement categories, Total cash profit - inclusive of
discontinued operations is presented such that
each Income Statement line item is inclusive of discontinued op
erations.


Half Year

Full Year








Total - inclusive of
discontinued operations Movement

Continuing operations Movement

Total - inclusive of
discontinued operations Movement

Continuing operations Movement


Sep 19
$M
Mar 19
$M
Sep 19
v. Mar 19

Sep 19
$M
Mar 19
$M
Sep 19
v. Mar 19

Sep 19
$M
Sep 18
$M
Sep 19
v. Sep 18

Sep 19
$M
Sep 18
$M
Sep 19
v. Sep 18

Net interest income
7,021
7,242
-3%
7,040
7,299
-4%
14,263
14,514
-2%
14,339
14,514
-1%
Other operating income
2,299
2,651
-13%
2,243
2,447
-8%
4,950
4,601
8%
4,690
4,853
-3%
Operating income
9,320
9,893
-6%
9,283
9,746
-5%
19,213
19,115
1%
19,029
19,367
-2%
Operating expenses
(4,934)
(4,586)
8%
(4,706)
(4,365)
8%
(9,520)
(9,945)
-4%
(9,071)
(9,401)
-4%
Profit before credit impairment and income tax
4,386
5,307
-17%
4,577
5,381
-15%
9,693
9,170
6%
9,958
9,966
0%
Credit impairment charge
(402)
(392)
3%
(402)
(393)
2%
(794)
(688)
15%
(795)
(688)
16%
Profit before income tax
3,984
4,915
-19%
4,175
4,988
-16%
8,899
8,482
5%
9,163
9,278
-1%
Income tax expense
(1,331)
(1,392)
-4%
(1,263)
(1,415)
-11%
(2,723)
(2,661)
2%
(2,678)
(2,775)
-3%
Non-controlling interests
(6)
(9)
-33%
(6)
(9)
-33%
(15)
(16)
-6%
(15)
(16)
-6%
Cash Profit
2,647
3,514
-25%

2,906
3,564
-18%

6,161
5,805
6%

6,470
6,487
0%

Average interest earning assets
814,831
811,528
0%

814,831
811,528
0%

813,219
774,883
5%

813,219
774,883
5%

Average deposits and other borrowings
642,448
635,822
1%
642,448
635,822
1%
639,144
617,008
4%
639,144
617,008
4%
Funds under management
1

84,171
83,164
1%
35,754
33,816
6%
84,171
81,122
4%
35,754
30,734
16%
Earnings per share (basic)
93.6
123.0
-24%
102.7
124.8
-18%
216.7
199.9
8%
227.6
223.4
2%

Ordinary share dividend payout ratio
85.7%
64.5%
78.0%
63.6%
73.6%
79.5%
70.1%
71.1%

Profitability Ratios

Return on average ordinary shareholders' equity
2

8.9%
11.9%
9.8%
12.0%
10.4%
9.8%
10.9%
11.0%

Return on average assets
0.53%
0.72%
0.59%
0.77%
0.63%
0.61%
0.68%
0.72%

Net interest margin
1.72%
1.79%
1.72%
1.80%
1.75%
1.87%
1.76%
1.87%

Net interest income to average credit RWAs
4.03%
4.23%
4.04%
4.26%
4.13%
4.28%
4.15%
4.28%

Efficiency Ratios








Operating expenses to operating income
52.9%
46.4%

50.7%
44.8%

49.5%
52.0%

47.7%
48.5%

Operating expenses to average assets
1.00%
0.94%

0.96%
0.94%
0.97%
1.05%
0.95%
1.04%

FTE
3

39,060
39,359
-1%
37,588
37,364
1%
39,060
39,924
-2%
37,588
37,860
-1%
1.
Funds under management for continuing operations relates to New Zealand Wealth in the New Zealand division and Private Bank in
Australia Retail and Commercial division.
2.
Average ordinary
shareholders’ equity excludes non-controlling interests.
3.
The actual FTE that will transfer to IOOF on sale completion of OnePath P&I or at a later date is currently being determined.
Discontinued FTE is based on an estimate using an allocation methodology.

SUMMARY


15
Key Balance Sheet Metrics
1



As at Movement

Reference
Page
Sep 19 Mar 19 Sep 18
Sep 19
v. Mar 19
Sep 19
v. Sep 18
Capital Management


Common Equity Tier 1 (Level 2)

- APRA Basel 3 46
11.4% 11.5% 11.4%
- Internationally Comparable Basel 3
2
46 16.4% 16.9% 16.8%
Credit risk weighted assets ($B) 118
358.1 345.5 337.6 4% 6%
Total risk weighted assets ($B) 46
417.0 396.3 390.8 5% 7%
APRA Leverage Ratio 49
5.6% 5.4% 5.5%
Balance Sheet: Key Items


Gross loans and advances ($B) 618.8 613.8 608.4 1% 2%
Net loans and advances ($B)
615.3 610.2 605.5 1% 2%
Total assets ($B)
981.1 980.3 943.2 0% 4%
Customer deposits ($B)
511.8 493.4 487.3 4% 5%
Total equity ($B)
60.8 60.0 59.4 1% 2%

As at Movement
Liquidity Risk
Reference
Page
Sep 19 Mar 19 Sep 18
Sep 19
v. Mar 19
Sep 19
v. Sep 18
Liquidity Coverage Ratio
3
44 143% 137% 142% 6% 1%
Net Stable Funding Ratio 45
116% 115% 115% 1% 1%

As at Movement

Reference
Page
Sep 19 Mar 19 Sep 18
Sep 19
v. Mar 19
Sep 19
v. Sep 18
Impaired Assets
4



Gross impaired assets ($M) 37
2,029 2,128 2,139 -5% -5%
Gross impaired assets as a % of gross loans and advances
0.33% 0.35% 0.35%
Net impaired assets ($M) 37
1,215 1,237 1,219 -2% 0%
Net impaired assets as a % of shareholders' equity
2.0% 2.0% 2.1%
Individually assessed provision ($M) 36 814 891 920 -9% -12%
Individually assessed provision as a % of gross impaired assets
40.1% 41.9% 43.0%
Collectively assessed provision ($M)
5
36 3,376 3,378 2,523 0% 34%
Collectively assessed provision as a % of credit risk weighted assets
0.94% 0.98% 0.75%
Net Tangible Assets
Net tangible assets attributable to ordinary shareholders ($B)
6
55.5 53.7 53.1 3% 5%
Net tangible assets per ordinary share ($)
19.59 18.94 18.47 3% 6%


As at Movement
Net Loans And Advances By Division (Excluding Held for Sale)
Sep 19
$B
Mar 19
$B
Sep 18
$B
Sep 19
v. Mar 19
Sep 19
v. Sep 18
Australia Retail and Commercial 331.9 336.6 341.3 -1% -3%
Institutional
164.5 151.7 149.2 8% 10%
New Zealand
7
116.7 118.8 111.3 -2% 5%
Pacific
2.1 2.1 2.1 0% 0%
TSO and Group Centre
0.1 0.1 0.6 0% -83%
Net loans and advances by division
615.3 609.3 604.5 1% 2%
1.
Balance Sheet amounts and metrics include assets and liabilities held for sale unless otherwise stated.
2.
See page 46 for further details regarding the differences between APRA Basel 3 and Internationally Comparable Basel 3 standards.
3.
Liquidity Coverage Ratio is calculated on a half year average basis.
4.
In the September 2019 half, ANZ implemented a more market responsive collateral valuation methodology for the home loan portfolio in Australia which increased the number of home loans
being classified as impaired rather than past due. Comparative information has not been restated for this change in methodology. Additionally, refinement to underlying data resulted in a
transfer from past due and sub-standard categories into impaired assets. Comparative information has been restated with a transfer of $106 million at March 2019 and $126 million at
September 2018.
5.
On adoption of AASB 9 on 1 October 2018, the Group increased the collectively assessed provision by $813 million. Comparative information has not been restated
6.
Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.
7.
Excluding the impact of foreign currency translation, the New Zealand division Net loans and advances increased 2% compared to March 2019 and 4% compared to September 2018.

SUMMARY


16
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
1

Half Year Full Year Half Year Full Year
Cash Profit Impact
Sep 19
$M
Mar 19
$M
Sep 19
$M
Sep 18
$M
Sep 19
$M
Mar 19
$M
Sep 19
$M
Sep 18
$M
Asia Retail and Wealth businesses - - - 99 - - - 30
SRCB - - - 2 - - - -
UDC
- - - 11 - - - -
MCC
- - - 240 - - - 10
Paymark
- 37 37 - - 4 4 5
Cambodia JV
10 - 10 (42) 10 21 31 40
OPL NZ
7 197 204 (3) - 14 14 90
PNG Retail, Commercial and SME
1 - 1 (19) 4 5 9 10
Profit/(Loss) before income tax
18 234 252 288 14 44 58 185
Income tax benefit/(expense) and non-controlling interests - (47) (47) (97) (7) (19) (26) (59)
Cash profit/(loss) from continuing operations
18 187 205 191 7 25 32 126
1.
For business results that relate to completed divestments, comparative information has been restated for items included in the September 2019 half.

