2024 Full Year Results Documents
ANZ Group Holdings Limited
ABN 16 659 510 791
Full Year
30 September 2024
Consolidated Financial Report
Dividend Announcement
and Appendix 4E
The Consolidated Financial Report and Dividend Announcement contains information required by Appendix 4E of the Australian Securities
Exchange (ASX) Listing Rules. It should be read in conjunction with the 2024 ANZ Group Holdings Limited Annual Report, and is lodged with
the ASX under listing rule 4.3A.
RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E
2
Name of Company: ANZ Group Holdings Limited
ABN 16 659 510 791
Report for the year ended 30 September 2024
Operating Results
1
AUD million
Statutory operating income
0% to 20,547
Statutory profit attributable to shareholders of the Company
-8%to 6,535
Cash profit
2
-9%to 6,725
Dividends
3
Cents Franked
per amount
share per share
Proposed final dividend
4
83 70%
Interim dividend 83 65%
Record date for determining entitlements to the proposed 2024 final dividend 14 November 2024
Payment date for the proposed 2024 final dividend 20 December 2024
Dividend Reinvestment Plan and Bonus Option Plan
ANZ Group Holdings Limited has a Dividend Reinvestment Plan (DRP) and a Bonus Option Plan (BOP) that will operate in respect of the proposed 2024
final dividend. For the 2024 final dividend, ANZ intends to provide shares under the DRP through an on-market purchase and BOP through the issue of
new shares. The 'Acquisition Price' to be used in determining the number of shares to be provided under the DRP and BOP will be calculated by
reference to the arithmetic average of the daily volume weighted average sale price of all fully paid ANZ ordinary shares sold in the ordinary course of
trading on the ASX and Cboe Australia during a pricing period commencing on 19 November 2024, and then rounded to the nearest whole cent. The
Pricing Period will be 10 trading days. Shares provided under the DRP and BOP will rank equally in all respects with existing fully paid ANZ ordinary
shares. Election notices from shareholders wanting to commence, cease or vary their participation in the DRP or BOP for the 2024 final dividend must be
received by ANZ's Share Registrar by 5.00pm (Australian Eastern Daylight Time) on 15 November 2024. Subject to receiving effective contrary
instructions from the shareholder, dividends payable to shareholders with a registered address in the United Kingdom (including the Channel Islands
and the Isle of Man) or New Zealand will be converted to Pounds Sterling or New Zealand Dollars respectively at an exchange rate calculated on
19 November 2024.
1.
Unless otherwise noted, all comparisons are to the consolidated financial information for the year ended 30 September 2023.
2.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the result of the core business activities of the Group. The non-core items
are calculated consistently period on period so as not to discriminate between positive and negative adjustments, and comprise economic hedging and similar accounting items that
represent timing differences that will reverse through earnings in the future. The net after tax loss adjusted from statutory profit to arrive at cash profit was $190 million. Refer to pages 77 to
79 for further details.
3.
The unfranked portion of the proposed final dividend will be sourced from the Group’s conduit foreign income account.
4.
It is proposed that the final dividend of 83 cents will be partially franked at 70% for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 12 cents per
ordinary share.
RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E
3
KPMG has audited the financial statements contained within the 2024 ANZ Group Holdings Limited Annual Report (Annual Report) and has issued an
unmodified audit report on 7 November 2024. The Annual Report will be available on 8 November 2024, and will include a copy of the KPMG audit report.
The financial information contained in the Condensed Consolidated Financial Statements section of this report includes financial information extracted
from the audited financial statements.
Cash profit is not subject to audit by the external auditor. The external auditor has informed the Audit Committee that recurring adjustments have been
determined on a consistent basis across each period presented.
Paul D O’Sullivan Shayne C Elliott
Chairman Managing Director
7 November 2024
RESULTS FOR ANNOUNCEMENT TO THE MARKET APPENDIX 4E
4
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ANZ GROUP HOLDINGS LIMITED ABN 16 659 510 791
5
CONSOLIDATED FINANCIAL REPORT, DIVIDEND ANNOUNCEMENT AND APPENDIX 4E
Year ended 30 September 2024
CONTENTS Page
Disclosure Summary 7
Summary 9
Group Results 17
Divisional Results 53
Profit Reconciliation 77
Condensed Consolidated Financial Statements 81
Supplementary Information 99
Definitions 111
ASX Appendix 4E - Cross Reference Index 114
This Consolidated Financial Report, Dividend Announcement and Appendix 4E (Results Announcement) has been prepared for ANZ Group Holdings
Limited (ANZGHL, Company, parent entity) and its subsidiaries (ANZ, Group, the consolidated entity, us, we, or our).
All amounts are in Australian dollars unless otherwise stated. The Condensed Consolidated Financial Statements were approved by resolution of the
Board of Directors on 7 November 2024.
DISCLAIMER & IMPORTANT NOTICE:
The material in the Results Announcement contains general background information about the Group’s activities current as at 7 November 2024. It is
information given in summary form and does not purport to be complete. It is not intended to be and should not be relied upon as advice to investors or
potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be
considered, with or without professional advice when deciding if an investment is appropriate.
The Results Announcement may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations
with respect to the Group’s business operations, market conditions, results of operations and financial condition, capital adequacy, sustainability
objectives or targets, specific provisions and risk management practices. When used in the Results Announcement, the words ‘forecast’, ‘estimate’, ‘goal’,
‘target’, ‘indicator’, ‘plan’, ‘pathway’, ‘ambition’, ‘modelling’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’,
‘could’, ‘should’ and similar expressions, as they relate to the Group and its management, are intended to identify forward-looking statements or opinions.
Those statements are usually predictive in character; and may be affected by inaccurate assumptions or unknown risks and uncertainties or may differ
materially from results ultimately achieved. As such, these statements should not be relied upon when making investment decisions. These statements
only speak as at the date of publication and no representation is made as to their correctness on or after this date. Forward-looking statements constitute
‘forward-looking statements’ for the purposes of the United States Private Securities Litigation Reform Act of 1995. The Group does not undertake any
obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to
reflect the occurrence of unanticipated events.
ANZ GROUP HOLDINGS LIMITED ABN 16 659 510 791
6
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DISCLOSURE SUMMARY
7
SUMMARY OF 2024 FULL YEAR RESULTS AND ASSOCIATED DISCLOSURE MATERIALS
The following disclosure items were lodged separately with the ASX and NZX and can be accessed via the ANZ Shareholder Centre on the
Group website https://www.anz.com/shareholder/centre/reporting/ on 8 November 2024 unless otherwise noted.
ANZ Group Holdings Limited
2024 Full Year Results Announcement
- News Release
- Consolidated Financial Report, Dividend Announcement and Appendix 4E
- Results Presentation and Investor Discussion Pack
- Key Financial Data (available on website only)
2024 ANZGHL Annual Report
2024 Corporate Governance Statement
2024 Climate-Related Financial Disclosures
2024 Environment, Social and Governance (ESG) Supplement
2024 ESG Data (available on website only)
Australia and New Zealand Banking Group Limited
2024 ANZBGL Annual Report
2024 September Quarter APS 330 Pillar III Disclosure
2024 United Kingdom Disclosure and Transparency Rules Submission
(incl 2024 Principal Risks and Uncertainties Disclosure) (available at a later date)
DISCLOSURE SUMMARY
8
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SUMMARY
9
CONTENTS Page
Guide to Results 10
Statutory Profit Results 11
Cash Profit Results 12
Key Balance Sheet Metrics 13
Cash Profit Results (excl. Suncorp Bank) 14
Key Balance Sheet Metrics (excl. Suncorp Bank) 15
Full Time Equivalent Staff 16
Other Non-Financial Information 16
SUMMARY
10
Guide to Results
SUNCORP BANK ACQUISITION
On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. Suncorp Bank provides
banking and related services to retail, commercial, small and medium enterprises and agribusiness customers in Australia. The transaction was
undertaken to accelerate the growth of the Group’s retail and commercial businesses while also improving the geographic balance of its business in
Australia. The reported results for the September 2024 half and September 2024 full year include 2 months results for Suncorp Bank from the date of
acquisition, presented as Suncorp Bank division throughout the Results Announcement.
The Group is currently completing the purchase price allocation exercise to identify, measure and recognise the acquired tangible and intangible assets
and assumed liabilities at their acquisition date fair values. At 30 September 2024, all values have been recognised on a provisional basis pending
completion of this exercise.
For further information on the assets acquired and liabilities assumed, refer to Note 8 Suncorp Bank acquisition in the Condensed Consolidated Financial
Statements.
Suncorp Bank acquisition related adjustments
Suncorp Bank’s divisional results for the September 2024 half and September 2024 full year include the following acquisition related adjustments
recognised by the Group post transaction completion, with an after tax charge of $196 million:
Collectively assessed credit impairment charge of $244 million ($171 million after tax) for Suncorp Bank’s performing loans and advances. In
accordance with Australian Accounting Standards requirements, the Group consolidated Suncorp Bank’s loans and advances on 31 July 2024,
however the Group was not permitted to recognise an allowance for ECL on the performing loans and advances, leading to a proportional reduction
in acquisition-related goodwill that would otherwise have been recognised. Subsequently, the Group was required to recognise a collectively
assessed allowance for ECL estimated using the Group’s ECL methodologies, with a corresponding collectively assessed credit impairment charge
recognised in the Group’s Income Statement.
Accelerated software amortisation expense of $36 million ($25 million after tax) on alignment to the Group’s software capitalisation policy.
NON-IFRS INFORMATION
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
International Financial Reporting Standards (IFRS). The Group provides additional measures of performance in the Results Announcement which are
prepared on a basis other than in accordance with accounting standards. The guidance provided in Australian Securities and Investments Commission
(ASIC) Regulatory Guide 230 has been followed when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents the Group’s preferred measure of the result of the core business activities of the Group, enabling readers to
assess Group and divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items
from statutory profit (refer to Definitions on pages 111 to 113 for further details). The adjustments made in arriving at cash profit are included in statutory
profit which is subject to audit within the context of the external auditor’s audit of the 2024 ANZGHL Annual Report. Cash profit is not subject to audit by
the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on a consistent basis
across each period presented.
Pro-forma Results (excl. Suncorp Bank)
Pro-forma results excluding Suncorp Bank have been included where relevant to provide transparency and aid comparison.
RESTATEMENT OF PRIOR PERIOD COMPARATIVE INFORMATION
Accounting standards adoption
The Group adopted AASB 17 Insurance Contracts (AASB 17) on 1 October 2023. Although the overall profit recognised in respect of insurance contracts
will not change over the life of contracts, the timing of revenue recognition will change. The Group applied AASB 17 effective from 1 October 2022 and
restated prior period comparative information. This resulted in a decrease in opening retained earnings of $37 million on 1 October 2022, an increase in
profit after tax (Sep 23 full year: $8 million), an increase in total assets (Sep 23: $22 million), and an increase in total liabilities (Sep 23: $51 million) in the
Australia Retail division.
Divisional results presentation
The presentation of divisional results was impacted by:
customer re-segmentation within the Australia Commercial division to better meet the needs of our customers during the September 2024 half, and
a number of cost reallocations across and within the divisions during the March 2024 half.
Comparative information has been restated to reflect these changes with no impact to Group results.
SUMMARY
11
Statutory Profit Results
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 8,170 7,899 3% 16,069 16,574 -3%
Other operating income 2,232 2,246 -1% 4,478 3,897 15%
Operating income 10,402 10,145 3% 20,547 20,471 0%
Operating expenses (5,526) (5,215) 6% (10,741) (10,139) 6%
Profit before credit impairment and income tax 4,876 4,930 -1% 9,806 10,332 -5%
Credit impairment (charge)/release (336) (70) large (406) (245) 66%
Profit before income tax 4,540 4,860 -7% 9,400 10,087 -7%
Income tax expense (1,391) (1,439) -3% (2,830) (2,953) -4%
Non-controlling interests (21) (14) 50% (35) (28) 25%
Profit attributable to shareholders of the Company 3,128 3,407 -8% 6,535 7,106 -8%
Earnings Per Ordinary Share (cents)
Half Year Full Year
Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Basic 104.4 113.5 -8% 217.9 237.1 -8%
Diluted 103.1 111.5 -8% 215.1 227.4 -5%
Half Year Full Year
Reference
Page Sep 24 Mar 24 Sep 24 Sep 23
Ordinary Share Dividends (cents)
1,2
Interim
- fully franked - - - 81
- partially franked - 83 83 -
Final
- partially franked 83 - 83 94
Total 83 83 166 175
Ordinary share dividend payout ratio
3
79.0% 73.3% 76.0% 74.0%
Profitability Ratios
Return on average ordinary shareholders' equity
4
9.1% 9.7% 9.4% 10.5%
Return on average assets 0.53% 0.59% 0.56% 0.64%
Net interest margin 1.58% 1.56% 1.57% 1.70%
Net interest margin (excl. Markets business unit) 2.38% 2.33% 2.35% 2.39%
Net interest income to average credit RWA 4.68% 4.55% 4.61% 4.73%
Net interest income to average credit RWA (excl. Markets business unit) 5.25% 5.10% 5.17% 5.19%
Efficiency Ratios
Operating expenses to operating income 53.1% 51.4% 52.3% 49.5%
Operating expenses to average assets 0.94% 0.90% 0.92% 0.91%
Credit Impairment Charge/(Release)
Individually assessed credit impairment charge/(release) ($M) 106 38 144 93
Collectively assessed credit impairment charge/(release) ($M)
5
230 32 262 152
Total credit impairment charge/(release) ($M) 93 336 70 406 245
Individually assessed credit impairment charge/(release) as a % of average gross loans
and advances
6
0.03% 0.01% 0.02% 0.01%
Total credit impairment charge/(release) as a % of average gross loans and advances
6
0.09% 0.02% 0.06% 0.04%
1.
Partially franked at 70% for Australian tax purposes (30% tax rate) for the proposed 2024 final dividend (2024 interim dividend: partially franked at 65%; 2023 final dividend: partially franked
at 56%; 2023 interim dividend: fully franked).
2.
Carry New Zealand imputation credits of NZD 12 cents for the proposed 2024 final dividend (2024 interim dividend: NZD 12 cents; 2023 final dividend: NZD 11 cents; 2023 interim dividend:
NZD 9 cents).
3.
Dividend payout ratio for the September 2024 half is calculated using the proposed 2024 final dividend of $2,472 million, based on the forecast number of ordinary shares on issue at the
dividend record date. Dividend payout ratios for the March 2024 half and September 2023 full year were calculated using actual dividends of $2,496 million and $5,258 million respectively.
4.
Average ordinary shareholders’ equity excludes non-controlling interests.
5.
Includes Suncorp Bank acquisition related collectively assessed credit impairment charge of $244 million, refer to Guide to Results on page 10 for further information.
6.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
SUMMARY
12
Cash Profit Results
1
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 8,170 7,899 3% 16,069 16,574 -3%
Other operating income 2,292 2,448 -6% 4,740 4,331 9%
Operating income 10,462 10,347 1% 20,809 20,905 0%
Operating expenses (5,526) (5,215) 6% (10,741) (10,139) 6%
Cash profit before credit impairment and income tax 4,936 5,132 -4% 10,068 10,766 -6%
Credit impairment (charge)/release (336) (70) large (406) (245) 66%
Cash profit before income tax 4,600 5,062 -9% 9,662 10,521 -8%
Income tax expense (1,406) (1,496) -6% (2,902) (3,080) -6%
Non-controlling interests (21) (14) 50% (35) (28) 25%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
Earnings Per Ordinary Share (cents) Half Year Full Year
Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Basic 105.9 118.3 -10% 224.3 247.3 -9%
Diluted 104.5 116.0 -10% 220.9 236.8 -7%
Half Year Full Year
Reference
Page Sep 24 Mar 24 Sep 24 Sep 23
Ordinary Share Dividends
Ordinary share dividend payout ratio
2
77.9% 70.3% 73.9% 70.9%
Profitability Ratios
Return on average ordinary shareholders' equity
3
9.2% 10.1% 9.7% 11.0%
Return on average assets 0.54% 0.61% 0.57% 0.67%
Return on average RWA 1.44% 1.65% 1.55% 1.68%
Net interest margin 1.58% 1.56% 1.57% 1.70%
Net interest margin (excl. Markets business unit) 2.38% 2.33% 2.35% 2.39%
Net interest income to average credit RWA 4.68% 4.55% 4.61% 4.73%
Net interest income to average credit RWA (excl. Markets business unit) 5.25% 5.10% 5.17% 5.19%
Efficiency Ratios
Operating expenses to operating income 52.8% 50.4% 51.6% 48.5%
Operating expenses to average assets 0.94% 0.90% 0.92% 0.91%
Credit Impairment Charge/(Release)
Individually assessed credit impairment charge/(release) ($M) 106 38 144 93
Collectively assessed credit impairment charge/(release) ($M)
4
230 32 262 152
Total credit impairment charge/(release) ($M) 28 336 70 406 245
Individually assessed credit impairment charge/(release) as a % of average gross loans
and advances
5
0.03% 0.01% 0.02% 0.01%
Total credit impairment charge/(release) as a % of average gross loans and advances
5
0.09% 0.02% 0.06% 0.04%
1.
Cash profit excludes non-core items included in statutory profit and is provided to assist readers in understanding the results of the core business activities of the Group. Refer to pages 77 to
79 for the reconciliation between statutory and cash profit.
2.
Dividend payout ratio for the September 2024 half is calculated using the proposed 2024 final dividend of $2,472 million, based on the forecast number of ordinary shares on issue at the
dividend record date. Dividend payout ratios for the March 2024 half and September 2023 full year were calculated using actual dividends of $2,496 million and $5,258 million respectively.
3.
Average ordinary shareholders’ equity excludes non-controlling interests.
4.
Includes Suncorp Bank acquisition related collective assessed credit impairment charge of $244 million, refer to Guide to Results on page 10 for further information.
