News Release – ANZ NZ 2020 half-year result

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
ANZ Centre Melbourne, Level 9A, 833 Collins Street, Docklands VIC 3008
News Release
For release: Thursday, 30 April 2020

ANZ NZ 2020 half-year result
shows early impacts of Covid-19

ANZ New Zealand
1
today reported statutory
2
net profit after tax (NPAT) of NZ$789 million
for the six months to 31 March 2020 – a 15% decrease on the corresponding half in the
2019 financial year.

Cash NPAT was NZ$677 million, down 39%, reflecting a significant uplift in credit provision
charges due to changes in the economic environment, together with benefits in the prior
comparable period
3
(PCP) from the sales of OnePath Life (NZ) Limited and ANZ New
Zealand’s share in Paymark Limited.

These sales partly contributed to ANZ New Zealand’s 13% decline in revenue PCP. Expenses
increased 13%, largely driven by increased regulatory compliance spend. Both customer
deposits and gross lending were up, 5% and 3% respectively.

As at 31 March 2020, the ANZ Bank New Zealand Limited group remains well capitalised
with a total capital ratio of 13.9%, up from 13.6% as at 30 September 2019.

ANZ New Zealand Chief Executive Officer Antonia Watson said banks are a reflection of the
financial well-being of customers and the economies in which they operate.

“New Zealand’s response to Covid-19 has resulted in extraordinary changes to the
economy, the fortunes of businesses and the lives of customers,” Ms Watson said.

“While the Covid-19 crisis only began in earnest in New Zealand at the end of March the
collective provision has increased substantially to recognise the possible impacts on
economic activity as we go through FY20 and beyond. The extent to which this impact
continues in the second half will depend on how and when New Zealand fully emerges from
lockdown.

“New Zealand has made much better progress in fighting the virus than nearly all countries,
and that potentially paves the way to a quicker economic recovery. While that’s encouraging
there will be many challenges as the country emerges from the high level of response and
starts to rebuild.

“Banks have an important role in helping New Zealanders through the recovery, and ANZ
New Zealand is ready to take on that task.”

ANZ New Zealand has been working closely with the Government and regulators to help
business and retail customers manage their finances during a time of severely curtailed
economic and business activity.





1
ANZ New Zealand represents all of ANZ’s operations in New Zealand (NZ Geography), including ANZ Bank New
Zealand Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ.
2
Statutory profit has been adjusted to exclude non-core items to arrive at cash profit continuing basis, the result
for the ongoing business activities of ANZ New Zealand. Refer to Summary of key financial information for details of
reconciling items between cash profit and statutory profit.
3
Prior comparable period is six months ended 31 March 2020 compared with six months ended 31 March 2019
unless otherwise noted.

Key Points

All comparisons are against the prior comparable period and on a cash basis unless otherwise noted
 Statutory profit down 15% at NZ$789 million.
 Cash profit down 39% at NZ$677 million, partly impacted by the PCP sales of
OnePath Life (NZ) Limited and ANZ New Zealand’s 25% share in Paymark Limited.
 Revenue down 13%, impacted by items in the PCP.
 Expenses increased 13% due to higher regulatory compliance spend.
 Credit impairment charge up $200 million from $32 million to $232 million reflecting
Covid-19 developments.
 Total capital ratio up to 13.9%, from 13.6% as at 30 September 2019.
 Customer deposits up 5% and gross lending up 3%.
 KiwiSaver funds under management grew 4% to $14.0 billion.
 No ordinary dividend paid.

The company has implemented key Government-led initiatives, such as home loan deferrals
and the Business Finance Guarantee Scheme, as well as a major programme of reduced
fees, charges and interest rates to help customers through the Covid-19 crisis. So far, ANZ
New Zealand has provided financial help to around 30,000 personal, home and business
loan customers through repayment deferrals or adjustments covering lending of around $12
billion.
“We have helped thousands of businesses to hunker down by using financial strategies such
as deferring loan repayments or increasing overdraft facilities in preparation for potentially
further impacts in the near future,” Ms Watson said.
“We’re also a participant in the Business Finance Guarantee Scheme, a risk sharing
arrangement for small to medium enterprise lending with the Government. It is early days
for this scheme as businesses make use of the liquidity provided by the Covid-19 Wage
Subsidy Scheme, payment deferrals and temporary facilities before committing to further
term lending.
“We’re optimistic many businesses will survive, but we know the next few months will be
difficult and we’re preparing for a higher-than-usual number of loan defaults.”
Consistent with other New Zealand banks, ANZ Bank New Zealand Limited will not pay
dividends on ordinary shares or redeem non-Common Equity Tier 1 capital instruments until
the Reserve Bank of New Zealand (RBNZ) considers New Zealand’s economic outlook
sufficiently recovered following Covid-19.
“We support the RBNZ’s current efforts to strengthen the financial system and position it for
shocks such as the one the country is currently experiencing,” Ms Watson said.
“Strong regulatory oversight and lessons from previous crises have prepared us, with more
capital, greater liquidity and the ability to be flexible to the needs of our customers.”
Digital banking continues to rise as customers used ANZ New Zealand’s mobile banking app
ANZ goMoney for more than 58 million transactions in the six months to March 2020. “While
digital remains the most popular way to bank, in recent weeks our Contact Centre has been
the lifeline for customer service and received almost 25% more calls in March than in
February.”
Recent global market volatility has impacted KiwiSaver account balances and Ms Watson
said ANZ Investments had contacted 350,000 of ANZ KiwiSaver schemes’ members
reminding them investments are for the long-term, and short-term ups and downs are part
of the investment cycle.

To help support customers through Covid-19’s economic impacts, in recent weeks ANZ New
Zealand has:
 Provided financial help to around 30,000 personal, home and business loan
customers through repayment deferrals or adjustments covering lending of around
$12 billion.
 Deferred 19,600 home loan repayments and moved 20,900 home loans to interest
only.
 Granted 1,345 temporary overdraft facilities to businesses needing more working
capital, worth around $25 million.
 Become a participant bank in the Business Finance Guarantee Scheme.
 Contacted 177,000 customers over the age of 70 to offer banking support, and set
up dedicated phone teams to help solve immediate needs and guide them through
self-service/digital options.
 Reduced customer fees, charges and interest rates across a range of products
including home loan, credit card, personal loan and overdraft rates.
 Reduced commercial business and agri loans and overdraft base rates.
 Waived the fee for contactless debit transactions for around 14,000 small business
customers until the end of June, with collective savings of around $500,000.
 Contacted more than 350,000 of ANZ’s KiwiSaver schemes’ members about
significant volatility in global markets and reminding them about the long-term
nature of investments.
 Donated $2 million in total to Women’s Refuge, Age Concern New Zealand, and the
Salvation Army’s 70 foodbanks, as well as the Red Cross and a series of local
charities in the Pacific to support vulnerable people through the Covid-19 crisis.
 Started proactively contacting customers who may be having financial difficulties to
see how we can help.
 Opened 61 branches across New Zealand on Wednesday mornings to help vulnerable
customers make 31,000 transactions while the country was in lockdown.

A table of key financial information follows

For media enquiries contact Siobhan Enright, 021 991 325

Approved for distribution by ANZ’s Continuous Disclosure Committee