ANZ 2020 Half Year Results Documents

Australia and New Zealand Banking Group Limited

ABN 11 005 357 522







Half Year
31 March 2020






Consolidated Financial Report
Dividend Announcement
and Appendix 4D




The Consolidated Financial Report and Dividend Announcement contains information required by Appendix 4D 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 4D


2


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



Report for the half year ended 31 March 2020



Operating Results
1



AUD million


Statutory operating income from continuing operations -4% to 8,893





Statutory profit attributable to shareholders -51% to 1,545





Cash profit
2
-62% to 1,323


Cash profit from continuing operations
2


-60% to 1,413








Dividends

Cents

Franked

per

amount

share

per share


Proposed interim dividend

TBD
3


TBD
3













Record date for determining entitlements to the proposed 2020 interim dividend
TBD
3




Payment date for the proposed 2020 interim dividend
TBD
3



Dividends
Australia and New Zealand Banking Group Limited (ANZ), with consideration to the current uncertainties in the economic outlook and the letter issued by
the Australian Prudential Regulation Authority (APRA) to all Authorised Deposit Taking Institutions (ADIs) on 7 April 2020, on capital management and
the ongoing Coronavirus (COVID-19) pandemic, has deferred the decision on the payment of a 2020 interim dividend until the economic outlook is
clearer. Decisions in relation to the Dividend Reinvestment Plan and Bonus Option Plan will also be made at that time as applicable.

The Board will continue to deliberate and an update will be provided at the August 2020 market update.









1
Unless otherwise noted, all comparisons are to the half year ended 31 March 2019.
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 credit risk on impaired derivatives. Cash profit is not a measure of cash flow or profit determined on a cash basis. The net
after tax adjustment was a reduction to statutory profit of $222 million (all attributable to continuing operations) made up of several items. Refer pages 71 to 75 for further details.
3
The decision on the payment of a 2020 interim dividend has been deferred until the economic outlook is clearer and an update will be provided at the August 2020 market update.

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


3

CONSOLIDATED FINANCIAL REPORT, DIVIDEND ANNOUNCEMENT AND APPENDIX 4D
Half year ended 31 March 2020



CONTENTS PAGE



Disclosure Summary 5
Summary 7
Group Results 19
Divisional Results 47
Profit Reconciliation 71
Condensed Consolidated Financial Statements 77
Supplementary Information 127
Definitions 139
ASX Appendix 4D Cross Reference Index 142
Alphabetical Index 143


















This Consolidated Financial Report, Dividend Announcement and Appendix 4D 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 29 April 2020.
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


4
This page has been left blank intentionally

DISCLOSURE SUMMARY


5
SUMMARY OF 2020 HALF YEAR RESULTS AND ASSOCIATED DISCLOSURE MATERIALS

The following disclosure items were lodged separately with the ASX and NZX and can be accessed via the ANZ Shareholder Centre on the Group
website http://www.shareholder.anz.com within the disclosures for 2020 Half Year Results.

 Consolidated Financial Report, Dividend Announcement and Appendix 4D
 Half Year Results Investor Discussion Pack
 News Release
 APS 330 Pillar III Disclosure as at 31 March 2020
 Key Financial Data Summary
 United Kingdom Disclosure and Transparency Rules Submission

DISCLOSURE SUMMARY


6
This page has been left blank intentionally

SUMMARY


7
CONTENTS Page

Guide to Half Year Results 8
Statutory Profit Results 9
Cash Profit Results 10
Financial Performance Summary – Total and continuing operations 11
Key Balance Sheet Metrics 12
Large/Notable Items – continuing operations 13
Full Time Equivalent Staff 17
Other Non-Financial Information 17

SUMMARY


8
Guide to Half Year Results
CORONAVIRUS (COVID-19)
The ongoing COVID-19 pandemic has increased the estimation uncertainty in the preparation of these Condensed Consolidated Financial Statements.
While pervasive across the financial statements, the estimation uncertainty is predominantly related to expected credit losses where the Group
recognised a credit impairment charge of $1.7bn pre-tax in the March 2020 half, and the fair value measurement and recoverable amount assessments
of non-financial assets where the Group recognised an impairment loss of $815 million in respect of two of the Group’s Asian associate investments. For
further details of these estimation uncertainties refer to Note 1 of the Condensed Consolidated Financial Statements

ACCOUNTING STANDARDS ADOPTED
During the period, the Group adopted AASB 16 Leases (AASB 16) and applied a modified retrospective transition approach in recognising all leases
(except for leases of low value assets and short term leases) on the balance sheet based on the present value of remaining lease payments as of 1
October 2019. Consequently on 1 October 2019 the Group recognised an increase in lease liabilities of $1.7 billion, a right-of-use lease asset of $1.6
billion, an increase in deferred tax assets of $37 million and a net reduction to opening retained earnings of $88 million. For further details on key
requirements and impacts of the changes refer to Note 1 of the Condensed Consolidated Financial Statements.
The Group early adopted AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform from 1 October 2019. The
standard modifies certain hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by interest rate benchmark
reform.
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 review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash
profit is not subject to review 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 71 to 75 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 13 to 16 for details of large/notable items.
DISCONTINUED OPERATIONS
The financial results of the divested Wealth Australia businesses and associated Group reclassification and consolidation impacts are treated as
discontinued operations from a financial reporting perspective. 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)
In 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 and the OnePath P&I business completed on 31
January 2020.
 Sale to Zurich Financial Services Australia (Zurich)
In December 2017, the Group announced it had agreed to sell its life insurance business to Zurich and the transaction completed on 31 May 2019.
Included in the ‘Cash loss from discontinued operations’ is:
 A $16 million loss on disposal ($11 million loss after tax) was recognised in the March 2020 half attributable to sale comple
tion costs. The
September 2019 half included a $23 million loss ($81 million loss after tax) 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 on sale
completion of gains previously deferred in equity reserves; 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, as follows:


Half Year


Mar 20
$M
Sep 19
$M
Mar 19
$M
Customer remediation (pre-tax)

124 166 75
Customer remediation (post-tax)

94 154 53

SUMMARY


9
Statutory Profit Results






Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net interest income

7,222 7,040 7,299

3% -1%
Other operating income

1,671 2,452 1,994

-32% -16%
Operating income

8,893 9,492 9,293

-6% -4%
Operating expenses

(4,605) (4,706) (4,365)

-2% 5%
Profit before credit impairment and income tax

4,288 4,786 4,928

-10% -13%
Credit impairment charge

(1,674) (402) (392)

large large
Profit before income tax

2,614 4,384 4,536

-40% -42%
Income tax expense

(978) (1,325) (1,284)

-26% -24%
Non-controlling interests

(1) (6) (9)

-83% -89%
Profit attributable to shareholders of the Company from continuing operations

1,635 3,053 3,243

-46% -50%
Profit/(Loss) from discontinued operations

(90) (273) (70)

-67% 29%
Profit attributable to shareholders of the Company

1,545 2,780 3,173

-44% -51%

Earnings Per Ordinary Share (cents)

Half Year

Movement

Reference
Page
Mar 20 Sep 19 Mar 19

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Basic
96
54.6 98.3 111.7

-44% -51%
Diluted 96
51.5 94.7 106.4 -46% -52%


Half Year

Reference
Page
Mar 20 Sep 19 Mar 19
Ordinary Share Dividends (cents)
Interim

- fully franked
1,2,3
95 TBD N/A 80
- partially franked
1
95 TBD N/A N/A
Final (partially franked)
3,4
95 N/A 80 N/A
Total 95
TBD 80 80
Ordinary share dividend payout ratio
5
95 TBD 81.6% 71.4%
Profitability Ratios

Return on average ordinary shareholders' equity
6
5.1% 9.3% 10.8%
Return on average assets
7
0.30% 0.56% 0.65%
Net interest margin
1.69% 1.72% 1.79%
Net interest income to average credit RWAs
7
3.96% 4.03% 4.23%
Efficiency Ratios

Operating expenses to operating income 53.8% 51.8% 48.6%
Operating expenses to average assets
7
0.92% 1.00% 0.94%
Credit Impairment Charge/(Release)

Individually assessed credit impairment charge ($M) 626 398 379
Collectively assessed credit impairment charge/(release) ($M)
1,048 4 13
Total credit impairment charge ($M) 102
1,674 402 392
Individually assessed credit impairment charge as a % of average gross loans and advances
7,8
0.20% 0.13% 0.12%
Total credit impairment charge as a % of average gross loans and advances
7,8
0.53% 0.13% 0.13%
1.
The decision on the payment of a 2020 interim dividend has been deferred until the economic outlook is clearer and an update will be provided at the August 2020 market update.
2.
Fully franked for Australian tax purposes (30% tax rate) for the 2019 interim dividend.
3.
Carry New Zealand imputation credits of NZD 9 cents for the 2019 interim and final dividend.
4.
Partially franked at 70% for Australian tax purposes (30% tax rate).
5.
The dividend payout ratio for the March 2020 half will be determined when the decision on the 2020 interim dividend has been made. The dividend payout ratio for the September 2019 half
and March 2019 half are calculated using the 2019 final and 2019 interim dividends respectively.
6.
Average ordinary shareholders’ equity excludes non-controlling interests.
7.
Average assets, average gross loans and advances and average credit RWAs include assets held for sale.
8.
Credit impairment charge used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.