 Asia Retail and Wealth businesses
The Group completed the sale of Retail and Wealth businesses in Singapore, Hong Kong, China, Taiwan and Indonesia to Singapore’s DBS Bank in
2017. The Group completed the sale of its Retail business in Vietnam to Shinhan Bank Vietnam during the 2018 full year and recognised a $99
million gain, net of costs associated with the sale.
 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
during the 2018 full year.
 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. 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 ceased being
classified as held for sale 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. The Group recognised a net gain on sale of $240 million and a dividend of $10 million during the 2018 full
year.
 Paymark Limited (Paymark)
On 17 January 2018, the Group entered into an agreement to sell its 25% shareholding in Paymark Limited to Ingenico Group. The transaction was
completed on 11 January 2019. The Group recognised a net gain on sale of $37 million during the March 2019 half.
 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. During the 2018 full year, the Group recognised a $42 million loss on the
reclassification of assets and liabilities to held for sale. The transaction completed on 19 August 2019 and the Group recognised a $10 million net
gain on sale, comprising a $30 million release from foreign currency translation reserve, partially offset by a $17 million dividend withholding tax
associated with the sale completion and $3 million of asset write-offs in the September 2019 half.
 OnePath Life (NZ) Ltd (OPL NZ)
On 30 May 2018, the Group announced that it had agreed to sell OPL NZ to Cigna Corporation. The transaction completed on 30 November 2018
and the Group recognised a $197 million net gain on sale in the March 2019 half, comprising a $115 million gain on the reversal of the life-to-date
cash profit adjustments on the revaluation of policy liabilities sold, a $56 million gain on sale, and a $26 million release from the foreign currency
translation reserve; and a provision release of $7 million in the September 2019 half.

SUMMARY


17
 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. During the 2018 full year, the Group recognised a $19 million loss on the reclassification of
assets and liabilities to held for sale. The transaction completed on 23 September 2019 and the Group recognised a gain of $1 million net of costs
associated with the sale.
Other large/notable items (continuing operations)
 Customer remediation
Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,
penalties and litigation outcomes.
Customer remediation charges of $585 million have been recognised in the September 2019 full year (Sep 19 half: $485 million; Mar 19 half: $100
million; Sep 18 full year: $419 million). $212 million relates to customer remediation impacting operating income (Sep 19 half: $148 million; Mar 19
half: $64 million; Sep 18 full year: $228 million), and $373 million relates to customer remediation impacting operating expenses (Sep 19 half: $337
million; Mar 19 half: $36 million; Sep 18 full year: $191 million).
 Accelerated software amortisation
During the 2018 full year, the Group accelerated the amortisation of certain software assets, predominantly relating to the Institutional division
following a review of the International business in light of divestments. An accelerated amortisation expense of $251 million was recognised in the
2018 full year.
 Royal Commission legal costs
External legal costs associated with responding to the Royal Commission were $15 million for the September 2019 full year (Sep 19 half: $2 million;
Mar 19 half: $13 million; Sep 18 full year: $55 million).
 Restructuring
The Group recognised restructuring expenses of $77 million in the September 2019 full year (Sep 19 half: $26 million; Mar 19 half: $51 million; Sep
18 full year: $227 million) largely relating to changes to the Group’s enablement functions announced during the period. The prior period largely
related to the move of the Australia Retail and Commercial division and technology function to agile ways of working in the 2018 full year.

SUMMARY
18
Large/Notable items - continuing operations

Cash Profit Results
Half Year
Full Year

Sep 19
Large/
notables
Sep 19
ex. Large/
notables Mar 19
Large/
notables
1

Mar 19
ex. Large/
notables
Movt
ex. Large/
notables
Sep 19
Large/
notables
Sep 19
ex. Large/
notables Sep 18
Large/
notables
1

Sep 18
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M
$M
$M
$M
%
$M
$M
$M $M $M $M %
Net interest income
7,040
(98)
7,138
7,299
7
7,292
-2%
14,339
(91)
14,430
14,514
7 14,507
-1%
Other operating income
2,243
3
2,240
2,447
231
2,216
1%
4,690
234
4,456
4,853
380
4,473
0%
Operating income
9,283
(95)
9,378
9,746
238
9,508
-1%
19,029
143
18,886
19,367
387 18,980
0%
Operating expenses
(4,706)
(384)
(4,322)
(4,365)
(125) (4,240)
2%
(9,071)
(509)
(8,562)
(9,401)
(838) (8,563)
0%
Profit before credit impairment and income tax
4,577
(479)
5,056
5,381
113
5,268
-4%
9,958
(366)
10,324
9,966
(451) 10,417
-1%
Credit impairment charge
(402)
(2)
(400)
(393)
1
(394)
2%
(795)
(1)
(794)
(688)
(28)
(660)
20%
Profit/(Loss) before income tax
4,175
(481)
4,656
4,988
114
4,874
-4%
9,163
(367)
9,530
9,278
(479)
9,757
-2%
Income tax benefit/(expense)
and non-controlling interests
(1,269)
82
(1,351)
(1,424)
(17) (1,407)
-4%
(2,693)
65
(2,758)
(2,791)
98 (2,889)
-5%
Cash profit/(loss) from continuing operations
2,906
(399)
3,305
3,564
97
3,467
-5%
6,470
(302)
6,772
6,487
(381)
6,868
-1%

Cash Profit/(Loss) By Division
Half Year

Full Year

Sep 19
Large/
notables
Sep 19
ex. Large/
notables Mar 19
Large/
notables
1

Mar 19
ex. Large/
notables
Movt
ex. Large/
notables
Sep 19
Large/
notables
Sep 19
ex. Large/
notables Sep 18
Large/
notables
1

Sep 18
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M
$M
$M
$M
%
$M
$M
$M $M $M $M %
Australia Retail and Commercial
1,492
(303)
1,795
1,703
(83) 1,786
1%
3,195
(386)
3,581
3,626
(366)
3,992
-10%
Institutional
816
(32)
848
1,012
8
1,004
-16%
1,828
(24)
1,852
1,480
(186)
1,666
11%
New Zealand
646
(58)
704
753
14
739
-5%
1,399
(44)
1,443
1,521
56
1,465
-2%
Pacific
26
(14)
40
33
-
33
21%
59
(14)
73
72
-
72
1%
TSO and Group Centre
2

(74)
8
(82)
63
158
(95)
-14%
(11)
166
(177)
(212)
115
(327)
-46%
Cash profit/(loss) from continuing operations
2,906
(399)
3,305
3,564
97
3,467
-5%
6,470
(302)
6,772
6,487
(381)
6,868
-1%
1.
Where applicable, comparative information has been restated for large/notable items included in the September 2019 half.
2.
TSO and Group Centre includes the Gain/(Loss) on sale from divestments. It also includes the divested business results for the
completed sales of Paymark, MCC and
Asia Retail and Wealth businesses.

SUMMARY
19
Large/Notable items - continuing operations


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






September 2019
Full Year

September 2018
Full 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
1

$M
Customer
remediation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
1

$M
Customer
remediation
$M
Accelerated
software
amortisation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Cash Profit
Net interest income
-
50
(141)
-
-
(91)
-
112
(105)
-
-
-
7
Other operating income
252
53
(71)
-
-
234
298
205
(123)
-
-
-
380
Operating income
252
103
(212)
-
-
143
298
317
(228)
-
-
-
387
Operating expenses
-
(44)
(373)
(15)
(77)
(509)
(10)
(104)
(191)
(251)
(55)
(227)
(838)
Profit before credit impairment and income tax
252
59
(585)
(15)
(77)
(366)
288
213
(419)
(251)
(55)
(227)
(451)
Credit impairment charge
-
(1)
-
-
-
(1)
- (
28) -
-
-
-

(28)
Profit before income tax
252
58
(585)
(15)
(77)
(367)
288
185
(419)
(251)
(55)
(227)
(479)
Income tax benefit
/(expense) and
non-controlling interests
(47)
(26)
110
5
23
65
(97)
(59)
124
45
17
68
98
Cash profit from continuing operations
205
32
(475)
(10)
(54)
(302)
191
126
(295)
(206)
(38)
(159)
(381)

September 2019 Half Year


March 2019 Half Year

Large/notable items in
cluded in continuing
cash profit

Large/n
otable items included in
continuing cash profit

Gain/(Loss)
on sale from
divestments
$M
Divested
business
results
1

$M
Customer
remediation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Gain/(Loss) on
sale from
divestments
$M
Divested
business
results
1