5.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
SUMMARY
13
Key Balance Sheet Metrics
As at Movement
Reference
Page
Sep 24 Mar 24 Sep 23
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Capital Management (Level 2)
Common Equity Tier 1
- APRA 46 12.2% 13.5% 13.3%
- Basel Harmonised 46 17.6% 19.7% 19.7%
Credit risk weighted assets ($B) 48 361.2 348.4 349.0 4% 3%
Total risk weighted assets ($B) 48 446.6 432.8 433.3 3% 3%
APRA Leverage Ratio 50 4.7% 5.4% 5.4%
Balance Sheet: Key Items
Gross loans and advances ($B) 807.1 718.7 710.6 12% 14%
Net loans and advances ($B) 803.4 715.2 707.0 12% 14%
Total assets ($B) 1,229.1 1,089.7 1,105.6 13% 11%
Customer deposits ($B) 715.2 641.1 647.1 12% 11%
Total shareholders' equity ($B) 70.6 71.1 70.0 -1% 1%
Half Year Full Year
Balance Sheet: Average Balances
Sep 24
$B
Mar 24
$B Movt
Sep 24
$B
Sep 23
$B Movt
Average gross loans and advances 753.6 714.0 6% 733.8 695.3 6%
Average assets 1,181.7 1,163.0 2%
1,172.4 1,113.8 5%
Average customer deposits 675.2 663.6 2% 669.4 639.9 5%
Average ordinary shareholders' equity
1
68.9 70.3 -2%
69.6 67.6 3%
Average interest earning assets 1,031.6 1,015.6 2%
1,023.6 975.1 5%
Average deposits and other borrowings 857.9 859.8 0%
858.8 824.8 4%
Average RWA 439.4 430.8 2%
435.1 442.6 -2%
Average credit RWA 349.2 347.3 1% 348.3 350.4 -1%
As at Movement
Liquidity and Funding
Reference
Page
Sep 24 Mar 24 Sep 23
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Liquidity Coverage Ratio
2
43 132% 134% 132% -2% 0%
Net Stable Funding Ratio 44 116% 118% 116% -2% 0%
As at Movement
Impaired Assets
Reference
Page
Sep 24 Mar 24 Sep 23
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Gross impaired assets ($M) 34 1,693 1,518 1,521 12% 11%
Gross impaired assets as a % of gross loans and advances 0.21% 0.21% 0.21%
Net impaired assets ($M) 34 1,385 1,193 1,145 16% 21%
Net impaired assets as a % of shareholders' equity 1.96% 1.68% 1.64%
Individually assessed provision ($M) 32 308 325 376 -5% -18%
Individually assessed provision as a % of gross impaired assets 18.2% 21.4% 24.7%
Collectively assessed provision ($M) 32 4,247 4,046 4,032 5% 5%
Collectively assessed provision as a % of credit risk weighted assets 1.18% 1.16% 1.16%
Net Tangible Assets
Net tangible assets attributable to ordinary shareholders ($B)
3
64.3 66.3 65.4 -3% -2%
Net tangible assets per ordinary share ($) 21.60 22.05 21.77 -2% -1%
1.
Average ordinary shareholders’ equity excludes non-controlling interests.
2.
Liquidity Coverage Ratio is calculated on a half year average basis.
3.
Equals total shareholders’ equity less total non-controlling interests, goodwill and other intangible assets.
SUMMARY
14
Cash Profit Results (excl. Suncorp Bank)
The reported results for the September 2024 half include 2 months results for Suncorp Bank from the date of acquisition. Pro-forma results excluding
Suncorp Bank have been presented below to provide transparency and aid comparison.
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 7,919 7,899 0% 15,818 16,574 -5%
Other operating income 2,286 2,448 -7% 4,734 4,331 9%
Operating income 10,205 10,347 -1% 20,552 20,905 -2%
Operating expenses (5,338) (5,215) 2% (10,553) (10,139) 4%
Cash profit before credit impairment and income tax 4,867 5,132 -5% 9,999 10,766 -7%
Credit impairment (charge)/release (93) (70) 33% (163) (245) -33%
Cash profit before income tax 4,774 5,062 -6% 9,836 10,521 -7%
Income tax expense (1,458) (1,496) -3% (2,954) (3,080) -4%
Non-controlling interests (21) (14) 50% (35) (28) 25%
Cash profit (excl. Suncorp Bank) 3,295 3,552 -7% 6,847 7,413 -8%
Half Year Full Year
Sep 24 Mar 24 Sep 24 Sep 23
Profitability Ratios (excl. Suncorp Bank)
Return on average ordinary shareholders' equity
1
9.8% 10.1% 10.0% 11.0%
Return on average assets 0.57% 0.61% 0.59% 0.67%
Return on average RWA 1.54% 1.65% 1.59% 1.68%
Net interest margin 1.57% 1.56% 1.57% 1.70%
Net interest margin (excl. Markets business unit) 2.40% 2.33% 2.36% 2.39%
Net interest income to average credit RWA 4.67% 4.55% 4.61% 4.73%
Net interest income to average credit RWA (excl. Markets business unit) 5.26% 5.10% 5.18% 5.19%
Efficiency Ratios (excl. Suncorp Bank)
Operating expenses to operating income 52.3% 50.4% 51.3% 48.5%
Operating expenses to average assets 0.93% 0.90% 0.91% 0.91%
Credit Impairment Charge/(Release) (excl. Suncorp Bank)
Individually assessed credit impairment charge/(release) ($M) 107 38 145 93
Collectively assessed credit impairment charge/(release) ($M) (14) 32 18 152
Total credit impairment charge/(release) ($M) 93 70 163 245
Individually assessed credit impairment charge/(release) as a % of average gross loans
and advances
2
0.03% 0.01% 0.02% 0.01%
Total credit impairment charge/(release) as a % of average gross loans and advances
2
0.03% 0.02% 0.02% 0.04%
1.
Average ordinary shareholders’ equity excludes non-controlling interests and regulatory capital allocated to Suncorp Bank weighted from the period post-acquisition.
2.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
SUMMARY
15
Key Balance Sheet Metrics (excl. Suncorp Bank)
As at Movement
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Balance Sheet: Key Items (excl. Suncorp Bank)
Gross loans and advances 736.0 718.7 710.6 2% 4%
Net loans and advances 732.5 715.2 707.0 2% 4%
Total assets 1,141.9 1,089.7 1,105.6 5% 3%
Customer deposits 660.5 641.1 647.1 3% 2%
Deposits and other borrowings 841.2 806.7 814.7 4% 3%
Debt issuance 139.4 127.1 116.0 10% 20%
Credit risk weighted assets 330.5 348.4 349.0 -5% -5%
Total risk weighted assets 413.2 432.8 433.3 -5% -5%
As at Movement
Impaired Assets (excl. Suncorp Bank) Sep 24 Mar 24 Sep 23
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Gross impaired assets ($M) 1,627 1,518 1,521 7% 7%
Gross impaired assets as a % of gross loans and advances 0.22% 0.21% 0.21%
Net impaired assets ($M) 1,319 1,193 1,145 11% 15%
Net impaired assets as a % of shareholders' equity 2.03% 1.68% 1.64%
Individually assessed provision ($M) 308 325 376 -5% -18%
Individually assessed provision as a % of gross impaired assets 18.9% 21.4% 24.7%
Collectively assessed provision ($M) 3,999 4,046 4,032 -1% -1%
Collectively assessed provision as a % of credit risk weighted assets 1.21% 1.16% 1.16%
SUMMARY
16
Full Time Equivalent Staff
As at 30 September 2024, the Group employed 42,370 staff (Mar 24: 40,262; Sep 23: 40,342) on a full time equivalent (FTE) basis.
Division
Half Year Full Year
Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Australia Retail 10,832 11,383 -5% 10,832 11,313 -4%
Australia Commercial 3,294 3,442 -4% 3,294 3,514 -6%
Institutional 6,272 6,310 -1% 6,272 6,366 -1%
New Zealand 6,756 6,754 0% 6,756 6,766 0%
Suncorp Bank 2,798 - n/a 2,798 - n/a
Pacific 985 972 1% 985 1,013 -3%
Group Centre 11,433 11,401 0% 11,433 11,370 1%
Total FTE 42,370 40,262 5% 42,370 40,342 5%
Average FTE 40,855 40,392 1% 40,624 39,885 2%
Total FTE (excl. Suncorp Bank) 39,572 40,262 -2% 39,572 40,342 -2%
Average FTE (excl. Suncorp Bank) 39,957 40,392 -1% 40,175 39,885 1%
Geography
Half Year Full Year
Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Australia
1
21,290 19,335 10% 21,290 19,626 8%
New Zealand 7,003 7,185 -3% 7,003 7,244 -3%
Rest of World
1
14,077 13,742 2% 14,077 13,472 4%
Total FTE 42,370 40,262 5% 42,370 40,342 5%
1.
Includes 2,798 FTE from acquisition of Suncorp Bank, with 2,768 FTE in Australia and 30 FTE in Rest of World as at September 2024. Excluding these FTE, Australia decreased 4% for the
September 2024 half and 6% for the September 2024 full year.
Other Non-Financial Information
Half Year
Full Year
Shareholder value - ordinary shares Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Share price ($)
- high 31.94 29.90 7% 31.94 26.08 22%
- low 27.10 23.90 13% 23.90 22.39 7%
- closing
30.48 29.40 4% 30.48 25.66 19%
Closing market capitalisation of ordinary shares ($B) 90.8 88.4 3% 90.8 77.1 18%
Total shareholder return 6.7% 19.0% large 27.0% 20.0% large
As at Sep 24
ANZBGL credit ratings
Short-
Term
Long-
Term Outlook
Moody's Investors Service P-1 Aa2 Stable
S&P Global Ratings A-1+ AA- Stable
Fitch Ratings F1+ AA- Stable
GROUP RESULTS
17
CONTENTS Page
Cash Profit 18
Cash Net Interest Income 19
Cash Other Operating Income 22
Cash Operating Expenses 25
Investment Spend 27
Software Capitalisation 27
Credit Risk 28
Cash Income Tax Expense 37
Impact of Foreign Currency Translation 38
Earnings Related Hedges 40
Cash Earnings Per Share 40
Dividends 41
Economic Profit 41
Condensed Balance Sheet 42
Liquidity Risk 43
Funding 44
Capital Management 45
Leverage Ratio 50
Capital Management - Other Developments 51
GROUP RESULTS
18
Non-IFRS Information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
IFRS. The Group provides additional measures of performance in the Results Announcement which are prepared on a basis other than in accordance
with accounting standards. The guidance provided in Australian Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed
when presenting this information.
Cash Profit
Cash profit, a non-IFRS measure, represents the Group’s preferred measure of the result of the core business activities of the Group, enabling readers to
assess Group and divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items
from statutory profit (refer to Definitions on pages 111 to 113 for further details). The adjustments made in arriving at cash profit are included in statutory
profit which is subject to audit within the context of the external auditor’s audit of the 2024 ANZGHL Annual Report. Cash profit is not subject to audit by
the external auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on a consistent basis
across each period presented.
This Group Results section is reported on a cash profit basis unless otherwise stated.
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Statutory profit attributable to shareholders of the Company 3,128 3,407 -8% 6,535 7,106 -8%
Adjustments between statutory profit and cash profit
1
Economic hedges 67 197 -66% 264 217 22%
Revenue and expense hedges (22) (52) -58% (74) 90 large
Total adjustments between statutory profit and cash profit 45 145 -69% 190 307 -38%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
1.
Refer to pages 77 to 79 for analysis of the adjustments between statutory profit and cash profit.
Group performance - cash profit
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 8,170 7,899 3% 16,069 16,574 -3%
Other operating income 2,292 2,448 -6% 4,740 4,331 9%
Operating income 10,462 10,347 1% 20,809 20,905 0%
Operating expenses (5,526) (5,215) 6% (10,741) (10,139) 6%
Cash profit before credit impairment and income tax 4,936 5,132 -4% 10,068 10,766 -6%
Credit impairment (charge)/release (336) (70) large (406) (245) 66%
Cash profit before income tax 4,600 5,062 -9% 9,662 10,521 -8%
Income tax expense (1,406) (1,496) -6% (2,902) (3,080) -6%
Non-controlling interests (21) (14) 50% (35) (28) 25%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
Half Year Full Year
Cash profit/(loss) by division
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail 813 794 2% 1,607 1,938 -17%
Australia Commercial 677 665 2% 1,342 1,440 -7%
Institutional 1,336 1,522 -12% 2,858 2,949 -3%
New Zealand 745 791 -6% 1,536 1,546 -1%
Suncorp Bank
1
(122) - n/a (122) - n/a
Pacific 29 31 -6% 60 71 -15%
Group Centre (305) (251) 22% (556) (531) 5%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
1.
Includes Suncorp Bank acquisition related adjustment charge after tax of $196 million, refer to Guide to Results on page 10 for further information.
GROUP RESULTS
19
Cash Net Interest Income
Half Year
Full Year
Group
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income
1
8,170 7,899 3% 16,069 16,574 -3%
Average interest earning assets 1,031,611 1,015,621 2% 1,023,616 975,079 5%
Average deposits and other borrowings 857,919 859,764 0% 858,841 824,809 4%
Net interest margin (%) 1.58 1.56 2 bps 1.57 1.70 -13 bps
Group (excl. Markets business unit)
Net interest income 8,237 7,963 3% 16,200 16,390 -1%
Average interest earning assets 691,396 684,626 1% 688,011 685,720 0%
Average deposits and other borrowings 667,003 650,098 3% 658,551 628,069 5%
Net interest margin (%) 2.38 2.33 5 bps 2.35 2.39 -4 bps
Half Year
Full Year
Net interest margin by major division
1
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail
Net interest margin (%) - cash 1.89 1.94 -5 bps 1.91 2.22 -31 bps
Average interest earning assets 277,098 269,406 3% 273,252 257,354 6%
Average deposits and other borrowings 174,248 168,912 3% 171,580 156,099 10%
Australia Commercial
2
Net interest margin (%) - cash 2.59 2.60 -1 bp 2.59 2.70 -11 bps
Average interest earning assets 65,482 63,623 3% 64,553 61,130 6%
Average deposits and other borrowings 116,314 115,357 1% 115,836 112,821 3%
Institutional (excl. Markets business unit)
Net interest margin (%) - cash
3
2.36 2.39 -3 bps 2.38 2.31 7 bps
Average interest earning assets 162,905 162,856 0% 162,881 166,879 -2%
Average deposits and other borrowings 162,563 159,851 2% 161,207 159,008 1%
New Zealand
Net interest margin (%) - cash 2.57 2.56 1 bp 2.57 2.64 -7 bps
Average interest earning assets 122,283 122,613 0% 122,448 119,510 2%
Average deposits and other borrowings 105,751 106,417 -1% 106,084 102,296 4%
Suncorp Bank
Net interest margin (%) - cash 1.93 - n/a 1.93 - n/a
Average interest earning assets
4
26,023 - n/a 13,011 - n/a
Average deposits and other borrowings
4
20,976 - n/a 10,488 - n/a
1.
Includes the major bank levy of -$197 million for the September 2024 half and -$389 million for the September 2024 full year (Mar 24 half: -$192 million; Sep 23 full year: -$353 million).
2.
Australia Commercial division generates positive net interest income from surplus deposits held. Accordingly, $57.0 billion of average deposits for the September 2024 half and $57.6 billion
for the September 2024 full year (Mar 24 half: $58.1 billion; Sep 23 full year: $58.4 billion) have been included within average net interest earning assets for the net interest margin
calculation to align with the internal management reporting view.
3.
Net interest margin for the Institutional division including Markets business unit was 0.74% for the September 2024 half and 0.75% for the September 2024 full year
(Mar 24 half: 0.76%; Sep 23 full year: 0.89%).
4.
Based on 2 months of balances from the date of acquisition. The average balance for the 2 months in isolation was $78,069 million for average interest earning assets and $62,928 million
for average deposits and other borrowings.
GROUP RESULTS
20
Group net interest margin - September 2024 Full Year v September 2023 Full Year
September 2024 v September 2023
Net interest margin (-13 bps)
Assets pricing (-8 bps): driven by home loan pricing competition in the Australia Retail division.
Deposits pricing and wholesale funding (-2 bps): driven by higher wholesale funding issuance volume including the replacement of the Term
Funding Facility (TFF).
Assets and funding mix (0 bps): driven by favourable asset mix due to reduction in the volume of lower margin liquid assets, offset by
unfavourable deposit mix with a shift towards lower margin term deposits.
Capital and replicating portfolio (+5 bps): driven by higher interest rates, partially offset by lower volumes including a reduction in capital due to
the completion of Suncorp Bank acquisition and the share buy-back.
Markets activities (-8 bps): lower net interest income was driven by higher funding costs, primarily on commodity assets where the related
revenues are recognised as Other operating income, and higher average volume growth relative to the Group.
Average interest earning assets
Average interest earning assets increased $48.5 billion (5%) driven by:
Average trading assets and investment securities increased $36.8 billion (29%) driven by higher Markets activities and the acquisition of Suncorp
Bank.
Average net loans and advances increased $32.0 billion (5%) driven by lending growth across the Australia Retail, Australia Commercial, New
Zealand divisions, and the acquisition of Suncorp Bank. This was partially offset by a decrease in the Institutional division.
Average cash and other liquid assets decreased $20.2 billion (10%) driven by lower central bank balances held following the maturity of the TFF,
partially offset by higher reverse repurchase agreements and higher settlement balances owed to ANZ.
Average deposits and other borrowings
Average deposits and other borrowings increased $34.0 billion (4%) driven by higher term deposits, the acquisition of Suncorp Bank and higher
commercial paper, partially offset by lower repurchase agreements.
GROUP RESULTS
21
Group net interest margin - September 2024 Half Year v March 2024 Half Year
September 2024 v March 2024
Net interest margin (+2 bps)
Assets pricing (-1 bps): driven by pricing competition in the Australia Retail and Commercial divisions, partially offset by favourable home loan
lending margins in the New Zealand division.
Deposits pricing and wholesale funding (-3 bps): driven by pricing competition in the New Zealand division and higher wholesale funding volume.
Assets and funding mix (+4 bps): driven by favourable asset mix due to reduction in the volume of lower margin liquid assets.
Capital and replicating portfolio (+2 bps): driven by higher interest rates, partially offset by lower volumes including a reduction in capital due to
the completion of Suncorp Bank acquisition and share buy-backs.
Suncorp Bank (+1 bps): positive contribution to the Group net interest margin from the acquisition of Suncorp Bank.
Markets activities (-1 bps): driven by higher average volume growth relative to the Group.
Average interest earning assets
Average interest earning assets increased $16.0 billion (2%) driven by:
Average trading assets and investment securities increased $21.4 billion (14%) driven by higher Markets activities, and the acquisition of
Suncorp Bank, partially offset by the impact of foreign currency translation.
Average net loans and advances increased $35.4 billion (5%) driven by lending growth across the Australia Retail, Australia Commercial, and
Institutional divisions, and the acquisition of Suncorp Bank, partially offset by the impact of foreign currency translation.
Average cash and other liquid assets decreased $40.8 billion (21%) driven by lower central bank balances, partially offset by higher settlement
balances owed to ANZ.
Average deposits and other borrowings
Average deposits and other borrowings decreased $1.8 billion driven by decreases in term deposits, repurchase agreements, certificates of
deposits and commercial paper, and the impact of foreign currency translation, partially offset by the acquisition of Suncorp Bank and an
increase in at-call deposits.