SUMMARY


10
Cash Profit Results
1




Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net interest income

7,222 7,040 7,299

3% -1%
Other operating income

1,357 2,243 2,447

-40% -45%
Operating income

8,579 9,283 9,746

-8% -12%
Operating expenses

(4,605) (4,706) (4,365)

-2% 5%
Profit before credit impairment and income tax

3,974 4,577 5,381

-13% -26%
Credit impairment charge

(1,674) (402) (393)

large large
Profit before income tax

2,300 4,175 4,988

-45% -54%
Income tax expense

(886) (1,263) (1,415)

-30% -37%
Non-controlling interests

(1) (6) (9)

-83% -89%
Cash profit from continuing operations

1,413 2,906 3,564

-51% -60%
Cash profit/(loss) from discontinued operations

(90) (259) (50)

-65% 80%
Cash profit

1,323 2,647 3,514

-50% -62%

Earnings Per Ordinary Share (cents)

Half Year

Movement

Mar 20 Sep 19 Mar 19

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Basic
46.7 93.6 123.0

-50% -62%
Diluted
44.7 90.3 116.8 -50% -62%


Half Year

Reference
Page
Mar 20 Sep 19 Mar 19
Ordinary Share Dividends
Ordinary share dividend payout ratio
2
TBD 85.7% 64.5%
Profitability Ratios


Return on average ordinary shareholders' equity
3
4.4% 8.9% 11.9%
Return on average assets
4
0.26% 0.53% 0.72%
Net interest margin
1.69% 1.72% 1.79%
Net interest income to average credit RWAs
4
3.96% 4.03% 4.23%
Efficiency Ratios


Operating expenses to operating income 55.2% 52.9% 46.4%
Operating expenses to average assets
4
0.92% 1.00% 0.94%
Credit Impairment Charge/(Release)


Individually assessed credit impairment charge ($M) 29 626 398 380
Collectively assessed credit impairment charge/(release) ($M) 29
1,048 4 13
Total credit impairment charge ($M) 29
1,674 402 393
Individually assessed credit impairment charge as a % of average gross loans and advances
4,5
0.20% 0.13% 0.12%
Total credit impairment charge as a % of average gross loans and advances
4,5
0.53% 0.13% 0.13%
Cash Profit/(Loss) By Division Half Year

Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

1,214 1,492 1,703 -19% -29%
Institutional
610 816 1,012 -25% -40%
New Zealand
567 646 753 -12% -25%
Pacific
20 26 33 -23% -39%
TSO and Group Centre
(998) (74) 63 large large
Discontinued Operations
(90) (259) (50) -65% 80%
Cash profit
1,323 2,647 3,514 -50% -62%
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 71 to
75 for the reconciliation between statutory and cash profit. Refer to pages 13 to 16 for information on large/notable items included in continuing cash profit.
2.
The dividend payout ratio for the March 2020 half will be determined when the decision on the 2020 interim dividend has been made. The dividend payout ratio for the September 2019 half
and March 2019 half are calculated using the 2019 final and 2019 interim dividends respectively.
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
11
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 un
derstanding 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.






Total cash profit - incl
usive of discontinued
operations

Movement


Cash profit - continuing operations

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19

Net interest income
7,217
7,021
7,242
3%
0%
7,222
7,040
7,299
3%
-1%
Other operating income
1,349
2,299
2,651
-41%
-49%
1,357
2,243
2,447
-40%
-45%
Operating income
8,566
9,320
9,893
-8%
-13%
8,579
9,283
9,746
-8%
-12%
Operating expenses
(4,725)
(4,934)
(4,586)
-4%
3%
(4,605)
(4,706)
(4,365)
-2%
5%
Profit before credit im
pairment and income tax
3,841
4,386
5,307
-12%
-28%
3,974
4,577
5,381
-13%
-26%
Credit impairment charge
(1,674)
(402)
(392)
316%
327%
(1,674)
(402)
(393)
316%
326%
Profit before income tax
2,167
3,984
4,915
-46%
-56%
2,300
4,175
4,988
-45%
-54%
Income tax expense
(843)
(1,331)
(1,392)
-37%
-39%
(886)
(1,263)
(1,415)
-30%
-37%
Non-controlling interests
(1)
(6)
(9)
-83%
-89%
(1)
(6)
(9)
-83%
-89%
Cash Profit
1,323
2,647
3,514
-50%
-62%

1,413
2,906
3,564
-51%
-60%

Average interest earning assets
856,652
814,831
811,528
5%
6%

856,652
814,831
811,528
5%
6%

Average deposits and other borrowings
669,342
642,448
635,822
4%
5%
669,342
642,448
635,822
4%
5%
Funds under management
1

35,665
84,171
83,164
-58%
-57%
35,665
35,754
33,816
0%
5%
Earnings per share (basic)
46.7
93.6
123.0
-50%
-62%

49.9
102.7
124.8
-51%
-60%

Ordinary share dividend payout ratio
2

TBD
86%
65%
TBD
78.0%
63.6%


Profitability Ratios


Return on average ordinary shareholders' equity
3

4.4%
8.9%
11.9%

4.7%
9.8%
12.0%

Return on average assets
0.26%
0.53%
0.72%

0.28%
0.59%
0.77%

Net interest margin
1.68%
1.72%
1.79%

1.69%
1.72%
1.80%


Net interest income to average credit RWAs
3.96%
4.03%
4.23%

3.96%
4.04%
4.26%


Efficiency Ratios


Operating expenses to operating income
55.2%
52.9%
46.4%

53.7%
50.7%
44.8%

Operating expenses to average assets
0.92%
1.00%
0.94%

0.90%
0.96%
0.94%

FTE
4

38,939
39,060
39,359
0%
-1%
37,834
37,588
37,364
1%
1%
1.
Funds under management for continuing operations relates to retained wealth management operations in the New Zealand division
and Australia Retail and Commercial division.
2.
The dividend payout ratio for the March 2020 half will be deter
mined when the decision on the 2020 interim dividend has been m
ade. The dividend payout ratio for the September 2019 half and March 2019 half are calculated using the 2019 final and 2019 int
erim dividends respectively.
3.
Average ordinary
shareholders’ equity excludes
non-controlling interests.
4.
The discontinued operations FTE is based on an estimate of the staff working in the divested businesses using an allocation me
thodology and includes staff retained in the Group working on transitioning the sold businesses to the purchasers.

SUMMARY


12
Key Balance Sheet Metrics
1



As at Movement

Reference
Page
Mar 20 Sep 19 Mar 19
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Capital Management


Common Equity Tier 1 (Level 2)

- APRA Basel 3 42
10.8% 11.4% 11.5%
- Internationally Comparable Basel 3
2
42 15.5% 16.4% 16.9%
Credit risk weighted assets ($B) 130
386.0 358.1 345.5 8% 12%
Total risk weighted assets ($B) 42
449.0 417.0 396.3 8% 13%
APRA Leverage Ratio 44
5.0% 5.6% 5.4%
Balance Sheet: Key Items


Gross loans and advances ($B) 661.3 618.8 613.8 7% 8%
Net loans and advances ($B)
656.6 615.3 610.2 7% 8%
Total assets ($B)
1,150.0 981.1 980.3 17% 17%
Customer deposits ($B)
566.5 511.8 493.4 11% 15%
Total equity ($B)
61.4 60.8 60.0 1% 2%

As at Movement
Liquidity Risk
Reference
Page
Mar 20 Sep 19 Mar 19
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Liquidity Coverage Ratio (half year average) 40 139% 143% 137% -4% 2%
Net Stable Funding Ratio 41
118% 116% 115% 2% 3%

As at Movement

Reference
Page
Mar 20 Sep 19 Mar 19
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Impaired Assets