$M
Customer
remediation
$M
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
Cash Profit
Net interest income
-
21
(119)
-
-
(98)
-
29
(22)
-
-
7
Other operating income
18
14
(29)
-
-
3
234
39
(42)
-
-
231
Operating income
18
35
(148)
-
-
(95)
234
68
(64)
-
-
238
Operating expenses
-
(19)
(337)
(2)
(26)
(384)
-
(25)
(36)
(13)
(51)
(125)
Profit before credit impairment and income tax
18
16
(485)
(2)
(26)
(479)
234
43
(100)
(13)
(51)
113
Credit impairment charge
-
(2)
-
-
-
(2)
-
1
-
-
-
1
Profit before income tax
18
14
(485)
(2)
(26)
(481)
234
44
(100)
(13)
(51)
114
Income tax benefit
/(expense) and
non-controlling interests
-
(7)
80
1
8
82
(47)
(19)
30
4
15
(17)
Cash profit from continuing operations
18
7
(405)
(1)
(18)
(399)
187
25
(70)
(9)
(36)
97
1.
For business results that relate to completed divestments, comparative information has been restated for large/notable items i
ncluded in the September 2019 half.

SUMMARY
20
Large/Notable items - continuing operations

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





September 2019
Full Year

September 2018
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
Royal
Commission
legal costs
$M
Restructuring
$M
Total
$M
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
Profit before income tax
Australia Retail and Commercial
-
-
(447)
-
(20)
(467)
-
-
(385)
(29)
-
(111)
(525)
Institutional
-
46
(49)
-
(16)
(19)
-
54
(7)
(222)
-
(25)
(200)
New Zealand
-
20
(75)
-
(8)
(63)
-
109
(27)
-
-
(9)
73
Pacific
-
-
(14)
-
-
(14)
-
-
-
-
-
-
-
TSO and Group Centre
3

252
(8)
-
(15)
(33)
196
288
22
-
-
(55)
(82)
173
Profit before income tax
252
58
(585)
(15)
(77)
(367)
288
185
(419)
(251)
(55)
(227)
(479)
Income tax benefit
/(expense) and non-
controlling interests
(47)
(26)
110
5
23
65
(97)
(59)
124
45
17
68
98
Cash profit from continuing operations
205
32
(475)
(10)
(54)
(302)
191
126
(295)
(206)
(38)
(159)
(381)

September 2019 Half Year

March 2019 Half 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
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 Retail and Commercial
-
-
(347)
-
(1)
(348)
-
-
(100)
-
(19)
(119)
Institutional
-
17
(49)
-
(9)
(41)
-
29
-
-
(7)
22
New Zealand
-
-
(75)
-
(6)
(81)
-
20
-
-
(2)
18
Pacific
-
-
(14)
-
-
(14)
-
-
-
-
-
-
TSO and Group Centre
3

18
(3)
-
(2)
(10)
3
234
(5)
-
(13)
(23)
193
Profit before income tax
18
14
(485)
(2)
(26)
(481)
234
44
(100)
(13)
(51)
114
Income tax benefit
/(expense) and
non-controlling interests
-
(7)
80
1
8
82
(47)
(19)
30
4
15
(17)
Cash profit from continuing operations
18
7
(405)
(1)
(18)
(399)
187
25
(70)
(9)
(36)
97
1.
Where applicable, comparative information has been restated for large/notable items included in the September 2019 half.
2.
Relates to business result
s for completed divestments.
3.
TSO and Group Centre includes the Gain/(Loss) on sale from divestments. It also includes the divested business results for the
completed sales of Paymark, MCC and
Asia Retail and Wealth businesses.

SUMMARY


21
Full Time Equivalent Staff

As at 30 September 2019, ANZ employed 39,060 staff (Mar 19: 39,359; Sep 18: 39,924) on a full-time equivalent (FTE) basis.

Division
Half Year Full Year

Sep 19 Mar 19 Movt Sep 19 Sep 18 Movt
Australia Retail and Commercial 13,903 13,660 2% 13,903 13,731 1%
Institutional
1
5,468 6,085 -10% 5,468 6,188 -12%
New Zealand
6,121 6,003 2% 6,121 6,165 -1%
Pacific
1,086 1,096 -1% 1,086 1,125 -3%
TSO and Group Centre
11,010 10,520 5% 11,010 10,651 3%
Total FTE from continuing operations
37,588 37,364 1% 37,588 37,860 -1%
Discontinued operations
2
1,472 1,995 -26% 1,472 2,064 -29%
Total FTE
39,060 39,359 -1% 39,060 39,924 -2%
Average FTE 39,147 39,571 -1% 39,358 42,388 -7%

Geography
Half Year Full Year

Sep 19 Mar 19 Movt Sep 19 Sep 18 Movt
Australia 18,874 18,652 1% 18,874 18,671 1%
Asia, Pacific, Europe & America
1
12,695 13,396 -5% 12,695 13,742 -8%
New Zealand
7,491 7,311 2% 7,491 7,511 0%
Total FTE
39,060 39,359 -1% 39,060 39,924 -2%
1.
Institutional FTE reduced by 606 as a result of the Cambodia JV and PNG Retail, Commercial and SME divestments completed in the September 2019 half.
2.
The actual FTE that will transfer to IOOF on sale completion or at a later date is currently being determined. The discontinued operations FTE is an estimate based on an allocation
methodology.

Other Non-Financial Information


Half Year

Full Year
Shareholder value - ordinary shares
Sep 19 Mar 19 Movt

Sep 19 Sep 18 Movt
Share price ($)

- high 29.30 28.36 3% 29.30 30.80 -5%
- low
25.36 22.98 10% 22.98 26.08 -12%
- closing

28.52 26.03 10% 28.52 28.18 1%
Closing market capitalisation of ordinary shares ($B)
80.8 73.7 10% 80.8 81.0 0%
Total shareholder returns (TSR)
12.9% -4.8% large 9.2% 0.6% large



As at Sep 19
Credit Ratings

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

SUMMARY


22
This page has been left blank intentionally

GROUP RESULTS


23

CONTENTS Page

Cash Profit 24
Group Performance – continuing operations 25
Net Interest Income - continuing operations 26
Other Operating Income - continuing operations 28
Operating Expenses - continuing operations 31
Software Capitalisation - continuing operations 33
Credit Risk - continuing operations 34
Income Tax Expense - continuing operations 39
Impact of Foreign Currency Translation - continuing operations 40
Earnings Related Hedges - continuing operations 41
Earnings per Share - continuing operations 41
Dividends - continuing operations 42
Economic Profit - continuing operations 42
Condensed Balance Sheet - including discontinued operations 43
Liquidity Risk - including discontinued operations 44
Funding - including discontinued operations 45
Capital Management - including discontinued operations 46
Leverage Ratio - including discontinued operations 49
Capital Management - Other Regulatory Developments 50

GROUP RESULTS


24
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 core 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 on pages 128 to 129 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 2019 ANZ Annual Financial Statements (when released). Cash profit
is not subject to audit by the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined
on a consistent basis across each period presented.
The Group Results section is reported on a cash profit basis for continuing operations unless otherwise stated. For information on
discontinued operations please refer to the Guide to Full Year Results on page 10.

Half Year

Full Year

Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Statutory profit attributable to shareholders of the Company from
continuing operations
3,053 3,243 -6% 6,296 7,095 -11%


Adjustments between statutory profit and cash profit
1


Revaluation of policy liabilities - 77 -100% 77 (14) large
Economic hedges
(67) 185 large 118 (248) large
Revenue and expense hedges
(79) 60 large (19) (9) large
Structured credit intermediation trades
(1) (1) 0% (2) (4) -50%
Sale of SRCB
- - n/a - (333) -100%
Total adjustments between statutory profit and cash profit from
continuing operations
(147) 321 large 174 (608) large
Cash profit from continuing operations 2,906 3,564 -18% 6,470 6,487 0%
1.
Refer to pages 77 to 81 for analysis of the adjustments between statutory profit and cash profit.