GROUP RESULTS
22
Cash Other Operating Income
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net fee and commission income
1
956 919 4% 1,875 1,862 1%
Markets other operating income 1,039 1,276 -19% 2,315 1,923 20%
Share of associates' profit/(loss) 21 84 -75% 105 221 -52%
Other
1
276 169 63% 445 325 37%
Total 2,292 2,448 -6% 4,740 4,331 9%
Half Year Full Year
Other operating income by division
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail 363 301 21% 664 670 -1%
Australia Commercial 173 169 2% 342 365 -6%
Institutional 1,461 1,687 -13% 3,148 2,694 17%
New Zealand 191 208 -8% 399 409 -2%
Suncorp Bank 6 - n/a 6 - n/a
Pacific 47 44 7% 91 85 7%
Group Centre 51 39 31% 90 108 -17%
Total 2,292 2,448 -6% 4,740 4,331 9%
The Markets business unit is managed on a total revenue basis, with volatility in the Net interest income component not being a true reflection of overall
return for the business. Markets Net interest income and Other operating income are summarised in the table below with corresponding commentaries
provided on total markets income basis.
Half Year Full Year
Markets income
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income
2
(67) (64) 5% (131) 184 large
Other operating income
2
1,039 1,276 -19% 2,315 1,923 20%
Total 972 1,212 -20% 2,184 2,107 4%
1.
Excluding the Markets business unit.
2.
Net interest income includes funding costs in the Franchise trading book, primarily on commodity assets, where the related revenue is recognised as other operating income.
GROUP RESULTS
23
Other operating income - September 2024 Full Year v September 2023 Full Year
September 2024 v September 2023
Other operating income increased $409 million (9%). Excluding Suncorp Bank, Other operating income increased $403 million (9%).
Net fee and commission income
Net fee and commission income increased $13 million (1%) driven by:
$36 million increase in the Institutional division (excluding Markets business unit) driven by higher transaction activity in Corporate Finance and
Transaction Banking.
$12 million increase in the Group Centre division driven by higher Cashrewards revenue.
$22 million decrease in the Australia Commercial division driven by lower non-lending fees.
$15 million decrease in the Australia Retail division driven by lower cards revenue.
Markets income
Markets income increased $77 million (4%) with a $392 million increase in Other operating income, partially offset by a $315 million decrease in Net
interest income. The decrease in Net interest income was driven by higher funding costs in the Franchise trading book, primarily on commodity
assets, where the related customer revenues are recognised as Other operating income. The net $77 million increase was attributable to the
following business activities:
$123 million increase in Franchise Revenue was driven by Credit and Capital Markets, Rates and Commodities, partially offset by Foreign
Exchange. Credit and Capital Markets revenue increased due to increased customer issuance activity, and credit spreads generally tightened
resulting in trading gains. Rates revenue increased due to higher customer demand for hedging and financing solutions, and trading gains amid
lower interest rate volatility. Commodities revenue increased due to sustained customer demand for hedging solutions and more favourable
trading conditions in precious metals, particularly in the March 2024 half. This was partially offset by a decrease in Foreign Exchange revenue as
less directional trends in key currency pairs than the prior year resulted in reduced customer demand and lower trading gains.
$49 million increase in Derivative valuation adjustments driven by gains (net of hedges) from favourable credit and funding spread movements.
$95 million decrease in Balance Sheet revenues from the impact of fewer short-term interest rate increases than the prior year, partially offset by
higher revenues from increased investment securities holdings.
Share of associates’ profit/(loss)
Share of associates’ profit/(loss) decreased $116 million (52%) driven by the loss of equity accounted earnings following the disposal of AMMB
Holdings Berhad (AmBank) ($56 million), and decreases in P.T. Bank Pan Indonesia ($54 million) and Worldline Australia Pty Ltd ($8 million).
Other
Other income increased $120 million driven by:
$85 million increase in the Group Centre division driven by:
- $89 million net increase from non-recurring items in the prior year, including unfavourable valuation adjustments from investments measured
at FVTPL, a loss on disposal of data centres in Australia, impairment of investments held in the ANZ Non-Bank Group, and favourable
adjustment to the gain on sale relating to the completed UDC Finance divestment,
- $27 million increase from release of excess provision following legal settlements,
- $19 million increase from dividend received from Bank of Tianjin (BoT),
- $21 million decrease from lower gains from recycling of foreign currency translation reserves (FCTR) from other comprehensive income (OCI)
to profit or loss on dissolution of a number of international entities, and
- $21 million decrease from a loss on disposal of investment in AmBank.
$26 million increase in the Institutional (excluding Markets business unit) division driven by valuation losses in the prior year relating to USD
capital held in overseas operation to meet local regulatory requirements ($16 million) and higher volume-driven foreign exchange revenue in
Transaction Banking ($8 million).
$11 million increase in the Pacific division driven by higher foreign exchange revenue from increased tourism.
GROUP RESULTS
24
$11 million decrease in the New Zealand division driven by a gain on disposal of data centres in the prior year.
September 2024 v March 2024
Other operating income decreased $156 million (6%). Excluding Suncorp Bank, Other operating income decreased $162 million (7%).
Net fee and commission income
Net fee and commission income increased $37 million (4%) driven by:
$37 million increase in the Australia Retail division driven by higher cards revenue due to timing of cards incentives and seasonality of fees,
partially offset by higher customer remediation.
$15 million decrease in the New Zealand division driven by timing of card incentives and seasonality of fees.
Markets income
Markets income decreased $240 million (20%) with a $237 million decrease in Other operating income and a $3 million decrease in Net interest
income. The net $240 million decrease was attributable to the following business activities:
$188 million decrease in Franchise Revenue across all businesses. Commodities revenue decreased due to lower trading gains and customer
demand for precious metals hedging solutions compared to the March 2024 half. Rates revenue decreased due to lower customer demand for
hedging and financing solutions, and lower trading revenues. Foreign Exchange revenues decreased as less directional trends in key currency
pairs and slightly higher volatility resulted in lower customer demand for hedging and reduced trading gains. Credit and Capital Markets revenue
decreased due to a widening of credit spreads reducing trading gains.
$37 million decrease in Balance Sheet revenues from the impact of fewer short-term interest rate increases, partially offset by higher revenues
from increased investment securities holdings.
$15 million decrease in Derivative valuation adjustments driven by losses (net of hedges) from widening credit spreads and higher currency
volatility compared to the March 2024 half.
Share of associates’ profit/(loss)
Share of associates’ profit/(loss) decreased $63 million (75%) driven by the loss of equity accounted earnings following the disposal of AmBank.
Other
Other income increased $107 million (63%) driven by:
$71 million increase in the Group Centre division driven by:
- $27 million increase from release of excess provision following legal settlements,
- $22 million increase from higher realised gains on economic hedges against foreign currency denominated revenue streams offsetting net
unfavourable foreign currency translations elsewhere in the Group,
- $21 million increase from a loss on disposal of investment in AmBank in the March 2024 half,
- $19 million increase from dividend received from BoT, and
- $18 million decrease from a lower gain on recycling of FCTR from OCI to profit or loss on dissolution of a number of international entities.
$25 million increase in the Australia Retail division driven by higher insurance-related income.
GROUP RESULTS
25
Cash Operating Expenses
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Personnel 3,116 3,062 2% 6,178 5,762 7%
Premises 338 321 5% 659 658 0%
Technology 1,017 898 13% 1,915 1,700 13%
Restructuring 94 141 -33% 235 169 39%
Other 961 793 21% 1,754 1,850 -5%
Total 5,526 5,215 6% 10,741 10,139 6%
Half Year Full Year
Operating expenses by division
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail 1,781 1,735 3% 3,516 3,461 2%
Australia Commercial 744 763 -2% 1,507 1,423 6%
Institutional 1,431 1,444 -1% 2,875 2,728 5%
New Zealand 699 677 3% 1,376 1,299 6%
Suncorp Bank 188 - n/a 188 - n/a
Pacific 68 70 -3% 138 145 -5%
Group Centre 615 526 17% 1,141 1,083 5%
Total 5,526 5,215 6% 10,741 10,139 6%
Half Year Full Year
FTE by division Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Australia Retail 10,832 11,383 -5% 10,832 11,313 -4%
Australia Commercial 3,294 3,442 -4% 3,294 3,514 -6%
Institutional 6,272 6,310 -1% 6,272 6,366 -1%
New Zealand 6,756 6,754 0% 6,756 6,766 0%
Suncorp Bank 2,798 - n/a 2,798 - n/a
Pacific 985 972 1% 985 1,013 -3%
Group Centre 11,433 11,401 0% 11,433 11,370 1%
Total FTE 42,370 40,262 5% 42,370 40,342 5%
Average FTE 40,855 40,392 1% 40,624 39,885 2%
Total FTE (excl. Suncorp Bank) 39,572 40,262 -2% 39,572 40,342 -2%
Average FTE (excl. Suncorp Bank) 39,957 40,392 -1% 40,175 39,885 1%
GROUP RESULTS
26
Operating expenses - September 2024 Full Year v September 2023 Full Year
September 2024 v September 2023
Operating expenses increased $602 million (6%). Excluding Suncorp Bank, Operating expenses increased $414 million (4%).
Personnel expenses increased $416 million (7%) driven by inflationary impacts on wages including an increase in employee leave provisions,
impact from acquisition of Suncorp Bank, and higher resourcing associated with strategic initiatives. This was partially offset by benefits from
productivity initiatives.
Technology expenses increased $215 million (13%) driven by higher software licence costs, inflationary impacts on vendor costs, and impact
from acquisition of Suncorp Bank including accelerated amortisation expense on alignment to the Group’s software capitalisation policy. This
was partially offset by benefits from technology simplification.
Restructuring expenses increased $66 million (39%) driven by operational changes across the Group.
Other expenses decreased $96 million (5%) driven by initial one-off Compensation Scheme of Last Resort levy in the September 2023 full year
and benefits from productivity initiatives. This was partially offset by impact from acquisition of Suncorp Bank.
September 2024 v March 2024
Operating expenses increased $311 million (6%). Excluding Suncorp Bank, Operating expenses increased $123 million (2%).
Personnel expenses increased $54 million (2%) driven by impact from the acquisition of Suncorp Bank, and higher resourcing associated with
strategic initiatives.
Premises expenses increased $17 million (5%) driven by impact from the acquisition of Suncorp Bank.
Technology expenses increased $119 million (13%) driven by impact from the acquisition of Suncorp Bank including accelerated amortisation
expense on alignment to the Group’s software capitalisation policy, and inflationary impacts on vendor costs.
Restructuring expenses decreased $47 million (33%) driven by timing of operational changes.
Other expenses increased $168 million (21%) driven by Suncorp Bank integration costs, impact from acquisition of Suncorp Bank and higher
investment spend.
GROUP RESULTS
27
Investment Spend
Investment spend includes allocation of funds towards initiatives that support substantial changes and does not include those that are smaller and/or
more routine in nature.
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Investment expensed 707 550 29% 1,257 1,240 1%
Investment capitalised 175 111 58% 286 261 10%
Total investment spend 882 661 33% 1,543 1,501 3%
Investment spend by division Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail 234 199 18% 433 435 0%
Australia Commercial 65 55 18% 120 120 0%
Institutional 121 104 16% 225 224 0%
New Zealand 93 71 31% 164 147 12%
Suncorp Bank 14 - n/a 14 - n/a
Pacific 1 1 0% 2 1 100%
Group Centre
1
354 231 53% 585 574 2%
Total investment spend 882 661 33% 1,543 1,501 3%
1.
Includes investment spend relating to technology, property, risk management, financial management, treasury, strategy, marketing, human resources, corporate affairs and shareholder
functions.
Software Capitalisation
Capitalised software comprises all costs incurred to develop and acquire software. These costs are capitalised as intangible assets and amortised over
the expected useful lives. Details are presented in the table below:
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Balance at start of period 905 919 -2% 919 896 3%
Software capitalised during the period
1
288 146 97% 434 342 27%
Amortisation during the period
2
(173) (151) 15% (324) (320) 1%
Software impaired/written-off - (9) -100% (9) - n/a
Foreign currency translation - - n/a - 1 -100%
Total capitalised software 1,020 905 13% 1,020 919 11%
Capitalised software by division Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail 126 117 8% 126 125 1%
Australia Commercial 133 113 18% 133 104 28%
Institutional 475 453 5% 475 433 10%
New Zealand 18 13 38% 18 35 -49%
Suncorp Bank 64 - n/a 64 - n/a
Group Centre 204 209 -2% 204 222 -8%
Total capitalised software 1,020 905 13% 1,020 919 11%
1.
Includes $103 million from the acquisition of Suncorp Bank for the September 2024 half and the September 2024 full year.
2.
Includes $36 million accelerated amortisation expense from Suncorp Bank on alignment to the Group’s software capitalisation policy for the September 2024 half and the September 2024
full year.
GROUP RESULTS
28
Credit Risk
The Group’s assessment of expected credit losses (ECL) from its credit portfolio is subject to judgements and estimates made by management based on
a variety of internal and external information, as well as the Group’s experience of the performance of the portfolio under a variety of conditions. Refer to
Note 5 Allowance for expected credit losses for further information.
Suncorp Bank acquisition related adjustment
The collectively assessed credit impairment charge for the September 2024 half and September 2024 full year includes $244 million for Suncorp Bank’s
performing loans and advances. In accordance with Australian Accounting Standards requirements, the Group consolidated Suncorp Bank’s loans and
advances on 31 July 2024, however the Group was not permitted to recognise an allowance for ECL on the performing loans and advances, leading to a
proportional reduction in acquisition-related goodwill that would otherwise have been recognised. Subsequently, the Group was required to recognise a
collectively assessed allowance for ECL estimated using the Group’s ECL methodologies, with a corresponding charge recognised in the Group’s Income
Statement.
Credit impairment charge/(release)
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Collectively assessed credit impairment charge/(release)
230 32 large 262 152 72%
Individually assessed credit impairment charge/(release) 106 38 large 144 93 55%
Total credit impairment charge/(release) 336 70 large 406 245 66%
Credit impairment charge/(release) analysis
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
New and increased provisions (net of releases)
- Collectively assessed
230 32 large 262 152 72%
- Individually assessed 264 201 31% 465 476 -2%
Write-backs (99) (85) 16% (184) (216) -15%
Recoveries of amounts previously written-off (59) (78) -24% (137) (167) -18%
Total credit impairment charge 336 70 large 406 245 66%
GROUP RESULTS
29
Credit impairment charge/(release) by division
Half Year
Full Year
Collectively assessed
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia Retail
(23) (6) large
(29) 55 large
Australia Commercial
(1) 9 large
8 65 -88%
Institutional
14 43 -67%
57 (31) large
New Zealand
(4) (10) -60%
(14) 86 large
Suncorp Bank
244 - n/a
244 - n/a
Pacific
(2) (4) -50%
(6) (22) -73%
Group Centre
2 - n/a
2 (1) large
Total collectively assessed 230 32 large 262 152 72%
Individually assessed
Australia Retail 51 49 4%
100 80 25%
Australia Commercial 46 26 77%
72 42 71%
Institutional (18) (49) -63%
(67) (49) 37%
New Zealand 28 14 100%
42 26 62%
Suncorp Bank (1) - n/a
(1) - n/a
Pacific - (2) -100%
(2) (6) -67%
Group Centre - - n/a
- - n/a
Total individually assessed 106 38 large 144 93 55%
Total credit impairment charge/(release)
Australia Retail 28 43 -35%
71 135 -47%
Australia Commercial 45 35 29%
80 107 -25%
Institutional (4) (6) -33%
(10) (80) -88%
New Zealand 24 4 large
28 112 -75%
Suncorp Bank 243 - n/a
243 - n/a
Pacific (2) (6) -67%
(8) (28) -71%
Group Centre 2 - n/a
2 (1) large
Total credit impairment charge/(release) 336 70 large 406 245 66%
GROUP RESULTS
30
Credit impairment charge/(release) by division, cont'd
Collectively assessed
Individually assessed
Stage 1 Stage 2 Stage 3
Total
collectively
assessed
Stage 3 -
New and
increased
Stage 3 -
Recoveries
and write-
backs
Total
individually
assessed Total
September 2024 Full Year $M $M $M $M $M $M $M $M
Australia Retail 2 (71) 40 (29) 194 (94) 100 71
Australia Commercial 9 (43) 42 8 138 (66) 72 80
Institutional 15 10 32 57 56 (123) (67) (10)
New Zealand (1) (16) 3 (14) 72 (30) 42 28
Suncorp Bank 93 150 1 244 1 (2) (1) 243
Pacific (2) 3 (7) (6) 4 (6) (2) (8)
Group Centre 2 - - 2 - - - 2
Total 118 33 111 262 465 (321) 144 406
September 2023 Full Year
Australia Retail (27) 91 (9) 55 192 (112) 80 135
Australia Commercial 57 21 (13) 65 127 (85) 42 107
Institutional 79 (94) (16) (31) 99 (148) (49) (80)
New Zealand (3) 76 13 86 53 (27) 26 112
Suncorp Bank - - - - - - - -
Pacific 4 (13) (13) (22) 5 (11) (6) (28)
Group Centre (1) - - (1) - - - (1)
Total 109 81 (38) 152 476 (383) 93 245
September 2024 Half Year
Australia Retail (11) (29) 17 (23) 103 (52) 51 28
Australia Commercial (1) (34) 34 (1) 80 (34) 46 45
Institutional 15 1 (2) 14 35 (53) (18) (4)
New Zealand (12) 14 (6) (4) 42 (14) 28 24
Suncorp Bank 93 150 1 244 1 (2) (1) 243
Pacific (4) 5 (3) (2) 3 (3) - (2)
Group Centre 2 - - 2 - - - 2
Total 82 107 41 230 264 (158) 106 336
March 2024 Half Year
Australia Retail 13 (42) 23 (6) 91 (42) 49 43
Australia Commercial 10 (9) 8 9 58 (32) 26 35
Institutional - 9 34 43 21 (70) (49) (6)
New Zealand 11 (30) 9 (10) 30 (16) 14 4
Suncorp Bank - - - - - - - -
Pacific 2 (2) (4) (4) 1 (3) (2) (6)
Group Centre - - - - - - - -
Total 36 (74) 70 32 201 (163) 38 70
GROUP RESULTS
31
Collectively assessed credit impairment charge/(release)
September 2024 v September 2023
The collectively assessed impairment charge of $262 million for the September 2024 full year was driven by deterioration in credit risk profile across
all divisions, the acquisition of Suncorp Bank, and portfolio growth. This was partially offset by a reduction in management temporary adjustments as
anticipated risks are now represented in the portfolio credit profiles, and an improvement in economic outlook.
The collectively assessed impairment charge of $152 million for the September 2023 full year was driven by deterioration in the economic outlook,
and deterioration in credit risk profile across all divisions. This was partially offset by favourable changes in portfolio composition, particularly in the
Institutional division.