Gross impaired assets ($M) 33
2,599 2,029 2,128 28% 22%
Gross impaired assets as a % of gross loans and advances
0.39% 0.33% 0.35%
Net impaired assets ($M) 33
1,506 1,215 1,237 24% 22%
Net impaired assets as a % of shareholders' equity
2.5% 2.0% 2.0%
Individually assessed provision ($M) 31 1,093 814 891 34% 23%
Individually assessed provision as a % of gross impaired assets
42.1% 40.1% 41.9%
Collectively assessed provision ($M) 31
4,501 3,376 3,378 33% 33%
Collectively assessed provision as a % of credit risk weighted assets
1.17% 0.94% 0.98%
Net Tangible Assets
Net tangible assets attributable to ordinary shareholders ($B)
3
56.4 55.5 53.7 2% 5%
Net tangible assets per ordinary share ($)
19.89 19.59 18.94 2% 5%


As at Movement
Net Loans And Advances By Division (Excluding Held for Sale)
Mar 20
$B
Sep 19
$B
Mar 19
$B
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 329.8 331.9 336.6 -1% -2%
Institutional
4
199.4 164.5 151.7 21% 31%
New Zealand
5
125.2 116.7 118.8 7% 5%
Pacific
2.2 2.1 2.1 5% 5%
TSO and Group Centre
- 0.1 0.1 -100% -100%
Net loans and advances by division
656.6 615.3 609.3 7% 8%
1.
Balance Sheet amounts and metrics include assets and liabilities held for sale unless otherwise stated.
2.
See page 43 for further details regarding the differences between APRA Basel 3 and Internationally Comparable Basel 3 standards.
3.
Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.
4.
Excluding the impact of foreign currency translation, the Institutional division Net loans and advances increased 17% compared to September 2019 and 25% compared to March 2019.
5.
Excluding the impact of foreign currency translation, the New Zealand division Net loans and advances increased 2% compared to September 2019 and 4% compared to March 2019.

SUMMARY


13
Large/Notable Items – continuing operations
Large/notable items included in cash profit from continuing operations are described below.
Divestment impacts
No divestments were announced or completed in the March 2020 half.
In the September 2019 half and March 2019 half, the Group completed the following divestments. As these divestments did not qualify as discontinued
operations under accounting standards they form part of continuing operations. The financial impacts from these divestments are summarised below
including the business results for those divestments that have completed:


Gain/(Loss) on sale from divestments Completed divestment business results
Half Year Half Year
Cash Profit Impact
Sep 19
$M
Mar 19
$M
Sep 19
$M
Mar 19
$M
Paymark - 37 - 4
Cambodia JV 10 - 10 21
OPL NZ 7 197 - 14
PNG Retail, Commercial and SME 1 - 4 5
Profit/(Loss) before income tax 18 234 14 44
Income tax benefit/(expense) and non-controlling interests - (47) (7) (19)
Cash profit/(loss) from continuing operations 18 187 7 25
 Paymark Limited (Paymark)
In 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)
In 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. 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)
In 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. In the September 2019 half a $7 million surplus provision was released.
 Papua New Guinea Retail, Commercial and Small-Medium Sized Enterprise businesses (PNG Retail, Commercial and SME)
In June 2018, the Group announced it had entered into an agreement to sell its Retail, Commercial and Small-Medium Sized Enterprise (SME)
banking businesses in Papua New Guinea to Kina Bank. The transaction 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
 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 $129 million have been recognised in the March 2020 half (Sep 19 half: $485 million; Mar 19 half: $100 million).
$58 million relates to customer remediation impacting operating income (Sep 19 half: $148 million; Mar 19 half: $64 million), and $71 million relates
to customer remediation impacting operating expenses (Sep 19 half: $337 million; Mar 19 half: $36 million).
 Royal Commission legal costs
External legal costs associated with responding to the Banking Royal Commission, which completed in February 2019, were nil for the March 2020
half (Sep 19 half: $2 million; Mar 19 half: $13 million).
 Restructuring
The Group recognised restructuring expenses of $105 million in the March 2020 half (Sep 19 half: $26 million; Mar 19 half: $51 million) largely
relating to business and property changes in Australia Retail and Commercial division.
 Lease-related items
In the March 2020 half, the Group recognised $83 million of additional charges associated with the adoption of the new lease accounting standard on
1 October 2019. Comparative information has not been restated for the adoption of the new lease accounting standard.
 Asian associate impairments
During the March 2020 half, the Group recognised a $815 million impairment in respect of two of the Group’s equity accounted investments to adjust
their carrying values in line with their value-in-use calculations (refer Note 1 (iv) of the Condensed Consolidated Financial Statements). AMMB
Holdings Berhad (AmBank) was impaired by $595 million and PT Bank Pan Indonesia (PT Panin) was impaired by $220 million.

SUMMARY
14
Large/Notable items - continuing operations

Cash Profit Results
Ma
rch 2020 Half Year vs
March 2019 Half Yea
r
March 2020 Half Year vs
September 2019 Half Year

Mar 20
Large/
notables
Mar 20
ex. Large/
notables Mar 19
Large/
notables
Mar 19
ex. Large/
notables
Movt
ex. Large/
notables
Mar 20
Large/
notables
Mar 20
ex. Large/
notables Sep 19
Large/
notables
Sep 19
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M
$M
$M
$M
%
$M
$M
$M
$M
$M
$M
%
Net interest income
7,222
(43)
7,265
7,299
7
7,292
0%
7,222
(43)
7,265
7,040
(98)
7,138
2%
Other operating income
1,357
(839)
2,196
2,447
231
2,216
-1%
1,357
(839)
2,196
2,243
3
2,240
-2%
Operating income
8,579
(882)
9,461
9,746
238
9,508
0%
8,579
(882)
9,461
9,283
(95)
9,378
1%
Operating expenses
(4,605)
(250)
(4,355)
(4,365)
(125) (4,240)
3%
(4,605)
(250)
(4,355)
(4,706)
(384)
(4,322)
1%
Profit before credit im
pairment and income tax
3,974
(1,132)
5,106
5,381
113
5,268
-3%
3,974
(1,132)
5,106
4,577
(479)
5,056
1%
Credit impairment charge
(1,674)
-
(1,674)
(393)
1
(394)
large
(1,674)
-
(1,674)
(402)
(2)
(400)
large
Profit/(Loss) before income tax
2,300
(1,132)
3,432
4,988
114
4,874
-30%
2,300
(1,132)
3,432
4,175
(481)
4,656
-26%
Income tax benefit/(expense)
and non-controlling interests
(887)
94
(981)
(1,424)
(17) (1,407)
-30%
(887)
94
(981)
(1,269)
82
(1,351)
-27%
Cash profit/(loss) from continuing operations
1,413
(1,038)
2,451
3,564
97
3,467
-29%
1,413
(1,038)
2,451
2,906
(399)
3,305
-26%

Cash Profit/(Loss) By Division
March 2020 Half Year vs March 20
19 Half Year

March 2020 Half Y
ear vs September 2019 Half Year

Mar 20
Large/
notables
Mar 20
ex. Large/
notables Mar 19
Large/
notables
Mar 19
ex. Large/
notables
Movt
ex. Large/
notables
Mar 20
Large/
notables
Mar 20
ex. Large/
notables Sep 19
Large/
notables
Sep 19
ex. Large/
notables
Movt
ex. Large/
notables

$M
$M
$M
$M
$M
$M
%
$M
$M
$M $M $M $M %
Australia Retail and Commercial
1,214
(153)
1,367
1,703
(83)
1,786
-23%
1,214
(153)
1,367
1,492
(303)
1,795
-24%
Institutional
610
(12)
622
1,012
8
1,004
-38%
610
(12)
622
816
(32)
848
-27%
New Zealand
567
(28)
595
753
14
739
-19%
567
(28)
595
646
(58)
704
-15%
Pacific
20
(3)
23
33
-
33
-30%
20
(3)
23
26
(14)
40
-43%
TSO and Group Centre
1

(998)
(842)
(156)
63
158
(95)
64%
(998)
(842)
(156)
(74)
8
(82)
90%
Cash profit/(loss) from continuing operations
1,413
(1,038)
2,451
3,564
97
3,467
-29%
1,413
(1,038)
2,451
2,906
(399)
3,305
-26%
1.
TSO and Group Centre includes the Gain/(Loss) on sale from divestments in the September 2019 half and March 2019 half. It also
includes the divested business results for the completed sales of Paymark in the March 2019 half.

SUMMARY
15
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.





