ANZ NOHC Restructure – release of Explanatory Memorandum
Australia and New Zealand Banking Group Limited
9/833 Collins Street Docklands Victoria 3008 Australia
ABN 11 005 357 522
News Release
For Release: 27 October 2022
Non-Operating Holding Company Restructure Explanatory
Memorandum
ANZ refers to the announcement made yesterday in connection with the proposal to
establish a non-operating holding company and to separate ANZ’s banking and certain non-
banking businesses into two groups (Restructure).
The Restructure proposes to establish ANZ Group Holdings Limited (ANZ NOHC) as the new
listed parent company of the ANZ group by a scheme of arrangement (Scheme), and to
separate ANZ’s banking and certain non-banking businesses into the Bank Group and Non-
Bank Group.
ANZ shareholders will be asked to vote on the Scheme on 15 December 2022 (Scheme
Meeting). The Scheme Meeting will follow ANZ’s 2022 Annual General Meeting to be held
on the same day.
The Restructure aims to assist ANZ to better deliver its strategy to strengthen and grow its
core business further. If the Scheme is approved and goes ahead, ANZ shareholders will
receive the same number of shares in ANZ NOHC as their existing shares (unless the ANZ
shareholder is an ineligible foreign shareholder).
1
Explanatory Memorandum
ANZ confirms that the Explanatory Memorandum has today been registered with the
Australian Securities and Investments Commission. A copy of the Explanatory Memorandum
is attached and will also be made available on ANZ’s website
(www.anz.com/schememeeting).
The Explanatory Memorandum should be read in its entirety before making a decision on
whether or not to vote in favour of the Scheme, which is one of the steps to implement the
proposed Restructure.
Independent Expert’s report
The Explanatory Memorandum includes a copy of the independent expert’s report prepared
by Grant Samuel & Associates Pty Limited (Independent Expert).
The Independent Expert has concluded that the Restructure (including the Scheme) is in the
best interests of ANZ shareholders. The Independent Expert’s conclusion should be read in
context with the full Independent Expert’s report, which can be found in Annexure 1 of the
Explanatory Memorandum.
1
Refer to sections 4.5(c) and 7.2(g) of the Explanatory Memorandum.
Recommendation of ANZ Directors
The ANZ Directors believe the proposed Restructure (including the Scheme) is in the best
interests of ANZ shareholders. The Restructure can only go ahead if the Scheme is approved
by ANZ shareholders.
The ANZ Directors recommend ANZ shareholders vote “Yes” in favour of the Scheme to
implement the proposed Restructure.
Scheme Meeting
The Scheme Meeting will be held on 15 December 2022 immediately after ANZ’s 2022
Annual General Meeting but not before 12.30pm (Melbourne time). ANZ Shareholders may
participate in the Scheme Meeting by attending in person or online at
https://meetnow.global/ANZ2022.
Further information about the proposed Restructure (including the Scheme) can be found on
ANZ’s website www.anz.com/schememeeting.
For media enquiries contact:
Lachlan McNaughton
Senior Manager Media Relations
Tel: +61 457 494 414
Approved for distribution by ANZ’s Continuous Disclosure Committee
PROPOSED RESTRUCTURE OF THE ANZ GROUP
TO ESTABLISH A NON-OPERATING
HOLDING COMPANY
EXPLANATORY MEMORANDUM
VOTE IN FAVOUR
Your Directors unanimously recommend that you vote “Yes” in favour
of the Scheme, which is one of the steps required to implement the
proposed Restructure.
You can vote at the Scheme Meeting to be held on 15 December 2022 –
see section 1 for how you can vote, including voting online.
The Independent Expert has concluded that the Restructure
(including the Scheme) is in the best interests of ANZ Shareholders.
This is an important document and requires your immediate attention.
You should read the whole document before you decide how to vote on the Scheme,
which is one of the steps required to implement the proposed Restructure.
If you are in any doubt about how to deal with this document, you should contact
your financial, taxation, legal or other professional adviser.
Legal
Adviser
CONTENTS
LETTER FROM THE CHAIRMAN
OF THE ANZ BOARD 4
SECTION 1
WHAT DO YOU NEED TO DO? 7
SECTION 2
KEY DATES IN THE
PROPOSED RESTRUCTURE 9
SECTION 3
FREQUENTLY
ASKED QUESTIONS 12
SECTION 4
OVERVIEW OF THE
RESTRUCTURE AND EFFECT
ON THE ANZ GROUP 22
SECTION 5
RATIONALE, BENEFITS,
DISADVANTAGES AND RISKS 30
SECTION 6
FINANCIAL INFORMATION 34
SECTION 7
IMPLEMENTING
THE RESTRUCTURE 40
SECTION 8
TAX IMPLICATIONS
OF THE SCHEME 47
SECTION 9
ADDITIONAL INFORMATION 60
SECTION 10
GLOSSARY 70
ANNEXURE 1 77
ANNEXURE 2 135
ANNEXURE 3 142
ANNEXURE 4 159
ANNEXURE 5 167
ANNEXURE 6 175
CORPORATE DIRECTORY 179
General
This Explanatory Memorandum is important and requires
your immediate attention. You should read this Explanatory
Memorandum in full before making any decision as to how
to vote at the Scheme Meeting.
Nature of this Explanatory Memorandum
This Explanatory Memorandum includes the explanatory
statement for the Scheme required by subsection 412(1) of
the Corporations Act.
This Explanatory Memorandum does not constitute or
contain an offer to ANZ Shareholders, or a solicitation of an
offer from ANZ Shareholders, in any jurisdiction. This
Explanatory Memorandum is not a disclosure document
required by Chapter 6D of the Corporations Act. Subsection
708(17) of the Corporations Act provides that Chapter 6D of
the Corporations Act does not apply in relation to
arrangements under Part 5.1 of the Corporations Act
approved at a meeting held as a result of an order under
subsection 411(1). Instead, ANZ Shareholders asked to vote
on an arrangement at such a meeting must be provided
with an explanatory statement as referred to above.
ASIC, ASX and NZX
A copy of this Explanatory Memorandum has been
registered by ASIC for the purposes of subsection 412(6) of
the Corporations Act. ASIC has been given the opportunity
to comment on this Explanatory Memorandum in
accordance with subsection 411(2) of the Corporations Act.
Neither ASIC, nor any of its officers, takes any responsibility
for the contents of this Explanatory Memorandum.
ASIC has been requested to provide a statement, in
accordance with paragraph 411(17)(b) of the Corporations
Act, that it has no objection to the Scheme. If ASIC provides
that statement, it will be produced to the Court at the time
of the Court hearings to approve the Scheme.
A copy of this Explanatory Memorandum has been
provided to the ASX and NZX. Neither the ASX , NZX, nor
any of their officers, takes any responsibility for the contents
of this Explanatory Memorandum.
Important notice associated with Court order
under subsection 411(1) of the Corporations Act
The fact that, under subsection 411(1) of the Corporations
Act, the Court has ordered that a meeting be convened and
has approved the explanatory statement required to
accompany the Notice of Scheme Meeting does not mean
that the Court:
•has formed any view as to the merits of the proposed
Scheme or as to how ANZ Shareholders should vote (on
this matter ANZ Shareholders must reach their own
conclusion); or
•has prepared, or is responsible for the content of, the
explanatory statement.
APRA
A copy of this Explanatory Memorandum has been
provided to APRA. Neither APRA nor any of its officers take
any responsibility for the content of this Explanatory
Memorandum.
Notice of Scheme Meeting
The Notice of Scheme Meeting is set out in Annexure 5.
Notice of Second Court Hearing
At the Second Court Hearing, the Court will consider
whether to approve the Scheme following the vote at the
Scheme Meeting. Any ANZ Shareholder may appear at the
Second Court Hearing, currently expected to be held at
10.15am (Melbourne time) on 22 December 2022 at 305
William Street, Melbourne VIC. Any ANZ Shareholder who
wishes to oppose approval of the Scheme at the Second
Court Hearing may do so by filing with the Court and
serving on ANZ a notice of appearance in the prescribed
form together with any affidavit that the ANZ Shareholder
proposes to rely on.
No investment advice
This Explanatory Memorandum has been prepared without
reference to the investment objectives, financial and
taxation situation or particular needs of any ANZ
Shareholder or any other person. The information and
recommendations contained in this Explanatory
Memorandum do not constitute, and should not be taken
as, financial product advice. The ANZ Directors encourage
you to seek financial, taxation, legal or other professional
advice before making any investment decision and any
decision as to whether or not to vote in favour of the
Scheme. This Explanatory Memorandum should be read in
full before making a decision on whether or not to vote in
favour of the Scheme. In particular, it is important that you
consider the potential risks if the Scheme does not proceed,
as set out in section 5.5, and the views of the Independent
Expert set out in the Independent Expert’s Report
contained in Annexure 1. If you are in any doubt about how
to deal with this document, you should contact your
financial, taxation, legal or other professional adviser.
Forward looking statements
Some of the statements appearing in this Explanatory
Memorandum (including in the Independent Expert’s
Report) may be in the nature of forward looking statements.
Forward looking statements or statements of intent in
relation to future events in this Explanatory Memorandum
(including in the Independent Expert’s Report) should not
IMPORTANT NOTICES
1
be taken to be forecasts or predictions that those events
will occur. Forward looking statements generally may be
identified by the use of forward looking words such as
‘believe’, ‘aim’, ‘expect’, ‘anticipate’, ‘intending’, ‘foreseeing’,
‘likely’, ‘should’, ‘planned’, ‘may’, ‘estimate’, ‘potential’, or other
similar words. Similarly, statements that describe the
objectives, plans, goals, intentions or expectations of ANZ
are or may be forward looking statements. You should be
aware that such statements are only opinions and are
subject to inherent risks and uncertainties. Those risks and
uncertainties include factors and risks specific to ANZBGL,
ANZ NOHC, the industries in which they operate or will
operate, as well as general economic conditions, prevailing
exchange rates and interest rates and conditions in financial
markets. These risks and uncertainties also include factors
relating to the Restructure, such as the timing of satisfaction
of the Conditions Precedent or the ability to realise the
anticipated benefits of the Restructure. See section 5
for a discussion of the potential risks and disadvantages
associated with the Restructure for further information.
Actual events or results may differ materially from the
events or results expressed or implied in any forward
looking statement and deviations are both normal and
to be expected. Neither ANZ nor its officers, directors,
employees or advisers or any person named in this
Explanatory Memorandum or any person involved in the
preparation of this Explanatory Memorandum makes any
representation or warranty (either express or implied) as to
the accuracy or likelihood of fulfilment of any forward looking
statement, or any events or results expressed or implied in
any forward looking statement. Accordingly, you are
cautioned not to place undue reliance on those statements.
Any forward looking statements in this Explanatory
Memorandum reflect views held only at the date of this
Explanatory Memorandum. Subject to any continuing
obligations under the ASX Listing Rules or the Corporations
Act, ANZ and its officers, directors, employees and advisers
disclaim any obligation or undertaking to distribute after
the date of this Explanatory Memorandum any updates or
revisions to any forward looking statements to reflect (a)
any change in expectations in relation to such statements;
or (b) any change in events, conditions or circumstances on
which any such statement is based.
Responsibility statement
ANZ has prepared this Explanatory Memorandum as
at the date of this Explanatory Memorandum and takes
responsibility for the content of this Explanatory
Memorandum.
Grant Samuel & Associates Pty Limited has prepared the
Independent Expert’s Report (as set out in Annexure 1)
and takes responsibility for that report.
KPMG Transaction Services (a division of KPMG Financial
Advisory Services (Australia) Pty Ltd) has prepared the
Investigating Accountant’s Report (as set out in Annexure 2)
and takes responsibility for that report.
Neither ANZ nor any of its subsidiaries, directors, officers,
employees or advisers assume any responsibility for the
accuracy or completeness of the information contained in
the Independent Expert’s Report or the Investigating
Accountant’s Report, except in relation to the information
which it has provided to the Independent Expert and the
Investigating Accountant.
No consenting party has withdrawn their consent to be
named before the date of this Explanatory Memorandum.
Foreign jurisdictions
ANZ Shareholders who are Ineligible Foreign Shareholders
are not permitted to participate in the Scheme and will not
receive ANZ NOHC Shares. Instead, Ineligible Foreign
Shareholders will have their ANZ Shares automatically
transferred to the Sale Agent (as nominee for the Ineligible
Foreign Shareholder) on the Implementation Date without
the need for any action by the Ineligible Foreign
Shareholder. The Sale Agent will participate in the Scheme
in respect of those ANZ Shares and will be issued ANZ
NOHC Shares on a one for one basis. The ANZ NOHC Shares
that are issued to the Sale Agent will be sold, with the
proceeds of such sale to be paid to Ineligible Foreign
Shareholders. Refer to Section 7.2(g) for further information.
This Explanatory Memorandum does not in any way
constitute an offer of securities in any place in which, or to
any person to whom, it would be unlawful to make such an
offer. No action has been taken to register or qualify ANZ
NOHC Shares or otherwise permit a public offer of such
securities in any jurisdiction outside Australia or
New Zealand.
Based on the information available to ANZ, ANZ
Shareholders whose addresses are shown in the ANZ Share
Register on the Scheme Record Date as being in Australia
(and its external territories), New Zealand or an Eligible
Foreign Jurisdiction, or any other jurisdiction in respect of
which ANZ reasonably believes that it is not prohibited and
not unduly onerous or impractical to issue ANZ NOHC
Shares to an ANZ Shareholder with a registered address in
such jurisdiction, will be entitled to have ANZ NOHC Shares
issued to them under the Scheme subject to any
qualifications set out in this Explanatory Memorandum.
Nominees, custodians and other ANZ Shareholders who
hold ANZ Shares on behalf of a beneficial owner resident
outside Australia may not forward this Explanatory
Memorandum (or any accompanying document) to
anyone outside Australia without the consent of ANZ.
Notice to US Investors
The ANZ NOHC Shares to be issued pursuant to the
Scheme, including any ANZ NOHC Shares represented by
ANZ NOHC ADSs, have not been and will not be registered
under the US Securities Act or the securities laws of any
state or other jurisdiction of the United States. The ANZ
NOHC Shares and ANZ NOHC ADSs will be issued in reliance
on the exemption from the registration requirements of the
US Securities Act provided by Section 3(a)(10) thereof on
the basis of the approval of an Australian court, which will
consider, among other things, the fairness of the terms and
conditions of the Scheme to ANZ NOHC Shareholders.
US investors should refer to section 9.9 for further
information concerning transfer restrictions disclosures
and other notices.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
2
Financial amounts and effects of rounding
All financial amounts in this Explanatory Memorandum are
expressed in Australian currency unless otherwise stated.
A number of figures, amounts, percentages, estimates,
calculations of value and fractions in the Explanatory
Memorandum are subject to the effect of rounding.
Accordingly, any discrepancies between totals in tables or
financial statements, or in calculations, graphs or charts are
due to rounding. All financial and operational information
set out in this Explanatory Memorandum is current as at
the Last Practicable Date, unless otherwise stated.
Charts and diagrams
Any diagrams, charts, graphs or tables appearing in this
Explanatory Memorandum are illustrative only and may
not be drawn to scale. Unless stated otherwise, all data
contained in diagrams, charts, graphs and tables is based
on information available as at Last Practicable Date.
Timetable and dates
All times and dates referred to in this Explanatory
Memorandum are times and dates in Melbourne, Australia,
unless otherwise indicated. All times and dates relating to
the implementation of the Scheme referred to in this
Explanatory Memorandum may change and, among
other things, are subject to all necessary approvals from
Government Agencies.
External websites
Unless expressly stated otherwise, the content of the
websites of ANZ does not form part of this Explanatory
Memorandum and ANZ Shareholders should not rely
on any such content.
Privacy
ANZ may collect personal information in the process of
implementing the Scheme. The type of information that it
may collect about you includes your name, contact details
and information on your shareholding in ANZ and the
names of persons appointed by you to act as a proxy,
attorney or corporate representative at the Scheme
Meeting as relevant to you. The collection of some of this
information is required or authorised by the Corporations
Act. The primary purpose of the collection of personal
information is to assist ANZ to conduct the Scheme
Meeting and implement the Scheme. Without this
information, ANZ may be hindered in its ability to issue this
Explanatory Memorandum and implement the Scheme.
Personal information of the type described above may be
disclosed to the ANZ Share Registry, third party service
providers (including print and mail service providers and
parties otherwise involved in the conduct of the Scheme
Meeting), authorised securities brokers, professional
advisers, related bodies corporate of ANZ, Government
Agencies, and also where disclosure is otherwise required or
allowed by law. ANZ Shareholders who are individuals and
the other individuals in respect of whom personal
information is collected as outlined above have certain
rights to access the personal information collected in
relation to them. If you would like to obtain details of the
information about you held by the ANZ Share Registry in
connection with ANZ Shares, please contact the ANZ Share
Registry. ANZ Shareholders who appoint an individual as
their proxy, corporate representative or attorney to vote at
the Scheme Meeting should ensure that they inform such
an individual of the matters outlined above. Further
information about how ANZ collects, uses and discloses
personal information is contained in ANZ’s Privacy Policy
located at anz.com.au/privacy/centre/.
Date of Explanatory Memorandum
This Explanatory Memorandum is dated 27 October 2022
3
LETTER FROM THE CHAIRMAN
OF THE ANZ BOARD
Dear fellow ANZ shareholder
On behalf of the ANZ Board, I am pleased to present you
with this Explanatory Memorandum which explains and
provides detailed information about ANZ’s proposed
Restructure.
The Restructure involves the establishment of a new
non-operating holding company as the listed parent of the
ANZ Group. This occurs through shareholders exchanging
their existing ANZ shares for shares in the new listed
holding company. It also involves the separation of ANZ’s
banking and certain non-banking businesses under the
new listed holding company. If the Restructure proceeds,
there will be no change to the level of your shareholding in
ANZ as this is an internal re-organisation.
The Restructure is about making our banking business more
efficient, providing us with greater strategic and operational
flexibility for growth, and importantly allowing us to create
opportunities for our customers to engage more closely
with their banking.
ANZ’s core business is strong and our strategic
focus remains consistent
Our core banking business is the heart of what ANZ does.
We are the pre-eminent bank in New Zealand, the lead
Institutional Bank in Australia and indeed a leader in Asia
Pacific and have a strong Australian Retail and Commercial
franchise. The Restructure aims to assist us to better deliver
ANZ’s strategy to strengthen and grow our core
business further.
An important part of our strategy is to improve the financial
wellbeing and sustainability of customers by providing
connected, relevant and efficient services, tools and
insights. We are already driving further capability in digital
banking and are excited about the customer service
propositions currently being developed under the ANZ
Plus brand.
Your Board and Executive team remain highly focussed on
continuing to develop our core business and to drive value
for you, our shareholders.
The Restructure is very much about adding to that strength
and if it goes ahead:
•ANZ’s existing banking businesses and operations will
remain the same.
•ANZ’s focus will remain banking and financial products.
•The people responsible for the overall governance and
management of the ANZ Group, including Shayne Elliott
as CEO, will remain substantially the same.
•The ANZ strategy will remain the same (and execution of
that strategy will be assisted by the Restructure).
•The ANZ Group’s strong financial position will not be
affected by the Restructure.
•Dividend returns to shareholders will not be affected.
Why ANZ proposes to undertake the Restructure
The financial services industry in Australia is
changing rapidly:
•Traditional banking businesses like ANZ are facing
significant disruption, principally from non-banking
businesses that are launching competing financial service
products. These businesses are not regulated in the same
way as banks like ANZ.
•Bank customers are demanding better and more tailored
banking products and services, including through
interconnected services and products, digital solutions
and providers.
To take advantage of this changing environment,
ANZ aims to grow with its customers and meet their
changing expectations.
The ANZ Board considers that the Restructure can help ANZ:
•through growth and expansion, acquisitions or
partnerships with third parties, develop a holistic ‘digital
banking ecosystem’ including adjacent, non-banking
services, platforms and partnerships that complement
ANZ’s core banking business;
•better meet customers’ needs in the digital age;
•compete in banking-adjacent areas on a level playing
field with other non-banking businesses, to allow ANZ to
provide better products and services to its customers;
•be an employer of choice in both banking and non-
banking areas; and
•remain a great bank that strives to improve the
financial wellbeing of its customers.
This is in line with ANZ’s existing strategy.
About the proposed Restructure
This Explanatory Memorandum provides the information
you need to help you decide on how to vote in relation to
our proposed Restructure.
If the Restructure goes ahead, then ANZ will:
•establish a non-operating holding company, ANZ Group
Holdings Limited (ANZ NOHC), as the new listed parent
company of the ANZ Group; and
•separate ANZ’s banking and certain non-banking
businesses into the ANZ Bank Group and ANZ Non-
Bank Group.
For the proposed Restructure to go ahead, ANZ
shareholders need to approve the scheme of arrangement
(Scheme), which is one of the steps required to implement
the proposed Restructure. ANZ shareholders are to vote on
the Scheme at the Scheme Meeting on 15 December 2022.
The proposed Restructure is important to ANZ’s future.
Each of your Directors recommend that you vote “Yes” in
favour of the Scheme. Your vote is important. I encourage
you to vote.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
4
PAUL D O’SULLIVAN
CHAIRMAN
Direct implications for ANZ shareholders and
ANZ dividends
If the Restructure goes ahead, there will be no change to
the number of shares you hold in ANZ. You will receive the
same number of shares in ANZ NOHC as your existing ANZ
shares (unless you are an ineligible foreign shareholder).
1
The total number of shares in ANZ will not increase as part
of the Scheme or Restructure.
ANZ NOHC shares will trade on the ASX and NZX with the
familiar ‘ANZ’. They will have the same dividend rights and
the same voting rights as your current ANZ shares.
The Restructure itself is not expected to:
•impact the ANZ Group’s ability to pay dividends;
•affect the ANZ dividend payout ratio (being the
percentage of earnings paid to shareholders as a
dividend); or
•affect the amount of franking credits available in respect
of any dividend paid (nor is it expected to affect ANZ
NOHC’s ability to pass franking credits to shareholders).
Benefits of the proposed Restructure
A NOHC or similar holding company structure is used
by many leading financial institutions and financial
conglomerates, including those with regulated banking
operations (for example, Macquarie Group and Suncorp
Group in Australia and Bank of America, J.P. Morgan, HSBC
and Barclays internationally).
After the Restructure, ANZ’s banking activities (including
Suncorp Bank, if that transaction goes ahead) will continue
to be subject to the same prudential regulation as they are
subject to now. However, the activities of certain non-
banking businesses will not be subject to the full suite of
APRA prudential and reporting standards for banking
activities. This will help enable a fit for purpose application
of regulations, policies and procedures to these non-
banking businesses.
1. You are an Ineligible Foreign Shareholder if your address is shown in the ANZ Share Register as at the Scheme Record Date as being outside Australia (and its external
territories), New Zealand, or an Eligible Foreign Jurisdiction. See sections 4.5(c) and 7.2(g). for more details.
5
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Chairman’s letter
Key benefits of the proposed Restructure are:
•Transparency: The Restructure will separate ANZ’s
banking and certain non-banking businesses within the
ANZ Group. This separation will create transparency and
clarity for employees, customers, regulators and investors.
•Flexibility: After the Restructure, the ANZ Group will
have a corporate structure that positions ANZ to have
more strategic and operational flexibility. That structure
can enable ANZ to be more innovative and responsive to
the changes occurring in the financial services industry.
•Stronger non-banking businesses: The Restructure
will better enable ANZ to develop its non-banking
businesses to enhance the provision of banking and
finance products and services to its customers. Although
the ANZ Non-Bank Group will initially be modest in scale,
the ANZ Board expects it to be used as a vehicle for
innovation and growth in certain non-banking businesses
(including banking-adjacent businesses) that ANZ may
develop or acquire. This will help bring new technology
and non-bank products and services to ANZ customers in
line with ANZ’s strategy to strengthen and grow ANZ’s
core banking business, and to improve the financial
wellbeing of its customers.
•Employer and partner of choice: The Restructure can
assist ANZ to attract staff and partners with skills outside
traditional banking, who are more aligned with a broad
financial services group.
Potential disadvantages of the
proposed Restructure
The most significant disadvantages of the Restructure are:
•One off transaction costs of approximately $35 million
(before tax).
•Additional ongoing incremental costs of less than
approximately $5 million (before tax) per annum.
•One or more of the potential risks associated with
the Restructure occurring (these risks are described in
section 5.3).
ANZ considers that these disadvantages are not expected
(or likely) to have a material impact on the ANZ Group.
The benefits, disadvantages and risks of the proposed
Restructure are described in more detail in section 5.
The Independent Expert has concluded that the
Restructure (including the Scheme) is in the best interests
of ANZ shareholders.
ANZ Directors recommend you vote “Yes”
in favour of the Scheme to implement the
proposed Restructure
Your Directors believe that the proposed Restructure
(including the Scheme) is in the best interests of ANZ
shareholders. The Restructure can go ahead only if the
Scheme is approved by ANZ shareholders.
Each Director recommends that you vote “Yes” in favour
of the Scheme.
Each ANZ Director intends to vote all the ANZ shares they
own or control in favour of the Scheme.
What should you do?
Your vote is important because the Restructure can go
ahead only if the Scheme is approved by ANZ shareholders
at the Scheme Meeting.
The Scheme Meeting will be held on 15 December 2022
immediately after ANZ’s 2022 Annual General Meeting but
not before 12.30pm. You may participate in the Scheme
Meeting by attending in person or online at
meetnow.global/ANZ2022.
How can you vote?
There are five ways ANZ shareholders can vote: in person,
online, by proxy, by attorney or by corporate representative.
See section 1 of this Explanatory Memorandum for more
information on how you can vote, including voting online.
If you are voting by proxy, your completed proxy form
must be received by 4.00pm on 13 December 2022.
There are two separate ANZ shareholder meetings on
15 December 2022 – the Scheme Meeting and the Annual
General Meeting. If you intend to vote by proxy, please
return a proxy form for each meeting.
Further information
You should carefully read this Explanatory Memorandum in
full before you make any decision in relation to the Scheme.
If you have any questions, please contact the ANZ
Shareholder Information Line on 1800 11 33 99 (within
Australia) or +61 3 9415 4010 (outside Australia). This line
is open between 8.30am and 5.00pm, Monday to Friday
(excluding public holidays).
If you are in any doubt as to what you should do, you
should contact your financial, taxation, legal or other
professional adviser.
On behalf of the ANZ Board, thank you for your continued
support of ANZ.
Yours faithfully
Paul D O’Sullivan
Chairman
Australia and New Zealand Banking Group Limited
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
6
SECTION
1
WHAT DO YOU
NEED TO DO?
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 1
1.1 STEP 1: READ THIS
EXPLANATORY MEMORANDUM
You should carefully read this Explanatory Memorandum
in full before deciding whether to vote in favour of
the Scheme.
If you have any questions, please contact the ANZ
Shareholder Information Line on 1800 11 33 99 (within
Australia) or +61 3 9415 4010 (outside Australia). This line
is open between 8.30am and 5.00pm, Monday to Friday
(excluding public holidays).
If you are in any doubt as to what you should do, you
should contact your financial, taxation, legal or other
professional adviser.
1.2 STEP 2: VOTE ON THE SCHEME
(a) Your vote is important
Your vote is important because the Restructure can only go
ahead if the Scheme is approved by ANZ shareholders at
the Scheme Meeting.
(b) Are you entitled to vote?
If you are a registered ANZ Shareholder on the ANZ Share
Register at 7.00pm on 13 December 2022, you will be
entitled to vote on the Scheme.
If you hold ANZ Regulatory Capital Securities (including
ANZ Capital Notes) only, you will not be entitled to vote.
If you hold ANZ ADSs only, you will not be solicited for
voting instructions.
You can read more about entitlements to vote in the
Notice of Scheme Meeting in Annexure 5.
(c) How may you vote?
You may vote:
•in person, by attending the Scheme Meeting held at
The Adelaide Convention Centre, North Terrace, Adelaide
on 15 December 2022 immediately after the Annual
General Meeting but not before 12.30pm;
•online, by participating and voting online at
meetnow.global/ANZ2022;
•by proxy, by completing a proxy form online at
investorvote.com.au or by completing, signing and
lodging a paper proxy form for the Scheme Meeting in
accordance with the instructions set out on the form.
To be valid, your proxy form (online or paper) must be
received by the ANZ Share Registry by 4.00pm on
13 December 2022;
•by attorney, by appointing an attorney to attend
and vote at the Scheme Meeting on your behalf and
providing a duly executed power of attorney to the ANZ
Share Registry by 4.00pm on 13 December 2022; or
•by corporate representative, if you are a body
corporate, by appointing a corporate representative to
attend and vote at the Scheme Meeting on behalf of that
ANZ Shareholder. The representative needs to provide a
duly executed certificate of appointment (in accordance
the Corporations Act) to be to admitted to the
Scheme Meeting.
You can read more about how to vote in the Notice of
Scheme Meeting in Annexure 5 and in the Online Meeting
Guide available on the ANZ website at anz.com/
schememeeting.
As the Scheme Meeting is being held after ANZ’s 2022
Annual General Meeting, you may register for the Scheme
Meeting any time after registration for the Annual General
Meeting has opened. Registration for the Annual General
Meeting will open at 9.30am (Melbourne time) (being
1 hour before the start of the Annual General Meeting.
Proxyholders will need to contact the ANZ Share Registry
on +61 3 9415 4024 no later than 1 hour before the Scheme
Meeting to obtain a unique email invitation link to
participate online.
1.3 SCHEME MEETING RESULTS
ANZ expects the results of the Scheme Meeting to be
available shortly after the Scheme Meeting ends. ANZ will
announce the results to the ASX (asx.com.au) and NZX
(nzx.com) once they are available.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
8
SECTION
2
KEY DATES IN THE
PROPOSED RESTRUCTURE
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 2
EVENTTIME AND DATE, MELBOURNE TIME
First Court Hearing
The date the Court ordered the convening of the Scheme Meeting
26 October 2022
Proxy deadline
Deadline by which proxy forms or powers of attorney must arrive at the
ANZ Share Registry for them to be counted
4.00pm, 13 December 2022
Voting eligibility
Time and date at which someone must own ANZ Shares to be able to vote
at the Scheme Meeting
7.00pm, 13 December 2022
Annual General Meeting10.30am (Melbourne time) / 10.00am
(Adelaide time), 15 December 2022
Scheme Meeting
For more information about the Scheme Meeting, see the Notice of
Scheme Meeting in Annexure 5
12.30pm (Melbourne time) / 12.00pm
(Adelaide time), 15 December 2022
However, if the Annual General Meeting
continues after 12.30pm (Melbourne time) /
12.00pm (Adelaide time), then the Scheme
Meeting will start as soon as the Annual
General Meeting ends or has been adjourned
If ANZ Shareholders approve the Scheme at the Scheme Meeting, then the following process takes place
Second Court Hearing
Court hearing for ANZ to seek approval of the Scheme
22 December 2022
Effective Date – that is, the date on which the Scheme becomes Effective
ANZ to lodge the Court order approving the Scheme with ASIC. ANZ to
announce that lodging to the ASX and NZX
ANZ Shares will be suspended from trading on the ASX and NZX from
close of trading
ANZ Regulatory Capital Securities quoted for trading on the ASX will be
suspended from trading on the ASX under their existing codes from close
of trading
23 December 2022
ANZ NOHC listing
ASX listing of ANZ NOHC. First day of trading in ANZ NOHC Shares on the
ASX (on a deferred settlement basis)
NZX foreign exempt listing of ANZ NOHC. First day of trading in ANZ
NOHC Shares on NZX (on a deferred settlement basis)
First day of trading in ANZ Regulatory Capital Securities quoted for trading
on the ASX under their new ASX codes (on a deferred settlement basis)
28 December 2022
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
10
Scheme Record Date
The date for determining eligibility to receive ANZ NOHC Shares (or, in the
case of Ineligible Foreign Shareholders,
2
the cash proceeds of the sale of
the ANZ NOHC Shares)
7.00pm, 29 December 2022
Implementation Date
ANZ NOHC Shares are transferred to Eligible Shareholders
6 January 2023
Commencement of normal trading
Holding statements for ANZ NOHC Shares sent to Eligible Shareholders
Commencement of normal trading of ANZ NOHC Shares on the ASX (ASX:
ANZ) and NZX (NZX: ANZ)
Commencement of normal trading of ANZ Regulatory Capital Securities
quoted for trading on the ASX under their new ASX codes
The Business Restructure is undertaken
9 January 2023
Completion of sales of ANZ NOHC Shares by the Sale Agent and payment
of the cash proceeds of the sale of the ANZ NOHC Shares to be made to
Ineligible Foreign Shareholders
By no later than 1 month from the
Implementation Date
Dates and times depend on approval. Certain times and dates in this Explanatory Memorandum depend on ANZ
Shareholders and the Court approving the Scheme.
Dates and times may change. Other than the First Court Hearing, the times and dates in this Explanatory Memorandum are
indicative only. So ANZ may change any or all of the times and dates. If ANZ does so, it will announce the changes to the ASX
and NZX. In particular, the times and dates in this Explanatory Memorandum may change (including the date of the Second
Court Hearing) if the Condition Precedent relating to obtaining the Regulatory Approvals (see section 7.4 for more information)
has not been satisfied or waived.
Melbourne time. The times and dates in this Explanatory Memorandum refer to the time and date in Melbourne, Australia,
unless otherwise stated.
2. An Ineligible Foreign Shareholder is an ANZ Shareholder whose address is shown in the ANZ Share Register as at the Scheme Record Date as being outside Australia (and its
external territories), New Zealand or an Eligible Foreign Jurisdiction. See sections 4.5(c) and 7.2(g) for more details.
11
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 2
SECTION
3
FREQUENTLY
ASKED QUESTIONS
You should read these frequently asked questions and answers with the rest of this
Explanatory Memorandum. These questions and answers are not intended to
address all relevant issues for ANZ Shareholders.
QUESTIONANSWERMORE INFORMATION
Your ANZ Shares and your dividends
What will happen to
your ANZ shares?
If the Restructure goes ahead, there will be no change to the
number of shares you hold in ANZ.
You will receive the same number of ANZ NOHC Shares as your
existing ANZ Shares (unless you are an Ineligible Foreign
Shareholder).
After the Scheme, ANZ NOHC Shares will trade on the ASX and
NZX with the familiar ‘ANZ’ code. They will have the same voting
rights as your current ANZ Shares.
Letter from the Chairman of
the ANZ Board and sections
4.5(b) and 4.5(c)
Will the number
of ANZ Shares on
issue increase?
The total number of shares in ANZ will not increase as part of the
proposed Restructure.
Letter from the Chairman of
the ANZ Board
Will ANZ’s dividend
payout ratio change
as a result of the
Restructure?
If the Restructure goes ahead, you will have the same dividend
rights as you do with your current ANZ Shares.
The Restructure itself is not expected to:
•impact the ANZ Group’s ability to pay dividends;
•affect the ANZ dividend payout ratio (being the percentage of
earnings paid to shareholders as a divided); or
•affect the amount of franking credits available in respect of
any dividend paid (nor is it expected to affect ANZ NOHC’s
ability to pass franking credits to shareholders).
Section 4.11(c)
Your vote and this Explanatory Memorandum
Why have you
received this
Explanatory
Memorandum?
You have received this Explanatory Memorandum because you
are an ANZ Shareholder.
This Explanatory Memorandum explains and provides detailed
information about ANZ’s proposed Restructure. It is intended to
help you decide on how to vote on the Scheme, which is one of
the steps required to implement the proposed Restructure.
Section 4
A copy of the Scheme is in
Annexure 3
What do you
need to do?
You should carefully read this Explanatory Memorandum in full
before deciding whether to vote in favour of the Scheme.
The proposed Restructure will be implemented by the Scheme
and Business Restructure. ANZ Shareholders must approve the
Scheme for the Restructure to go ahead.
Letter from the Chairman of
the ANZ Board and section 1
Can you vote?If you are a registered ANZ Shareholder on the ANZ Share
Register at 7.00pm on 13 December 2022, you will be entitled to
vote on the Scheme.
If you hold ANZ Regulatory Capital Securities (including ANZ
Capital Notes) only, you will not be entitled to vote. If you hold
ANZ ADSs only, you will not be solicited for voting instructions.
Letter from the Chairman of
the ANZ Board and section 1
13
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 3
QUESTIONANSWERMORE INFORMATION
How may you vote?You may vote by attending the Scheme Meeting in person or
online at meetnow.global/ANZ2022.
Alternatively, you can vote by appointing:
•a proxy (including by lodging your proxy form online at
investorvote.com.au);
•attorney; or
•corporate representative.
Section 1 and Annexure 5
(Notice of Scheme Meeting)
What are the tax
implications of
the Scheme?
The tax implications of the Scheme will depend on your
particular circumstances.
Section 8 provides a general description of the taxation
consequences for eligible ANZ Shareholders in Australia, New
Zealand, the United Kingdom and the United States.
You should consult with your own independent tax adviser
regarding the tax implications of participating in the Scheme
based on your particular circumstances.
Section 8
The Restructure
What is the
Restructure?
The Restructure is the proposed internal reorganisation of ANZ
under which:
•ANZ NOHC will become the new listed parent company of the
ANZ Group in place of ANZBGL;
•ANZ’s banking and certain non-banking businesses will be
separated into two groups, the ANZ Bank Group and ANZ
Non-Bank Group; and
•ANZ ServiceCo will become an internal service company.
If the proposed Restructure goes ahead, the ANZ Group will have
a similar holding company structure to many leading financial
institutions and financial conglomerates (for example, Macquarie
Group and Suncorp Group in Australia and Bank of America, J.P.
Morgan, HSBC and Barclays internationally).
Section 4.4
What is a NOHC?A non-operating holding company (a “NOHC”) is a company that
owns or controls other companies but does not carry on an
operating business itself.
A NOHC or similar holding company structure is used by many
leading financial institutions and financial conglomerates
globally, including those with regulated banking operations (for
example, Macquarie Group and Suncorp Group in Australia and
Bank of America, J.P. Morgan, HSBC and Barclays internationally).
N/A
What is ANZ NOHC?If the Scheme is approved and implemented, ANZ NOHC will
become the new listed parent company of the ANZ Group in
place of the current company, ANZBGL.
After the Restructure, ANZ NOHC will be a NOHC and will own all
ANZ Group businesses and assets.
ANZ NOHC will be an authorised NOHC under the Banking Act.
Section 4.6(a)(1)
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
14
QUESTIONANSWERMORE INFORMATION
Which of ANZ’s
businesses will be in
the ANZ Bank Group?
The ANZ Bank Group will hold all of ANZ’s:
•banking businesses (including ANZBGL and ANZ NZ);
•international regulated bank operations; and
•insurance businesses (including ANZ Lenders Mortgage
Insurance and ANZ Cover).
If the Suncorp Transaction and Restructure both go ahead,
Suncorp Bank will be held in the ANZ Bank Group.
Section 4.6(a)(2)
Which of ANZ’s
non-banking
businesses will
be in the ANZ
Non-Bank Group?
The ANZ Non-Bank Group will hold certain non-banking
businesses, including ANZ’s:
•beneficial interests in the 1835i trusts;
•non-controlling interest in the Worldline merchant acquiring
joint venture; and
•equity interests in Lygon, TIN and Pollination.
The ANZ Non-Bank Group will initially be modest in scale (relative
to the ANZ Bank Group). The ANZ Board expects it to be used as
a vehicle for innovation and growth in certain non-banking
businesses (including banking-adjacent businesses) that ANZ
may develop or acquire. This will help bring new technology and
non-bank services to ANZ customers.
It is currently expected that there will be no material changes to
the way ANZ operates its non-banking businesses after the
Restructure. However, ANZ may, in the future, change how it
operates certain non-banking businesses that are held in the
ANZ Non-Bank Group.
Immediately following the Restructure, neither ANZ NOHC nor
ANZ Non-Bank HoldCo will hold an AFSL or ACL. ANZ NOHC may
seek to obtain an AFSL following implementation of the
Restructure.
Section 4.6(a)(3)
What is ANZ
ServiceCo?
ANZ ServiceCo has been established to become an internal
service company to hold certain property interests and, in the
future, to potentially provide certain central shared service
functions across the ANZ Group.
Section 4.6(a)(4)
Will ANZ’s banking
businesses change
as a result of the
Restructure?
The Restructure will not result in any change to ANZ’s existing
banking businesses or operations. ANZ’s focus will remain
banking and financial products.
After the Restructure, ANZ will continue to provide banking
services in the ordinary course, including retail, commercial and
institutional services to Australia, New Zealand, Asia, Europe
and the US.
Section 4.6(a)(2)
What is the Suncorp
Transaction?
The Suncorp Transaction is ANZ’s proposed acquisition of
Suncorp Bank. This transaction remains subject to a number of
conditions.
The Suncorp Transaction does not relate to the Restructure.
Accordingly, this Explanatory Memorandum, including the
pro-forma financial information included in section 6, does not
contemplate or include the Suncorp Transaction.
Section 4.3
15
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 3
QUESTIONANSWERMORE INFORMATION
The ANZ Directors’ recommendation and the Independent Expert
What do the
ANZ Directors
recommend?
The ANZ Directors consider that the Restructure is in the best
interests of ANZ Shareholders. Each ANZ Director recommends
that you vote “Ye s” in favour of the Scheme.
The reasons for this recommendation are summarised in the
question below titled “What are the potential benefits of the
Restructure?”.
If you are in any doubt as to what you should do, you should
contact your financial, taxation, legal or other
professional adviser.
Letter from the Chairman of
the ANZ Board and section 5
How will the ANZ
Directors vote?
Each ANZ Director who holds ANZ Shares intends to vote in
favour of the Scheme at the Scheme Meeting.
Letter from the Chairman of
the ANZ Board
What is the
Independent
Expert’s opinion?
The Independent Expert has concluded that the Restructure
(including the Scheme) is in the best interests of ANZ
Shareholders.
A copy of the Independent
Expert is in Annexure 1
Rationale, benefits, disadvantages and risks of the Restructure
What is the rationale
of the Restructure?
The financial services industry is changing rapidly.
•Traditional banking businesses like ANZ are facing significant
disruption, principally from non-banking businesses that are
launching competing financial service products. These
businesses are not regulated in the same way as
banks like ANZ.
•Bank customers are demanding better and more tailored
banking products and services, including through
interconnected services and products, digital solutions
and providers.
To take advantage of this changing environment, ANZ aims to
grow with its customers and meet their changing expectations.
The ANZ Board considers that the Restructure can help ANZ:
•through growth and expansion, acquisitions or partnerships
with third parties, develop a holistic ‘digital banking ecosystem’
including adjacent, non-banking services, platforms and
partnerships that complement ANZ’s core banking business;
•better meet customers’ needs in the digital age;
•compete in banking adjacent areas on a level playing field
with other non-banking businesses, to allow ANZ to provide
better products and services to its customers;
•be an employer of choice in both banking and non-banking
areas; and
•remain a great bank that strives to improve the financial
wellbeing of its customers.
This is in line with ANZ’s existing strategy.
Letter from the Chairman of
the ANZ Board and
section 5.1
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
16
QUESTIONANSWERMORE INFORMATION
What are the
potential benefits
of the Restructure?
After the Restructure, ANZ’s banking activities (including Suncorp
Bank, if the Suncorp Transaction goes ahead) will continue to be
subject to the same prudential regulation as they are subject to
now. However, the activities of certain non-banking businesses
will not be subject to the full suite of APRA prudential and
reporting standards for banking activities. This will help enable a
fit for purpose application of regulations, policies and procedures
to these non-banking businesses.
The benefits of the Restructure are set out in section 5.1. In
summary, the key benefits are:
•Transparency: The Restructure will separate ANZ’s banking
and certain non-banking businesses within the ANZ Group.
This separation will create transparency and clarity for
employees, customers, regulators and investors.
•Flexibility: After the Restructure, the ANZ Group will have a
corporate structure that positions ANZ to have more strategic
and operational flexibility. That structure can enable ANZ to be
more innovative and responsive to the changes occurring in
the financial services industry.
•Stronger non-banking businesses: The Restructure will
better enable ANZ to develop its non-banking businesses.
Although the ANZ Non-Bank Group will initially be modest in
scale (relative to the ANZ Bank Group), the ANZ Board expects
it to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacent
businesses) that ANZ may develop or acquire. This will help
bring new technology and non-bank products and services to
ANZ customers in line with ANZ’s strategy to strengthen and
grow ANZ’s core banking business, and to improve the
financial wellbeing of its customers.
•Employer and partner of choice: The Restructure can assist
ANZ to attract staff and partners with skills outside traditional
banking, who are more aligned with a broad financial
services group.
Letter from the Chairman
of the ANZ Board and
section 5.1
What are the
potential
disadvantages of
the Restructure?
The most significant disadvantages of the Restructure are:
•one off transaction costs of approximately $35 million (before
tax) (of which approximately $25 million (before tax) is
expected to be incurred by ANZ if the Restructure does
not proceed);
•additional ongoing incremental costs associated with
corporate and operating costs of less than approximately
$5 million (before tax) per annum; and
•one or more of the risks identified in section 5.3.
ANZ considers that these disadvantages are not expected (or
likely) to have a material impact on the ANZ Group.
Letter from the Chairman
of the ANZ Board and
section 5.2
17
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 3
QUESTIONANSWERMORE INFORMATION
What are the
potential risks of
the Restructure?
The following potential risks have been identified:
•possible negative consequences as a result of unforeseen
changes in APRA’s final regulatory framework for NOHCs
of an ADI;
•the operating model of ANZ not functioning as expected as a
result of any unforeseen changes to business, market and/or
regulatory factors;
•adverse impacts on ANZ as a result of unexpected
developments to timing of implementation and/or the form
and scope of the Restructure; and
•unexpected liabilities caused by any delays in non-material
regulatory approvals or by regulatory relief not being granted.
The ANZ Board believes that the overall risk profile of the ANZ
Group will not be adversely affected by the Restructure. This is
due to a number of reasons, including the following:
•ANZ’s existing banking businesses and operations will
remain the same;
•ANZ’s focus will remain banking and financial products;
•the people responsible for the overall governance and
management of the ANZ Group will remain
substantially the same;
•the ANZ strategy will remain the same (and execution of that
strategy will be assisted by the Restructure);
•the ANZ Group’s consolidated financial position will not be
affected by the Restructure itself; and
•ANZ’s dividend payout ratio (being the percentage of earnings
paid to shareholders as a divided) will not be affected.
Letter from the Chairman
of the ANZ Board and
section 5.3
What alternatives
did the ANZ
Board consider?
Before proposing the Restructure, the ANZ Board considered a
number of alternatives it believes are available to ANZ to ensure
that it can continue to pursue its strategy while meeting its
obligations to APRA and other regulators. These alternatives
include a dual listed company structure, stapled security
structure and minority investment structure.
The ANZ Board has decided to not pursue these alternatives
because, after due consideration, the ANZ Board believes that
the Restructure will provide the optimal structure for ANZ.
These alternatives are described in more detail in section 5.4.
Section 5.4
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
18
QUESTIONANSWERMORE INFORMATION
Implementing the Restructure and treatment of ANZ Shareholders
How will the
Restructure be
implemented?
The Restructure will be implemented by the Scheme and
Business Restructure.
The Scheme will involve ANZ NOHC:
•acquiring all of the ANZ Shares;
•issuing ANZ NOHC Shares to ANZ Shareholders (other than
Ineligible Foreign Shareholders) and the Sale Agent on a one
for one basis; and
•remitting the cash proceeds of the sale of the relevant ANZ
NOHC Shares to Ineligible Foreign Shareholders.
The Business Restructure will be implemented immediately after
the Scheme. It involves:
•ANZ’s banking and certain non-banking businesses and assets
being separated into the ANZ Bank Group and ANZ Non-Bank
Group; and
•certain property interests being transferred to ANZ ServiceCo.
The Restructure can only be implemented if the Scheme is
approved by ANZ Shareholders.
Sections 4.4 and 7
What will Eligible
Shareholders receive
for their ANZ Shares?
If you are an Eligible Shareholder, then you will receive one ANZ
NOHC Share for each ANZ Share that you hold as at the Scheme
Record Date (currently expected to be 7.00pm on 29
December 2022).
Eligible Shareholders are ANZ Shareholders whose addresses are
shown in the ANZ Share Register as at the Scheme Record Date
as being in Australia (and its external territories), New Zealand or
an Eligible Foreign Jurisdiction.
Following implementation of the Scheme, ANZ NOHC Shares will
trade under the ASX and NZX code “ANZ”.
Sections 4.5(b) and 4.5(c)
What will Ineligible
Foreign Shareholders
receive for their
ANZ Shares?
Ineligible Foreign Shareholders are ANZ Shareholders whose
addresses are shown in the ANZ Share Register as at the Scheme
Record Date as being outside Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.
If you are an Ineligible Foreign Shareholder, your ANZ Shares will
be automatically transferred to the Sale Agent (as nominee for
the Ineligible Foreign Shareholder) on the Implementation Date
without any action by you.
Ineligible Foreign Shareholders are not permitted to participate
in the Scheme and will not be issued ANZ NOHC Shares. Instead
of receiving ANZ NOHC Shares, Ineligible Foreign Shareholders
will receive the cash proceeds of the sale of the ANZ
NOHC Shares.
If any Ineligible Foreign Shareholder wishes to be an ANZ
Shareholder after the Restructure, they may purchase ANZ NOHC
Shares (subject to any legal requirements or restrictions) in the
usual way.
Sections 4.5(c) and 7.2(g)
How will ANZ Senior
Notes and ANZ RMBS
be affected?
ANZ Senior Notes and ANZ RMBS will not be affected by the
Restructure. Following implementation of the Scheme, the ANZ
Senior Notes and ANZ RMBS will remain on issue on the same
terms and, where applicable, will remain listed on the same
exchanges as at present.
Section 4.5(d)
19
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 3
QUESTIONANSWERMORE INFORMATION
How will ANZ
Regulatory Capital
Securities
be affected?
Following implementation of the Scheme, ANZ Regulatory
Capital Securities (including ANZ Capital Notes) will remain on
issue and (where applicable) quoted for trading on the ASX by
ANZBGL under their new ASX codes until they are repaid,
converted or written off in accordance with their terms.
Section 7.2(d) identifies the current and new ASX codes of ANZ
Regulatory Capital Securities that are quoted for trading
on the ASX.
Following implementation of the Scheme, ANZBGL will remain
listed on the ASX as a debt listing with the ASX code ”AN3” (and
ANZ Shares will no longer be quoted for trading on the ASX).
Sections 4.5(e) and 7.2(d)
How will ANZ NZ
security holders
be affected?
ANZ NZ security holders will not be affected by the Restructure.
Following implementation of the Scheme, ANZ NZ securities will
remain on issue on the same terms.
Section 4.5(f )
What is required for
the Scheme to be
implemented?
The Scheme will be implemented if:
•the Scheme is approved by ANZ Shareholders at the Scheme
Meeting on 15 December 2022;
•the Court approves the Scheme at the Second Court
Hearing; and
•all of the outstanding Conditions Precedent to the Scheme are
satisfied or waived (as applicable).
Sections 7.2(b)(1) and 7.2(a)
What is the ANZ
Shareholder approval
threshold for
the Scheme?
The Scheme can only be implemented if ANZ Shareholders
approve it by the following thresholds:
•unless the Court orders otherwise, a majority in number (more
than 50%) of ANZ Shareholders who vote on the Scheme
Resolution; and
•at least 75% of the total number of votes cast on the Scheme
Resolution at the Scheme Meeting.