September 2024 v March 2024
The collectively assessed impairment charge of $230 million for the September 2024 half was driven by the acquisition of Suncorp Bank
($244 million), deterioration in credit risk profile across all divisions, and portfolio growth. This was partially offset by improvement in economic
outlook.
The collectively assessed impairment charge of $32 million for the March 2024 half was driven by deterioration in credit risk profile across all
divisions, and portfolio growth. This was partially offset by reduction in management temporary adjustments as anticipated risks are now represented
in portfolio credit profiles.
Individually assessed credit impairment charge/(release)
September 2024 v September 2023
The individually assessed credit impairment charge increased $51 million (55%) driven by increases in the Australia Commercial division ($30
million) due to higher new impairment flows in the SME Banking portfolio, the Australia Retail division ($20 million) due to higher new impairment
flows in the unsecured portfolio, and New Zealand division ($16 million) due to higher new impairment flows mainly in the Business & Agri portfolio.
This was partially offset by a decrease in the Institutional division ($18 million) due to lower new impairment flows.
September 2024 v March 2024
The individually assessed credit impairment charge increased $68 million driven by an increase in the Institutional division ($31 million) due to lower
write-backs and recoveries, and increases in the Australia Commercial division ($20 million) due to higher new impairment flows in the SME Banking
portfolio, and New Zealand division ($14 million) due to higher new impairment flows mainly in the Business & Agri portfolio.
GROUP RESULTS
32
Allowance for expected credit losses
1
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Collectively assessed allowance for ECL 4,247 4,046 4,032 5% 5%
Individually assessed allowance for ECL 308 325 376 -5% -18%
Total allowance for ECL 4,555 4,371 4,408 4% 3%
Net loans and advances at amortised cost 3,675 3,489 3,546 5% 4%
Off-balance sheet commitments - undrawn and contingent 846 849 827 0% 2%
Investment securities - debt securities at amortised cost 34 33 35 3% -3%
Total allowance for ECL 4,555 4,371 4,408 4% 3%
Allowance for expected credit losses by division
1
As at Movement
Collectively assessed
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Australia Retail 925 948 954 -2% -3%
Australia Commercial 1,049 1,050 1,041 0% 1%
Institutional 1,438 1,458 1,425 -1% 1%
New Zealand 539 542 560 -1% -4%
Suncorp Bank 248 - - n/a n/a
Pacific 45 48 52 -6% -13%
Group Centre 3 - - n/a n/a
Total collectively assessed 4,247 4,046 4,032 5% 5%
Individually assessed
Australia Retail 54 61 63 -11% -14%
Australia Commercial 133 121 127 10% 5%
Institutional 58 88 126 -34% -54%
New Zealand 51 38 40 34% 28%
Suncorp Bank - - - n/a n/a
Pacific 12 17 20 -29% -40%
Group Centre - - - n/a n/a
Total individually assessed 308 325 376 -5% -18%
Allowance for ECL
Australia Retail 979 1,009 1,017 -3% -4%
Australia Commercial 1,182 1,171 1,168 1% 1%
Institutional 1,496 1,546 1,551 -3% -4%
New Zealand 590 580 600 2% -2%
Suncorp Bank 248 - - n/a n/a
Pacific 57 65 72 -12% -21%
Group Centre 3 - - n/a n/a
Total allowance for ECL 4,555 4,371 4,408 4% 3%
1.
Includes allowance for ECL for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments - undrawn and
contingent facilities. For Investment securities - debt securities at FVOCI, the allowance for ECL is recognised in Other comprehensive income with a corresponding charge to profit or loss.
GROUP RESULTS
33
Allowance for expected credit losses by division, cont'd
1
Collectively assessed
Individually
assessed
As at September 2024
Stage 1
$M
Stage 2
$M
Stage 3
$M
Total
$M
Stage 3
$M
Total
$M
Australia Retail 121 600 204 925 54 979
Australia Commercial 418 489 142 1,049 133 1,182
Institutional 1,180 217 41 1,438 58 1,496
New Zealand 137 329 73 539 51 590
Suncorp Bank 92 150 6 248 - 248
Pacific 18 23 4 45 12 57
Group Centre 2 1 - 3 - 3
Total 1,968 1,809 470 4,247 308 4,555
As at March 2024
Australia Retail 131 631 186 948 61 1,009
Australia Commercial 420 522 108 1,050 121 1,171
Institutional 1,197 218 43 1,458 88 1,546
New Zealand 148 315 79 542 38 580
Suncorp Bank - - - - - -
Pacific 22 19 7 48 17 65
Group Centre - - - - - -
Total 1,918 1,705 423 4,046 325 4,371
As at September 2023
Australia Retail 118 674 162 954 63 1,017
Australia Commercial 410 531 100 1,041 127 1,168
Institutional 1,205 210 10 1,425 126 1,551
New Zealand 139 351 70 560 40 600
Suncorp Bank - - - - - -
Pacific 20 20 12 52 20 72
Group Centre - - - - - -
Total 1,892 1,786 354 4,032 376 4,408
1.
Includes allowance for ECL for Net loans and advances - at amortised cost, Investment securities - debt securities at amortised cost and Off-balance sheet commitments - undrawn and
contingent facilities. For Investment securities – debt securities at FVOCI, the allowance for ECL is recognised in Other comprehensive income with a corresponding charge to profit or loss.
Allowance for expected credit losses
September 2024 v September 2023
The allowance for ECL increased $147 million (3%) driven by a $215 million increase in collectively assessed allowance for ECL, partially offset by a
$68 million decrease in individually assessed allowance for ECL. The increase in collectively assessed allowance for ECL was driven by deterioration
in credit risk profile across all divisions ($267 million), additional allowance for ECL for Suncorp Bank ($248 million), and portfolio growth
($88 million). This was partially offset by reduction in management temporary adjustments as anticipated risks are more represented in portfolio credit
profiles ($201 million), improvement in economic outlook ($136 million), and reduction from foreign currency translation and other impacts
($51 million). The decrease in individually assessed allowance for ECL was driven by a decrease in the Institutional division ($68 million) due to lower
new impairment flows and continued write-backs and recoveries.
September 2024 v March 2024
The allowance for ECL increased $184 million (4%) driven by a $201 million increase in collectively assessed allowance for ECL, partially offset by a
$17 million decrease in individually assessed allowance for ECL. The increase in collectively assessed allowance for ECL was driven by additional
allowance for ECL for Suncorp Bank ($248 million), deterioration in credit risk profile across all divisions ($98 million), and portfolio growth
($25 million). This was partially offset by improvement in economic outlook ($141 million), and reduction from foreign currency translation and other
impacts ($33 million). The decrease in individually assessed allowance for ECL was driven by a decrease in the Institutional division ($30 million) due
to lower new impairment flows and continued write-backs and recoveries.
GROUP RESULTS
34
Long-Run Loss Rates
Management believes that disclosure of modelled long-run historical loss rates for individually assessed provisions assists in assessing the longer term
expected loss rates of the lending portfolio by removing the volatility of reported earnings created by the use of accounting losses. The long-run loss
methodology used for economic profit is an internal measure and is not based on the credit loss recognition principles of AASB 9 Financial Instruments.
As at
Long-run loss as a % of gross lending assets by division
Sep 24Mar 24Sep 23
Australia Retail 0.11%0.09%0.10%
Australia Commercial 0.52%0.53%0.52%
Institutional 0.20%0.21%0.19%
New Zealand 0.17%0.13%0.12%
Suncorp Bank 0.14%n/an/a
Total Group 0.18%0.18%0.17%
Non-Performing Credit Exposures
As at
Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Impaired loans
1
881 880 1,037 0% -15%
Restructured items
2
786 589 437 33% 80%
Non-performing commitments, contingencies and derivatives
1
26 49 47 -47% -45%
Gross impaired assets 1,693 1,518 1,521 12% 11%
Non-performing credit exposures not impaired
1
5,787 4,495 3,500 29% 65%
Total non-performing credit exposures
3
7,480 6,013 5,021 24% 49%
Gross impaired assets by division
Australia Retail 870 669 520 30% 67%
Australia Commercial 291 261 248 11% 17%
Institutional 284 437 562 -35% -49%
New Zealand 158 119 122 33% 30%
Suncorp Bank 66 - - n/a n/a
Pacific 24 32 69 -25% -65%
Gross impaired assets 1,693 1,518 1,521 12% 11%
Gross impaired assets by size of exposure
Less than $10 million 1,422 1,095 999 30% 42%
$10 million to $100 million 271 262 113 3% large
Greater than $100 million - 161 409 -100% -100%
Gross impaired assets 1,693 1,518 1,521 12% 11%
Individually assessed provisions
Impaired loans (303) (320) (366) -5% -17%
Non-performing commitments, contingencies and derivatives (5) (5) (10) 0% -50%
Net impaired assets 1,385 1,193 1,145 16% 21%
1.
Impaired loans and non-performing commitments, contingencies and derivatives do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail
exposures of 90+ days past due and defaulted but well secured wholesale and retail exposures. These collectively assessed exposures are included in Non-performing credit exposures not
impaired.
2.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed for
Stage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities
with similar risk.
3.
Non-performing credit exposures are aligned with the definition in APS220 Credit Risk Management.
September 2024 v September 2023
Gross impaired assets increased $172 million (11%) driven by an increase in the Australia Retail division ($350 million) due to restructured home
loan facilities, the acquisition of Suncorp Bank ($66 million), an increase in the Australia Commercial division ($43 million) due to higher new
impairment flows from the SME Banking portfolio, and an increase in New Zealand division ($36 million) due to credit deterioration across all
portfolios. This was partially offset by a decrease in the Institutional division ($278 million) due to the upgrade of several single name exposures, and
a decrease in the Pacific division ($45 million) due to reduced restructured exposures.
Non-performing credit exposures not impaired increased $2,287 million (65%) driven by defaults on well secured mortgages in the Australia Retail
and New Zealand divisions where 90+ days past due delinquency rates have increased, the acquisition of Suncorp Bank, and the downgrade of
several large well secured exposures in the Institutional division.
GROUP RESULTS
35
September 2024 v March 2024
Gross impaired assets increased $175 million (12%) driven by an increase in the Australia Retail division ($201 million) due to restructured home
loan facilities, the acquisition of Suncorp Bank ($66 million), and increases in the New Zealand ($39 million) and Australia Commercial ($30 million)
divisions due to portfolio deterioration. This was partially offset by a decrease in the Institutional division ($153 million) due to the upgrade of several
single name exposures.
Non-performing credit exposures not impaired increased $1,292 million (29%) driven by defaults on well secured mortgages in the Australia Retail
and New Zealand divisions where 90+ days past due delinquency rates have increased and the acquisition of Suncorp Bank.
The Group’s individually assessed provision coverage ratio on gross impaired assets was 18.2% at 30 September 2024 (Mar 24: 21.4%;
Sep 23: 24.7%). The decrease in ratio was driven by increase in well secured gross impaired assets with no corresponding increase in individually
assessed allowance for ECL.
New Impaired Assets
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Impaired loans
1
498 359 39% 857 1,032 -17%
Restructured items
2
330 269 23% 599 284 large
Non-performing commitments and contingencies
1
31 2 large 33 51 -35%
Total new impaired assets 859 630 36% 1,489 1,367 9%
New impaired assets by division
Australia Retail 454 323 41% 777 497 56%
Australia Commercial 132 122 8% 254 186 37%
Institutional 141 98 44% 239 525 -54%
New Zealand 119 84 42% 203 148 37%
Suncorp Bank 2 - n/a 2 - n/a
Pacific 11 3 large 14 11 27%
Total new impaired assets 859 630 36% 1,489 1,367 9%
1.
Impaired loans and non-performing commitments and contingencies do not include exposures that are collectively assessed for Stage 3 ECL, which comprise unsecured retail exposures of
90+ days past due and defaulted but well secured exposures.
2.
Restructured items are facilities where the original contractual terms have been modified for reasons related to the financial difficulties of the customer and are collectively assessed for
Stage 3 ECL. Restructuring may consist of reduction of interest, principal or other payments legally due, or an extension in maturity materially beyond those typically offered to new facilities
with similar risk.
September 2024 v September 2023
New impaired assets increased $122 million (9%) driven by the Australia Retail division ($280 million) due to higher new impairment flows from
restructured home loan facilities, the Australia Commercial division ($68 million) due to higher new impairment flows from the SME Banking portfolio
and well collateralised Agri exposures, and the New Zealand division ($55 million) due to credit deterioration across all portfolios. This was partially
offset by the Institutional division ($286 million) due to a lower number of downgrades.
September 2024 v March 2024
New impaired assets increased $229 million (36%) driven by the Australia Retail division ($131 million) due to higher new impairment flows from
restructured home loan facilities, the Institutional division ($43 million) due to a number of downgrades, and the New Zealand division ($35 million)
due to credit deterioration across all portfolios.
GROUP RESULTS
36
Ageing analysis of net loans and advances that are past due but not impaired
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
1-29 days 7,746 6,927 7,223 12% 7%
30-59 days 2,095 2,337 1,809 -10% 16%
60-89 days 1,368 1,234 1,146 11% 19%
90+ days 4,173 3,490 2,841 20% 47%
Total 15,382 13,988 13,019 10% 18%
September 2024 v September 2023
Net loans and advances past due but not impaired increased $2,363 million (18%) with increases across all ageing categories predominantly driven
by the acquisition of Suncorp Bank ($1,695 million), increases in the Australia Retail ($1,124 million) and New Zealand divisions ($440 million) mainly
from home loan portfolios. This was partially offset by decreases in the Institutional ($494 million), Pacific ($280 million), and Australia Commercial
($122 million) divisions.
September 2024 v March 2024
Net loans and advances past due but not impaired increased $1,394 million (10%) with increases across the 1-29 days, 60-89 days, and 90+ days
ageing categories predominantly driven by the acquisition of Suncorp Bank ($1,695 million), increases in the New Zealand ($185 million) and
Australia Retail ($112 million) divisions mainly from home loan portfolios. This was partially offset by decreases in the Institutional ($262 million),
Pacific ($229 million), and Australia Commercial ($107 million) divisions.
GROUP RESULTS
37
Cash Income Tax Expense
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Cash profit before income tax 4,600 5,062 -9% 9,662 10,521 -8%
Prima facie income tax expense at 30% 1,380 1,519 -9% 2,899 3,156 -8%
Tax effect of permanent differences:
Share of associates' (profit)/loss (7) (25) -72% (32) (66) -52%
Interest on convertible instruments 60 64 -6% 124 92 35%
Overseas tax rate differential (72) (90) -20% (162) (166) -2%
Provision for foreign tax on dividend repatriation 15 21 -29% 36 41 -12%
Other 19 (2) large 17 23 -26%
Subtotal 1,395 1,487 -6% 2,882 3,080 -6%
Income tax (over)/under provided in previous years 11 9 22% 20 - n/a
Income tax expense from cash profit 1,406 1,496 -6% 2,902 3,080 -6%
Australia 723 765 -5% 1,488 1,737 -14%
Overseas 683 731 -7% 1,414 1,343 5%
Income tax expense from cash profit 1,406 1,496 -6% 2,902 3,080 -6%
Effective tax rate 30.6% 29.6% 30.0% 29.3%
September 2024 v September 2023
The effective tax rate increased from 29.3% to 30.0%. The increase of 70 bps was driven by higher non-deductible interest on convertible
instruments (41 bps), lower equity accounted earnings (30 bps), and higher prior period adjustments (21 bps), partially offset by higher relative
contribution from offshore earnings that attract a lower rate of tax (10 bps) and various other small items (12 bps).
September 2024 v March 2024
The effective tax rate increased from 29.6% to 30.6%. The increase of 100 bps was driven by lower equity accounted earnings (34 bps), lower
relative contribution from offshore earnings that attract a lower rate of tax (21 bps), higher prior period adjustments (6 bps), lower non-deductible
interest on convertible instruments (4 bps) and various other small items (44 bps), partially offset by lower withholding tax expense on foreign
dividends (9 bps).
GROUP RESULTS
38
Impact of Foreign Currency Translation
The following tables present the Group’s comparative cash profit results, net loans and advances and customer deposits neutralised for the impact of
foreign currency translation. Comparative data has been adjusted to remove the translation impact of foreign currency movements by retranslating prior
period comparatives at current period foreign exchange rates.
