Chairman’s Report 1H21

Australia and New Zealand Banking Group Limited ABN 11 005 357 522


30 June 2021

Market Announcements Office
ASX Limited
Level 4
20 Bridge Street
SYDNEY NSW 2000






Chairman’s Report 1H21


The attached Chairman’s Report 1H21 is being made available to ANZ shareholders in
conjunction with the despatch of the 2021 Interim Dividend Statements. It has been
approved for distribution by ANZ’s Company Secretary.



Yours faithfully




Simon Pordage
Company Secretary
Australia and New Zealand Banking Group Limited









Corporate Governance
ANZ Centre Melbourne, Level 9, 833 Collins Street, Docklands Vic 3008
GPO Box 254, MELBOURNE VIC 3001 AUSTRALIA
www.anz.com

ANZ’s Common Equity Tier 1 Ratio, a measure of the bank’s
capital position, increased to 12.4% while Cash Return
on Equity increased to 9.7% from 7.6% in the prior half.
Earnings per share increased 27% to 105 cents per share.
Our interim dividend this year will see almost $2 billion
paid to shareholders and we have maintained our capital
ratios significantly above the Australian Prudential
Regulation Authority’s ‘unquestionably strong’ benchmark.
We also announced we would again apply no discount to
the Group’s Dividend Reinvestment Plan (DRP) and would
neutralise the impact of shares allocated under the DRP.
Performance
The actions taken by the Board and management over
the past five years to simplify and strengthen the Group
had us well placed to manage the impact of the COVID-19
pandemic on our business and our customers.
We went into the pandemic in a strong position. Despite
the uncertainty we did not need to raise capital by diluting
existing shareholdings and unlike our major competitors
we have actually reduced the number of shares on issue
over the last few years.
That strength has also meant we have been able to
support our customers through one of the most difficult
periods in generations.
While it has been a challenging period, all parts of the
business performed well.
In Australia we grew in our targeted segment of residential
housing owner occupiers and regained our place as the
third largest lender. To put this into better perspective, we
added more than 92,000 new home loan accounts during
the half in Australia.
It was a similar story in New Zealand where we grew
faster than the market and remain firmly in the number
one position. We are in a robust position in New Zealand
and remain well placed to manage the increased capital
impost required by the Reserve Bank of New Zealand.
Customer revenue in our Institutional business was solid
while trading income in our markets business reduced
after an exceptional 2020. Net interest margins were up
during the half and this off set lower lending volumes.
Credit conditions were favourable with a net credit
provision release of $491 million. This was comprised of
collective provision (CP) release of $678 million and an
individually assessed provision (IP) charge of $187 million.
The CP release was a result of the improving economic
outlook as well as some loan volume reductions. The low
IP charge refl ected the positive impact of government and
bank support packages as well as our disciplined focus on
customer selection in Institutional.
We know uncertainty remains however and our Collective
Provision balance is more than $900 million above
pre-COVID levels at $4,285 million.
COVID-19 Response
While Australia and New Zealand have both managed
the pandemic well, the experience of some of our closest
neighbours demonstrates the fragility of the situation.
India, a country in which we have a large and
dedicated workforce, has been particularly hard hit. The
management team has responded by providing our staff in
India with as much support as possible and they remain in
our thoughts.
Closer to home the situation is more stable. While
continued lockdowns will need to be carefully managed,
the economy is starting to recover strongly as businesses
are more confident with the outlook. Government support
has been critical in the recovery.
The coordination between governments, industry and
regulators has meant our customers are in a far better
position today than they would have been without this
cooperation.
Finally, I would like to acknowledge our people across our
network. The Board is deeply appreciative of how they
supported customers even at a time when many of our
staff had been personally impacted.
PAUL O’SULLIVAN
CHAIRMAN
271698_32_V3
2021 HALF YEAR HIGHLIGHTS
28% 100% 27%
$2,990 million
CASH PROFIT
(Continuing operations)
70 cents
DIVIDEND PER SHARE
105 cents
CASH EARNINGS PER ORDINARY SHARE
(Continuing operations)
2H20 $2,345 million2H20 35 cents2H20 83 cents
Note:
All figures are on Cash Profit (Continuing operations) basis, adjusted to exclude non-core items within Statutory Profit and discontinued operations.
Growth rates refer to 2021 First Half compared to the 2020 Second Half (2H20).
CHAIRMAN’S REPORT
A message from Paul O’Sullivan
Along with your Shareholder Update covering the First Half 2021 Financial Results
I’m pleased to enclose details of the Interim Dividend payment of 70 cents per
share. This dividend is double that of the Final Dividend FY20.
ANZ reported a Statutory Profit after tax for the Half Year ended 31 March 2021 of
$2,943 million, up 45% on the prior half.
This half, Cash Profit increased 28% on the prior half refl ecting the strength of our
diversified franchise, management actions and the improved economic outlook on
credit provisioning. Core banking revenue increased 3%; Markets income while strong
was lower half-on-half as market volatility and customer activity normalised. We were
once again disciplined on costs and continued to invest for the future.