Even if the Scheme is approved by ANZ Shareholders at the
Scheme Meeting, the Scheme is still subject to the approval of
the Court at the Second Court Hearing.
Section 7.2(b)(1)
What regulatory
approvals are
required to
implement the
Restructure?
As at the date of this Explanatory Memorandum, all Regulatory
Approvals (including those from APRA, the Treasurer and RBNZ
RBNZ in New Zealand) required for ANZ to implement the
Restructure have been obtained, other than the approval from
the US Federal Reserve.
If the approval from the US Federal Reserve has not been
obtained prior to the currently scheduled date for the Second
Court Hearing, ANZ may:
•postpone or adjourn the Second Court Hearing; or
•proceed with the Second Court Hearing (currently expected to
be held on 22 December 2022) on the basis that the Scheme
will not be implemented until the approval from the US
Federal Reserve is obtained.
ANZ will announce to the ASX and NZX any updates to the status
of the approval from the US Federal Reserve. ANZ will also
provide an update of this status at or before the Scheme Meeting
held on 15 December 2022.
More information about the Regulatory Approvals is in
section 7.4.
Section 7.4
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
20
QUESTIONANSWERMORE INFORMATION
What happens to the
elections that ANZ
Shareholders have
given about their
shareholdings?
All instructions, notifications and elections relating to your
shareholding (for example, about dividend payment elections,
participation in the ANZ DRP and/or BOP and about how you
receive notices and communications) will automatically be
transferred to ANZ NOHC unless prohibited by law or
revoked by you.
This transfer also includes TFNs, ABNs or any relevant exemption
from providing a TFN which was provided by ANZ Shareholders
to ANZ. If you do not want this to occur, then before the Effective
Date, please :
•call the ANZ Shareholder Information Line on 1800 11 33 99
(within Australia) or +61 3 9415 4010 (outside Australia); or
•write to the ANZ Share Registry.
Sections 9.3 and 8.2(f )(1)
What happens if the
Restructure does
not proceed?
If the Restructure does not proceed, ANZ has the appropriate
strategy, governance framework and policies in place to
effectively manage the ANZ Group. However, the ANZ Board
believes that if the Restructure does not proceed, the structure of
the ANZ Group will be less optimal for the effective execution of
ANZ’s strategy.
If the Restructure does not proceed, approximately $25 million
(before tax) one off transaction costs is expected to be
incurred by ANZ.
More implications are described in section 5.5.
Section 5.5
21
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 3
SECTION
4
OVERVIEW OF THE
RESTRUCTURE AND EFFECT
ON THE ANZ GROUP
ANZ Group
ANZ Shareholders
ANZBGL
Banking and non-banking
businesses and assets
3. This diagram has been simplified and does not show all subsidiaries of the ANZ Group and interests of ANZ. Note that references to ANZ Shareholders includes holders of ANZ
ADSs representing ANZ Shares. 4. This diagram has been simplified and does not show all subsidiaries of the ANZ Group and interests of ANZ. Note that references to ANZ NOHC
Shareholders includes holders of ADSs representing ANZ NOHC Shares.
4.1 OVERVIEW OF ANZ AND THE
ANZ GROUP
ANZ comprises banking and non-banking businesses and
assets, and provides banking and financial products and
services, including:
•retail and commercial and private bank services to
customers in Australia;
•institutional services in Australia, New Zealand, Asia,
Europe and the US;
•personal and business services in New Zealand; and
•products and services to retail and commercial customers
in the Pacific Islands.
Currently, ANZBGL is the listed parent company of the
ANZ Group. ANZBGL is an ADI and is regulated by various
prudential regulators, including APRA in Australia, RBNZ in
New Zealand and various international regulators.
All banking and non-banking businesses and assets in the
ANZ Group are owned by ANZBGL. The current composition
of the ANZ Group is shown in the diagram below.
3
Refer to the ANZ website for more details (anz.com.au).
4.2 ANZ PURPOSE AND STRATEGY
The ANZ purpose is to shape a world where people and
communities thrive. It drives everything ANZ does, infuses
ANZ strategy and is fundamental to ANZ
shareholder returns.
The ANZ purpose is brought to life through the ANZ
strategy: to improve the financial wellbeing and
sustainability of customers by providing connected,
relevant and efficient services, tools and insights, directly
and in partnership with others.
ANZ will achieve its strategy through:
•Propositions: Easy to use services that improve the
financial wellbeing and sustainability of customers.
•Platforms: More agile and more resilient banking
infrastructure platforms provided to ANZ and
third parties.
•Partnerships: Integrated, data-enabled, home owner
and business owner ecosystems (that bring
propositions to life).
•People: A diverse team, who listen, learn and adapt to
deliver outcomes that address financial and sustainability
challenges.
The ANZ strategy can be viewed on the ANZ website
(anz.com/shareholder/centre/about/our-purpose-and-
strategy/), in the ANZ 2021 Annual Report and in ANZ’s
announcement to the ASX on 18 July 2022 regarding the
Suncorp Transaction.
4.3 DEVELOPMENTS TO THE
ANZ GROUP
As announced by ANZ to the ASX on 18 July 2022, ANZ
has entered into an agreement to acquire Suncorp Bank
from Suncorp Group Limited (Suncorp Transaction).
The Suncorp Transaction remains subject to a minimum
completion period of at least 12 months from the date
the Suncorp Transaction was announced and a number
of conditions precedent (including Federal Treasurer
approval, Australian Competition and Consumer
Commission authorisation or approval and repeal of /
certain amendments to the State Financial Institutions and
Metway Merger Act 1996 (Qld)). Accordingly, this Explanatory
Memorandum, including the pro-forma financial
information included in section 6, does not contemplate
or include the Suncorp Transaction on the basis that
this transaction is unrelated to the Restructure and r
emains conditional.
4.4 OVERVIEW OF THE
RESTRUCTURE
The proposed Restructure will be implemented by
the Scheme and Business Restructure. The proposed
composition of the ANZ Group after the Restructure is
shown in the diagram below.
4
(a) Scheme to establish ANZ NOHC as the new
listed parent company of the ANZ Group
If the Scheme is approved and implemented, ANZ NOHC
will become the new listed parent company of the
ANZ Group.
Under the Scheme, it is proposed that ANZ NOHC will
acquire all of the ANZ Shares and will issue ANZ NOHC
Shares to ANZ Shareholders (other than Ineligible Foreign
Shareholders) on a one for one basis.
More details about the Scheme are set out in section 7.2.
(b) Business Restructure
After the Scheme, ANZ will undertake the Business
Restructure. The Business Restructure will involve separating
certain businesses and assets of the ANZ Group into the
ANZ Bank Group and ANZ Non-Bank Group. The Business
Restructure will also involve the transfer of certain property
interests to ANZ ServiceCo.
More details about the Business Restructure are set out in
section 7.3.
23
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 4
ANZ Bank Group
ANZ Group
ANZ Non-Bank Group
ANZ NOHC Shareholders
ANZ NOHC
ANZ ServiceCo
Certain
property assets
1835i trusts,
Worldline JV,
Lygon TIN and
Pollination
Other potential
non-banking
businesses
ANZ Non-Bank HoldCo
ANZ Bank HoldCo
ANZBGL
Banking businesses
incl. ANZ NZ
4.5 IMPLICATIONS OF THE
RESTRUCTURE FOR ANZ
SHAREHOLDERS AND OTHER
STAKEHOLDERS
(a) ANZ Shareholders
The way in which an individual ANZ Shareholder
participates in the Scheme will depend on whether
that shareholder is an:
•Eligible Shareholder; or
•Ineligible Foreign Shareholder.
(b) Eligible Shareholders
If the Scheme is approved and implemented, each ANZ
Shareholder who is an Eligible Shareholder will receive one
ANZ NOHC Share for each ANZ Share that they hold as at
the Scheme Record Date (currently expected to be 7.00pm
on 29 December 2022).
Eligible Shareholders are ANZ Shareholders whose
addresses are shown in the ANZ Share Register as at the
Scheme Record Date as being in Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.
(c) Ineligible Foreign Shareholders
Ineligible Foreign Shareholders are ANZ Shareholders
whose addresses are shown in the ANZ Share Register at
the Scheme Record Date as being outside Australia (and its
external territories), New Zealand or an Eligible Foreign
Jurisdiction.
Ineligible Foreign Shareholders are not permitted to
participate in the Scheme and will not be issued ANZ NOHC
Shares. Instead, Ineligible Foreign Shareholders will receive
the cash proceeds of the sale of the ANZ NOHC Shares.
If any Ineligible Foreign Shareholder wishes to be an ANZ
Shareholder after the Restructure, they may purchase ANZ
NOHC Shares (subject to any legal requirements or
restrictions) in the usual way.
More details about the impact of the Scheme for Ineligible
Foreign Shareholders are set out in section 7.2(g).
(d) ANZ Senior Notes and ANZ RMBS
ANZ Senior Notes and ANZ RMBS will not be affected by the
Restructure. Following implementation of the Scheme, the
ANZ Senior Notes and ANZ RMBS will remain on issue on
the same terms and, where applicable, will remain listed on
the same exchanges as at present.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
24
(e) ANZ Regulatory Capital Securities
Following implementation of the Scheme, ANZBGL will
remain listed on the ASX as a debt listing with the ASX code
“AN3” (and ANZ Shares will no longer be quoted for trading
on the ASX). Following implementation of the Scheme, ANZ
Regulatory Capital Securities (including ANZ Capital Notes)
will remain on issue by ANZBGL and (where applicable)
quoted for trading on the ASX under their new ASX codes
until they are repaid, converted or written off in accordance
with their terms. Section 7.2(d) identifies the current and
new ASX codes of ANZ Regulatory Capital Securities that
are quoted for trading on the ASX.
More details about the impact of the Scheme on ANZ
Regulatory Capital Securities are set out in section 7.2(d).
(f ) ANZ NZ security holders
ANZ NZ security holders will not be affected by the
Restructure. Following implementation of the Scheme, ANZ
NZ securities will remain on issue on the same terms.
(g) ANZ ADS Holders
If the Scheme is approved and implemented, ANZ ADS
Holders will receive one ADS representing one ANZ NOHC
Share for each ANZ ADS that they hold as at the
Effective Date.
More details about the impact of the Scheme on ANZ ADSs
and the ADR program are set out in section 7.2(e).
4.6 EFFECT OF THE RESTRUCTURE
ON THE ANZ GROUP
(a) Outline of the ANZ Group after the
Restructure
A description of ANZ NOHC, the ANZ Bank Group and
ANZ Non-Bank Group, and ANZ ServiceCo following the
proposed Restructure is set out below in this section 4.6(a).
(1) ANZ NOHC
ANZ NOHC has been established to become the new
listed parent company of the ANZ Group in place of
ANZBGL. ANZ NOHC will be a NOHC and will own all
ANZ Group businesses and assets.
ANZ NOHC will be an authorised NOHC for the purposes
of the Banking Act.
(2) ANZ Bank Group and ANZBGL
ANZ Bank HoldCo has been established to become the
non-operating holding company of the ANZ Bank Group.
The ANZ Bank Group will hold ANZ’s banking businesses
(including ANZBGL and ANZ NZ), all international regulated
bank operations and insurance businesses (including ANZ
Lenders Mortgage Insurance and ANZ Cover). After the
Restructure, ANZ will continue to provide banking services
in the ordinary course, including retail, commercial and
institutional services to Australia, New Zealand, Asia, Europe
and the US.
If the Suncorp Transaction and Restructure both go ahead,
Suncorp Bank will be held in the ANZ Bank Group.
Following implementation of the Scheme, ANZBGL will
continue to be listed on the ASX as a debt listing with the
ASX code “AN3”.
(3) ANZ Non-Bank Group
ANZ Non-Bank HoldCo has been established to become
the non-operating holding company of the ANZ Non-Bank
Group. The ANZ Non-Bank Group will hold certain non-
banking businesses and assets. These businesses and assets
are set out in the table below.
INVESTMENT
DESCRIPTION
ANZ NON-BANK
GROUP INTEREST
5
1835i trustsEconomic interest in start-up businesses which support or are involved
in the development of technology and related services in the financial
services industry. Interests of varying sizes in these businesses are held
by the 1835i trusts in which ANZ has a 100% beneficial interest.
100% economic interest
in 1835i trusts
Worldline
merchant acquiring
joint venture
Minority stake in the merchant acquiring business ANZ Wordline
Payment Solutions.
49%
PollinationPollination provides advisory services, project investment, and asset
management for corporations accelerating their transition to net-zero.
~12%
LygonLygon is a private blockchain platform which allows customers to
request, track and exchange bank guarantees all from the one portal.
25%
Trade Information
Network (TIN)
TIN is a trade data registry, which enables the collation and exchange
of original trade supply data between buyers, suppliers and financiers
around the globe.
16.7%
25
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 4
5. Other than for 1835i trusts, the interests set out in this table are current as at the half year ended 31 March 2022.
The ANZ Non-Bank Group will initially be modest in scale
(relative to the ANZ Bank Group). The ANZ Board expects it
to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacent
businesses) that the ANZ Group may develop or acquire.
This will help bring new technology and non-bank services
to ANZ customers.
Having regard to the nature of the interests to be initially held
by the ANZ Non-Bank Group, ANZ does not expect to make
material changes to the way ANZ operates its non-banking
businesses immediately following the Restructure. The future
operation of non-banking businesses, including the
appropriate application of ANZ Group policies, will be
determined at the time of developing or acquiring non-
banking businesses as part of the ANZ Non-Bank Group. ANZ
will monitor the appropriateness of these operating models
and policy applications having regard to the nature, size,
scale or complexity of the underlying entities and businesses
in the ANZ Non-Bank Group.
The ANZ NOHC Board is ultimately responsible for
overseeing all activities in the ANZ Group. It is possible
that senior executive reporting and accountability may be
adjusted as non-banking businesses are developed or
acquired. As noted in section 5.1(b), the Restructure
provides ANZ with this flexibility.
Immediately following the Restructure, neither ANZ NOHC
nor ANZ Non-Bank HoldCo will hold an AFSL or ACL. ANZ
NOHC may seek to obtain an AFSL following
implementation of the Restructure.
(4) ANZ ServiceCo
ANZ ServiceCo has been established to become an internal
service company to hold certain property interests and, in
the future, to potentially provide certain central shared
service functions across the ANZ Group.
(5) Interaction between ANZ Group members
It is intended that intragroup services and resourcing
agreements will be put in place to: set out the terms
on which:
•ANZ ServiceCo can, in the future, potentially provide
certain central shared service functions across the ANZ
Group; and
•ANZ Group members can access certain resources
(including employees and technology), materials or
assistance that are retained by ANZBGL.
These agreements will be on standard commercial terms
and have regard to applicable prudential standards and
ANZ Group policies.
(b) ANZ strategy
ANZ’s strategy to improve the financial wellbeing and
sustainability of customers by providing connected,
relevant and efficient services, tools and insights will remain
the same. The Restructure can facilitate the execution of
ANZ’s strategy by providing ANZ with greater flexibility for
how it runs its businesses and partners with others, whilst
maintaining the appropriate protections for customers and
other stakeholders.
4.7 PROPOSED ANZ GROUP
GOVERNANCE FRAMEWORK
AND POLICIES
(a) Proposed boards after the Restructure
(1) ANZ NOHC
It is proposed that, from the Effective Date, the ANZ NOHC
Board will comprise the following individuals (subject to any
elections or retirements in relation to the ANZ Board at the
ANZ 2022 Annual General Meeting):
•Paul O'Sullivan (Chairman);
•Shayne Elliott (CEO);
•Ilana Atlas AO;
•Jane Halton AO PSM;
•Rt Hon Sir John Key GNZM AC;
•John Macfarlane;
•Christine O'Reilly;
•Jeff Smith; and
•Graeme Liebelt.
The ANZ NOHC Board will be responsible for the oversight
and strategic direction of the ANZ Group.
(2) ANZ Bank HoldCo and ANZBGL
It is proposed that the ANZ Bank HoldCo and ANZBGL
boards will comprise the following individuals (subject to
any elections or retirements in relation to the ANZ Board at
the ANZ 2022 Annual General Meeting) Paul O’Sullivan
(Chairman), Shayne Elliott (CEO), Ilana Atlas AO, Jane Halton
AO PSM, Rt Hon Sir John Key GNZM AC, Graeme Liebelt,
John Macfarlane, Christine O’Reilly, Jeff Smith and one
additional non-executive director who is independent of
ANZ NOHC (and ANZ Non-Bank Group).
The ANZ Bank HoldCo and ANZBGL boards will be
responsible for the oversight of the ANZ Group’s banking
businesses.
(3) ANZ Non-Bank HoldCo
It is proposed that the ANZ Non-Bank HoldCo board will
comprise the following individuals (subject to any elections
or retirements in relation to the ANZ Board at the ANZ 2022
Annual General Meeting) Paul O’Sullivan (Chairman), Shayne
Elliott, Ilana Atlas AO, Jane Halton AO PSM, Rt Hon Sir John
Key GNZM AC, Graeme Liebelt, John Macfarlane, Christine
O’Reilly and Jeff Smith.
The ANZ Non-Bank HoldCo board will be responsible for
the oversight of the ANZ Group’s non-bank businesses and
assets that are owned by ANZ Non-Bank HoldCo.
Going forward, depending on the growth in size and
complexity of the ANZ Non-Bank Group, consideration will
be given to the appointment of additional non-executive
director(s) to the ANZ Non-Bank HoldCo Board, not
currently on the ANZ NOHC Board, to provide independent
thought leadership and challenge on non-banking
related matters.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
26
(4) ANZ ServiceCo
It is proposed that the ANZ ServiceCo board will comprise
an independent non-executive director and appropriately
qualified senior management.
The ANZ ServiceCo board will be responsible for overseeing
the property interests held by ANZ ServiceCo and the
potential services provided in the future by ANZ ServiceCo
to other ANZ Group members.
(b) Executive Committee
After the Restructure, it is proposed that the existing
ANZ Executive Committee will continue to operate on an
ANZ Group wide basis. It is proposed that the Executive
Committee will comprise the current members (subject to
any appointments or resignations), being Shayne Elliott
(CEO), Maile Carnegie, Kevin Corbally, Farhan Faruqui, Gerard
Florian, Kathryn van der Merwe, Antonia Watson, Mark
Whelan and Antony Strong (who is appointed to the ANZ
Executive Committee effective 1 November 2022).
The ANZ Group Executive Committee headed by the ANZ
Group CEO is the ANZ Group’s leadership team whose role
is to support the ANZ Group CEO to deliver ANZ’s purpose,
which is summarised in section 4.2. It does this by
focusing on:
•all key stakeholders;
•ANZ’s culture and capabilities; and
•prioritising efforts and allocating resources in line with
ANZ’s strategic objectives and pillars.
(c) ANZ NOHC constitution
The ANZ NOHC constitution will be the main document
governing the rights and obligations of ANZ NOHC
Shareholders. The terms of the ANZ NOHC constitution will
be substantially the same as the existing ANZBGL
constitution.
A summary of the material differences between the existing
ANZBGL constitution and the ANZ NOHC constitution is set
out in section 9.4.
(d) ANZBGL constitution
The ANZBGL constitution will remain in effect and will not
be amended as part of the Restructure. The ANZBGL
constitution may in the future be amended to reflect
ANZBGL’s status as a wholly owned subsidiary.
(e) Board committee charters and
governance policies
The terms of the ANZ NOHC Group Board committee
charters and governance policies will be adopted in
substantially the same form and structure as the existing
ANZ Group’s Board committee charters and governance
policies, subject to certain changes that will be made to
reflect the structure of the ANZ Group after the Restructure.
Following implementation of the Scheme, certain ANZ
NOHC Group Board committee charters and governance
policies will be available on the ANZ website (anz.com.au).
(f ) Director remuneration
The Restructure itself will not change the current
remuneration of ANZ Directors and the remuneration
policies after the Restructure will (including for the directors
of the ANZ Non-Bank Group entities) remain the same as
those currently applied to the ANZ Group (although, as
noted in section 9.6, certain non-material amendments will
be made to the ANZ Incentive Plans to reflect the corporate
structure of the ANZ Group after the Restructure).
4.8 APRA REGULATORY
REQUIREMENTS
(a) APRA’s regulation after the Restructure
As part of the Restructure, ANZ’s prudential policy
framework will be adjusted to reflect APRA’s regulation of
the ANZ Group after the Restructure. A summary of APRA’s
regulation of the ANZ Group after the Restructure is set
out below.
•ANZ NOHC: will be a non-operating holding company
that is authorised by APRA (an authorised NOHC). It will
be required to comply with the conditions of its
authorisation, which are summarised in section 4.8(c)
and include the specific capital requirements. As an
authorised NOHC, it will also be subject to regulation
under the Banking Act and certain APRA prudential
standards. As the head of a Level 3 group, it will be
required to ensure certain APRA prudential standards
are applied appropriately throughout the ANZ Group
(including the ANZ Bank Group and relevant members
of the ANZ Non-Bank Group).
•ANZ Bank Group: includes the ANZ Group’s entities that
conduct banking business (including ANZBGL and ANZ
NZ). The ANZ Bank Group will continue to be subject to
the full suite of APRA prudential and reporting standards
for ADIs, including standards in relation to capital
adequacy and liquidity.
•ANZ Non-Bank Group: will comprise the ANZ Group’s
entities that are not within the ANZ Bank Group. Subject
to those requirements relating to APRA’s authorisation
(see sections 4.8(b) and 4.8(c) for more information),
these entities will not be subject to ADI-specific
regulation, such as bank capital adequacy and liquidity
requirements currently applied to ANZBGL. As noted
above, ANZ NOHC will be required to apply certain APRA
prudential standards appropriately throughout the ANZ
Group, including to relevant members of the ANZ
Non-Bank Group being those where the ANZ NOHC has
considered it appropriate to do so to protect the ANZ
Group or ANZ customers or where APRA has required
ANZ NOHC to do so.
Initially, ANZ's risk management framework will apply to the
ANZ Group following implementation of the Scheme in
substantially the same form as the current risk management
framework. However, over time, ANZ's risk management
framework and risk appetite statement may be adjusted as
the ANZ Non-Bank Group (including ANZ
ServiceCo) develops.
27
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 4
(b) APRA capital requirements
After the Restructure, ANZ NOHC will be required to hold
adequate capital to reflect the risks of the whole ANZ
Group, including both the ANZ Bank Group and ANZ
Non-Bank Group.
The capital requirements of the ANZ Group will be the sum
of the capital requirements of the ANZ Bank Group and the
ANZ Non-Bank Group. The ANZ Bank Group’s capital
requirements will continue to be determined by existing
APRA requirements. The capital requirements of the ANZ
Non-Bank Group will be assessed using an independently
validated and ANZ NOHC Board approved economic capital
framework and model, which will be subject to
independent assurance.
(c) APRA conditions
ANZ NOHC will be an APRA-regulated entity, with
obligations under the Banking Act and APRA prudential and
reporting standards. APRA’s authorisation of ANZ NOHC as a
non-operating holding company under the Banking Act is
subject to certain conditions, including the following:
•ANZ Bank HoldCo and ANZBGL must have an
independent director who is not on the board of ANZ
NOHC or any ANZ Non-Bank Group entity;
•ANZ NOHC itself must not undertake any activities other
than for example, providing executive leadership across
the ANZ Group, holding investments in subsidiaries,
raising funds to invest in or support subsidiaries or to
conduct its own activities or other activities required to
achieve compliance with its prudential obligations, or
other activities approved by APRA;
•ANZ NOHC must obtain APRA’s no-objection
confirmation prior to starting material activities in ANZ
Non-Bank Group;
•ANZBGL must retain ownership of, or access to, all
functions critical to its operations;
•non-regulated businesses of the ANZ Group must be
financially and operationally separable from ANZBGL; and
•ANZ NOHC must ensure that the ANZ Non-Bank Group
does not carry on any activities that pose excessive risk to
the ADI (and ensure that the ANZ Bank Group transfers to
the ANZ Non-Bank Group any activities that APRA notifies
in writing to constitute an undue risk to the ADI).
APRA has the ability to review and modify these conditions
at any time if it considers it appropriate to do so.
A copy of the APRA conditions imposed on ANZ NOHC
as an authorised non-operating holding company is in
Annexure 6.
4.9 RBNZ REGULATORY
REQUIREMENTS
ANZ NOHC and ANZ Bank HoldCo will not be RBNZ-
regulated entities. The Restructure is not expected to result
in any material change to the regulation of ANZBGL and
ANZ NZ (or ANZ NZ’s subsidiaries) by RBNZ.
4.10 OTHER REGULATORY IMPACTS
After the Restructure, a number of regulators will continue
to maintain oversight and regulation of the ANZ Group
(including both the ANZ Bank Group and ANZ Non-Bank
Group). These regulators include:
•ASIC – in relation to corporations and securities matters;
•Australian Transaction Reports and Analysis Centre – in
relation to anti-money laundering and counter-terrorism
financing laws; and
•the Office of the Australia Information Commissioner –
in relation to privacy and freedom of information law.
As discussed in section 4.8, the ANZ Non-Bank Group will
not be subject to specific bank or ADI regulation. However,
to the extent the activities of the ANZ Non-Bank Group
involve the provision of products or services to ANZ
customers, ANZ will be required to continue to comply with
a range of laws and regulation (as is currently the case)
including those relating to conflicts of interest and
customer data protection.
4.11 FINANCIAL AND TAXATION
IMPACT OF THE RESTRUCTURE
ON THE ANZ GROUP
(a) Financial impact
The Restructure itself is not expected to result in any
material change to the consolidated financial position
of the ANZ Group.
More details on the financial impact of the Restructure
on the ANZ Group are set out in section 6.
(b) Funding arrangements
The Restructure itself is not expected to result in any
material change to the overall funding requirements or
debt issuance capacity of the ANZ Bank Group or the ANZ
Group as a whole, nor is it expected to impact ANZ Bank
Group’s liquidity and stable funding requirements.
After the Restructure, ANZ NOHC will have the ability to
raise debt to provide funding support to the ANZ Group as
needed including, potentially, to refinance (in whole or in
part) the short term loan from ANZBGL to ANZ ServiceCo
referred to in section 6.3. The interest costs associated with
any debt raised by ANZ NOHC may exceed the interest
costs associated with any debt raised by ANZBGL because
the credit rating of ANZ NOHC will likely be lower than
ANZBGL’s credit rating (see section 4.11(e)). However, the
structure of the ANZ Group after the Restructure provides
ANZ greater flexibility to raise debt at different levels and/or
groups (generally at the ANZ NOHC level or the ANZ Bank
Group level) within the ANZ Group, however, ANZ NOHC
may not raise debt finance in the short term.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
28
(c) Dividends
If the Restructure goes ahead, ANZ NOHC Shareholders will
have the same dividend rights as their current ANZ Shares.
The Restructure itself is not expected to:
•impact the ANZ Group’s ability to pay dividends;
•affect the ANZ dividend payout ratio (being the
percentage of earnings paid to shareholders as a
divided); or
•affect the amount of franking credits available in respect
of any dividend paid (nor is it expected to affect ANZ
NOHC’s ability to pass franking credits to shareholders).
(d) ANZ DRP and BOP
On implementation of the Scheme, ANZ NOHC will
establish its own DRP and BOP. These will be on
substantially same terms as the current ANZ DRP and BOP.
If an ANZ Shareholder has an election in place to participate
in the ANZ DRP and/or the BOP, that election will on the
Implementation Date automatically apply to the ANZ NOHC
DRP and/or BOP. If you do not wish to participate in the ANZ
NOHC DRP and/or BOP, please contact the ANZ
Share Registry.
Following implementation of the Scheme, a full copy of
the ANZ NOHC DRP and BOP will be available on the ANZ
website (anz.com.au).
Any positive residual balance held in a participant’s ANZ
DRP account on the Scheme Record Date will be transferred
to the participant’s respective ANZ NOHC DRP on
implementation of the Scheme.
(e) ANZ’s credit ratings
It is expected that:
•the credit rating of ANZBGL and ANZ NZ will not be
impacted by the Restructure itself; and
•ANZ NOHC is likely to obtain an investment grade rating
from credit rating agencies (as noted in section 4.11(b),
the credit rating for ANZ NOHC is expected to be lower
than the credit rating of ANZBGL).
As is the case prior to the Restructure, any applicable credit
rating of any entity may be received, suspended, withdrawn
or downgraded.
(f ) Taxation implications on the ANZ Group
ANZBGL is currently the head company of the ANZ
consolidated tax group. After the Restructure, the ANZ
consolidated tax group will continue in existence with ANZ
NOHC as the new head company.
The applicable stamp duties regimes Australia wide will
continue to apply to the ANZ Group after the Restructure in
the same way as they did before the Restructure. If
corporate consolidation and reconstruction relief is
obtained in relation to the Restructure such that certain
amounts of stamp duty that may otherwise have become
payable are not payable, conditions for relief may include
that certain entities remain within the ANZ Group for up to
3 years (failing which stamp duty may become payable at
the applicable future time).
The tax implications of the Scheme on ANZ Shareholders
are described in section 8.
29
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 4
SECTION
5
RATIONALE, BENEFITS,
DISADVANTAGES
AND RISKS
5.1 RATIONALE AND POTENTIAL
BENEFITS OF THE RESTRUCTURE
The financial services industry in Australia is changing
rapidly. Traditional banking businesses like ANZ are facing
significant disruption, principally from non-banking
businesses that are launching competing financial and
service products. These businesses are not regulated in the
same way as banks like ANZ. In addition, bank customers
are demanding better and more tailored banking products
and services, including through interconnected services
and products, digital solutions and providers.
To take advantage of this changing environment, ANZ aims
to grow with its customers and meet their changing
expectations.
The ANZ Board considers that the Restructure can help ANZ:
•through growth and expansion, acquisitions or
partnerships with third parties, develop a holistic ‘digital
banking ecosystem’ including adjacent, non-banking
services, platforms and partnerships that complement
ANZ’s core banking business;
•better meet customers’ needs in the digital age;
•compete in banking adjacent areas on a level playing
field with other non-banking businesses, to allow ANZ to
provide better products and services to its customers;
•be an employer of choice in both banking and non-
banking areas; and
•remain a great bank that strives to improve the financial
wellbeing of its customers.
This is in line with ANZ’s existing strategy.
A NOHC or similar holding company structure is used by
many leading financial institutions and financial
conglomerates (including those with regulated banking
operations) (for example, Macquarie Group and Suncorp
Group in Australia and Bank of America, J.P. Morgan, HSBC
and Barclays internationally).
After the Restructure, ANZ’s banking activities (including
Suncorp Bank, if that transaction goes ahead) will continue
to be subject to the same prudential regulation as they are
subject to now. However, the activities of certain non-
banking businesses will not be subject to the full suite of
APRA prudential and reporting standards for banking
activities. This will help enable a fit for purpose application
of regulations, policies and procedures to these non-
banking businesses.
The key benefits of the Restructure are summarised below
in this section 5.1.
(a) Transparency
The Restructure will separate ANZ’s banking and certain
non-banking businesses within the ANZ Group. This
separation will create transparency and clarity for
employees, customers, regulators and investors. After the
Restructure, APRA will retain oversight of non-banking
businesses in the ANZ Non-Bank Group, without the added
complexity of applying the full suite of APRA prudential and
reporting standards for ADIs (including standards in relation
to bank capital adequacy and liquidity).
This separation also places ANZ in a stronger and clearer
position in the event recovery actions are required or
recovery progresses to resolution. The ANZ Group structure
after the Restructure will allow certain assets, liabilities and
risks to be quarantined (or “legally separated”) from those of
the other members of the ANZ Group, providing additional
protection and minimising contagion risk.
(b) Flexibility
After the Restructure, the ANZ Group will have a corporate
structure that positions ANZ to have more strategic and
operational flexibility. That structure can enable ANZ to be
more innovative and responsive to the changes occurring
in the financial services industry. The NOHC structure
proposed by the Restructure can allow ANZ to deliver a
fuller suite of products and services to customers, while
maintaining appropriate protections for customers and
other stakeholders.
Under ANZ’s current corporate structure, ANZBGL is the
listed parent company of the ANZ Group and is an ADI.
Accordingly, all of the ANZ consolidated group’s activities
are subject to the full suite of APRA prudential and
reporting standards for ADIs, including standards in relation
to bank capital adequacy and liquidity.
The Restructure will allow a fit for purpose application of
regulations, policies and procedures suitable to certain
non-banking businesses. This fit for purpose application can
allow ANZ to adapt more readily to changes occurring in
the financial services industry. It can ensure ANZ is better
able to pursue its purpose and strategy, while ensuring the
appropriate application of regulatory requirements to ANZ’s
banking and certain non-banking businesses.
As part of the Restructure, ANZ will adjust its current
prudential policy framework to take account of its NOHC
structure and the separation of ANZ’s banking and certain
non-banking businesses. Over time, ANZ expects that the
revised prudential policy framework can provide the ANZ
Group with additional flexibility to appropriately apply its
policies to its underlying businesses in a way that takes
account of the nature of those underlying businesses. In
particular, ANZ expects that the framework can be applied
in a way that allows the ANZ Non-Bank Group to pursue
ANZ’s strategy.
(c) Stronger non-banking business
As described above, the Restructure will better enable ANZ
to develop its non-banking businesses by allowing a fit for
purpose application of regulations, policies and procedures.
The ANZ Non-Bank Group will initially be modest in scale
(relative to the ANZ Bank Group). The ANZ Board expects it
to be used as a vehicle for innovation and growth in certain
non-banking businesses (including banking-adjacent
businesses) that the ANZ Group may develop or acquire.
This will help bring new technology and non-bank services
to ANZ customers in line with ANZ’s strategy to strengthen
and grow ANZ’s core banking business, and to improve the
financial wellbeing of its customers.
31
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 5
(d) Employer and partner of choice
The Restructure can assist ANZ to attract staff and partners
with skills outside traditional banking, who are more aligned
with a broad financial services group.
The ANZ Non-Bank Group will aim to create a workforce
that will diverge from traditional banking skillsets, creating
space to grow, attract, motivate and remunerate new talent
differently, and to incubate its own fit for purpose
innovative, fast-paced, high performance culture.
5.2 POTENTIAL DISADVANTAGES
OF THE RESTRUCTURE
The most significant disadvantages of the Restructure are:
•the one off cash transaction and implementation costs
associated with the Restructure are estimated to be in
aggregate approximately $35 million (before tax) and
largely relate to stamp duty, advisor fees, and costs
associated with ANZ’s internal project team (of which
approximately $25 million is expected to be incurred by
ANZ if the Restructure does not proceed);
•there will be additional ongoing incremental costs
associated with corporate and operating costs of the ANZ
Group. These are estimated to be less than approximately
$5 million (before tax) per annum and largely relate to the
incremental resources required to support the new
NOHC structure and the separate ANZ Bank Group and
ANZ Non-Bank Group, as well as additional costs
associated with ASX listing compliance, governance,
reporting, share registry and maintaining additional
boards; and
•one or more of the risks identified in section 5.3
might occur.
ANZ considers that these disadvantages are not expected
(or likely) to have a material impact on the ANZ Group.
5.3 POTENTIAL RISKS ASSOCIATED
WITH THE RESTRUCTURE
The following potential risks have been identified:
•APRA has not yet finalised its prudential framework for
Australian NOHCs of ADIs. ANZ has undertaken extensive
discussion with APRA as part of the Restructure, and the
authorisation of ANZ NOHC has been approved by APRA.
However, there is a risk that APRA’s final regulatory
framework for Australian NOHCs of ADIs and the
regulation of ANZ NOHC over time will differ from
ANZ’s current expectations. This may have negative
consequences for the ANZ Group and/or may require
further changes to its structure;
•the Restructure will result in certain changes to
ANZ’s existing operating model. ANZ considers that
these changes can be implemented and managed
appropriately after the Restructure. However, it is possible
that unexpected business, market and/or regulatory
factors may result in these operating model changes not
functioning as expected and further changes may
be required;
•implementation of the Restructure will involve a number
of steps, and unexpected developments may arise which
can affect the timing of implementation and/or the form
and scope of the Restructure; and
•unexpected liabilities caused by any delays in non-
material regulatory approvals or by regulatory relief not
being granted.
The ANZ Board believes that the overall risk profile of the
ANZ Group will not be adversely affected by the Restructure
itself. This is due to a number of reasons, including the
following:
•ANZ’s existing banking businesses and operations will
remain the same;
•ANZ’s focus will remain banking and financial products;
•the people responsible for the overall governance and
management of the ANZ Group will remain substantially
the same;
•the ANZ strategy will remain the same (and execution of
that strategy will be assisted by the Restructure);
•the ANZ Group’s consolidated financial position will not
be affected by the Restructure itself; and
•ANZ’s dividend payout ratio (being the percentage of
earnings paid to shareholders as a divided) will not
be affected.
5.4 ALTERNATIVES CONSIDERED
BY THE ANZ BOARD
Before proposing the Restructure, the ANZ Board considered
a number of alternatives it believes are available to ANZ to
ensure that it can continue to pursue its strategies while
meeting its obligations to APRA and other regulators.
The primary alternatives to the proposed Restructure, and
the potential disadvantages relevant to the ANZ Group, are
summarised below.
• Dual listed company structure
−A dual listed company structure is a corporate structure
in which 2 companies retain separate primary stock
exchange listings with separate shareholder bases, but
operate as a single unified business.
−The characteristics that usually drive a dual listed
company structure are not present in ANZ’s case.
−A dual listed company structure is typically expensive
and complex to establish and operate due to initial
and ongoing costs associated with establishing and
maintaining two separate entities, each with their
own primary stock exchange listings.
•Stapled security structure
−A stapled security structure is a corporate structure in
which 2 or more securities issued by different entities
are contractually bound together, meaning those
securities cannot be bought or sold separately.
−A stapled security structure typically makes it more
difficult to raise capital in a targeted manner due to
lack of a single holding company, and is typically more
expensive than a single holding company due to
maintaining two separate entities.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
32
•Minority investment structure
−A minority investment structure is a corporate structure
in which a minority investment (being a non-
controlling interest) is acquired in an asset or retained
in an asset that has been divested.
−A minority investment structure is not appropriate in all
cases for certain non-banking businesses of ANZ as it
results in a loss of control of any divested assets and
may give rise to a risk of brand dilution.
The ANZ Board has decided to not pursue these alternatives
because, after due consideration, the ANZ Board believes
that the Restructure will provide the optimal
structure for ANZ.
5.5 IMPLICATIONS OF THE
RESTRUCTURE NOT PROCEEDING
If the Restructure does not proceed, ANZ has the
appropriate strategy, governance framework and policies
in place to effectively manage the ANZ Group. However,
the ANZ Board believes that if the Restructure does not
proceed, the structure of ANZ will be less optimal for
the effective execution of ANZ’s strategy.
If the Restructure does not proceed:
•ANZBGL will remain the listed parent company of
the ANZ Group;
•ANZ Shareholders will retain their existing holding
in ANZ Shares;
•Eligible Shareholders will not receive ANZ NOHC Shares
and Ineligible Foreign Shareholders will not receive the
cash proceeds of the sale of the ANZ NOHC Shares;
•the amendments to the ANZ Regulatory Capital
Securities to substitute ANZ NOHC as the issuer of
ordinary shares on conversion will not take effect;
•ANZ ADS Holders will retain their existing holding in ANZ
ADSs and the ANZ ADS Deposit Agreement will not be
terminated;
•approximately $25 million (before tax) one off transaction
costs is expected to be incurred by ANZ;
•the benefits of the Restructure described in section 5.1
will not be realised; and
•the disadvantages and risks of the Restructure described
in sections 5.2 and 5.3 will not arise.
33
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 5
SECTION
6
FINANCIAL
INFORMATION
6.1 INTRODUCTION
(a) Overview
The financial information of ANZ contained in this section
comprises the:
•the historical consolidated statement of financial position
of ANZBGL as at 31 March 2022;
•the historical consolidated income statement for the
half year ended 31 March 2022 of ANZBGL;
(together the Historical Financial Information);
•pro-forma statement of financial position for ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo as at
31 March 2022 assuming the ANZ NOHC Group was in
place on that date (Pro-forma Balance Sheet);
•pro-forma income statement for ANZ Bank HoldCo,
ANZ Non-Bank HoldCo and ANZ ServiceCo for the half
year ended 31 March 2022 assuming that the ANZ NOHC
Group was in place during the period (Pro-forma
Income Statement);
(together the ANZ NOHC Pro Forma Financial
Information)
•assumptions and notes on the adjustments relevant
to the above; and
•reconciliation of the ANZ NOHC Pro Forma Financial
Information to the Historical Financial Information
(together, the Financial Information).
The ANZ NOHC Pro-forma Financial Information is provided
for illustrative purposes only. It does not represent what
ANZ’s financial results would have been if the ANZ NOHC
Group had in fact been in place on the dates mentioned
above. It is not intended to be representative of the
financial results for any future period.
The Financial Information has been prepared and presented
in accordance with the recognition and measurement
principles prescribed in the Australian Accounting
Standards (AAS) issued by the Australian Accounting
Standards Board (AASB), which are consistent with the
International Financial Reporting Standards (IFRS).
The Financial Information is presented in an abbreviated
form insofar as it does not include all the disclosures,
statements or comparative information as required by
the AAS applicable to annual financial reports prepared
in accordance with the Corporations Act. ANZ’s key
accounting policies have been consistently applied with
ANZ’s half year financial statements. For further details of
the significant accounting policies refer to the Historical
Financial Information.
The ANZ NOHC Pro-forma Financial Information has been
reviewed by the Investigating Accountant in accordance
with the Australian Standard on Assurance Engagements
ASAE 3450 Assurance Engagements involving Fundraising
and/or Prospective Information, as stated in its Investigating
Accountant’s Report in Annexure 2.
This section 6 should be read with the information outlined
in this Explanatory Memorandum.
(b) Basis of preparation
The Financial Information is prepared for the purposes
of this Explanatory Memorandum.
Historical Financial Information
The Historical Financial Information has been extracted
from the ANZBGL Consolidated Financial Report for the Half
Year 31 March 2022, which were reviewed by KPMG in
accordance with Australian Auditing Standards. KPMG
issued an unqualified review opinion on these consolidated
financial statements.
The ANZ NOHC Pro-forma Financial Information
The ANZ NOHC Pro-forma Financial Information has been
derived from the Historical Financial Information adjusted to
illustrate the effects of the Restructure on ANZ described in
section 4 of this Explanatory Memorandum.
It is assumed that the accounting policies adopted by
entities within the ANZ NOHC Group are unchanged from
those policies adopted by the ANZ Group prior to the
Restructure as reported in Note 1 to the Financial
Statements of the ANZ 2021 Annual Report.
The ANZ NOHC Group’s accounting policies specific to the
proposed Restructure include:
•investments in controlled entities – ANZ NOHC accounts
for its investment in ANZBGL as an acquisition in
exchange for issuing new ANZ NOHC Shares. ANZ NOHC
initially recognises its investment in controlled entities at
an amount equal to the carrying value of total equity of
the ANZBGL parent company outstanding at the
Implementation Date;
•after the Restructure, ANZ NOHC’s investment in
controlled entities continues to be carried at cost; and
•reverse acquisition – the Restructure is accounted for
as a reverse acquisition in the ANZ NOHC Group’s
consolidated financial statements, with ANZBGL
identified as the acquirer applying the principles of
AASB 3: Business Combinations. While ANZ NOHC reflects
investments in controlled entities at carrying value at
the date of acquisition in its parent entity financial
statements, the ANZ NOHC Group consolidated financial
statements are presented as a continuation of the ANZ
Group that includes ANZ Bank HoldCo, ANZ Non-Bank
HoldCo and ANZ ServiceCo.
The ANZ NOHC Pro-forma Financial Information is
presented in Australian dollars, rounded to the nearest
million dollars ($m), unless otherwise stated.
35
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 6
6.2 APPROACH USED TO
DETERMINE THE ANZ NOHC PRO-
FORMA FINANCIAL INFORMATION
As described throughout this Explanatory Memorandum,
ANZ is proposing to implement the Restructure under
which ANZ NOHC will become the new listed parent
company of the ANZ Group.
The Financial Information included in this section 6
incorporates the various internal share and asset transfers
amongst the ANZ NOHC Group as described in section
7.3(a), and all associated revenue, expense and taxation
information being transferred from ANZBGL to ANZ
Non-Bank HoldCo and ANZ ServiceCo. In summary, the ANZ
NOHC will be established as the new listed parent company
of the ANZ Group comprising the following:
•ANZ Bank HoldCo which will hold all of ANZ’s banking
businesses (including ANZBGL and ANZ NZ), international
regulated bank operations and insurance businesses
(including ANZ Lenders Mortgage Insurance and ANZ
Cover). If the Suncorp Transaction and Restructure both
go ahead, Suncorp Bank will be held by the ANZ
Bank HoldCo.
•ANZ Non-Bank HoldCo which will hold certain
non-banking businesses including ANZ’s beneficial
interests in the 1835 trusts, non-controlling interest in the
Worldline merchant acquiring joint venture6 and equity
interest in Lygon, TIN and Pollination. ANZ Non-Bank
HoldCo will initially be modest in scale relative to ANZ
Bank HoldCo. The ANZ Board expects it to be used as a
vehicle for innovation and growth in certain non-banking
businesses (including banking adjacent businesses) that
ANZ may develop or acquire. Given the nature of the type
of investments to be held by ANZ Non-Bank HoldCo are
early stage, some of those investments are expected to
be loss making in the near term as these investments
continue to mature.
•ANZ ServiceCo has been established to become an
internal service company to initially hold certain property
interests and, in the future, to potentially provide certain
central shared services function across the ANZ Group.
6.3 PRO-FORMA BALANCE SHEET
AS AT 31 MARCH 2022
The Pro-forma Balance Sheet has been prepared to illustrate
the Restructure, disclosing separately the assets, liabilities
and equity of ANZ NOHC, ANZ Bank HoldCo, ANZ Non-Bank
HoldCo, ANZ ServiceCo and the consolidated ANZ NOHC
Group as at 31 March 2022 assuming the Restructure had
occurred on that date.
The Pro-forma Balance Sheet has been prepared as follows:
• the consolidated balance sheet for ANZBGL as at
31 March 2022 has been disaggregated into ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo in
accordance with the Restructure as if it had occurred
such that the relevant structure was in place as at
31 March 2022;
•equity transactions occurring after 31 March 2022 have
not been included in the Pro-forma Balance Sheet on the
basis that they are not connected with the Restructure.
This includes the declaration and subsequent payment of
the ANZ Group’s 2022 Interim Dividend of $1,973 million,
the announcement of a pro-rata accelerated
renounceable share entitlement offer to raise
approximately $3.5 billion and the raising of perpetual
preferences shares by ANZ NZ of NZ$550 million;
•the equity of ANZBGL has been split between ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo. This
has been reflected as a transfer of capital in ANZ Bank
HoldCo to ANZ NOHC, which has subsequently injected
the appropriate amount of capital into ANZ Non-Bank
HoldCo and ANZ ServiceCo as a capital contribution;
•surplus capital in ANZ Bank HoldCo has been repaid
to ANZ NOHC via a dividend payment of approximately
$1.9 billion;7 and
•the assets transferred into ANZ ServiceCo are part funded
by a short term intra-group loan. All intra-group funding
is assumed to be provided on an arm’s length basis.
The pro-forma ANZ NOHC standalone balance sheet has
been prepared as follows:
•ANZ NOHC has recognised the issue of ANZ NOHC Shares
to ANZ Shareholders under the Scheme at the carrying
value of the equity in ANZBGL’s parent entity accounts as
at 31 March 2022; and
•recognition of ANZ NOHC’s investment in the ANZ Bank
HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo are at
carrying value in the parent entity balance sheet and will
be eliminated on consolidation.
The pro forma impact of the one-off costs of implementing
the Restructure has been excluded from the pro-forma
consolidated income statement. These costs are estimated
to be $25 million before income tax comprising advisor
fees, personnel and transaction costs. It is estimated a
further $10 million before tax will be incurred on stamp
duty as part of the Restructure.
The information in the table below has been extracted from
the financial information of the ANZ Group contained
within the ANZ Consolidated Financial Report Dividend
Announcement and Appendix 4D for the half year ended
31 March 2022.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
36
6. Earnings attributable to the Worldline merchant acquiring assets and operations pre-joint venture are accounted in ANZ Bank HoldCo within the Pro Forma Income Statement
outlined in section 6.4. 7. Note that this is illustrative only. Any future return of capital is subject to regulatory approvals and will depend on the circumstances and levels of
capital at the time.
ANZBGL
ANZ Bank
HoldCo
ANZ
ServiceCo
ANZ
Non-Bank
HoldCoANZ NOHC
Consolidation
Adjustments
ANZ NOHC
Group
ASSETS
Cash and cash equivalents168,054 166,175 – 9 1,870 – 168,054
Settlement balances owed to ANZ7,141 7,141 – – – – 7,141
Collateral paid 10,764 10,764 – – – – 10,764
Trading securities39,433 39,433 – – – – 39,433
Derivative financial instruments45,238 45,238 – – – – 45,238
Investment securities 79,757 79,411 – 346 – – 79,757
Net loans and advances651,436 651,436 – – – – 651,436
Regulatory deposits 661 661 – – – – 661
Due from controlled entities– 843 254 – – (1,097) –
Shares in controlled entities – – – – 54,901 (54,901) –
Investments in associates 2,018 1,933 – 85 – – 2,018
Current tax assets227 227 – – – – 227
Deferred tax assets 2,903 2,887 31 1 – (16) 2,903
Goodwill and other intangible assets4,068 3,968 – 9 – 91 4,068
Premises and equipment 2,702 3,069 400 – – (767) 2,702
Other assets 2,959 2,942 296 17 – (296) 2,959
Total assets1, 017, 3 61 1,016,128 981 467 56,771 (56,986) 1,017,361
LIABILITIES
Settlement balances owed by ANZ 19,752 19,752 – – – – 19,752
Collateral received 6,716 6,716 – – – – 6,716
Deposits and other borrowings780,288 780,288 – – – – 780,288
Derivative financial instruments 47,795 47,795 – – – – 47,795
Due to controlled entities – 254 843 – – (1,097) –
Current tax liabilities 320 320 – – – – 320
Deferred tax liabilities 82 46 23 13 – – 82
Payables and other liabilities 10,579 11,670 – 26 – (1,117) 10,579
Employee entitlements 585 583 – 2 – – 585
Other provisions 2,262 2,262 – – – – 2,262
Debt issuances 87,226 87,226 – – – – 87,226
Total liabilities955,605 956,912 866 41 – (2,214) 955,605
Net assets 61,756 59,216 115 426 56,771 (54,772)61,756
SHAREHOLDERS' EQUITY
Ordinary share capital 25,091 24,416 147 528 54,901 (54,910)25,091
Reserves (1,422) (1,433) – 80 –91(1,422)
Retained earnings38,078 36,224(32)(22) 1,870 38 38,078
Share capital and reserves
attributable to shareholders of
the Company
61,747 59,207115 426 56,771 (54,772) 61,747
Non–controlling interests 9 9 – – – –9
Total shareholders' equity 61,756 59,216115 42656,771 (54,772)61,756
37
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 6
6.4 PRO-FORMA INCOME
STATEMENT FOR THE HALF YEAR
ENDED 31 MARCH 2022
The Pro-forma Income Statement has been prepared to
illustrate the financial performance of the ANZ Bank HoldCo,
ANZ Non-Bank HoldCo. ANZ ServiceCo, ANZ NOHC, and the
consolidated ANZ NOHC Group for the half year ended
31 March 2022, assuming that the Restructure had occurred
such that the relevant structure was in place during
that period.