September 2024 Full Year v September 2023 Full Year
Full Year Movement
Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted
Sep 24
$M
Sep 23
$M
Sep 23
$M
Sep 23
$M
Sep 24
v. Sep 23
Sep 24
v. Sep 23
Net interest income 16,069 16,574 - 16,574 -3% -3%
Other operating income 4,740 4,331 (49) 4,282 9% 11%
Operating income 20,809 20,905 (49) 20,856 0% 0%
Operating expenses (10,741) (10,139) 3 (10,136) 6% 6%
Cash profit before credit impairment and income tax 10,068 10,766 (46) 10,720 -6% -6%
Credit impairment (charge)/release (406) (245) (2) (247) 66% 64%
Cash profit before income tax 9,662 10,521 (48) 10,473 -8% -8%
Income tax expense (2,902) (3,080) 13 (3,067) -6% -5%
Non-controlling interests (35) (28) - (28) 25% 25%
Cash profit 6,725 7,413 (35) 7,378 -9% -9%
Cash profit/(loss) by division
Australia Retail
1,607 1,938 - 1,938
-17% -17%
Australia Commercial
1,342 1,440 - 1,440
-7% -7%
Institutional
2,858 2,949 (3) 2,946
-3% -3%
New Zealand
1,536 1,546 - 1,546
-1% -1%
Suncorp Bank
(122) - - -
n/a n/a
Pacific
60 71 - 71
-15% -15%
Group Centre (556) (531) (32) (563) 5% -1%
Cash profit 6,725 7,413 (35) 7,378 -9% -9%
Net loans and advances by division
Australia Retail
332,501 312,249 - 312,249
6% 6%
Australia Commercial
65,025 61,557 - 61,557
6% 6%
Institutional
210,464 210,234 (4,994) 205,240
0% 3%
New Zealand
123,504 121,824 (1,565) 120,259
1% 3%
Suncorp Bank
70,871 - - -
n/a n/a
Pacific
1,665 1,684 (53) 1,631
-1% 2%
Group Centre (648) (504) - (504) 29% 29%
Net loans and advances 803,382 707,044 (6,612) 700,432 14% 15%
Customer deposits by division
Australia Retail
176,813 164,786 - 164,786
7% 7%
Australia Commercial
116,273 113,408 - 113,408
3% 3%
Institutional
264,414 266,462 (9,293) 257,169
-1% 3%
New Zealand
100,907 99,076 (1,273) 97,803
2% 3%
Suncorp Bank
54,715 - - -
n/a n/a
Pacific
3,565 3,719 (117) 3,602
-4% -1%
Group Centre (1,476) (332) - (332) large large
Customer deposits 715,211 647,119 (10,683) 636,436 11% 12%
GROUP RESULTS
39
September 2024 Half Year v March 2024 Half Year
Half Year Movement
Actual
FX
unadjusted
FX
impact
FX
adjusted
FX
unadjusted
FX
adjusted
Sep 24
$M
Mar 24
$M
Mar 24
$M
Mar 24
$M
Sep 24
v. Mar 24
Sep 24
v. Mar 24
Net interest income 8,170 7,899 (48) 7,851 3% 4%
Other operating income 2,292 2,448 11 2,459 -6% -7%
Operating income 10,462 10,347 (37) 10,310 1% 1%
Operating expenses (5,526) (5,215) 31 (5,184) 6% 7%
Cash profit before credit impairment and income tax 4,936 5,132 (6) 5,126 -4% -4%
Credit impairment (charge)/release (336) (70) (1) (71) large large
Cash profit before income tax 4,600 5,062 (7) 5,055 -9% -9%
Income tax expense (1,406) (1,496) 2 (1,494) -6% -6%
Non-controlling interests (21) (14) - (14) 50% 50%
Cash profit 3,173 3,552 (5) 3,547 -11% -11%
Cash profit/(loss) by division
Australia Retail
813 794 - 794 2% 2%
Australia Commercial
677 665 - 665 2% 2%
Institutional
1,336 1,522 (14) 1,508 -12% -11%
New Zealand
745 791 (12) 779 -6% -4%
Suncorp Bank
(122) - - - n/a n/a
Pacific
29 31 - 31 -6% -6%
Group Centre (305) (251) 21 (230) 22% 33%
Cash profit 3,173 3,552 (5) 3,547 -11% -11%
Net loans and advances by division
Australia Retail
332,501 322,364 - 322,364 3% 3%
Australia Commercial
65,025 63,874 - 63,874 2% 2%
Institutional
210,464 206,268 (4,016) 202,252 2% 4%
New Zealand
123,504 121,625 233 121,858 2% 1%
Suncorp Bank
70,871 - - - n/a n/a
Pacific
1,665 1,678 (53) 1,625 -1% 2%
Group Centre (648) (638) - (638) 2% 2%
Net loans and advances 803,382 715,171 (3,836) 711,335 12% 13%
Customer deposits by division
Australia Retail
176,813 172,312 - 172,312 3% 3%
Australia Commercial
116,273 116,463 - 116,463 0% 0%
Institutional
264,414 249,169 (6,826) 242,343 6% 9%
New Zealand
100,907 99,779 191 99,970 1% 1%
Suncorp Bank
54,715 - - - n/a n/a
Pacific
3,565 3,657 (112) 3,545 -3% 1%
Group Centre (1,476) (290) - (290) large large
Customer deposits 715,211 641,090 (6,747) 634,343 12% 13%
GROUP RESULTS
40
Earnings Related Hedges
Where it is considered appropriate, the Group takes out economic hedges against larger foreign exchange denominated revenue streams (primarily New
Zealand Dollar and US Dollar). New Zealand Dollar exposure relates to the New Zealand geography and US Dollar exposures relate to Rest of World
geography. Details of these hedges are set out below.
Half Year Full Year
NZD Economic hedges
Sep 24
$M
Mar 24
$M
Sep 24
$M
Sep 23
$M
Net open NZD position (notional principal)
1,2
3,132 3,071 3,132 3,050
Amount taken to income (pre-tax statutory basis)
3
(27) 23 (4) (155)
Amount taken to income (pre-tax cash basis)
4
(11) (34) (45) 3
USD Economic hedges
Net open USD position (notional principal)
1,2
1,006 967 1,006 906
Amount taken to income (pre-tax statutory basis)
3
51 6 57 (1)
Amount taken to income (pre-tax cash basis)
4
(5) (12) (17) (31)
1.
Value in AUD at contracted rate.
2.
The following hedges were in place to partially hedge future earnings against adverse movements in exchange rates, at a NZD forward rate of NZD 1.09/AUD as at 30 September 2024
(Mar 24: NZD 1.09/AUD; Sep 23: NZD 1.10/AUD), and a USD forward rate of USD 0.66/AUD as at 30 September 2024 (Mar 24: USD 0.67/AUD; Sep 23: USD 0.68/AUD).
Half Year Full Year
Sep 24 Mar 24 Sep 24 Sep 23
NZD Economic Hedges
At period end (NZD billion) 3.4 3.4 3.4 3.4
Matured during the period (NZD billion) 1.5 1.4 2.9 2.7
USD Economic Hedges
At period end (USD billion) 0.7 0.6 0.7 0.6
Matured during the period (USD billion) 0.2 0.2 0.4 0.3
3.
Unrealised valuation movement plus realised revenue from matured or closed out hedges.
4.
Realised revenue from closed out hedges.
An unrealised gain on the outstanding NZD and USD economic hedges of $40 million for the September 2024 half (Mar 24 half: $75 million gain) and
$115 million for the September 2024 full year (Sep 23 full year: $128 million loss) was recorded in statutory profit. This unrealised gain is treated as an
adjustment to statutory profit in determining cash profit (included within revenue and expense hedge adjustments) as these are hedges of future NZD and
USD revenues.
Cash Earnings Per Share
Half Year Full Year
Sep 24Mar 24MovtSep 24Sep 23Movt
Cash earnings per share (cents)
Basic
105.9 118.3 -10%224.3 247.3 -9%
Diluted 104.5 116.0 -10%220.9 236.8 -7%
Cash weighted average number of ordinary shares (M)
Basic 2,995.5 3,001.3 0%2,998.4 2,997.2 0%
Diluted 3,230.2 3,249.4 -1%3,234.0 3,270.5 -1%
Cash profit ($M) 3,173 3,552 -11%6,725 7,413 -9%
Cash profit used in calculating diluted cash earnings per share ($M) 3,376 3,769 -10%7,145 7,745 -8%
GROUP RESULTS
41
Dividends
Half Year Full Year
Dividend per ordinary share (cents) Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Interim
- fully franked
1
- -
- 81
- partially franked
2
- 83 83 -
Final
- partially franked
3,4
83 - 83 94
Total 83 83 0% 166 175 -5%
Ordinary share dividends used in payout ratio ($M)
5.6
2,472 2,496 -1% 4,968 5,258 -6%
Cash profit ($M) 3,173 3,552 -11% 6,725 7,413 -9%
Ordinary share dividend payout ratio (cash profit basis)
6
77.9% 70.3% 73.9% 70.9%
1.
2023 interim dividend was fully franked for Australian tax purposes (30% tax rate) and carried New Zealand imputation credits of NZD 9 cents.
2.
2024 interim dividend was partially franked at 65% for Australian tax purposes (30% tax rate) and carried New Zealand imputation credits of NZD 12 cents.
3.
2023 final dividend comprising 81 cents and an additional dividend of 13 cents was partially franked at 56% for Australian tax purposes (30% tax rate) and carried New Zealand imputation
credits of NZD 11 cents.
4.
2024 proposed final dividend will be partially franked at 70% for Australian tax purposes (30% tax rate) and carry New Zealand imputation credits of NZD 12 cents.
5.
Dividend paid to ordinary equity holders of the Company. Excludes dividends paid by subsidiaries to the Group’s non-controlling equity holders of $19 million for the September 2024 half
and $32 million for the September 2024 full year (Mar 24 half: $13 million; Sep 23 full year: $27 million).
6.
Dividend payout ratio is calculated using the proposed 2024 final dividend of $2,472 million, based on the forecast number of ordinary shares on issue at the dividend record date. Dividend
payout ratios for the March 2024 half and September 2023 full year were calculated using actual dividends.
The Directors proposed a 2024 final dividend of 83 cents be paid on each eligible fully paid ANZ ordinary share, partially franked at 70% for Australian
taxation purposes. The 2024 final dividend will be paid on 20 December 2024 to owners of ANZ ordinary shares at the close of business on 14 November
2024 (record date), and carry New Zealand imputation credits of NZD 12 cents per ordinary share.
Economic Profit
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Statutory profit attributable to shareholders of the Company 3,128 3,407 -8% 6,535 7,106 -8%
Adjustments between statutory profit and cash profit 45 145 -69% 190 307 -38%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
Economic credit cost adjustment (234) (377) -38% (611) (695) -12%
Imputation credits 563 588 -4% 1,151 1,181 -3%
Economic return 3,502 3,763 -7% 7,265 7,899 -8%
Cost of capital (3,361) (3,433) -2% (6,794) (6,592) 3%
Economic profit 141 330 -57% 471 1,307 -64%
Economic profit is a risk adjusted profit measure used to evaluate business unit performance. This is used for internal management purposes and is not
subject to audit by the external auditor.
At a business unit level, capital is allocated based on regulatory capital such that higher risk businesses attract higher levels of capital. This method is
designed to help drive appropriate risk management and ensure business returns align with the level of risk. Key risks covered include credit risk,
operational risk, market risk and other risks.
Economic profit is calculated via a series of adjustments to cash profit:
The economic credit cost adjustment replaces the accounting expected credit loss charge with internal expected loss based on the average long-run
loss rate per annum on the portfolio over an economic cycle.
The benefit of imputation credits is recognised, estimated based on 70% of Australian tax.
The cost of capital is a major component of economic profit. At the Group level, this is calculated using average ordinary shareholders’ equity
(excluding non-controlling interests), multiplied by the cost of capital rate (currently at 9.75%).
Economic profit decreased by $836 million against the September 2023 full year, driven by lower cash profit, higher levels of capital (with the cost of
capital rate unchanged), and lower imputation credits, partially offset by favourable economic credit cost adjustment.
Economic profit decreased by $189 million against the March 2024 half, driven by lower cash profit and lower imputation credits, partially offset by
favourable economic cost adjustment, and lower levels of capital (with the cost of capital rate unchanged).
GROUP RESULTS
42
Condensed Balance Sheet
As at
Movement
Assets
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Cash / Settlement balances owed to ANZ / Collateral paid 166.6 149.7 186.1 11% -10%
Trading assets and investment securities 186.3 160.5 134.4 16% 39%
Derivative financial instruments 54.4 47.5 60.4 15% -10%
Net loans and advances 803.4 715.2 707.0 12% 14%
Other 18.4 16.8 17.7 10% 4%
Total assets 1,229.1 1,089.7 1,105.6 13% 11%
Liabilities
Settlement balances owed by ANZ / Collateral received 22.8 22.4 29.7 2% -23%
Deposits and other borrowings 903.6 806.7 814.7 12% 11%
Derivative financial instruments 55.3 42.7 57.5 30% -4%
Debt issuances 156.4 127.1 116.0 23% 35%
Other 20.4 19.7 17.7 4% 15%
Total liabilities 1,158.5 1,018.6 1,035.6 14% 12%
Total shareholders' equity
1
70.6 71.1 70.0 -1% 1%
1.
Total shareholders' equity as at 30 September 2024 includes $0.9 billion reduction in ordinary share capital following the commencement of a $2 billion on-market share buy-back on 3 July
2024.
September 2024 v September 2023
Cash / Settlement balances owed to ANZ / Collateral paid decreased $19.5 billion (10%) driven by decreases in balances with central banks
($34.0 billion), and settlement balances owed to ANZ ($3.7 billion), and the impact of foreign currency translation. This was partially offset by
increases in reverse repurchase agreements ($12.5 billion), and overnight interbank deposits ($8.2 billion).
Trading assets and investment securities increased $51.9 billion (39%) driven by increases in government and semi-government bonds and
treasury bills, and the acquisition of Suncorp Bank ($11.6 billion), partially offset by the impact of foreign currency translation.
Net loans and advances increased $96.4 billion (14%) driven by the acquisition of Suncorp Bank ($70.9 billion), increases in the Australia Retail
($20.3 billion) and New Zealand ($3.2 billion) divisions due to home loan growth, and the Institutional ($5.2 billion) and Australia Commercial
($3.5 billion) divisions due to higher lending volumes, partially offset by the impact of foreign currency translation.
Settlement balances owed by ANZ / Collateral received decreased $6.9 billion (23%) driven by decreases in collateral received and cash
clearing accounts.
Deposits and other borrowings increased $88.9 billion (11%) driven by the acquisition of Suncorp Bank ($62.3 billion), higher customer deposits
in the Australia Retail ($12.0 billion), Institutional ($7.2 billion), New Zealand ($3.1 billion) and Australia Commercial ($2.9 billion) divisions,
increases in commercial paper ($14.5 billion), and deposits from banks and repurchase agreements ($8.8 billion), partially offset by the impact of
foreign currency translation.
Debt issuances increased $40.4 billion (35%) driven by the issue of new senior and subordinated debt, including ANZ Capital Notes 9, partially
offset by the redemption of ANZ Capital Notes 4, and the acquisition of Suncorp Bank ($16.6 billion).
September 2024 v March 2024
Cash / Settlement balances owed to ANZ / Collateral paid increased $16.9 billion (11%) driven by increases in reverse repurchase agreements
($17.1 billion), and overnight interbank deposits ($13.4 billion). This was partially offset by a decrease in balances with central banks
($15.2 billion), and the impact of foreign currency translation.
Trading assets and investment securities increased $25.8 billion (16%) driven by an increase in semi-government bonds, and the acquisition of
Suncorp Bank ($11.6 billion), partially offset by the impact of foreign currency translation.
Derivative financial assets and liabilities increased $6.9 billion (15%) and $12.6 billion (30%) respectively driven by market rate movements,
primarily depreciation of the USD against certain major currencies and decreases in swap rates.
Net loans and advances increased $88.2 billion (12%) driven by the acquisition of Suncorp Bank ($70.9 billion), increases in the Australia Retail
($10.1 billion) and New Zealand ($1.6 billion) divisions due to home loan growth, and the Institutional ($8.2 billion) and Australia Commercial
($1.2 billion) divisions due to higher lending volumes, partially offset by the impact of foreign currency translation.
Deposits and other borrowings increased $96.9 billion (12%) driven by the acquisition of Suncorp Bank ($62.3 billion), higher customer deposits
in the Institutional ($22.1 billion) and Australia Retail ($4.5 billion) divisions, increases in deposits from banks and repurchase agreements
($19.5 billion), and certificates of deposit ($3.5 billion), partially offset by the impact of foreign currency translation.
Debt issuances increased $29.3 billion (23%) driven by the issue of new senior and subordinated debt and the acquisition of Suncorp Bank
($16.6 billion).
GROUP RESULTS
43
Liquidity Risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations as they fall due, including repaying depositors or maturing wholesale
debt, or that the Group has insufficient capacity to fund increases in assets. The timing mismatch of cash flows and the related liquidity risk is inherent in
all banking operations and is closely monitored by the Group and managed in accordance with the risk appetite set by the relevant Boards.
The Group operates under a non-operating holding company (NOHC) structure whereby:
ANZBGL’s liquidity risk management framework remains unchanged and continues to operate its own liquidity and funding program, governance
frameworks and reporting regime reflecting its Authorised Deposit-taking Institution (ADI) operations;
ANZGHL (parent entity) has no material liquidity risk given the structure and nature of the balance sheet; and
ANZ Non-Bank Group is not expected to have separate funding arrangements and will rely on ANZGHL for funding.
Furthermore, a separate liquidity policy has been established for ANZGHL and ANZBGL to reflect the differing nature of liquidity risk inherent in each
business model. The Group will ensure that ANZGHL and ANZ Non-Bank Group holds sufficient cash reserves to meet operating and financing
requirements.
ANZBGL Group’s approach to liquidity risk management incorporates two key components:
Scenario modelling of funding sources
ANZBGL Group’s liquidity risk appetite is defined by the ability to meet a range of regulatory requirements and internal liquidity metrics mandated by
the ANZBGL Board. The metrics cover a range of scenarios of varying duration and level of severity. The objective of this framework is to:
Provide protection against shorter term extreme market dislocation and stress.
Maintain structural strength in the balance sheet by ensuring that an appropriate amount of longer-term assets are funded with longer-term
funding.
Ensure that no undue timing concentrations exist in the Group’s funding profile.
Key components of this framework include the Liquidity Coverage Ratio (LCR), which is a severe short term liquidity stress scenario, the Net Stable
Funding Ratio (NSFR), a longer term structural liquidity measure (both of which are mandated by banking regulators including APRA), and internally-
developed liquidity scenarios for stress-testing purposes.
Liquid assets
ANZBGL Group holds a portfolio of high quality unencumbered liquid assets in order to protect ANZBGL Group’s liquidity position in a severely
stressed environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions
consistent with Basel 3 LCR:
Highest-quality liquid assets (HQLA1): Cash, highest credit quality government, central bank or public sector securities eligible for repurchase
with central banks to provide same-day liquidity.
High-quality liquid assets (HQLA2): High credit quality government, central bank or public sector securities, high quality corporate debt securities
and high quality covered bonds eligible for repurchase with central banks to provide same-day liquidity.
Alternative liquid assets (ALA): Eligible securities listed by the RBNZ.
ANZBGL Group monitors and manages the size and composition of its liquid assets portfolio on an ongoing basis in line with regulatory requirements
and the risk appetite set by the ANZBGL Board.
Half Year Average
1
Movement
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Market Values Post Discount
HQLA1 250.6 268.2 258.6
-7%-3%
HQLA2 12.9 11.6 9.8
11%32%
ALA
2
2.7 1.9 2.4
42%13%
Total liquid assets 266.2 281.7 270.8 -6%-2%
Cash flows modelled under stress scenario
Cash outflows 255.1 262.8 256.1 -3%0%
Cash inflows 53.4 51.9 51.4 3%4%
Net cash outflows 201.7 210.9 204.7 -4%-1%
Liquidity Coverage Ratio
3,4
132%134%132%-2%0%
1.
Half year average basis, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements.
2.
Comprised of any liquid assets as defined in the RBNZ's Liquidity Policy - Annex: Liquidity Assets - Prudential Supervision Department Document BS13A12.
3.
All currency Level 2 LCR.
4.
LCR remained above the regulatory minimum thresholds throughout the periods.
GROUP RESULTS
44
Funding
The ANZBGL Group targets a diversified funding base, avoiding undue concentrations by investor type, maturity, market source and currency. During the
September 2024 full year, the ANZBGL Group issued $41.6 billion of term wholesale funding
1
(including $3.7 billion of pre-funding for the September
2025 full year, $1.4 billion of Suncorp Bank issuance and $0.8 billion of perpetual subordinated notes issued by ANZ Holdings (New Zealand) Limited). In
addition, $1.7 billion of APRA compliant Additional Tier 1 (AT1) capital and $0.3 billion of RBNZ compliant additional tier 1 capital was issued.