March 2020 Half Year

March 2019 Half Year

Large/notable items include
d in continuing cash profit

Large/notable items include
d in continuing cash profit

Customer
remediation
$M
Restructuring
$M
Lease-related
items
$M
Asian
associate
impairments
$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
(22)
-
(21)
-
(43)
-
29
(22)
-
-
7
Other operating income
(36)
-
12
(815)
(839)
234
39
(42)
-
-
231
Operating income
(58)
-
(9)
(815)
(882)
234
68
(64)
-
-
238
Operating expenses
(71)
(105)
(74)
-
(250)
-
(25)
(36)
(13)
(51)
(125)
Profit before credit im
pairment and income tax
(129)
(105)
(83)
(815)
(1,132)
234
43
(100)
(13)
(51)
113
Credit impairment charge
-
-
-
-
-
-
1
-
-
-
1
Profit before income tax
(129)
(105)
(83)
(815)
(1,132)
234
44
(100)
(13)
(51)
114
Income tax benefit
/(expense) and
non-controlling interests
38
31
25
-
94
(47)
(19)
30
4
15
(17)
Cash profit/(loss) from continuing operations
(91)
(74)
(58)
(815)
(1,038)
187
25
(70)
(9)
(36)
97

March 2020 Half Year

Se
ptember 2019 Half Year

Large/notable items in
cluded in continuing
cash profit

Large/n
otable items included in
continuing cash profit

Customer
remediation
$M
Restructuring
$M
Lease-related
items
$M
Asian
associate
impairments
$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
(22)
-
(21)
-
(43)
-
21
(119)
-
-
(98)
Other operating income
(36)
-
12
(815)
(839)
18
14
(29)
-
-
3
Operating income
(58)
-
(9)
(815)
(882)
18
35
(148)
-
-
(95)
Operating expenses
(71)
(105)
(74)
-
(250)
-
(19)
(337)
(2)
(26)
(384)
Profit before credit im
pairment and income tax
(129)
(105)
(83)
(815)
(1,132)
18
16
(485)
(2)
(26)
(479)
Credit impairment charge
-
-
-
-
-
-
(2)
-
-
-
(2)
Profit before income tax
(129)
(105)
(83)
(815)
(1,132)
18
14
(485)
(2)
(26)
(481)
Income tax benefit
/(expense) and
non-controlling interests
38
31
25
-
94
-
(7)
80
1
8
82
Cash profit/(loss) from continuing operations
(91)
(74)
(58)
(815)
(1,038)
18
7
(405)
(1)
(18)
(399)
1.

Relates to business results
for completed divestments.

SUMMARY
16
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.





March 2020 Half Year

March 2019 Half Year

Large/notable items include
d in continuing cash profit

Large/notable items include
d in continuing cash profit

Customer
remediation
$M
Restructuring
$M
Lease-related
items
$M
Asian
associate
impairments
$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
Profit before income tax
Australia Retail and Commercial
(101)
(85)
(32)
-
(218)
-
-
(100)
-
(19)
(119)
Institutional
-
(4)
(11)
-
(15)
-
29
-
-
(7)
22
New Zealand
(26)
(11)
(3)
-
(40)
-
20
-
-
(2)
18
Pacific
(2)
-
(2)
-
(4)
-
-
-
-
-
-
TSO and Group Centre
2

-
(5)
(35)
(815)
(855)
234
(5)
-
(13)
(23)
193
Profit before income tax
(129)
(105)
(83)
(815)
(1,132)
234
44
(100)
(13)
(51)
114
Income tax benefit/(expens
e) and non-controlling
interests
38
31
25
-
94
(47)
(19)
30
4
15
(17)
Cash profit/(loss) from continuing operations
(91)
(74)
(58)
(815)
(1,038)
187
25
(70)
(9)
(36)
97

March 2020 Half Year

September 2019 Half Year

Large/notable items include
d in continuing cash profit

Large/notable items include
d in continuing cash profit

Customer
remediation
$M
Restructuring
$M
Lease-related
items
$M
Asian
associate
impairments
$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
Profit before income tax
Australia Retail and Commercial
(101)
(85)
(32)
-
(218)
-
-
(347)
-
(1)
(348)
Institutional
-
(4)
(11)
-
(15)
-
17
(49)
-
(9)
(41)
New Zealand
(26)
(11)
(3)
-
(40)
-
-
(75)
-
(6)
(81)
Pacific
(2)
-
(2)
-
(4)
-
-
(14)
-
-
(14)
TSO and Group Centre
2

-
(5)
(35)
(815)
(855)
18
(3)
-
(2)
(10)
3
Profit before income tax
(129)
(105)
(83)
(815)
(1,132)
18
14
(485)
(2)
(26)
(481)
Income tax benefit
/(expense) and
non-controlling interests
38
31
25
-
94
-
(7)
80
1
8
82
Cash profit/(loss) from continuing operations
(91)
(74)
(58)
(815)
(1,038)
18
7
(405)
(1)
(18)
(399)
1.
Relates to business results
for completed divestments.
2.
TSO and Group Centre includes the Gain/(Loss) on sale from divestments in the September 2019 half and March 2019 half. It also
includes the divested business results for the completed sales of Paymark in the March 2019 half.

SUMMARY


17
Full Time Equivalent Staff

As at 31 March 2020, ANZ employed 38,939 staff (Sep 19: 39,060; Mar 19: 39,359) on a full-time equivalent (FTE) basis.

Division

As at

Movement

Mar 20 Sep 19 Mar 19
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 14,061 13,903 13,660 1% 3%
Institutional
1
5,350 5,468 6,085 -2% -12%
New Zealand
6,103 6,121 6,003 0% 2%
Pacific
1,108 1,086 1,096 2% 1%
TSO and Group Centre
11,212 11,010 10,520 2% 7%
Total FTE from continuing operations
37,834 37,588 37,364 1% 1%
Discontinued operations
2
1,105 1,472 1,995 -25% -45%
Total FTE
38,939 39,060 39,359 0% -1%
Average FTE 39,154 39,147 39,571 0% -1%

Geography

As at

Movement

Mar 20 Sep 19 Mar 19
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia 18,823 18,874 18,652 0% 1%
Asia, Pacific, Europe & America
1
12,584 12,695 13,396 -1% -6%
New Zealand
7,532 7,491 7,311 1% 3%
Total FTE
38,939 39,060 39,359 0% -1%
1.
Institutional division 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 discontinued operations FTE is based on an estimate of the staff working in the divested businesses based on an allocation methodology and includes staff retained in the Group
working on transitioning the sold businesses to the purchasers.

Other Non-Financial Information


Half Year

Movement
Shareholder value - ordinary shares

Mar 20 Sep 19 Mar 19

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Share price ($)
- high
28.79 29.30 28.36 -2% 2%
- low
14.10 25.36 22.98 -44% -39%
- closing

16.96 28.52 26.03 -41% -35%
Closing market capitalisation of ordinary shares ($B)
48.1 80.8 73.7 -40% -35%
Total shareholder returns (TSR)
-38.7% 12.9% -4.8% large large



As at Mar 20
Credit Ratings

Short-
Term
Long-
Term Outlook
Moody's Investor Services P1 Aa3 Stable
Standard & Poor's A-1+ AA- Stable
Fitch Ratings F1+ AA- Negative

On 7 April 2020 Fitch Ratings downgraded the Short-term credit rating to F1 and the Long-term credit rating to A+. The outlook remains negative.
On 8 April 2020 Standard & Poor’s revised the outlook to negative.

SUMMARY


18
This page has been left blank intentionally

GROUP RESULTS


19

CONTENTS Page

Cash Profit 20
Net Interest Income - continuing operations 21
Other Operating Income - continuing operations 23
Operating Expenses - continuing operations 26
Software Capitalisation - continuing operations 28
Credit Risk - continuing operations 29
Income Tax Expense - continuing operations 35
Impact of Foreign Currency Translation - continuing operations 36
Earnings Related Hedges - continuing operations 37
Earnings per Share - continuing operations 37
Dividends - continuing operations 38
Condensed Balance Sheet - including discontinued operations 39
Liquidity Risk - including discontinued operations 40
Funding - including discontinued operations 41
Capital Management - including discontinued operations 42
Leverage Ratio - including discontinued operations 44
Capital Management - Other Developments 45

GROUP RESULTS


20
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 139 to 140 for further details). The adjustments made in arriving at cash profit are included in statutory
profit which is subject to review within the context of the external auditor’s review of the Condensed Consolidated Financial Statements. Cash profit is not
subject to review 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.
This 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 Half Year Results on page 8.

Half Year

Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Statutory profit attributable to shareholders of the Company from continuing
operations
1,635 3,053 3,243 -46% -50%

Adjustments between statutory profit and cash profit
1

Revaluation of policy liabilities - - 77 n/a -100%
Economic hedges
(340) (67) 185 large large
Revenue and expense hedges
120 (79) 60 large 100%
Structured credit intermediation trades
(2) (1) (1) 100% 100%
Total adjustments between statutory profit and cash profit from
continuing operations
(222) (147) 321 51% large
Cash profit from continuing operations 1,413 2,906 3,564 -51% -60%
1.
Refer to pages 71 to 75 for analysis of the adjustments between statutory profit and cash profit.