The Pro-forma Income Statement has been prepared
as follows:
•The consolidated income statement for ANZBGL for the
half year ended 31 March 2022 has been disaggregated
into ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ
ServiceCo in accordance with the Restructure as if it had
occurred such that the relevant structure was in place
during that period.
•Intragroup arrangements between ANZ Bank HoldCo and
ANZ ServiceCo for the utilisation of property assets held
by ANZ ServiceCo as well as interest payments on
intragroup loan (as described in section 6.3).
The pro-forma ANZ NOHC standalone income statement
has been prepared as follows:
•Surplus capital in ANZ Bank HoldCo has been repaid to
ANZ NOHC subsequent to the Restructure via a dividend
payment of $1.9 billion.8 The dividend income is
eliminated on consolidation.
The pro forma impact of the one-off costs of implementing
the Restructure has been excluded from the pro -forma
consolidated income statement (see section 6.3 for more
information).
The pro forma impact of additional ongoing incremental
costs associated with corporate and operating costs has
been excluded from the pro forma consolidated income
statement. These costs are estimated to be less than
approximately $5 million (before tax) per annum.
The information in the table below has been extracted from
the financial information of the ANZ Group contained
within the ANZ Consolidated Financial Report Dividend
Announcement and Appendix 4D for the half year ended
31 March 2022.
ANZBGL
ANZ
Bank HoldCo
ANZ
ServiceCo
ANZ
Non-
Bank HoldCo
ANZ
NOHC
Consolidation
Adjustments
ANZ NOHC
Group
Interest income9,707 9,723 6 – – (22)9,707
Interest expense(2,607)(2,623)(15)– – 31 (2,607)
Net interest income7,100 7,100 (9)– – 9 7,100
Other operating income2,313 2,315 24 (2)1,870 (1,894)2,313
Net income from
insurance business
55 55 – – – – 55
Share of associates' profit/(loss)74 75 – (1)– – 74
Operating income9,542 9,545 15 (3)1,870 (1,885)9,542
Operating expenses(4,791)(4,792)(9)(14)– 24 (4,791)
Profit before credit impairment
and income tax
4,751 4,753 6 (17)1,870 (1,861) 4,751
Credit impairment (charge)/release284 284 – – – – 284
Profit before income tax5,035 5,037 6 (17)1,870 (1,861) 5,035
Income tax expense(1,500)(1,496)(1)– – (3)(1,500)
Profit after tax from continuing
operations
3,535 3,541 5 (17)1,870 (1,864) 3,535
Profit/(Loss) after tax from
discontinued operations
(5)(5)– – – – (5)
Profit for the period3,530 3,536 5 (17)1,870(1,864) 3,530
Comprising:
Profit attributable to shareholders
of the Company
3,530 3,536 5 (17)1,870 (1,864) 3,530
Profit attributable to non–
controlling interests
– – – – – – –
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
38
8. Note that this is illustrative only. Any future return of capital is subject to regulatory approvals and will depend on the circumstances and levels of capital at the time).
6.5 MATERIAL CHANGES
IN FINANCIAL POSITION
(SINCE 31 MARCH 2022)
(a) Material changes
Since 31 March 2022, and as previously announced to the
ASX, ANZBGL has entered into an agreement in relation to
the proposed Suncorp Transaction (as described in section
4.3) and has raised approximately $3.5 billion in equity
funding through a fully underwritten 1 for 15 pro rata
accelerated renounceable entitlement offer. The
entitlement offer proceeds will be retained by ANZBGL and
used to partly fund ANZ’s acquisition of Suncorp Bank. This
additional equity is to be retained by ANZBGL to fund future
investments in banking businesses such as the proposed
Suncorp Transaction. In addition, ANZ NZ has completed
the raising of perpetual preference shares of NZ$550 million.
Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, to the knowledge of the
ANZ Directors, there have been no material changes to the
financial position of ANZBGL and the ANZ Group since
31 March 2022.
(b) Release of FY22 financial statements
The financial statements of ANZ for the full year ending
30 September 2022 have not been used in the preparation
of this Explanatory Memorandum. These financial
statements will be included in the 2022 ANZ Annual Report,
which is intended to be announced by ANZ to the ASX and
NZX on 3 November 2022. If required to do so, ANZ will
announce to the ASX and NZX any material updates to this
Explanatory Memorandum following the release of the full
year ending 30 September 2022 financial statements.
Following the release of the full year ending 30 September
2022 financial statements, the Independent Expert will be
asked to confirm whether there is anything in these
financial statements that would cause the Independent
Expert to alter its opinion that the Restructure (including
the Scheme) is in the best interests of ANZ Shareholders.
This will be announced by ANZ to the ASX and NZX.
6.6 CAPITAL STRUCTURE
As at Last Practicable Date, the equity capital structure of ANZ was:
TYPE OF SECURITYNUMBER ON ISSUE
ANZ Shares2,989,923,751
ANZ options and rights6,207,962
6.7 SUBSTANTIAL HOLDERS IN ANZ SHARES
As extracted from filings released on the ASX on or before Last Practicable Date, the following persons were substantial holders
of ANZ Shares:
SUBSTANTIAL HOLDERNUMBER OF ANZ SHARESVOTING POWER IN ANZ
Blackrock Group172,225,5276.07%
State Street Corporation142,312,3095.08%
The Vanguard Group, Inc.139,745,2315.001%
6.8 PUBLICLY AVAILABLE INFORMATION ABOUT ANZ
ANZ is a listed disclosing entity for the purpose of the Corporations Act and as such is subject to regular reporting and
disclosure obligations. Specifically, as a company listed on ASX, ANZ is subject to the ASX Listing Rules which require (subject to
some exceptions) continuous disclosure of any information that ANZ has that a reasonable person would expect to have a
material effect on the price or value of ANZ Shares.
ASX maintains files containing publicly disclosed information about all entities listed on ASX. Information disclosed to ASX by
ANZ (including financial information regarding ANZ) is available on ASX’s website at asx.com.au.
As a NZX foreign exempt listed company, ANZ does not need to separately comply with the NZX Listing Rules (subject to certain
exceptions). It is however required to comply with rule 1.7.2 which provides that all announcements by a foreign exempt issuer
on the issuer’s home exchange must be released simultaneously, or promptly without delay afterwards, to NZX.
NZX maintains files containing publicly disclosed information about all entities listed on NZX (including foreign exempt entities).
Information disclosed to NZX by ANZ is available on NZX’s website at nzx.com.
ANZ’s prior ASX and NZX announcements, along with its annual reports and other financial information, can be found on ANZ’s
website at anz.com/shareholder/centre/.
39
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 6
SECTION
7
IMPLEMENTING
THE RESTRUCTURE
7.1 OVERVIEW
The Restructure will be implemented by the:
•Scheme; and
•Business Restructure.
7.2 SCHEME
If the Scheme is approved and implemented, ANZ NOHC
will become the new listed parent company of the ANZ
Group in place of ANZBGL. This process will involve the
following key steps:
•ANZ Shares held by Ineligible Foreign Shareholders
will be automatically transferred to the Sale Agent
(as nominee for the Ineligible Foreign Shareholder)
on the Implementation Date without the need for any
action by the Ineligible Foreign Shareholder;
•ANZ NOHC will issue ANZ NOHC Shares on a one for one
basis to Eligible Shareholders who hold ANZ Shares on
the Scheme Record Date (currently expected to be
7.00pm on 29 December 2022);
•ANZ NOHC will issue ANZ NOHC Shares on a one for one
basis attributable to Ineligible Foreign Shareholders to
the Sale Agent and the cash proceeds of the sale of those
ANZ NOHC Shares will be remitted to those Ineligible
Foreign Shareholders; and
•all ANZ Shares will be acquired from ANZ Shareholders
(or, in the case of ANZ Shares held by Ineligible Foreign
Shareholders, from the Sale Agent) by ANZ NOHC under
the terms of the Scheme.
(a) Conditions of the Scheme
The Scheme is subject to a number of Conditions Precedent
set out in clause 3.1 of the Restructure Implementation
Deed, including the following:
•Shareholder approval: the Requisite Majorities of ANZ
Shareholders approve the Scheme at the
Scheme Meeting;
•ANZ NOHC ASX listing: ASX approves the admission of
ANZ NOHC to the official list of the ASX and the official
quotation of the ANZ NOHC Shares on the ASX;
•ANZ NOHC NZX listing: ANZ NOHC being admitted as
a foreign exempt listed company on NZX;
•Regulatory Approvals: the Regulatory Approvals
being obtained;
•Court approval: the Court approves the Scheme in
accordance with section 411(4)(b) of the
Corporations Act; and
•No restraining order: no temporary restraining order,
preliminary or permanent injunction or other order being
issued by any court of competent jurisdiction and no
other legal restraint or prohibition preventing the
Restructure being implemented.
The Scheme will not be implemented unless all of the
Conditions Precedent described above are satisfied or
waived (as applicable).
As at the date of this Explanatory Memorandum, the
Condition Precedent relating to Regulatory Approvals
remains outstanding as the Regulatory Approval from the
US Federal Reserve remains outstanding. More details about
this Regulatory Approval is set out in in section 7.4.
As at the date of this Explanatory Memorandum, none of
the ANZ Directors are aware of any circumstances which
would cause any Condition Precedent to be breached, or
not to be satisfied or waived (as applicable).
(b) Key steps in the Scheme
1. Scheme Meeting and Scheme approval
requirements
At the First Court Hearing, the Court ordered ANZ to
convene the Scheme Meeting at which ANZ Shareholders
will be asked to approve the Scheme.
The terms of the Scheme Resolution to be considered by
ANZ Shareholders at the Scheme Meeting are in the Notice
of Scheme Meeting in Annexure 5.
The Scheme will only be implemented if:
•it is approved by the Requisite Majorities of ANZ
Shareholders at the Scheme Meeting to be held on
15 December 2022;
•it is approved by the Court at the Second Court
Hearing; and
•the other Conditions Precedent to the Scheme outlined
in section 7.2(a) are satisfied or waived (as applicable).
The Requisite Majorities of ANZ Shareholders to approve
the Scheme are:
•unless the Court orders otherwise, a majority in number
(more than 50%) of ANZ Shareholders present and voting
at the Scheme Meeting (either in person or by proxy,
attorney or body corporate representative); and
•at least 75% of the total number of votes cast on the
Scheme Resolution at the Scheme Meeting by ANZ
Shareholders present and voting (either in person or
by proxy, attorney or body corporate representative).
The entitlement of ANZ Shareholders to vote at the Scheme
Meeting is set out in the Notice of Scheme Meeting in
Annexure 5.
Voting is not compulsory. However, the ANZ Directors
believe that the Restructure (including the Scheme) is in
the best interests of ANZ Shareholders. Each ANZ Director
recommends that ANZ Shareholders vote “ Ye s ” in favour of
the Scheme. The Independent Expert has concluded that
the Restructure (including the Scheme) is in the best
interests of ANZ shareholders.
You should be aware that even if you do not vote, or vote
against the Scheme, the Scheme will still be implemented
if it is approved by the Requisite Majorities of ANZ
Shareholders and the Court.
The results of the Scheme Meeting are expected to be
available shortly after the Scheme Meeting ends. ANZ will
announce the results to the ASX (asx.com.au) and NZX
(nzx.com) once they are available.
41
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 7
2. Court approval of the Scheme
ANZ will apply to the Court for orders approving the
Scheme at the Second Court Hearing, if the Scheme is
approved by the Requisite Majorities of ANZ Shareholders
at the Scheme Meeting.
Each ANZ Shareholder has the right to appear at the
Second Court Hearing.
3. Effective Date
If the Court approves the Scheme at the Second Court
Hearing, the Scheme will become Effective on the Effective
Date, being the date an office copy of the Court order from
the Second Court Hearing approving the Scheme is lodged
with ASIC. ANZ will, on the Scheme becoming Effective,
give notice of that event to the ASX and NZX.
ANZ intends to apply to the ASX and NZX for ANZ Shares to
be suspended from trading on the ASX and NZX from close
of trading on the Effective Date.
(c) Dealings in ANZ Shares
For the purposes of determining which ANZ Shareholders
are eligible to participate in the Scheme, dealings in ANZ
Shares will be recognised only if:
•in the case of dealings of the type to be effected using
CHESS, the transferee is registered on the ANZ Share
Register as the holder of the relevant ANZ Shares before
the Scheme Record Date; and
•in all other cases, registrable transfer or transmission
applications in respect of those dealings, or valid requests
in respect of other alterations, are received by the ANZ
Share Registry before the Scheme Record Date (and the
transferee remains registered as at the Scheme
Record Date).
For the purposes of determining entitlements under the
Scheme, ANZ will not accept for registration, or recognise
any transfer or transmission applications, in respect of ANZ
Shares received after the Scheme Record Date.
(d) ANZ Regulatory Capital Securities
Following implementation of the Scheme, ANZ Regulatory
Capital Securities will remain on issue by ANZBGL until they
are repaid, converted or written off in accordance with
their terms.
ANZ Capital Notes will continue to be quoted for trading on
the ASX until they are repaid, converted or written off in
accordance with their terms. Following implementation of
the Scheme, ANZBGL will remain listed on the ASX as a debt
listing with the ASX code “AN3” (and ANZ Shares will no
longer be quoted for trading on the ASX).
Trading in ANZ Regulatory Capital Securities that are quoted
for trading on the ASX under their existing ASX codes will
be suspended from close of trading on the Effective Date.
These ANZ Regulatory Capital Securities will commence
trading under their new ASX codes (on a deferred
settlement basis) on the Business Day after the Effective
Date (currently expected to be 28 December 2022) and
normal trading will commence on 9 January 2023. The table
below identifies the current and new ASX codes for these
ANZ Regulatory Capital Securities.
ANZ REGULATORY CAPITAL SECURITYCURRENT ASX CODESNEW ASX CODES
ANZ Capital Notes 3ANZPFAN3PF
ANZ Capital Notes 4ANZPGAN3PG
ANZ Capital Notes 5ANZPHAN3PH
ANZ Capital Notes 6ANZPIAN3PI
ANZ Capital Notes 7ANZPJAN3PJ
As ANZ Shares will no longer be quoted for trading after the Scheme, in the circumstances where an ANZ Regulatory Capital
Security is required to convert, the conversion will be into ANZ NOHC Shares. ANZBGL will amend the terms of each of the ANZ
Regulatory Capital Securities to give effect to the substitution of ANZ NOHC as the issuer of ordinary shares on conversion. These
amendments will be made pursuant to the terms of the ANZ Regulatory Capital Securities (as approved by APRA) and do not
require the approval of holders. ANZ will separately be providing notice of these amendments to the holders of the ANZ
Regulatory Capital Securities. There are no other amendments to the rights of holders of the ANZ Regulatory Capital Securities.
Following these amendments, an ANZ Regulatory Capital Security will continue to be eligible for inclusion in the same tier of
regulatory capital as it is before the Scheme.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
42
(e) ANZ ADS Holders
1. ANZ ADS Holders will receive ANZ NOHC
ADSs in connection with the Scheme
In connection with the implementation of the Scheme,
ANZ ADS Holders will receive one ADS representing one
ANZ NOHC Share for each ANZ ADS that they hold as at the
Implementation Date.
ANZ NOHC will establish an ADR program on substantially
the same terms as ANZ’s existing ADR program. The ANZ
NOHC ADSs will be governed by the terms of the ANZ
NOHC Deposit Agreement. Following implementation
of the Scheme, the ANZ ADS Deposit Agreement, which
governs the ANZ ADSs, will be terminated.
2. The terms of the ANZ NOHC ADSs are
expected to be substantially similar to those
of the ANZ ADSs
Aside from the underlying ordinary shares represented by
the applicable ADSs, the terms of the ANZ NOHC ADR
program are expected to be substantially similar to the
terms of the existing ANZ ADR program. For instance, the
ANZ NOHC ADSs will not be listed on any exchange in the
United States. Instead, the ANZ NOHC ADSs will be eligible
for trading on the United States over-the-counter market.
Settlement of ANZ NOHC ADSs traded on the over-the-
counter market will take place through the facilities of the
Depository Trust Company. If a person wishes to trade the
ANZ NOHC ADSs, they should consult their broker or other
securities intermediary to determine how the ANZ NOHC
ADSs may be traded and how such trades may be settled
in the United States.
The terms of the ANZ ADSs and ANZ NOHC ADSs are set
out in the ANZ ADS Deposit Agreement and ANZ NOHC
ADS Deposit Agreement (respectively) each filed with the
US Securities and Exchange Commission (SEC). Please refer
to the Form F-6 filed with the SEC for further details
regarding the ANZ ADSs and ANZ NOHC ADSs and for the
fees that ANZ ADS Holders and ANZ NOHC ADS Holders
must pay in connection with the provision of general
depositary services by the applicable ADS Depositary.
The SEC maintains a website that contains registration
statements and other information, including the ANZ
Form F-6 and the ANZ NOHC Form F-6, at sec.gov.
3. ANZ ADS Holders wishing to vote and/or receive
ANZ NOHC Shares rather than ANZ NOHC ADSs
ANZ ADS Holders will not be requested to submit voting
instructions in respect of their ADSs. Any ANZ ADS Holder
who wishes to vote as an ANZ Shareholder must become
an ANZ Shareholder by the applicable date and vote in
that capacity.
If you are an ANZ ADS Holder and you wish to vote or
attend the Scheme Meeting as an ANZ Shareholder or
receive ANZ NOHC Shares instead of ANZ NOHC ADSs
under the Scheme, you must take steps to present your
ANZ ADSs (and, to the extent that such ANZ ADSs are
certificated, the certificates evidencing such ANZ ADSs) to
the ANZ ADS Depositary for cancellation (subject to any
restrictions on cancellation or withdrawal, or on the receipt
of ANZ Shares, which the ANZ ADS Depositary may impose
from time to time), together with delivery instructions for
the ANZ Shares represented by such ANZ ADSs (including,
if applicable, the name and address of the person who will
be the registered holder of such ANZ Shares), with sufficient
time to be registered as a holder of ANZ Shares on the
register at the applicable record date.
If you are an ANZ ADS Holder and you hold your ANZ ADSs
in a brokerage, bank, custodian or other nominee account,
you should promptly contact your broker, bank, custodian
or other nominee account to find out what actions are
required to instruct your broker, bank or other nominee to
cancel the ANZ ADSs on your behalf. ANZ ADS Holders who
present their ANZ ADSs to the ANZ ADS Depositary for
cancellation prior to implementation of the Scheme will be
responsible for the payment of the ANZ ADS Depositary’s
fees associated with such cancellation.
Any ANZ ADS Holder may appear at the Second Court
Hearing, currently expected to be held at 10.15am
(Melbourne time) on 22 December 2022 at 305 William
Street, Melbourne VIC.
It is expected that ANZ ADSs Holders will not be permitted
to cancel their ANZ ADSs from the close of business (New
York time) on the Effective Date and that the last time for
dealings in ANZ ADS Holders will be close of business
(New York time) on the Implementation Date.
(f ) Implementation Date
On the Implementation Date, Eligible Shareholders will
receive ANZ NOHC Shares.
(g) Ineligible Foreign Shareholders
and Sale Agent
Restrictions in certain foreign jurisdictions make it unlawful
or unduly onerous or impracticable to offer or receive ANZ
NOHC Shares in those countries. Ineligible Foreign
Shareholders are ANZ Shareholders whose addresses are
shown in the ANZ Share Register at the Scheme Record
Date as being outside Australia (and its external territories),
New Zealand or an Eligible Foreign Jurisdiction.
Ineligible Foreign Shareholders are not permitted to
participate in the Scheme and will not receive or be issued
ANZ NOHC Shares. Instead:
• Ineligible Foreign Shareholders will automatically transfer
their ANZ Shares to the Sale Agent (as nominee for the
Ineligible Foreign Shareholder) on the Implementation
Date without the need for any action by the Ineligible
Foreign Shareholder.
•The Sale Agent will participate in the Scheme in respect
of those ANZ Shares and will be issued ANZ NOHC Shares
on a one for one basis.
•The ANZ NOHC Shares that are issued to the Sale Agent
will be sold, as soon as reasonably practicable on or after
the Implementation Date, on the ASX.
•Ineligible Foreign Shareholders will receive the cash
proceeds of the sale of those ANZ NOHC Shares
(calculated on an average basis as described in
section 7.2(h)).
43
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 7
(h) Sale Facility
Under the Sale Facility, the Sale Agent will arrange for the
sale the ANZ NOHC Shares it receives under the Scheme
during the Sale Period (which is expected to be from the
Implementation Date and ending no later than 1 month
following the Implementation Date).
The Sale Agent will arrange for the sale of the ANZ NOHC
Shares at the price it determines in good faith, in its
absolute discretion, with the objective of seeking to achieve
the best price reasonably obtainable, having regard to a
number of factors such as prevailing market conditions.
The amount of money received by each Ineligible Foreign
Shareholder will be calculated on an averaged basis so that
all Ineligible Foreign Shareholders will receive the same
price per ANZ NOHC Share, subject to rounding down to
the nearest whole cent. Consequently, the amount received
by Ineligible Foreign Shareholders for each ANZ NOHC
Share may be more or less than the actual price that is
received by the Sale Agent for that the sale of any particular
ANZ NOHC Share.
As the market price of ANZ NOHC Shares will be subject to
change from time to time, the sale price of those ANZ
NOHC Shares, and the proceeds of those sales, cannot be
guaranteed. Ineligible Foreign Shareholders will be able to
obtain information on the market price of ANZ NOHC
Shares on the ASX’s website (asx.com.au) and NZX's
website (nzx.com).
The cash proceeds of the sale of the ANZ NOHC Shares
will be paid to each Ineligible Foreign Shareholder by:
•direct credit to the nominated bank account of the
Ineligible Foreign Shareholder as noted on the ANZ
Share Register on the Scheme Record Date; or
•if an Ineligible Foreign Shareholder has not provided
an account, the Sale Proceeds will be remitted by sending
a cheque in Australian dollars by mail to the Ineligible
Foreign Shareholder’s Registered Address as at the
Scheme Record Date.
Payment by direct credit will be in the currency set out in
the Ineligible Foreign Shareholder’s dividend election. If the
Ineligible Foreign Shareholder has elected to be paid in a
currency other than Australian dollars, the cash proceeds of
the sale of the ANZ NOHC Shares attributable to that
shareholder will be converted from Australian dollars to the
relevant currency at the prevailing market exchange rate
during the Sale Period. Payment by cheque will be in
Australian dollars.
Under the Scheme, each Ineligible Foreign Shareholder is
taken to appoint ANZBGL as its agent to receive on its
behalf any financial services guide or other notices that the
Sale Agent is required to provide to that Ineligible Foreign
Shareholder.
In providing services to ANZBGL in connection with the
Sale Facility, the Sale Agent is not acting as agent or sub
agent of any Ineligible Foreign Shareholder, does not have
any duties or obligations (fiduciary or otherwise) to
Ineligible Foreign Shareholders and does not underwrite
the sale of any ANZ NOHC Shares. The Sale Agent, together
with its affiliates, is a full service financial institution
engaged in various activities, which may include trading,
financing, financial advisory, investment management,
investment research, principal investment, hedging, market
making, brokerage and other financial and non-financial
activities and services.
Holders of ANZ ADSs will not participate in the Sale Facility.
(i) Deed Poll
As at the date of this Explanatory Memorandum, a Deed
Poll has been entered into by ANZ NOHC to undertake in
favour of the Scheme Shareholders (subject to the Scheme
becoming Effective), to:
•provide, or procure the provision of, the aggregate
number of ANZ NOHC Shares to all Eligible Shareholders
under the Scheme; and
•undertake all other actions attributed to ANZ NOHC
under the Scheme.
A copy of the Deed Poll is in Annexure 4.
(j) Warranties by Scheme Shareholders
Under the terms of the Scheme, each Scheme Shareholder
is taken to have warranted to ANZBGL and ANZ NOHC,
and each Ineligible Foreign Shareholder is taken to have
warranted to the Sale Agent, on the Implementation
Date, that:
•all their ANZ Shares (including any rights and
entitlements attaching to those shares) which are
transferred under the Scheme will, at the date of transfer,
be fully paid and free from all mortgages, charges, liens,
encumbrances, pledges, security interests (including any
‘security interests’ within the meaning of section 12 of the
Personal Property Securities Act 2009 (Cth)) and interests of
third parties of any kind, whether legal or otherwise, and
restrictions on transfer of any kind; and
•they have full power and capacity to transfer their
Scheme Shares to ANZ NOHC or the Sale Agent (as
applicable) together with any rights and entitlements
attaching to those shares.
(k) ASX and NZX trading dates for
ANZ NOHC Shares
If the Scheme is implemented, then:
•the Scheme will become Effective on the Effective Date
(currently expected to be 23 December 2022) and this is
the date that ANZ will be suspended from trading on the
ASX and NZX from close of trading;
•on the first Business Day after the Effective Date (currently
expected to be 28 December 2022), trading in ANZ
NOHC Shares on the ASX and NZX commences on a
deferred settlement basis; and
•on 9 January 2023, ANZ NOHC Shares will commence
normal trading on the ASX and NZX.
Following implementation of the Scheme, ANZ NOHC
Shares will trade under the ASX and NZX code “ANZ”.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
44
7.3 BUSINESS RESTRUCTURE
(a) Key steps
After the Scheme is implemented, the ANZ Group proposes
to undertake the Business Restructure to separate certain
businesses and assets to be effected by various internal
share and asset transfers and other corporate actions.
The key steps to be undertaken in the Business
Restructure are:
•ANZBGL transferring its beneficial interests in the 1835i
trusts, its non-controlling interest in the Worldline
merchant acquiring joint venture with Worldline, and its
equity interests in Lygon, TIN and Pollination to ANZ
Non-Bank HoldCo;
•ANZBGL transferring its interest in ANZ Centre Trust, ANZ
Centre Chattels Trust, certain fixtures and fittings
(including leasehold improvement assets) and ANZ
Centre to ANZ ServiceCo;
•ANZBGL transferring all the shares in ANZ Bank HoldCo,
ANZ Non-Bank HoldCo and ANZ ServiceCo to
ANZ NOHC; and
•ANZ NOHC transferring all the shares in ANZBGL to ANZ
Bank HoldCo.
(b) Restructure Deed
The material steps of the Business Restructure described in
this section 7.3(a) will be governed by the Restructure Deed.
Under the Restructure Deed, the Business Restructure is
conditional on implementation of the Scheme.
7.4 REGULATORY APPROVALS
REQUIRED FOR THE
RESTRUCTURE
In order for the Restructure to be implemented, certain
Regulatory Approvals are required from certain prudential
and other regulators or agencies in jurisdictions where ANZ
does business. As at the date of this Explanatory
Memorandum, Regulatory Approvals from the following
have been obtained:
•APRA;
•the Treasurer;
•RBNZ in New Zealand;
•MAS in Singapore; and
•OIO in New Zealand.
As at the date of this Explanatory Memorandum, only
Regulatory Approval from the US Federal Reserve remains
outstanding.
If there is any delay in obtaining the approval from the US
Federal Reserve prior to the currently scheduled date for the
Second Court Hearing, ANZ may:
•postpone or adjourn the Second Court Hearing; or
•proceed with the Second Court Hearing (currently
expected to be held on 22 December 2022) on the basis
that the Scheme will not be implemented until the
approval from the US Federal Reserve is obtained.
ANZ will announce to the ASX any updates to the status of
the US Guam Approval. ANZ will also provide an update of
this status at or before the Scheme Meeting held on 15
December 2022.
7.5 APPLICATION FOR ADMISSION
OF ANZ NOHC TO THE OFFICIAL
LIST OF THE ASX
ANZ NOHC will apply for admission to the official list of the
ASX, for official quotation of the ANZ NOHC Shares to be
issued under the Scheme prior to the Scheme Meeting.
7.6 APPLICATION FOR ADMISSION
OF ANZ NOHC TO THE OFFICIAL
LIST OF NZX AS A FOREIGN
EXEMPT LISTING
An application will be made to NZX for permission to list
the ANZ NOHC as an NZX foreign exempt listing and for
official quotation of the ANZ NOHC Shares to be issued
under the Scheme prior to the Scheme Meeting.
As an NZX foreign exempt issuer, ANZ NOHC can list on NZX
by meeting ASX obligations without having to separately
comply with the NZX Listing Rules (subject to limited
exceptions).
As further noted at section 6.8, ANZ NOHC will still be
required to comply with NZX Listing Rule 1.7.2 which
provides that all announcements by a foreign exempt issuer
on the issuer’s home exchange must be released
simultaneously, or promptly without delay
afterwards, to NZX.
7.7 ANZ NOHC’S ABILITY TO
CONDUCT AN ON-MARKET
SHARE BUY-BACK FOLLOWING
IMPLEMENTATION OF THE SCHEME
An on-market share buy-back requires shareholder approval
if it exceeds the “10/12 limit” set out in the Corporations Act.
The “10/12 limit” restricts the number of ordinary shares
ANZ can buy-back in any rolling 12-month period to 10% of
the smallest number of ordinary shares ANZ had on issue
during that 12-month period.
ANZ NOHC will have the ability to undertake an on-market
share buy-back following implementation of the Scheme in
the same way as ANZBGL before the Implementation Date.
To enable ANZ NOHC to do this, before the Implementation
Date, ANZBGL will (when ANZBGL is ANZ NOHC’s only
shareholder) authorise ANZ NOHC to undertake an
on-market share buy-back in the 12 months following the
Implementation Date. The aggregate number of ANZ NOHC
Shares that could ultimately be bought back under any
such buy-back would not exceed more than 10% of the
ordinary shares ANZ NOHC has on issue when the Scheme
is implemented (which will be the same number of shares
ANZBGL currently has on issue). As a result, in assessing ANZ
NOHC’s “10/12 limit” for the first 12 months following the
45
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 7
Implementation Date, ANZ NOHC and ANZBGL’s equity
capital structure would effectively be regarded as the same.
ANZBGL’s approval (as ANZ NOHC’s sole shareholder) is
technically required because ANZ NOHC is a recently
incorporated entity that was established to facilitate the
Restructure and upon incorporation, as is usual, only had a
nominal share capital.
These arrangements do not mean ANZ has decided to
launch any buy-back in the first 12 months post the
Implementation Date. ANZ has no current intention to
conduct an on-market share buy-back during this period.
These arrangements have been put in place simply to
ensure that ANZ NOHC continues to have the same
flexibility as ANZBGL to conduct any such buy-back post
the Implementation Date should it decide to do so. Any
decision by ANZ NOHC to conduct a buy-back would be
announced to the ASX and NZX in the normal course.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
46
SECTION
8
TA X I M P L I C AT I O N S
OF THE SCHEME
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
8.1 SUMMARY OF TAX OUTCOMES
A high-level summary of the tax outcomes for certain ANZ Shareholders that are resident in Australia, New Zealand, the United
Kingdom and the United States is outlined below and should be read in the context of the full disclosure below and, in
particular, the section referenced in this summary.
This summary is necessarily general in nature and is not a complete analysis of all taxation laws that may apply in relation to the
Scheme for ANZ Shareholders. ANZ Shareholders should consult with their own independent tax adviser regarding the tax
implications of participating in the Scheme based on their particular circumstances. The tax summary provided in this section
8.1 does not constitute tax advice.
This summary does not take into account or anticipate changes in the law (by legislation or judicial decision) or practice (by
ruling or otherwise) after the Last Practicable Date.
TAX RESIDENT AND
TAXING JURISDICTION
TAX CONSEQUENCES
MORE
INFORMATION
Disposal of ANZ Shares
AustraliaAny capital gain or loss made by ANZ Shareholders under the
Scheme should be disregarded.
Section 8.2(c)
New ZealandYou should not be treated as deriving income from the disposal
of the ANZ Shares under the Scheme except in limited
circumstances, for example if you hold the ANZ Shares for the
purpose of disposal or you are in the business of dealing
in shares.
If you are an ANZ Shareholder that is a PIE other than a life fund
PIE and that is not assured under an arrangement with another
person of having a gain on the disposal of the ANZ Shares, any
income arising from the disposal will be treated as excluded
income and therefore will not be taxable.
Section 8.3(a)
United KingdomThe issue of ANZ NOHC Shares to ANZ Shareholders in
consideration for the transfer of ANZ Shares is expected to be
treated as a reorganisation of share capital for UK tax purposes.
Accordingly, ANZ Shareholders are not expected to be treated as
making a disposal of their holding of ANZ Shares, such that no
liability to UK capital gains tax or corporation tax on chargeable
gains is expected to arise.
Section 8.4(b)
United StatesThe Scheme is intended to constitute a tax-free exchange
governed by Section 351 of the U.S. Internal Revenue Code.
Provided that this treatment is respected, you should not
recognise a gain or loss.
Section 8.5(b)(1)
Holding ANZ NOHC Shares
AustraliaDividends received from ANZ NOHC should be included in the
assessable income of an Australian tax resident ANZ NOHC
Shareholder.
Dividends may be franked to the extent determined by
ANZ NOHC.
If a dividend is franked, the ANZ NOHC Shareholder will generally
be entitled to a tax offset if they meet the holding period and
related payment rules. Certain shareholders may be entitled to a
tax refund.
Section 8.2(d)
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
48
TAX RESIDENT AND
TAXING JURISDICTION
TAX CONSEQUENCES
MORE
INFORMATION
New ZealandThe holding of ANZ NOHC Shares and any dividends paid by
ANZ NOHC should have the same New Zealand tax treatment as
the holding of ANZ Shares and dividends paid by ANZBGL.
The New Zealand foreign investment fund rules will not apply to
your shareholding in ANZ NOHC.
Any dividends you receive will generally be taxable to you. To the
extent franking credits are attached to the dividends, no tax
credit will arise for such franking credits.
To the extent New Zealand imputation credits are attached to
the dividends, you should be entitled to a credit which can be
applied against your taxable income.
If Australian withholding tax is deducted from dividends paid by
ANZ NOHC to you, such withholding tax may be able to be
claimed as a credit against New Zealand tax otherwise payable in
relation to such dividends. The dividends should not be subject
to New Zealand withholding tax.
Section 8.3(b)
United KingdomFor individual shareholders, dividend income that does not fall
within the dividend allowance of £2,000 will generally be subject
to tax (at the applicable dividend rate) as the highest part of the
shareholder’s income.
ANZ NOHC Shareholders who are within the charge to UK
corporation tax will generally not be subject to UK corporation
tax on the gross amount of any dividends paid by ANZ NOHC so
long as certain conditions are met.
Section 8.4(c)
United StatesUnder US federal income tax laws, if you are a US holder,
dividends paid by ANZ NOHC will be subject to United States
federal income taxation.
Subject to the passive foreign investment company rules (PFIC)
rules discussed in the full tax disclosure below, if you are a
non-corporate US holder, dividends that constitute qualified
dividend income will be taxable to you at the preferential rates
applicable to long-term capital gains provided that you hold the
ANZ NOHC Shares or ANZ NOHC ADSs for more than 60 days
during the 121-day period beginning 60 days before the
ex-dividend date and meet other holding period requirements.
Section 8.5(c)(1)(A)
Disposal of ANZ NOHC Shares
AustraliaAn Australian tax resident ANZ NOHC Shareholder who disposes
of their ANZ NOHC Shares may make a capital gain or loss.
Certain shareholders may be entitled to a discount on any capital
gain if they have held their ANZ NOHC Shares for at least
12 months.
Section 8.2(d)
New ZealandThe future disposal of the ANZ NOHC Shares should not give rise
to taxable income for you, provided that you hold the ANZ
NOHC Shares on capital account.
Section 8.3(a)
United KingdomANZ NOHC Shareholders may, depending on their circumstances
(including the availability of exemptions or reliefs), be liable to UK
capital gains tax or corporation tax on chargeable gains, as
applicable, in respect of gains arising from a sale or other
disposal of any ANZ NOHC Shares.
Section 8.4(d)
49
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
TAX RESIDENT AND
TAXING JURISDICTION
TAX CONSEQUENCES
MORE
INFORMATION
United StatesProvided that as intended, the Scheme is a tax-free exchange,
your aggregate tax basis in ANZ NOHC Shares or ANZ NOHC
ADSs that you receive will equal your carryover tax basis
(generally the price you paid for your ANZ Shares or ANZ ADSs
prior to implementation of the Scheme).
Subject to the PFIC rules discussed in section 8.5, if you are a US
holder, you will generally recognise a capital gain or loss for
United States federal income tax purposes equal to the
difference between the amount that you receive and your tax
basis, determined in respect of the disposal of your ANZ NOHC
Shares or ANC NOHC ADSs.
Section 8.5(c)(1)(B)
8.2 AUSTRALIA
(a) Introduction
This section 8.2 provides a general summary of the
Australian income tax implications arising for certain ANZ
Shareholders under the Scheme. This summary is
necessarily general in nature and is not a complete analysis
of all taxation laws that may apply in relation to the Scheme
for ANZ Shareholders. ANZ Shareholders should consult
with their own independent tax adviser regarding the tax
implications of participating in the Scheme based on their
particular circumstances. The tax summary provided in this
section 8.2 does not constitute tax advice.
This tax summary only addresses the position of ANZ
Shareholders who:
•were registered on the ANZ Share Register as the holders
of ANZ Shares at the Scheme Record Date;
•hold their ANZ Shares on capital account (and not on
revenue account or as trading stock) for income
tax purposes;
•are treated for Australian income tax purposes as having
acquired their ANZ Shares after 19 September 1985;
•have not elected for the TOFA provisions in Division 230
of the ITAA to apply in respect of their ANZ Shares; and
•are not subject to the Investment Manager Regime, not
temporary residents of Australia for income tax purposes,
not exempt from Australian income tax or subject to a
legal disability, not holding their ANZ Shares as partners
in a partnership and not a bank or insurance company.
This tax summary does not address any tax consequences
arising under the laws of jurisdictions other than Australia.
This tax summary is based on Australian tax laws and
regulations, interpretations of such laws and regulations,
and administrative practice as at the date of this
Explanatory Memorandum. These laws, regulations and
interpretations can change, and it is important that ANZ
Shareholders monitor for such changes after the date of this
Explanatory Memorandum.
(b) ATO Class Ruling
ANZ has applied to the Commissioner of Taxation
(Commissioner) for a class ruling confirming certain
income tax implications of the Scheme for ANZ
Shareholders (Class Ruling).
Consistent with standard ATO practice in relation to
transactions of this nature, the final Class Ruling will be
received from the Commissioner after the Implementation
Date for the Scheme and will be published on the ATO
website (ato.gov.au).
The information below addresses the implications for ANZ
Shareholders where tax relief is available and is consistent
with the submissions made in the Class Ruling application.
(c) Rollover tax relief
Australian tax resident ANZ Shareholders
Ordinarily, the disposal of ANZ Shares by ANZ Shareholders
who are tax resident in Australia and whose ANZ Shares are
held on capital account would result in a capital gain or loss
being realised. Under the Scheme, any capital gain or loss
made by ANZ Shareholders on the exchange of their ANZ
Shares for ANZ NOHC Shares should be disregarded.
Roll-over relief under Division 615 of the ITAA should apply
to defer recognition of any taxable gains or losses until the
ANZ NOHC Shareholder subsequently disposes of their ANZ
NOHC Shares.
Following implementation of the Scheme, the first element
of the cost base (or reduced cost base, if applicable) for the
ANZ NOHC Shares received under the Scheme by an ANZ
Shareholder who is tax resident in Australia should equal
the initial purchase price paid for the ANZ Shares.
For the purposes of determining whether the capital gains
tax discount concession is available on a subsequent
disposal of ANZ NOHC Shares, ANZ Shareholders who are
tax residents in Australia should be taken to have acquired
their ANZ NOHC Shares at the time their ANZ Shares were
initially acquired.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
50
Non-Australian tax resident ANZ Shareholders
ANZ Shareholders who are non-Australian tax residents
should consider both the Australian tax implications of
the Scheme, as well as the tax implications in their country
of residence.
If a capital gain or loss arises for a non-Australian tax
resident as a result of the exchange of their ANZ Shares for
ANZ NOHC Shares under the Scheme, any capital gain or
loss should be disregarded due to the availability of
roll-over relief.
Following implementation of the Scheme, the first element
of the cost base (or reduced cost base, if applicable) for
ANZ NOHC Shares received by an ANZ Shareholder who is a
non-Australian tax resident should equal the initial purchase
price paid for the ANZ Shares.
(d) Holding ANZ NOHC Shares after the
Implementation Date
Tax treatment of future distributions – Australian tax
resident ANZ NOHC Shareholders
Generally, dividends received from ANZ NOHC should be
included in an ANZ NOHC Shareholder’s assessable income
together with any franking credit attached to the dividend.
Where the franking credit is included in the ANZ NOHC
Shareholder’s assessable income, the ANZ NOHC
Shareholder will generally be entitled to a corresponding
tax offset.
To be eligible for the franking credit and tax offset, ANZ
NOHC Shareholders must satisfy the holding period rule
including, if necessary, the related payment rule.
The holding period rule requires ANZ NOHC Shareholders
to have held ANZ NOHC Shares at risk for a period of at least
45 days (not including the date of acquisition or the date of
disposal) and free of any related payment obligations. An
ANZ NOHC Shareholder will not be taken to have held ANZ
NOHC Shares at risk where the ANZ NOHC Shareholder or
an associate holds a position (such as an option or other
hedging arrangement) which materially diminishes the risks
of loss or opportunity for gain in respect of those ANZ
NOHC Shares.
The holding period rule will not apply to an ANZ NOHC
Shareholder who is an individual whose tax offset
entitlement (for all franked distributions received in the
income year) does not exceed $5,000 for the income year in
which the franked dividend from ANZ NOHC is received.
Under the related payment rule, a different testing period
applies where the ANZ NOHC Shareholder has made, or is
under an obligation to make, a related payment in relation
to a dividend. A related payment is one where the ANZ
NOHC Shareholder or their associate passes on the benefit
of the dividend to another person. The related payment rule
requires the ANZ NOHC Shareholder to have held ANZ
NOHC Shares at risk for a period commencing on the 45th
day before, and ending on the 45th day after the day the
ANZ NOHC Shares become ex-dividend. This should not
affect any ANZ NOHC Shareholder who does not pass on
the benefit of the dividend to another person.
Where the ANZ NOHC Shareholder is an Australian tax
resident individual, complying superannuation entity, or
registered charity (in certain circumstances) and satisfies
the above requirements, the ANZ NOHC Shareholder will
generally be entitled to a refund of tax to the extent that
the franking credit attached to the ANZ NOHC Shareholder’s
dividends exceed the ANZ NOHC Shareholder’s income tax
liability for the relevant income year.
Where the ANZ NOHC Shareholder is an Australian tax
resident company, franked dividends received by the ANZ
NOHC Shareholder will generally give rise to a franking
credit in the ANZ NOHC Shareholder’s franking account.
No refund of tax is available for companies for excess
franking credits.
Tax treatment of future distributions – non-Australian
tax resident ANZ NOHC Shareholders
Franked dividends received by ANZ NOHC Shareholders
who are non-Australian tax residents should not generally
be subject to dividend withholding tax.
Unfranked dividends will be subject to dividend
withholding tax. The withholding tax rate is 30% but is
generally reduced to 15% (or less, pursuant to some tax
treaties) on dividends which are paid to residents of
countries which have entered into tax treaties with
Australia.
ANZ NOHC Shareholders are advised to obtain their own
tax advice to confirm their entitlement to the benefit of any
franking credit gross-up and tax offset in respect of franked
dividends paid by ANZ NOHC.
Tax treatment of future disposals of ANZ NOHC Shares
– Australian tax resident ANZ NOHC Shareholders
Following the implementation of the Scheme, ANZ NOHC
Shareholders who dispose of their ANZ NOHC Shares
will make:
•a capital gain if the capital proceeds for the disposal of
ANZ NOHC Shares exceed the cost base of the relevant
ANZ NOHC Shares; or
•a capital loss if the capital proceeds for the disposal of
ANZ NOHC Shares are less than the reduced cost base of
the relevant ANZ NOHC Shares.
ANZ NOHC Shareholders who are individuals, trustees or
complying superannuation entities and who have held their
ANZ NOHC Shares for at least 12 months should be entitled
to discount the amount of the capital gain (after the
application of any current year or carry forward
capital losses).
The amount of the discount is:
•in the case of individuals and trustees – 50%; and
•for complying superannuation funds – 33.33%.
No discount on a capital gain is available for ANZ NOHC
Shareholders that are companies.
A capital loss may be used to offset any capital gains
derived by relevant ANZ NOHC Shareholders for the
relevant income year or may be carried forward to offset
capital gains in future income years. Specific capital loss
recoupment rules apply to companies to restrict their ability
to utilise capital losses in future income years.
ANZ NOHC Shareholders should seek their own tax advice
prior to utilising capital losses to confirm the availability of
the losses.
51
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
Tax treatment of future disposals of ANZ NOHC Shares
– non-Australian tax resident ANZ NOHC Shareholders
ANZ NOHC Shareholders who are a non-Australian tax
resident need to consider both the Australian income tax
implications of any future disposal of ANZ NOHC Shares and
the tax implications of such a disposal in their own
jurisdiction.
Broadly, a capital gain or loss may arise to non-Australian tax
resident ANZ NOHC Shareholders from the disposal of their
ANZ NOHC Shares if they hold their shares on capital
account, and:
•they held more than 10% of the issued capital of ANZ
NOHC at the date of the disposal of the ANZ NOHC
Shares or through a 12-month period that began no
earlier than 24 months before the date of disposal and
ended no later than the date of disposal; and
•more than 50% of the market value of ANZ NOHC
consists of taxable Australian real property (direct and
indirect interests in Australian real property, including
leases of Australian land).
A capital gain may also arise for ANZ NOHC Shareholders
who have held their ANZ NOHC Shares in the course of
carrying on a business through an Australian permanent
establishment.
If the non-Australian tax resident ANZ NOHC Shareholder
is a tax resident of a country which has entered a tax treaty
with Australia, relief from taxation may be available under
the relevant treaty. ANZ NOHC Shareholders who are a
non-Australian tax resident should seek their own advice
concerning the availability of treaty relief.
No discount capital gain is available for non-Australian
tax resident ANZ NOHC Shareholders.
(e) Sale Facility
A small number of ANZ Shares are held by ANZ
Shareholders whose addresses are shown in the ANZ
Share Register as being outside Australia (and its external
territories), New Zealand or an Eligible Foreign Jurisdiction.
These Ineligible Foreign Shareholders and are not permitted
to participate in the Scheme and will not receive ANZ
NOHC Shares. Instead, Ineligible Foreign Shareholders will
receive the cash proceeds of the sale of the ANZ NOHC
Shares. More information about Ineligible Foreign
Shareholders is set out in section 7.2(g).
Ineligible Foreign Shareholders need to consider both
Australian income tax implications and the tax implications
in their own jurisdiction.
A capital gain or loss should not arise to Ineligible Foreign
Shareholders from the disposal of their ANZ Shares unless
they have held their ANZ Shares in the course of carrying on
a business through an Australian permanent establishment.
If an Ineligible Foreign Shareholder does derive a capital
gain and is a tax resident of a country in which a tax treaty
exists with Australia, relief may be available under the
relevant treaty.
No discount capital gain is available for Ineligible Foreign
Shareholders.
(f ) Other matters
1. Provision of tax file numbers
Under Australian tax law, a company is entitled to ask its
shareholders to disclose their TFN to the company. A
shareholder can choose whether or not to disclose their
TFN. A shareholder may be entitled to provide their ABN
(in circumstances) or tell the company that they have an
exemption from providing a TFN.
Many ANZ Shareholders have previously quoted their TFN
or ABN to ANZ, or told ANZ that they have an exemption
from providing a TFN.
When we refer to TFNs being transferred to ANZ NOHC,
we also refer to ABNs and information about exemptions
from providing a TFN being transferred.
As part of the Scheme, ANZ (or the ANZ Share Registry)
intends to transfer the TFNs provided to ANZ by ANZ
Shareholders to ANZ NOHC (or the ANZ NOHC Share
Registry) on behalf of those ANZ Shareholders. If the ANZ
NOHC Shareholder’s TFN is transferred, ANZ NOHC does not
have to withhold any tax from any dividends paid to the
shareholder.
However, an ANZ Shareholder may direct ANZ to not
transfer that ANZ Shareholder’s TFN to ANZ NOHC
(or the ANZ NOHC Share Registry).
If the ANZ Shareholder makes such a direction, and does
not separately quote their TFN to ANZ NOHC, then ANZ
NOHC may be required to deduct TFN withholding from
any dividends paid by ANZ NOHC at the highest marginal
rate plus the Medicare levy (currently 47%), unless those
dividends are fully franked. If the tax withheld by ANZ NOHC
is more than the ANZ NOHC Shareholder would have paid
in tax, the ANZ NOHC Shareholder must wait until he or she
lodges an income tax return before being entitled to an
income tax offset or refund (as applicable) of any excess tax
withheld from the dividend payment.
If you do not want ANZ to transfer your TFN to ANZ NOHC
(or the ANZ NOHC Share Registry) (and therefore you
accept that ANZ NOHC may be required to withhold tax
at the top marginal tax rate plus Medicare levy on
dividends payable to you), please call the ANZ Shareholder
Information Line on 1800 11 33 99 (within Australia) or
+61 3 9415 4010 (outside Australia) or write to the ANZ
Share Registry before the Effective Date.
If an ANZ Shareholder does not specify that they do not
wish their TFN to be disclosed and collected in accordance
with the process discussed above, they are deemed under
the terms of the Scheme to agree to such disclosure and
collection of their TFN.
2. GST
No GST should be payable by ANZ Shareholders in relation
to their participation in the Scheme. The eligibility for ANZ
Shareholders to claim full or partial input tax credits in
relation to GST incurred on adviser fees and other costs
relating to their participation in the Scheme will depend on
the individual circumstances of each shareholder.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
52
3. Stamp duty
No stamp duty should be payable in any Australian State or
Territory by ANZ Shareholders in relation to their
participation in the Scheme.
(g) ANZ Incentive Plans
ANZBGL operates two ANZ Incentive Plans known as the
Employee Share Acquisition Plan (ESAP) and the Employee
Share Option Plan (ESOP). Under the ESAP, participating
employees are granted deferred shares in ANZBGL. Under
the ESOP, participating employees are granted deferred
share rights and performance rights which may be settled
with either shares or cash payments in lieu of shares at the
discretion of ANZ at the time of vesting.
The Equity Awards are held by the trustee of the ANZ
employee incentive plan trust and vest on specific dates in
accordance with the terms of the ESAP and ESOP.
Participating employees are not subject to taxation on
deferred shares until they vest and on performance rights,
restricted shares, restricted rights and deferred share rights
until they are exercised, which triggers an employee share
scheme (ESS) deferred taxing point.
For Australian resident participants in the ANZ Incentive
Plans, the Restructure should not trigger an ESS deferred
taxing point in relation to any Equity Awards issued under
the ANZ Incentive Plans, nor should it give rise to any
realised capital gains or capital losses for participating
employees.
In relation to the ESAP, all deferred shares held by the
trustee of the ANZ employee incentive plan trust will be
rolled over and exchanged for ANZ NOHC Shares on a one
for one basis.
To the extent that the Restructure results in a participating
employee becoming employed by a subsidiary of ANZ
NOHC, their employment will be treated as a continuation
of their employment with ANZBGL for the purposes of the
ANZ Incentive Plans.