The following table shows the ANZBGL Group’s total funding composition:
As at Movement
ANZBGL Group
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Customer deposits and other liabilities
Australia Retail 176.8 172.3 164.8 3%7%
Australia Commercial 116.3 116.5 113.4 0%3%
Institutional 264.4 249.2 266.5 6%-1%
New Zealand 100.9 99.8 99.1 1%2%
Suncorp Bank 54.7 - - n/an/a
Pacific 3.6 3.7 3.7 -3%-3%
Group Centre (0.1)(0.2)(0.1)-50%0%
Customer deposits 716.6 641.3 647.4 12%11%
Other funding liabilities
2
12.9 10.8 11.7 19%10%
Total customer liabilities (funding) 729.5 652.1 659.1 12%11%
Wholesale funding
3
Unsubordinated debt and central bank term funding
4
119.2 102.3 94.0 17%27%
Subordinated debt
5
39.7 36.3 33.7 9%18%
Certificates of deposit 42.2 39.1 41.9 8%1%
Commercial paper 47.8 45.2 33.3 6%44%
Other wholesale borrowings
6
127.7 96.8 113.9 32%12%
Total wholesale funding 376.6 319.7 316.8 18%19%
Shareholders' equity 68.8 70.2 69.1 -2%0%
Total funding 1,174.9 1,042.0 1,045.0 13%12%
1.
Excludes unsubordinated debt with shorter tenors (such as 12 to 18 months) and AT1 capital.
2.
Includes interest accruals, payables and other liabilities, provisions and net tax provisions, and excludes liability for acceptances as they do not provide net funding.
3.
Wholesale funding as at September 2024 includes $24.4 billion from the acquisition of Suncorp Bank.
4.
Includes RBA TFF of nil as it was fully repaid in the September 2024 half (Mar 24: $8.1 billion; Sep 23: $8.1 billion), RBNZ FLP of $2.3 billion (Mar 24: $3.2 billion; Sep 23: $3.2 billion) and
TLF of $0.2 billion (Mar 24: $0.3 billion; Sep 23: $0.3 billion).
5.
Includes subordinated debt issued by ANZ Bank New Zealand Limited which constitutes tier 2 capital under RBNZ requirements but does not meet the APRA Tier 2 requirements, and
$0.8 billion of perpetual subordinated notes issued by ANZ Holdings (New Zealand) Limited. The USD 300 million perpetual subordinated notes were redeemed on 31 October 2023.
6.
Includes borrowings from banks, securities sold under repurchase agreements, net derivative balances, special purpose vehicles and other borrowings.
Net Stable Funding Ratio
The following table shows the Level 2 NSFR composition:
As at Movement
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Required Stable Funding (RSF)
1
Retail & small and medium enterprises, corporate loans with 65% RSF factor
2
261.1 218.3 213.6 20%22%
Retail & small and medium enterprises, corporate loans with 85% RSF factors
2
221.4 206.1 208.5 7%6%
Other lending
3
58.4 56.2 54.9 4%6%
Liquid assets 17.9 15.1 13.8 19%30%
Other assets
4
48.4 46.8 46.8 3%3%
Total Required Stable Funding 607.2 542.5 537.6 12%13%
Available Stable Funding
1
Retail & small and medium enterprise customer deposits 357.0 308.9 301.3 16%18%
Corporate, public sector entities & operational deposits 133.9 128.5 130.8 4%2%
Central bank & other financial institution deposits 6.9 6.4 7.2 8%-4%
Term funding
5
94.2 81.5 76.0 16%24%
Short term funding & other liabilities 10.5 12.4 10.3 -15%2%
Capital 102.3 102.7 99.6 0%3%
Total Available Stable Funding 704.8 640.4 625.2 10%13%
Net Stable Funding Ratio
6
116%118%116%-2%0%
1.
NSFR factored balance as per APRA Prudential Regulatory Standard APS 210 Liquidity.
2.
Risk weighting as per APRA Prudential Regulatory Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk.
3.
Includes loans to financial institutions and central banks, and non-performing loans.
4.
Includes off-balance sheet items, net derivatives and other assets.
5.
Includes balances from the drawdown of the RBA and RBNZ Funding Facilities (TFF, FLP and TLF).
6.
The regulatory minimum NSFR is 100%.
GROUP RESULTS
45
Capital Management
The Group’s capital management framework includes managing capital at Level 1, Level 2 and ANZGHL Group.
The Group’s framework includes managing to Board approved risk appetite settings and maintaining all regulatory requirements. APRA requirements at
Level 1 and Level 2 include ANZ operating at or above APRA’s expectation for Domestic Systematically Important Banks (D-SIBs).
APRA’s authority for ANZGHL to be a NOHC of an ADI includes five conditions for ANZ’s capital management framework. Two of these are quantitative
requirements being:
ANZGHL must always ensure that the quality and quantity of the total capital of the Level 3 group is equivalent to, or greater than, the quality and
quantity of the sum of the total capital of the consolidated ANZ Bank Group and the consolidated ANZ Non-Bank Group.
ANZGHL must calculate and manage capital for the ANZ Non-Bank Group in accordance with an Economic Capital Model (ECM), which requires the
amount of capital held, in the form of Common Equity Tier 1 (CET1), to be equal to or greater than the capital requirement as calculated under the
ECM.
The Group has an ECM to calculate the capital to support the ANZ Non-Bank Group operations. The material risks included in the ANZ Non-Bank Group
currently are investment risk and fixed asset risk.
The Group’s compliance with these two conditions is presented in the following tables:
ANZ Bank
Group
3
$M
ANZ Non-Bank
Group
$M
ANZGHL
$M
ANZ Group
$M
As at September 2024
Allocated equity
1,2
68,760 567 1,301 70,628
Prudential adjustments to allocated equity (721) - - (721)
Gross Common Equity Tier 1 capital 68,039 567 1,301 69,907
Deductions (13,570) - - (13,570)
Common Equity Tier 1 capital 54,469 567 1,301 56,337
Tier 1 capital 62,676 567 1,301 64,544
Tier 2 capital 29,189 - - 29,189
Total qualifying capital 91,865 567 1,301 93,733
As at March 2024
Allocated equity
1
70,202 716 156 71,074
Prudential adjustments to shareholders' equity (648) - - (648)
Gross Common Equity Tier 1 capital 69,554 716 156 70,426
Deductions (11,142) - - (11,142)
Common Equity Tier 1 capital 58,412 716 156 59,284
Tier 1 capital 66,709 716 156 67,581
Tier 2 capital 28,223 - - 28,223
Total qualifying capital 94,932 716 156 95,804
As at September 2023
Allocated equity
1
69,085 749 183 70,017
Prudential adjustments to shareholders' equity (396) - - (396)
Gross Common Equity Tier 1 capital 68,689 749 183 69,621
Deductions (10,895) - - (10,895)
Common Equity Tier 1 capital 57,794 749 183 58,726
Tier 1 capital 66,026 749 183 66,958
Tier 2 capital 24,959 - - 24,959
Total qualifying capital 90,985 749 183 91,917
1.
Allocated in accordance with prudential capital management view.
2.
ANZGHL allocated equity includes ~$1.1 billion for the remaining share buy-back.
3.
ANZ Bank Group allocated equity is adjusted for capital deductions, including deconsolidated entity adjustments, to calculate ANZ Level 2 CET1, Tier 1, Tier 2 and total qualifying capital.
GROUP RESULTS
46
ANZ Non-Bank Group
As at
Sep 24
$M
Mar 24
$M
Sep 23
$M
Economic Capital Required 384 571 563
Actual Capital
1
543 740 744
Actual v Economic Capital 159 169 181
1.
This represents the aggregation of ANZ NBH Pty Ltd and ANZ Group Services Pty Ltd’s shareholders’ equity.
ANZ Bank Group
As at
APRA Capital Ratios Basel Harmonised
1
Sep 24Mar 24Sep 23Sep 24Mar 24Sep 23
Capital Ratios (Level 2)
Common Equity Tier 1 12.2%13.5%13.3%17.6%19.7%19.7%
Tier 1 14.0%15.4%15.2%19.9%22.2%22.2%
Total capital 20.6%21.9%21.0%28.2%30.7%29.8%
Risk weighted assets ($B) 446.6 432.8 433.3 353.1 334.1 331.5
1.
Basel harmonised methodology aligns with the Australia Banking Association Basel 3.1 Capital Comparison Study (March 2023).
APRA CET1 - September 2024 v September 2023
1.
Excluding the capital for the remaining share buy-back
September 2024 v September 2023
CET1 ratio decreased -114 bps to 12.20% during the September 2024 full year. Key drivers of the movement in the CET1 ratio were:
Cash profit (Level 2) increased the CET1 ratio by +157 bps.
Higher underlying RWA usage (excluding impact of foreign currency translation, regulatory changes and other one-offs) decreased the CET1
ratio by -19 bps primarily driven by lending growth in the Australia Retail and Institutional divisions and higher operational RWA, partially offset by
decreases in IRRBB and market risk RWA.
Payment of the 2023 final dividend (net of BOP issuance) and the 2024 interim dividend decreased the CET1 ratio by -122 bps.
RWA initiatives mainly from mortgage PD/LGD RWA modelling initiatives, partially offset by higher capital deductions including higher capitalised
expenses, higher deferred tax assets and loss in FVOCI reserves together with higher capital floor and additional operational RWA overlay,
increased CET1 ratio by +5 bps.
Proceeds from disposal of investment in AmBank increased the CET1 ratio by +20 bps.
Impact of Suncorp Bank decreased CET1 ratio by -109 bps:
RWA impacts decreased the CET1 ratio by -70 bps, driven by $30.6 billion increase in credit RWA, $3.3 billion increase in operational RWA,
$0.1 billion increase in market risk RWA, partially offset by capital floor benefit of $9.2 billion.
Total deductions and ECL adjustment impacts decreased the CET1 ratio by -39 bps, including provisional goodwill of $1.4 billion, ECL
adjustments and other deductions of $0.2 billion.
Transfer of $2 billion capital from ANZBGL to ANZGHL to fund $2 billion share buy-back decreased CET1 ratio by -46 bps.
September 2024 pro-forma CET1 capital ratio of 12.24% includes pro-forma adjustments for NOHC surplus capital of +4 bps.
GROUP RESULTS
47
APRA CET1 - September 2024 v March 2024
1.
Excluding the capital for the remaining share buy-back
September 2024 v March 2024
CET1 ratio decreased -130 bps to 12.20% during the September 2024 half. Key drivers of the movement in the CET1 ratio were:
Cash profit (Level 2) increased the CET1 ratio by +74 bps.
Higher underlying RWA usage (excluding impact of foreign currency translation, regulatory changes and other one-offs) decreased the CET1
ratio by -8 bps primarily driven by lending growth in the Australia Retail and Institutional divisions, partially offset by lower IRRBB RWA and
market risk RWA.
Payment of the 2024 interim dividend reduced the CET1 ratio by -58 bps.
RWA initiatives mainly from mortgage PD/LGD RWA modelling initiatives, partially offset by higher capital deductions including higher capitalised
expenses, higher deferred tax assets and loss in FVOCI reserves together with higher capital floor and additional operational RWA overlay,
increased CET1 ratio by +12 bps.
Proceeds from disposal of the remaining investment in AmBank increased the CET1 ratio by +5 bps.
Impact of Suncorp Bank decreased CET1 ratio by -109 bps:
RWA impacts decreased the CET1 ratio by -70 bps, driven by $30.6 billion increase in credit RWA, $3.3 billion increase in operational RWA,
$0.1 billion increase in market risk RWA, partially offset by capital floor benefit of $9.2 billion.
Total deductions and ECL adjustment impacts decreased the CET1 ratio by -39 bps, including provisional goodwill of $1.4 billion, ECL
adjustments and other deductions of $0.2 billion.
Transfer of $2 billion capital from ANZBGL to ANZGHL to fund $2 billion share buy-back decreased CET1 ratio by -46 bps.
September 2024 pro-forma CET1 capital ratio of 12.24% includes pro-forma adjustments for NOHC surplus capital of +4 bps.
GROUP RESULTS
48
Total Risk Weighted Assets
As at Movement
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Credit RWA 361.2 348.4 349.0 4% 3%
Market risk and IRRBB RWA 30.9 38.1 42.0 -19% -26%
Operational RWA 49.6 43.3 42.3 15% 17%
Total 441.7 429.8 433.3 3% 2%
IRB floor adjustment 4.9 3.0 - 63% n/a
Total RWA 446.6 432.8 433.3 3% 3%
Total Risk Weighted Assets - September 2024 v September 2023
1.
The attribution of CRWA movements requires assumptions and judgement, with different assumptions leading to different attributions.
September 2024 v September 2023
Total RWA increased $13.3 billion driven by:
$12.1 billion increase in total credit RWA due to:
$30.6 billion increase from impact of Suncorp Bank,
$13.2 billion increase from divisional lending, mainly from lending growth in the Australia Retail and Institutional divisions,
$2.8 billion increase from risk impacts,
$30.0 billion decrease from other credit RWA impacts including benefits from mortgage PD/LGD model updates in the Australia Retail and
New Zealand divisions, implementation of a new model relating to New Zealand rural exposures, removal of associated RBNZ supervisory
adjustments, and continued refinement in process, data and associated methodology treatments post implementation of revised capital
reform rules, and
$4.5 billion decrease from impact of foreign currency translation.
$3.7 billion decrease in non-credit RWA (operational RWA, and market risk & IRRBB RWA) due to:
$11.2 billion decrease in market risk and IRRBB RWA reflecting decreases in embedded losses,
$3.4 billion increase in non-credit RWA from impact of Suncorp Bank,
$3.1 billion increase from additional operational RWA overlay, and
$1.0 billion increase in underlying operational RWA driven by annual SMA model update.
$4.9 billion increase from IRB floor adjustment.
GROUP RESULTS
49
Total Risk Weighted Assets - September 2024 v March 2024
1.
The attribution of credit RWA movements requires assumptions and judgement, with different assumptions leading to different attributions.
September 2024 v March 2024
Total RWA increased $13.8 billion driven by:
$12.7 billion increase in total credit RWA due to:
$30.6 billion increase from impact of Suncorp Bank,
$6.4 billion increase from divisional lending, mainly from lending growth in the Australia Retail and Institutional divisions,
$2.7 billion increase from risk impacts,
$24.2 billion decrease from other credit RWA impacts mainly from mortgage PD/LGD model updates in the Australia Retail and New Zealand
divisions, and
$2.8 billion decrease from impact of foreign currency translation.
$0.8 billion decrease in non-credit RWA (operational RWA, and market risk & IRRBB RWA) due to:
$7.3 billion decrease from market risk and IRRBB RWA reflecting decreases in embedded losses,
$3.4 billion increase from non-credit risk RWA from impact of Suncorp Bank, and
$3.1 billion increase from additional operational RWA overlay.
$1.9 billion increase from IRB floor adjustment.
GROUP RESULTS
50
Leverage Ratio
At 30 September 2024, ANZ Bank Group’s APRA Leverage Ratio was 4.7% which is above the 3.5% minimum for IRB ADIs, including ANZ. The
following table summarises the ANZ Bank Group’s Leverage Ratio calculation:
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Tier 1 capital (net of capital deductions) 62,676 66,709 66,026 -6% -5%
On-balance sheet exposures (excluding derivatives and securities financing transaction
exposures)
1,096,917 984,875 984,663 11% 11%
Derivative exposures 52,478 59,357 51,008 -12% 3%
Securities financing transaction exposures 65,015 58,995 50,747 10% 28%
Other off-balance sheet exposures 129,727 124,894 138,301 4% -6%
Total exposure measure 1,344,137 1,228,121 1,224,719 9% 10%
APRA Leverage Ratio 4.7% 5.4% 5.4%
Basel Harmonised Leverage Ratio
1
5.2% 6.0% 6.0%
1
Basel Harmonised methodology aligns with the Australia Banking Association Basel 3.1 Capital Comparison Study (March 2023).
September 2024 v September 2023
APRA leverage ratio decreased -73 bps during the September 2024 full year. Key drivers of the movement were:
Net organic capital generation (largely from Level 2 cash profit and movements in capital deductions), less dividends paid increased the leverage
ratio by +11 bps.
Net AT1 capital impact (ANZ Capital Notes 9 issuance net of ANZ Capital Notes 4 redemption) increased the leverage ratio by +1 bps.
Growth in exposures (excluding the impacts from foreign currency translation) reduced the leverage ratio by -17 bps driven by lending growth
mainly in the Australia Retail division, growth in securities, partially offset by reduction in liquid assets.
Completion of Suncorp Bank acquisition decreased the leverage ratio by -49 bps.
Capital reduction to fund $2 billion on-market share buy-back decreased the leverage ratio by -16 bps.
Net other impacts decreased the leverage ratio by -3 bps.
September 2024 v March 2024
APRA leverage ratio decreased -77 bps during the September 2024 half. Key drivers of the movement were:
Net organic capital generation (largely from Level 2 cash profit and movements in capital deductions), less dividends paid increased the leverage
ratio by +7 bps.
Growth in exposures (excluding the impacts from foreign currency translation) decreased the leverage ratio by -16 bps driven by lending growth
mainly in the Australia Retail and Institutional divisions, growth in securities and off-balance sheet exposures.
Lower derivatives exposures increased the leverage ratio by +3 bps.
Completion of Suncorp Bank acquisition decreased the leverage ratio by -48 bps.
Capital reduction to fund $2 billion on-market share buy-back decreased the leverage ratio by -16bps.
Net other impacts decreased the leverage ratio by -7 bps.
GROUP RESULTS
51
Capital Management - Other Developments
Capital Requirements
APRA implemented its updated requirements in relation to capital adequacy and credit risk requirements for ADIs on 1 January 2023. In June 2024,
APRA released final prudential standards that contained minor amendments to the capital framework for ADIs. One update related to Prudential
Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112), which is effective from 30 September 2024. ADIs calculate
RWA under both the IRB RWA approach and the standardised RWA approach. When the standardised RWA multiplied by 72.5% is greater than the
IRB RWA, the difference is added as an adjustment to the total IRB RWA. APRA’s revised APS 112 methodology, for general corporate exposures,
includes an option (subject to APRA approval) to differentiates between ‘investment grade’ and ‘non-investment grade’ corporate exposures, allowing
ADI’s to assign an 85% risk weighting to ‘investment grade’ and 110% risk weighting to ‘non-investment grade’ exposures. The Group has received
formal approval from APRA to apply the revised methodology effective from 30 September 2024.
In July 2024, APRA released final IRRBB standards for implementation from October 2025. The final impact to the Group is subject to approval from
APRA of Group’s IRRBB models and so the final impact is uncertain currently.
In addition, APRA continues to consult and finalise revisions to a number of remaining prudential standards, being market risk and counterparty
credit risk. Given the number of items that are yet to be finalised by APRA, the aggregate final outcome from all changes to APRA's prudential
standards relating to their review of ADIs ‘unquestionably strong’ capital framework remains uncertain.