Group performance - cash profit

Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net interest income 7,222 7,040 7,299 3% -1%
Other operating income
1,357 2,243 2,447 -40% -45%
Operating income
8,579 9,283 9,746 -8% -12%
Operating expenses (4,605) (4,706) (4,365) -2% 5%
Profit before credit impairment and income tax
3,974 4,577 5,381 -13% -26%
Credit impairment charge (1,674) (402) (393) large large
Profit before income tax
2,300 4,175 4,988 -45% -54%
Income tax expense (886) (1,263) (1,415) -30% -37%
Non-controlling interests
(1) (6) (9) -83% -89%
Cash profit from continuing operations
1,413 2,906 3,564 -51% -60%

Half Year Movement
Cash profit/(loss) by Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

1,214 1,492 1,703

-19% -29%
Institutional
610 816 1,012 -25% -40%
New Zealand
567 646 753 -12% -25%
Pacific
20 26 33 -23% -39%
TSO and Group Centre
(998) (74) 63 large large
Cash profit from continuing operations
1,413 2,906 3,564 -51% -60%

GROUP RESULTS


21
Net Interest Income - continuing operations



Half Year

Movement
Group

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Cash net interest income
1
7,222 7,040 7,299 3% -1%
Average interest earning assets
2
856,652 814,831 811,528 5% 6%
Average deposits and other borrowings
2
669,342 642,448 635,822 4% 5%
Net interest margin (%) - cash
1.69 1.72 1.80 -3 bps -11 bps

Group (excluding Markets business unit)

Cash net interest income
1
6,822 6,829 7,019 0% -3%
Average interest earning assets
2
576,494 566,907 563,579 2% 2%
Average deposits and other borrowings
2
477,861 462,283 459,478 3% 4%
Net interest margin (%) - cash
2.37 2.40 2.50 -3 bps -13 bps



Half Year

Movement
Cash profit net interest margin by major division
1


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

Net interest margin (%) - cash

2.65 2.58 2.61

7 bps 4 bps
Average interest earning assets

305,981 309,684 314,215

-1% -3%
Average deposits and other borrowings

210,214 204,791 202,765

3% 4%




Institutional

Net interest margin (%) - cash

0.78 0.80 0.85

-2 bps -7 bps
Average interest earning assets
2


415,490 375,573 372,270

11% 12%
Average deposits and other borrowings
2


305,506 290,948 281,770

5% 8%




New Zealand

Net interest margin (%) - cash

2.31 2.27 2.39

4 bps -8 bps
Average interest earning assets
2


121,955 118,714 116,201

3% 5%
Average deposits and other borrowings
2
90,329 86,970 86,244 4% 5%
1.
Includes large/notable items of -$43 million for the March 2020 half (Sep 19 half: -$98 million; Mar 19 half: $7 million). Refer to pages 13 to 16 for further details on large/notable items. Also
includes the major bank levy of -$196 million for the March 2020 half (Sep 19 half: -$185 million; Mar 19 half: -$178 million).
2.
Average balance sheet amounts include assets and liabilities classified as held for sale from continuing operations in the September 2019 half and the March 2019 half.
Group net interest margin - March 2020 Half Year v March 2019 Half Year

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

 March 2020 v March 2019
Net interest margin (-11 bps)
 Asset mix and funding mix (-2 bps): unfavourable asset mix from the impacts of customer switching from interest only to principal and interest
home loans in the Australia Retail and Commercial division, unfavourable mix impacts from a higher proportion of Institutional lending, partly
offset by favourable deposit mix.
 Wholesale funding costs (+3 bps): favourable short term funding spreads and broadly stable long term funding costs.
 Deposit pricing (-9 bps): margin compression from lower interest rates in all divisions.
 Assets pricing (+5 bps): re-pricing of home loans in the Australia Retail and Commercial division, partially offset by increased competition in all
divisions.
 Treasury (-6 bps): lower earnings on capital and replicated deposits reflecting a lower interest rate environment.

GROUP RESULTS


22
 Markets Balance Sheet activities (-1 bps): growth in lower interest margin Markets Balance Sheet trading activities and the impact of flattening
yield curve. This was partially offset by higher net interest income from Rates and Balance Sheet activity.
 Large/notable items (-1 bps): the impact of lease-related items in the Mar 2020 half and divested businesses in the Mar 2019 half.
Average interest earning assets (+$45.1 billion or +6%)
 Average net loans and advances (+$18.7 billion or +3%): 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 (+$12.1 billion or +11%): increase primarily driven by higher liquid assets and trading securities in
Markets and the impact of foreign currency translation movements.
 Average cash and other liquids (+$14.3 billion or +13%): increase primarily driven by higher central bank cash balances, higher collateral
balances and the impact of foreign currency translation movements.
Average deposits and other borrowings (+$33.5 billion or +5%)
 Average deposits and other borrowings (+$33.5 billion or +5%): increase driven by growth in deposits in all divisions, but particularly in
Institutional division, and the impact of foreign currency translation movements.

Group net interest margin - March 2020 Half Year v September 2019 Half Year

1. Markets Balance Sheet activities includes the impact of discretionary liquid assets and other Balance Sheet activities.
 March 2020 v September 2019
Net interest margin (-3 bps)
 Asset mix and funding mix (0 bps): unfavourable product mix from the impacts of customer switching from interest only to principal and interest
home loans in the Australia Retail and Commercial division, unfavourable mix impacts from a higher proportion of Institutional lending offset by
favourable deposit mix.
 Wholesale funding costs (+1 bps): favourable short term funding spreads and broadly stable long term funding costs.
 Deposit pricing (-5 bps): margin compression from lower rates in all divisions.
 Assets pricing (+4 bps): re-pricing in Australia Retail and Commercial and New Zealand divisions, partially offset by increased competition
applying to all divisions.
 Treasury (-4 bps): lower earnings on capital and replicated deposits reflecting a lower interest rate environment.
 Markets Balance Sheet activities (0 bps): growth in the lower margin Markets Balance Sheet trading activities offset by higher net interest income
from Rates and Balance Sheet activity.
 Large/notable (+1 bps): the impact of higher customer remediation in the September 2019 half.
Average interest earning assets (+$41.8 billion or 5%)
 Average net loans and advances (+$14.7 billion or +2%): 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 (+$8.1 billion or +7%): increase primarily driven by an increase in liquid assets in Markets and the
impact of foreign currency translation movements.
 Average cash and other liquids (+$19.0 billion or 18%): increase primarily driven by higher central bank cash balances, and the impact of foreign
currency translation movements.
Average deposits and other borrowings (+$26.9 billion or +4%)
 Average deposits and other borrowings (+$26.9 billion or +4%): increase driven predominantly by growth in the Institutional division, and the
impact of foreign currency translation movements.

GROUP RESULTS


23
Other Operating Income - continuing operations




Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net fee and commission income
1


1,135 1,275 1,218 -11% -7%
Markets other operating income

764 619 667 23% 15%
Share of associates' profit
1


135 131 131 3% 3%
Other
1,2


(677) 218 431 large large
Total cash other operating income from continuing operations
3
1,357 2,243 2,447 -40% -45%

Half Year Movement
Other operating income by division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

595 696 651 -15% -9%
Institutional
1,167 1,066 1,126 9% 4%
New Zealand
247 278 302 -11% -18%
Pacific
50 54 50 -7% 0%
TSO and Group Centre
(702) 149 318 large large
Total cash other operating income from continuing operations
3
1,357 2,243 2,447 -40% -45%
1.
Excluding Markets.
2.
Includes foreign exchange earnings, net income from insurance business and impairment of Asian associates.
3.
Includes large/notable items of -$839 million for the March 2020 half (Sep 19 half: $3 million; Mar 19 half: $231 million). Refer to items on pages 13 to 16 for further details on large/notable
items.
Other operating income - March 2020 Half Year v March 2019 Half Year


Markets income

Half Year Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net interest income 400 211 280 90% 43%
Other operating income
764 619 667 23% 15%
Total cash Markets income from continuing operations
1,164 830 947 40% 23%

GROUP RESULTS


24
Other operating income (excluding large/notable items)

Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Net fee and commission income
1


1,164 1,293 1,244 -10% -6%
Markets other operating income

764 618 665 24% 15%
Share of associates' profit
1


135 131 131 3% 3%
Other
1,2


133 198 176 -33% -24%
Total cash other operating income from continuing operations
2,196 2,240 2,216 -2% -1%

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

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

625 704 693 -11% -10%
Institutional
1,163 1,064 1,109 9% 5%
New Zealand
255 287 280 -11% -9%
Pacific
50 54 50 -7% 0%
TSO and Group Centre
103 131 84 -21% 23%
Total cash other operating income from continuing operations
2,196 2,240 2,216 -2% -1%
1.
Excluding Markets.
2.
Includes foreign exchange earnings and net income from insurance business.