In relation to the ESOP, the rules of the ESOP will be
amended to allow ANZBGL to replace ANZBGL deferred
share rights and performance rights with ANZ NOHC
deferred share rights performance rights on the same
condition of grant. The existing rights will therefore lapse
and participating employees will be granted
replacement rights.
If the rights granted to a participating employee under the
ESOP are ultimately settled with shares, the amount
included in that participating employee’s assessable income
will be determined by reference to the market value of the
ANZ NOHC shares.
If the rights granted to a participating employee under the
ESOP are ultimately settled in cash, those amounts will be
taxed in that participating employee’s hands as salary
and wages.
8.3 NEW ZEALAND
This section 8.3 provides a general summary of the New
Zealand income tax implications under the Scheme arising
for ANZ Shareholders who are tax resident in New Zealand
(NZ ANZ Shareholders). This summary is necessarily
general in nature and is not a complete analysis of all
taxation laws that may apply in relation to the Scheme for
NZ ANZ Shareholders. The tax summary provided in this
section 8.3 does not constitute tax advice.
(a) Disposal of ANZ Shares
For New Zealand income tax purposes, the transaction
under the Scheme will be treated as a disposal of ANZ
Shares by NZ ANZ Shareholders in consideration for the
monetary equivalent of the market value of the ANZ NOHC
Shares received, which will be equal to the value of the ANZ
Shares as they will carry the same rights.
A binding ruling has been issued by the Commissioner of
Inland Revenue in relation to the Scheme (BR Prd 22/11,
referred to in this section as Binding Ruling) which has
been published on Inland Revenue's website (taxtechnical.
ird.govt.nz).
As provided in the Binding Ruling, the receipt of ANZ NOHC
Shares by an NZ ANZ Shareholder under the Scheme will not
be treated as income under part C of the Income Tax Act
2007 (NZ), and therefore will not be subject to New Zealand
income tax, provided that the relevant NZ ANZ Shareholder:
•does not derive the ANZ NOHC Shares from a business, or
if the ANZ NOHC Shares are derived from a business, are
received on capital account;
•does not hold their ANZ Shares as trading stock;
•did not acquire their ANZ Shares for the purpose
of disposal;
•is not in the business of dealing in shares;
•is not a company that is for that income year part of a
wholly-owned group of companies and had the group of
companies been a single company, the ANZ NOHC
Shares derived by the company would have been income
of that single company; and
•is not a company that is part of a consolidated group,
where the ANZ NOHC Shares derived by the company
would be income of the group if the group were
one company.
The Binding Ruling also provides that for an ANZ
Shareholder that is a "portfolio investment entity" (as that
term is defined in the Income Tax Act 2007 (NZ)) other than
a life fund PIE and that is not assured under an arrangement
with another person of having a gain on the disposal of the
ANZ Shares, where the receipt of ANZ NOHC Shares under
the Scheme gives rise to income that income will be treated
as excluded income under section CX 55 of the Income Tax
Act 2007 (NZ).
An NZ ANZ Shareholder that does not hold their ANZ
Shares on capital account for New Zealand income tax
purposes and is not a portfolio investment entity, as
described above, should seek tax advice regarding the tax
implications of participating in the Scheme based on their
particular circumstances.
(b) Holding ANZ NOHC Shares
As ANZ NOHC is an Australian incorporated tax resident
company and listed on the ASX, the New Zealand tax
treatment of dividends paid by ANZ NOHC will be the same
as the tax treatment of dividends paid by ANZBGL.
53
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
While ANZ NOHC is a foreign company for New Zealand
income tax purposes, New Zealand's foreign investment
fund rules will not apply to a shareholding in ANZ NOHC as
such a shareholding should qualify for exemption from
those rules applicable to certain ASX listed companies.
Generally, dividends received from ANZ NOHC will be
income for ANZ NOHC Shareholders who are tax resident in
New Zealand (NZ ANZ NOHC Shareholders). Where such
dividends have franking credits attached, no tax credit will
arise for such franking credits. To the extent New Zealand
imputation credits, if any, are attached to such dividends,
NZ ANZ NOHC Shareholders should be entitled to a tax
credit for such imputation credits which can be applied
against their taxable income.
If Australian withholding tax is deducted from dividends
paid by ANZ NOHC to NZ ANZ NOHC Shareholders, such
withholding tax may be able to be claimed as a credit
against New Zealand tax otherwise payable in relation to
such dividends. Dividends paid by ANZ NOHC to NZ ANZ
NOHC Shareholders should not be subject to New Zealand
withholding tax.
Provided that the ANZ NOHC Shares are held on capital
account, the future disposal of ANZ NOHC Shares by NZ
ANZ NOHC Shareholders should not give rise to any taxable
income. Taxable income may arise, for example, where a NZ
ANZ NOHC Shareholder is in the business of dealing
in shares.
8.4 UNITED KINGDOM
(a) Introduction
This section 8.4 provides a general summary of certain
United Kingdom (UK) tax implications arising for certain
ANZ Shareholders under the Scheme. This summary is
necessarily general in nature and is not a complete analysis
of all taxation laws that may apply in relation to the Scheme
for ANZ Shareholders.
This UK tax summary only addresses the position of ANZ
Shareholders who are resident and, in the case of
individuals domiciled, for tax purposes solely in the UK (and
to whom split-year treatment does not apply) and who hold
their ANZ Shares (and will hold their ANZ NOHC Shares) as
an investment for UK tax purposes and who are treated as
being the underlying absolute beneficial owners thereof. In
particular, ANZ Shareholders (or as the case may be ANZ
NOHC Shareholders) who hold their shares via a depositary
receipt system or clearance service should note that they
may not always be the absolute beneficial owners thereof.
Furthermore, for UK tax purposes, where a depositary
receipt is issued outside the UK, the question of whether
the holder of the depositary receipt is the beneficial owner
of the underlying shares will generally be determined by
reference to the law of the territory in which the relevant
depositary receipt is issued.
This summary does not apply to certain categories of
shareholders to whom special rules apply, including
pension funds, charities, dealers in securities, those who
hold their shares through an individual savings account or a
pension arrangement, those who are subject to specific tax
regimes or who benefit from certain reliefs or exemptions,
those who are connected with ANZBGL or ANZ NOHC or
those for whom the shares are employment related
securities.
The tax summary provided in this section 8.4 does
not constitute tax advice and does not address any tax
consequences arising under the laws of jurisdictions other
than the UK. The tax summary in this section 8.4 is based
on UK tax law and published practice of HM Revenue &
Customs (HMRC) as at the date of this Explanatory
Memorandum (which may not be binding on HMRC),
both of which are subject to change, possibly with
retrospective effect.
ANZ Shareholders should consult with their own
independent tax adviser regarding the tax implications of
participating in the Scheme or holding ANZ NOHC Shares
based on their particular circumstances.
(b) Implementation of the Scheme
For the purposes of UK capital gains tax (CGT) and
corporate tax on chargeable gains, the issue of ANZ NOHC
Shares to ANZ Shareholders in consideration for the transfer
of their ANZ Shares to ANZ NOHC is expected to be treated
as a reorganisation of share capital for UK tax purposes.
Accordingly, ANZ Shareholders should not be treated as
making a disposal of all or part of their holding of ANZ
Shares and no liability to CGT or corporation tax on
chargeable gains should arise. Instead, the ANZ NOHC
Shares acquired and the ANZ Shares transferred should, for
CGT and corporation tax on chargeable gains purposes, be
treated as the same asset and the ANZ NOHC Shares should
be treated as having been acquired at the same time and
for the same consideration as the ANZ Shares.
In the case of a person who holds (either alone or together
with persons connected with them) more than 5% of, or of
any class of, shares or debentures in ANZBGL, the treatment
in the preceding paragraph is subject to the issue of ANZ
NOHC Shares to them and the transfer of their ANZ Shares
to ANZ NOHC being carried out for bona fide commercial
reasons and not forming part of a scheme or arrangements
of which the main purpose, or one of the main purposes, is
avoidance of the liability to CGT or corporation tax. Provided
that this is the case (although it should be noted that no
clearance has been sought from HMRC in this regard), any
such shareholder is expected to be treated in the manner
described in the preceding paragraph.
(c) Taxation of dividends
ANZ NOHC will not be required to withhold amounts on
account of UK tax at source when paying a dividend.
For the tax year beginning 6 April 2022, ANZ NOHC
Shareholders that are individuals should not be subject to
income tax on dividends they receive from ANZ NOHC if
the total amount of all dividend income received by the
individual in the tax year (including when aggregated with
any dividends received from ANZ NOHC) does not exceed a
dividend allowance of £2,000, which will be taxed at a nil
rate (the Dividend Allowance).
In determining the income tax rate or rates applicable to an
individual ANZ NOHC Shareholder’s taxable income,
dividend income is treated as the highest part of such
individual shareholder’s income. Dividend income that falls
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
54
within the Dividend Allowance will count towards the basic
or higher rate limits (as applicable) which may affect the
rate of tax due on any dividend income in excess of the
Dividend Allowance.
To the extent that an individual ANZ NOHC Shareholder’s
dividend income for the tax year exceeds the Dividend
Allowance and, when treated as the top slice of such
individual shareholder’s income, falls above such individual
shareholder’s personal allowance (if available) but below
the basic rate limit, such an individual shareholder should
be subject to tax on that dividend income at the dividend
basic rate of 8.75%. To the extent that such dividend income
falls above the basic rate limit but below the higher rate
limit, such an individual shareholder should be subject to
tax on that dividend income at the dividend higher rate of
33.75 per cent. To the extent that such dividend income falls
above the higher rate limit, such an individual shareholder
will be subject to tax on that dividend income at the
dividend additional rate of 39.35 per cent.
ANZ NOHC Shareholders who are within the charge to
UK corporation tax in respect of ANZ NOHC Shares will
generally not be subject to UK corporation tax on the gross
amount of any dividends paid by ANZ NOHC unless so long
as certain conditions are met. In the case of ANZ NOHC
Shareholders that are not small companies, one of the
conditions is that the dividends fall within an exempt class.
It is generally expected that most dividends paid by ANZ
NOHC should fall within an exempt class (subject to the
application of anti-avoidance rules). Each shareholder’s
position will depend on their own particular circumstances.
If Australian dividend withholding tax is payable on
dividends from ANZ NOHC, UK resident shareholders
should seek their own tax advice to determine any relevant
taxation implications (including the availability of any relief
or credit in respect of any such withholding tax).
(d) Disposal of shares in ANZ NOHC
ANZ NOHC Shareholders may depending on their
circumstances (including the availability of exemptions or
reliefs) be liable to UK CGT or corporation tax on chargeable
gains, as applicable, in respect of gains arising from a sale or
other disposal of any ANZ NOHC Shares.
(e) Stamp duty and stamp duty reserve tax
No UK stamp duty or stamp duty reserve tax (“SDRT”)
should generally be payable on the issue of the ANZ
NOHC Shares.
No UK stamp duty should be required to be paid on the
transfer of any ANZ NOHC Shares provided that no
instrument of transfer is executed in the UK and provided
that no such instrument relates to any property situate, or
to any matter or thing done or to be done, in the UK.
No SDRT should be payable on the issue or transfer of the
ANZ NOHC Shares, provided that the ANZ NOHC Shares
are not registered in any register kept in the UK.
8.5 UNITED STATES
(a) Introduction
This section 8.5 provides a general summary of certain
material United States federal income tax consequences of
the Scheme, and ownership and disposition of ANZ NOHC
Shares or ANZ NOHC ADSs following implementation of the
Scheme. This summary assumes that the Scheme will be
implemented as contemplated by this Explanatory
Memorandum, and applies only to ANZ Shareholders that
hold their ANZ Shares and that will hold their ANZ NOHC
Shares received under the Scheme, or to ANZ ADS Holders
that will hold their ANZ NOHC ADSs received under the
Scheme, as “capital assets” for tax purposes. This summary
addresses only United States federal income taxation and
does not discuss all of the tax consequences that may be
relevant in light of the ANZ Shareholder’s or ANZ ADS
Holder’s individual circumstances, including foreign, state or
local tax consequences, estate and gift tax consequences,
and tax consequences arising under the Medicare
contribution tax on net investment income or the
alternative minimum tax. ANZ Shareholders and ANZ ADS
Holders should consult with their own independent tax
adviser regarding the tax implications of participating in the
Scheme based on their particular circumstances.
This summary does not apply to an ANZ Shareholder or an
ANZ ADS Holder subject to special rules, including because
the ANZ Shareholder or the ANZ ADS Holder is:
•a dealer in securities;
•a trader in securities that elects to use a mark-to-market
method of accounting for securities holdings;
•a tax-exempt organisation;
•a life insurance company;
•a person who holds ANZ Shares or ANZ ADSs, or will hold
ANZ NOHC Shares or ANZ NOHC ADSs, as the case may
be, as part of a straddle or a hedging or conversion
transaction;
•a person who purchases or sells ANZ NOHC Shares or
ANZ NOHC ADSs as part of a wash sale for tax purposes;
•a US holder whose functional currency is not the
US dollar;
•a person that actually or constructively will own 5% or
more of either the combined voting power of ANZ NOHC
or of the total value of ANZ NOHC immediately after
implementation of the Scheme;
•a person who holds ANZ Shares or ANZ ADSs, or will hold
ANZ NOHC Shares or ANZ NOHC ADSs, as the case may
be, in an individual retirement or other tax-deferred
account; or
•a person who received ANZ Shares or ANZ ADSs, or who
acquires ANZ NOHC Shares or ANZ NOHC ADSs, as the
case may be, pursuant to the exercise of employee stock
options or otherwise as compensation or in connection
with the performance of services.
This section 8.5 is based on the Internal Revenue Code
of 1986, as amended, its legislative history, existing and
proposed regulations, published rulings and court
decisions, all as currently in effect (Code). These authorities
are subject to change, possibly on a retroactive basis.
55
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
If an entity or arrangement that is treated as a partnership
for United States federal income tax purposes holds ANZ
Shares or ANZ ADSs, the United States federal income tax
treatment of a partner will generally depend on the status
of the partner and the tax treatment of the partnership. A
partner in a partnership holding ANZ Shares or ANZ ADSs
should consult its own independent tax adviser regarding
the United States federal income tax treatment with respect
to the Scheme.
As noted above, this summary does not address the tax
consequences to an ANZ Shareholder who holds ANZ
Shares, or to an ANZ ADS Holder who holds ANZBY ADSs,
and who will own directly, indirectly or constructively
through attribution rules, at least 5% of either the combined
voting power of ANZ NOHC or of the total value of ANZ
NOHC immediately after implementation of the Scheme
pursuant to the applicable Treasury Regulations under
section 367 of the Code (five-percent transferee
shareholder). ANZ Shareholders and ANZ ADS Holders
who believe they are or could become five-percent
transferee shareholders of ANZ NOHC should consult with
their own independent tax adviser regarding the special
rules and time-sensitive tax procedures, including the
requirement to file a gain recognition agreement with the
Internal Revenue Service (IRS), which might apply regarding
their ability to obtain tax-free treatment under the Scheme.
For the purposes of this summary, a US holder is a
beneficial owner of ANZ Shares or ANZ ADSs and, after
implementation of the Scheme, ANZ NOHC Shares or ANZ
NOHC ADSs who is:
•a citizen or resident of the United States;
•a domestic corporation;
•an estate whose income is subject to United States
federal income tax regardless of its source; or
•a trust if a United States court can exercise primary
supervision over the trust’s administration and one or
more United States persons are authorized to control all
substantial decisions of the trust.
A non-US holder is a beneficial owner of ANZ Shares or ANZ
ADSs that is not a United States person and is not a
partnership for United States federal income tax purposes. A
non-US holder should consult with its own independent tax
adviser regarding the tax implications of participating in the
Scheme based on its particular circumstances.
(b) Material United States federal income tax
consequences of the Scheme, including the
exchange of ANZ Shares or ANZ ADSs for ANZ
NOHC Shares or ANZ NOHC ADSs, respectively
The exchange of ANZ Shares or ANZ ADSs for ANZ NOHC
Shares or ANZ NOHC ADSs, respectively, under the Scheme
is intended to be treated as a transfer to which section 351
of the Code applies. This summary assumes that the
exchange of ANZ Shares or ANZ ADSs for ANZ NOHC Shares
or ANZ NOHC ADSs, respectively, under the Scheme will be
treated as a transfer to which section 351 of the
Code applies.
1. US holders
Unless the PFIC provisions described in section 8.5(c)(1)(C)
apply, a US holder will generally not recognise any gain or
loss on the exchange of ANZ Shares or ANZ ADSs for ANZ
NOHC Shares or ANZ NOHC ADSs, respectively, under the
Scheme. If a US holder has differing bases or holding
periods in respect of its ANZ Shares or ANZ ADSs, the US
holder must determine the bases and holding periods in
the ANZ NOHC Shares or ANZ NOHC ADSs received under
the Scheme separately for each identifiable block (ie, stock
of the same class acquired at the same time for the same
price) of ANZ Shares or ANZ ADSs that the US holder
receives. US holders will have an aggregate adjusted US
federal tax basis in ANZ NOHC Shares or ANZ NOHC ADSs
received under the Scheme equal to their aggregate
adjusted US federal tax basis in the ANZ Shares or ANZ ADSs
transferred under the Scheme. Thus, to the extent a US
holder had a loss in its ANZ Shares or ANZ ADSs, such loss
generally will be preserved. The holding period for ANZ
NOHC Shares or ANZ NOHC ADSs received under the
Scheme will generally include the holding period of the
ANZ Shares or ANZ ADSs transferred under the Scheme.
Until after the implementation of the Scheme, the parties
cannot determine the tax treatment of the Scheme. In
addition, no assurance can be given that the IRS will not
assert, or that a court would not sustain, that the Scheme
does not qualify as an exchange within the meaning of
section 351 of the Code.
If the IRS were to successfully challenge the qualification of
the Scheme as an exchange within the meaning of section
351 of the Code, a US holder would generally be required to
recognise a gain or loss equal to the difference between its
adjusted tax basis in the ANZ Shares or ANZ ADSs
transferred under the Scheme and an amount equal to the
fair market value, as at the Implementation Date, of any ANZ
NOHC Shares or ANZ NOHC ADSs, respectively, received
under the Scheme. Any gain or loss so recognised would be
long-term capital gain if the US holder has held the ANZ
Shares or ANZ ADSs for more than one year as at the
Implementation Date. Generally, in such event, the tax basis
in the ANZ NOHC Shares or ANZ NOHC ADSs received by
the US holder under the Scheme would equal the fair
market value of such ANZ NOHC Shares or ANZ NOHC ADSs
as at the Implementation Date, and the US holder’s holding
period for the ANZ NOHC Shares or ANZ NOHC ADSs would
begin on the day after the Implementation Date.
2. Non-US holders
Non-US holders are not expected to recognise any gain or
loss as a result of the Scheme unless the Scheme fails to
qualify as an exchange to which section 351 of the Code
applies, as discussed above. In addition, even if the Scheme
were to fail to qualify as an exchange to which section 351
of the Code applies, non-US holders of ANZ Shares or ANZ
ADSs would generally not be subject to United States
federal income tax on any gain that may be recognised
unless they are within a class of non-US holders that would
be subject to United States federal income tax on the sale
or disposition of ANZ NOHC Shares or ANZ NOHC ADSs, as
discussed in section 8.5(c)(2)(B).
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
56
(c) United States federal income tax
consequences of holding or disposing of ANZ
NOHC Shares or ANZ NOHC ADSs following
implementation of the Scheme
1. US holders
(a) Distributions
In general, the distributions in respect of ANZ NOHC
Shares or ANZ NOHC ADSs will be treated as dividends
to the extent of ANZ NOHC’s current or accumulated
earnings and profits as determined for United States
federal income tax purposes. Subject to the discussion
in section 8.5(c)(1)(C), any portion of a distribution in
excess of ANZ NOHC’s current and accumulated
earnings and profits would be treated first as a
nontaxable return of capital that would reduce the US
holder’s tax basis in the ANZ NOHC Shares or ANZ
NOHC ADSs, and would thereafter be treated as capital
gain, the tax treatment of which is discussed in section
8.5(c)(1)(B). Because it is not expected that ANZ NOHC
will maintain calculations of its earnings and profits
under United States federal income tax principles, it is
expected that all distributions will generally be reported
to US holders as dividends.
Subject to the discussion in section 8.5(c)(1)(C), for a
non-corporate US holder, distributions that are treated
as dividends for United States federal income tax
purposes may be qualified dividend income taxable to
the US holder at the preferential rates applicable to
long-term capital gains provided that the US holder
holds ANZ NOHC Shares or ANZ NOHC ADSs for more
than 60 days during the 121-day period beginning 60
days before the ex-dividend date and meets other
holding period requirements. US holders should consult
with their own independent tax adviser regarding the
holding period in ANZ NOHC Shares or ANZ NOHC
ADSs based on their particular circumstances. Amounts
ANZ NOHC pays with respect to ANZ NOHC Shares or
ANZ NOHC ADSs will not be eligible for the dividends-
received deduction generally allowed to United States
corporations in respect of dividends received from
other United States corporations.
If a US holder receives a distribution on ANZ NOHC
Shares or ANZ NOHC ADSs that is denominated in, or
determined by reference to, a non-US dollar currency,
the US holder must recognise income equal to the US
dollar value of the distribution, based on the exchange
rate in effect on the date of distribution, regardless of
whether the US holder actually converts the payment
into US dollars. Generally, any gain or loss resulting from
currency exchange fluctuations during the period from
the date the dividend is distributed to the date the US
holder converts the payment into US dollars will be
treated as ordinary income or loss and will not be
eligible for the special tax rate applicable to qualified
dividend income. The gain or loss generally will be
income or loss from sources within the United States
for foreign tax credit limitation purposes.
A US holder must include any Australian tax withheld
from the dividend payment in the gross amount of the
distribution even though the US holder does not in fact
receive it. The dividend is taxable to the US holder when
the US holder, in the case of ANZ NOHC Shares, or the
Depositary, in the case of ANZ NOHC ADSs, receives the
dividend, actually or constructively. Subject to certain
limitations and the following sentence, some of which
vary depending upon the US holder’s circumstances,
the Australian tax withheld and paid over to Australia
that is not eligible for an exemption from Australian
withholding tax (under the US-Australia tax treaty or
otherwise) will be creditable or deductible against the
US holder’s federal income tax liability. However, under
recently finalized Treasury Regulations, it is possible that
such withholding taxes may not be creditable unless
the US holder is eligible to claim the benefits of the
US-Australia income tax treaty and elects to apply such
treaty. Special rules apply in determining the foreign tax
credit limitation with respect to dividends that are
subject to the preferential tax rates. The rules governing
foreign tax credits are complex, and the US holder
should consult with their own independent tax adviser
regarding the creditability of foreign taxes based on
their particular circumstances.
Dividends will generally be income from sources
outside the United States and will generally be “passive”
income for purposes of computing the foreign tax
credit allowable to the US holder. However, if (a) ANZ
NOHC is 50% or more owned, by vote or value, by
United States persons and (b) at least 10% of ANZ
NOHC’s earnings and profits are attributable to sources
within the United States, then for foreign tax credit
purposes, a portion of the dividends would be treated
as derived from sources within the United States. With
respect to any dividend paid for any taxable year, the
United States source ratio of the dividends for foreign
tax credit purposes would be equal to the portion of
ANZ NOHC’s earnings and profits from sources within
the United States for such taxable year, divided by the
total amount of ANZ NOHC’s earnings and profits for
such taxable year.
(b) Sale or other disposition of ANZ NOHC Shares or
ANZ NOHC ADSs
Subject to the discussion in section 8.5(c)(1)(C), a US
holder will generally recognise capital gain or loss upon
the sale or other disposition of the US holder’s ANZ
NOHC Shares or ANZ NOHC ADSs in an amount equal
to the difference between the amount the US holder
receives at such time and the US holder’s tax basis in
the ANZ NOHC Shares or ANZ NOHC ADSs. In general,
the US holder’s tax basis in their ANZ NOHC Shares or
ANZ NOHC ADSs will be equal to the carryover tax basis
as described above (generally the price the US holder
paid for them prior to implementation of the Scheme).
Such capital gain or loss will be long-term capital gain
or loss if the US holder held their ANZ NOHC Shares or
ANZ NOHC ADSs for more than one year. Capital gain
of a non-corporate US holder is generally taxed at
preferential rates where the property is held for more
than one year. The deductibility of capital losses is
subject to limitations. Such gain or loss will generally
be income or loss from sources within the United States
for foreign tax credit limitation purposes.
57
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
(c) PFIC considerations
ANZ NOHC does not expect to be a passive foreign
investment company (PFIC) for United States federal
income tax purposes, and therefore believes that ANZ
NOHC Shares or ANZ NOHC ADSs should not be treated
as stock of a PFIC, but this conclusion is a factual
determination made annually and thus may be subject
to change. In general, ANZ NOHC will be a PFIC with
respect to a US holder if, for any taxable year in which
the US holder holds ANZ NOHC Shares or ANZ NOHC
ADSs, either (i) at least 75% of the gross income of ANZ
NOHC for the taxable year is passive income or (ii) at
least 50% of the value, determined on the basis of a
quarterly average, of ANZ NOHC’s assets is attributable
to assets that produce or are held for the production of
passive income (including cash). If ANZ NOHC were to
be treated as a PFIC, gain realised on the sale or other
disposition of ANZ NOHC Shares or ANZ NOHC ADSs
would in general not be treated as capital gain. Instead,
the US holder would be treated as if the US holder had
realized such gain ratably over the US holder’s holding
period for the ANZ NOHC Shares or ANZ NOHC ADSs.
Amounts allocated to the year of disposition and to
years before ANZ NOHC became a PFIC would be taxed
as ordinary income and amounts allocated to each
other taxable year would be taxed at the highest tax
rate applicable to individuals or corporations, as
appropriate, in effect for each such year to which the
gain was allocated, together with an interest charge in
respect of the tax attributable to each such year. Further,
to the extent that a distribution received by a US holder
on their ANZ NOHC Shares or ANZ NOHC ADSs during a
single taxable year, other than the taxable year in which
the US holder’s holding period in their ANZ NOHC
Shares or ANZ NOHC ADSs began, exceeded 125% of
the average of the annual distributions on the ANZ
NOHC Shares or ANZ NOHC ADSs received during the
preceding three years or the US holder’s holding period
that preceded the taxable year of the distribution,
whichever is shorter, the distribution would be subject
to taxation in the same manner as gain, described
immediately above. With certain exceptions, a US
holder’s ANZ NOHC Shares or ANZ NOHC ADSs will be
treated as stock in a PFIC if ANZ NOHC was a PFIC at any
time during the US holder’s holding period for the ANZ
NOHC Shares or ANZ NOHC ADSs. In addition, dividends
that a US holder receives from ANZ NOHC would not
constitute qualified dividend income to such holder if
ANZ NOHC were a PFIC (or were treated as a PFIC with
respect to such holder) either in the taxable year of the
distribution or the preceding taxable year.
(d) Information with respect to foreign financial assets
A US holder that owns “specified foreign financial assets”
with an aggregate value in excess of US$50,000 (and in
some circumstances, a higher threshold) may be
required to file an information report with respect to
such assets with their tax returns. “Specified foreign
financial assets” may include any financial accounts
maintained by foreign financial institutions, as well as
the following, but only if they are held for investment
and not held in accounts maintained by financial
institutions: (i) stocks and securities issued by non-
United States persons, (ii) financial instruments and
contracts that have non-United States issuers or
counterparties, and (iii) interests in foreign entities.
Significant penalties may apply for failing to satisfy this
filing requirement. ANZ NOHC Shares should qualify as
specified foreign financial assets unless held in accounts
maintained by financial institutions. US holders should
consult with their own independent tax advisers
regarding the application of this filing requirement to
their ownership of ANZ NOHC Shares or ANZ NOHC
ADSs based on their particular circumstances.
2. Non-US holders
(a) Distributions
Dividends paid to a non-US holder in respect of ANZ
NOHC Shares or ANZ NOHC ADSs will not be subject to
United States federal income tax unless the dividends
are “effectively connected” with the non-US holder’s
conduct of a trade or business within the United States,
and the dividends are attributable to a permanent
establishment that the non-US holder maintains in the
United States if that is required by an applicable income
tax treaty as a condition for subjecting the non-US
holder to United States taxation on a net income basis.
In such cases the non-US holder generally will be taxed
in the same manner as a US holder. For a corporate
non-US holder, “effectively connected” dividends may,
under certain circumstances, be subject to an additional
“branch profits tax” at a 30% rate or at a lower rate if the
corporate non-US holder is eligible for the benefits of an
income tax treat that provides for a lower rate.
(b) Sale or other disposition of ANZ NOHC Shares or
ANZ NOHC ADSs
A non-US holder will not be subject to United States
federal income tax on gain recognized on the sale or
other disposition of their ANZ NOHC Shares or ANZ
NOHC ADSs unless:
• the gain is “effectively connected” with the non-US
holder’s conduct of a trade or business in the United
States, and the gain is attributable to a permanent
establishment that the non-US holder maintains in
the United States if that is required by an applicable
income tax treaty as a condition for subjecting the
non-US holder to United States taxation on a net
income basis, or
• the non-US holder is an individual, is present in the
United States for 183 or more days in the taxable year
of the sale and certain other conditions exist.
For a non-US holder, “effectively connected” gains that
the non-US holder recognises may also, under certain
circumstances, be subject to an additional “branch
profits tax” at a 30% rate or at a lower rate if the non-US
holder is eligible for the benefits of an income tax treaty
that provides for a lower rate.
(c) FATCA withholding
30% withholding may be imposed on certain payments
to certain non-United States financial institutions that
fail to comply with information collection and reporting
requirements, certification requirements, or any other
relevant requirements in respect of their accountholders
that are tax resident in the United States (including
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
58
certain non-United States entities that are controlled by
United States tax residents). Accountholders subject to
such information collection/reporting or certification
requirements may include certain holders of ANZ NOHC
Shares or ANZ NOHC ADSs, and ANZ NOHC may be
required to withhold on a portion of any distribution
made under the ANZ NOHC Shares or ANZ NOHC ADSs.
In addition, ANZ NOHC may be required to withhold on
a portion of any distribution that is made to a non-US
financial institution that has not agreed to comply with
these information reporting requirements or has been
found to be non-compliant in its execution of the
obligations by the IRS. Such withholding may be
imposed at any point in a chain of payments if a payee
fails to comply with United States information collection,
reporting, certification and related requirements.
Accordingly, ANZ NOHC Shares or ANZ NOHC ADSs held
through a non-compliant institution may be subject to
withholding even if the non-US holder otherwise would
not be subject to withholding. However, under proposed
US Treasury regulations, such withholding will not apply
to payments made before the date that is two years after
the date on which final regulations defining the term
“foreign passthru payment” are enacted.
Non-US holders should consult their own independent
tax advisers and their banks or brokers regarding the
possibility of this withholding based on their particular
circumstances.
(d) Backup withholding and information reporting
In general, for a noncorporate US holder, ANZ NOHC
and other payors are required to report to the IRS all
payments of dividend payments or other taxable
distributions on the ANZ NOHC Shares or ANZ NOHC
ADSs within the United States, and any payment of
proceeds of the sale of the ANZ NOHC Shares or ANZ
NOHC ADSs effected at a United States office of a
broker. Additionally, backup withholding would apply
to such payments if the US holder fails to provide an
accurate taxpayer identification number, or (in the case
of dividend payments) the US holder is notified by the
IRS that the US holder has failed to report all interest
and dividends required to be shown on their United
States federal income tax returns.
Non-US holders are generally exempt from backup
withholding and information reporting requirements
with respect to dividend payments made to non-US
holders outside the United States by ANZ NOHC or
another non-United States payor. Non-US holders are
also generally exempt from backup withholding and
information reporting requirements in respect of
dividend payments made within the United States and
the payment of the proceeds from the sale of ANZ
NOHC Shares or ANZ NOHC ADSs effected at a United
States office of a broker, as long as either (i) the payor or
broker does not have actual knowledge or reason to
know that the non-US holder is a United States person
and the non-US holder has furnished a valid IRS Form
W-8 or other documentation upon which the payor or
broker may rely to treat the payments as made to a
non-United States person, or (ii) the non-US holder
otherwise establishes an exemption.
In general, payment of the proceeds from the sale
of ANZ NOHC Shares or ANZ NOHC ADSs effected
at a foreign office of a broker will not be subject to
information reporting or backup withholding. However,
a sale effected at a foreign office of a broker could be
subject to information reporting in the same manner
as a sale within the United States (and in certain cases
may be subject to backup withholding as well) if (i) the
broker has certain connections to the United States,
(ii) the proceeds or confirmation are sent to the United
States or (iii) the sale has certain other specified
connections with the United States.
ANZ NOHC Shareholders generally may obtain
a refund of any amounts withheld under the backup
withholding rules that exceed their income tax liability
by filing a refund claim with the IRS.
59
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 8
SECTION
9
ADDITIONAL
INFORMATION
9.1 INTERESTS HELD BY ANZ DIRECTORS
As at the Last Practicable Date, the ANZ Directors have the following Relevant Interests in ANZ Shares and interests in
other ANZ securities:
ANZ DIRECTORNUMBER OF ANZ SHARESOTHER ANZ SECURITIES
Paul O'Sullivan (Chairman)4,3509,250 ANZ Capital Notes 7
Shayne Elliott (CEO)522,083453,727 performance rights
Ilana Atlas AO15,318Nil
Jane Halton AO PSM9,653Nil
Rt Hon Sir John Key GNZM AC10,500Nil
Graeme Liebelt21,6712,500 ANZ Capital Notes 6
2,500 ANZ Capital Notes 7
John Macfarlane19,0425,000 ANZ Capital Notes 3
2,140 ANZ Capital Notes 6
2,000 ANZ Capital Notes 7
Christine O'Reilly6,400Nil
Jeff Smith2,779Nil
9.2 INTENTIONS OF ANZ
NOHC DIRECTORS
Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, the ANZ NOHC Directors
have indicated that it is their present intention following
the Restructure:
•to continue the business and operations of the
ANZ Group;
•to not make any major changes to the businesses
of the ANZ Group, except as contemplated within this
Explanatory Memorandum; and
•to continue the employment of employees of the
ANZ Group.
9.3 ANZ SHAREHOLDER
ELECTIONS
Unless prohibited by law, all instructions, notifications
and elections by a Scheme Shareholder to ANZ that are
binding between the Scheme Shareholder will be deemed
from the Implementation Date to be made by the Scheme
Shareholder to ANZ NOHC in respect of the NOHC Shares
issued until that instruction, notification or election is
revoked or amended in writing addressed to ANZ NOHC at
the ANZ NOHC Share Registry. This includes instructions,
notifications and elections relating to:
•whether dividends are to be paid by cheque or into
a specific bank account;
•payments of dividends on ANZ Shares, including
the currency in which dividends are to be paid;
•participation in the ANZ DRP and BOP; and
•personal details including for receipt of notices or other
communications from ANZ (including by email).
ANZ Shareholders’ TFNs, ABNs any relevant exemption from
providing a TFN will automatically transfer from ANZBGL to
ANZ NOHC unless an ANZ Shareholder notifies ANZ or the
ANZ Share Registry as described in section 8.2(f )(1).
61
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 9
9.4 ANZ NOHC CONSTITUTION
This section 9.4 summarises the material differences between the existing ANZBGL constitution and the ANZ
NOHC constitution.
RELEVANT PROVISION IN THE
EXISTING ANZBGL CONSTITUTION
PROPOSED CHANGE IN THE
NEW ANZ NOHC CONSTITUTION
TerminologySeveral amendments have been made in the ANZ NOHC
constitution to clarify terminology and definitions as well as
to adopt gender-neutral and modernised terminology.
For example, ‘chairman’ has been replaced by ‘chairperson’ and
references to telegrams and facsimile have been removed.
Provisions have also been included to clarify processes for
electronic signing.
Definition of ‘Register’The definition of ‘Register’ has been amended to reflect the
Corporations Act definition of a register, removing references
to computerised or electronic sub-registers.
Definition of ‘Remuneration’The definition of ‘Remuneration’ has been amended to reflect
the ASX Listing Rules requirements that a non-executive
directors’ aggregate fee pool includes fees for acting as a
director of any subsidiary of the ANZ NOHC but excludes
securities issued to a director under the ASX Listing Rules
(where approved by members).
Termination of appointment of Managing DirectorThe current ANZBGL constitution provides that a Managing
Director’s appointment will automatically end if they cease to
be a director. The ANZ NOHC constitution embeds additional
flexibility, providing the ability for the Board to decide that it
wishes to allow the Managing Director to continue
employment in an executive role even after they cease
to be a director.
Chairman's powers at a meeting of membersA new provision has been inserted to provide the chairperson
of a general meeting with the power to withdraw certain
resolutions that are not legally required to be put to
the meeting.
Admission to general meetingsUnder the current ANZBGL constitution, the chairperson of a
general meeting has the power to refuse to admit a person who
behaves or threatens to behave in a dangerous, offensive or
disruptive way. The ANZ NOHC constitution clarifies that this
power extends to a person who the chairperson has reasonable
grounds to believe may behave in such a way.
Member present at meetingA new provision has been included to clarify that a person who
has lodged a Direct Vote is taken to be present at the meeting
(ie, counts towards a quorum).
Deposit of proxy forms and powers of attorneyThe current ANZBGL constitution requires proxy forms to
provide at least 48 hours before the meeting. The ANZ NOHC
constitution has embedded new flexibility to allow the Board
to determine that proxies may be lodged closer to the meeting
if appropriate.
Evidence of proxy forms, powers of attorney and
other appointments
A new provision has been included which provides ANZ NOHC
with the power to clarify proxy instructions from a member, or
to ask a member to rectify errors in a proxy form.
Method of voting (poll or show of hands)A new provision has been included so that any resolution
set out in the notice of meeting must be decided by poll
(in accordance with section 250JA of the Corporations Act).
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
62
RELEVANT PROVISION IN THE
EXISTING ANZBGL CONSTITUTION
PROPOSED CHANGE IN THE
NEW ANZ NOHC CONSTITUTION
Payment of dividendsA new provision has been included to clarify the record date in
respect of the payment of dividends will be the date fixed for
payment if not otherwise set by the Board.
Methods of payment (of dividends) New provisions have been included to clarify that dividends
may be paid by electronic payment. The new provisions provide
that if an electronic transfer is rejected or refunded (or the
member doesn’t have a registered address) ANZ NOHC may
credit the amount to a company account, to be held for the
shareholder, and can be used for the benefit of the company
until claimed, reinvested for the shareholder, or otherwise
disposed of in accordance with the laws relating to
unclaimed money.
Reinvestment of unclaimed dividendsA new provision has been included to allow ANZ NOHC to
reinvest unclaimed dividends into shares in the company on
the member’s behalf (so that they do not become
unclaimed money).
Mode of transfer (of shares)The ANZBGL constitution currently provides that the company
must not charge any fee on transfer of a share. This prohibition
has been qualified in the ANZ NOHC constitution, whereby a
fee may be charged if the company is not listed on the ASX, or
the fee is permitted by the ASX Listing Rules.
Verification of instrument authenticityA new clause has been inserted to enable ANZ NOHC to put in
place reasonable processes and procedures to determine the
authenticity of an instrument of transfer.
Restricted securitiesThe restricted securities provisions have been updated to reflect
amendments to the ASX Listing Rules, setting out conditions
that must be included in a constitution for restricted shares to
be issued (such as the use of a holding lock).
Non-marketable parcelsA new provision has been included to clarify that the Board
may, in certain circumstances, revoke a notice given in relation
to an unmarketable parcel.
Capitalization of profitsA new provision has been included to give the Board the
express power to apply all or any part of a capitalised amount in
any manner permitted by law, giving ANZ NOHC greater
flexibility.
Conversion to Australian dollarsThe ANZBGL constitution currently provides that the Board
must set a time for determining the relevant exchange rate
before payment. The ANZ NOHC constitution now provides the
Board with additional flexibility for the relevant exchange rate to
be set at the time of payment (rather than having to fix an
exchange rate in advance).
A full copy of the ANZ NOHC constitution will be available on the ANZ website (anz.com.au).
63
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 9
9.5 ASX CORPORATE
GOVERNANCE COUNSEL’S
CORPORATE GOVERNANCE
PRINCIPLES AND
RECOMMENDATIONS
ANZ NOHC is seeking a listing on the ASX. The ASX Corporate
Governance Council has developed the fourth edition of the
Corporate Governance Principles and Recommendations
(ASX Recommendations) for entities listed on the ASX in
order to promote investor confidence and to assist
companies in meeting shareholder expectations.
Under the ASX Listing Rules, ANZ NOHC will be required
to provide a corporate governance statement in its annual
report disclosing the extent to which it has followed the
ASX Recommendations during the reporting period. Where
ANZ NOHC does not follow the ASX Recommendations,
it must identify the recommendation that has not been
followed and provide reasons for not following it.
ANZ NOHC intends to comply with all of the ASX
Recommendations from the time of its listing on the ASX.
9.6 IMPACT OF RESTRUCTURE
ON ANZ INCENTIVE PLANS
Under the ANZ Incentive Plans ANZ deferred shares,
deferred share rights, restricted shares, restricted rights and
performance rights (together, Equity Awards) may be
granted to select employees, including the Chief Executive
Officer, Group Executive Committee, other Banking
Executive Accountability Regime Accountable Executives
and other employees who receive variable remuneration
outcomes above a certain threshold or who receive Equity
Awards as part of an offer made to a specific employee,
such as through a retention award or on
commencement with ANZ.
Deferred shares are offered and granted under the
ESAP (including broad based employee share offers and
executive deferred short term incentive offers). Deferred
share rights and performance rights are offered and
granted under the ESOP.
Equity Awards granted to ANZ employees are subject to
time-based deferral periods of generally between 1-5 years
after which time they vest (become available to trade).
Vesting of performance rights are subject to meeting
additional performance-based conditions.
The Equity Awards will vest if employees are employed by
the ANZ Group on the vesting date, subject to the specific
conditions of grant under the ANZ Incentives Plans and
ANZ’s downward adjustment discretion. Where the Equity
Awards do not vest, they are forfeited and/or lapse.
The ANZ Equity Awards held by employees on the Scheme
Record Date will be replaced on implementation of the
Scheme with ANZ NOHC Equity Awards on a one for one
basis, and will continue to be governed by the relevant
plan rules and same offer terms.
The Equity Awards and the ANZ Incentive Plans will
continue to operate and apply after implementation of the
Scheme on substantially the same terms and conditions,
except that the incentive plans will be operated by ANZ
NOHC and provide interests in ANZ NOHC Shares.
Details on the tax treatment of the Equity Awards for
Australian eligible employees under the Restructure are
in section 8.2(g).
9.7 PAYMENTS AND OTHER
BENEFITS AND AGREEMENTS
RELATING TO THE RESTRUCTURE
It is not proposed that any payment or other benefit will be
made or given to any ANZ Director, secretary or executive
office of ANZ or any body corporate related to ANZ as a
consequence of or in connection with the Restructure,
including as compensation for loss of, or as consideration
for or in connection with, their retirement from office as
director, secretary or executive officer of ANZ or a body
corporate connected with ANZ as a consequence of or in
connection with the Restructure.
9.8 OTHER REGULATORY
WAIVERS, CONSENTS AND
EXEMPTIONS, INCLUDING IN
RELATION TO ANZ NOHC SHARES
(a) ASIC
ASIC has granted relief from the disclosure requirements
that would otherwise apply to this Explanatory
Memorandum under the Corporations Act with respect
to payments and benefits to directors and officers in
relation to their loss of office or retirement.
ASIC has granted relief from paragraph 8302(h) of Part 3 of
Schedule 8 of the Corporations Regulations, which requires
an explanatory statement to set out whether, within the
knowledge of the ANZ Directors, the financial position of
ANZ has materially changed since the date of the last
balance sheet laid before ANZ Shareholders in accordance
with section 314 or 317 of the Corporations Act, being
30 September 2021.
ASIC has also granted ANZ relief from this requirement so
that this Explanatory Memorandum only needs to set out
whether, within the knowledge of the ANZ Directors, the
financial position of ANZ has materially changed since
31 March 2022 (being the last date of the period to which
the financial statements for the half year ended 31 March
2022 relate) and, if so, full particulars of any change.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
64
In addition, ASIC has provided:
•relief from section 710 of the Corporations Act to allow
ANZ NOHC to rely on an alternative disclosure test on the
basis that references to “continuously quoted securities” in
Chapter 6D are taken to permit the continuous disclosure
of ANZ Shares to be included in the calculation of the
3 month period for the purposes of section 713(1) of
the Corporations Act;
•relief from section 707(3) of the Corporations Act to
allow ANZ NOHC Shareholders to offer any or all of their
ANZ NOHC Shares for sale without disclosure to investors
in accordance with Chapter 6D.2 of the Corporations Act,
where that sale will occur within 12 months after the
Implementation Date;
•a modification of section 708(13)(a) so that this section
will apply to the ANZ NOHC DRP in circumstances where
there has been a transfer of any residual balances in the
accounts of participants in the ANZ DRP to those
participants’ respective accounts under the
ANZ NOHC DRP;
•an indication that certain relief will be provided in
relation to the treatment and issue of securities under
the ANZ Incentive Plans; and
•an indication that certain existing relief granted to
ANZ by ASIC (that is required by ANZ NOHC) will be
replicated to ANZ NOHC.
(b) ASX
ASX has confirmed, based solely on the information provided
by ANZ, that ASX would likely do each of the following:
•grant a waiver from Listing Rule 1.1 conditions 9, and
20 to permit ANZ NOHC to be admitted to the official list
without having to meet certain requirements (subject to
certain conditions);
•accept that ANZ NOHC may use an information
memorandum instead of a prospectus for the purposes
of satisfying Listing Rule 1.1 condition 3 (on condition
that the information memorandum complies with the
requirements of Listing Rule 1.4.1);
•grant a waiver from Listing Rule 1.4.1 to the extent
necessary to permit the ANZ NOHC information
memorandum not to state that it contains all the
information required under section 710 of the
Corporations Act (subject to certain conditions);
•confirm that the ANZ NOHC constitution complies
with the requirements of Listing Rule 1.1 condition 2;
•confirm that items 12 to 18, 22, 23, 34, 35, 36, 44 and 45
of the Information Form and Checklist (Appendix 1A) are
not required as part of the admission of ANZ NOHC;
•confirm that Listing Rules 7.1 and 10.11, 11.1, 10.1 and
11.4 do not apply to the Restructure;
•grant certain waivers in respect of certain matters relating
to ANZ equity incentives;
•confirm that ANZBGL’s listing may continue as a debt
listing following implementation of the Scheme and
confirm the change in listing status of ANZBGL to a debt
listing does not affect the status of the existing waivers
and confirmations granted to ANZBGL in connection
with previous issues of ANZ Capital Notes and those
waivers and confirmations will be replicated
to ANZ NOHC;
•confirm that the amendments to ANZ Capital Notes
are appropriate and equitable for the purposes of
Listing Rule 6.1.
•confirm that a concessional list fee will apply to
ANZ NOHC’s admission to the official list; and
•confirm that ASX has no objection the Scheme
timetable .
(c) New Zealand
The FMA has provided a discretionary exemption to ANZ
NOHC under section 556 of the Financial Markets Conduct
Act 2013 (New Zealand) (FMCA). This exempts ANZ NOHC
from the provisions in Part 3 of the FMCA in respect of the
ANZ NOHC Shares to be issued under the Scheme.
9.9 FOREIGN DISCLAIMERS
This Explanatory Memorandum does not constitute an offer
of ANZ NOHC Shares in any jurisdiction in which it would be
unlawful. In particular, this Explanatory Memorandum may
not be distributed to any person, and the ANZ NOHC Shares
may not be offered or sold, in any country outside Australia
except to the extent provided below.
Cook Islands
The contents of this Explanatory Memorandum have not
been reviewed by any Cook Islands regulatory authority.
You should exercise caution in relation to the offer. If you
are in doubt about any of the contents of this Explanatory
Memorandum or your regulatory obligations, you should
obtain independent professional advice.
Fiji
This Explanatory Memorandum is not, and will not be,
registered as a prospectus or offer document under the
Companies Act of Fiji. No action has been taken in Fiji to
authorise or register this Explanatory Memorandum or to
permit the distribution of this Explanatory Memorandum
or any documents issued in connection with it. This
Explanatory Memorandum does not constitute a public
offer of “securities” as determined by reference to Fiji’s
Companies Act 2015.
European Union
This Explanatory Memorandum is not a prospectus under
Regulation (EU) 2017/1129 of the European Parliament
and the Council of the European Union (the "Prospectus
Regulation"). Therefore, the Explanatory Memorandum has
not been, and will not be, registered with or approved by any
securities regulator or supervisory authority in the European
Union. Accordingly, this Explanatory Memorandum may not
be made available, nor may ANZ NOHC Shares be offered
for sale or exchange, in the European Union except in
circumstances that do not require the obligation to publish
a prospectus under the Prospectus Regulation.
In accordance with Article 1(4) of the Prospectus
Regulation, an offer of ANZ NOHC Shares in each
member state of the European Union is limited:
•to persons who are "qualified investors" (as defined in
Article 2(e) of the Prospectus Regulation);
•to fewer than 150 other natural or legal persons; and
•in any other circumstance falling within Article 1(4) of
the Prospectus Regulation.
65
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 9
Hong Kong
WARNING: The contents of this Explanatory Memorandum
have not been reviewed or approved by any regulatory
authority in Hong Kong. You are advised to exercise caution
in relation to the Scheme. If you are in any doubt about any
of the contents of this Explanatory Memorandum, you
should obtain independent professional advice.
This Explanatory Memorandum does not constitute an
offer or invitation to the public in Hong Kong to acquire or
subscribe for or dispose of any securities. This Explanatory
Memorandum also does not constitute a prospectus (as
defined in section 2(1) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of
Hong Kong)) or notice, circular, brochure or advertisement
offering any securities to the public for subscription or
purchase or calculated to invite such offers by the public
to subscribe for or purchase any securities, nor is it an
advertisement, invitation or document containing an
advertisement or invitation falling within the meaning
of section 103 of the Securities and Futures Ordinance
(Cap. 571 of the Laws of Hong Kong).
Accordingly, unless permitted by the securities laws of
Hong Kong, no person may issue or cause to be issued this
Explanatory Memorandum in Hong Kong, other than to
persons who are “professional investors” (as defined in the
Securities and Futures Ordinance and any rules made
thereunder) or in other circumstances that do not constitute
an offer to the public within the meaning of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
No person may issue or have in its possession for the
purposes of issue, this Explanatory Memorandum or any
advertisement, invitation or document relating to these
securities, whether in Hong Kong or elsewhere, which is
directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the securities laws of Hong Kong)
other than any such advertisement, invitation or document
relating to securities that are or are intended to be disposed
of only to persons outside Hong Kong or only to
professional investors.
Copies of this Explanatory Memorandum may be issued to
a limited number of persons in Hong Kong in a manner that
does not constitute any issue, circulation or distribution of
this Explanatory Memorandum, or any offer or an invitation
in respect of these securities, to the public in Hong Kong.
This Explanatory Memorandum is for the exclusive use of
ANZ Shareholders in connection with the Scheme. No steps
have been taken to register or seek authorisation for the
issue of this Explanatory Memorandum in Hong Kong.
This Explanatory Memorandum is confidential to the
person to whom it is addressed and no person to whom a
copy of this Explanatory Memorandum is issued may issue,
circulate, distribute, publish, reproduce or disclose (in whole
or in part) this Explanatory Memorandum to any other
person in Hong Kong or use for any purpose in Hong Kong
other than in connection with consideration of the Scheme
by ANZ Shareholders.