Group performance - cash profit
Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Net interest income 7,040 7,299 -4% 14,339 14,514 -1%
Other operating income
2,243 2,447 -8% 4,690 4,853 -3%
Operating income
9,283 9,746 -5% 19,029 19,367 -2%
Operating expenses (4,706) (4,365) 8% (9,071) (9,401) -4%
Profit before credit impairment and income tax
4,577 5,381 -15% 9,958 9,966 0%
Credit impairment charge (402) (393) 2% (795) (688) 16%
Profit before income tax
4,175 4,988 -16% 9,163 9,278 -1%
Income tax expense (1,263) (1,415) -11% (2,678) (2,775) -3%
Non-controlling interests
(6) (9) -33% (15) (16) -6%
Cash profit from continuing operations
2,906 3,564 -18% 6,470 6,487 0%

Half Year Full Year
Cash profit/(loss) by Division
Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 1,492 1,703 -12% 3,195 3,626 -12%
Institutional
816 1,012 -19% 1,828 1,480 24%
New Zealand
646 753 -14% 1,399 1,521 -8%
Pacific
26 33 -21% 59 72 -18%
TSO and Group Centre
(74) 63 large (11) (212) -95%
Cash profit from continuing operations
2,906 3,564 -18% 6,470 6,487 0%

GROUP RESULTS


25
Group Performance – continuing operations

Group Cash Profit - September 2019 Full Year v September 2018 Full Year

 September 2019 v September 2018
Cash profit from continuing operations decreased $17 million (0%) compared with the September 2018 full year. Excluding foreign currency
translation movements, cash profit decreased $54 million (-1%).
 Net interest income decreased $175 million (-1%) largely due to lower interest rates and competitive pressures resulting in a 11 basis point
decrease in the net interest margin, partially offset by 5% growth in average interest earning assets. The lower net interest margin reflects growth
in lower margin Markets Balance Sheet activities, higher proportionate growth in the lower Institutional business, customer switching to principal
and interest in Australia home loans, deposit margin compression and lower earnings on capital, partially offset by the impact of home loans
repricing. The increase in average interest earning assets reflects growth in Institutional banking portfolios and home loan growth in the New
Zealand division. Refer to pages 26 and 27 for further details on key movements.
 Other operating income decreased $163 million (-3%) largely as the result of net divestment impacts of $198 million, a $120 million decrease in
net fee and commission income, and $130 million decrease primarily in other income attributable to realised losses on economic hedges against
foreign currency denominated revenue streams (which offset favourable foreign currency translations elsewhere in the Group) and a reduction in
income from the lenders mortgage insurance business. This was partially offset by higher Markets other operating income of $154 million, a $79
million increase in share of associate’s profit and a $52 million decrease in customer remediation within other operating income. Refer to pages
28 to 30 for further details on key movements.
 Operating expenses decreased $330 million (-4%) primarily due to an accelerated software amortisation charge in the prior period of $251
million, lower restructuring expenses of $150 million, a reduction in expenses following the sale of OnePath Life (NZ) and Asia Retail and Wealth
businesses of $60 million, lower Royal Commission legal costs of $40 million and lower FTE. This was partially offset by higher customer
remediation of $182 million within operating expenses, inflation, the impact of foreign currency translation and regulatory compliance spend in
New Zealand. Refer to pages 31 to 32 for further details on key movements.
 Credit impairment charges increased $107 million (+16%) largely due to higher collectively assessed credit impairment charges, primarily as a
result of the prior period benefitting from the release of temporary economic overlays and a greater number of customer upgrades. Refer to
pages 34 and 35 for further details on key movements.
Excluding large/notable items, cash profit decreased $96 million (-1%).
 September 2019 v March 2019
Cash profit from continuing operations decreased $658 million (-18%) compared with the March 2019 half. Excluding foreign currency translation
movements, cash profit decreased $669 million (-19%).
 Net interest income decreased $259 million (-4%) largely due to lower interest rates and competitive pressures resulting in a 8 basis point
decrease in the net interest margin. The lower net interest margin reflects deposit margin compression from lower interest rates, higher
proportionate growth in the lower Institutional business, customer switching to principal and interest in Australia home loans and asset
competition. This was partially offset by lower funding costs and the impact of home loans re-pricing. Refer to pages 26 and 27 for further details
on key movements.
 Other operating income decreased $204 million (-8%) largely as a result of net divestment impacts of $241 million and lower Markets other
operating income of $47 million. This was partially offset by a $49 million increase in net fee and commission income, $22 million increase in
other income and lower customer remediation of $13 million within other operating income. Refer to pages 28 to 30 for further details on key
movements.
 Operating expenses increased $341 million (+8%) primarily due to higher customer remediation of $301 million within operating expenses,
higher investment and marketing spend and the impact of foreign currency translation, partially offset by lower restructuring expenses of $25
million and Royal Commission legal costs of $11 million. Refer to pages 31 to 32 for further details on key movements.
 Credit impairment charges increased $9 million (+2%) largely due to higher individually assessed credit impairment charges, partially offset by
lower collectively assessed credit impairment charges. Refer to pages 34 and 35 for further details on key movements.
Excluding large/notable items, cash profit decreased $162 million (-5%).

GROUP RESULTS


26
Net Interest Income - continuing operations


Half Year

Full Year
Group
Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Cash net interest income
1
7,040 7,299 -4% 14,339 14,514 -1%
Average interest earning assets
2
814,831 811,528 0% 813,219 774,883 5%
Average deposits and other borrowings
2
642,448 635,822 1% 639,144 617,008 4%
Net interest margin (%) - cash
1.72 1.80 -8 bps 1.76 1.87 -11 bps

Group (excluding Markets business unit)

Cash net interest income
1,3
6,829 7,019 -3% 13,848 13,856 0%
Average interest earning assets
2
566,907 563,579 1% 565,282 544,211 4%
Average deposits and other borrowings
2
462,283 459,478 1% 460,884 456,442 1%
Net interest margin (%) - cash
3

2.40 2.50 -10 bps 2.45 2.55 -10 bps


Half Year

Full Year
Cash profit net interest margin by major division
1

Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial

Net interest margin (%) - cash
3

2.58 2.61 -3 bps 2.59 2.69 -10 bps
Average interest earning assets
309,684 314,215 -1% 311,944 314,048 -1%
Average deposits and other borrowings
204,791 202,765 1% 203,781 202,884 0%


Institutional

Net interest margin (%) - cash
3

0.80 0.85 -5 bps 0.82 0.88 -6 bps
Average interest earning assets
2
375,573 372,270 1% 373,926 341,525 9%
Average deposits and other borrowings
2
290,948 281,770 3% 286,372 263,742 9%


New Zealand

Net interest margin (%) - cash
3

2.27 2.39 -12 bps 2.33 2.42 -9 bps
Average interest earning assets
2
118,714 116,201 2% 117,461 109,554 7%
Average deposits and other borrowings
2
86,970 86,244 1% 86,608 80,444 8%
1.
Includes large/notable items of -$98 million for the September 2019 half (Mar 19 half: $7 million; Sep 18 full year: $7million). Refer to pages 16 to 20 for further details on large/notable
items. Also includes the major bank levy of -$185 million for the September 2019 half (Mar 19 half: -$178 million; Sep 18 full year: -$355 million).
2.
Average balance sheet amounts include assets and liabilities reclassified as held for sale from continuing operations.
3.
In the March 2019 half, the methodology for allocating earnings on capital at a business unit level changed from being based on Economic Capital to Regulatory Capital. While neutral at a
Group level, this change impacted net interest income at the divisional level and comparative information has been restated accordingly.

Group net interest margin - September 2019 Full Year v September 2018 Full Year

1.
Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.

 September 2019 v September 2018
Net interest margin (-11 bps)
 Asset mix and funding mix (-4 bps): unfavourable asset mix from the impacts of customer switching from interest only to principal and interest
home loans in the Australia Retail and Commercial division, customer switching from variable to fixed home loans in the New Zealand division
and unfavourable mix impacts from a higher proportion of Institutional lending.
 Wholesale funding costs (0 bps): broadly flat basis risk and broadly flat spreads on wholesale funding.
 Deposit pricing (-1 bps): margin compression from lower interest rates and competition in the Australia Retail and Commercial and New Zealand
divisions. Higher deposit margins in the Institutional division during the March 2019 half were offset by rate cuts in the September 2019 half.