APRA Total Loss Absorbing Capacity Requirements
On 2 December 2021, APRA finalised its loss-absorbing capacity requirements for Australian D-SIBs, including ANZBGL, requiring an increase to
their minimum total capital requirement by 4.5% of RWA by January 2026. Absent of the potential capital requirement changes from AT1 discussion
paper (refer below), total Tier 2 ratio will increase to 6.5%. APRA expects the requirement to be satisfied predominantly with additional Tier 2 capital
with an equivalent decrease in other senior funding. The amount of the additional total capital requirement will be based on the Group’s actual RWA
as at January 2026.
APRA Discussion Paper on Additional Tier 1 Capital in Australia
In September 2024, APRA released a discussion paper ‘A more effective capital framework for a crisis’, which outlines potential amendments to
APRA’s prudential framework to ensure that the capital strength of the Australian banking system operates more effectively in stress. The proposed
changes include:
replacing the current requirement for 1.5% of Additional Tier 1 capital with 0.25% of CET1 and 1.25% of Tier 2 capital;
increasing the minimum CET1 requirement from 4.5% to 6%, but removing the Advanced portion of the capital conservation buffer of 1.25%;
total capital minimum, inclusive of APRA buffers, remains unchanged at 18.25% (including total loss-absorbing capacity (TLAC) requirements);
Tier 2 requirement (inclusive of TLAC) would increase from 6.5% to 7.75%.
The changes are proposed to come into effective from January 2027.
The Reserve Bank of New Zealand review of capital requirements
The RBNZ’s revised capital adequacy requirements for New Zealand banks, which are set out in the Banking Prudential Requirements documents
are being implemented in stages during a transition period from October 2021 to July 2028. The key requirements for ANZ Bank New Zealand
Limited (ANZ Bank New Zealand) still being implemented are as follows:
ANZ Bank New Zealand’s tier 1 capital requirement will increase to 16% of RWA, of which up to 2.5% can be in the form of AT1 capital. ANZ
Bank New Zealand’s total capital requirement will increase to 18% of RWA, of which up to 2% can be tier 2 capital. The increased capital ratio
requirements are being implemented progressively from 1 July 2022 to 1 July 2028.
AT1 capital must consist of perpetual preference shares, which may be redeemable. Tier 2 capital must consist of long-term subordinated debt.
The net impact on the Group’s Level 1 CET1 capital, by the end of the transition period in 2028, is dependent on the additional capital required by
ANZ Bank New Zealand to comply with the increased capital requirements. Whether the additional capital requirement for ANZ Bank New Zealand
results in financial implications for ANZ will also depend on whether the Group’s Level 1 CET1 ratio is lower than the Group’s Level 2 CET1 ratio in
2028. Given the level of uncertainty of these outcomes, the future financial impact of the RBNZ’s revised capital adequacy requirements is not able to
be quantified currently.
Group regulation - roadmap for review
In October 2022, APRA released a roadmap for review of the prudential framework for ‘groups’ of entities. The review will focus on rationalising
requirements, promoting consistency, and providing clarity across different standards that apply to groups. As part of the review, guidelines for
licensing new NOHC authorities will be updated. For existing APRA authorised NOHCs, there will be no immediate changes, although APRA will
seek to ensure new or adjusted NOHC license conditions are applied in a consistent manner. The review will be multi-year, finishing in 2025.
GROUP RESULTS
52
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DIVISIONAL RESULTS
53
CONTENTS Page
Divisional Performance 54
Australia Retail 58
Australia Commercial 60
Institutional 62
New Zealand 69
Suncorp Bank 74
Pacific 75
Group Centre 75
DIVISIONAL RESULTS
Divisional Performance
54
The Group operates on a divisional structure with seven divisions: Australia Retail, Australia Commercial, Institutional, New Zealand, Suncorp Bank,
Pacific, and Group Centre. For further information on the composition of divisions, refer to the Definitions on page 113.
The presentation of divisional results has been impacted by the following changes during the period.
Accounting standards adoption - the Group adopted AASB 17 Insurance Contracts (AASB 17) on 1 October 2023. Although the overall profit
recognised in respect of insurance contracts will not change over the life of contracts, the timing of revenue recognition will change. The Group
applied AASB 17 effective from 1 October 2022 and restated prior period comparative information. This resulted in a decrease in opening retained
earnings of $37 million on 1 October 2022, an increase in profit after tax (Sep 23 full year: $8 million), an increase in total assets (Sep 23: $22
million), and an increase in total liabilities (Sep 23: $51 million) in the Australia Retail division.
Divisional results presentation – prior period divisional comparative information was restated to reflect customer re-segmentation within the
Australia Commercial division to better meet the needs of our customers during the September 2024 half, and a number of cost reallocations across
and within the divisions during the March 2024 half.
Other than those described above, there have been no other significant changes.
The divisions reported are consistent with internal reporting provided to the chief operating decision maker, being the Chief Executive Officer.
The Divisional Results section is reported on a cash profit basis.
DIVISIONAL RESULTS
Divisional Performance
55
Cash profit by division - September 2024 Full Year v September 2023 Full Year
September 2024 Full Year
Australia
Retail
$M
Australia
Commercial
$M
Institutional
$M
New Zealand
$M
Suncorp
Bank
$M
Pacific
$M
Group
Centre
$M
Group
$M
Net interest income 5,223 3,164 3,741 3,143 251 123 424 16,069
Other operating income 664 342 3,148 399 6 91 90 4,740
Operating income 5,887 3,506 6,889 3,542 257 214 514 20,809
Operating expenses (3,516) (1,507) (2,875) (1,376) (188) (138) (1,141) (10,741)
Cash profit/(loss) before credit
impairment and income tax
2,371 1,999 4,014 2,166 69 76 (627) 10,068
Credit impairment (charge)/release (71) (80) 10 (28) (243) 8 (2) (406)
Cash profit/(loss) before income tax 2,300 1,919 4,024 2,138 (174) 84 (629) 9,662
Income tax (expense)/benefit (693) (577) (1,166) (602) 52 (22) 106 (2,902)
Non-controlling interests - - - - - (2) (33) (35)
Cash profit/(loss) 1,607 1,342 2,858 1,536 (122) 60 (556) 6,725
September 2023 Full Year
Australia
Retail
$M
Australia
Commercial
$M
Institutional
$M
New Zealand
$M
Suncorp
Bank
$M
Pacific
$M
Group
Centre
$M
Group
$M
Net interest income 5,709 3,224 4,040 3,149 - 123 329 16,574
Other operating income 670 365 2,694 409 - 85 108 4,331
Operating income 6,379 3,589 6,734 3,558 - 208 437 20,905
Operating expenses (3,461) (1,423) (2,728) (1,299) - (145) (1,083) (10,139)
Cash profit/(loss) before credit
impairment and income tax
2,918 2,166 4,006 2,259 - 63 (646) 10,766
Credit impairment (charge)/release (135) (107) 80 (112) - 28 1 (245)
Cash profit/(loss) before income tax 2,783 2,059 4,086 2,147 - 91 (645) 10,521
Income tax (expense)/benefit (845) (619) (1,137) (601) - (18) 140 (3,080)
Non-controlling interests - - - - - (2) (26) (28)
Cash profit/(loss) 1,938 1,440 2,949 1,546 - 71 (531) 7,413
September 2024 Full Year v
September 2023 Full Year
Australia
Retail
Australia
Commercial Institutional New Zealand
Suncorp
Bank Pacific
Group
Centre Group
Net interest income -9% -2% -7% 0% n/a 0% 29% -3%
Other operating income -1% -6% 17% -2% n/a 7% -17% 9%
Operating income -8% -2% 2% 0% n/a 3% 18% 0%
Operating expenses 2% 6% 5% 6% n/a -5% 5% 6%
Cash profit/(loss) before credit
impairment and income tax
-19% -8% 0% -4% n/a 21% -3% -6%
Credit impairment (charge)/release -47% -25% -88% -75% n/a -71% large 66%
Cash profit/(loss) before income tax -17% -7% -2% 0% n/a -8% -2% -8%
Income tax (expense)/benefit -18% -7% 3% 0% n/a 22% -24% -6%
Non-controlling interests n/a n/a n/a n/a n/a 0% 27% 25%
Cash profit/(loss) -17% -7% -3% -1% n/a -15% 5% -9%
DIVISIONAL RESULTS
Divisional Performance
56
Cash profit by division - September 2024 Half Year v March 2024 Half Year
September 2024 Half Year
Australia
Retail
$M
Australia
Commercial
$M
Institutional
$M
New Zealand
$M
Suncorp
Bank
$M
Pacific
$M
Group
Centre
$M
Group
$M
Net interest income 2,615 1,584 1,859 1,571 251 60 230 8,170
Other operating income 363 173 1,461 191 6 47 51 2,292
Operating income 2,978 1,757 3,320 1,762 257 107 281 10,462
Operating expenses (1,781) (744) (1,431) (699) (188) (68) (615) (5,526)
Cash profit/(loss) before credit
impairment and income tax
1,197 1,013 1,889 1,063 69 39 (334) 4,936
Credit impairment (charge)/release (28) (45) 4 (24) (243) 2 (2) (336)
Cash profit/(loss) before income tax 1,169 968 1,893 1,039 (174) 41 (336) 4,600
Income tax (expense)/benefit (356) (291) (557) (294) 52 (11) 51 (1,406)
Non-controlling interests - - - - - (1) (20) (21)
Cash profit/(loss) 813 677 1,336 745 (122) 29 (305) 3,173
March 2024 Half Year
Australia
Retail
$M
Australia
Commercial
$M
Institutional
$M
New Zealand
$M
Suncorp
Bank
$M
Pacific
$M
Group
Centre
$M
Group
$M
Net interest income 2,608 1,580 1,882 1,572 - 63 194 7,899
Other operating income 301 169 1,687 208 - 44 39 2,448
Operating income 2,909 1,749 3,569 1,780 - 107 233 10,347
Operating expenses (1,735) (763) (1,444) (677) - (70) (526) (5,215)
Cash profit/(loss) before credit
impairment and income tax
1,174 986 2,125 1,103 - 37 (293) 5,132
Credit impairment (charge)/release (43) (35) 6 (4) - 6 - (70)
Cash profit/(loss) before income tax 1,131 951 2,131 1,099 - 43 (293) 5,062
Income tax (expense)/benefit (337) (286) (609) (308) - (11) 55 (1,496)
Non-controlling interests - - - - - (1) (13) (14)
Cash profit/(loss) 794 665 1,522 791 - 31 (251) 3,552
September 2024 Half Year v
March 2024 Half Year
Australia
Retail
Australia
Commercial Institutional New Zealand
Suncorp
Bank Pacific
Group
Centre Group
Net interest income 0% 0% -1% 0% n/a -5% 19% 3%
Other operating income 21% 2% -13% -8% n/a 7% 31% -6%
Operating income 2% 0% -7% -1% n/a 0% 21% 1%
Operating expenses 3% -2% -1% 3% n/a -3% 17% 6%
Cash profit/(loss) before credit
impairment and income tax
2% 3% -11% -4% n/a 5% 14% -4%
Credit impairment (charge)/release -35% 29% -33% large n/a -67% n/a large
Cash profit/(loss) before income tax 3% 2% -11% -5% n/a -5% 15% -9%
Income tax (expense)/benefit 6% 2% -9% -5% n/a 0% -7% -6%
Non-controlling interests n/a n/a n/a n/a n/a 0% 54% 50%
Cash profit/(loss) 2% 2% -12% -6% n/a -6% 22% -11%
DIVISIONAL RESULTS
Divisional Performance
57
Key Balance Sheet Metrics by division
As at Movement
Net Loans and Advances
Sep 24
$B
Mar 24
$B
Sep 23
$B
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Australia Retail 332.5 322.4 312.2 3% 6%
Australia Commercial 65.0 63.9 61.6 2% 6%
Institutional
1
210.5 206.3 210.2 2% 0%
New Zealand
1
123.5 121.6 121.8 2% 1%
Suncorp Bank 70.9 - - n/a n/a
Pacific
1
1.7 1.7 1.7 0% 0%
Group Centre (0.7) (0.7) (0.5) 0% 40%
Total 803.4 715.2 707.0 12% 14%
Customer Deposits
Australia Retail 176.8 172.3 164.8 3% 7%
Australia Commercial 116.3 116.5 113.4 0% 3%
Institutional
1
264.4 249.2 266.5 6% -1%
New Zealand
1
100.9 99.8 99.1 1% 2%
Suncorp Bank 54.7 - - n/a n/a
Pacific
1
3.6 3.7 3.7 -3% -3%
Group Centre (1.5) (0.4) (0.3) large large
Total 715.2 641.1 647.1 12% 11%
Risk Weighted Assets
Australia Retail 116.9 130.2 127.7 -10% -8%
Australia Commercial 45.5 46.6 47.5 -2% -4%
Institutional 166.9 171.4 175.2 -3% -5%
New Zealand 62.1 66.8 70.9 -7% -12%
Suncorp Bank 33.4 - - n/a n/a
Pacific 3.6 3.6 3.8 0% -5%
Group Centre 18.2 14.2 8.2 28% large
Total 446.6 432.8 433.3 3% 3%
Half Year Full Year
Return on Average Risk Weighted Assets
Sep 24Mar 24Sep 24Sep 23
Australia Retail
1.30%1.22%
1.26%1.58%
Australia Commercial
2.94%2.83%
2.88%2.88%
Institutional
1.59%1.77%
1.68%1.55%
New Zealand
2.34%2.31%
2.33%2.29%
Suncorp Bank
2
(2.21%)n/a
(2.21%)n/a
Pacific
1.62%1.67%
1.64%1.81%
Group Centre
(2.97%)(5.01%)
(3.88%)(6.05%)
Total 1.44%1.65% 1.55%1.67%
1.
Refer to pages 38 and 39 for Net loans and advances and Customer deposits movements excluding the impact of foreign currency translation.
2.
Includes Suncorp Bank acquisition related adjustment charge after tax of $196 million.
DIVISIONAL RESULTS
Australia Retail
Maile Carnegie
58
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 2,615 2,608 0%
5,223 5,709 -9%
Other operating income 363 301 21%
664 670 -1%
Operating income 2,978 2,909 2%
5,887 6,379 -8%
Operating expenses (1,781) (1,735) 3%
(3,516) (3,461) 2%
Cash profit before credit impairment and income tax 1,197 1,174 2%
2,371 2,918 -19%
Credit impairment (charge)/release (28) (43) -35%
(71) (135) -47%
Cash profit before income tax 1,169 1,131 3%
2,300 2,783 -17%
Income tax expense (356) (337) 6%
(693) (845) -18%
Cash profit 813 794 2%
1,607 1,938 -17%
Balance Sheet
Net loans and advances 332,501 322,364 3%
332,501 312,249 6%
Other external assets 2,855 3,411 -16%
2,855 2,958 -3%
External assets 335,356 325,775 3%
335,356 315,207 6%
Customer deposits 176,813 172,312 3%
176,813 164,786 7%
Other external liabilities 3,988 4,172 -4%
3,988 4,140 -4%
External liabilities 180,801 176,484 2%
180,801 168,926 7%
Risk weighted assets 116,931 130,184 -10%
116,931 127,673 -8%
Average gross loans and advances 328,413 318,649 3%
323,531 302,203 7%
Average deposits and other borrowings 174,248 168,912 3%
171,580 156,099 10%
Ratios
Return on average assets 0.49% 0.50%
0.49% 0.64%
Net interest margin 1.89% 1.94%
1.91% 2.22%
Operating expenses to operating income 59.8% 59.6%
59.7% 54.3%
Operating expenses to average assets 1.08% 1.08%
1.08% 1.14%
Individually assessed credit impairment charge/(release) 51 49 4%
100 80 25%
Individually assessed credit impairment charge/(release) as a % of average GLA
1
0.03% 0.03%
0.03% 0.03%
Collectively assessed credit impairment charge/(release) (23) (6) large
(29) 55 large
Collectively assessed credit impairment charge/(release) as a % of average GLA
1
(0.01%) (0.00%)
(0.01%) 0.02%
Gross impaired assets 870 669 30%
870 520 67%
Gross impaired assets as a % of GLA 0.26% 0.21%
0.26% 0.17%
Total FTE 10,832 11,383 -5%
10,832 11,313 -4%
1.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
Performance September 2024 v September 2023
Lending volumes increased driven by home loan growth.
Net interest margin decreased driven by margin contraction from home
loan and deposit pricing competition, unfavourable deposit mix with a
shift towards lower margin term deposits, and higher net funding costs.
This was partially offset by higher earnings on capital and replicating
portfolio.
Operating expenses increased driven by inflationary impacts and
incremental costs associated with strategic initiatives including ANZ Plus,
partially offset by lower restructuring expense, and benefits from
productivity initiatives.
Credit impairment charge decreased primarily driven by lower collectively
assessed credit impairment, partially offset by higher individually
assessed credit impairment charge due to higher new impairment flows
in the unsecured portfolio.
Performance September 2024 v March 2024
Lending volumes increased driven by home loan growth.
Net interest margin decreased driven by asset margin contraction from
home loan pricing competition, and unfavourable deposit mix with a shift
towards lower margin savings and term deposits. This was partially offset
by higher earnings on capital and replicating portfolio.
Other operating income increased driven by timing of cards incentives
and seasonality of fees.
Operating expenses increased driven by incremental costs associated
with strategic initiatives including ANZ Plus, inflationary impacts and
seasonal factors, partially offset by benefits from productivity initiatives
and lower restructuring expense.
Credit impairment charge decreased driven by lower collectively
assessed credit impairment.
DIVISIONAL RESULTS
Australia Retail
Maile Carnegie
59
Individually assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Home Loans 3 6 -50% 9 10 -10%
Cards and Personal Loans 47 42 12% 89 68 31%
Deposits and Payments
1
1 1 0% 2 2 0%
Individually assessed credit impairment charge/(release) 51 49 4% 100 80 25%
Collectively assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Home Loans (23) 2 large (21) 42 large
Cards and Personal Loans (1) (11) -91% (12) 11 large
Deposits and Payments
1
1 3 -67% 4 2 100%
Collectively assessed credit impairment charge/(release) (23) (6) large (29) 55 large
Net loans and advances As at
Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Home Loans 326,770 316,517 306,445 3% 7%
Cards and Personal Loans 5,698 5,817 5,772 -2% -1%
Deposits and Payments
1
33 30 32 10% 3%
Net loans and advances 332,501 322,364 312,249 3% 6%
Customer deposits As at
Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Home Loans
2
50,211 47,692 45,006 5% 12%
Cards and Personal Loans 175 179 219 -2% -20%
Deposits and Payments 126,427 124,441 119,561 2% 6%
Customer deposits 176,813 172,312 164,786 3% 7%
1.