Indonesia
A registration statement with respect to the NOHC Shares
has not been, and will not be, filed with Otoritas Jasa
Keuangan in the Republic of Indonesia. Therefore, the
NOHC Shares may not be offered or sold to the public in
Indonesia. Neither this Explanatory Memorandum nor any
other document relating to the Scheme may be circulated
or distributed, whether directly or indirectly, in the Republic
of Indonesia or to Indonesian citizens, corporations or
residents, except in a manner that will not be considered
as a “public offer” under the law and regulations of the
Republic of Indonesia.
Japan
The NOHC Shares have not been, and will not be, registered
under Article 4, paragraph 1 of the Financial Instruments and
Exchange Law of Japan (Law No. 25 of 1948), as amended
(the “FIEL”) pursuant to an exemption from the registration
requirements applicable to a private placement of securities
to small number investors. This Explanatory Memorandum is
for the exclusive use of employee shareholders of ANZBGL in
connection with the Scheme. This document is confidential
to the person to whom it is addressed and must not be
distributed, published, reproduced or disclosed (in whole or
in part) to any other person in Japan or resident of Japan
other than in connection with consideration by ANZBGL’s
shareholders of the Scheme.
Korea
Neither ANZBGL nor ANZ NOHC are making any
representation with respect to the eligibility of any
recipients of this Explanatory Memorandum to acquire
ANZ NOHC Shares under the laws of the Republic of Korea,
including the Foreign Exchange Transaction Act and
regulations thereunder. ANZ NOHC Shares have not been,
and will not be, registered under the Financial Investment
Services and Capital Markets Act of Korea (“FSCMA”) and
therefore may not be offered or sold in Korea or to any
resident of Korea or to any persons for re-offering or resale
in Korea or to any resident of Korea (as defined under the
Foreign Exchange Transaction Act of Korea and its
enforcement decree), except as permitted under the
applicable laws and regulations of Korea.
Accordingly, ANZ NOHC Shares may not be offered or sold
in Korea other than (i) to “accredited investors” (as defined
in the FSCMA) or (ii) in other circumstances that do not
constitute an offer to the public within the meaning of
the FSCMA.
Malaysia
No approval from, or recognition by, the Securities
Commission of Malaysia has been, or will be, obtained in
relation to any offer of ANZ NOHC Shares. ANZ NOHC
Shares may not be issued or transferred in Malaysia except
to persons who are shareholders of ANZBGL in compliance
with the Scheme.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
66
New Zealand
This Explanatory Memorandum is not a New Zealand
disclosure document and has not been registered, filed
with or approved by any New Zealand regulatory authority
under or in accordance with the FMCA or any other
New Zealand law. The offer of ANZ NOHC Shares under the
Scheme is being made to existing shareholders of ANZBGL
in reliance upon an exemption under section 556 of the
FMCA which exempts ANZ NOHC from the disclosure
requirements in Part 3 of the FMCA. Accordingly, this
Explanatory Memorandum may not contain all the
information that a disclosure document is required to
contain under New Zealand law.
Philippines
The securities being offered or sold have not been registered
with the Philippine securities and exchange commission
("sec") under the philippine securities regulation code
(the "code"). Any future offer or sale thereof is subject to
registration requirements under the code unless such
offer or sale qualifies as an exempt transaction.
ANZ NOHC Shares may be issued only to existing
shareholders of ANZBGL in an exempt transaction.
Samoa
An offer of ANZ NOHC Shares in Samoa does not constitute
an offer of securities to the public in Samoa. In accordance
with section 8(3)(b)(ii) of the Securities Act 2006, an offer of
ANZ NOHC Shares in Samoa is limited to persons in Samoa
who in all the circumstances can properly be regarded as
having been selected otherwise than as members of
the public.
Singapore
This Explanatory Memorandum and any other document
relating to the Scheme have not been, and will not be,
registered as a prospectus with the Monetary Authority of
Singapore and the Scheme is not regulated by any financial
supervisory authority in Singapore. Accordingly, statutory
liabilities in connection with the contents of prospectuses
under the Securities and Futures Act 2001 (the "SFA") will
not apply.
This Explanatory Memorandum and any other document
relating to the Scheme may not be made the subject of an
invitation for subscription, purchase or receipt, whether
directly or indirectly, to persons in Singapore except
pursuant to exemptions in Subdivision (4) Division 1, Part 13
of the SFA, including the exemption under section 273(1)(c)
of the SFA, or otherwise pursuant to, and in accordance
with the conditions of, any other applicable provisions
of the SFA.
Any offer is not made to you with a view to ANZ NOHC
Shares being subsequently offered for sale to any other
party in Singapore. You are advised to acquaint yourself
with the SFA provisions relating to on-sale restrictions in
Singapore and comply accordingly.
This Explanatory Memorandum is being furnished to you on
a confidential basis and solely for your information and may
not be reproduced, disclosed, or distributed to any other
person. Any investment referred to in this Explanatory
Memorandum may not be suitable for you and it is
recommended that you consult an independent investment
advisor if you are in doubt about such investment.
Neither ANZBGL nor ANZ NOHC is in the business of
dealing in securities or holds itself out, or purports to hold
itself out, to be doing so. As such, ANZBGL and ANZ NOHC
are neither licensed nor exempted from dealing in securities
or carrying out any other regulated activities under the SFA
or any other applicable legislation in Singapore.
Taiwan
The Scheme does not constitute a public offering of
securities under the Taiwan Securities and Exchange Act.
This Explanatory Memorandum has not been, and will not
be, registered or filed with, or approved by, the Financial
Supervisory Commission of Taiwan or other regulatory
institution under the securities laws of Taiwan. ANZ NOHC
Shares may not be offered or sold in Taiwan in any
circumstance that would constitute an offer to the public
under the Securities and Exchange Act. This Explanatory
Memorandum may be distributed in Taiwan only to existing
ANZBGL shareholders. No person or entity in Taiwan has
been authorized to offer, market or sell or ANZ NOHC Shares
in Taiwan.
United Kingdom
Neither Explanatory Memorandum nor any other document
relating to the Scheme has been delivered for approval to
the Financial Conduct Authority in the United Kingdom and
no prospectus (within the meaning of section 85 of the
Financial Services and Markets Act 2000, as amended
(“FSMA”)) has been published or is intended to be published
in respect of the ANZ NOHC Shares.
This Explanatory Memorandum does not constitute an offer
of transferable securities to the public within the meaning
of the UK Prospectus Regulation or the FSMA. Accordingly,
this Explanatory Memorandum does not constitute a
prospectus for the purposes of the Prospectus Regulation
or the FSMA.
Any invitation or inducement to engage in investment
activity (within the meaning of section 21 FSMA) received in
connection with the issue or sale of the ANZ NOHC Shares
has only been communicated or caused to be
communicated and will only be communicated or caused to
be communicated in the United Kingdom in circumstances
in which section 21(1) FSMA does not apply to ANZBGL.
In the United Kingdom, this Explanatory Memorandum is
being distributed only to, and is directed at, persons (i) who
fall within Article 43 (members of certain bodies corporate)
of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2005, or (ii) to whom it may otherwise be
lawfully communicated (together “relevant persons”). The
investments to which this Explanatory Memorandum
relates are available only to, and any invitation, offer or
agreement to purchase will be engaged in only with,
relevant persons. Any person who is not a relevant person
should not act or rely on this Explanatory Memorandum.
67
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 9
United States
No registration
The ANZ NOHC Shares to be issued pursuant to the
Scheme, including any ANZ NOHC Shares represented by
ANZ NOHC ADSs, have not been and will not be registered
under the US Securities Act or the securities laws of any
state or other jurisdiction of the United States. The ANZ
NOHC Shares and ANZ NOHC Shares ADSs will be issued in
reliance on the exemption from the registration
requirements of the US Securities Act provided by Section
3(a)(10) thereof on the basis of the approval of an Australian
court, which will consider, among other things, the fairness
of the terms and conditions of the Scheme to ANZ
Shareholders. For the purposes of qualifying for the
exemption from the registration requirements of the US
Securities Act afforded by Section 3(a)(10) of the US
Securities Act, the Australian court will be advised that its
approval of the Scheme will be relied upon by ANZBGL and
ANZ NOHC as an approval of the Scheme following a
hearing on the fairness of the terms and conditions of the
Scheme to ANZ Shareholders at which hearing all ANZ
Shareholders are entitled to attend in person or through
their duly appointed proxies or through counsel to support
or oppose the approval of the Scheme and with respect to
which notification has been given to all ANZ Shareholders.
None of the United States securities and exchange
commission nor any state securities commission in the
united states or any other us regulatory authority has
approved or disapproved of the securities issuable pursuant
to the scheme, or passed upon the accuracy or adequacy of
this explanatory memorandum. Any representation to the
contrary is a criminal offence.
Transfer restrictions
The ANZ NOHC Shares, including any ANZ NOHC Shares
represented by ANZ NOHC ADSs, to be issued pursuant to
Section 3(a)(10) of the US Securities Act generally should not
be treated as ‘restricted securities’ within the meaning of Rule
144(a)(3) under the US Securities Act and persons who
receive ANZ NOHC Shares under the Scheme (including ANZ
NOHC Shares represented by ANZ NOHC ADSs) may resell
them without restriction under the US Securities Act, other
than any holder of ANZ NOHC Shares who may be deemed
an ‘affiliate’ of ANZ NOHC post completion of the Restructure
for purposes of Rule 144 under the US Securities Act.
Under US securities laws, persons who are or will be
deemed to be affiliates (as defined under the US Securities
Act) of ANZBGL prior to or after the Implementation Date
may be subject to timing, manner of sale and volume
restrictions on the resale in the United States of ANZ NOHC
Shares (including ANZ NOHC Shares represented by ANZ
NOHC ADSs) received in connection with the Scheme.
Whether a person is an ‘affiliate’ of a company for such
purposes depends upon the circumstances, but an affiliate
of a company is any person that directly or indirectly
controls, or is controlled by, or is under common control
with, the issuer, which is generally interpreted to include
the directors and senior officers of the issuer. The US
Securities Act would not generally restrict sale of ANZ
NOHC Shares (including ANZ NOHC Shares represented by
ANZ NOHC ADSs) on the ASX provided that the sale has not
been pre-arranged with a buyer in the United States. ANZ
Shareholders (including those persons who become ANZ
NOHC Shareholders pursuant to the Scheme) who believe
they may be affiliates of ANZBGL for the purposes of the US
Securities Act should consult their own legal advisers.
Disclosure considerations
The Scheme is expected to be effected by means of a
scheme of arrangement pursuant to laws of Australia
and is not subject to the tender offer rules or other proxy
requirements of section 14(a) under the US Exchange Act .
This Explanatory Memorandum has been prepared in
accordance with disclosure requirements under applicable
laws of Australia. Shareholders in the United States should
be aware that these requirements may be different from
those of the United States.
You should be aware that ANZ NOHC may purchase
securities otherwise than under the Scheme, such as in
open market or privately negotiated purchases.
Any financial statements or other financial information
included or referenced in this Explanatory Memorandum
have been prepared and presented in accordance with the
recognition and measurement principles prescribed in the
Australian Accounting Standards (AAS) issued by the
Australian Accounting Standards Board (AASB), which
are consistent with the International Financial Reporting
Standards (IFRS), and thus may not be comparable to the
financial statements and information of US companies or
companies whose financial statements are prepared in
accordance with generally accepted accounting principles
in the US. The pro-forma financial information included in
this document does not purport to be in compliance with
Article 11 of Regulation S-X of the rules and regulations
of the SEC.
Enforcement of civil liabilities
It may be difficult for you to enforce your rights and any
claim you may have arising under US federal securities laws
since ANZBGL and ANZ NOHC are located in Australia and
most of their respective officers and directors reside outside
the United States. You may not be able to sue ANZBGL, ANZ
NOHC or their respective officers or directors in Australia for
violations of the US securities laws. It may be difficult to
compel ANZBGL and its affiliates to subject themselves
to a US court's judgment.
Vanuatu
This Explanatory Memorandum is not, and will not be,
registered as a prospectus or offer document under the
Companies Act No. 25 of 2012 (the “Act”). No action has
been taken in Vanuatu to authorise or register this
Explanatory Memorandum or to permit the distribution of
this Explanatory Memorandum or any documents issued in
connection with it. This Explanatory Memorandum does not
constitute a public offer of “securities” as determined by
reference to the Act.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
68
9.10 NO UNACCEPTABLE
CIRCUMSTANCES
The ANZ Directors believe that the Scheme does not
involve any circumstances in relation to the affairs of ANZ
that could reasonably be characterised as constituting
‘unacceptable circumstances’ for the purposes of section
657A of the Corporations Act.
9.11 NO OTHER MATERIAL
INFORMATION
Except as disclosed in this Explanatory Memorandum or
announced to the ASX and NZX, so far as the ANZ Directors
are aware, there is no other information that is:
•material to the making of a decision by an ANZ
Shareholder whether or not to vote in favour of the
Scheme Resolution; and
•known to any ANZ Director at the Last Practicable Date,
which has not previously been disclosed to ANZ
Shareholders.
9.12 SUPPLEMENTARY
DISCLOSURE
ANZ will issue a supplementary document to this
Explanatory Memorandum if it becomes aware of any
of the following between the date of this Explanatory
Memorandum and the Second Court Date:
•a material statement in this Explanatory Memorandum
is false or misleading in a material respect;
•a material omission from this Explanatory Memorandum;
•a significant change affecting a matter included in this
Explanatory Memorandum; or
•a significant new matter has arisen and it would have
been required to be included in this Explanatory
Memorandum if it had arisen before the date of this
Explanatory Memorandum.
Depending on the nature and timing of the changed
circumstances, and subject to obtaining any relevant
approvals, ANZ may circulate and publish any
supplementary document by:
•making an announcement to the ASX and NZX;
•placing an advertisement in a prominently published
newspaper which is circulated generally throughout
Australia;
•posting the supplementary document to ANZ
Shareholders at their address shown on the ANZ Share
Register; and/or
•posting a statement on ANZ’s website at anz.com.au,
as ANZ, in its absolute discretion, considers appropriate.
9.13 CONSENTS AND DISCLOSURES
(a) Consents
This Explanatory Memorandum contains statements made
by, or statements said to be based on statements made by:
•Grant Samuel & Associates Pty Limited as the
Independent Expert;
•KPMG Transaction Services (a division of KPMG Financial
Advisory Services (Australia) Pty Ltd) as the Investigating
Accountant; and
•KPMG, an Australian partnership and a member firm of
the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private
English company limited by guarantee, as auditor to ANZ.
Each of those persons named above has consented to the
inclusion of each statement it has made in the form and
context in which the statements appear and has not
withdrawn that consent at the date of this Explanatory
Memorandum.
The following parties have given and have not, before the
time of registration of this Explanatory Memorandum with
ASIC, withdrawn their consent to be named in this
Explanatory Memorandum in the form and context in
which they are named:
• Herbert Smith Freehills as legal adviser to the ANZ Group;
•Computershare Investor Services Pty Limited as the ANZ
Share Registry; and
•King & Wood Mallesons as Australian taxation adviser.
(b) Disclosures and responsibility
Each person named in section 9.13(a):
•has not authorised or caused the issue of this
Explanatory Memorandum;
•does not make, or purport to make, any statement in
this Explanatory Memorandum or any statement on
which a statement in this Explanatory Memorandum is
based, other than:
−Grant Samuel & Associates Pty Limited in relation
to its Independent Expert’s Report; and
−KPMG Transaction Services (a division of KPMG
Financial Advisory Services (Australia) Pty Ltd) in
relation to its Investigating Accountant’s Report.
•to the maximum extent permitted by law, expressly
disclaims all liability in respect of, makes no
representation regarding, and takes no responsibility for,
any part of this Explanatory Memorandum other than a
reference to its name and the statement (if any) included
in this Explanatory Memorandum with the consent of
that party as specified in this section 9.13(b).
69
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 9
SECTION
10
GLOSSARY
10.1 DEFINITIONS
In this Explanatory Memorandum, unless the context otherwise appears, the following terms have the meanings shown below:
TERMMEANING
1835i1835i Creation Fund 1 Trust, 1835i Ventures Trust I, 1835i Ventures I Trust II and
1835i Ventures Trust III.
1997 Wallis ReviewThe Wallis Report on the Australian Financial System: Summary and Critique dated
23 June 1997.
AASAustralian Accounting Standards issued by the Australian Accounting Standards Board.
ABNAustralian Business Number.
ACLAustralian Credit Licence.
ADIan authorised deposit-taking institution licensed under the Banking Act.
ADRAmerican Depositary Receipts.
ADS Holdersholders of ADSs.
ADSsAmerican Depositary Shares, including the ANZ ADSs and the ANZ NOHC ADSs,
as applicable, and ADS means any one of them.
AFSLAustralian Financial Services Licence.
ANZANZBGL or the ANZ NOHC, as the context requires.
ANZ ADS
Deposit Agreement
the amended and restated deposit agreement dated 11 December 2018, by and among
ANZBGL, the ANZ ADS Depositary, and the ANZ ADS Holders.
ANZ ADS DepositaryThe Bank of New York Mellon, the depositary under ANZ’s ADR program.
ANZ ADS Holdersowners and holders of ADSs representing ANZBGL Shares.
ANZ ADSsADSs representing ANZBGL Shares (each an ANZ ADS), each ANZ ADS representing one ANZ
Share. The terms and conditions of the ANZ ADSs are set forth in the ANZ ADS Deposit
Agreement.
ANZ Bank HoldCoANZ BH Pty Ltd ACN 658 939 952, a non-operating intermediate holding company to be
owned by ANZ NOHC and which will own the ANZ Bank Group subsidiaries (including
ANZBGL and ANZ NZ).
ANZ Bank Groupall businesses and entities owned by ANZ Bank HoldCo, including ANZBGL and ANZ NZ.
ANZBGLAustralia and New Zealand Banking Group Limited ACN 005 357 522.
ANZBGL GroupANZBGL and each of its subsidiaries.
ANZ Boardthe board of directors of ANZBGL.
ANZ Capital NotesANZ Capital Notes 3, ANZ Capital Notes 4, ANZ Capital Notes 5, ANZ Capital Notes 6 and
ANZ Capital Notes 7.
ANZ Capital Notes 3the fully paid convertible notes issued by ANZBGL acting through its New Zealand branch under
a prospectus dated 5 February 2015 (which replaced a prospectus dated 23 January 2015).
ANZ Capital Notes 4the fully paid convertible notes issued by ANZBGL under a prospectus dated 24 August 2016
(which replaced a prospectus dated 16 August 2016).
ANZ Capital Notes 5the fully paid convertible notes issued by ANZBGL under a prospectus dated 24 August 2017
(which replaced a prospectus dated 16 August 2017).
ANZ Capital Notes 6the fully paid convertible notes issued by ANZBGL under a prospectus dated 9 June 2021
(which replaced a prospectus dated 1 June 2021).
ANZ Capital Notes 7the fully paid convertible notes issued by ANZBGL under a prospectus dated 23 February
2022 (which replaced a prospectus dated 15 February 2022).
71
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 10
TERMMEANING
ANZ CentreANZ Centre Pty Ltd ACN 158 546 528.
ANZ Centre Chattels Trustthe ANZ Centre Chattels Trust, which owns the leasehold improvements, furniture and
equipment for 833 Collins Street, Docklands VIC 3008.
ANZ Centre Trustthe ANZ Centre Trust, which owns 833 Collins Street, Docklands VIC 3008.
ANZ CoverANZcover Insurance Private Ltd.
ANZ Directora member of the ANZ Board.
ANZ DRPthe ANZBGL dividend reinvestment plan.
ANZ Groupthe ANZBGL Group or the ANZ NOHC Group as a whole (including all businesses), as the
context requires.
ANZ Incentive PlansANZ employee incentive plans under which employees are offered Equity Awards, including
the ESAP and ESOP.
ANZ Lenders MortgageANZ Lenders Mortgage Insurance Pty. Limited ACN 008 680 055.
ANZ NOHCANZ Group Holdings Limited ACN 659 510 791.
ANZ NOHC
Deposit Agreement
the deposit agreement to be entered into by and among ANZ NOHC, the ANZ ADS
Depositary, and the ANZ ADS Holders, governing the terms of the ANZ NOHC ADSs.
ANZ NOHC ADS
Depositary
The Bank of New York Mellon, the depositary under ANZ NOHC’s ADR program.
ANZ NOHC ADS Holdersowners and holders of ADSs representing ANZ NOHC Shares.
ANZ NOHC ADSsADSs representing ANZ NOHC Shares (each an ANZ NOHC ADS), each ANZ NOHC ADS
representing one ANZ NOHC Share. The terms and conditions of the ANZ NOHC ADSs are
set forth in the ANZ NOHC ADS Deposit Agreement.
ANZ NOHC DRPthe ANZ NOHC dividend reinvestment plan.
ANZ NOHC Groupall businesses owned or controlled by the ANZ NOHC after the Restructure
(including ANZ Bank HoldCo, ANZBGL, ANZ ServiceCo and ANZ Non-Bank HoldCo).
ANZ NOHC Sharea fully paid ordinary share in the capital of ANZ NOHC.
ANZ NOHC Share RegistryComputershare Investor Services Pty Limited ACN 078 279 277.
ANZ Non-Bank GroupANZ ServiceCo and all businesses and entities owned by ANZ Non-Bank HoldCo, including
ANZ’s beneficial interests in the 1835i trusts, non-controlling interest in the Worldline
merchant acquiring joint venture, and equity interests in Lygon, TIN and Pollination.
ANZ Non-Bank HoldCoANZ NBH Pty Ltd ACN 658 941 096, a non-operating intermediate holding company to be
owned by ANZ NOHC and which will own certain non-banking subsidiaries.
ANZ NZANZ Bank New Zealand Limited.
ANZ Perpetual
Subordinated Contingent
Convertible Securities
the 6.75% fixed rate resetting perpetual subordinated contingent convertible securities
issued by ANZBGL’s London Branch on 15 June 2016.
ANZ Regulatory Capital
Securities
ANZ Capital Notes, ANZ Perpetual Subordinated Contingent Convertible Securities and the
Tier 2 debt securities issued by ANZBGL to wholesale investors under its debt programmes.
ANZ RMBSresidential mortgage backed securities issued by the trustee of a securitisation trust
established under ANZBGL's Kingfisher programme.
ANZ Senior Notesthe debt securities issued by ANZBGL (other than ANZ Regulatory Capital Securities),
including covered bonds and senior bonds.
ANZ ServiceCoANZ Group Services Pty Ltd ACN 658 940 900.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
72
TERMMEANING
ANZ Sharea fully paid ordinary share in the capital of ANZBGL.
ANZ Share Registerthe register of members of ANZBGL maintained in accordance with the Corporations Act.
ANZ Share Registry Computershare Investor Services Pty Limited ACN 078 279 277.
ANZ Shareholder each person who is registered as the holder of an ANZ Share in the ANZ Share Register.
APRAthe Australian Prudential Regulation Authority.
ASICthe Australian Securities and Investments Commission.
ASXASX Limited ABN 98 008 624 691 and, where the context requires, the financial market
that it operates.
ASX Listing Rulesthe official Listing Rules of the ASX.
ATOthe Australian Taxation Office.
Banking Actthe Banking Act 1959 (Cth).
BOPBonus Option Plan.
Business Daya day that is not a Saturday, Sunday, public holiday or bank holiday in Melbourne, Australia.
Business Restructurethe restructure to be undertaken following implementation of the Scheme, as described in
section 4.4(b).
CHESSthe Clearing House Electronic Subregister System operated by ASX Settlement Pty Ltd and
ASX Clear Pty Limited.
Class Rulinghas the meaning given in section 8.2(b).
Conditions Precedenteach of the conditions to the Scheme set out in clause 3.1 of the Restructure
Implementation Deed.
Corporations Actthe Corporations Act 2001 (Cth).
Corporations Regulationsthe Corporations Regulations 2001 (Cth).
Courtthe Federal Court of Australia, Victoria Registry, or such other court of competent jurisdiction
under the Corporations Act determined by ANZ.
Effectivewhen used in relation to the Scheme, the coming into effect, under subsection 411(10) of the
Corporations Act, of the Court order made under paragraph 411(4)(b) of the Corporations Act
in relation to the Scheme.
Effective Datethe date on which the Scheme becomes Effective, currently expected to be
23 December 2022.
Eligible Foreign
Jurisdiction
is expected to include:
1. China, Cook Islands, Fiji, France, Germany, Hong Kong, India, Korea, Malaysia, Papua
New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, the United States
(including American Samoa and Guam) and Vanuatu; and
2. in the case of Scheme Shareholders who are an ANZ employee as at the Scheme Record
Date, those jurisdictions listed in 1 above and Indonesia and Japan, noting that ANZ may
change these jurisdictions on the basis that ANZ determines that it is not lawful or unduly
onerous or impracticable to issue ANZ NOHC Shares in a particular jurisdiction when the
Scheme becomes Effective.
Eligible Shareholdera Scheme Shareholder who is not an Ineligible Foreign Shareholder and, for the avoidance
of doubt, the Sale Agent.
Equity Awardshas the meaning given in section 9.6.
ESAPthe ANZ Employee Share Acquisition Plan.
73
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 10
TERMMEANING
ESOPthe ANZ Employee Share Option Plan.
Explanatory
Memorandum
this document being the explanatory statement in respect of the Scheme, which has been
prepared by ANZBGL in accordance with section 412 of the Corporations Act.
First Court Hearingthe first day on which an application made to the Court for an order under section 411(1)
of the Corporations Act convening the Scheme Meeting is heard.
FMAthe Financial Markets Authority (New Zealand).
FSSAthe Financial Sector (Shareholdings) Act 1998 (Cth).
Government Agencyany foreign or Australian government or governmental, semi-governmental, administrative,
fiscal or judicial body, department, commission, authority, tribunal, agency or entity
(including any stock or other securities exchange), or any minister of the Crown in right of the
Commonwealth of Australia or any state, or any other federal, state, provincial, local or other
government, whether foreign or Australian.
GSTgoods and services tax or similar value added tax levied or imposed in Australia under the
GST Law or otherwise on a supply.
GST Actthe A New Tax System (Goods and Services Tax) Act 1999 (Cth).
GST Lawhas the same meaning as in the GST Act.
Implementation Datethe fifth Business Day after the Scheme Record Date as determined by ANZBGL, or such other
date after the Scheme Record Date, currently expected to be 6 January 2023.
Independent ExpertGrant Samuel & Associates Pty Limited ABN 28 050 036 372, the independent expert in
respect of the Scheme appointed by ANZ.
Independent
Expert’s Report
the report issued by the Independent Expert in connection with the Scheme, as set out in
Annexure 1.
Ineligible Foreign
Shareholder
an ANZ Shareholder whose address is shown in the ANZ Share Register on the Scheme
Record Date as being outside Australia (and its external territories), New Zealand or an
Eligible Foreign Jurisdiction, unless ANZ NOHC determines that it is lawful and not unduly
onerous or impracticable to issue that Scheme Shareholder with ANZ NOHC Shares when
this Scheme becomes Effective.
Inland RevenueInland Revenue Department, New Zealand.
Investigating AccountantKPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd
ABN 43 007 363 215), the investigating accountant appointed by ANZ.
Investigating
Accountant’s Report
the Limited Assurance Investigating Account’s Report issued by the Investigating
Accountant, as set out in Annexure 2.
Last Practicable Date23 October 2022.
LygonLygon 1B Pty Ltd ACN 633 568 411.
MASMonetary Authority of Singapore.
NZXmeans NZX Limited and, where the context requires, the main board financial market
that it operates.
OIOthe Overseas Investment Office (New Zealand).
PollinationPollination Global Holdings Limited Company No. 11892654, a company incorporated
under the laws of England and Wales.
RBNZReserve Bank of New Zealand.
Regulatory Approvalsall approvals, consents, confirmations, waivers or other acts from or by Regulatory
Authorities as are necessary or, in the reasonable opinion of ANZBGL and ANZ NOHC,
desirable to implement the Restructure.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
74
TERMMEANING
Regulatory Authorityincludes:
1. ASX and ASIC;
2. APRA and the Federal Treasurer (acting pursuant to the FSSA);
3. RBNZ
4. OIO;
5. US Federal Reserve;
6. the ATO;
7. a Government Agency;
8. a minister, department, office, commission, delegate, instrumentality, agency, board,
authority or organisation of any government; and
9. any regulatory organisation established under statute.
Relevant Interesthas the meaning given in sections 608 and 609 of the Corporations Act.
Requisite Majoritiesin relation to the Scheme Resolution, a resolution passed by:
1. unless the Court orders otherwise, a majority in number (more than 50%) of ANZ
Shareholders present and voting at the Scheme Meeting (either in person or by proxy,
attorney or, in the case of corporate ANZ Shareholders, body corporate representative); and
2. at least 75% of the total number of votes cast on the Scheme Resolution at the Scheme
Meeting by ANZ Shareholders present and voting (either in person or by proxy, attorney or,
in the case of corporate ANZ Shareholders, body corporate representative).
Restructurethe restructure of the ANZ Group to be implemented by the:
1. Scheme; and
2. Business Restructure.
Restructure Deedthe Restructure Deed between ANZBGL and ANZ NOHC.
Restructure
Implementation Deed
the Restructure Implementation Deed between ANZBGL and ANZ NOHC.
Sale Agentthe nominee appointed by ANZBGL to sell or facilitate the transfer of ANZ NOHC Shares in
accordance with the Sale Facility.
Sale Facilitythe facility established by ANZBGL under which ANZ NOHC Shares may be sold, as described
in section 7.2(h).
Sale Periodthe period the Sale Agent will sell the ANZ NOHC Shares it received under the Scheme, being
from the Implementation Date and ending no later than 1 month following the
Implementation Date.
Schemethe scheme of arrangement under Part 5.1 of the Corporations Act between ANZBGL and the
Scheme Shareholders, the form of which is attached as Annexure 3, subject to any alterations
or conditions made or required by the Court under subsection 411(6) of the Corporations
and agreed to in writing by ANZBGL and ANZ NOHC.
Scheme Meetingthe meeting of ANZ Shareholders ordered by the Court to be convened under subsection
411(1) of the Corporations Act to consider and vote on the Scheme and includes any
meeting convened following any adjournment or postponement of that meeting.
Scheme Record Date7.00pm on the second Business Day after the Effective Date, currently expected to be
7.00pm on 29 December 2022.
Scheme Resolution the resolution to the terms of the Scheme, as set out in the Notice of Scheme Meeting in
Annexure 5.
Scheme Shareholdera holder of ANZ Shares recorded in the ANZ Share Register as at the Scheme Record Date.
Scheme Sharesall ANZ Shares held by the Scheme Shareholders as at the Scheme Record Date.
75
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Section 10
TERMMEANING
Second Court Datethe first day on which an application made to the Court for an order under paragraph 411(4)
(b) of the Corporations Act approving the Scheme is heard, currently expected to be 22
December 2022, or, if the application is adjourned or subject to appeal for any reason, the
day on which the adjourned application or appeal is heard.
Second Court Hearingthe hearing of the application made to the Court for an order pursuant to section 411(4)(b)
of the Corporations Act approving the Scheme.
TFNAustralian tax file number.
Tier 2Tier 2 Capital as defined in Prudential Standard APS 111 Capital Adequacy: Measurement
of Capital.
TINTrade Information Network Limited Company No. 12210032, a company incorporated under
the laws of England and Wales.
Treasurerthe Treasurer under the FSSA.
United States or USthe United States of America, its territories and possessions, any state of the United States of
America, the District of Columbia, and all other areas subject to its jurisdiction.
US Exchange Actthe United States Securities Exchange Act of 1934, as amended from time to time.
US Securities Actthe United States Securities Act of 1933, as amended from time to time.
WorldlineWorldline Australia Pty Ltd ACN 645 073 034.
10.2 INTERPRETATION
In this Explanatory Memorandum, unless expressly stated or
the context otherwise appears:
(a) words and phrases have the same meaning (if any)
given to them in the Corporations Act;
(b) words importing a gender include any gender;
(c) words importing the singular include the plural and
vice versa;
(d) an expression importing a natural person includes
any company, partnership, joint venture, association,
corporation or other body corporate and vice versa;
(e) a reference to a section or annexure is a reference
to a section of and an annexure to this Explanatory
Memorandum as relevant;
(f ) a reference to any statute, regulation, proclamation,
ordinance or by law includes all statutes, regulations,
proclamations, ordinances, or by laws amending,
varying, consolidating or replacing it and a reference
to a statute includes all regulations, proclamations,
ordinances and by laws issued under that statute;
(g) headings and bold type are for convenience only and
do not affect the interpretation of this Explanatory
Memorandum;
(h) a reference to time is a reference to time in Melbourne,
Australia;
(i) a reference to writing includes facsimile
transmissions; and
(j) a reference to dollars, $, cents, ¢ and currency is a
reference to the lawful currency of the Commonwealth
of Australia.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
76
GRANT SAMUEL & ASSOCIATES PTY LIMITED
ABN 28 050 036 372 AFS Licence No 240985
Level 19 Governor Macquarie Tower, 1 Farrer Place Sydney NSW 2000 GPO BOX 4301 SYDNEY NSW 2001 T +61 2 9324 4211 F +61 2 9324 4301
GRANTSAMUEL.COM.AU
26 October 2022
The Directors
Australia and New Zealand Banking Group Limited
833 Collins Street
Docklands VIC 3008
Dear Directors
Proposed Restructure of the ANZ Group
1 Introduction
On 4 May 2022, Australia and New Zealand Banking Group Limited (“ANZ”), the parent entity of the ANZ
Group, announced the intention to implement a non-operating holding company (“NOHC”) structure for
the ANZ Group (“Restructure”). The Restructure involves:
the establishment of a new parent entity for the ANZ Group, ANZ Group Holdings Limited (“ANZ
NOHC”) which is a public company that will be listed on the Australian Securities Exchange (“ASX”) and
on the New Zealand Stock Exchange. The NOHC structure will be implemented by way of a scheme of
arrangement under Section 411 of the Corporations Act 2001 (Cth) (“Corporations Act”) (the
“Scheme”); and
various internal share and asset transfers and other corporate actions (the “Business Restructure”)
that will result in the:
• separation of certain businesses and assets into:
- ANZ Bank Group, which will own all of the ANZ Group’s core banking businesses (including
ANZ and ANZ Bank New Zealand Limited), all international banking businesses and all
insurance businesses (including the ANZ Group’s mortgage insurance and captive insurance
businesses); and
- ANZ Non-Bank Group, which will own certain ANZ banking-adjacent interests and
investments; and
• establishment of an internal service company, ANZ Group Services Pty Ltd (“ANZ ServiceCo”),
which will be part of the ANZ Non-Bank Group, to hold certain property interests.
The Business Restructure is conditional on implementation of the Scheme. The ANZ Group after
implementation of the Restructure is referred to in this letter, where necessary, as the ANZ NOHC Group.
It is also intended that intragroup resourcing agreements will be put in place to set out the terms on which:
ANZ ServiceCo can, in the future, potentially provide certain central shared service functions across
the ANZ Group; and
ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.
These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.
ANNEXURE 1
INDEPENDENT EXPERT’S REPORT
77
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
2
If the Scheme is implemented, ANZ shareholders (other than ineligible foreign shareholders
1
) will be issued
one new share in ANZ NOHC in exchange for each share held in ANZ on the record date for the Scheme.
There will be no change in the proportionate ownership interests of shareholders (other than ineligible
foreign shareholders) as a result of the Scheme.
Ineligible foreign shareholders will not receive ANZ NOHC shares under the Scheme. They will transfer their
ANZ shares to a sale agent which will arrange for the sale of the ANZ NOHC shares received under the
Scheme on the ASX through a sale facility. Ineligible foreign shareholders will receive the cash proceeds
from the sale of those ANZ NOHC shares.
The Scheme is subject to a number of conditions that are set out in full in the Explanatory Memorandum in
relation to the Scheme sent to shareholders by ANZ.
The ANZ directors unanimously recommend that shareholders vote in favour of the Scheme. Each ANZ
director intends to vote, or procure the voting of, any ANZ shares they hold or control in favour of the
Scheme.
The directors of ANZ have engaged Grant Samuel & Associates Pty Limited (“Grant Samuel”) to prepare an
independent expert’s report setting out whether, in its opinion, the Scheme is in the best interests of ANZ
shareholders. A copy of the report (including this letter) will accompany the Explanatory Memorandum to
be sent to shareholders by ANZ. This letter contains a summary of Grant Samuel’s opinion and main
conclusions.
2 Opinion
In Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best interests of ANZ
shareholders.
3 Summary of Conclusions
The Australian banking industry has changed significantly over the last decade, with traditional banking
facing headwinds from a number of sources as well as transformational digital and technological change
required to meet constantly evolving customer expectations. Over the past six years, the ANZ Group has
also undergone a period of substantial simplification and, with this process largely complete, has entered a
new phase focused on growth and areas where it can deliver better outcomes for customers and provide
returns for shareholders. To address these challenges and opportunities, the ANZ Group has adopted a
strategy which envisages complementing its core banking business with a range of non-banking businesses
focused on infrastructure “platforms” and digital “ecosystems” of businesses and partnerships that provide
relevant, efficient and connected services, tools and insights for customers.
The combination of having an authorised deposit-taking institution (“ADI”), ANZ, as the parent entity of the
ANZ Group and the highly regulated nature of ADIs has presented challenges for the ANZ Group in the
execution of this strategy. Non-banking businesses are not intended by the Australian Prudential
Regulation Authority (“APRA”) to be subject to banking regulation and the “one-size-fits-all” regulatory
requirements that an ADI must comply with do not fit well with the agile operating environments that are
critical to the success of start-up or early stage non-banking businesses. These factors have put the ANZ
Group at a competitive disadvantage (at least relative to non-ADIs) and constrained the growth of its non-
banking businesses. Owning and effectively operating a non-banking business within an ADI structure was
________________________________________________________________________________________________________________________________________________________
1
ANZ shareholders with a registered address outside Australia (and its external territories), New Zealand or an Eligible Foreign Jurisdiction
unless ANZ reasonably believes that it is not prohibited and not unduly onerous or impracticable to issue that ANZ shareholder with ANZ
NOHC shares when the Scheme becomes effective. Eligible Foreign Jurisdiction is expected to include China, Cook Islands, Fiji, France,
Germany, Hong Kong, India, Korea, Malaysia, Papua New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, the
United States (including American Samoa and Guam) and Vanuatu and, in the case of an ANZ shareholder who is an ANZ employee at
the Scheme record date, those jurisdictions listed above and Indonesia and Japan.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
78
3
so challenging for its venture capital business, ANZi, that the decision was made to separate the business
from ANZ and create 1835i
2
as a standalone entity. However, relinquishing direct ownership and
operational control is not an ideal solution and it is in the interests of ANZ and its shareholders for ANZ to
best position itself to achieve its strategic objectives in a constantly changing environment.
The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and maximise the returns from those opportunities for shareholders. In particular,
the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital structure and
operating environment with a “fit-for-purpose” risk management and governance framework (including
decision making/approval processes and remuneration structures). Furthermore, the Restructure more
appropriately aligns the ANZ Group’s corporate structure with APRA’s regulatory framework as APRA and
other regulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions
with the broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank
Group should also put ANZ in a clearer position in the event recovery actions are required or recovery
progresses to resolution as contagion risk should be lower. In short, the Restructure should facilitate the
delivery of a broad range of non-banking products and services to customers while maintaining, if not
enhancing, appropriate protections for ANZ depositors.
The Restructure will have no immediate impact on the underlying businesses and strategy, group
regulatory capital requirements or, for the most part
3
, Board or management of the ANZ Group. There will
be no change to the ANZ Group’s indebtedness, its overall funding requirements or its debt issuance
capacity as a result of the Restructure and there is not expected to be any change to ANZ’s credit ratings.
While ANZ NOHC is expected to have an investment grade credit rating below that of ANZ, the Restructure
is not expected to have any immediate impact on funding costs for the ANZ Group as there is no intention
for ANZ NOHC to raise debt finance in the short term.
ANZ shareholders
4
will have the same number of shares in ANZ NOHC as they currently hold in ANZ and
ANZ NOHC shares will have the same dividend and voting rights as ANZ shares. ANZ NOHC will continue to
have the ability to pay fully franked dividends and the Restructure will have no impact on the accumulated
franking credit balance or the extent to which the ANZ NOHC Group generates franking credits in the
future. The Restructure is not expected to have any adverse tax consequences for relevant Australian
resident shareholders. In short, there is no impact on the economic interest of ANZ shareholders
4
. There
will be no impact on ANZ NOHC’s ability to undertake future on-market share buybacks. The Restructure
will also have no direct impact on customers and no material impact on the ANZ Group’s employees.
The Restructure is not a “must do” transaction. The status quo would continue to offer ANZ shareholders a
financially sound exposure to one of Australia’s largest banks and the ANZ Group could continue to execute
its strategy as it has been doing for the past three years. However, the ability to successfully grow its non-
banking businesses should be enhanced by these businesses being owned by a legal entity, ANZ Non-Bank
HoldCo, which is structurally separate from the ANZ Group’s banking businesses. The ANZ Board believes
that, of the alternatives considered, the Restructure will provide the optimal structure for the ANZ Group to
achieve its objectives to grow its non-banking activities while meeting its obligations to APRA and its
depositors. If the Scheme is not approved and the Restructure is not implemented, the ANZ Group will be
in a sub-optimal position in executing its strategy to grow its non-banking businesses and deliver a broad
range of non-banking products and services to customers.
________________________________________________________________________________________________________________________________________________________
2
1835i comprises 1835i Creation Fund I Trust, 1835i Ventures I Trust, 1835i Ventures II Trust and 1835i Ventures III Trust.
3
One of the conditions of APRA’s NOHC authorisation is that ANZ Bank HoldCo and ANZ must have an independent director who is not on
the Board of ANZ NOHC or any ANZ Non-Bank Group entity to safeguard the interests of depositors.
4
Other than ineligible foreign shareholders.
79
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
4
The potential benefits of the Restructure are not quantifiable and will not deliver any significant
incremental short term value to shareholders. The real value of the Restructure will only be realised over
time if the ANZ NOHC Group can materially increase the scale of its non-banking activities. On the other
hand, the Restructure has few disadvantages and risks, other than one-off cash transaction costs and
additional ongoing operating and corporate costs that will be incurred if the Restructure proceeds, both of
which are immaterial in the context of the ANZ Group as a whole, and certain implementation risks. The
key risk is the lack of a formal regulatory framework for Australian NOHCs of ADIs and the potential for any
formal Level 3 regulatory framework subsequently put in place by APRA to differ significantly from the
conditions set out in APRA’s NOHC authorisation. While the risks associated with the Restructure cannot
be disregarded, they are, for the most part, not beyond the normal risks of any corporate restructuring
transaction and most have mitigating factors that should minimise their impact.
The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guarantee
that the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile of
the non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However, growing its non-banking businesses is a key component of the ANZ Group’s current
strategy which has been publicly stated and pursued for some time. Furthermore, shareholders are not
being asked to vote on the appropriate strategy for the ANZ Group. This is a separate question to whether
the Restructure is in the best interests of shareholders.
The critical question is whether ANZ shareholders are likely to be better off if the Restructure is
implemented than if the ANZ Group’s current corporate structure is maintained. The evaluation is
essentially subjective. However, on balance, in Grant Samuel’s view, the potential advantages of the
Restructure, while uncertain, outweigh the disadvantages and risks, which are minimal, and shareholders
are ultimately likely to be better off if the Restructure is implemented.
The Restructure comprises the Scheme and the Business Restructure. The Scheme is subject to the
approval of ANZ shareholders. The Business Restructure does not require the approval of ANZ
shareholders but is conditional on, and is expected to be undertaken immediately after, implementation of
the Scheme. Consequently, in Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best
interests of ANZ shareholders.
4 Other Matters
This letter (and the report to which it is attached) is general financial product advice only and has been
prepared without taking into account the objectives, financial situation or needs of individual ANZ
shareholders. Accordingly, before acting in relation to their investment, shareholders should consider the
appropriateness of the advice having regard to their own objectives, financial situation or needs.
Shareholders should read the Explanatory Memorandum issued by ANZ in relation to the Scheme.
Grant Samuel has not been engaged to provide a recommendation to shareholders in relation to the
Scheme, the responsibility for which lies with the directors of ANZ. In any event, the decision whether to
vote for or against the Scheme is a matter for individual shareholders, based on their own views as to value
and business strategy, their expectations about future economic and market conditions and their particular
circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax
position. Shareholders who are in doubt as to the action they should take in relation to the Scheme should
consult their own professional adviser.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
80
5
Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell shares in ANZ or ANZ
NOHC. This is an investment decision upon which Grant Samuel does not offer an opinion and is
independent of a decision on whether to vote for or against the Scheme. Shareholders should consult their
own professional adviser in this regard.
Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The Financial
Services Guide is included at the beginning of the full report.
This letter is a summary of Grant Samuel’s opinion. The full report from which this summary has been
extracted is attached and should be read in conjunction with this summary.
The opinion is made as at the date of this letter and reflects circumstances and conditions as at that date.
Yours faithfully
GRANT SAMUEL & ASSOCIATES PTY LIMITED
81
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
82
FINANCIAL SERVICES GUIDE
AND
INDEPENDENT EXPERT’S REPORT
IN RELATION TO THE PROPOSED RESTRUCTURE OF
THE AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
GRANT SAMUEL & ASSOCIATES PTY LIMITED
ABN 28 050 036 372
26 OCTOBER 2022
83
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
GRANT SAMUEL & ASSOCIATES PTY LIMITED
ABN 28 050 036 372 AFS Licence No 240985
Level 19 Governor Macquarie Tower, 1 Farrer Place Sydney NSW 2000 GPO BOX 4301 SYDNEY NSW 2001 T +61 2 9324 4211 F +61 2 9324 4301
GRANTSAMUEL.COM.AU
FINANCIAL SERVICES GUIDE
Grant Samuel & Associates Pty Limited (“Grant Samuel”) holds Australian Financial Services Licence No. 240985 authorising it to
provide financial product advice on securities and interests in managed investments schemes to wholesale and retail clients.
The Corporations Act, 2001 (Cth) (“Corporations Act”) requires Grant Samuel to provide this Financial Services Guide (“FSG”) in
connection with its provision of an independent expert’s report (“Report”) which is included in a document (“Disclosure Document”)
provided to members by the company or other entity (“Entity”) for which Grant Samuel prepares the Report.
Grant Samuel does not accept instructions from retail clients. Grant Samuel provides no financial services directly to retail clients
and receives no remuneration from retail clients for financial services. Grant Samuel does not provide any personal retail financial
product advice to retail investors nor does it provide market-related advice to retail investors.
When providing Reports, Grant Samuel’s client is the Entity to which it provides the Report. Grant Samuel receives its remuneration
from the Entity. In respect of the Report for The Australia and New Zealand Banking Group Limited (“ANZ”) in relation to the
proposed scheme of arrangement (“Scheme”) between ANZ and its shareholders (“the ANZ Report”), Grant Samuel will receive a
fixed fee of $625,000 plus reimbursement of out-of-pocket expenses (as stated in Section 7.3 of the ANZ Report).
No related body corporate of Grant Samuel, or any of the directors or employees of Grant Samuel or of any of those related bodies
or any associate receives any remuneration or other benefit attributable to the preparation and provision of the ANZ Report.
Grant Samuel is required to be independent of the Entity to provide a Report. The guidelines for independence in the preparation
of Reports are set out in Regulatory Guide 112 issued by the Australian Securities & Investments Commission on 30 March 2011.
The following information in relation to the independence of Grant Samuel is stated in Section 7.3 of the ANZ Report:
“Grant Samuel and its related entities do not have at the date of this report, and have not had within the
previous two years, any business or professional relationship with the ANZ Group or any financial or other
interest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in
relation to the Scheme.
Grant Samuel had no part in the formulation of the Restructure (including the Scheme). Its only role has been
the preparation of this report.
Grant Samuel will receive a fixed fee of $625,000 for the preparation of this report. This fee is not contingent on
the conclusions reached or the outcome of the Scheme. Grant Samuel’s out of pocket expenses in relation to the
preparation of the report will be reimbursed. Grant Samuel will receive no other benefit for the preparation of
this report.
Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30 March
2011.”
Grant Samuel has internal complaints-handling mechanisms and is a member of the Australian Financial Complaints Authority,
No. 11929. If you have any concerns regarding the ANZ Report, please contact the Compliance Officer in writing at Level 19,
Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000. If you are not satisfied with how we respond, you may contact the
Australian Financial Complaints Authority at GPO Box 3 Melbourne VIC 3001 or 1800 931 678. This service is provided free of charge.
Grant Samuel holds professional indemnity insurance which satisfies the compensation requirements of the Corporations Act.
Grant Samuel is only responsible for the ANZ Report and this FSG. Complaints or questions about the Disclosure Document should
not be directed to Grant Samuel which is not responsible for that document. Grant Samuel will not respond in any way that might
involve any provision of financial product advice to any retail investor.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
84
TABLE OF CONTENTS
1 Overview of the Restructure (including the Scheme)____________________________________________ 1
2 Scope of the Report _____________________________________________________________________ 3
3 Profile of the ANZ Group __________________________________________________________________ 7
3.1 Background ______________________________________________________________________ 7
3.2 Corporate Structure and Business Operations __________________________________________ 11
3.3 Strategy ________________________________________________________________________ 13
3.4 Key Historical Financial Information and Regulatory Capital _______________________________ 14
3.5 Taxation Position _________________________________________________________________ 15
3.6 Capital Structure and Ownership ____________________________________________________ 16
4 Background to Financial NOHCs ___________________________________________________________ 18
4.1 Overview _______________________________________________________________________ 18
4.2 Regulatory Environment for Financial NOHCs in Australia _________________________________ 18
4.3 Rationale for Financial NOHC Restructures ____________________________________________ 19
5 Impact of the Restructure (including the Scheme) _____________________________________________ 23
5.1 Process _________________________________________________________________________ 23
5.2 Corporate Structure _______________________________________________________________ 24
5.3 Corporate Governance ____________________________________________________________ 25
5.4 Regulatory Framework ____________________________________________________________ 27
5.5 Pro Forma Historical Financial Information and Regulatory Capital__________________________ 28
6 Evaluation of the Restructure (including the Scheme) __________________________________________ 34
6.1 Summary _______________________________________________________________________ 34
6.2 Background _____________________________________________________________________ 36
6.3 Advantages and Benefits ___________________________________________________________ 37
6.4 Disadvantages and Risks ___________________________________________________________ 39
6.5 Alternatives _____________________________________________________________________ 40
6.6 Other Matters ___________________________________________________________________ 41
6.7 Shareholder Decision ______________________________________________________________ 46
7 Qualifications, Declarations and Consents ___________________________________________________ 47
85
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
86
1
1 Overview of the Restructure (including the Scheme)
On 4 May 2022, in conjunction with the release of its 1HY22
1
results, Australia and New Zealand Banking
Group Limited (“ANZ”), the parent entity of the ANZ Group, announced the intention to implement a non-
operating holding company (“NOHC”) structure for the ANZ Group (“Restructure”). The Restructure
involves:
the establishment of a new parent entity for the ANZ Group, ANZ Group Holdings Limited (“ANZ
NOHC”) which is a public company that will be listed on the Australian Securities Exchange (“ASX”) and
the New Zealand Stock Exchange (“NZX”). The NOHC structure will be implemented by way of a
scheme of arrangement under Section 411 of the Corporations Act 2001 (Cth) (“Corporations Act”)
(the “Scheme”); and
various internal share and asset transfers and other corporate actions (the “Business Restructure”)
that will result in the:
• separation of certain businesses and assets into:
- ANZ Bank Group, which will own all of the ANZ Group’s core banking businesses (including
ANZ and ANZ Bank New Zealand Limited (“ANZ NZ”)), all international banking businesses
and all insurance businesses (including the ANZ Group’s mortgage insurance and captive
insurance businesses
2
); and
- ANZ Non-Bank Group, which will own certain ANZ banking-adjacent interests and
investments (see Section 5.2 for details); and
• establishment of an internal service company, ANZ Group Services Pty Ltd (“ANZ ServiceCo”),
which will be part of the ANZ Non-Bank Group, to hold certain property interests.