GROUP RESULTS


27
 Assets pricing (+2 bps): impact of re-pricing of home loans in the Australia Retail and Commercial division, partially offset by increased
competition in all divisions.
 Treasury (-2 bps): lower earnings on capital reflecting a lower interest rate environment.
 Markets Balance Sheet activities (-5 bps): growth in lower interest margin Markets Balance Sheet trading activities and the impact of flattening
yield curve.
 Large/notable items (-1 bps): the impact of higher customer remediation and the impact of divestments.
Average interest earning assets (+$38.3 billion or +5%)
 Average net loans and advances (+$20.9 billion or +4%): increase primarily driven by growth in Institutional lending, home loan growth in the
New Zealand division, and foreign currency translation movements.
 Average trading and investment securities/available-for-sale assets (+$5.8 billion or +5%): increase primarily driven by an increase in liquid
assets in Markets and the impact of foreign currency translation movements, partially offset by a decrease in trading securities.
 Average cash and other liquids (+$11.6 billion or +12%): increase primarily driven by higher central bank cash balances, and the impact of
foreign currency translation movements.
Average deposits and other borrowings (+$22.1 billion or +4%)
 Average deposits and other borrowings (+$22.1 billion or +4%): increase primarily driven by growth in the Institutional and New Zealand
divisions, and the impact of foreign currency translation movements.
Group net interest margin - September 2019 Half Year v March 2019 Half Year

1.
Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.
 September 2019 v March 2019
Net interest margin (-8 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 lower unsecured lending in the Australia Retail and Commercial division, and a higher proportion of Institutional lending.
 Wholesale funding costs (+2 bps): favourable basis risk and broadly flat wholesale funding spreads.
 Deposit pricing (-4 bps): margin compression across all divisions from lower interest rates and competition.
 Assets pricing (+1 bps): impact of re-pricing of home loans in the Australia Retail and Commercial division, partially offset by increased
competition in all divisions.
 Treasury (-2 bps): lower earnings on capital reflecting a lower interest rate environment.
 Markets Balance Sheet activities (-1 bps): the impact of lower interest margins on trading activities.
 Large/notable (-2 bps): the impact of higher customer remediation in the September 2019 half.
Average interest earning assets (+$3.3 billion)
 Average net loans and advances (+$4.0 billion or +1%): increase primarily driven by growth in Institutional lending, home loans in the New
Zealand division, and the impact of foreign currency translation movements. This was partially offset by a reduction in lending in the Australia
Retail and Commercial division.
 Average trading and investment securities/available-for-sale assets (+$4.0 billion or +3%): increase primarily driven by an increase in liquid
assets in Markets and the impact of foreign currency translation movements.
 Average cash and other liquids (-$4.7 billion or -4%): decrease primarily driven by lower central bank cash balances, and the impact of foreign
currency translation movements.
Average deposits and other borrowings (+$6.6 billion or +1%)
 Average deposits and other borrowings (+$6.6 billion or +1%): increase primarily driven by growth in the Institutional and Australia Retail and
Commercial divisions, and the impact of foreign currency translation movements.

GROUP RESULTS


28
Other Operating Income - continuing operations



Half Year

Full Year
1


Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Net fee and commission income
2
1,275 1,218 5% 2,493 2,624 -5%
Markets other operating income
619 667 -7% 1,286 1,129 14%
Share of associates' profit
2
131 131 0% 262 183 43%
Other
2,3
218 431 -49% 649 917 -29%
Total cash other operating income from continuing operations
4
2,243 2,447 -8% 4,690 4,853 -3%


Half Year Full Year
1

Markets income
Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Net interest income 211 280 -25% 491 658 -25%
Other operating income
619 667 -7% 1,286 1,129 14%
Total cash Markets income from continuing operations
830 947 -12% 1,777 1,787 -1%

Half Year Full Year
1

Other operating income by division
Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 696 651 7% 1,347 1,510 -11%
Institutional
1,066 1,126 -5% 2,192 2,066 6%
New Zealand
278 302 -8% 580 671 -14%
Pacific
54 50 8% 104 100 4%
TSO and Group Centre
149 318 -53% 467 506 -8%
Total cash other operating income from continuing operations
4
2,243 2,447 -8% 4,690 4,853 -3%
1.
On adoption of AASB 15, the Group reclassified certain items previously netted which are now presented gross in operating income and operating expenses. Comparative information has
been restated accordingly which increased total operating income by $153 million for the September 2018 full year.
2.
Excluding Markets.
3.
Includes foreign exchange earnings and net income from insurance business.
4.
Includes large/notable items of $3 million for the September 2019 half (Mar 19 half: $231 million; Sep 18 full year: $380 million). Refer to items on pages 16 to 20 for further details on
large/notable items.
Other operating income - September 2019 Full Year v September 2018 Full Year

GROUP RESULTS


29
Other operating income (excluding large/notable items) Half Year

Full Year
1


Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Net fee and commission income
2
1,293 1,244 4% 2,537 2,657 -5%
Markets other operating income
618 665 -7% 1,283 1,129 14%
Share of associates' profit
2
131 131 0% 262 183 43%
Other
2,3
198 176 13% 374 504 -26%
Total cash other operating income from continuing operations
2,240 2,216 1% 4,456 4,473 0%

Other operating income by division (excluding large/notable
items)
Half Year Full Year
1


Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 704 693 2% 1,397 1,625 -14%
Institutional
1,064 1,109 -4% 2,173 2,036 7%
New Zealand
287 280 3% 567 552 3%
Pacific
54 50 8% 104 100 4%
TSO and Group Centre
131 84 56% 215 160 34%
Total cash other operating income from continuing operations
2,240 2,216 1% 4,456 4,473 0%
1.
On adoption of AASB 15, the Group reclassified certain items previously netted which are now presented gross in operating income and operating expenses. Comparative information has
been restated accordingly which increased total operating income by $153 million for the September 2018 full year.
2.
Excluding Markets.
3.
Includes foreign exchange earnings and net income from insurance business.

 September 2019 v September 2018
Other operating income decreased by $163 million (-3%).
Net fee and commission income (-$131 million or -5%)
 $125 million decrease in the Australia Retail and Commercial division primarily driven by lower fee income due to the reduction or removal of
commercial and retail fees and lower volumes.
 $42 million decrease due to the impact of divested business results.
 $14 million decrease in the Institutional division excluding Markets primarily due to higher interchange and scheme costs in the payments and
cash management business and a slowdown in loan syndication activities. This was partially offset by higher guarantee and commitment fees in
the Transaction Banking business and favourable foreign currency translation movements.
 $38 million increase in the New Zealand division primarily due to an increase in commission fees, higher funds under management income and
favourable foreign currency translation movements.
 $17 million increase due to lower customer remediation in 2019.
Markets income (-$10 million or -1%)
 $120 million decrease in Balance Sheet trading driven by a reduction in net interest income from falling and flattening yield curves.
 $71 million increase in Franchise Trading primarily attributable to favourable market conditions in Australia and New Zealand rates and tighter
credit spreads in the March 2019 half ($96 million). This was partially offset by adverse derivative valuation adjustments primarily from falling
AUD and NZD swap rates (-$25 million).
 $39 million increase in Franchise Sales due to Australian and New Zealand clients restructuring to lock in low rates, and franchise growth
initiatives in North East Asia.
Share of associates’ profit (+$79 million or +43%)
 $79 million increase in profits from associates of which $44 million relates to P.T. Bank Pan Indonesia and $36 million relates to AmBank.
Other (-$268 million or -29%)
 $154 million decrease due to a loss of income from divested businesses of $111 million, primarily related to OnePath Life (NZ) and a $43 million
decrease due to gains on sale recognised in 2018 from divestments of $295 million in respect of MCC, Asia Retail and Wealth, SRCB, UDC,
Cambodia JV and PNG Retail, Commercial and SME. This was partially offset by divestment impacts recognised in 2019: One Path Life (NZ)
($204 million), Cambodia JV ($10 million) and Paymark ($37 million).
 $64 million decrease in the TSO and Group Centre division primarily due to realised losses on economic hedges against foreign currency
denominated revenue streams as the result of the NZD and USD strengthening against the AUD of $51 million in 2019 compared to a $4 million
gain in 2018. These offset favourable foreign currency translations elsewhere in the Group.
 $61 million decrease in the Australia Retail and Commercial division. This was partly due to a reduction in income from the lenders mortgage
insurance business.
 $28 million increase due to lower customer remediation in 2019.
Excluding large/notable items, other operating income decreased $17 million.

GROUP RESULTS


30

 September 2019 v March 2019
Other operating income decreased by $204 million (-8%).
Net fee and commission income (+$57 million or +5%)
 $44 million increase in the Australia Retail and Commercial division primarily as the result of higher credit card rebates incentives.
 $11 million increase due to lower remediation costs in the September 2019 half.
 $7 million decrease in the Institutional division excluding Markets primarily due to a reduction in upfront fees within Loans and Specialised
Finance business, partially offset by favourable foreign currency translation movements.
Markets income (-$117 million or -12%)
 $66 million decrease in Balance Sheet trading attributable to reduced net interest income from falling and flattening yield curves.
 $53 million decrease in Franchise Trading primarily attributable to challenging market conditions in international rates markets, particularly
greater China ($111 million). This was partially offset by favourable derivative valuation adjustments ($58 million).
 $2 million increase in Franchise Sales primarily attributable to customer activity in New Zealand.
Other (-$213 million or -49%)
 $238 million decrease due to a loss of income from divested businesses of $22 million primarily related to OnePath Life (NZ) and divestment
impacts of $216 million for One Path Life NZ ($197 million) and gain on sale from Paymark ($37 million) recognised in the March 2019 half. This
was partially offset by divestment impacts in the September 2019 half for Cambodia JV ($10 million) and One Path Life NZ ($7 million).
 $13 million decrease in the Australia Retail and Commercial division primarily due to a reduction in income from the lenders mortgage insurance
business.
 $9 million net decrease in the TSO and Group Centre division due to realised losses on economic hedges against foreign currency denominated
revenue streams as the result of the NZD strengthening against the AUD. These offset favourable foreign currency translations elsewhere in the
Group.
 $27 million increase due to dividend income from Bank of Tianjin in the September 2019 half.
 $11 million increase in the Institutional division primarily due to credit spread movements driving fair value adjustments on loans measured at fair
value following the adoption of AASB 9.
Excluding large/notable items, other operating income increased $24 million (1%).