 March 2020 v March 2019
Other operating income decreased by $1,090 million (-45%).
Net fee and commission income (-$83 million or -7%)
 $56 million decrease in the Australia Retail and Commercial division was primarily driven by the full period impact of fees removed in the prior
period and lower volume related fees.
 $28 million decrease in the New Zealand division primarily due to an increase in commission costs and a reduction in rebates.
 $1 million increase due to other small items including lower customer remediation in the March 2020 half and higher commitment fees in the
Transaction Banking business, partially offset by decreases due to the impact of divested business results and the slowdown of loan syndication
activities.
Markets income (+$217 million or +23%)
 $48 million increase in Franchise Sales due to demand from large corporate customers and financial institutions for FX, Commodities and Rates
products.
 $187 million increase in Franchise Trading across all asset classes primarily attributable to improved trading conditions, increased volumes,
particularly in International, and favourable derivative valuation adjustments.
 $18 million decrease in Balance Sheet trading primarily attributable to cuts in the Official Cash Rate in Australia.
Share of associates’ profit (+$4 million or +3%)
 $4 million increase in profits from associates of which $4 million relates to PT Panin and $5 million relates to AmBank, partially offset by a $4
million reduction following the sale of Paymark.
Other (-$1,108 million)
 $815 million decrease due to the impairment of PT Panin of $220 million and AmBank of $595 million.
 $259 million decrease due to gains on sale ($234 million) from One Path Life NZ and Paymark in the March 2019 half and the impact of divested
business results ($25 million) in the March 2019 half.
 $34 million decrease in Institutional division due to widening credit spread impacts on loans measured at fair value.
 Other small items including a gain on sale of an investment security in the March 2019 half and higher customer remediation in the March 2020
half were offset by the gross up of sublease income on adoption of the new leasing standard (comparatives not restated).
Excluding large/notable items, other operating income decreased $20 million (-1%).

GROUP RESULTS


25
 March 2020 v September 2019
Other operating income decreased by $886 million (-40%).
Net fee and commission income (-$140 million or -11%)
 $84 million decrease in the Australia Retail and Commercial division was primarily driven by seasonality of unsecured portfolio rebates and
incentives, and lower volume related fees.
 $38 million decrease in the New Zealand division due to lower insurance commissions and higher commission costs.
 $18 million decrease due to other small items including the impact of divested business results and a decrease in the Institutional division due to
higher merchant scheme fees in the March 2020 half.
Markets income (+$334 million or +40%)
 $46 million increase in Franchise Sales due to demand from large corporate customers and financial institutions for FX, Commodities and Rates
products.
 $240 million increase in Franchise Trading across all asset classes. Trading conditions supported the franchise from the start of the half, and
then the increase in volatility in the second quarter drove higher risk premiums, which was combined with trading volume growth across all asset
classes. This was partially offset by lower derivative valuation adjustments.
 $48 million increase in Balance Sheet trading driven by steepening of yield curves.
Share of associates’ profit (+$4 million or +3%)
 $4 million increase in profits from associates of which a $11 million increase relates to PT Panin partially offset by a decrease of $9 million
relating to AmBank.
Other (-$895 million)
 $815 million decrease due to the impairment of PT Panin of $220 million and AmBank of $595 million.
 $44 million decrease in the Institutional division primarily due to widening credit spread impacts on loans measured at fair value.
 $27 million decrease due to dividend income from Bank of Tianjin in the September 2019 half.
 $21 million decrease due to gains on sale ($18 million) from Cambodia and OnePath Life (NZ) in the September 2019 half and the impact of
divested business results ($3 million) in the September 2019 half.
 $12 million increase due to other smaller items including an increase from the gross up of sublease income on the adoption of the new leasing
standard and higher incentive receipts, partially offset by higher customer remediation in the March 2020 half.
Excluding large/notable items, other operating income decreased $44 million (-2%).

GROUP RESULTS


26
Operating Expenses - continuing operations


Half Year Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Personnel 2,465 2,395 2,370 3% 4%
Premises
405 389 406 4% 0%
Technology (excluding personnel)
839 770 764 9% 10%
Restructuring
105 26 51 large large
Other
791 1,126 774 -30% 2%
Total cash operating expenses from continuing operations
1
4,605 4,706 4,365 -2% 5%
Full time equivalent staff (FTE) from continuing operations 37,834 37,588 37,364 1% 1%
Average full time equivalent staff (FTE) from continuing operations 37,759 37,405 37,558 1% 1%



Half Year

Movement
Expenses by division

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

2,065 2,161 1,913

-4% 8%
Institutional

1,290 1,347 1,320

-4% -2%
New Zealand

690 674 612

2% 13%
Pacific

76 80 70

-5% 9%
TSO and Group Centre

484 444 450

9% 8%
Total cash operating expenses from continuing operations
1
4,605 4,706 4,365 -2% 5%



Half Year

Movement
FTE by division

Mar 20 Sep 19 Mar 19

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

14,061 13,903 13,660

1% 3%
Institutional

5,350 5,468 6,085

-2% -12%
New Zealand

6,103 6,121 6,003

0% 2%
Pacific

1,108 1,086 1,096

2% 1%
TSO and Group Centre

11,212 11,010 10,520

2% 7%
Total FTE from continuing operations
37,834 37,588 37,364 1% 1%
Average FTE from continuing operations 37,759 37,405 37,558 1% 1%
1.
Includes large/notable items of $250 million for the March 2020 half (Sep 19 half: $384 million; Mar 19 half: $125 million). Refer to items on pages 13 to 16 for further details on large/notable
items.
Operating expenses - March 2020 Half Year v March 2019 Half Year

GROUP RESULTS


27
Expenses (excluding large/notable items)

Half Year Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Personnel 2,413 2,341 2,352 3% 3%
Premises
379 387 403 -2% -6%
Technology (excluding personnel)
790 768 762 3% 4%
Restructuring
- - - n/a n/a
Other
773 826 723 -6% 7%
Total cash operating expenses from continuing operations
4,355 4,322 4,240 1% 3%

Expenses by division (excluding large/notable items)

Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial

1,887 1,885 1,858

0% 2%
Institutional

1,275 1,282 1,293

-1% -1%
New Zealand

671 650 604

3% 11%
Pacific

74 73 70

1% 6%
TSO and Group Centre

448 432 415

4% 8%
Total cash operating expenses from continuing operations
4,355 4,322 4,240 1% 3%


 March 2020 v March 2019
Operating expenses increased by $240 million (+5%).
 Personnel expenses increased $95 million (+4%) largely driven by higher investment spend in the New Zealand and Australia Retail and
Commercial divisions, along with wage inflation, higher customer remediation ($48 million) and adverse foreign currency translation movements.
This was partially offset by lower variable remuneration and business as usual personnel expenses.
 Premises expense decreased $1 million largely driven by the consolidation of our property footprint offset by a change in accounting treatment
associated with the new leasing standard (comparatives not restated).
 Technology expenses increased $75 million (+10%) largely as a result of a change in accounting treatment associated with the new leasing
standard (comparatives not restated) and an increase in investment spend.
 Restructuring expenses increased $54 million largely relating to business and property changes in the Australia Retail and Commercial division.
 Other expenses increased $17 million (+2%) largely due to higher investment spend offset by lower customer remediation ($13 million).
Excluding large/notable items, operating expenses increased $115 million (+3%).
 March 2020 v September 2019
Operating expenses decreased by $101 million (-2%).
 Personnel expenses increased $70 million (+3%) largely driven by wage inflation, higher customer remediation ($18 million), higher investment
spend in the New Zealand and Australia Retail and Commercial divisions and adverse foreign currency translation movements. This was
partially offset by lower variable remuneration and business as usual personnel expenses.
 Premises expenses increased $16 million (+4%) largely as a result of a change in accounting treatment associated with the new leasing
standard (comparatives not restated). This was partially offset by lower premises expense in our International network.
 Technology expenses increased $69 million (+9%) largely as a result of a change in accounting treatment associated with the new leasing
standard (comparatives not restated) and higher investment spend.
 Restructuring expenses increased $79 million largely relating to business and property changes in the Australia Retail and Commercial division.
 Other expenses decreased $335 million (-30%) largely driven by lower customer remediation ($284 million), a reduction in consulting spend and
lower marketing spend which is typically higher in the September half.
Excluding large/notable items, operating expenses increased $33 million (+1%).