The Business Restructure is conditional on implementation of the Scheme. The ANZ Group after
implementation of the Restructure is referred to in this report, where necessary, as the ANZ NOHC
Group.
It is also intended that intragroup resourcing agreements will be put in place to set out the terms on which:
ANZ ServiceCo can, in the future, potentially provide certain central shared service functions across
the ANZ Group; and
ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.
These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.
If the Scheme is implemented, ANZ shareholders (other than ineligible foreign shareholders
3
) will be issued
one new share in ANZ NOHC in exchange for each share held in ANZ on the record date for the Scheme.
________________________________________________________________________________________________________________________________________________________
1
1HY22 is the six months ended 31 March 2022.
2
The ANZ Group’s mortgage insurance business is carried out by ANZ Lenders Mortgage Insurance Pty Limited, a direct subsidiary of ANZ
and its captive insurance business is carried out by ANZcover Insurance Pte. Ltd, a direct subsidiary of ANZ Funds Pty. Ltd, which in turn
is a direct subsidiary of ANZ.
3
ANZ shareholders with a registered address outside Australia (and its external territories), New Zealand or an Eligible Foreign Jurisdiction
unless ANZ reasonably believes that it is not prohibited and not unduly onerous or impracticable to issue that ANZ shareholder with ANZ
NOHC shares when the Scheme becomes effective. Eligible Foreign Jurisdiction is expected to include China, Cook Islands, Fiji, France,
Germany, Hong Kong, India, Korea, Malaysia, Papua New Guinea, Philippines, Samoa, Singapore, Taiwan, the United Kingdom, the
United States (including American Samoa and Guam) and Vanuatu and, in the case of an ANZ shareholder who is an ANZ employee at
the Scheme record date, those jurisdictions listed above and Indonesia and Japan.
87
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
2
There will be no change in the proportionate ownership interests of shareholders (other than ineligible
foreign shareholders) as a result of the Scheme.
Ineligible foreign shareholders will not receive ANZ NOHC shares under the Scheme. They will transfer their
ANZ shares to a sale agent which will arrange for the sale of the ANZ NOHC shares received under the
Scheme on the ASX through a sale facility. Ineligible foreign shareholders will receive the cash proceeds
from the sale of those ANZ NOHC shares.
The Scheme requires approval by a majority in number (i.e. more than 50%) of ANZ shareholders present
and voting (either in person or by proxy) on the Scheme resolution at the Scheme meeting, representing at
least 75% of the votes cast on the resolution. If approved by ANZ shareholders, the Scheme will then be
subject to approval by the Federal Court of Australia (“Court”).
The Scheme is subject to a number of conditions that are set out in full in the Explanatory Memorandum
sent to shareholders by ANZ and include:
the ASX approves the admission of ANZ NOHC to the official list of the ASX and the official quotation
of the ANZ NOHC shares on the ASX;
ANZ NOHC being admitted as a foreign exempt listed company on the NZX; and
all approvals, consents, confirmations, exemptions, waivers or other acts from or by regulatory
authorities (including from the ASX and the Australian Securities & Investments Commission (“ASIC”),
the Australian Prudential Regulation Authority (“APRA”) and the Federal Treasurer (acting pursuant to
the Financial Sector (Shareholdings) Act 1998 (Cth)), the Reserve Bank of New Zealand (“RBNZ”), the
Overseas Investment Office (New Zealand), the United States Federal Reserve (“US Federal Reserve”)
and the Australian Taxation Office (“ATO”), as are necessary or, in the reasonable opinion of ANZ and
ANZ NOHC, desirable to implement the Restructure (“Regulatory Approvals”).
At the date of this report, all Regulatory Approvals have been obtained other than regulatory approval from
the US Federal Reserve. If this approval has not been obtained prior to the Second Court Hearing (where
the Court makes the order to approve the Scheme and which is scheduled to be held on 22 December
2022), ANZ may:
postpone or adjourn the Second Court Hearing; or
proceed with the Second Court Hearing on the basis that the Scheme will not be implemented until
the approval from the US Federal Reserve is obtained.
The ANZ directors unanimously recommend that shareholders vote in favour of the Scheme. Each ANZ
director intends to vote, or procure the voting of, any ANZ shares they hold or control in favour of the
Scheme.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
88
3
2 Scope of the Report
2.1 Purpose of the Report
The Scheme is subject to the approval of ANZ shareholders in accordance with Section 411 of the
Corporations Act (“Section 411”), which governs schemes of arrangement.
Part 3 of Schedule 8 to the Corporations Regulations prescribes the information to be sent to shareholders
in relation to schemes of arrangement pursuant to Section 411. Part 3 of Schedule 8 requires an
independent expert’s report in relation to a scheme of arrangement to be prepared when a party to a
scheme of arrangement has a prescribed shareholding in the company subject to the scheme, or where any
of its directors are also directors of the company subject to the scheme. In those circumstances, the
independent expert’s report must state whether the scheme of arrangement is in the best interests of
shareholders subject to the scheme and must state reasons for that opinion.
The directors of ANZ have engaged Grant Samuel & Associates Pty Limited (“Grant Samuel”) to prepare an
independent expert’s report setting out whether, in its opinion, the Scheme is in the best interests of ANZ
shareholders and to state reasons for that opinion. A copy of the report will accompany the Explanatory
Memorandum sent to shareholders by ANZ.
This report is general financial product advice only and has been prepared without taking into account the
objectives, financial situation or needs of individual ANZ shareholders. Accordingly, before acting in
relation to their investment, shareholders should consider the appropriateness of the advice having regard
to their own objectives, financial situation or needs. Shareholders should read the Explanatory
Memorandum issued by ANZ in relation to the Scheme.
Voting for or against the Scheme is a matter for individual shareholders based on their views as to value
and business strategy, their expectations about future economic and market conditions and their particular
circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax
position. Shareholders who are in doubt as to the action they should take in relation to the Scheme should
consult their own professional adviser.
Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell securities in ANZ or
ANZ NOHC. This is an investment decision upon which Grant Samuel does not offer an opinion and is
independent of a decision on whether to vote for or against the Scheme. Shareholders should consult their
own professional adviser in this regard.
2.2 Basis of Evaluation
There is no legal definition of the expression “in the best interests”. However, ASIC has issued Regulatory
Guide 111 (“RG111”) which establishes guidelines in respect of independent expert’s reports. RG111
differentiates between the analysis required for control transactions and other transactions. In the context
of control transactions (whether by takeover bid, by scheme of arrangement, by the issue of securities or
by selective capital reduction or buyback), the expert is required to distinguish between “fair” and
“reasonable”. A proposal that was “fair and reasonable” or “not fair but reasonable” would be in the best
interests of shareholders (being the opinion required under Part 3 of Schedule 8).
For most other transactions, the expert is to weigh up the advantages and disadvantages of the proposal
for shareholders. This involves a judgement on the part of the expert as to the overall commercial effect of
the proposal, the circumstances that have led to the proposal and the alternatives available. If the
advantages outweigh the disadvantages, the proposal would be in the best interests of shareholders.
The Scheme is not a control transaction and does not change the underlying economic interests of
shareholders. Accordingly, Grant Samuel has evaluated the Scheme by assessing the overall impact on the
shareholders of ANZ and formed a judgement as to whether the expected benefits outweigh any
89
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
4
disadvantages and risks that might result. By definition, if the advantages outweigh the disadvantages,
shareholders are likely to be better off if the Scheme is implemented than if it is not.
The Scheme is only part of the Restructure, which also includes the Business Restructure. The Business
Restructure does not require the approval of ANZ shareholders but is conditional on, and is expected to be
undertaken immediately after, implementation of the Scheme. RG111 paragraph 5 states that, in deciding
on the appropriate form of analysis for a report, an expert should “focus on the purpose and outcome of
the transaction, rather than the legal mechanism used to effect the transaction". Consequently, in forming
its opinion as to whether the Scheme is in the best interests of ANZ shareholders, Grant Samuel has
considered, where appropriate, the broader Restructure (including the Scheme and the Business
Restructure) and has had regard to the following:
the impact of the Restructure on the:
• business activities, strategy and governance of the ANZ Group;
• earnings and dividends attributable to existing ANZ shareholders;
• financial position and financial risk profile of the ANZ Group;
• capital requirements and risk management activities of the ANZ Group; and
• credit rating of ANZ and the ANZ Group;
potential taxation consequences of the Restructure for the ANZ Group and the ANZ NOHC Group as
well as for existing ANZ shareholders;
advantages and benefits arising from the Restructure; and
costs, disadvantages and risks of the Restructure.
2.3 Sources of Information
The following information was utilised and relied upon, without independent verification, in preparing this
report:
Publicly Available Information
the Explanatory Memorandum (including earlier drafts and pro forma financial information for the
ANZ Group for 1HY22);
half year report of the ANZ Group for 1HY22;
press releases, public announcements, media and analyst presentation material and other public
filings by ANZ including information available on its website; and
brokers’ reports and recent press articles on ANZ.
Non Public Information provided by ANZ
application to APRA for approval to establish a NOHC and the related Business Restructure;
various papers and presentations prepared for the purpose of regulatory approvals;
various rating agency background papers and presentations;
submissions to the ATO for class rulings in relation to the taxation implications for shareholders from
the proposed interposition of ANZ NOHC between ANZ and ANZ shareholders;
other confidential documents, board papers, presentations and working papers relating to the
Restructure.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
90
5
In preparing this report, representatives of Grant Samuel have also held discussions with, and obtained
information from, senior management of ANZ and its advisers.
2.4 Limitations and Reliance on Information
Grant Samuel believes that its opinion must be considered as a whole and that selecting portions of the
analysis or factors considered by it, without considering all factors and analyses together, could create a
misleading view of the process employed and the conclusions reached. Any attempt to do so could lead to
undue emphasis on a particular factor or analysis. The preparation of an opinion is a complex process and is
not necessarily susceptible to partial analysis or summary.
Grant Samuel’s opinion is based on economic, sharemarket, business trading, financial and other conditions
and expectations prevailing at the date of this report. These conditions can change significantly over
relatively short periods of time. If they did change materially, subsequent to the date of this report, the
opinion could be different in these changed circumstances.
This report is also based upon financial and other information provided by ANZ and its advisers. Grant
Samuel has considered and relied upon this information. ANZ has represented in writing to Grant Samuel
that to its knowledge the information provided by it was then, and is now, complete and not incorrect or
misleading in any material respect. Grant Samuel has no reason to believe that any material facts have
been withheld.
The information provided to Grant Samuel has been evaluated through analysis, inquiry and review to the
extent that it considers necessary or appropriate for the purposes of forming an opinion as to whether the
Scheme is in the best interests of ANZ shareholders. However, Grant Samuel does not warrant that its
inquiries have identified or verified all of the matters that an audit, extensive examination or “due
diligence” investigation might disclose. While Grant Samuel has made what it considers to be appropriate
inquiries for the purposes of forming its opinion, “due diligence” of the type undertaken by companies and
their advisers in relation to, for example, prospectuses or profit forecasts, is beyond the scope of an
independent expert.
Accordingly, this report and the opinions expressed in it should be considered more in the nature of an
overall review of the anticipated commercial and financial implications rather than a comprehensive audit
or investigation of detailed matters.
An important part of the information used in forming an opinion of the kind expressed in this report
comprises the opinions and judgement of management. This type of information was also evaluated
through analysis, inquiry and review to the extent practical. However, such information is often not
capable of external verification or validation.
Preparation of this report does not imply that Grant Samuel has audited in any way the management
accounts or other records of the ANZ Group. It is understood that the accounting information that was
provided was prepared in accordance with generally accepted accounting principles and in a manner
consistent with the method of accounting in previous years (except where noted).
The information provided to Grant Samuel included pro forma financial information for 1HY22. ANZ is
responsible for this pro forma financial information. The pro forma financial information was subject to
review by KPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd)
(“KPMG Transaction Services”). The Limited Assurance Investigating Accountant’s Report is set out in
Annexure 2 to the Explanatory Memorandum. On this basis, Grant Samuel considers that there are
reasonable grounds to believe that the pro forma financial information has been prepared on a reasonable
basis.
91
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
6
In forming its opinion, Grant Samuel has also assumed that:
matters such as title, compliance with laws and regulations and contracts in place are in good standing
and will remain so and that there are no material legal proceedings, other than publicly disclosed;
the assessments by ANZ and its advisers with regard to legal, regulatory, tax and accounting matters
relating to the Restructure are accurate and complete;
the information set out in the Explanatory Memorandum sent by ANZ to its shareholders is complete,
accurate and fairly presented in all material respects;
the publicly available information relied on by Grant Samuel in its analysis was accurate and not
misleading;
the Scheme and the Business Restructure will be implemented in accordance with their terms; and
the legal mechanisms to implement the Scheme and the Business Restructure are correct and will be
effective.
To the extent that there are legal issues relating to assets, properties or business interests or issues relating
to compliance with applicable laws, regulations and policies, Grant Samuel assumes no responsibility and
offers no legal opinion or interpretation on any issue.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
92
7
3 Profile of the ANZ Group
3.1 Background
Overview
The ANZ Group is one of the four largest banks
4
in Australia and provides banking and financial products to
over 9.2 million retail, commercial and institutional customers. It operates across 32 markets in Australia,
New Zealand, Asia, Europe and the Americas.
The antecedents of the ANZ Group can be traced back to The Bank of Australasia which was founded in
1835. In 1951, The Bank of Australasia merged with Union Bank of Australia to form the Australia and New
Zealand Bank, which in turn merged with the English, Scottish and Australian Bank in 1970 to form the ANZ
Group. ANZ, the parent entity of the ANZ Group, was incorporated in Australia in 1977 (having been
transferred from the United Kingdom). Over the following decades, ANZ consolidated its position in the
Australian financial services sector and expanded globally (particularly in New Zealand and the Asia Pacific
region). However, factors including slower growth in non-core markets, increased regulatory scrutiny and
growing capital requirements resulted in ANZ exiting most of its non-core businesses (e.g. wealth
management and advice and Asia Pacific retail and commercial businesses) as it refocused primarily on its
core retail banking businesses in Australia and New Zealand and its institutional banking business.
In recent years, the rise of digital banking and financial technology solutions has accelerated ANZ’s
investment in expanding its technology platform to better serve its customers. This investment has ranged
from improving core banking activities (e.g. the ANZx internal transformation program) to partnering with
adjacent non-banking services that complement its core banking offering (e.g. the establishment of its
venture capital business, ANZi, in 2018 and its subsequent separation as 1835i
5
.
In July 2022, ANZ announced the proposed acquisition of Suncorp Group Limited’s (“Suncorp Group”)
banking business (“Suncorp Bank”)
6
. The proposed acquisition of Suncorp Bank is subject to a minimum
completion period of 12 months and certain conditions including Federal Treasurer approval, Australian
Competition and Consumer Commission (“ACCC”) authorisation or approval and repeal of/certain
amendments to Queensland State Government legislation. If completed, the acquisition will broaden the
ANZ Group’s scale and penetration in the Queensland retail and commercial banking market.
Today, ANZ is one of the ten largest companies listed on the ASX with a market capitalisation of
approximately $75 billion and at 31 March 2022 had total assets of $1,017 billion.
Industry Environment
The Australian banking industry faces constant and rapid technological change to keep up with the digital
transformation required to meet customer preferences. Recent developments have included:
regulatory or policy-driven changes such as Open Banking (improved and secure access to customer
banking data) and the New Payments Platform (open access infrastructure for real time payments);
broadening of the digital banking platform, which has traditionally focused on providing core banking
services (e.g. bill payment and account transfers). Customers increasingly expect a broader suite of
financial services from digital banking (e.g. online lending and personalised money management);
________________________________________________________________________________________________________________________________________________________
4
Also referred to as the major banks. This group comprises ANZ, Commonwealth Bank of Australia Limited (“CBA”), National Australia
Bank Limited (“NAB”) and Westpac Banking Corporation (“Westpac”).
5
1835i comprises 1835i Creation Fund I Trust, 1835i Ventures I Trust, 1835i Ventures II Trust and 1835i Ventures III Trust.
6
Unless stated otherwise, information in this report (including the pro forma financial information set out in Section 5.5) does not reflect
the proposed acquisition of Suncorp Bank as this transaction is unrelated to the Restructure and remains conditional.
93
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
8
process automation and integration of artificial intelligence solutions targeting back-office banking
processes such as payments, fraud detection and cybersecurity systems; and
the emergence of new product markets such as buy-now pay-later (as a financing alternative for
customers) and cryptocurrency (as an investment class).
The investment required to meet evolving customer expectations is substantial. Moreover, the risks
associated with investing in new technologies and entering new markets are different from (if not higher
than) the risks faced by traditional banking operations. The recent closures of Xinja Bank and Volt Bank
illustrate the nature of these risks and the importance of scale (and access to capital) to navigate these
changes. As the largest participants in the sector, the major banks have invested significant capital and
resources to ensure their banking platforms remain fit-for-purpose to meet the evolving technology needs
of the market.
Regulation
REGULATORY BODIES
The authorised deposit-taking institution (“ADI”) sector of the Australian banking industry is heavily
regulated. The primary prudential regulator is APRA and the primary conduct regulator is ASIC.
Under the Banking Act 1959 (Cth) (“Banking Act”), APRA is responsible for overseeing the prudential
framework under which ADIs must operate including, in particular:
licensing ADIs to operate and supervising them to ensure that the interests of depositors are
protected;
establishing prudential standards that ADIs must comply with, including requirements in relation to:
• financial soundness (e.g. minimum regulatory capital requirements, capital adequacy, liquidity
and credit quality). The regulatory capital requirements that apply to ADIs are discussed in more
detail below;
• risk management (e.g. the requirement to have systems for identifying, measuring, evaluating,
monitoring, reporting and controlling or mitigating material risks that may affect an ADIs ability
to meet its obligations to depositors); and
• governance (e.g. culture, accountability and remuneration). Remuneration governance includes:
- administration of the Banking Executive Accountability Regime (“BEAR”), which establishes
accountability obligations for ADIs and their senior executives and directors. BEAR also
establishes, among other things, deferred remuneration, key personnel and notification
obligations for ADIs; and
- APRA’s Prudential Standard CPS 511 Remuneration (“CPS 511”), which requires an APRA-
regulated entity’s variable remuneration arrangements to incorporate adjustment tools that
can reduce variable remuneration, potentially to zero, for adverse risk and conduct
outcomes. CPS 511 comes into effect for significant financial institutions (which include the
ANZ Group) from 1 January 2023.
Prudential standards are legally binding;
ongoing supervision of ADIs to ensure compliance with APRA’s prudential requirements; and
the ability to take enforcement actions against ADIs (or individuals associated with an ADI) if
necessary to protect the interests of depositors.
In addition to APRA, the ANZ Group’s branch operations and major banking subsidiary operations are
overseen by local regulators such as the Reserve Bank of New Zealand, the US Federal Reserve, the United
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
94
9
Kingdom Prudential Regulation Authority, the Monetary Authority of Singapore, the Hong Kong Monetary
Authority and the China Banking and Insurance Regulatory Commission. These regulators may impose
regulatory requirements, including minimum capital levels, on operations in their individual jurisdictions.
CAPITAL ADEQUACY REQUIREMENTS
APRA’s prudential standards aim to ensure that ADIs maintain adequate eligible capital to act as a buffer
against the risks of unexpected losses associated with their activities. APRA classifies regulatory capital into
three tiers:
Common Equity Tier 1 (“CET1”) capital, which broadly comprises ordinary shares, general reserves and
retained earnings less intangible assets, capitalised expenses, certain investments and other
regulatory deductions;
Tier 1 capital, which consists of CET1 capital plus certain securities with complying loss absorbing
characteristics (“Additional Tier 1 capital”) (e.g. non-cumulative preference shares, hybrid capital
securities not redeemable at the holder’s option and minority interests); and
Tier 2 capital, which comprises other hybrid capital instruments and subordinated debt instruments
which have a minimum term of five years.
These measures form the total capital for regulatory purposes. As a domestic systemically important bank
(“D-SIB”)
7
, ANZ is currently required to meet the following minimum prudential capital ratios (calculated on
the basis of risk weighted assets
8
)
9
:
CET1 capital of at least 8.0%, comprising a minimum prudential capital ratio of 4.5% plus a capital
conservation buffer of 3.5%;
Tier 1 capital of at least 9.5%; and
total capital (being Tier 1 capital plus Tier 2 capital) of at least 11.5%.
From January 2023, APRA’s revised minimum prudential capital requirements for D-SIBs (calculated on the
basis of risk weighted assets) will include:
CET1 capital comprising a minimum prudential capital ratio of 4.5% plus a capital conservation buffer
of 4.75% plus a countercyclical capital buffer of 1.0% (applicable to Australian exposures);
Additional Tier 1 capital of 1.5% (the same as the current requirement); and
Tier 2 capital of 2.0% (the same as the current requirement), increasing by 3% (to 5%) by January 2024
and a further 1.5% (to 6.5%) by January 2026.
The increase in minimum prudential capital ratios is primarily due to finalisation of APRA’s “Unquestionably
Strong Framework for Bank Capital” and the new total loss absorbing capital buffer requirement for D-SIBs.
The higher CET1 minimum requirements are expected to be offset by a decrease in risk weighted assets
from January 2023, with APRA indicating that it is not its intention to require banks to raise additional
capital as a result of the changes.
The above changes would impact the capital management plans (and consequently, the availability of
capital for non-banking activities) for D-SIBs.
________________________________________________________________________________________________________________________________________________________
7
Domestic systematically important banks in Australia as determined by APRA are the four major banks (including ANZ).
8
Risk weighed assets are the loans and other assets of an ADI, weighted (i.e. multiplied by a percentage factor) to reflect their respective
level of risk or loss to the ADI. For example, mortgages secured by residential property are generally considered to be lower risk than
unsecured credit card lending. The greater the amount of higher risk loans and other assets that an ADI has, the higher its risk weighted
assets and the higher the amount of capital the ADI must hold to meet APRA’s minimum prudential capital ratios.
9
Notwithstanding these requirements, APRA can also impose higher minimum capital requirements for individual ADIs and may change
an ADI’s capital requirements at any time.
95
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
10
Other measures such as the leverage ratio (to cap debt levels in the funding structure) and liquidity ratios
(to promote the resilience of a bank’s liquidity and funding profile) have recently been implemented by
APRA to better regulate the capital and funding resilience of ADIs.
In addition, APRA sets specific capital adequacy reporting levels for ADIs:
Level 1, which is the ADI on a standalone basis (in the case of the ANZ Group, comprising ANZ and
specified subsidiaries that are consolidated to form the ADI’s Extended Licensed Entity (“ELE”)
10
);
Level 2, which is the ADI and all of its subsidiary entities (i.e. the ANZ Group) less certain subsidiaries
and associates that are excluded under the prudential standards (broadly, insurers, funds
management entities, non-financial (commercial) subsidiaries and qualifying securitisation vehicles);
and
Level 3, which is a conglomerate group at the widest level (including, for example, subsidiaries
excluded from Level 2).
The ANZ Group reports to APRA on a Level 1 (ANZ and ELE subsidiaries) and Level 2 (Level 1 entities plus
international ADIs (including ANZ NZ) and other subsidiaries undertaking financial activities) basis, and
measures capital adequacy monthly on a Level 1 and Level 2 basis. APRA does not currently regulate the
capital adequacy of conglomerate groups (Level 3), which would include operations such as 1835i,
securitisation special purpose vehicles and entities acting as manager or trustee (see below for further
discussion). Investments in these Level 3 entities are currently fully deducted for the purposes of
calculating Level 2 capital ratios.
NON-BANKING EXPOSURES
ADIs are subject to prudential standards that ensure risks from non-banking operations are managed and
contained.
The regulatory framework for ADIs that have non-banking entities (or controlling shareholder or parent
entities) is well established. These measures complement the prudential capital adequacy ratios and are
designed to protect the ADI’s deposit holders from the ADI’s non-banking activities, which may expose the
deposit holders to a different set of risks than traditional banking activities. Under the prudential
standards, ADIs are required to maintain robust Board and internal governance systems to monitor these
activities and must operate under a regulatory cap (measured as non-banking capital a percentage of total
Tier 1 capital) that limits the ADI’s exposure to non-banking activities.
In contrast, the regulatory framework for diversified groups (Level 3 group entities, e.g. for ADIs in a NOHC
structure, or “financial” NOHCs) is yet to be finalised by APRA. APRA has developed a Level 3 supervision
framework which includes standards governing risk management, governance and outsourcing and a
prudential framework for Level 3 parent entities which includes standards relating to aggregate risk
exposures, intragroup transactions and exposures and audit and related matters. APRA has not finalised an
overall framework for the capital requirements that would apply to Level 3 conglomerate groups but has
historically imposed capital (and other prudential) requirements on financial NOHCs through conditions
attaching to NOHC authorisations.
In summary, APRA expects financial NOHCs to adopt a holistic approach to group risks and have clear
systems in place to supervise intragroup transactions between banking and non-banking groups and ensure
that adequate capital buffers are maintained across the entire group, including the non-banking group (see
Section 4.2 for details).
________________________________________________________________________________________________________________________________________________________
10
An ELE is an ADI and each subsidiary of an ADI which APRA allows to be treated as part of the ADI itself for the purpose of measuring
capital adequacy and exposures to related entities.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
96
11
3.2 Corporate Structure and Business Operations
Corporate Structure
The current corporate structure of the ANZ Group
11
is summarised below:
ANZ GROUP – CURRENT CORPORATE STRUCTURE (SIMPLIFIED)
ANZ Group
Under its current corporate structure, ANZ has:
controlling interests in certain entities, including:
• ANZ Funds Pty. Ltd., a holding company which owns the ANZ Group’s banking subsidiaries
operating in New Zealand (including ANZ Holdings (New Zealand) Limited, the holding company
of ANZ NZ), Vanuatu, Samoa and Kiribati;
• other subsidiaries which operate the ANZ Group’s banking businesses in China, Vietnam, Papua
New Guinea and Guam; and
• a majority owned subsidiary which operates the ANZ Group’s banking businesses in Indonesia;
non-controlling interests in certain:
• banking businesses (such as interests in PT Bank Pan Indonesia in Indonesia, AMMB Holdings
Berhad in Malaysia and Bank of Tianjin Co Ltd in China); and
• non-banking businesses (see below for details of key non-banking businesses); and
interests in non-subsidiaries and trusts (such as 1835i).
All of the Australian banking business is conducted through the parent entity, ANZ.
Business Operations
The ANZ Group primarily operates retail, commercial and institutional banking businesses. Its operations
are segmented by geography (i.e. Australia Retail and Commercial, New Zealand and Pacific) or function
(i.e. Institutional and Group Centre).
The Australia Retail and Commercial segment represents the largest share of the ANZ Group’s balance
sheet lending activities (measured as net loans and advances) and operating income:
________________________________________________________________________________________________________________________________________________________
11
The corporate structure diagram is simplified and does not show all ANZ subsidiaries and interests.
ANZ
(shares listed on ASX
and NZX)
100%
Shareholders
Banking subsidiaries
(Including ANZ NZ)
Non-banking interests
and investments
97
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
12
ANZ GROUP – CONTRIBUTION BY SEGMENT
NET LOANS & ADVANCES
AT 31 MARCH 2022
OPERATING INCOME
1HY22
ANZ Group
At 31 March 2022, the ANZ Group’s various non-banking businesses were spread across Australian Retail
and Commercial, Institutional and the Group Centre segments and include:
beneficial interests in the 1835i trusts, the ANZ Group’s venture capital business which operates
through two segments:
• 1835i Ventures, which invests in businesses focused on digital and financial technology solutions
including Cashrewards (a leading cashback company in Australia), Airwallex (an online payments
company) and Lendi (an online home loans platform); and
• 1835i Creation Fund, which is an incubator that facilitates the creation of new businesses.
1835i was structurally separated from ANZ in July 2021. Following a strategic review of the business,
the ANZ Group elected to relinquish direct ownership and operational control over 1835i to better
align existing risk and governance frameworks with 1835i’s business operations and facilitate
investment decisions and speed to market activities;
a 49% interest in ANZ Worldline Payment Solutions, a joint venture between the ANZ Group and
Worldline SA that provides small business, commercial and institutional customers with merchant
acquiring services;
a ~12% interest in Pollination Group (“Pollination”), a global climate change investment and advisory
firm;
a 25% interest in Lygon 1B Pty Limited (“Lygon”), a private blockchain platform which allows
customers to request, check, track and exchange bank guarantees from a single portal; and
a 16.7% interest in Trade Information Network (“TIN”), a trade data registry which enables the
collation and exchange of original trade supply data between buyers, suppliers and financiers globally.
From 1 April 2022, the ANZ Group implemented a structural change to its divisions involving the integration
of the Australian retail and digital businesses and the separation of the Australian commercial business into
a new division. The new reporting segments will be reflected in the ANZ Group’s FY22
12
results.
________________________________________________________________________________________________________________________________________________________
12
FY22 is the year ending 30 September 2022.
Australia Retail
and
Commercial
52.5%
Institutional
26.9%
New Zealand
19.9%
Pacific
0.3%
Group Centre
0.5%
Australia Retail
and
Commercial
51.5%
Institutional
26.9%
New Zealand
19.6%
Pacific
0.9%
Group Centre
1.2%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
98
13
3.3 Strategy
The ANZ Group has undergone a period of significant simplification over the past six years. While this
process is ongoing, the ANZ Group has entered a new phase focused on growth and areas where it can
deliver better outcomes for customers and provide returns for shareholders.
The ANZ Group’s strategy is to improve the financial wellbeing and sustainability of its customers by
providing connected, relevant and efficient services, tools and insights, directly and in partnership with
others. The strategy is centred on the ANZ Group’s core banking offering that is tailored to the financial
goals of its retail customers (e.g. to save for, buy and own a home), small-to-medium enterprise customers
(e.g. to start or buy and sustainably grow their business) and institutional customers (e.g. to facilitate the
movement of capital and goods and secure funding for growth).
The ANZ Group aims to achieve its strategy through investing in technology and developing a culture built
around delivering better outcomes for customers, offering them a broader range of banking and banking-
adjacent services. The strategy recognises the shifting source of competitive advantage in the Australian
banking industry, particularly the importance (and to some extent, urgency) of accelerating the
development of digital banking “platforms” and “ecosystems”. In this context, the ANZ Group’s strategic
priorities are to:
develop infrastructure “platforms”, which can be readily scaled and made accessible to other
financial institutions and non-bank users. Successful rollouts of new platforms are expected to
encourage greater use of the ANZ Group’s systems and products. These platforms are intended to:
• augment core banking services, such as developing a new seamless platform that allows
customers to integrate their systems to automate payments and reconciliation processes; and
• open new market opportunities for non-banking offerings including in accounting and financial
solutions, credit processes, clearing services, trade services and agency services; and
invest in digital “ecosystems”, particularly by partnering with banking-aligned and financial
technology organisations that offer innovative solutions to improve the financial wellbeing of
customers. An example of an ecosystem is the Australian cashback company, Cashrewards.
Underpinning this strategy is simplicity and the organisational flexibility to respond quickly to the changing
environment, including through breaking down technology barriers, reducing rigidity and improving
decision making processes.
99
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
14
3.4 Key Historical Financial Information and Regulatory Capital
Income Statement
The 1HY22 consolidated income statement of the ANZ Group is summarised below:
ANZ GROUP – SUMMARISED CONSOLIDATED INCOME STATEMENT ($ MILLIONS)
1HY22
ACTUAL
Operating income 9,542
Operating expenses (4,791)
Cash profit from continuing operations excluding large and notable items
13
3,156
NPAT
14
attributable to ANZ shareholders 3,530
STATISTICS
Operating expenses to operating income 50.5%
Return on equity
15
11.3%
Basic earnings per share 125.7c
Dividends per share 72c
Dividend payout ratio
16
64%
Amount of dividend franked 100%
ANZ Group and Grant Samuel analysis
The ANZ Group’s 1HY22 consolidated income statement reflects improving economic conditions in its key
markets, although its performance was partly constrained by tightening interest margins, declining fees
from capital markets activities (hedging and trading) and a growing cost base as well as the scale of the ANZ
Group’s investment spend (which is predominantly expensed as incurred and has escalated in recent years
with the ramp up of the ANZx internal transformation program). Overall, while there has been a recovery
in the ANZ Group’s cash profit from continuing operations and NPAT attributable to ANZ shareholders,
these parameters remain below pre-COVID-19 pandemic levels.
ANZ currently has dividend guidance of between 60% and 65% of cash profit from continuing operations
excluding large and notable items. It paid fully franked dividends towards the top end of its target range in
1HY22.
Balance Sheet
The consolidated balance sheet of the ANZ Group at 31 March 2022 is summarised below:
ANZ GROUP – SUMMARISED CONSOLIDATED BALANCE SHEET ($ MILLIONS)
AT 31 MARCH 2022
ACTUAL
Total assets 1,017,361
Total liabilities (955,605)
Net assets attributable to ANZ shareholders 61,747
Net tangible assets attributable to ANZ shareholders 57,679
STATISTICS
Net tangible assets per share $20.64
ANZ Group and Grant Samuel analysis
________________________________________________________________________________________________________________________________________________________
13
In 1HY22, large and notable items primarily comprised one-off payment of withholding tax, customer remediation costs, legal entity
rationalisation costs and impact of divestment of One Path and was largely offset by the accounting impact of the ANZ Worldline
Partnership.
14
NPAT is net profit after tax.
15
Return on equity is based on annualised 1HY22 NPAT attributable to ANZ shareholders and average ordinary shareholders’ equity.
16
Dividend payout ratio is dividends paid divided by cash profit from continuing operations excluding large and notable items.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
100
15
The ANZ Group has over $1 trillion in assets on its balance sheet which are backed by a diversified funding
portfolio. The majority of the ANZ Group’s assets comprise a portfolio of high quality liquid assets and
loans and advances. Funding sources are primarily deposits, supplemented by domestic and international
wholesale funding and convertible subordinated notes.
Investments in non-banking businesses are relatively small, with a carrying value of less than $500 million
at 31 March 2022.
ANZ has an AA-, Aa3 and A+ investment grade rating from Standard & Poor’s (“S&P”), Moody’s Investor
Service (“Moody’s”) and Fitch Ratings (“Fitch”), respectively.
Regulatory Capital
The following table summarises the consolidated (i.e. Level 2) capital position of ANZ at 31 March 2022:
ANZ – LEVEL 2 CAPITAL RATIOS
AT 31 MARCH 2022
ACTUAL
CET1 capital ($ millions) 50,511
Tier 1 capital ($ millions) 58,001
Tier 2 capital ($ millions) 14,780
Total capital (Tier 1 + Tier 2) ($ millions) 72,781
Risk weighted assets ($ millions) 437,910
CAPITAL ADEQUACY RATIOS
CET1 capital ratio 11.5%
Tier 1 capital ratio 13.2%
Total capital ratio 16.6%
Leverage ratio 5.2%
Liquidity coverage ratio 132%
Net stable funding ratio 123%
ANZ Group and Grant Samuel analysis
At 31 March 2022, ANZ’s CET1, Tier 1, Tier 2 and total capital ratios were well in excess of APRA’s minimum
requirements (even allowing for a buffer above the minimum prudential requirements). ANZ’s CET1 capital
and Tier 1 capital ratios are also above APRA’s increased requirements that will apply by January 2023.
ANZ’s leverage ratio, liquidity coverage ratio and net stable funding ratio are also in excess of the
regulatory levels (of 3.5%, 100% and 100% respectively).
3.5 Taxation Position
Under the Australian tax consolidation regime, ANZ and its Australian resident wholly owned entities have
elected to be taxed as a single entity. Members of the group have entered into tax sharing and tax funding
agreements with ANZ (as the head entity of the consolidated tax group), which govern certain aspects of
the operation of the group.
At 30 September 2021
17
, ANZ had:
no carried forward income tax losses and no on-balance sheet carried forward capital losses; and
________________________________________________________________________________________________________________________________________________________
17
Carried forward income tax losses, carried forward on-balance sheet capital losses and franking credits are shown at 30 September 2021
(and not at 31 March 2022) as they are only calculated definitively at each financial year end.
101
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
16
$772 million of accumulated Australian franking credits (tax effected) and NZ$5 billion of accumulated
New Zealand franking credits which can be attached to ANZ’s Australian dividends but may only be
used by New Zealand resident shareholders
18
.
3.6 Capital Structure and Ownership
Capital Structure
ANZ has the following equity securities on issue:
2,989,923,751 ordinary shares; and
6,207,962 options and rights.
In July 2021, ANZ announced its intention to buy back up to $1.5 billion of ordinary shares as part of its
capital management plan. This buy back was completed in March 2022 with ANZ buying back 54,139,675
ordinary shares.
In July 2022, ANZ announced a $3.5 billion fully underwritten pro rata accelerated renounceable
entitlement offer (“entitlement offer”) to help fund the acquisition of Suncorp Bank. The entitlement offer
was completed in August 2022, resulting in the issue of 187,105,950 ordinary shares. These ANZ shares are
included in the number of issued ordinary shares shown above.
ANZ operates an American Depository Receipts (“ADR”) Programme. ADRs are traded in the United States
over-the-counter market with each ADR representing one ordinary share.
Under the ANZ Incentive Plan, certain employees and executives are offered part of their variable
remuneration as deferred equity awards as follows:
deferred shares, offered under the Employee Share Acquisition Plan (“ESAP”), are held on trust
generally for between one and four years, and are subject to certain conditions being satisfied.
Deferred shares are not subject to performance hurdles;
deferred share rights, offered under the Employee Share Option Plan (“ESOP”), are generally deferred
for between one and four years, and entitle the participant to one ANZ ordinary share (or cash
equivalent amount) for each share right awarded, subject to certain conditions being satisfied.
Deferred share rights are not subject to performance hurdles; and
restricted rights and performance rights, offered under the ESOP, are generally deferred for four or
five years, and entitle the participant to acquire ANZ ordinary shares (or at ANZ’s discretion, a cash
amount equal to the value of an ANZ share) for nil consideration, subject to certain conditions being
satisfied, including total shareholder return performance hurdles (for performance rights) and a four-
year performance period.
ANZ has a dividend reinvestment plan (“DRP”) and a bonus option plan that allow shareholders to forgo or
reinvest all or part of their dividend payments into additional fully paid ordinary shares. Shares allocated
under these plans can be sourced either through on-market purchase or through new share issuances.
ANZ also has on issue capital notes (“ANZ capital notes”)
19
, which are mandatorily convertible subordinated
perpetual securities. ANZ issues ANZ capital notes as Additional Tier 1 capital to support its Tier 1 capital
requirements. These capital notes are denominated in Australian dollars and are quoted for trading on the
________________________________________________________________________________________________________________________________________________________
18
The franking account balances at 30 September 2021 have been adjusted for:
franking credits that will arise from the payment of income tax payable at the end of the 30 September 2021 financial year; and
franking credits/debits from the receipt/payment of dividends that have been recognised as tax receivable/payable at 30
September 2021.
19
ANZ currently has five capital note issues quoted for trading on the ASX, Capital Notes 3, Capital Notes 4, Capital Notes 5, Capital Notes 6
and Capital Notes 7.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
102
17
ASX. They do not confer voting rights but provide ANZ with early redemption or conversion options under
certain circumstances (subject to the approval of APRA).
Ownership
ANZ has more than 500,000 registered ordinary shareholders. The top ten registered shareholders
represent more than 55% of the ordinary shares on issue.
The top ten registered ordinary shareholders are principally institutional nominee companies or investment
companies. ANZ registered shareholders are predominantly Australian based investors (approximately 94%
of registered shareholders and approximately 97% of issued shares).
ANZ has received substantial shareholder notices from BlackRock Group (6.07%
20
), State Street Corporation
(5.08%
21
) and The Vanguard Group, Inc. (5.00%
22
).
________________________________________________________________________________________________________________________________________________________
20
Based on issued shares on 2 December 2019.
21
Based on issued shares on 20 July 2022.
22
Based on issued shares on 22 April 2022.
103
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
18
4 Background to Financial NOHCs
4.1 Overview
A NOHC is a holding company that does not conduct its own business and has subsidiaries that are the main
operating entities that carry out the day-to-day activities of the group. Under this structure, the NOHC sits
at the top of the corporate structure as the parent entity and its scope of standalone activities are generally
limited to:
receiving upstream dividends from its subsidiaries;
providing financial support to its subsidiaries; and
raising external capital (i.e. debt or equity).
In the banking sector, a NOHC structure can be used to structurally separate the banking group (which
includes ADI-type entities) from the non-banking group which can cover a wider range of activities such as
insurance, securitisation, investment banking and venture capital. The parent entity in this structure is
commonly referred to as a “financial” NOHC
23
.
The structural separation of banking and non-banking activities within a group is not mandatory in
Australia. However, it does have implications for the regulatory framework that applies to the entities
within the group. APRA regulations (including capital adequacy requirements) for an ADI continue to apply
to the banking entities in the group, whereas a different capital adequacy regime applies to the financial
NOHC itself and there is flexibility to apply APRA’s prudential standards differently to the non-banking
entities in the group given the nature of their activities. This approach is intended to facilitate regulatory
oversight and, ultimately, mitigate contagion risks between the two sets of entities within the group.
In Australia, financial NOHCs can be authorised by APRA under the Banking Act, the Insurance Act 1973
(Cth) or the Life Insurance Act 1995 (Cth), depending on whether the APRA regulated business within the
group is predominantly involved in banking, general insurance or life insurance activities, respectively.
There are currently 19 authorised financial NOHCs in Australia, including Macquarie Group Limited,
Suncorp Group and AMP Limited (“AMP”).
4.2 Regulatory Environment for Financial NOHCs in Australia
The origin of the NOHC structure in the Australian banking sector can be traced back to the 1997 Financial
Systems Inquiry (the “Wallis Inquiry”). The Wallis Inquiry was launched to evaluate the impact of financial
deregulation over prior decades, which had resulted in the rise of financial conglomerates with diversified
banking and non-banking operations across the financial sector.
Up to this point, the head entity of a financial conglomerate group was typically the regulated ADI entity,
which, in addition to its banking activities, was a holding company for the conglomerate’s diversified
operations. Following its review of the structures of financial conglomerates in 1997, the Wallis Inquiry
recommended the NOHC structure as a superior structural option to support prudential supervision. In
particular, the NOHC structure was found to be a more efficient structure to promote financial disclosure
and information transparency and provide greater flexibility to manage and monitor the risks arising from
diversified businesses.
However, implementation of a NOHC structure must also satisfy APRA’s requirements in relation to capital
adequacy, suitability of firewalls (i.e. to minimise contagion risk), reporting of intragroup activities and
independence of board representation for the subsidiary entities. Defining the appropriate prudential
framework for these requirements was the subject of regulatory and industry debate and consultation over
the following two decades:
________________________________________________________________________________________________________________________________________________________
23
In contrast, a “bank” NOHC (common in the United States) is limited to only owning interests in separate banking entities.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
104
19
in April 2000, APRA published a comprehensive framework for the prudential supervision of financial
NOHCs. The framework covered requirements for ownership and structure, board composition,
permitted activities and risk governance. However, few banking groups elected to implement a NOHC
structure due to regulatory and tax impediments;
in June 2007, the Federal Government resolved these issues by passing the Financial Sector Legislation
Amendment (Restructures) Act 2007 to provide relief for NOHC restructures under the Corporations Act
and amending Australian tax legislation to minimise income tax consequences and provide rollover relief
for NOHC restructures. Both Macquarie Bank Limited (“Macquarie Bank”) and Suncorp-Metway Limited
(“Suncorp-Metway”) implemented financial NOHC structures shortly after introduction of the new
legislation, with APRA specifying the Level 3 capital requirements for these financial NOHCs under the
conditions of their respective NOHC authorisations
24
;
between 2010 and 2016, APRA released a number of discussion papers relating to the supervision of
financial NOHCs. These papers included the release of draft Level 3 prudential standards in 2014 that
outlined the recommended governance framework and proposed limits on intra group capital
transactions that were due to come into effect from July 2017; and
in March 2016, APRA elected to defer the implementation of capital standards for financial NOHCs but
agreed to release the governance framework for the non-capital components of the supervision of
conglomerate groups. APRA published these non-capital prudential standards in July 2017,
emphasising the importance of managing (and limiting) aggregate group risk exposure and intragroup
transactions and exposures within conglomerates.
APRA’s prudential framework for financial NOHCs continues to evolve. At this stage, APRA has not finalised
its recommendations on specific minimum capital requirements and the approach to measuring capital
adequacy. However, the industry and regulatory engagement over the past two decades demonstrates
that APRA continues to actively evaluate the merits of a NOHC structure in overseeing a conglomerate’s
banking and non-banking activities.
The approach adopted by APRA is not inconsistent with that of other international financial centres which
have adopted similar holding company structure requirements to manage risks between banking and non-
banking businesses. In 2015, the United States introduced a new “intermediate holding company”
requirement to manage the banking and non-banking exposures of foreign banking organisations.
Similarly, the United Kingdom introduced a new holding company requirement in 2019 to facilitate the
“ring-fencing” of retail and commercial banking from investment banking activities.
4.3 Rationale for Financial NOHC Restructures
Benefits and Disadvantages of Financial NOHCs
The benefits typically cited for financial NOHCs largely revolve around simplification of the business and
alignment of the regulatory and governance regime over the banking and non-banking businesses.
However, at the same time, there are some disadvantages, potential risks and costs associated with NOHC
restructures. The primary issues raised are listed below:
________________________________________________________________________________________________________________________________________________________
24
For example, APRA specified an aggregate capital requirement for the Macquarie Bank NOHC (Macquarie Group Limited) that was the
sum of the capital requirements of each regulated entity in the NOHC group (determined by APRA) and each non-regulated entity in the
NOHC group (based on a Board approved economic capital model which required agreement with APRA in relation to its elements and
inclusion).
105
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
20
ISSUES ASSOCIATED WITH FINANCIAL NOHCS
ADVANTAGES/BENEFITS DISADVANTAGES/RISKS/COSTS
• simplified corporate structure
• transparency and regulatory oversight
• isolation of risk (i.e. minimise contagion risk)
• “fit-for-purpose” governance and risk management
• capital flexibility and clarity in capital allocation
• better targeted incentives and management/board focus
• additional ongoing costs
• one-off transaction costs (including stamp duty)
• potentially lower credit rating and therefore increased
financing costs for the NOHC
Grant Samuel analysis
Precedent Financial NOHC Restructures
The NOHC structure has limited precedent in the Australian banking sector (particularly for large domestic
banks) but has been widely used internationally. Over the past three decades, there have been a number
of NOHC restructures in the banking sector:
SELECTED NOHC RESTRUCTURES IN THE BANKING SECTOR
PARENT COMPANY
DATE PURPOSE/OBSERVATIONS
AUSTRALIA
HBOS Australia Pty Ltd
(“Bankwest Australia”)
early 2000s
• one of the first financial NOHCs in Australia
• structurally separate the wealth management and life insurance businesses
Members Equity Bank 2007
• facilitate the merger with Industry Funds Services (“IFS”)
• structurally separate IFS’s funds management and funds services businesses
Macquarie Bank
2007
• promote greater strategic and operating flexibility to pursue international and
diversified growth while complying with APRA’s regulatory framework
• structurally separate investment banking and corporate finance businesses
• NOHC restructure was required by APRA
Suncorp-Metway 2010
• simplify corporate structure and business model
• promote capital flexibility to transfer surplus funds within the group
• structurally separate banking, general insurance and life insurance businesses
AMP 2022
• no public information available but the NOHC registration of AMP Limited
followed the announcement of a series of divestments and the demerger of
its private markets division (which required the transfer of the asset
management business to AMP)
• structurally separate the banking business from the remainder of its financial
services businesses (e.g. wealth management)
INTERNATIONAL
Bank of America Corporation 1968
• initially established as a bank holding company to facilitate interstate
expansion and compete with other banking peers
• registered as a financial holding company following the Gramm Leach Bliley
Act of 1999 which allowed banks to engage in a broader range of financial
activities (e.g. securities underwriting, insurance, etc.) under a NOHC structure
JPMorgan Chase & Co.
1969
• initially established as a bank holding company to facilitate interstate
expansion and compete with other banking peers
• registered as a financial holding company following the Gramm Leach Bliley
Act of 1999 (see above)
HSBC Holdings plc (“HSBC”) 1991
• strategic flexibility to align with increasingly global structure, particularly in
Hong Kong and the broader Asia Pacific region
• structurally separate Asia Pacific and European businesses
Citigroup Inc. (“Citigroup”) 1998
• facilitate the acquisition of Travelers Group
• structurally separate the newly acquired insurance and investments business
• NOHC restructure was required by the Federal Reserve
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
106
21
SELECTED NOHC RESTRUCTURES IN THE BANKING SECTOR (CONT)
PARENT COMPANY
DATE PURPOSE/OBSERVATIONS
INTERNATIONAL (CONT)
Morgan Stanley 2008
• secure access to liquidity during the financial crisis, which was available only
to bank NOHCs and financial NOHCs
• structurally separate investment banking and capital markets businesses
The Goldman Sachs Group, Inc.
(“Goldman Sachs”)
2008
• secure access to liquidity during the financial crisis, which was available only
to bank NOHCs and financial NOHCs
• structurally separate investment banking and capital markets businesses
Mitsubishi UFJ Financial Group,
Inc. (“MUFG”)
2008
• facilitate the acquisition of a 21% interest in Morgan Stanley
• structurally separate investment banking and capital markets business (i.e. the
Morgan Stanley business)
• NOHC restructure was required by the Federal Reserve
Large Swiss banks
(including UBS AG and Credit
Suisse AG)
2014
• regulatory requirement in Switzerland to enhance resolvability (i.e. loss
absorption capabilities of the NOHC to facilitate “bail-ins” and recapitalise the
group companies if required) of systemically important banks
• resulted in the creation of financial NOHCs as part of the “single point of
entry” resolution strategy
INTERNATIONAL – LOCAL OPERATIONS ONLY
United States foreign banking
organisations
(including BNP Paribas, Credit
Suisse, Deutsche Bank, UBS and
Barclays)
2014 -2018
• internal restructure impacted United States operations only
• regulatory requirement for foreign banks with more than US$50 billion in total
non-bank assets in the United States to put in place an “intermediate holding
company” which had the same effect as a NOHC but impacted only the
domestic operations
Large United Kingdom banks
(including Barclays plc, HSBC,
Lloyds Banking Group and The
Royal Bank of Scotland Group
plc)
2018
• internal restructure impacted United Kingdom operations only
• regulatory requirement in the United Kingdom to “ring-fence” retail and
commercial banking activities from investment banking activities
Grant Samuel analysis
Most financial NOHC restructures were completed to address immediate constraints such as:
regulatory requirements, which often carry implementation deadlines and are typically driven by:
• temporary regulatory relief. For example, Macquarie Bank committed to APRA that it would seek
a solution (including via a NOHC structure) to ensure the non-banking exposure of its ADI
business operated within the allowable capital thresholds of authorised activities;
• reforms, such as for large banks in the United Kingdom (which required the “ring fencing” of
retail banking operations), large banks in Switzerland (which required enhanced loss absorption
capabilities to facilitate resolvability) and foreign bank organisations in the United States (which
required a local intermediate holding company if their non-banking assets exceeded US$50
billion); and
• mergers and acquisitions, such as for Citigroup and MUFG which both implemented financial
NOHCs to separately hold their banking and non-banking interests following major acquisitions;
and
access to liquidity. In 2008, Morgan Stanley and Goldman Sachs transitioned to a bank holding
company structure and implemented financial NOHCs under arguably more pressing circumstances.