GROUP RESULTS


31
Operating Expenses - continuing operations

Half Year Full Year
1


Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Personnel 2,395 2,370 1% 4,765 4,758 0%
Premises
389 406 -4% 795 811 -2%
Technology (excluding personnel)
770 764 1% 1,534 1,899 -19%
Restructuring
26 51 -49% 77 227 -66%
Other
1,126 774 45% 1,900 1,706 11%
Total cash operating expenses from continuing operations
2
4,706 4,365 8% 9,071 9,401 -4%
Full time equivalent staff (FTE) from continuing operations 37,588 37,364 1% 37,588 37,860 -1%
Average full time equivalent staff (FTE) from continuing operations 37,405 37,558 0% 37,480 40,016 -6%


Half Year Full Year
1

Expenses by division
Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 2,161 1,913 13% 4,074 4,075 0%
Institutional
1,347 1,320 2% 2,667 2,948 -10%
New Zealand
674 612 10% 1,286 1,205 7%
Pacific
80 70 14% 150 128 17%
TSO and Group Centre
444 450 -1% 894 1,045 -14%
Total cash operating expenses from continuing operations
2
4,706 4,365 8% 9,071 9,401 -4%


Half Year Full Year
FTE by division
Sep 19 Mar 19 Movt Sep 19 Sep 18 Movt
Australia Retail and Commercial 13,903 13,660 2% 13,903 13,731 1%
Institutional
3

5,468 6,085 -10% 5,468 6,188 -12%
New Zealand
6,121 6,003 2% 6,121 6,165 -1%
Pacific
1,086 1,096 -1% 1,086 1,125 -3%
TSO and Group Centre
11,010 10,520 5% 11,010 10,651 3%
Total FTE from continuing operations
37,588 37,364 1% 37,588 37,860 -1%
Average FTE from continuing operations 37,405 37,558 0% 37,480 40,016 -6%
1.
On adoption of AASB 15, the Group reclassified certain items previously netted which are now presented gross in operating income and operating expenses. Comparative information has
been restated accordingly which increased total operating expenses by $153 million for the September 2018 full year.
2.
Includes large/notable items of $384 million for the September 2019 half (Mar 19 half: $125 million; Sep 18 full year: $838 million). Refer to items on pages 16 to 20 for further details on
large/notable items.
3.
Institutional FTE reduced by 606 as a result of the Cambodia JV and PNG Retail, Commercial and SME divestments completed in the September 2019 half.
Operating expenses - September 2019 Full Year v September 2018 Full Year

GROUP RESULTS


32
Expenses (excluding large/notable items) Half Year Full Year
1


Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Personnel 2,341 2,352 0% 4,693 4,594 2%
Premises
387 403 -4% 790 807 -2%
Technology (excluding personnel)
768 762 1% 1,530 1,639 -7%
Restructuring
- - n/a - - n/a
Other
826 723 14% 1,549 1,523 2%
Total cash operating expenses from continuing operations
4,322 4,240 2% 8,562 8,563 0%

Expenses by division (excluding large/notable items)
Half Year Full Year
1


Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 1,885 1,858 1% 3,743 3,756 0%
Institutional
1,282 1,293 -1% 2,575 2,661 -3%
New Zealand
650 604 8% 1,254 1,155 9%
Pacific
73 70 4% 143 128 12%
TSO and Group Centre
432 415 4% 847 863 -2%
Total cash operating expenses from continuing operations
4,322 4,240 2% 8,562 8,563 0%
1.
On adoption of AASB 15, the Group reclassified certain items previously netted which are now presented gross in operating income and operating expenses. Comparative information has
been restated accordingly which increased total operating expenses by $153 million for the September 2018 full year.

 September 2019 v September 2018
Operating expenses decreased by $330 million (-4%).
 Personnel expenses increased $7 million (0%) largely driven by higher regulatory compliance spend in the New Zealand division, higher
employee leave provisions, wage inflation and the impact of insourcing technology services. This was offset by lower FTE, lower personnel
expenses following the sale of OnePath Life (NZ) and Asia Retail and Wealth businesses ($33 million) and lower customer remediation ($58
million).
 Premises expenses decreased $16 million (-2%) primarily driven by the consolidation of our property footprint.
 Technology expenses decreased $365 million (-19%) largely due to accelerated amortisation charge in the prior period ($251 million) and the
insourcing of technology services.
 Restructuring expenses decreased $150 million (-66%) due to higher spend in the prior period associated with the move to agile ways of working
in the Australia Retail and Commercial division and technology function.
 Other expenses increased $194 million (+11%) largely due to higher customer remediation ($240 million), partially offset by lower expenses
following the sale of OnePath Life (NZ) and Asia Retail and Wealth businesses ($26 million) and a reduction in Royal Commission legal costs
($40 million).
Excluding large/notable items, operating expenses decreased $1 million.
 September 2019 v March 2019
Operating expenses increased by $341 million (+8%).
 Personnel expenses increased $25 million (+1%) largely driven by the insourcing of technology services, an increase in customer remediation
($39 million), and higher regulatory compliance spend. This was partially offset by a decrease in employee leave provisions in the September
half and lower personnel expenses in the September half following the sale of OnePath Life (NZ) ($3 million).
 Premises expenses decreased $17 million (-4%) primarily driven by the consolidation of our property portfolio.
 Restructuring expenses decreased $25 million (-49%) due to higher spend in the prior period associated with the move to agile ways of working
in Group’s enablement functions.
 Other expenses increased $352 million (+45%) largely related to higher customer remediation ($262 million), higher investment spend and
higher marketing spend which is typically higher in the September half. This was partially offset by lower Royal Commission legal costs ($11
million).
Excluding large/notable items, operating expenses increased $82 million (+2%).

GROUP RESULTS


33
Software Capitalisation - continuing operations
As at 30 September 2019, the Group’s intangible assets included $1,323 million of costs incurred to acquire and develop software. Details are presented
in the table below:

Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Balance at start of period 1,368 1,421 -4% 1,421 1,856 -23%
Software capitalised during the period
222 199 12% 421 393 7%
Amortisation during the period
1
(265) (252) 5% (517) (820) -37%
Software impaired/written-off
(1) (3) -67% (4) (17) -76%
Foreign currency translation movements
(1) 3 large 2 9 -78%
Total capitalised software from continuing operations
1,323 1,368 -3% 1,323 1,421 -7%

Net book value by division Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Australia Retail and Commercial 260 306 -15% 260 344 -24%
Institutional
223 246 -9% 223 277 -19%
New Zealand
7 14 -50% 7 17 -59%
TSO and Group Centre
833 802 4% 833 783 6%
Total from continuing operations
1,323 1,368 -3% 1,323 1,421 -7%
1.
The September 2018 full year includes an accelerated amortisation expense of $251 million.

GROUP RESULTS


34
Credit Risk – continuing operations
The Group has adopted AASB 9 Financial Instruments effective from 1 October 2018 which has resulted in key changes to the classification and
measurement of financial assets, including the impairment of financial assets. Under the new standard, provision for credit impairment is based on an
expected credit loss model (ECL) incorporating forward looking information. The presentation of credit risk information for the September and March 2019
halves and the September 2019 full year have been amended accordingly. Comparative information has not been restated and continues to reflect the
requirements of the previous standard AASB 139 Financial Instruments: Recognition and Measurement. For further details on key requirements and
impacts of the changes described above refer to Note 1 and 16 of the Condensed Consolidated Financial Statements.