GROUP RESULTS


28
Software Capitalisation - continuing operations
As at 31 March 2020, the Group’s intangible assets included $1,263 million of costs incurred to acquire and develop software. Details are presented in
the table below:

Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Balance at start of period 1,323 1,368 1,421 -3% -7%
Software capitalised during the period
181 222 199 -18% -9%
Amortisation during the period
(241) (265) (252) -9% -4%
Software impaired/written-off
(2) (1) (3) 100% -33%
Foreign currency translation movements
2 (1) 3 large -33%
Total capitalised software from continuing operations
1,263 1,323 1,368 -5% -8%

Net book value by division As at

Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 209 260 306 -20% -32%
Institutional
196 223 246 -12% -20%
New Zealand
8 7 14 14% -43%
TSO and Group Centre
850 833 802 2% 6%
Total from continuing operations
1,263 1,323 1,368 -5% -8%

GROUP RESULTS


29
Credit Risk – continuing operations
The tables below provide information about the credit provision of the Group.
The impact and duration of COVID-19 on the global economy and how governments, businesses and consumers respond is uncertain. The Expected
Credit Loss (ECL) charge for the half year and ECL provisions as at 31 March 2020 are therefore largely based on management judgement with respect
to the impacts of COVID-19 on the Group’s credit exposures. The judgements and assumptions made by management are based on a variety of internal
and external information, as well as the Group’s experience with respect to the performance of the portfolio under previous stressed conditions. The
Group also considers applying temporary adjustments to the ECL for recent and transitory conditions applying to segments of the portfolio.

Credit impairment charge/(release)



Collectively assessed

Half Year Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 525 (39) 46 large large
Institutional 369 33 (23) large large
New Zealand
144 17 (5) large large
Pacific
10 (6) (6) large large
TSO and Group Centre
- (1) 1 -100% -100%
Total 1,048 4 13 large large


Individually assessed

Half Year Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 318 355 350 -10% -9%
Institutional 272 - (12) n/a large
New Zealand
35 40 35 -13% 0%
Pacific
1 3 8 -67% -88%
TSO and Group Centre
- - (1) n/a -100%
Total 626 398 380 57% 65%

Total

Half Year Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 843 316 396 large large
Institutional 641 33 (35) large large
New Zealand
179 57 30 large large
Pacific
11 (3) 2 large large
TSO and Group Centre
- (1) - -100% n/a
Total 1,674 402 393 large large

GROUP RESULTS


30
Credit impairment charge/(release), cont'd

March 2020 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
105 395 25 525 511 (193) 318 843
Institutional
203 177 (11) 369 327 (55) 272 641
New Zealand
39 86 19 144 59 (24) 35 179
Pacific
7 3 - 10 3 (2) 1 11
TSO and Group Centre
- - - - - - - -
Total
354 661 33 1,048 900 (274) 626 1,674


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
 March 2020 v March 2019
The collectively assessed credit impairment charge increased by $1,035 million primarily driven by a $479 million increase in the Australia Retail and
Commercial division, a $392 million increase in the Institutional division and a $149 million increase in the New Zealand division. The significant
increases across all divisions are primarily due to forward-looking impact of material deterioration in the economic outlook due to the COVID-19
pandemic.
 March 2020 v September 2019
The collectively assessed credit impairment charge increased by $1,044 million primarily driven by a $564 million increase in the Australia Retail and
Commercial division, a $336 million increase in the Institutional division and a $127 million increase in the New Zealand division. The significant
increases across all divisions are primarily due to forward-looking impact of material deterioration in the economic outlook due to the COVID-19
pandemic.

GROUP RESULTS


31
Individually assessed credit impairment charge
 March 2020 v March 2019
The individually assessed credit impairment charge increased by $246 million primarily due to a small number of new single name impairments in the
Institutional division. This was partially offset by improved mortgage delinquencies in the Australia retail portfolios combined with ongoing lower
portfolio growth in the unsecured portfolio.
 March 2020 v September 2019
The individually assessed credit impairment charge increased by $228 million primarily due to a small number of new single name impairments in the
Institutional division. This was partially offset by improved mortgage delinquencies in the Australia retail portfolios combined with ongoing lower
portfolio growth in the unsecured portfolio.

Allowance for expected credit losses
1,2


Collectively assessed

As at Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 2,320 1,795 1,834 29% 26%
Institutional 1,590 1,169 1,132 36% 40%
New Zealand
541 374 369 45% 47%
Pacific
50 38 43 32% 16%
Total 4,501 3,376 3,378 33% 33%



Individually assessed

As at Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 582 558 586 4% -1%
Institutional 406 160 208 large 95%
New Zealand
79 72 73 10% 8%
Pacific
26 24 24 8% 8%
Total 1,093 814 891 34% 23%



Total provision

As at Movement
Division
Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
Australia Retail and Commercial 2,902 2,353 2,420 23% 20%
Institutional 1,996 1,329 1,340 50% 49%
New Zealand
620 446 442 39% 40%
Pacific
76 62 67 23% 13%
Total 5,594 4,190 4,269 34% 31%
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.

GROUP RESULTS


32
Allowance for expected credit losses, cont'd
1,2


As at Mar 20

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 474 1,477 369 2,320 582 2,902
Institutional
1,115 444 31 1,590 406 1,996
New Zealand
200 279 62 541 79 620
Pacific
26 13 11 50 26 76
Total
1,815 2,213 473 4,501 1,093 5,594

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 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 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.

GROUP RESULTS


33
Long-Run Loss Rates
Management believe that disclosure of modelled long-run historical 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 long-run loss
methodology used for economic profit is an internal measure and is not based on the credit loss principles of AASB 9 Financial Instruments. In addition,
given it is based on an average historical long-run loss rate it does not reflect the potential forward looking impacts associated with COVID-19.


As at
Long-run loss as a % of gross lending assets
Mar 20 Sep 19 Mar 19
Australia Retail and Commercial division

0.28% 0.29% 0.29%
New Zealand division

0.19% 0.18% 0.19%
Institutional division

0.25% 0.25% 0.27%
Total Group

0.26% 0.26% 0.27%


Gross Impaired Assets
1





As at

Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Impaired loans
2
2,209 1,711 1,803 29% 23%
Restructured items
3
226 267 264 -15% -14%
Non-performing commitments and contingencies
2
164 51 61 large large
Gross impaired assets
2,599 2,029 2,128 28% 22%
Individually assessed provisions
Impaired loans
(1,055) (791) (865) 33% 22%
Non-performing commitments and contingencies
(38) (23) (26) 65% 46%
Net impaired assets
1,506 1,215 1,237 24% 22%

Gross impaired assets by division

Australia Retail and Commercial 1,544 1,468 1,463 5% 6%
Institutional
742 265 373 large 99%
New Zealand
264 245 238 8% 11%
Pacific
49 51 53 -4% -8%
TSO and Group Centre
- - 1 n/a -100%
Gross impaired assets
2,599 2,029 2,128 28% 22%

Gross impaired assets by size of exposure
Less than $10 million 1,680 1,593 1,611 5% 4%
$10 million to $100 million
349 247 328 41% 6%
Greater than $100 million
570 189 189 large large
Gross impaired assets
2,599 2,029 2,128 28% 22%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale.
2.
Impaired loans and non-performing commitments and contingencies do not include exposures which are included in collectively assessed Stage 3 ECL, which comprise unsecured retail
exposures greater than 90 days past due and defaulted but well secured exposures.
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.
 March 2020 v March 2019
Gross impaired assets increased $471 million (22%) driven by the Institutional division ($369 million), Australia Retail and Commercial division ($81
million) and New Zealand division ($26 million). The increase in the Institutional division relates to impairments on a small number of single name
exposures. The Australia Retail and Commercial division increase was driven by the implementation of a more market responsive collateral valuation
methodology for the Australian home loan portfolio combined with a single name exposure in the commercial portfolio. The increase in New Zealand
is driven by impairments on a small number of single name commercial exposures.
 March 2020 v September 2019
Gross impaired assets increased $570 million (28%) driven by the Institutional division ($477 million), Australia Retail and Commercial division ($76
million) and New Zealand division ($19 million). The increase in the Institutional division relates to impairments on a small number of single name
exposures. The Australia Retail and Commercial division increase was driven by the implementation of a more market responsive collateral valuation
methodology for the Australian home loan portfolio combined with a single name exposure in the commercial portfolio.
The Group’s individually assessed provision coverage ratio on impaired assets was 42.1% at 31 March 2020 (Sep 19: 40.1%; Mar 19: 41.9%).