The collapse of Bear Stearns and Lehman Brothers resulted in significant losses and uncertainty for the
investment banking industry. The transition to a NOHC structure enabled both banks to bolster their
financial positions by enhancing their ability to access (through banking subsidiaries) low-cost
federally insured deposits and through the NOHC becoming subject to regulation by, and having the
support of, the Federal Reserve.
107
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
22
On the other hand, some financial NOHC restructures did not involve an immediate catalyst but were
primarily designed to position the business for the future. The rationale for these NOHC restructures
included:
enhanced capital flexibility and delineation of capital, such as for Suncorp Group, which sought to
align the group’s corporate structure with the different regulatory capital requirements of its three
operating businesses (i.e. banking, general insurance and life insurance). The NOHC structure enabled
Suncorp Group to stream surplus capital to the group NOHC and inject it into any of the three groups
as required; and
increased strategic flexibility and focus, such as for HSBC which required greater board and
management focus (as well as more targeted management incentives) to deliver the different growth
requirements for its Asia Pacific and European businesses.
The major banks in Australia also evaluated the merits of implementing a NOHC structure around the mid-
2000s. At the time, each of the major banks held diversified non-banking interests across the financial
sector including insurance, funds management and wealth management and retail financial advice. While
no action was ultimately taken, the major banks recognised the potential benefits of a NOHC structure,
citing advantages such as simplified regulatory oversight and improved delineation between (and
management of) the banking and non-banking activities.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
108
23
5 Impact of the Restructure (including the Scheme)
5.1 Process
If the Scheme is approved and implemented:
ANZ NOHC will issue ANZ NOHC shares on a one-for-one basis to shareholders (other than ineligible
foreign shareholders) who hold ANZ shares on the record date for the Scheme;
ANZ NOHC will issue ANZ NOHC shares on a one-for-one basis attributable to ineligible foreign
shareholders to a sale agent. These ANZ NOHC shares will be sold on the ASX through a sale facility
and ineligible foreign shareholders will receive the cash proceeds from the sale of those ANZ NOHC
shares; and
all ANZ shares will be acquired from ANZ shareholders (or, in the case of ANZ shares held by ineligible
foreign shareholders, from the sale agent) by ANZ NOHC.
After implementation of the Scheme, ANZ NOHC will become the new listed parent entity of the ANZ Group.
Shareholders (other than ineligible foreign shareholders) will hold the same number of ANZ NOHC shares as
the number of ANZ shares held prior to implementation of the Scheme. The Scheme will not change the
economic interest of shareholders (other than ineligible foreign shareholders) in the ANZ Group.
In addition:
existing ANZ capital notes issued by ANZ will remain on issue by ANZ under ANZ’s debt listing on the
ASX until they are repaid, converted or written off and will be on substantially the same terms. The
terms of the ANZ capital notes will be amended so that:
• distribution restrictions will apply to ANZ (i.e. there will be restrictions on the payment of
distributions by ANZ to ANZ NOHC) if a scheduled dividend on the ANZ capital notes is not paid;
and
• on conversion, holders of ANZ capital notes will be issued ANZ NOHC shares instead of shares in
ANZ.
The hybrid securities issued by ANZ NZ will not be affected by the Scheme (and will remain on issue
under ANZ NZ’s debt listing on the New Zealand Stock Exchange);
ANZ NOHC intends to continue to operate an ADR programme on substantially the same terms as
ANZ’s current ADR programme; and
the ANZ Incentive Plans will continue to operate and apply on substantially the same terms and
conditions except that the incentive plans will be operated by ANZ NOHC and provide interests in ANZ
NOHC shares:
• ANZ deferred shares will be transferred to ANZ NOHC and exchanged for ANZ NOHC shares on a
one-for-one basis. These new employee share scheme interests in ANZ NOHC will be deemed to
be a continuation of the old interests in ANZ and will continue to be held on trust for the relevant
employee; and
• ANZ deferred share rights, restricted rights and performance rights held by employees will lapse
and will be replaced with ANZ NOHC deferred share rights and performance rights on a one-for-
one basis and on the same terms.
After implementation of the Scheme, the ANZ Group will undertake the Business Restructure. Non-
operating intermediate holdings companies for the ANZ Bank Group (ANZ BH Pty Ltd (“ANZ Bank HoldCo”)),
the ANZ Non-Bank Group (ANZ NBH Pty Ltd (“ANZ Non-Bank HoldCo”) and ANZ ServiceCo) have already
been incorporated by ANZ. The key steps to be undertaken in the Business Restructure are:
109
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
24
ANZ transferring the beneficial interest in 1835i
25
managed trusts, its non-controlling interest in the
ANZ Worldline Payment Solutions joint venture and its equity interests in Pollination, Lygon and TIN to
ANZ Non-Bank HoldCo;
ANZ transferring its interest in land and buildings at 833 Collins Street, Docklands (in Victoria)
26
and
leasehold improvements associated with Australian leased properties to ANZ ServiceCo;
ANZ transferring all the shares in ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo to ANZ
NOHC; and
ANZ NOHC transferring all the shares in ANZ to ANZ Bank HoldCo.
5.2 Corporate Structure
Corporate Structure
The corporate structure of the ANZ NOHC Group
11
after implementation of the Restructure is illustrated
below:
ANZ NOHC GROUP – CORPORATE STRUCTURE AFTER THE RESTRUCTURE (SIMPLIFIED)
ANZ Group
________________________________________________________________________________________________________________________________________________________
25
Excluding 1853i’s interest in OneTwo Finance Pty Ltd, which will remain indirectly owned by ANZ by way of a separate restructure of
1835i.
26
ANZ’s interest in land and buildings at 833 Collins Street, Docklands comprises ANZ Centre Trust, which owns 833 Collins Street,
Docklands, ANZ Centre Chattels Trust which owns the leasehold improvements, furniture and equipment for 833 Collins Street,
Docklands and ANZ Centre Pty Ltd, which is the trustee of these trusts.
ANZ NOHC
(new company)
(shares listed on ASX
and NZX)
100%
Shareholders
100%
100%
ANZ Bank HoldCo
(new company)
ANZ ServiceCo
(new company)
ANZ Non-Bank
HoldCo
(new company)
ANZ
Banking subsidiaries
(including ANZ NZ)
100%
100%
ANZ NOHC Group
ANZ Bank Group
ANZ Non-Bank Group
Specific non-banking
interests and
investments
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
110
25
Legal Entities
After implementation of the Scheme, ANZ NOHC will be the parent entity of the ANZ NOHC Group and
replace ANZ as the listed holding company of the ANZ Group. It will generally function as a non-operating
holding company and will not carry on its own business or operations. ANZ NOHC will be an authorised
NOHC under the Banking Act. After implementation of the Business Restructure, ANZ NOHC will have three
subsidiaries:
ANZ Bank HoldCo, which will be the new non-operating holding company of the ANZ Bank Group.
ANZ, as the regulated ADI entity, will be wholly owned by ANZ Bank HoldCo and will continue to be
the parent entity of the ANZ NOHC Group’s offshore regulated banking subsidiaries (e.g. ANZ NZ and
other international banking businesses) and insurance businesses (including mortgage insurance and
captive insurance);
ANZ Non-Bank HoldCo, which will be the new non-operating holding company for certain of ANZ
NOHC Group’s non-banking subsidiaries and equity investments in banking-adjacent businesses,
including the beneficial interests in the 1835i trusts, the non-controlling interest in the ANZ Worldline
Payment Solutions joint venture and equity interests in Pollination, Lygon and TIN; and
ANZ ServiceCo, which will be established to become an internal service company. ANZ ServiceCo will
initially own certain property interests.
ANZ Non-Bank HoldCo and its subsidiaries and ANZ ServiceCo comprise the ANZ Non-Bank Group. The ANZ
Non-Bank Group will initially be modest in scale and is expected to be primarily used as a vehicle for
developing or acquiring non-banking businesses (including banking-adjacent businesses).
As part of the Restructure, it is intended that intragroup services and resourcing agreements will be put in
place to set out the terms on which:
ANZ ServiceCo can, in the future, potentially provide certain central shared services across the ANZ
Group. These services could include corporate functions such as group property, group mergers and
acquisitions and strategy, investor relations, procurement and company secretarial services. APRA
has required that business functions that are critical to the businesses and service delivery of the ANZ
Bank Group will remain with their respective groups and will not be transferred to ANZ ServiceCo; and
ANZ Group members can access certain resources (including employees and technology), materials or
assistance that are retained by ANZ.
These agreements will be on standard commercial terms and have regard to applicable prudential
standards and ANZ Group policies.
5.3 Corporate Governance
Constitution
The rights, roles and responsibilities of ANZ NOHC shareholders and directors and the rules governing the
internal management of ANZ NOHC are set out in the ANZ NOHC Constitution.
ANZ NOHC will continue to have substantially the same corporate governance framework and
arrangements as ANZ, apart from certain changes that relate to procedural and administrative matters (see
Section 9.4 of the Explanatory Memorandum).
Board Committee Charters and Governance Policies
The terms of ANZ NOHC Group Board committee charters and governance policies after implementation of
the Restructure will be in substantially the same form and structure as the existing ANZ Group’s Board
111
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
26
committee charters and governance policies, subject to certain changes that will be made to reflect the
structure of the ANZ Group after implementation of the Restructure.
Company Boards and Senior Management
If the Restructure is implemented, there will be a Board of ANZ NOHC and of each of ANZ Bank HoldCo,
ANZ, ANZ Non-Bank HoldCo and ANZ ServiceCo. The composition of each Board will reflect the business
operations, market risks and regulatory considerations for each entity
27
:
ANZ NOHC GROUP – BOARDS OF DIRECTORS
DIRECTOR
BOARD REPRESENTATION
ROLE
ANZ
NOHC
ANZ
BANK
HOLDCO
ANZ
ANZ
NON-
BANK
HOLDCO
Paul O’Sullivan Chairman, Independent Non-Executive Director
Shayne Elliot Chief Executive Officer, Executive Director
Ilana Atlas AO Independent Non-Executive Director
Jane Halton AO PSM Independent Non-Executive Director
Sir John Key GNZM AC Independent Non-Executive Director
Graeme Liebelt Independent Non-Executive Director
John Macfarlane Independent Non-Executive Director
Christine O’Reilly Independent Non-Executive Director
Jeff Smith Independent Non-Executive Director
Vacant Independent Non-Executive Director
ANZ
In this regard, it is proposed that the membership of the:
ANZ NOHC Board will be identical to the current membership of the ANZ Board. After implementation
of the Restructure, the ANZ NOHC Board will be responsible for the oversight and strategic direction
of the ANZ NOHC Group;
ANZ Bank HoldCo and ANZ Boards will mirror the ANZ NOHC Board but will also include one non-
executive director who is not on the Board of ANZ NOHC and ANZ Non-Bank Group. The ANZ Bank
HoldCo and ANZ Boards will be responsible for the oversight of the ANZ NOHC Group’s banking
businesses; and
ANZ Non-Bank HoldCo Board will mirror the ANZ NOHC Board. The ANZ Non-Bank HoldCo Board will
be able to appoint additional independent non-executive directors (who are not on the ANZ NOHC,
ANZ Bank HoldCo and ANZ Boards) as the non-banking business grows in the future. The ANZ Non-
Bank HoldCo Board will be responsible for the oversight of the ANZ NOHC Group’s non-banking
businesses and assets that are owned by ANZ Non-Bank HoldCo.
The Board of ANZ ServiceCo will have a different structure, reflecting the nature of its operations. It will
comprise an independent non-executive director and appropriately qualified senior management from the
ANZ NOHC Group.
The Restructure will not have any impact on the ANZ Group’s executive committee, which will continue to
operate on a groupwide basis. It is proposed that the executive committee will continue to comprise
28
:
________________________________________________________________________________________________________________________________________________________
27
Subject to any changes to the Board prior to implementation of the Restructure as part of the normal Board renewal process (and
unrelated to the Restructure).
28
Subject to any appointments or resignations prior to implementation of the Restructure (and unrelated to the Restructure).
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
112
27
ANZ NOHC GROUP – EXECUTIVE COMMITTEE
EXECUTIVE COMMITTEE MEMBER ROLE
Shayne Elliot Chief Executive Officer
Farhan Faruqui Chief Financial Officer
Kevin Corbally Group Chief Risk Officer
Maile Carnegie Group Executive Australia Retail
Antonia Watson CEO of New Zealand
Mark Whelan Group Executive, Institutional
Gerard Florian Group Executive Technology & Group Services
Kathryn van der Merwe Group Executive Talent & Culture and Service Centres
Antony Strong Group Executive Strategy & Transformation (effective 1 November 2022)
ANZ
5.4 Regulatory Framework
After implementation of the Restructure, APRA’s primary supervision focus will be on ANZ NOHC, ANZ and
ANZ’s subsidiaries:
ANZ NOHC will be a non-operating holding company that is authorised by APRA (i.e. an authorised
NOHC). It will be subject to regulation under the Banking Act and under certain APRA prudential
standards. It will be required to comply with the conditions of APRA’s NOHC authorisation (which are
summarised below) and as the head of a Level 3 group, will be required to ensure that a range of
APRA prudential standards are applied appropriately throughout the ANZ NOHC Group. On a
standalone basis, as it is not an ADI and will have limited activities, it will not be subject to ADI-specific
regulation by APRA;
ANZ Bank Group (comprising ANZ Bank HoldCo, ANZ and ANZ’s banking subsidiaries including ANZ NZ)
will own the ANZ NOHC Group’s core banking businesses and ADIs and will continue to be subject to
the full range of APRA’s prudential and reporting regulations for ADIs (including standards in relation
to capital adequacy and liquidity); and
ANZ Non-Bank Group (comprising ANZ Non-Bank HoldCo and ANZ ServiceCo) will own certain of the
ANZ NOHC Group’s banking-adjacent businesses and will not be subject to ADI-specific regulation. As
noted above, ANZ NOHC will be required to apply certain APRA prudential and reporting standards
appropriately throughout the ANZ NOHC Group and therefore may require entities in the ANZ Non-
Bank Group to comply with certain prudential requirements where it considers it appropriate to do so
to protect the ANZ NOHC Group or its customers or where APRA has required ANZ NOHC to do so.
APRA’s authorisation of ANZ NOHC as a non-operating holding company under the Banking Act is subject to
a number of conditions, including:
ANZ Bank HoldCo and ANZ must have an independent director who is not on the Board of ANZ NOHC
or any ANZ Non-Bank Group entity;
ANZ NOHC must not undertake any activities other than those approved by APRA (e.g. providing ANZ
NOHC Group executive leadership, holding investments in subsidiaries, raising funds to invest in or
support subsidiaries or to conduct its own activities or other activities required to comply with its
prudential obligations);
ANZ NOHC must obtain a no-objection confirmation from APRA prior to commencing material
activities in the ANZ Non-Bank Group;
ANZ must retain ownership of, or access to, all functions critical to its operations;
the ANZ NOHC Group’s non-banking businesses must be financially and operationally separable from
ANZ; and
113
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
28
ANZ NOHC must ensure that the ANZ Non-Bank Group does not carry on any activities that expose the
ADI to excessive risk (and ensure that the ANZ Bank Group transfers to the ANZ Non-Bank Group any
activities that APRA notifies in writing to constitute an undue risk to the ADI).
APRA has the ability to review and modify these conditions at any time if it considers it appropriate to do
so.
There will be no change to the ANZ Group’s risk management framework after implementation of the
Restructure. However, the ANZ NOHC Group’s risk management framework and risk appetite statement
may change over time as the ANZ Non-Bank Group develops.
5.5 Pro Forma Historical Financial Information and Regulatory Capital
Basis of Preparation
The Explanatory Memorandum pro forma 1HY22 financial information has been prepared by the ANZ
Group and was subject to review by KPMG Transaction Services. KPMG Transaction Services’ Limited
Assurance Investigating Accountant’s Report is set out in Annexure 2 to the Explanatory Memorandum.
The Explanatory Memorandum pro forma historical financial information:
focuses on the disaggregation of the ANZ NOHC Group’s consolidated financial information to show
the ANZ NOHC, ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo on a standalone basis
and reflects the intended legal structure of the ANZ NOHC Group after implementation of the
Restructure; and
has not been adjusted for one off cash transaction and implementation costs associated with the
Restructure (estimated at $35 million before tax, including stamp duty of $10 million) or additional
ongoing costs that will be incurred if the Restructure is implemented (estimated at less than
approximately $5 million per annum before tax).
Consequently, the pro forma consolidated 1HY22 financial information for the ANZ NOHC Group is identical
to the ANZ Group’s reported consolidated 1HY22 financial information.
Grant Samuel has made adjustments to the Explanatory Memorandum pro forma consolidated 1HY22
financial information to show the pro forma impact of these one-off costs and additional ongoing costs on
the ANZ Group’s 1HY22 financial information as if the Restructure had been implemented in the historical
period.
The movement between the Explanatory Memorandum pro forma 1HY22 financial information and the
Grant Samuel pro forma 1HY22 financial information is indicative of the impact of the Restructure on the
ANZ Group.
Pro Forma Income Statement
The Explanatory Memorandum pro forma 1HY22 consolidated income statement of the ANZ NOHC Group
set out in Section 6.4 of the Explanatory Memorandum illustrates the 1HY22 income statement of the ANZ
Bank HoldCo, ANZ Non-Bank HoldCo, ANZ ServiceCo, ANZ NOHC and the ANZ NOHC Group assuming that
the Restructure was in place during the period. The pro forma ANZ NOHC standalone income statement
assumes that surplus capital in ANZ Bank HoldCo is repaid to ANZ NOHC by way of a dividend payment of
$1.9 billion
29
. The dividend income is eliminated on consolidation.
The proportion of pro forma 1HY22 operating income and NPAT represented by each of these entities in
the ANZ NOHC Group (before intercompany dividends and other consolidation adjustments) are
summarised below:
________________________________________________________________________________________________________________________________________________________
29
The surplus capital amount of $1.9 billion is illustrative only. Any return of capital is subject to regulatory approvals and will depend on
the circumstances and levels of capital at the time that the Restructure is implemented.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
114
29
ANZ NOHC GROUP – PRO FORMA DECONSOLIDATED 1HY22 OPERATING INCOME AND NPAT ($ MILLIONS)
Explanatory Memorandum and Grant Samuel analysis
The pro forma 1HY22 deconsolidated income statement (excluding intercompany dividends) shows that
almost 100% of the ANZ NOHC Group’s pro forma operating income and more than 100% of its pro forma
NPAT is attributable to ANZ Bank HoldCo. ANZ NOHC does not carry on its own business or operations and
therefore has no pro forma operating income or pro forma NPAT (excluding intercompany dividends that
are eliminated on consolidation). The ANZ Non-Bank Group (comprising ANZ Non-Bank HoldCo and ANZ
ServiceCo) has nominal pro forma operating income and a pro forma net loss after tax on a standalone
basis, reflecting:
small losses incurred by the non-banking businesses owned by ANZ Non-Bank HoldCo ($(3) million of
pro forma operating income and a $17 million pro forma loss after tax); and
intragroup arrangements between ANZ Bank HoldCo and ANZ ServiceCo for the utilisation of property
assets held by ANZ ServiceCo as well as interest payments on the short term intragroup loan provided
by ANZ to ANZ ServiceCo to fund the acquisition of those property assets ($15 million of pro forma
operating income and $5 million of pro forma NPAT).
The pro forma 1HY22 consolidated income statement of the ANZ NOHC Group is summarised below:
SUMMARISED ACTUAL AND PRO FORMA 1HY22 CONSOLIDATED INCOME STATEMENT ($ MILLIONS)
ANZ GROUP
ACTUAL
ANZ NOHC GROUP
EXPLANATORY
MEMORANDUM
GRANT SAMUEL
Operating income 9,542 9,542 9,542
Operating expenses (4,791) (4,791) (4,794)
Cash profit from continuing operations excluding large
and notable items
3,156 3,156 3,154
NPAT attributable to ANZ shareholders 3,530 3,530 3,528
STATISTICS
Operating expenses to operating income 50.5% 50.5% 50.5%
Return on equity
15
11.3% 11.3% 11.3%
Basic earnings per share 125.7c 125.7c 125.6c
Dividends per share 72c 72c 72c
Dividend payout ratio
16
64% 64% 64%
Amount of dividend franked 100% 100% 100%
Explanatory Memorandum and Grant Samuel analysis
0.0%
0.1%
-0.5%
100.3%
0.0%
0.2%
0.0%
99.9%
ANZ
NOHC
ANZ
ServiceCo
ANZ
Non-Bank
HoldCo
ANZ
Bank
HoldCo
Pro Forma Operating incomePro Forma NPAT
115
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
30
Using the Explanatory Memorandum pro forma 1HY22 consolidated income statement as a starting point,
the Grant Samuel pro forma 1HY22 consolidated income statement assumes $5 million per annum of
additional ongoing costs (i.e. $2.5 million of additional ongoing costs for 1HY22) and a corporate tax rate of
30%.
The Grant Samuel pro forma 1HY22 consolidated income statement indicates that the Restructure has no
material impact on the ANZ Group’s income statement or its key statistics. There is a $2 million reduction
in pro forma cash profit from continuing operations excluding large and notable items and pro forma NPAT
attributable to ANZ shareholders. In particular, there is no impact on the ANZ Group’s dividend payout
ratio or the extent of franking. ANZ has also stated in the Explanatory Memorandum that the Restructure
will not affect the dividend payout ratio.
Pro Forma Balance Sheet
The Explanatory Memorandum pro forma balance sheet of the ANZ NOHC Group set out in Section 6.3 of
the Explanatory Memorandum illustrates the balance sheet of ANZ Bank HoldCo, ANZ Non-Bank HoldCo,
ANZ ServiceCo, ANZ NOHC and the ANZ NOHC Group at 31 March 2022 1HY22 assuming that the
Restructure was in place on that date. The pro forma balance sheet of the ANZ NOHC Group assumes that
the equity of ANZ is split between ANZ Bank HoldCo, ANZ Non-Bank HoldCo and ANZ ServiceCo by way of:
a transfer of capital in ANZ Bank HoldCo to ANZ NOHC, which subsequently injects capital into ANZ
Non-Bank HoldCo and ANZ ServiceCo as a capital contribution;
surplus capital in ANZ Bank HoldCo has been repaid to ANZ NOHC by way of a dividend payment of
$1.9 billion
29
; and
the assets transferred to ANZ ServiceCo are part funded by a short term intragroup loan provided by
ANZ to ANZ ServiceCo on an arms’ length basis.
The proportion of pro forma total assets and net assets represented by each of these entities at 31 March
2022 (before investments in subsidiaries and other consolidation adjustments) are summarised below:
ANZ NOHC GROUP – PRO FORMA DECONSOLIDATED 31 MARCH 2022 TOTAL ASSETS AND NET ASSETS ($ MILLIONS)
Explanatory Memorandum and Grant Samuel analysis
The pro forma deconsolidated balance sheet of the ANZ NOHC Group at 31 March 2022 (excluding
investments in subsidiaries) shows that the vast majority of the ANZ NOHC Group’s total assets and net
assets are attributable to the ANZ Bank HoldCo. Excluding investments in subsidiaries (which are
eliminated on consolidation), ANZ NOHC’s only asset is surplus capital (i.e. capital that is surplus to the
3.0%
0.2%
0.7%
96.1%
0.2%
0.1%
0.0%
99.7%
ANZ
NOHC
ANZ
ServiceCo
ANZ
Non-Bank
HoldCo
ANZ
Bank
HoldCo
Total assetsNet assets
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
116
31
regulatory requirements of the ANZ Bank Group that has been paid as a dividend to ANZ NOHC net of the
amount of capital provided by ANZ NOHC to ANZ Non-Bank HoldCo to enable the acquisition of the non-
banking businesses from ANZ), reflecting its nature as a non-operating holding company. The ANZ Non-
Bank Group (comprising ANZ Non-Bank HoldCo and ANZ ServiceCo) has relatively small pro forma total
assets ($1.4 billion) and pro forma net assets ($541 million) on a standalone basis, reflecting:
ANZ Non-Bank HoldCo’s investments in banking-adjacent businesses at their carrying value, along with
associated cash, working capital and tax balances (pro forma total assets of $467 million and pro
forma net assets of $426 million); and
ANZ ServiceCo’s ownership of the land and buildings comprising 833 Collins Street, Docklands and
leasehold improvements associated with Australian leased properties along with amounts due from
other ANZ NOHC Group entities for the provision of office space (pro forma total assets of $981
million and pro forma net assets of $115 million).
The pro forma consolidated balance sheet of the ANZ NOHC Group at 31 March 2022 is summarised below:
SUMMARISED ACTUAL AND PRO FORMA CONSOLIDATED BALANCE SHEET ($ MILLIONS)
ANZ GROUP
ACTUAL
ANZ NOHC GROUP
EXPLANATORY
MEMORANDUM
GRANT SAMUEL
Total assets 1,017,361 1,017,361 1,017,326
Total liabilities (955,605) (955,605) (955,599)
Net assets attributable to ANZ shareholders 61,747 61,747 61,718
Net tangible assets attributable to ANZ shareholders 57,679 57,679 57,650
STATISTICS
Net tangible assets per share $20.64 $20.64 $20.63
Explanatory Memorandum and Grant Samuel analysis
Using the Explanatory Memorandum pro forma balance sheet at 31 March 2022 as a starting point, the
Grant Samuel pro forma consolidated balance sheet at 31 March 2022 assumes $35 million of one off cash
transaction and implementation costs associated with the Restructure (including $10 million of stamp duty
that is not tax deductible) and a corporate tax rate of 30%
30
.
The Grant Samuel pro forma consolidated balance sheet at 31 March 2022 indicates that the Restructure
has no material impact on the ANZ Group’s balance sheet or its key statistics. There is a $29 million
30
reduction in pro forma net assets and pro forma net tangible assets attributable to ANZ shareholders and a
1 cent reduction in pro forma net tangible assets per share.
The Restructure will have no impact on the overall funding requirements or debt issuance capacity of the
ANZ Group. However, ANZ NOHC will have the ability to raise debt (or raise equity as a listed entity) to
provide funding support to the ANZ NOHC Group (both the ANZ Bank Group and the ANZ Non-Bank Group)
as needed including, potentially, to refinance (in whole or in part) the short term intragroup loan from ANZ
to ANZ ServiceCo. ANZ NOHC’s funding program will be separate from, and in addition to, the ANZ Group’s
existing ADI funding programs. ANZ Non-Bank Group will not have its own separate funding program (as
funding from ANZ NOHC should be cheaper than individual non-bank businesses could achieve).
The short and long term credit ratings of ANZ and its wholly owned banking subsidiaries are expected to
remain unchanged after implementation of the Restructure. ANZ NOHC is expected to have an investment
grade credit rating below that of ANZ, reflecting the structural subordination of ANZ NOHC’s obligations
which depend on upstream dividends from ANZ Bank Group and ANZ Non-Bank Group or external capital
raisings to support its cash flow requirements.
________________________________________________________________________________________________________________________________________________________
30
Only 83% of the $25 million in one off cash transaction and implementation costs (excluding stamp duty) are tax deductible. The after
tax costs have been calculated as $25 million x 83% x (1-30%) + $25 million x 17% + $10 million (stamp duty) = $29 million.
117
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
32
Pro Forma Regulatory Capital
After implementation of the Restructure, ANZ NOHC will be required to hold adequate capital to reflect the
risks of the entire group. The capital requirements of ANZ NOHC will be the sum of:
the ANZ Bank Group’s capital requirements, which will continue to be determined by existing APRA
requirements; and
the ANZ Non-Bank Group’s capital requirements, which will be assessed using an independently
validated and ANZ NOHC Board approved economic capital framework and model developed by ANZ.
The ANZ Bank Group’s Level 2 pro forma capital requirements at 31 March 2022 are summarised below:
ACTUAL AND PRO FORMA LEVEL 2 CAPITAL RATIOS AT 31 MARCH 2022
ANZ
ACTUAL
ANZ BANK GROUP
PRO FORMA
31
CET1 capital ($ millions) 50,511 50,396
Tier 1 capital ($ millions) 58,001 57,886
Tier 2 capital ($ millions) 14,780 14,780
Total capital (Tier 1 + Tier 2) ($ millions) 72,781 72,666
Risk weighted assets ($ millions) 437,910 437,910
CAPITAL ADEQUACY RATIOS
CET1 capital ratio 11.5% 11.5%
Tier 1 capital ratio 13.2% 13.2%
Total capital ratio 16.6% 16.6%
Leverage ratio 5.2% 5.2%
Liquidity coverage ratio 132% 132%
Net stable funding ratio 123% 123%
ANZ Group and Grant Samuel analysis
ANZ has not provided pro forma regulatory capital or capital ratios in the Explanatory Memorandum. Grant
Samuel has calculated pro forma Level 2 capital ratios for ANZ Bank Group at 31 March 2022 by:
adding back to CET 1 capital ANZ’s CET1 deduction for non-banking net assets of $455 million
32
; and
deducting from CET 1 capital:
• $541 million of capital paid as a dividend to ANZ NOHC and provided by ANZ NOHC to the ANZ
Non-Bank Group as capital to enable the acquisition of the property/lease net assets ($115
million) and the non-banking businesses net assets ($426 million) from ANZ; and
• one off cash transaction and implementation costs associated with the Restructure of $29 million
after tax
30
(which would result in a reduction in retained earnings).
No net adjustment has been made to risk weighted assets. While the carrying value of ANZ’s property
assets of $981 million (which were previously included in risk weighted assets with a 100% weighting)
would be deduced from risk weighted assets, the right of use assets created by ServiceCo leasing the
property assets back to ANZ would be included in risk weighted assets (and would also be risk weighted to
100%). For the purposes of this analysis, it has been assumed that there is no net impact on risk weighted
assets.
________________________________________________________________________________________________________________________________________________________
31
The ANZ Bank Group’s Level 2 pro forma capital ratios at 31 March 2022 have been calculated prior to any return of surplus capital from
the ANZ Bank Group to ANZ NOHC to enable a like-for-like comparison with ANZ’s Level 2 actual capital ratios at 31 March 2022.
32
The CET1 deduction added back differs from the non-banking net assets of $426 million as not all non-banking liabilities are eligible to
offset capital deductions under APRA rules.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
118
33
Grant Samuel’s analysis indicates that the Restructure does not have any material impact on ANZ’s Level 2
pro forma capital adequacy ratios. The Restructure also has no impact on ANZ’s Level 2 pro forma leverage
ratio, pro forma liquidity ratio and pro forma net stable funding ratio.
Level 3 capital requirements are yet to be finalised by APRA. However, ANZ does not expect any material
change in its overall capital position as a result of the Restructure.
119
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
34
6 Evaluation of the Restructure (including the Scheme)
6.1 Summary
In Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best interests of ANZ
shareholders.
The Australian banking industry has changed significantly over the last decade, with traditional banking
facing headwinds from a number of sources as well as transformational digital and technological change
required to meet constantly evolving customer expectations. Over the past six years, the ANZ Group has
also undergone a period of substantial simplification and, with this process largely complete, has entered a
new phase focused on growth and areas where it can deliver better outcomes for customers and provide
returns for shareholders. To address these challenges and opportunities, the ANZ Group has adopted a
strategy which envisages complementing its core banking business with a range of non-banking businesses
focused on infrastructure “platforms” and digital “ecosystems” of businesses and partnerships that provide
relevant, efficient and connected services, tools and insights for customers.
The combination of having an ADI, ANZ, as the parent entity of the ANZ Group and the highly regulated
nature of ADIs has presented challenges for the ANZ Group in the execution of this strategy. Non-banking
businesses are not intended by APRA to be subject to banking regulation and the “one-size-fits-all”
regulatory requirements that an ADI must comply with do not fit well with the agile operating
environments that are critical to the success of start-up or early stage non-banking businesses. These
factors have put the ANZ Group at a competitive disadvantage (at least relative to non-ADIs) and
constrained the growth of its non-banking businesses. Owning and effectively operating a non-banking
business within an ADI structure was so challenging for ANZi that the decision was made to separate the
business from ANZ and create 1835i as a standalone entity. However, relinquishing direct ownership and
operational control is not an ideal solution and it is in the interests of ANZ and its shareholders for ANZ to
best position itself to achieve its strategic objectives in a constantly changing environment.
The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and maximise the returns from those opportunities for shareholders. In particular,
the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital structure and
operating environment with a “fit-for-purpose” risk management and governance framework (including
decision making/approval processes and remuneration structures). Furthermore, the Restructure more
appropriately aligns the ANZ Group’s corporate structure with APRA’s regulatory framework as APRA and
other regulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions
with the broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank
Group should also put ANZ in a clearer position in the event recovery actions are required or recovery
progresses to resolution as contagion risk should be lower. In short, the Restructure should facilitate the
delivery of a broad range of non-banking products and services to customers while maintaining, if not
enhancing, appropriate protections for ANZ depositors.
The Restructure will have no immediate impact on the underlying businesses and strategy, group
regulatory capital requirements or, for the most part
33
, Board or management of the ANZ Group. There will
be no change to the ANZ Group’s indebtedness, its overall funding requirements or its debt issuance
capacity as a result of the Restructure and there is not expected to be any change to ANZ’s credit ratings.
While ANZ NOHC is expected to have an investment grade credit rating below that of ANZ, the Restructure
is not expected to have any immediate impact on funding costs for the ANZ Group as there is no intention
for ANZ NOHC to raise debt finance in the short term.
________________________________________________________________________________________________________________________________________________________
33
One of the conditions of APRA’s NOHC authorisation is that ANZ Bank HoldCo and ANZ must have an independent director who is not on
the Board of ANZ NOHC or any ANZ Non-Bank Group entity to safeguard the interests of depositors.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
120
35
ANZ shareholders
34
will have the same number of shares in ANZ NOHC as they currently hold in ANZ and
ANZ NOHC shares will have the same dividend and voting rights as ANZ shares. ANZ NOHC will continue to
have the ability to pay fully franked dividends and the Restructure will have no impact on the accumulated
franking credit balance or the extent to which the ANZ NOHC Group generates franking credits in the
future. The Restructure is not expected to have any adverse tax consequences for relevant Australian
resident shareholders. In short, there is no impact on the economic interest of ANZ shareholders
34
. There
will be no impact on ANZ NOHC’s ability to undertake future on-market share buybacks. The Restructure
will also have no direct impact on customers and no material impact on the ANZ Group’s employees.
The Restructure is not a “must do” transaction. The status quo would continue to offer ANZ shareholders a
financially sound exposure to one of Australia’s largest banks and the ANZ Group could continue to execute
its strategy as it has been doing for the past three years. However, the ability to successfully grow its non-
banking businesses should be enhanced by these businesses being owned by a legal entity, ANZ Non-Bank
HoldCo, which is structurally separate from the ANZ Group’s banking businesses. The ANZ Board believes
that, of the alternatives considered, the Restructure will provide the optimal structure for the ANZ Group to
achieve its objectives to grow its non-banking activities while meeting its obligations to APRA and its
depositors. If the Scheme is not approved and the Restructure is not implemented, the ANZ Group will be
in a sub-optimal position in executing its strategy to grow its non-banking businesses and deliver a broad
range of non-banking products and services to customers.
The potential benefits of the Restructure are not quantifiable and will not deliver any significant
incremental short term value to shareholders. The real value of the Restructure will only be realised over
time if the ANZ NOHC Group can materially increase the scale of its non-banking activities. On the other
hand, the Restructure has few disadvantages and risks, other than one-off cash transaction costs and
additional ongoing operating and corporate costs that will be incurred if the Restructure proceeds, both of
which are immaterial in the context of the ANZ Group as a whole, and certain implementation risks. The
key risk is the lack of a formal regulatory framework for Australian NOHCs of ADIs and the potential for any
formal Level 3 regulatory framework subsequently put in place by APRA to differ significantly from the
conditions set out in APRA’s NOHC authorisation. While the risks associated with the Restructure cannot
be disregarded, they are, for the most part, not beyond the normal risks of any corporate restructuring
transaction and most have mitigating factors that should minimise their impact.
The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guarantee
that the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile of
the non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However, growing its non-banking businesses is a key component of the ANZ Group’s current
strategy which has been publicly stated and pursued for some time. Furthermore, shareholders are not
being asked to vote on the appropriate strategy for the ANZ Group. This is a separate question to whether
the Restructure is in the best interests of shareholders.
The critical question is whether ANZ shareholders are likely to be better off if the Restructure is
implemented than if the ANZ Group’s current corporate structure is maintained. The evaluation is
essentially subjective. However, on balance, in Grant Samuel’s view, the potential advantages of the
Restructure, while uncertain, outweigh the disadvantages and risks, which are minimal, and shareholders
are ultimately likely to be better off if the Restructure is implemented.
The Restructure comprises the Scheme and the Business Restructure. The Scheme is subject to the
approval of ANZ shareholders. The Business Restructure does not require the approval of ANZ
shareholders but is conditional on, and is expected to be undertaken immediately after, implementation of
________________________________________________________________________________________________________________________________________________________
34
Other than ineligible foreign shareholders.
121
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
36
the Scheme. Consequently, in Grant Samuel’s opinion, the Restructure (including the Scheme) is in the best
interests of ANZ shareholders.
6.2 Background
The Australian banking industry has changed significantly over the last decade. Traditional banking is facing
headwinds from long term low growth and declining returns, greater competitive intensity (particularly
from non-bank competitors such as non-bank lenders, buy-now pay-later and other emerging financial
technology companies) and substantial regulatory scrutiny.
In addition, the pace and scope of digital and technological change required to meet constantly evolving
customer expectations has been transformational. Retail banking customers are increasingly digitally
connected and expect a fully integrated financial services digital solution that combines traditional banking
(e.g. deposit-taking and lending) with adjacent non-banking offerings (e.g. cashback awards programs and
personalised money management services). Commercial and institutional banking customers are
increasingly seeking business banking solutions that are digital, automated, reliable and easily integrated
with their existing systems. The investment required to meet evolving customer expectations is substantial
and the risks associated with investing in new technologies and entering new markets are fundamentally
different from the risks associated with traditional banking activities.
Coupled with these industry-wide developments have been changes within the ANZ Group. Over the past
six years, the ANZ Group has undergone a period of substantial simplification involving the sale of 29 non-
core businesses and the release of over $13 billion of capital. With this process largely complete, the ANZ
Group has entered a new phase focused on growth and areas where it can deliver better outcomes for
customers and provide returns for shareholders.
To address these challenges and opportunities, the ANZ Group has adopted a strategy that envisages
complementing its core banking business with a range of non-banking businesses focused on infrastructure
“platforms” and digital “ecosystems” of businesses and partnerships that provide services, tools and
insights for customers that are relevant, efficient and connected. Some of these non-banking businesses
will be developed and/or owned by the ANZ Group while others will be provided through partnerships with
third parties. Underpinning this strategy is simplicity and the organisational flexibility to respond quickly to
the changing environment.
The ANZ Group is able to execute its strategy under its current corporate structure as it has been doing for
the past three years. However, the combination of having an ADI as the parent entity of the ANZ Group
and the highly regulated nature of ADIs makes the current structure sub-optimal as the:
non-banking businesses are not intended by APRA to be subject to banking regulation; and
risk management and governance frameworks (including approval processes and remuneration
structures) and regulatory capital requirements that an ADI is required to comply with under APRA’s
prudential standards do not fit well with the competitiveness (e.g. the ability to move quickly and
easily), operational and capital efficiency and innovation that are critical to the success of start-up,
non-banking businesses.
Owning and effectively operating a non-banking business within an ADI structure was so challenging for
ANZi that the decision was made by the ANZ Group to separate the business from ANZ and create 1835i as
a standalone entity in July 2021 to help accelerate growth and deliver digital solutions to ANZ customers.
Separation from ANZ allows 1835i to operate more like a start-up business and act quickly as it develops its
pipeline of investments. However, the structure is not ideal. While ANZ continues to fund 1835i
investments, it has had to relinquish direct ownership and operational control over 1835i (although it
retains the beneficial interest in the trusts). The structure also exposes the ANZ Group to increased risk as
it has less control over management, less ability to ensure 1835i’s activities are aligned to the ANZ Group’s
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
122
37
strategy and its involvement is less transparent (as APRA requires that the 1835i brand is not associated
with ANZ).
ANZ has a pipeline of platforms and partnerships at various stages of assessment. Under its current
corporate structure, the ANZ Group is likely to face similar compromises as it seeks to execute its strategy
and grow its non-banking businesses. In short, the existing corporate structure puts the ANZ Group at a
competitive disadvantage (at least compared to non-ADIs) and is a constraint on its future growth.
In this context, it is in the interests of ANZ and its shareholders for ANZ to best position itself to achieve its
strategic objectives in a constantly changing environment.
6.3 Advantages and Benefits
The key benefit of the Restructure is that it results in a more efficient corporate structure that provides the
ANZ Group with an enhanced ability to pursue opportunities that have the potential to provide better
outcomes for customers and to maximise the returns from those opportunities for shareholders.
Under its current corporate structure, ANZ is the parent entity of the ANZ Group. All of the Australian
banking business is conducted through ANZ and all banking and non-banking subsidiaries and investments
are owned by ANZ. As ANZ is also the APRA regulated ADI, the entire corporate structure is subject to full
“one-size fits all” regulation by APRA (i.e. the full range of APRA prudential and reporting standards for ADIs
including standards in relation to capital adequacy and liquidity). After implementation of the Restructure,
the ANZ Group’s non-banking businesses will be owned by a legal entity, ANZ Non-Bank HoldCo, which is
structurally separate from ANZ. ANZ will continue to own the ANZ Group’s banking businesses in Australia
and internationally.
APRA will continue to have oversight of the ANZ NOHC Group. ANZ and its ELE subsidiaries will remain
subject to Level 1 APRA regulation and the ANZ Bank Group (including ANZ, international ADIs (including
ANZ NZ) and other subsidiaries undertaking financial activities) will be subject to Level 2 APRA regulation.
ANZ NOHC and the ANZ Non-Bank Group will not be subject to the full range of APRA’s prudential and
reporting standards that apply to banking activities but will be subject to the different financial and
operational compliance requirements of Level 3 APRA regulation.
In particular, the Restructure will enable the ANZ Non-Bank Group to establish an appropriate capital
structure and operating environment with a “fit-for-purpose” risk management and governance framework
that should enhance its ability to:
operate the non-banking businesses without having to comply with the prescriptive and extensive
regulatory capital requirements and risk management and governance policies and procedures that
apply to ADIs under APRA’s prudential standards, reducing the financial and operational regulatory
burden on the ANZ Non-Bank Group. As outlined above, the ANZ Non-Bank Group will no longer be
subject to the full extent of APRA regulation (i.e. Level 1 or Level 2 regulation relating to financial
soundness, risk management and governance) under which the non-banking businesses currently
operate but will instead be subject to Level 3 regulation. Level 3 regulation is primarily focused on
protecting the banking entities from the intragroup contagion risks associated with the ANZ Non-Bank
Group;
make decisions without the requirement to consider or manage the impact of APRA’s ADI prudential
standards (in particular, approval processes), which should enable the ANZ Non-Bank Group to
increase the speed at which it is able to:
• react to market conditions and their impact on existing non-banking businesses;
• introduce new initiatives to market (i.e. test, launch and scale up new products and services); and
• respond to new third party partnership and other strategic opportunities;
123
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
38
attract and retain appropriately skilled talent as it will be able to:
• adopt remuneration structures that are more heavily weighted to “at risk” incentives, consistent
with the remuneration structures adopted by its competitors (e.g. other start-up or venture
capital businesses) and will not be required to comply with requirements which prescribe
remuneration requirements for senior executives, directors and other employees of ADIs,
including restrictions around “at risk” incentives such as BEAR or any aspects of CPS 511 that are
not appropriate for its business (see Section 3.1 for details); and
• provide a more attractive working environment where employees will not be subject to the
compliance requirements that apply to ADIs (e.g. risk management and governance frameworks,
multiple layers of internal approvals, other regulatory hurdles, reporting requirements etc);
tailor funding structures to meet the risk-return requirements of potential investments (e.g. utilise an
appropriate mix of debt, equity or other instruments). An economic capital model will be adopted to
assess the capital requirements of the ANZ Non-Bank Group, which is expected to result in a more risk
based assessment of potential losses (with the key risks being business, equity investment,
operational and fixed asset risk) rather than the 100% equity funding/deduction from CET 1 capital
that applies under APRA’s Level 2 ADI capital adequacy requirements; and
attract new funding and strategic partners that may be deterred from investing in non-banking
businesses in partnership with an APRA regulated ADI.
The Restructure removes the competitive disadvantages that the ANZ Group has faced in executing its
strategy to grow its non-bank businesses and will essentially “level the playing field” relative to non-ADI
competitors.
Furthermore, the Restructure enables the ANZ Group to achieve these benefits while continuing to meet its
obligations to APRA and protect the interests of depositors. The Restructure more appropriately aligns the
ANZ Group’s corporate structure with APRA’s “one-size-fits-all” regulatory framework. APRA and other
regulators will have better visibility of the ANZ Group’s standalone ADI operations and its interactions with
the broader ANZ Group. The structural separation of the ANZ Bank Group and the ANZ Non-Bank Group
should also put ANZ in a clearer position in the event recovery actions are required or recovery progresses
to resolution as contagion risk should be lower (risks to depositors from the ANZ Group’s non-banking
businesses will be ringfenced or isolated in the ANZ Non-Bank Group).
In short, the Restructure should facilitate the delivery of a broad range of non-banking products and
services to customers while maintaining, if not enhancing, appropriate protections for ANZ depositors.
The benefits of the Restructure should not be overstated. They will not deliver any significant incremental
short term value to shareholders given the relatively small quantum of the net assets being transferred to
the ANZ Non-Banking Group ($426 million of non-banking net assets in ANZ Non-Bank HoldCo and $115
million of property and lease net assets in ANZ ServiceCo). Even in the long term, the benefits of the
Restructure will only be realised if the ANZ NOHC Group successfully executes its strategy and materially
grows its non-banking businesses (e.g. through a substantial non-banking transaction). The Restructure
does not provide any guarantee that the ANZ NOHC Group will be successful in executing its strategy to
grow its non-banking businesses or that any material non-banking acquisition will be made. Such
circumstances may never eventuate. While the ANZ Group has a pipeline of platforms and partnerships at
various stages of assessment, no material non-banking acquisition is currently planned by the ANZ Group.
Nonetheless, there is, at a minimum, the potential for the existing non-banking businesses to grow and
become a greater proportion of the ANZ Group and there is the expectation that change will continue and
that more investment in non-banking businesses will be required to meet changing customer expectations.
The ANZ Group anticipates other benefits in terms of creating transparency and clarity for employees,
customers and investors (in addition to regulators which is discussed above). In theory, this transparency
and clarity for employees, customers and investors should be able to occur under the current structure.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
124
39
There is no impediment to the ANZ Group separately reporting the financial performance of, and other
information on, its non-banking businesses under its current corporate structure, although the relatively
immaterial size and contribution from these non-banking businesses means that this has probably not been
warranted. However, the structural separation should, at least, enable the performance of the ANZ
Group’s banking businesses and non-banking businesses to be more easily monitored and benchmarked by
investors.
Overall, in Grant Samuel’s view, the individual advantages of the Restructure are not overwhelmingly
compelling. However, the Restructure does better position the ANZ Group to take advantage of non-
banking opportunities to achieve its strategic objectives and deliver better outcomes for customers. The
advantages of the Restructure, while not quantifiable, are real and have the potential to create value for
shareholders over time.
6.4 Disadvantages and Risks
The disadvantages of the Restructure are not material. They primarily relate to the costs associated with
implementation of the Restructure.
The Restructure will result in the ANZ Group incurring costs that it would not otherwise incur. These costs
include one-off cash transaction and implementation costs and additional ongoing costs:
ANZ has estimated one-off cash transaction and implementation costs associated with the Restructure
of $35 million before tax (including stamp duty which is expected to be $10 million). These costs
largely relate to adviser fees and costs associated with ANZ’s internal project team. ANZ has advised
that approximately $19 million of these one-off cash transaction and implementation costs will have
been incurred by the ANZ Group by the time of the Scheme meeting and so are not relevant to
shareholders’ consideration of the Scheme. Accordingly, approval of the Scheme will result in
incremental one-off costs of around $16 million (including stamp duty); and
the ANZ Group will incur additional ongoing costs as a result of the Restructure. There will be
incremental operating and corporate costs of less than approximately $5 million per annum (before
tax). These costs largely relate to the incremental resources required to support the new NOHC
structure and the separate ANZ Bank Group and ANZ Non-Bank Group as well as additional costs
associated with ASX listing compliance, governance, reporting and maintaining additional boards.
In the context of the scale of the ANZ Group, the costs associated with implementation of the Restructure
(both one-off and ongoing) are immaterial and have no measurable adverse effect on shareholder returns,
even if the ANZ Group fails to grow its non-banking businesses.
There are also a number of risks associated with the Restructure.
There is a risk that implementation of the Restructure will be delayed, or the Restructure will not be
implemented, even if the Scheme is approved by ANZ shareholders, as there is a regulatory approval
condition precedent to implementation of the Scheme that remains outstanding at the date of this report.
The details of this condition precedent are set out in Section 7.4 of the Explanatory Memorandum (and
summarised in Section 1 of this report). However, in ANZ’s view, this is a non-material regulatory approval
and is a timing risk only. There is no expectation that the regulatory approval will not ultimately be
obtained.
If the Restructure is implemented, the key risks include:
the lack of an existing formal regulatory framework for Australian NOHCs of ADIs. While ANZ has
received APRA’s authorisation of ANZ NOHC as a non-operating holding company under the Banking
Act (subject to the ANZ NOHC Group complying with certain conditions, see Section 5.4), there is a risk
that if/when APRA does formalise its Level 3 regulatory framework for Australian NOHCs of ADIs, the
125
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
40
regulation of ANZ NOHC will differ from the conditions set out in APRA’s NOHC authorisation. This
outcome may have negative consequences for the ANZ NOHC Group. However,
• ANZ has engaged extensively with APRA as part of the authorisation process and has addressed
all issues raised by APRA. It would be unusual if APRA subsequently adopted a framework that
represented a material shift from the position it has adopted to date; and
• the ANZ NOHC Group would expect to be involved (i.e. consulted or given the opportunity to
respond to discussion papers) in any process undertaken by APRA to formalise the regulatory
framework for Australian NOHC ADIs; and
transition and implementation risks. Any corporate restructure is susceptible to complications at an
operational level. There are inevitable risks relating to implementation of the Restructure, including:
• the ability to expand the scope of services currently provided by third parties to ANZ to cover the
ANZ NOHC Group entities (i.e. ANZ NOHC, ANZ Bank HoldCo, ANZ ServiceCo and ANZ Non-Bank
HoldCo) without incurring greater cost or on adverse terms compared to the existing
arrangements;
• ANZ has received rulings to confirm the availability of stamp duty relief in a number of
jurisdictions but stamp duty relief will not be formally granted until after implementation of the
Restructure; and
• operating model disruption and senior management team distraction during the implementation
period.