Credit impairment charge/(release)



Collectively Assessed Individually Assessed

Total

Full Year Full Year

Full Year
Division
Sep 19
$M
Sep 18
$M
Movt
Sep 19
$M
Sep 18
$M
Movt
Sep 19
$M
Sep 18
$M
Movt
Australia Retail and
Commercial
7 (14) large 705 712 -1%

712 698 2%
Institutional 10 (20) large (12) (24) -50%

(2) (44) -95%
New Zealand
12 (43) large 75 49 53%

87 6 large
Pacific
(12) (2) large 11 5 large

(1) 3 large
TSO and Group Centre
- (6) -100% (1) 31 large

(1) 25 large
Total 17 (85) large 778 773 1%

795 688 16%




Collectively Assessed Individually Assessed

Total

Half Year Half Year

Half Year
Division
Sep 19
$M
Mar 19
$M
Movt
Sep 19
$M
Mar 19
$M
Movt
Sep 19
$M
Mar 19
$M
Movt
Australia Retail and
Commercial
(39) 46 large 355 350 1%

316 396 -20%
Institutional 33 (23) large - (12) -100%

33 (35) large
New Zealand
17 (5) large 40 35 14%

57 30 90%
Pacific
(6) (6) 0% 3 8 -63%

(3) 2 large
TSO and Group Centre
(1) 1 large - (1) -100%

(1) - n/a
Total 4 13 -69% 398 380 5%

402 393 2%

September 2019 Full Year Collectively Assessed

Individually Assessed



Stage 1 Stage 2 Stage 3 Total
Stage 3 -
New and
increased
Stage 3 -
Recoveries
and write-
backs Total Total
Division
$M $M $M $M $M $M $M $M
Australia Retail and Commercial
(35) (26) 68 7 1,173 (468) 705 712
Institutional
27 (13) (4) 10 55 (67) (12) (2)
New Zealand
1 10 1 12 131 (56) 75 87
Pacific
(4) (6) (2) (12) 16 (5) 11 (1)
TSO and Group Centre
- - - - - (1) (1) (1)
Total
(11) (35) 63 17 1,375 (597) 778 795

September 2018 Full Year
Individually assessed credit impairment charge/(release) under AASB 139
New and
increased

Recoveries and
write-backs

Total
Division $M $M

$M
Australia Retail and Commercial 1,109 (397) 712
Institutional 143 (167) (24)
New Zealand 143 (94) 49
Pacific 13 (8) 5
TSO and Group Centre 36 (5) 31
Total 1,444 (671) 773

GROUP RESULTS


35
September 2019 Half Year Collectively Assessed

Individually Assessed



Stage 1 Stage 2 Stage 3 Total
Stage 3 -
New and
increased
Stage 3 -
Recoveries
and write-
backs Total Total
Division
$M $M $M $M $M $M $M $M
Australia Retail and Commercial
(14) (69) 44 (39) 637 (282) 355 316
Institutional
8 22 3 33 37 (37) - 33
New Zealand
5 15 (3) 17 71 (31) 40 57
Pacific
(3) (2) (1) (6) 5 (2) 3 (3)
TSO and Group Centre
(1) - - (1) - - - (1)
Total
(5) (34) 43 4 750 (352) 398 402


March 2019 Half Year Collectively Assessed

Individually Assessed



Stage 1 Stage 2 Stage 3 Total
Stage 3 -
New and
increased
Stage 3 -
Recoveries
and write-
backs Total Total
Division
$M $M $M $M $M $M $M $M
Australia Retail and Commercial
(21) 43 24 46 536 (186) 350 396
Institutional
19 (35) (7) (23) 18 (30) (12) (35)
New Zealand
(4) (5) 4 (5) 60 (25) 35 30
Pacific
(1) (4) (1) (6) 11 (3) 8 2
TSO and Group Centre
1 - - 1 - (1) (1) -
Total
(6) (1) 20 13 625 (245) 380 393

Collectively assessed credit impairment charge
 September 2019 v September 2018
The collectively assessed credit impairment charge increased by $102 million primarily driven by a $55 million increase in the New Zealand division
and a $30 million increase in the Institutional division. The increase in the New Zealand division was primarily due to release of a temporary
economic overlay in 2018, followed by a new temporary economic overlay in 2019. The increase in the Institutional division was due to a greater
number of customer upgrades in the prior period.
 September 2019 v March 2019
The collectively assessed credit impairment charge decreased by $9 million (-69%) primarily driven by an $85 million decrease in the Australia Retail
and Commercial division, partially offset by a $56 million increase in the Institutional division and a $22 million increase in the New Zealand division.
The decrease in the Australia Retail and Commercial division was primarily due to the downward revision of forward looking economic scenario
weights for the Australian geography in the March 2019 half, as well as part release of a temporary management overlay in the September 2019 half.
The increase in the Institutional division was primarily due to a greater number of customers downgrades compared to the prior period. The increase
in the New Zealand division was due to the downward revision of forward looking economic scenario weights, along with a temporary economic
overlay in the September 2019 half.

Individually assessed credit impairment charge
 September 2019 v September 2018
The individually assessed credit impairment charge increased by $5 million (+1%) primarily due to lower write-backs and recoveries in the New
Zealand and Institutional divisions, partially offset by higher write-backs and recoveries in the Australia Retail and Commercial division and a
decrease due to the sale of the Asia Retail and Wealth businesses in the prior year.
 September 2019 v March 2019
The individually assessed credit impairment charge increased by $18 million (+5%) driven by increased provisions in the Institutional, Australia Retail
and Commercial and New Zealand divisions. The increase in the Australia Retail and Commercial division is due to higher new and increased
provision following the implementation of a more market responsive collateral valuation methodology for the Australian home loan portfolio.

GROUP RESULTS


36
Allowance for expected credit losses
1,2



Collectively assessed Individually assessed Total provision

As at As at As at
Division
Sep 19
$M
Sep 18
$M
Movt
Sep 19
$M
Sep 18
$M
Movt
Sep 19
$M
Sep 18
$M
Movt
Australia Retail and
Commercial
1,795 1,125 60%

558 569 -2%

2,353 1,694 39%
Institutional 1,169 1,073 9%

160 251 -36%

1,329 1,324 0%
New Zealand
374 279 34%

72 81 -11%

446 360 24%
Pacific
38 43 -12%

24 18 33%

62 61 2%
TSO and Group Centre
- 3 -100%

- 1 -100%

- 4 -100%
Total
3
3,376 2,523 34%

814 920 -12%

4,190 3,443 22%



Collectively assessed Individually assessed Total provision

As at As at As at
Division
Sep 19
$M
Mar 19
$M
Movt
Sep 19
$M
Mar 19
$M
Movt
Sep 19
$M
Mar 19
$M
Movt
Australia Retail and
Commercial
1,795 1,834 -2%

558 586 -5%

2,353 2,420 -3%
Institutional 1,169 1,132 3%

160 208 -23%

1,329 1,340 -1%
New Zealand
374 369 1%

72 73 -1%

446 442 1%
Pacific
38 43 -12%

24 24 0%

62 67 -7%
TSO and Group Centre
- - n/a

- - n/a

- - n/a
Total
3
3,376 3,378 0%

814 891 -9%

4,190 4,269 -2%

As at Sep 19

Collectively Assessed
Individually
Assessed

Division
Stage 1
$M
Stage 2
$M
Stage 3
$M
Total
$M
Stage 3
$M
Total
$M
Australia Retail and Commercial 370 1,082 343 1,795 558 2,353
Institutional
872 257 40 1,169 160 1,329
New Zealand
152 182 40 374 72 446
Pacific
18 9 11 38 24 62
Total
3
1,412 1,530 434 3,376 814 4,190

As at Mar 19

Collectively Assessed
Individually
Assessed

Division
Stage 1
$M
Stage 2
$M
Stage 3
$M
Total
$M
Stage 3
$M
Total
$M
Australia Retail and Commercial 384 1,150 300 1,834 586 2,420
Institutional
859 234 39 1,132 208 1,340
New Zealand
152 173 44 369 73 442
Pacific
20 11 12 43 24 67
Total
3
1,415 1,568 395 3,378 891 4,269
1.
Includes allowance for expected credit losses for Net loans and advances – at amortised cost, Investment securities – debt securities at amortised cost and Off-balance sheet commitments -
undrawn and contingent facilities.
2.
Balance Sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
3.
On adoption of AASB 9 on 1 October 2018, the Group increased the collectively assessed provision by $813 million. Comparative information has not been restated.

GROUP RESULTS


37
Long-Run Loss Rates
Management believe that disclosure of modelled expected loss data using average long-run loss rates for individually assessed 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 economic profit is an internal measure and is not based on the credit loss provision principles of AASB 9
Financial Instruments which were effective from 1 October 2018.