GROUP RESULTS


34
New Impaired Assets
1



Half Year

Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Impaired loans

1,407 1,070 857

31% 64%
Restructured items

23 29 13

-21% 77%
Non-performing commitments and contingencies
140 18 20 large large
Total new impaired assets
1,570 1,117 890 41% 76%
New impaired assets by division
Australia Retail and Commercial 870 916 715 -5% 22%
Institutional
571 37 41 large large
New Zealand
125 158 120 -21% 4%
Pacific
4 6 14 -33% -71%
TSO and Group Centre
- - - n/a n/a
Total new impaired assets
1,570 1,117 890 41% 76%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale.
 March 2020 v March 2019
New impaired assets increased $680 million (76%) with increases in Institutional division ($530 million) related to a small number of impairments of
single name exposures. Australia Retail and Commercial division increases ($155 million) driven by the implementation of a more market responsive
collateral valuation methodology for the Australian home loan portfolio combined with a single name exposure in the commercial portfolio.
 March 2020 v September 2019
New impaired assets increased by $453 million (41%) with increases in Institutional division ($534 million) related to a small number of impairments
of single name exposures. This was partially offset by Australia Retail and Commercial division (-$46 million) driven by ongoing lower growth in the
unsecured and small business banking portfolio.



Ageing analysis of net loans and advances that are past due but not impaired
1,2,3



As at Movement

Mar 20
$M
Sep 19
$M
Mar 19
$M
Mar 20
v. Sep 19
Mar 20
v. Mar 19
1-29 days 9,114 8,383 9,558 9% -5%
30-59 days
2,772 2,255 2,993 23% -7%
60-89 days
1,368 1,369 1,436 0% -5%
>90 days
3,621 3,744 3,328 -3% 9%
Total
16,875 15,751 17,315 7% -3%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale.
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 was not restated for the change in methodology.
3.
Excludes eligible customers that applied and were granted or are in the process of being granted a 6 month repayment deferral package provided to customers impacted by COVID-19 as at
31 March 2020. Customers who were 30 days past due or greater were not eligible for the 6 month repayment deferral packages.
 March 2020 v March 2019
Net loans and advances past due but not impaired decreased $440 million primarily driven by Australia Retail and Commercial division home loan
portfolio in the 1-29 days segment.
 March 2020 v September 2019
Net loans and advances past due but not impaired increased $1,124 million primarily driven by Australia Retail and Commercial division and New
Zealand division home loan portfolio in the 1-29 days and 30-59 days segments due to seasonality.

GROUP RESULTS


35
Income Tax Expense - continuing operations



Half Year

Movement


Mar 20
$M
Sep 19
$M
Mar 19
$M

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Income tax expense on cash profit

886 1,263 1,415 -30% -37%
Effective tax rate (cash profit)
38.5% 30.3% 28.4%
 March 2020 v March 2019
The effective tax rate has increased from 28.4% to 38.5%. The increase of 1,010 bps is primarily due to the non-tax deductible impairment of
investments in AmBank and PT Panin (+1,065 bps).
 March 2020 v September 2019
The effective tax rate has increased from 30.3% to 38.5%. The increase of 820 bps is primarily due to non-tax deductible impairment of investments
in AmBank and PT Panin (+1,065 bps) partially offset by the impact of customer remediation (-146 bps) in the September 2019 half.

GROUP RESULTS


36
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 - March 2020 Half Year vs March 2019 Half Year

Half Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Mar 20
$M
Mar 19
$M
Mar 19
$M
Mar 19
$M
Mar 20
v. Mar 19
Mar 20
v. Mar 19
Net interest income 7,222 7,299 55 7,354 -1% -2%
Other operating income
1,357 2,447 41 2,488 -45% -45%
Operating income
8,579 9,746 96 9,842 -12% -13%
Operating expenses (4,605) (4,365) (57) (4,422) 5% 4%
Profit before credit impairment and income tax
3,974 5,381 39 5,420 -26% -27%
Credit impairment charge (1,674) (393) 2 (391) large large
Profit before income tax
2,300 4,988 41 5,029 -54% -54%
Income tax expense (886) (1,415) (7) (1,422) -37% -38%
Non-controlling interests
(1) (9) (1) (10) -89% -90%
Cash profit from continuing operations
1,413 3,564 33 3,597 -60% -61%
Balance Sheet
Net loans and advances
1
656,609 610,169 10,585 620,754 8% 6%

Cash Profit - March 2020 Half Year vs September 2019 Half Year
Half Year Movement

Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted

Mar 20
$M
Sep 19
$M
Sep 19
$M
Sep 19
$M
Mar 20
v. Sep 19
Mar 20
v. Sep 19
Net interest income 7,222 7,040 29 7,069 3% 2%
Other operating income
1,357 2,243 22 2,265 -40% -40%
Operating income
8,579 9,283 51 9,334 -8% -8%
Operating expenses (4,605) (4,706) (30) (4,736) -2% -3%
Profit before credit impairment and income tax
3,974 4,577 21 4,598 -13% -14%
Credit impairment charge (1,674) (402) (2) (404) large large
Profit before income tax
2,300 4,175 19 4,194 -45% -45%
Income tax expense (886) (1,263) (6) (1,269) -30% -30%
Non-controlling interests
(1) (6) - (6) -83% -83%
Cash profit from continuing operations
1,413 2,906 13 2,919 -51% -52%
Balance Sheet
Net loans and advances
1
656,609 615,258 11,760 627,018 7% 5%
1.
Balance sheet amounts include assets and liabilities reclassified as held for sale from continuing and discontinued operations.

GROUP RESULTS


37
Earnings Related Hedges – continuing operations
Where it is considered appropriate, the Group takes out economic hedges against larger foreign exchange denominated revenue streams (primarily New
Zealand Dollar, US Dollar and US Dollar correlated). New Zealand Dollar exposure relates to the New Zealand geography and USD exposures relate to
Asia, Pacific, Europe & America. Details of these hedges are set out below.


Half Year
NZD Economic hedges
Mar 20
$M
Sep 19
$M
Mar 19
$M
Net open NZD position (notional principal)
1
3,165 3,451 3,361
Amount taken to income (pre-tax statutory basis)
2
(156) 115 (105)
Amount taken to income (pre-tax cash basis)
3
(13) (18) (25)
USD Economic hedges
Net open USD position (notional principal)
1
662 769 561
Amount taken to income (pre-tax statutory basis)
2
(39) (37) (2)
Amount taken to income (pre-tax cash basis)
3
(15) (8) -
1.
Value in AUD at contracted rate.
2.
Unrealised valuation movement plus realised revenue from matured or closed out hedges.
3.
Realised revenue from closed out hedges.
As at 31 March 2020, the following hedges were in place to partially hedge future earnings against adverse movements in exchange rates:
 NZD 3.3 billion at a forward rate of approximately NZD 1.05/AUD.
 USD 0.4 billion at a forward rate of approximately USD 0.67/AUD.
During the March 2020 half:

 NZD 1.1 billion of economic hedges matured and a realised loss of $13 million (pre-tax) was recorded in cash profit.
 USD 0.2 billion of economic hedges matured and a realised loss of $15 million (pre-tax) was recorded in cash profit.
 An unrealised loss of $167 million (pre-tax) on the outstanding NZD and USD economic hedges were recorded in the statutory Income Statement
during the year. This unrealised loss has been treated as an adjustment to statutory profit in calculating cash profit as these are hedges of future
NZD and USD revenues.


Earnings per Share - continuing operations


Half Year

Movement

Mar 20 Sep 19 Mar 19

Mar 20
v. Sep 19
Mar 20
v. Mar 19
Cash earnings per share (cents) from continuing operations

Basic

49.9 102.7 124.8 -51% -60%
Diluted
47.5 98.7 118.4 -52% -60%
Cash weighted average number of ordinary shares (M)
1

Basic 2,830.6 2,829.3 2,856.9 0% -1%
Diluted
3,238.6 3,075.5 3,125.8 5% 4%
Cash profit from continuing operations ($M) 1,413 2,906 3,564 -51% -60%
Cash profit from continuing operations used in calculating diluted
cash earnings per share ($M)
1,537 3,037 3,701 -49% -58%
1.
Cash weighted average number of ordinary shares for the comparative periods includes ANZ shares previously held in Wealth Australia discontinued operations as treasury shares. These
shares ceased to be treasury shares on completion of the successor fund transfer on 13 April 2019 in preparation for the disposal of discontinued operations.