Grant Samuel does not regard these risks as being beyond the normal risks of any corporate
restructuring transaction. In any event:
• even if the necessary consents to expand the scope of services provided by third parties are not
obtained, any incremental cost would be unlikely to be material in the context of the overall ANZ
Group;
• the provision of rulings confirming the availability of stamp duty relief prior to formal application
for stamp duty relief is the usual basis on which stamp duty relief is received and ANZ expects
that, on the basis that the facts and circumstances of the Restructure remain the same, stamp
duty relief will be available in relation to the Restructure; and
• there is a dedicated project team at ANZ that is responsible for implementation to minimise
operating model disruption and senior management team distraction during the implementation
period.
6.5 Alternatives
The ANZ Board considered a number of alternatives to the Restructure, including a:
dual listed company structure, where two companies retain separate legal entities, ownership and
primary stock exchange listings but operate as a single business (e.g. the Rio Tinto Group and BHP
Group Limited prior to its unification);
stapled security structure, where two or more entities with common ownership are legally bound
together so that their securities cannot be traded separately (e.g. many ASX-listed real estate groups
including Goodman Group, Dexus and Stockland Group); and
minority investment structure where only non-controlling interests are acquired or retained in an
asset (similar to ANZ’s current structure where it has acquired minority investments in non-banking
businesses).
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
126
41
These alternatives and the Restructure were assessed against ANZ’s objectives to pursue its growth
strategies in non-banking activities while meeting its obligations to APRA and its depositors.
Each of the alternatives was considered to have drawbacks:
the features that make a dual listed company structure attractive (e.g. a merger that cannot be
completed without value leakage and/or material risk) do not apply to ANZ. Furthermore, a dual
listed company structure is typically more expensive and complex to establish and operate and would
require an ongoing contractual link between the banking and non-banking entities to ensure all
shareholders are exposed to the benefits and risks of the group as a whole;
a stapled security structure, while the most viable alternative to the Restructure having regard to
ANZ’s objectives, would limit the ANZ Group’s flexibility to raise and deploy capital between the
banking and non-banking entities in the stapled group; and
a minority investment structure, while simpler from a regulatory perspective, would result in the ANZ
Group not having control over key operational and strategic decisions and could risk dilution of the
ANZ brand over time. This type of structure is unlikely to be appropriate for certain non-banking
business investments.
The ANZ Board believes that, of the alternatives considered, the Restructure will provide the optimal
structure for the ANZ Group to achieve its objectives.
6.6 Other Matters
Impact on Underlying Businesses and Strategy
The Restructure will have no direct impact on the underlying businesses or strategy of the ANZ Group. The
ANZ Group will continue to operate as one of the largest banks in Australia and invest in growing its non-
banking businesses.
The non-banking businesses currently represent a very small part of the ANZ Group. The Restructure is
expected to enhance the ANZ Group’s ability to grow its non-banking businesses, but it does not guarantee
that the ANZ Group will be successful in doing so. Some shareholders may not want the ANZ Group to
move away from its core banking business. They may not be comfortable with the different risk profile of
the non-banking businesses and/or the risk of failure and would prefer that the ANZ Group “stick to its
knitting”. However:
growing its non-banking businesses is a key component of the ANZ Group’s current strategy which has
been publicly stated and pursued for some time. Shareholders who are uncomfortable with, or not in
favour of, this strategy have had the opportunity to sell their ANZ shares; and
shareholders are not being asked to vote on the appropriate strategy for the ANZ Group. This is a
separate question to whether the Restructure is in the best interests of shareholders.
In any event, any shareholder objections are likely to be directed more to specific acquisitions rather than
the ANZ Group’s overall strategy. Certainly, there is a wide range of business opportunities that could fall
into “non-banking” activities but which actually have a close alignment with the ANZ Group’s core banking
activities and have the potential to enhance the value proposition for customers and returns to
shareholders.
Impact on Board and Executive Committee
The Restructure will not result in any change to the ANZ Group’s executive committee and minimal changes
to its Boards:
the Board of ANZ NOHC will be identical to the ANZ Board; and
127
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
42
the Boards of ANZ Bank HoldCo, ANZ and ANZ Non-Bank HoldCo will be identical to the Board of ANZ
NOHC except that an independent non-executive director (who is not on the Board of ANZ NOHC and
ANZ Non-Bank HoldCo) will be appointed to the ANZ Bank HoldCo and ANZ Boards. This independent
non-executive director is a condition of APRA’s NOHC authorisation.
The Board of ServiceCo will comprise an independent non-executive director and appropriately qualified
senior management.
Impact on Customers
The Restructure will have no direct impact on ANZ’s customers. The products, pricing, services and support
that ANZ customers currently receive from ANZ will remain the same. ANZ customers will continue to
interact with ANZ as they do currently and any customer contracts with the ANZ Group will continue to be
with the same legal entity (e.g. ANZ for retail banking customers). In particular, depositors will continue to
benefit from the regulatory protections that govern the capital requirements and operations of the ANZ
Group’s banking business.
The Restructure results in a more efficient corporate structure that has the potential to deliver benefits to
customers in terms of an enhanced experience and a broader suite of products and services to meet
expectations, if the ANZ Group is successful in executing its strategy (see Section 6.3 for further discussion).
Impact on Employees
The Restructure will have no material impact on the ANZ Group’s employees. A small number (less than
1%) of current ANZ employees may be transferred to ANZ ServiceCo at some future date under the same
terms and conditions in place at ANZ (except where a change is required by law). In particular, the same
performance and remuneration policies and practices will apply. Moreover, ANZ will consult with
employees and the Finance Sector Union on the Restructure and its impact on transferring employees.
No current ANZ employees are expected to transfer to ANZ Non-Bank HoldCo on implementation of the
Restructure (although new roles are likely to be created as the ANZ Non-Bank Group grows).
ANZ deferred shares, deferred share rights, restricted shares, restricted rights and performance rights that
are held by certain employees will be replaced with ANZ NOHC deferred shares, deferred share rights,
restricted shares, restricted rights and performance right on a one-for-one basis and will continue to be
governed by the relevant plan rules and same offer terms. The ANZ Incentive Plans will continue to operate
and apply after implementation of the Restructure on substantially the same terms and conditions, except
that the incentive plans will be operated by ANZ NOHC and provide interests in ANZ NOHC shares.
Impact on Dividends and Franking Credits
The Restructure is not expected to impact the ability of ANZ NOHC to pay dividends relative to ANZ.
While ANZ NOHC, ANZ Bank HoldCo and ANZ Non-Bank HoldCo will not be operating entities and therefore
will not generate cash from operations, ANZ will be an operating entity and will generate cash from its
operations which will be available to pay cash dividends to ANZ Bank HoldCo which will, in turn be able to
pay cash dividends to ANZ NOHC (in each case subject to APRA requirements). In this regard:
dividend payments from ANZ will continue to be subject to the same APRA regulations and guidelines
in relation to capital adequacy requirements, maintenance of appropriate capital buffers and
regulatory approvals; and
the terms of ANZ’s existing capital notes will be amended to prevent ANZ Bank HoldCo from paying
dividends to ANZ NOHC if dividends are not paid on the capital notes in accordance with their terms
(similar to the current restrictions on ANZ).
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
128
43
Similarly, to the extent that the subsidiaries of, or investments by, ANZ Non-Bank HoldCo generate cash
from their operations or pay distributions, this cash will also be available to pay cash dividends to ANZ
NOHC.
As a result, ANZ NOHC will have accumulated profits and cash from which to pay dividends (and/or other
capital distributions) to ANZ NOHC shareholders.
Historically, ANZ has paid fully franked dividends to shareholders. After implementation of the Scheme, the
franking account balance of ANZ will transfer to ANZ NOHC and the ANZ NOHC Group will continue to
generate the same level of franking credits that are currently generated by the ANZ Group. The ANZ
Group’s available New Zealand franking credits will continue to be held by the ANZ Group. The Restructure
is therefore not expected to impact the capacity of ANZ NOHC to frank dividends.
The Restructure is not expected to result in any change to the dividend guidance of the ANZ Group, which
will continue to target an annual payout ratio of between 60% and 65% of cash profit from continuing
operations excluding large and notable items. However, there can be no guarantee as to the amount or
timing of future dividend payments by ANZ NOHC which will be subject to the discretion of the ANZ NOHC
Board and will depend on, among other criteria, its financial position and capital requirements.
The final dividend for FY22 (scheduled to be paid on 15 December 2022) will be paid by ANZ (not ANZ
NOHC).
If the Restructure is implemented, ANZ NOHC intends to establish a DRP and a bonus option plan on
substantially the same terms as the ANZ DRP and bonus option plan. ANZ shareholders who participate in
the ANZ DRP will agree to participate in the ANZ NOHC DRP in the same manner and to the same extent as
their current participation in the ANZ DRP. Residual balances in the ANZ DRP account of each participant
will be paid by ANZ to ANZ NOHC and applied under the ANZ NOHC DRP.
Impact on Future Share Buybacks
ANZ has historically used on-market share buybacks as a capital management tool to return surplus capital
to shareholders. The most recent on-market share buyback was completed in March 2022 where ANZ
bought back 54.1 million shares for $1.5 billion, reducing its CET1 capital ratio by approximately 35 basis
points.
On-market share buybacks undertaken within the “10/12 limit” set out in the Corporations Act do not
require shareholder approval. The “10/12 limit” restricts the number of ordinary shares that ANZ can buy
back in any rolling 12 month period to 10% of the smallest number of ordinary shares ANZ had on issue
during that 12 month period.
The Restructure will not have any impact on the ANZ Group’s ability to undertake on-market share
buybacks in the future. If an on-market share buyback is considered to be appropriate as part of the ANZ
NOHC Group’s capital management plan, it will be undertaken by ANZ NOHC as the listed entity in the same
manner as on-market share buybacks have previously been undertaken by ANZ. The aggregate number of
ANZ NOHC shares that could be bought back would not exceed more than 10% of the ordinary shares that
ANZ NOHC has on issue when the Scheme is implemented (which will be the same number of shares as ANZ
currently has on issue)
35
. As a result, in assessing ANZ NOHC’s “10/12 limit” for the first 12 months after
implementation of the Scheme, the equity capital structure of ANZ NOHC and ANZ would effectively be
regarded as the same.
________________________________________________________________________________________________________________________________________________________
35
To enable ANZ NOHC to undertake on-market share buybacks after implementation of the Scheme, ANZ will (when ANZ is ANZ NOHC’s
only shareholder) authorise ANZ NOHC to undertake an on-market share buyback in the 12 months after implementation.
129
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
44
Impact on Indebtedness and Credit Ratings
Implementation of the Restructure is not expected to result in any change to the indebtedness of ANZ
Group, its overall funding requirements or its debt issuance capacity. In this regard:
ANZ will continue to operate its own funding program and maintain its own Board approved capital
management strategies (e.g. financial risk appetite and liquidity policies), governance frameworks and
reporting regime reflecting its ADI operations;
ANZ NOHC will have the ability to issue debt instruments to support the funding requirements of both
the ANZ Bank Group and the ANZ Non-Bank Group. ANZ NOHC will establish its own Board approved
capital management strategy and its capital planning process will cover the requirements of the ANZ
NOHC Group as a whole; and
ANZ Non-Bank Group is not expected to have separate funding arrangements and will rely on ANZ
NOHC for funding as ANZ NOHC is expected to have a lower cost of funds than any ANZ Non-Bank
Group entities.
There is also not expected to be any impact on the ANZ Group’s liquidity and net stable funding ratios.
The Restructure is not expected to materially affect the credit ratings of the ANZ Group and its businesses.
The creditworthiness of ANZ and its wholly owned banking subsidiaries is expected to remain unchanged
because the Restructure does not result in any significant change to the ANZ Group’s overall business and
financial profile. ANZ NOHC is likely to obtain an investment grade credit rating below that of ANZ because
of the structural subordination of ANZ NOHC’s obligations. However:
this approach is consistent with the approach taken by the ratings agencies in other financial NOHC
restructures such as Macquarie Bank and Suncorp-Metway, where the credit ratings of the banking
entities remained unchanged but the credit ratings for the new NOHC were one notch lower than the
banking entities; and
the Restructure is not expected to have any immediate impact on overall funding costs for the ANZ
Group as there is no intention for ANZ NOHC to raise debt finance in the short term.
Since announcement of the Restructure in May 2022, there has been no change to ANZ’s ratings or outlook
from its ratings agencies. Final ratings will be determined by the ratings agencies after implementation of
the Restructure.
Impact on Regulatory Capital Requirements
The Restructure is not expected to have any material impact on the ANZ Group’s regulatory capital
requirements. The ANZ NOHC Group’s Level 3 regulatory capital requirements will be the sum of the
current ADI capital requirements plus the ANZ Non-Bank Group capital requirements determined by an
economic capital model. ANZ expects that the total amount of capital held within the ANZ NOHC Group in
aggregate will remain materially the same after implementation of the Restructure.
This position contrasts with precedent financial NOHC restructures undertaken by financial institutions in
Australia (e.g. Macquarie Bank and Suncorp-Metway), where the capital advantages were a primary driver
for the restructure.
Furthermore, it is relevant to note that:
the ANZ Bank Group will continue to be appropriately capitalised after returning any excess capital
(above target levels) to ANZ NOHC; and
non-bank investments represent a capital requirement of $426 million at 31 March 2022 or less than
1% of the ANZ Group’s CET1 capital.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
130
45
There is the potential that the Restructure could result in a regulatory capital advantage to the ANZ NOHC
Group in the future (relative to the regulatory capital requirement under its current structure). A
regulatory capital advantage is only likely to eventuate in circumstances where the risk of potential loss as
assessed by the economic capital model for the ANZ Non-Bank Group is less than the 100% CET 1 capital
deduction that would be required under APRA’s Level 2 ADI capital ratios. For example, in the situation
where:
the ANZ NOHC Group’s existing start-up non-banking businesses grow to a sufficient size over time
and application of the economic capital model subsequently assesses that these non-banking
businesses carry less than a 100% risk of potential loss (i.e. these investments become less risky than
they are currently); and/or
the ANZ NOHC Group acquires a mature non-banking business that application of the economic
capital model assesses carries less than 100% risk of potential loss.
However, neither of these situations is a certain outcome of the Restructure and, in any event, APRA may
adjust the ANZ Bank Group’s prudential capital requirement if it deems the assessment of ANZ Non-Bank
Group’s risk and capital requirements as insufficient.
Taxation Consequences (excluding stamp duty)
ANZ and its Australian resident wholly owned entities are currently members of a tax consolidated group,
with ANZ as the head entity of the group. ANZ has applied for a private binding ruling from the ATO in
respect of certain aspects of the Scheme. Broadly, the private ruling will confirm that the tax consolidated
group will continue to exist with ANZ NOHC as the head entity. As head entity, ANZ NOHC will inherit the
tax attributes of ANZ, including its franking account balance and any carried forward capital losses.
The Scheme is not expected to give rise to any other capital gains tax or other tax related liability for ANZ or
ANZ NOHC.
Similarly, it is expected that the Scheme will have no adverse tax consequences for relevant Australian
resident ANZ shareholders
36
. It is expected that relevant Australian resident ANZ shareholders will be
eligible for rollover relief to defer the capital gains tax consequences of the capital gains tax events relating
to the Scheme. ANZ has applied to the ATO for a class ruling regarding the Australian income tax
consequences of the Scheme for those ANZ shareholders and expects that a final class ruling will be issued
in the form sought after implementation of the Scheme.
ANZ shareholders who are not residents of Australia and are not ineligible foreign shareholders should not
generally be subject to Australian capital gains tax rules if they hold their shares on capital account and their
ANZ shares are not considered “taxable Australian property”. The non-Australian taxation implications for
non-Australian resident shareholders will depend on the country of domicile of the shareholders. Many
countries have similar rollover relief to that available in Australia but some do not. Non-Australian
residents (including ineligible foreign shareholders) should seek their own taxation advice in relation to the
taxation impact of the Scheme.
The analysis set out above outlines the major tax consequences of the Scheme and should be viewed as
indicative only. It does not purport to represent formal tax advice regarding the taxation consequences of
the Scheme. Further details on the taxation consequences of the Scheme for Australian resident
shareholders as well as shareholders resident in New Zealand, the United Kingdom and the United States
are set out in Section 8 of the Explanatory Memorandum. In any event, the tax consequences for
________________________________________________________________________________________________________________________________________________________
36
Relevant Australian resident ANZ shareholders are those who are registered on the ANZ share register at 7.00pm on the record date for
the Scheme, are residents of Australia within the meaning of Section 6(1) of the Income Tax Assessment Act 1936 (Cth), are not
temporary residents within the meaning of Section 995-1(1) of the Income tax Assessment Act 1997 (Cth) and have not elected the
taxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (Cth) to apply in relation to their ANZ
shares.
131
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
46
shareholders will depend on their individual circumstances. If in any doubt, shareholders should consult
their own professional adviser.
Ineligible Foreign Shareholders
Ineligible foreign shareholders will not be entitled to participate in the Scheme and will not receive ANZ
NOHC shares. Under the Scheme, the ANZ NOHC shares that they would otherwise be entitled to will be
issued to a sale agent and sold on the ASX through a sale facility. Ineligible foreign shareholders will receive
the cash proceeds from the sale of those ANZ NOHC shares. Ineligible foreign shareholders may also be
required to pay tax on any profit on that disposal (in their country of residence). However:
their ANZ NOHC shares will be sold for market value;
the ineligible foreign shareholder can acquire ANZ NOHC shares through the ASX following its listing if
it wishes to retain an exposure to the ANZ NOHC Group; and
shareholders representing less than 0.2% of ANZ’s issued ordinary shares are expected to be impacted
by these provisions.
6.7 Shareholder Decision
Grant Samuel has been engaged to prepare an independent expert’s report setting out whether in its
opinion the Scheme is in the best interests of ANZ shareholders and to state reasons for that opinion.
Grant Samuel has not been engaged to provide a recommendation to shareholders in relation to the
Scheme, the responsibility for which lies with the directors of ANZ.
In any event, the decision whether to vote for or against the Scheme is a matter for individual shareholders
based on each shareholder’s views as to value and business strategy, their expectations about future
economic and market conditions and their particular circumstances including risk profile, liquidity
preference, investment strategy, portfolio structure and tax position. In particular, taxation consequences
may vary from shareholder to shareholder. If in any doubt as to the action they should take in relation to
the Scheme, shareholders should consult their own professional adviser.
Similarly, it is a matter for individual shareholders as to whether to buy, hold or sell shares in ANZ or ANZ
NOHC. These are investment decisions upon which Grant Samuel does not offer an opinion and are
independent of a decision on whether to vote for or against the Scheme. Shareholders should consult their
own professional adviser in this regard.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
132
47
7 Qualifications, Declarations and Consents
7.1 Qualifications
The Grant Samuel group of companies provide corporate advisory services in relation to mergers and
acquisitions, capital raisings, debt raisings, corporate restructurings and financial matters generally. The
primary activity of Grant Samuel & Associates Pty Limited is the preparation of corporate and business
valuations and the provision of independent expert’s reports in connection with mergers and acquisitions,
takeovers and capital reconstructions. Since inception in 1988, Grant Samuel and its related companies
have prepared more than 580 public independent expert and appraisal reports.
The persons responsible for preparing this report on behalf of Grant Samuel are Jaye Gardner BCom LLB
(Hons) CA SF Fin GAICD and Stephen Wilson MCom (Hons) CA SF Fin. Each has a significant number of years
of experience in relevant corporate advisory matters. Shaun Yu BBA CFA and Mitchell Skene BEng (Hons)
BCom assisted in the preparation of the report. Each of the above persons is a representative of Grant
Samuel pursuant to its Australian Financial Services Licence under Part 7.6 of the Corporations Act.
7.2 Disclaimers
It is not intended that this report should be used or relied upon for any purpose other than as an
expression of Grant Samuel’s opinion as to whether the Scheme is in the best interests of shareholders.
Grant Samuel expressly disclaims any liability to any ANZ shareholder who relies or purports to rely on the
report for any other purpose and to any other party who relies or purports to rely on the report for any
purpose whatsoever.
Grant Samuel has had no involvement in the preparation of the Explanatory Memorandum issued by ANZ
and has not verified or approved any of the contents of the Explanatory Memorandum. Grant Samuel does
not accept any responsibility for the contents of the Explanatory Memorandum (except for this report).
Grant Samuel has had no involvement in ANZ’s due diligence investigation in relation to the Explanatory
Memorandum and does not accept any responsibility for the completeness or reliability of the process
which is the responsibility of ANZ.
7.3 Independence
Grant Samuel and its related entities do not have at the date of this report, and have not had within the
previous two years, any business or professional relationship with the ANZ Group or any financial or other
interest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion
in relation to the Scheme.
Grant Samuel had no part in the formulation of the Restructure (including the Scheme). Its only role has
been the preparation of this report.
Grant Samuel will receive a fixed fee of $625,000 for the preparation of this report. This fee is not
contingent on the conclusions reached or the outcome of the Scheme. Grant Samuel’s out of pocket
expenses in relation to the preparation of the report will be reimbursed. Grant Samuel will receive no
other benefit for the preparation of this report.
Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30
March 2011.
133
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
48
7.4 Declarations
ANZ has agreed that it will indemnify Grant Samuel and its employees and officers in respect of any liability
suffered or incurred as a result of or in connection with the preparation of the report. This indemnity will
not apply in respect of the proportion of any liability found by a court to be primarily caused by any
conduct involving gross negligence or wilful misconduct by Grant Samuel. ANZ has also agreed to
indemnify Grant Samuel and its employees and officers for time spent and reasonable legal costs and
expenses incurred in relation to any inquiry or proceeding initiated by any person. Any claims by ANZ are
limited to an amount equal to the fees paid to Grant Samuel. Where Grant Samuel or its employees and
officers are found to have been grossly negligent or engaged in wilful misconduct Grant Samuel shall bear
the proportion of such costs caused by its action.
Advance drafts of this report were provided to ANZ and its advisers. Certain changes were made to the
drafting of the report as a result of the circulation of the draft report. There was no alteration to the
methodology, evaluation or conclusions as a result of issuing the drafts.
7.5 Consents
Grant Samuel consents to the issuing of this report in the form and context in which it is to be included in
the Explanatory Memorandum to be sent to shareholders of ANZ. Neither the whole nor any part of this
report nor any reference thereto may be included in any other document without the prior written consent
of Grant Samuel as to the form and context in which it appears.
7.6 Other
The accompanying letter dated 26 October 2022 forms part of this report.
Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The Financial
Services Guide is set out at the beginning of this report.
GRANT SAMUEL & ASSOCIATES PTY LIMITED
26 October 2022
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
134
KPMG Transaction Services
ABN: 43 007 363 215
A division of KPMG Financial Advisory Services
(Australia) Pty Ltd
Australian Financial Services Licence No. 246901
Level 38 Tower Three
300 Barangaroo Avenue
Sydney NSW 2000
P O Box H67 Australia Square
Sydney NSW 1213
Australia
Telephone: +61 2 9335 7000
Facsimile: +61 2 9335 7001
DX: 1056 Sydney
www.kpmg.com.au
kkppmmgg
KPMG, an Australian partnership and a member
firm of the KPMG network of independent
member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss
entity
Investigating Accountant’s Report
Introduction
KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Transaction Services is
a division) (“KPMG Transaction Services”) has been engaged by Australia and New Zealand
Banking Group Limited (“ANZ”) to prepare this report for inclusion in the Explanatory
Memorandum to be dated 27 October 2022 (“Explanatory Memorandum”), and to be issued
by ANZ in connection with the proposed restructure of ANZ into a non-operating holding
company (“NOHC”) structure with separate banking and non-banking activities (the
“Restructure”).
Expressions defined in the Explanatory Memorandum have the same meaning in this report.
This Investigating Accountant’s Report should be read in conjunction with the KPMG
Transaction Services Financial Services Guide included in the Explanatory Memorandum.
Scope
You have requested KPMG Transaction Services to perform a limited assurance engagement in
relation to the pro forma historical financial information described below and disclosed in the
Explanatory Memorandum.
The pro forma historical financial information is presented in the Explanatory Memorandum in
an abbreviated form, insofar as it does not include all of the presentation and disclosures
required by Australian Accounting Standards and other mandatory professional reporting
requirements applicable to general purpose financial reports prepared in accordance with the
Corporations Act 2001.
The Directors
Australia and New Zealand Banking Group Ltd
ANZ Centre Docklands
Level 9, 833 Collins Street
Docklands Victoria 3008
27 October 2022
Dear Directors
Limited Assurance Investigating Accountant’s Report and Financial Services Guide
ANNEXURE 2
INVESTIGATING ACCOUNTANT’S REPORT
135
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
2
Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022
Pro F orma Historical Financial Information
You have requested KPMG Transaction Services to perform limited assurance procedures in
relation to the pro forma historical financial information of ANZ (the responsible party) i ncluded
in the Explanatory Memorandum.
The pro forma historical financial information has been derived from the historical financial
information of ANZ, after adjusting for the effects of pro forma adjustments described in section
6 of the Explanatory Memorandum. The pro forma financial information consists of ANZ’s:
— pro forma statement of financial position for the ANZ Bank HoldCo, ANZ Non-Bank HoldCo,
and ANZ ServiceCo as at 31 March 2022 assuming the ANZ NOHC Group was in place on
that date (“Pro forma Balance Sheet”); and
— pro forma income statements for the ANZ Bank HoldCo, ANZ Non-Bank HoldCo, and ANZ
ServiceCo for the half year ended 31 March 2022 assuming that the ANZ NOHC Group was
in place during the period (“Pro forma Income Statement”).
(collectively the “ANZ NOHC Pro Forma Financial Information”).
as set out in s ection 6 of the Explanatory Memorandum issued by ANZ
The stated basis of preparation is the recognition and measurement principles contained in
Australian Accounting Standards applied to the historical financial information and the event(s)
or transaction(s) to which the pro forma adjustments relate, as described in section 6 of the
Explanatory Memorandum. Due to its nature, the ANZ NOHC Pro Forma Financial Information
does not represent the company’s actual or prospective financial position and/or financial
performance.
The ANZ NOHC Pro Forma Financial Information has been compiled by ANZ to illustrate the
impact of the Restructure described in section 4 and 7 of the Explanatory Memorandum on
ANZ’s financial position as at 31 March 2022 and ANZ’s financial performance for the half year
ended 31 March 2022. As part of this process, information about ANZ’s financial position and
financial performance
has been extracted by ANZ from ANZ’s financial statements for the period
ended 31 March 2022.
The financial statements of ANZ for the half year ended 31 March 2022 were reviewed by
KPMG in accordance with Australian Auditing Standards. The review opinions issued to the
members of ANZ relating to t hose financial statements were unqualified.
For the purposes of preparing this report we have performed limited assurance procedures in
relation to ANZ NOHC Pro Forma Financial Information in order to state whether, on the basis
of the procedures described, anything comes to our attention that would cause us to believe
that the ANZ NOHC Pro Forma Financial Information is not prepared or presented fairly, in all
material respects, by the directors in accordance with the stated basis of preparation as set out
in section 6 of the Explanatory Memorandum.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
136
3
Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022
We have conducted our engagement in accordance with the Standard on Assurance
Engagements ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or
Prospective Financial Information.
The procedures performed in a l imited assurance engagement vary in nature from, and are less
in extent than for, an audit . As a result, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we
performed an audit. Accordingly, we do not express an audit opinion about whether the ANZ
NOHC Pro Forma Financial Information is prepared, in all material respects, by the directors in
accordance with the stated basis of preparation.
Directors’ responsibilities
The directors of ANZ are responsible for the preparation of the ANZ NOHC Pro Forma Financial
Information, including the selection and determination of the pro forma transactions and/or
adjustments made to the historical financial information and included in the ANZ NOHC Pro
Forma Financial Information.
The directors’ responsibility includes establishing and maintaining such internal controls as the
directors determine are necessary to enable the preparation of financial information that is free
from material misstatement, whether due to fraud or error.
Conclusions
Review statement on t he ANZ NOHC Pro F orma Financial Information
Based on our procedures, which are not an audit, nothing has come to our attention that causes
us to believe that the ANZ NOHC Pro Forma Financial Information, as set out in section 6 of the
Explanatory Memorandum, comprising:
•the Pro forma Balance Sheet as at 31 March 2022; and
•the Pro Forma Income Statement for the half year ended 31 March 2022
is not prepared or presented fairly, in all material respects, on the basis of the pro forma
transactions and/or adjustments described in s ection 6 of the Explanatory Memorandum, and in
accordance with the recognition and measurement principles prescribed in Australian
Accounting Standards, and ANZ’s accounting policies.
Independence
KPMG Transaction Services does not have any interest in the outcome of the proposed
Restructure, other than in connection with the preparation of this report and participation in due
diligence procedures for which normal professional fees will
be received. KPMG is the auditor of
ANZ and from time to time, KPMG also provides ANZ with certain other professional services
for which normal professional fees are received.
137
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
4
Australia and New Zealand Banking Group Limited
Limited Assurance Investigating Accountant’s Report and
Financial Services Guide
27 October 2022
General advice warning
This report has been prepared, and included in t he Explanatory Memorandum, to provide
investors with general information only and does not take into account the objectives, financial
situation or needs of any specific investor. It is not intended to take the place of professional
advice and investors should not make specific investment decisions in reliance on the
information contained in this report. Before acting or relying on any information, an investor
should consider whether it is appropriate for their circumstances having r egard to their
objectives, financial situation or needs.
Design a nd Distribution Obligations (“DDO”)
KPMG has made reasonable enquiries of ANZ as to whether the underlying financial product
pursuant to the Restructure is captured by Design and Distribution Obligations (“DDO”)
regulations. Where a Target Market Determination (“TMD”) is required KPMG has reviewed the
TMD to ensure the content of the IAR is consistent with the TMD.
Restriction on u se
Without modifying our conclusions, we draw attention to section 6 of the Explanatory
Memorandum, which describes the purpose of the financial information, being for inclusion in
the Explanatory Memorandum. As a result, the financial information may not be suitable for use
for another purpose. We disclaim any assumption of responsibility for any reliance on this
report, or on the financial information to which it relates, for any purpose other than that for
which it was prepared.
KPMG Transaction Services has consented to the inclusion of this Investigating Accountant’s
Report in the Explanatory Memorandum in the form and context in which it is so included, but
has not authorised the issue of the Explanatory Memorandum. Accordingly, KPMG Transaction
Services makes no representation regarding, and takes
no responsibility for, any other
statements, or material in, or omissions from, the Explanatory Memorandum.
Yours faithfully
Paul Guinea
Authorised Representative
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
138
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.
Liability limited by a scheme approved under Professional Standards Legislation.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation
Financial Services Guide
Dated October 2021
What is a Financial Services Guide (FSG)?
This FSG is designed to help you to decide whether to use any of the general financial product advice provided by KPMG
Financial Advisory Services (Australia) Pty Ltd ABN 43 007 363 215 (“KPMG FAS”), Australian Financial Services
Licence Number 246901 (of which KPMG Transaction Services is a division) (‘KPMG Transaction Services’), and Paul
Guinea as an authorised representative of KPMG FAS, authorised representative number 001245044 (Authorised
Representative).
This FSG includes information about:
• KPMG FAS and its Authorised Representative and how they can be contacted;
• The services KPMG FAS and its Authorised Representative are authorised to provide;
• How KPMG FAS and its Authorised Representative are paid;
• Any relevant associations or relationships of KPMG FAS and its Authorised Representative;
• How complaints are dealt with as well as information about internal and external dispute resolution systems and
how you can access them; and
• The compensation arrangements that KPMG FAS has in place.
The distribution of this FSG by the Authorised Representative has been authorised by KPMG FAS.
This FSG forms part of an Investigating Accountant’s Report (Report) which has been prepared for inclusion in a
disclosure document or, if you are offered a financial product for issue or sale, a Product Disclosure Statement (PDS).
The purpose of the disclosure document or PDS is to help you make an informed decision in relation to a financial
product. The contents of the disclosure document or PDS, as relevant, will include details such as the risks, benefits, and
costs of acquiring the particular financial product.
Financial services that KPMG FAS and the Authorised Representative are authorised to provide
KPMG FAS holds an Australian Financial Services Licence, which authorises it to provide, amongst other services,
financial product advice for the following classes of financial products:
• Deposit and non-cash payment products;
• Derivatives;
• Foreign exchange contracts;
• Government debentures, stocks or bonds;
• Interests in managed investments schemes including investor directed portfolio services;
• Securities;
• Superannuation;
• Carbon units;
• Australian carbon credit units; and
• Eligible international emissions units,
to retail and wholesale clients.
ABN 43 007 363 215
Australian Financial Services Licence No. 246901
KPMG Financial Advisory Services (Australia) Pty Ltd
139
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
We provide financial product advice when engaged to prepare a report in relation to a transaction relating to one of these
types of financial products. The Authorised Representative is authorised by KPMG FAS to provide financial product advice
on KPMG FAS’s behalf.
KPMG FAS and the Authorised R epresentative’s responsibility to you
KPMG FAS has been engaged by Australia and New Zealand Banking Group Limited (“ANZ”) to provide general financial
product advice in the form of a Report to be included in the Explanatory Memorandum (“Document”) prepared by ANZ in
relation to the proposed restructure of ANZ into a non-operating holding company structure with separate banking and
non-banking activities (the “Restructure”).
You have not engaged KPMG FAS or the Authorised Representative directly but have received a copy of the Report
because you have been provided with a copy of the Document. Neither KPMG FAS nor the Authorised Representative
are acting for any person other than ANZ.
KPMG FAS and the Authorised Representative are responsible and accountable to you for ensuring that there is a
reasonable basis for the conclusions in the Report.
General advice
As KPMG FAS has been engaged by ANZ, the Report only contains general advice as it has been prepared without taking
into account your personal objectives, financial situation or needs.
You should consider the appropriateness of the general advice in the Report having regard to your circumstances before
you act on the general advice contained in the Report.
You should also consider th e other parts of the Document before maki
ng any decision in relation to the Restructure.
Fees KPMG FAS may receive, and remuneration or other benefits received by our representatives
KPMG FAS charges fees for preparing reports. These fees will usually be agreed with, and paid by ANZ. Fees are agreed
on either a fixed fee or a time cost basis. In this instance, the ANZ has agreed to pay KPMG FAS $375,000 for preparing
the Report. KPMG FAS and its officers, representatives, related entities and associates will not receive any other fee or
benefit in connection with the provision of the Report.
KPMG FAS officers and representatives (including the Authorised Representative) receive a salary or a partnership
distribution from KPMG’s Australian professional advisory and accounting practice (the KPMG Partnership). KPMG FAS’
representatives (including the Authorised Representative) are eligible for bonuses based on overall productivity. Bonuses
and other remuneration and benefits are not provided directly in connection with any engagement for the provision of
general financial product advice in the Report.
Further details may be provided on request.
Referrals
Neither KPMG FAS nor the Authorised Representative pay commissions or provide any other benefits to any person for
referring customers to them in connection with a Report.
Associations and relationships
Through a variety of corporate and trust structures KPMG FAS is controlled by and operates as part of the KPMG
Partnership. KPMG FAS’ directors and Authorised Representatives may be partners in the KPMG Partnersh
ip. The
Authorised Representative is a partner in the KPMG Partnership. The financial product advice in the Report is provided by
KPMG FAS and the Authorised Representative and not by the KPMG Partnership.
From time to time KPMG FAS, the KPMG Partnership and related entities (KPMG entities) may provide professional
services, including audit, tax and financial a dvisory services, to companies and issuers of financial products in the ordinary
course of their businesses.
No individual i nvolved in the preparation of this Report holds a substantial interest in, or is a s ubstantial creditor of, the
ANZ or has other material financial i nterests in the transaction.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.
Liability l imited by a scheme approved under Professional Standards Legislation.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
140
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.
Liability limited by a scheme approved under Professional Standards Legislation.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation
Complaints resolution
Internal complaints resolution process
If you have a complaint, please let KPMG FAS or the Authorised Representative know. Complaints can be sent in writing
to The Complaints Officer, KPMG, GPO Box 2291U, Melbourne, VIC 3000 or via email (AU-FM-AFSL-
COMPLAINT@kpmg.com.au). If you have difficulty in putting your complaint in writing, please telephone the Complaints
Officer on (03) 9288 5555 and they will assist you in documenting your complaint.
We will acknowledge receipt of your complaint, in writing, within 1 business day or as soon as practicable.
Following an investigation of your complaint, you will receive a written response within 30 calendar days. If KPMG FAS is
unable to resolve your complaint within 30 calendar days, we will let you know the reasons for the delay and advise you
of your right to refer the matter to the Australian Financial Complaints Authority (AFCA).
External complaints resolution process
If KPMG FAS or the Authorised Representative cannot resolve your complaint to your satisfaction within 30 calendar
days, you can refer the matter to AFCA. AFCA is an independent body that has been established to provide free advice
and assistance to consumers to help in resolving complaints relating to the financial services industry. KPMG FAS is a
member of AFCA (member no 11690).
Further details about AFCA are available at the AFCA website www.afca.org.au
or by contacting them directly at:
Address: Australian Financial Complaints Authority Limited, GPO Box 3, Melbourne Victoria 3001
Telephone: 1800 931 678
Email: info@afca.org.au
The Australian Securities and Investments Commission also has a freecall infoline on 1300 300 630 which you may use to
obtain information about your rights
.
Compensation arrangements
KPMG FAS holds professional indemnity insurance cover in accordance with section 912B of the Corporations Act
2001(Cth).
Contact details
You may contact KPMG FAS or the Authorised Representative using the below contact details:
KPMG Transaction Services (a division of KPMG Financial Advisory Services (Australia) Pty Ltd)
Level 38, International Towers Three
300 Barangaroo Avenue
Sydney NSW 2000
PO Box H67
Australia Square
NSW 1213
Telephone: (02) 9335 7621
Facsimile: (02) 9335 7001
Paul Guinea
C/O KPMG
PO Box H67
Australia Square
NSW 1213
Telephone: (02) 9335 7621
Facsimile: (02) 9335 7001
141
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
80 Collins Street Melbourne Vic 3000 Australia
GPO Box 128 Melbourne Vic 3001 Australia
T +61 3 9288 1234 F +61 3 9288 1567
herbertsmithfreehills.com DX 240 Melbourne
Scheme of arrangement
Australia and New Zealand Banking Group Limited
Scheme Shareholders
80 Collins Street Melbourne Vic 3000 Australia
GPO Box 128 Melbourne Vic 3001 Australia
T +61 3 9288 1234 F +61 3 9288 1567
herbertsmithfreehills.com DX 240 Melbourne
Scheme of arrangement
Australia and New Zealand Banking Group Limited
Scheme Shareholders
ANNEXURE 3
SCHEME OF ARRANGEMENT
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
142
98481504
Scheme of arrangement page 1
Scheme of arrangement – share scheme
This scheme of arrangement is made under section 411 of the Corporations Act
2001 (Cth)
Between the parties
Australia and New Zealand Banking Group Limited
ABN 11 005 357 522 of 833 Collins St, Docklands VIC 3008
The Scheme Shareholders
1 Definitions and interpretation
1.1 Definitions
The meanings of the terms used in this Scheme are set out below.
Term Meaning
ANZBGL Australia and New Zealand Banking Group Limited ABN 11 005 357
522 .
ANZBGL Registry Computershare Investor Services Pty Ltd ACN 078 279 277.
ANZBGL Share a fully paid ordinary share in the capital of ANZBGL.
ANZBGL Shareholder each person who is registered as the holder of a ANZBGL Share in the
Share Register.
ANZ NOHC ANZ Group Holdings Limited ACN 659 510 791.
ANZ NOHC Register the register of shareholders maintained by ANZ NOHC or its agent.
143
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
98481504
Scheme of arrangement page 2
Term Meaning
ANZ NOHC Registry Computershare Investor Services Pty Ltd ACN 078 279 277.
ANZ NOHC Share a fully paid ordinary share in ANZ NOHC.
ASIC the Australian Securities and Investments Commission.
ASX ASX Limited ABN 98 008 624 691 and, where the context requires, the
financial market that it operates.
Business Day business day as defined in the Listing Rules.
CHESS the Clearing House Electronic Subregister System operated by ASX
Settlement Pty Ltd and ASX Clear Pty Limited.
Corporations Act the Corporations Act 2001 (Cth).
Court
the Federal Court of Australia, Victoria Registry, or such other court of
competent jurisdiction under the Corporations Act determined by
ANZBGL.
Deed Poll the deed poll substantially in the form of Attachment 2 of the
Implementation Deed under which ANZ NOHC covenants in favour of
the Scheme Shareholders to perform the obligations attributed to ANZ
NOHC under this Scheme.
Effective when used in relation to this Scheme, the coming into effect, under
subsection 411(10) of the Corporations Act, of the Court order made
under paragraph 411(4)(b) of the Corporations Act in relation to this
Scheme.
Effective Date the date on which this Scheme becomes Effective.
Eligible Foreign
Jurisdiction
is expected to include:
1 China, Cook Islands, Fiji, France, Germany, Hong Kong, India,
Korea, Malaysia, Papua New Guinea, Philippines, Samoa,
Singapore, Taiwan, the United Kingdom, the United States
(including American Samoa and Guam) and Vanuatu; and
2 in the case of Scheme Shareholders who are an ANZ employee as
at the Scheme Record Date, those jurisdictions listed in 1 above
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
144
98481504
Scheme of arrangement page 3
Term Meaning
and Indonesia and Japan,
noting that ANZ may change these jurisdictions on the basis that ANZ
determines that it is not lawful or unduly onerous or impracticable to
issue ANZ NOHC Shares in a particular jurisdiction when the Scheme
becomes Effective.
End Date the later of 30 June 2023, or such other date determined by ANZBGL.
Government Agency any foreign or Australian government or governmental, semi-
governmental, administrative, fiscal or judicial body, department,
commission, authority, tribunal, agency or entity (including any stock or
other securities exchange), or any minister of the Crown in right of the
Commonwealth of Australia or any state, or any other federal, state,
provincial, local or other government, whether foreign or Australian.
Implementation Date
the fifth Business Day after the Scheme Record Date, or such other
date after the Scheme Record Date as determined by ANZBGL.
Implementation Deed the NOHC Restructure Implementation Deed dated 26 October 2022
between ANZBGL and ANZ NOHC relating to the implementation of
the NOHC Restructure, including this Scheme.
Ineligible Foreign
Shareholder
a Scheme Shareholder whose address shown in the Share Register on
the Scheme Record Date is a place outside Australia (and its external
territories), New Zealand, or an Eligible Foreign Jurisdiction, unless
ANZ NOHC determines that it is lawful and not unduly onerous or
impracticable to issue that Scheme Shareholder with ANZ NOHC
Shares when this Scheme becomes Effective.
Listing Rules
the official listing rules of ASX.
NOHC Restructure has the meaning given to that term in the Implementation Deed.
Registered Address in relation to a ANZBGL Shareholder, the address shown in the Share
Register as at the Scheme Record Date.
Sale Agent the entity appointed by ANZBGL to act as the sale facility agent and
nominee of the Ineligible Foreign Shareholders under this Scheme.
Scheme this scheme of arrangement under Part 5.1 of the Corporations Act
between ANZBGL and the Scheme Shareholders subject to any
145
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
98481504
Scheme of arrangement page 4
Term Meaning
alterations or conditions made or required by the Court under
subsection 411(6) of the Corporations Act and agreed to in writing by
ANZBGL and ANZ NOHC.
Scheme Booklet the scheme booklet published by ANZBGL and dated 27 October
2022.
Scheme Consideration for each ANZBGL Share held by a Scheme Shareholder as at the
Scheme Record Date, one ANZ NOHC Share.
Scheme Meeting the meeting of the ANZBGL Shareholders ordered by the Court to be
convened under subsection 411(1) of the Corporations Act to consider
and vote on this Scheme and includes any meeting convened following
any adjournment or postponement of that meeting.
Scheme Record Date 7.00pm on the second Business Day after the Effective Date or such
other date as determined by ANZBGL.
Scheme Shares all ANZBGL Shares held by the Scheme Shareholders as at the
Scheme Record Date.
Scheme Shareholder a holder of ANZBGL Shares recorded in the Share Register as at the
Scheme Record Date.
Scheme Transfer a duly completed and executed proper instrument of transfer in respect
of the Scheme Shares for the purposes of section 1071B of the
Corporations Act, in favour of ANZ NOHC or the Sale Agent (as
applicable) as transferee, which may be a master transfer of all or part
of the Scheme Shares.
Second Court Date the first day on which an application made to the Court for an order
under paragraph 411(4)(b) of the Corporations Act approving this
Scheme is heard or, if the application is adjourned or subject to appeal
for any reason, the day on which the adjourned application or appeal is
heard.
Share Register the register of members of ANZBGL maintained by ANZBGL or the
ANZBGL Registry in accordance with the Corporations Act.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
146
98481504
Scheme of arrangement page 5
1.2 Interpretation
In this Scheme:
(a) headings and bold type are for convenience only and do not affect the
interpretation of this Scheme;
(b) the singular includes the plural and the plural includes the singular;
(c) words of any gender include all genders;
(d) other parts of speech and grammatical forms of a word or phrase defined in this
Scheme have a corresponding meaning;
(e) a reference to a person includes any company, partnership, joint venture,
association, corporation or other body corporate and any Government Agency
as well as an individual;
(f) a reference to a clause, party, schedule, attachment or exhibit is a reference to
a clause of, and a party, schedule, attachment or exhibit to, this Scheme;
(g) a reference to any legislation includes all delegated legislation made under it
and amendments, consolidations, replacements or reenactments of any of them
(whether passed by the same or another Government Agency with legal power
to do so);
(h) a reference to a document (including this Scheme) includes all amendments or
supplements to, or replacements or novations of, that document;
(i) a reference to ‘$’, ‘A$’ or ‘dollar’ is to Australian currency;
(j) a reference to any time is, unless otherwise indicated, a reference to that time in
Melbourne;
(k) a term defined in or for the purposes of the Corporations Act, and which is not
defined in clause 1.1, has the same meaning when used in this Scheme;
(l) a reference to a party to a document includes that party’s successors and
permitted assignees;
(m) if a period of time is specified and dates from a given day or the day of an act or
event, it is to be calculated exclusive of that day;
(n) a reference to a day is to be interpreted as the period of time commencing at
midnight and ending 24 hours later;
(o) if an act prescribed under this Scheme to be done by a party on or by a given
day is done after 5.00pm on that day, it is taken to be done on the next day; and
(p) a reference to the Listing Rules includes any variation, consolidation or
replacement of these rules and is to be taken to be subject to any waiver or
exemption granted to the compliance of those rules by a party..
1.3 Interpretation of inclusive expressions
Specifying anything in this Scheme after the words ‘include’ or ‘for example’ or similar
expressions does not limit what else is included.
1.4 Business Day
Where the day on or by which any thing is to be done is not a Business Day, that thing
must be done on or by the next Business Day.
147
Contents
Chairman’s letter
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Annexures
Annexures
98481504
Scheme of arrangement page 6
2 Preliminary matters
(a) ANZBGL is a public company limited by shares, registered in Victoria, Australia,
and has been admitted to the official list of the ASX. ANZBGL Shares are
quoted for trading on the ASX. As at 23 October 2022, 2,989,923,751 ANZBGL
Shares were on issue.
(b) ANZ NOHC is an unlisted public company limited by shares registered in
Victoria, Australia. As at 23 October 2022, one ANZ NOHC Share was on issue,
which is held by ANZBGL. The board of ANZ NOHC has resolved to become
the new parent of ANZBGL by acquiring all the Scheme Shares under this
Scheme.
(c) ANZBGL and ANZ NOHC have agreed, by executing the Implementation Deed,
to implement the NOHC Restructure, including this Scheme.
(d) This Scheme attributes actions to ANZ NOHC but does not itself impose an
obligation on it to perform those actions. ANZ NOHC has agreed, by executing
the Deed Poll and the Implementation Deed, to perform the actions attributed to
it under this Scheme.
3 Conditions
3.1 Conditions precedent
This Scheme is conditional on and will have no force or effect until, the satisfaction of
each of the following conditions precedent:
(a) all the conditions in clause 3.1 of the Implementation Deed (other than the
condition in the Implementation Deed relating to Court approval of this Scheme)
having been satisfied or waived;
(b) neither the Implementation Deed nor the Deed Poll having been terminated;
(c) approval of this Scheme by the Court under paragraph 411(4)(b) of the
Corporations Act, including with any alterations made or required by the Court
under subsection 411(6) of the Corporations Act and agreed to by ANZ NOHC
and ANZBGL;
(d) the orders of the Court made under paragraph 411(4)(b) (and, if applicable,
subsection 411(6)) of the Corporations Act approving this Scheme coming into
effect, pursuant to subsection 411(10) of the Corporations Act on or before the
End Date (or any later date ANZBGL and ANZ NOHC agree in writing).
3.2 Certificate
(a) ANZBGL and ANZ NOHC will provide to the Court on the Second Court Date a
certificate, or such other evidence as the Court requests, confirming (in respect
of matters within their knowledge) whether or not all of the conditions precedent
in clauses 3.1(a) and 3.1(b) have been satisfied or waived.
(b) The certificate referred to in clause 3.2(a) constitutes conclusive evidence that
such conditions precedent were satisfied, waived or taken to be waived as at
the Second Court Date.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
148
98481504
Scheme of arrangement page 7
3.3 End Date
This Scheme will lapse and be of no further force or effect if:
(a) the Effective Date does not occur on or before the End Date; or
(b) the Implementation Deed or the Deed Poll is terminated in accordance with its
terms,
unless ANZBGL and ANZ NOHC otherwise agree in writing.
4 Implementation of this Scheme
4.1 Lodgement of Court orders with ASIC
ANZBGL must lodge with ASIC, in accordance with subsection 411(10) of the
Corporations Act, an office copy of the Court order approving this Scheme as soon as
possible after the Court approves this Scheme and in any event by 5.00pm on the first
Business Day after the day on which the Court approves this Scheme.
4.2 Transfer of Schemes Shares held by Ineligible Foreign Shareholders
to Sale Agent
On the Implementation Date:
(a) all the Scheme Shares held by the Ineligible Foreign Shareholders, together
with all rights and entitlements attaching to those Scheme Shares as at the
Implementation Date, must be transferred to the Sale Agent, without the need
for any further act by any Ineligible Foreign Shareholder, by:
(1) ANZBGL delivering to the Sale Agent a duly completed Scheme
Transfer, executed on behalf of the Ineligible Foreign Shareholders by
ANZBGL; and
(2) ANZBGL procuring that the Sale Agent duly executes the Scheme
Transfer and attending to the stamping of the Scheme Transfer (if
required); and
(b) immediately following receipt of the Scheme Transfer in accordance with clause
4.3(a)(2), ANZBGL must enter, or procure the entry of, the name of the Sale
Agent in the Share Register in respect of all the Scheme Shares transferred to
the Sale Agent in accordance with this Scheme.
4.3 Transfer of Scheme Shares to ANZ NOHC
On the Implementation Date, following the transfer referred to in clause 4.2 and the issue
of ANZ NOHC Shares under clause 5.1:
(a) the Scheme Shares (including those transferred to the Sale Agent under clause
4.2), together with all ri
[TRUNCATED]
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.