As at
Long-run loss as a % of gross lending assets
Sep 19 Mar 19 Sep 18
Australia Retail and Commercial division

0.29% 0.29% 0.29%
New Zealand division

0.18% 0.19% 0.19%
Institutional division

0.25% 0.27% 0.27%
Total Group

0.26% 0.27% 0.27%


Gross Impaired Assets
1,2




As at

Movement


Sep 19
$M
Mar 19
$M
Sep 18
$M

Sep 19
v. Mar 19
Sep 19
v. Sep 18
Impaired loans

1,711 1,803 1,802 -5% -5%
Restructured items
3


267 264 269 1% -1%
Non-performing commitments and contingencies
51 61 68 -16% -25%
Gross impaired assets
2,029 2,128 2,139 -5% -5%
Individually assessed provisions
Impaired loans
(791) (865) (894) -9% -12%
Non-performing commitments and contingencies
(23) (26) (26) -12% -12%
Net impaired assets
1,215 1,237 1,219 -2% 0%

Gross impaired assets by division

Australia Retail and Commercial 1,468 1,463 1,411 0% 4%
Institutional
265 373 442 -29% -40%
New Zealand
245 238 236 3% 4%
Pacific
51 53 50 -4% 2%
TSO and Group Centre
- 1 - -100% n/a
Gross impaired assets
2,029 2,128 2,139 -5% -5%

Gross impaired assets by size of exposure
Less than $10 million 1,593 1,611 1,615 -1% -1%
$10 million to $100 million
247 328 335 -25% -26%
Greater than $100 million
189 189 189 0% 0%
Gross impaired assets
2,029 2,128 2,139 -5% -5%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
2.
In the September 2019 half, ANZ implemented a more market responsive collateral valuation methodology for the home loan portfolio in Australia which increased the number of home loans
being classified as impaired rather than past due. Comparative information has not been restated for the change in methodology. Additionally, refinement to underlying processes and
associated data resulted in the transfer of loans from past due and sub-standard categories into impaired assets. Comparative information has been restated with a transfer of $106 million at
March 2019 and $126 million at September 2018.
3.
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 2019 v September 2018
Gross impaired assets decreased $110 million (-5%) driven by the Institutional division (-$177 million) with repayments reducing a number of large
impaired assets. This was partially offset by an increase in the Australia Retail and Commercial division ($57 million) primarily driven by a number of
single name impaired loans in the Commercial portfolio. The Group’s individually assessed provision coverage ratio on impaired assets was 40.1% at
30 September 2019 (Sep 18: 43.0%).
 September 2019 v March 2019
Gross impaired assets decreased $99 million (-5%) driven by the Institutional division ($108 million) due to repayments and write-offs. This was
partially offset by the Australia Retail and Commercial ($5 million) and the New Zealand division ($7 million). The Group’s individually assessed
provision coverage ratio on impaired assets was 40.1% at 30 September 2019 (March 19: 41.9%).

GROUP RESULTS


38
New Impaired Assets
1,2



Half Year Full Year

Sep 19
$M
Mar 19
$M Movt
Sep 19
$M
Sep 18
$M Movt
Impaired loans 1,070 857 25% 1,927 1,846 4%
Restructured items
29 13 large 42 224 -81%
Non-performing commitments and contingencies
18 20 -10% 38 38 0%
Total new impaired assets
1,117 890 26% 2,007 2,108 -5%
New impaired assets by division
Australia Retail and Commercial 916 715 28% 1,631 1,604 2%
Institutional
37 41 -10% 78 169 -54%
New Zealand
158 120 32% 278 292 -5%
Pacific
6 14 -57% 20 11 82%
TSO and Group Centre
- - n/a - 32 -100%
Total new impaired assets
1,117 890 26% 2,007 2,108 -5%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
2.
In the September 2019 half, ANZ implemented a more market responsive collateral valuation methodology for the home loan portfolio in Australia which increased the number of home
loans being classified as impaired rather than past due. Comparative information has not been restated for the change in methodology.
 September 2019 v September 2018
New impaired assets decreased $101 million (-5%) primarily driven by the Institutional division as the result of an improved risk profile due to portfolio
rebalancing, combined with a benign credit environment. In addition, new impaired assets decreased due to lending reductions following the sale of
Asia Retail and Wealth businesses. This was partially offset by an increase in the Australia Retail and Commercial division.
 September 2019 v March 2019
New impaired assets increased by $227 million (26%) driven by the Australia Retail and Commercial and New Zealand division. The increase in the
Australia Retail and Commercial division is primarily driven by an increase of $167 million from the implementation of a more market responsive
collateral valuation methodology for the Australian home loan portfolio. The increase in the New Zealand division is driven by a number of single
name impaired loans in the Commercial & Agri portfolio.



Ageing analysis of net loans and advances that are past due but not impaired
1,2



As at Movement

Sep 19
$M
Mar 19
$M
Sep 18
$M
Sep 19
v. Mar 19
Sep 19
v. Sep 18
1-29 days 8,383 9,558 8,956 -12% -6%
30-59 days
2,255 2,993 2,235 -25% 1%
60-89 days
1,369 1,436 1,263 -5% 8%
>90 days
3,744 3,328 2,911 13% 29%
Total
15,751 17,315 15,365 -9% 3%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.
2.
In the September 2019 half, ANZ implemented a more market responsive collateral valuation methodology for the home loan portfolio in Australia which increased the number of home loans
being classified as impaired rather than past due. Comparative information has not been restated for the change in methodology. Additionally, refinement to underlying processes and
associated data resulted in the transfer of loans from past due and sub-standard categories into impaired assets. Comparative information has been restated with a transfer from past due of
$75 million and from sub-standard of $31 million at March 2019, and from past due of $99 million and from sub-standard of $27 million at September 2018.
 September 2019 v September 2018
Net loans and advances past due but not impaired increased $386 million due to a deterioration in home loans in the Australia Retail and
Commercial division primarily in the > 90 days segment.
 September 2019 v March 2019
Net loans and advances past due but not impaired decreased $1,564 million due to improvements in home loans in the Australian Retail and
Commercial division primarily in the 1-29 and 30-59 days segment.

GROUP RESULTS


39
Income Tax Expense - continuing operations


Half Year

Full Year

Sep 19
$M
Mar 19
$M Movt

Sep 19
$M
Sep 18
$M Movt
Income tax expense on cash profit 1,263 1,415 -11% 2,678 2,775 -3%
Effective tax rate (cash profit)
30.3% 28.4% 29.2% 29.9%
 September 2019 v September 2018
The effective tax rate has decreased from 29.9% to 29.2%. The decrease of 70 bps is primarily due to higher offshore earnings which attract a lower
average tax rate (-71 bps) and a net movement in respect of gains and losses on sale from divestments (-60 bps), partially offset by a net movement
in other items (+74 bps) which included the impact of customer remediation.
 September 2019 v March 2019
The effective tax rate has increased from 28.4% to 30.3%. The increase of 190 bps is primarily due to an increase in the provision for foreign tax on
dividend repatriations (+54 bps) and a net movement in other items (+160 bps) which included the impact of customer remediation, partially offset by
an overprovision in respect of prior years (-58 bps).

GROUP RESULTS


40
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
movements. 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 2019 Full Year vs September 2018 Full Year

Full Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Sep 19
$M
Sep 18
$M
Sep 18
$M
Sep 18
$M
Sep 19
v. Sep 18
Sep 19
v. Sep 18
Net interest income 14,339 14,514 173 14,687 -1% -2%
Other operating income
4,690 4,853 35 4,888 -3% -4%
Operating income
19,029 19,367 208 19,575 -2% -3%
Operating expenses (9,071) (9,401) (164) (9,565) -4% -5%
Profit before credit impairment and income tax
9,958 9,966 44 10,010 0% -1%
Credit impairment charge (795) (688) 3 (685) 16% 16%
Profit before income tax
9,163 9,278 47 9,325 -1% -2%
Income tax expense (2,678) (2,775) (9) (2,784) -3% -4%
Non-controlling interests
(15) (16) (1) (17) -6% -12%
Cash profit from continuing operations
6,470 6,487 37 6,524 0% -1%
Balance Sheet
Net loans and advances
1
615,258 605,463 5,289 610,752 2% 1%

Cash Profit - September 2019 Half Year vs March 2019 Half Year
Half Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Sep 19
$M
Mar 19
$M
Mar 19
$M
Mar 19
$M
Sep 19
v. Mar 19
Sep 19
v. Mar 19
Net interest income 7,040 7,299 25 7,324 -4% -4%
Other operating income
2,243 2,447 16 2,463 -8% -9%
Operating income
9,283 9,746 41 9,787 -5% -5%
Operating expenses (4,706) (4,365) (29) (4,394) 8% 7%
Profit before credit impairment and income tax
4,577 5,381 12 5,393 -15% -15%
Credit impairment charge (402) (393) 1 (392) 2% 3%
Profit before income tax
4,175 4,988 13 5,001 -16% -17%
Income tax expense (1,263) (1,415) (2) (1,417) -11% -11%
Non-controlling interests
(6) (9) - (9) -33% -33%
Cash profit from continuing operations
2,906 3,564 11 3,575 -18% -19%
Balance Sheet
Net loans and advances
1
615,258 610,169 (1,325) 608,844 1% 1%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.