Net loans and advances for the deposits and payments business represent amounts in overdraft.
2.
Customer deposits amounts for the home loans business represent balances in offset accounts.
DIVISIONAL RESULTS
Australia Commercial
Clare Morgan
60
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 1,584 1,580 0%
3,164 3,224 -2%
Other operating income 173 169 2%
342 365 -6%
Operating income 1,757 1,749 0%
3,506 3,589 -2%
Operating expenses (744) (763) -2%
(1,507) (1,423) 6%
Cash profit before credit impairment and income tax 1,013 986 3%
1,999 2,166 -8%
Credit impairment (charge)/release (45) (35) 29%
(80) (107) -25%
Cash profit before income tax 968 951 2%
1,919 2,059 -7%
Income tax expense (291) (286) 2%
(577) (619) -7%
Cash profit 677 665 2%
1,342 1,440 -7%
Balance Sheet
Net loans and advances 65,025 63,874 2%
65,025 61,557 6%
Other external assets 431 405 6%
431 359 20%
External assets 65,456 64,279 2%
65,456 61,916 6%
Customer deposits 116,273 116,463 0%
116,273 113,408 3%
Other external liabilities 5,756 5,923 -3%
5,756 5,933 -3%
External liabilities 122,029 122,386 0%
122,029 119,341 2%
Risk weighted assets 45,460 46,601 -2%
45,460 47,497 -4%
Average gross loans and advances 65,752 63,880 3%
64,816 61,283 6%
Average deposits and other borrowings 116,314 115,357 1%
115,836 112,821 3%
Ratios
Return on average assets 1.11% 1.09%
1.10% 1.21%
Net interest margin
1
2.59% 2.60%
2.59% 2.70%
Operating expenses to operating income 42.3% 43.6%
43.0% 39.6%
Operating expenses to average assets 1.21% 1.25%
1.23% 1.19%
Individually assessed credit impairment charge/(release) 46 26 77%
72 42 71%
Individually assessed credit impairment charge/(release) as a % of average GLA
2
0.14% 0.08%
0.11% 0.07%
Collectively assessed credit impairment charge/(release) (1) 9 large
8 65 -88%
Collectively assessed credit impairment charge/(release) as a % of average GLA
2
(0.00%) 0.03%
0.01% 0.11%
Gross impaired assets 291 261 11%
291 248 17%
Gross impaired assets as a % of GLA 0.44% 0.40%
0.44% 0.40%
Total FTE 3,294 3,442 -4%
3,294 3,514 -6%
1.
Australia Commercial division generates positive net interest income from surplus deposits held. Accordingly, $57.0 billion of average deposits for the September 2024 half and $57.6 billion
for the September 2024 full year (Mar 24 half: $58.1 billion; Sep 23 full year: $58.4 billion) have been included within average net interest earning assets for the net interest margin
calculation to align with the internal management reporting view.
2.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
Performance September 2024 v September 2023
Lending volumes increased driven by Diversified & Specialist Businesses,
partially offset by lower lending in Central Functions and SME Banking.
Net interest margin decreased driven by unfavourable deposit mix with a
shift towards lower margin term deposits, asset margin contraction from
pricing competition, and higher net funding costs. This was offset by
favourable deposit margins and higher earnings on capital and
replicating portfolio.
Other operating income decreased driven by a decrease in non-lending
fees and a gain on sale of Investment Lending business in the
September 2023 full year.
Operating expenses increased driven by higher restructuring expense
and inflationary impacts, partially offset by benefits from productivity
initiatives.
Credit impairment charge decreased driven by lower collectively
assessed credit impairment, partially offset by higher individually
assessed credit impairment charge due to higher new impairment flows
in the SME Banking portfolio.
Performance September 2024 v March 2024
Lending volumes increased driven by Diversified & Specialist Businesses,
partially offset by lower lending in SME Banking and Central Functions.
Net interest margin decreased driven by unfavourable deposit mix with a
shift towards lower margin term deposits, and asset margin contraction
from pricing competition. This was partially offset by higher earnings on
capital and replicating portfolio, and favourable deposit margins.
Operating expenses decreased driven by lower restructuring expense
and benefits from productivity initiatives, partially offset by seasonal
factors.
Credit impairment charge increased driven by higher individually
assessed credit impairment charge due to higher new impairment flows
in the SME Banking portfolio, partially offset by lower collectively
assessed credit impairment.
DIVISIONAL RESULTS
Australia Commercial
Clare Morgan
61
Individually assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
SME Banking 43 29 48% 72 50 44%
Diversified & Specialist Businesses 2 (3) large (1) (8) -88%
Central Functions 1 - n/a 1 - n/a
Individually assessed credit impairment charge/(release) 46 26 77% 72 42 71%
Collectively assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
SME Banking (5) 2 large (3) 11 large
Diversified & Specialist Businesses 4 7 -43% 11 54 -80%
Collectively assessed credit impairment charge/(release) (1) 9 large 8 65 -88%
Net loans and advances As at
Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
SME Banking 26,473 26,727 26,694 -1% -1%
Diversified & Specialist Businesses 38,317 36,809 34,388 4% 11%
Central Functions 235 338 475 -30% -51%
Net loans and advances 65,025 63,874 61,557 2% 6%
Customer deposits As at
Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
SME Banking 73,251 74,157 72,203 -1% 1%
Diversified & Specialist Businesses 43,022 42,306 41,205 2% 4%
Customer deposits 116,273 116,463 113,408 0% 3%
DIVISIONAL RESULTS
Institutional
Mark Whelan
62
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 1,859 1,882 -1%
3,741 4,040 -7%
Other operating income 1,461 1,687 -13%
3,148 2,694 17%
Operating income 3,320 3,569 -7%
6,889 6,734 2%
Operating expenses (1,431) (1,444) -1%
(2,875) (2,728) 5%
Cash profit before credit impairment and income tax 1,889 2,125 -11%
4,014 4,006 0%
Credit impairment (charge)/release 4 6 -33%
10 80 -88%
Cash profit before income tax 1,893 2,131 -11%
4,024 4,086 -2%
Income tax expense (557) (609) -9%
(1,166) (1,137) 3%
Cash profit 1,336 1,522 -12%
2,858 2,949 -3%
Balance Sheet
Net loans and advances 210,464 206,268 2%
210,464 210,234 0%
Other external assets 364,534 306,758 19%
364,534 328,591 11%
External assets 574,998 513,026 12%
574,998 538,825 7%
Customer deposits 264,414 249,169 6%
264,414 266,462 -1%
Other deposits and borrowings 91,207 70,255 30%
91,207 85,374 7%
Deposits and other borrowings 355,621 319,424 11%
355,621 351,836 1%
Other external liabilities 104,432 88,020 19%
104,432 100,941 3%
External liabilities 460,053 407,444 13%
460,053 452,777 2%
Risk weighted assets 166,906 171,437 -3%
166,906 175,245 -5%
Average gross loans and advances 211,735 207,308 2%
209,522 210,900 -1%
Average deposits and other borrowings 353,479 369,517 -4%
361,497 355,748 2%
Ratios
Return on average assets 0.45% 0.52%
0.49% 0.54%
Net interest margin 0.74% 0.76%
0.75% 0.89%
Net interest margin (excl. Markets business unit) 2.36% 2.39%
2.38% 2.31%
Operating expenses to operating income 43.1% 40.5%
41.7% 40.5%
Operating expenses to average assets 0.48% 0.49%
0.49% 0.50%
Individually assessed credit impairment charge/(release) (18) (49) -63%
(67) (49) 37%
Individually assessed credit impairment charge/(release) as a % of average GLA
1
(0.02%) (0.05%)
(0.03%) (0.02%)
Collectively assessed credit impairment charge/(release) 14 43 -67%
57 (31) large
Collectively assessed credit impairment charge/(release) as a % of average GLA
1
0.01% 0.04%
0.03% (0.01%)
Gross impaired assets 284 437 -35%
284 562 -49%
Gross impaired assets as a % of GLA 0.13% 0.21%
0.13% 0.27%
Total FTE 6,272 6,310 -1%
6,272 6,366 -1%
1.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
Performance September 2024 v September 2023
Lending volumes increased driven by Markets from higher levels of reverse
repurchase agreement activity with customers, partially offset by lower
lending in Transaction Banking.
Net interest margin (excl. Markets business unit) increased driven by
higher earnings on capital.
Other operating income increased driven by higher Markets revenues in
the Customer Franchise business lines.
Operating expenses increased driven by inflationary impacts and higher
restructuring expense, partially offset by benefits from productivity
initiatives.
Credit impairment release decreased driven by higher collectively
assessed credit impairment, partially offset by higher individually
assessed credit impairment release due to lower new impairment flows.
Performance September 2024 v March 2024
Lending volumes increased driven by Markets from higher levels of reverse
repurchase agreement activity with customers and higher core lending in
Corporate Finance.
Net interest margin (excl. Markets business unit) decreased driven by
unfavourable deposit margins.
Other operating income decreased driven by lower Markets revenues
due to seasonal factors.
Operating expenses decreased driven by lower restructuring expense
and benefits from productivity initiatives, partially offset by higher
seasonal factors.
Credit impairment release decreased driven by lower individually
assessed credit impairment release due to lower write-backs and
recoveries, partially offset by lower collectively assessed credit
impairment.
DIVISIONAL RESULTS
Institutional
Mark Whelan
63
Institutional by Geography
Half Year Full Year
Australia
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 812 778 4%
1,590 1,668 -5%
Other operating income 723 807 -10%
1,530 1,342 14%
Operating income 1,535 1,585 -3%
3,120 3,010 4%
Operating expenses (678) (683) -1%
(1,361) (1,333) 2%
Cash profit before credit impairment and income tax 857 902 -5%
1,759 1,677 5%
Credit impairment (charge)/release 12 (4) large
8 112 -93%
Cash profit before income tax 869 898 -3%
1,767 1,789 -1%
Income tax expense (260) (269) -3%
(529) (536) -1%
Cash profit 609 629 -3%
1,238 1,253 -1%
Individually assessed credit impairment charge/(release) (43) (26) 65%
(69) (70) -1%
Collectively assessed credit impairment charge/(release) 31 30 3%
61 (42) large
Net loans and advances 121,203 117,157 3%
121,203 115,569 5%
Customer deposits 104,184 101,486 3%
104,184 100,526 4%
Risk weighted assets 82,719 84,977 -3%
82,719 85,170 -3%
International and PNG
Net interest income 703 753 -7%
1,456 1,722 -15%
Other operating income 607 730 -17%
1,337 1,036 29%
Operating income 1,310 1,483 -12%
2,793 2,758 1%
Operating expenses (637) (648) -2%
(1,285) (1,178) 9%
Cash profit before credit impairment and income tax 673 835 -19%
1,508 1,580 -5%
Credit impairment (charge)/release (22) 37 large
15 24 -38%
Cash profit before income tax 651 872 -25%
1,523 1,604 -5%
Income tax expense (193) (238) -19%
(431) (407) 6%
Cash profit 458 634 -28%
1,092 1,197 -9%
Individually assessed credit impairment charge/(release) 18 (13) large
5 (8) large
Collectively assessed credit impairment charge/(release) 4 (24) large
(20) (16) 25%
Net loans and advances 73,121 72,089 1%
73,121 77,202 -5%
Customer deposits 136,013 123,306 10%
136,013 141,642 -4%
Risk weighted assets 63,477 65,148 -3%
63,477 66,568 -5%
New Zealand
Net interest income 344 351 -2%
695 650 7%
Other operating income 131 150 -13%
281 316 -11%
Operating income 475 501 -5%
976 966 1%
Operating expenses (116) (113) 3%
(229) (217) 6%
Cash profit before credit impairment and income tax 359 388 -7%
747 749 0%
Credit impairment (charge)/release 14 (27) large
(13) (56) -77%
Cash profit before income tax 373 361 3%
734 693 6%
Income tax expense (104) (102) 2%
(206) (194) 6%
Cash profit 269 259 4%
528 499 6%
Individually assessed credit impairment charge/(release) 7 (10) large
(3) 29 large
Collectively assessed credit impairment charge/(release) (21) 37 large
16 27 -41%
Net loans and advances 16,140 17,022 -5%
16,140 17,463 -8%
Customer deposits 24,217 24,377 -1%
24,217 24,294 0%
Risk weighted assets 20,710 21,312 -3%
20,710 23,507 -12%
DIVISIONAL RESULTS
Institutional
Mark Whelan
64
Individually assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Transaction Banking (3) (10) -70%
(13) (1) large
Corporate Finance (15) (39) -62%
(54) (48) 13%
Markets - - n/a
- - n/a
Individually assessed credit impairment charge/(release) (18) (49) -63%
(67) (49) 37%
Collectively assessed credit impairment charge/(release) Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Transaction Banking (1) 9 large
8 (1) large
Corporate Finance 7 32 -78%
39 (44) large
Markets 8 2 large
10 14 -29%
Collectively assessed credit impairment charge/(release) 14 43 -67%
57 (31) large
Net loans and advances
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Transaction Banking 17,637 17,666 19,597
0% -10%
Corporate Finance 145,232 143,440 145,472
1% 0%
Markets 47,563 45,150 45,134
5% 5%
Central Functions 32 12 31
large 3%
Net loans and advances 210,464 206,268 210,234
2% 0%
Customer deposits
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Transaction Banking 153,576 149,691 152,722
3% 1%
Corporate Finance 1,082 1,166 1,110
-7% -3%
Markets 109,666 98,202 112,566
12% -3%
Central Functions 90 110 64
-18% 41%
Customer deposits 264,414 249,169 266,462
6% -1%
DIVISIONAL RESULTS
Institutional
Mark Whelan
65
September 2024 Full Year
Transaction
Banking
$M
Corporate
Finance
$M
Markets
$M
Central
Functions
$M
Total
$M
Net interest income 1,573 2,273 (131) 26 3,741
Other operating income 727 112 2,315 (6) 3,148
Operating income 2,300 2,385 2,184 20 6,889
Operating expenses (800) (760) (1,174) (141) (2,875)
Cash profit/(loss) before credit impairment and income tax 1,500 1,625 1,010 (121) 4,014
Credit impairment (charge)/release 5 15 (10) - 10
Cash profit/(loss) before income tax 1,505 1,640 1,000 (121) 4,024
Income tax expense (410) (446) (283) (27) (1,166)
Cash profit/(loss) 1,095 1,194 717 (148) 2,858
Individually assessed credit impairment charge/(release) (13) (54) - - (67)
Collectively assessed credit impairment charge/(release) 8 39 10 - 57
Net loans and advances 17,637 145,232 47,563 32 210,464
Customer deposits 153,576 1,082 109,666 90 264,414
Risk weighted assets 23,674 91,190 50,824 1,218 166,906
September 2023 Full Year
Net interest income 1,557 2,297 184 2 4,040
Other operating income 708 79 1,923 (16) 2,694
Operating income 2,265 2,376 2,107 (14) 6,734
Operating expenses (758) (704) (1,167) (99) (2,728)
Cash profit/(loss) before credit impairment and income tax 1,507 1,672 940 (113) 4,006
Credit impairment (charge)/release 2 92 (14) - 80
Cash profit/(loss) before income tax 1,509 1,764 926 (113) 4,086
Income tax expense (400) (489) (263) 15 (1,137)
Cash profit/(loss) 1,109 1,275 663 (98) 2,949
Individually assessed credit impairment charge/(release) (1) (48) - - (49)
Collectively assessed credit impairment charge/(release) (1) (44) 14 - (31)
Net loans and advances 19,597 145,472 45,134 31 210,234
Customer deposits 152,722 1,110 112,566 64 266,462
Risk weighted assets 26,247 94,313 53,520 1,165 175,245
September 2024 Full Year v September 2023 Full Year
Net interest income 1% -1% large large -7%
Other operating income 3% 42% 20% -63% 17%
Operating income 2% 0% 4% large 2%
Operating expenses 6% 8% 1% 42% 5%
Cash profit/(loss) before credit impairment and income tax 0% -3% 7% 7% 0%
Credit impairment (charge)/release large -84% -29% n/a -88%
Cash profit/(loss) before income tax 0% -7% 8% 7% -2%
Income tax expense 3% -9% 8% large 3%
Cash profit/(loss) -1% -6% 8% 51% -3%
Individually assessed credit impairment charge/(release) large 13% n/a n/a 37%
Collectively assessed credit impairment charge/(release) large large -29% n/a large
Net loans and advances -10% 0% 5% 3% 0%
Customer deposits 1% -3% -3% 41% -1%
Risk weighted assets -10% -3% -5% 5% -5%
DIVISIONAL RESULTS
Institutional
Mark Whelan
66
September 2024 Half Year
Transaction
Banking
$M
Corporate
Finance
$M
Markets
$M
Central
Functions
$M
Total
$M
Net interest income 777 1,136 (67) 13 1,859
Other operating income 365 59 1,039 (2) 1,461
Operating income 1,142 1,195 972 11 3,320
Operating expenses (404) (377) (577) (73) (1,431)
Cash profit/(loss) before credit impairment and income tax 738 818 395 (62) 1,889
Credit impairment (charge)/release 4 8 (8) - 4
Cash profit/(loss) before income tax 742 826 387 (62) 1,893
Income tax expense (203) (222) (112) (20) (557)
Cash profit/(loss) 539 604 275 (82) 1,336
Individually assessed credit impairment charge/(release) (3) (15) - - (18)
Collectively assessed credit impairment charge/(release) (1) 7 8 - 14
Net loans and advances 17,637 145,232 47,563 32 210,464
Customer deposits 153,576 1,082 109,666 90 264,414
Risk weighted assets 23,674 91,190 50,824 1,218 166,906
March 2024 Half Year
Net interest income 796 1,137 (64) 13 1,882
Other operating income 362 53 1,276 (4) 1,687
Operating income 1,158 1,190 1,212 9 3,569
Operating expenses (396) (383) (597) (68) (1,444)
Cash profit/(loss) before credit impairment and income tax 762 807 615 (59) 2,125
Credit impairment (charge)/release 1 7 (2) - 6
Cash profit/(loss) before income tax 763 814 613 (59) 2,131
Income tax expense (207) (224) (171) (7) (609)
Cash profit/(loss) 556 590 442 (66) 1,522
Individually assessed credit impairment charge/(release) (10) (39) - - (49)
Collectively assessed credit impairment charge/(release) 9 32 2 - 43
Net loans and advances 17,666 143,440 45,150 12 206,268
Customer deposits 149,691 1,166 98,202 110 249,169
Risk weighted assets 24,848 88,955 56,326 1,308 171,437
September 2024 Half Year v March 2024 Half Year
Net interest income -2% 0% 5% 0% -1%
Other operating income 1% 11% -19% -50% -13%
Operating income -1% 0% -20% 22% -7%
Operating expenses 2% -2% -3% 7% -1%
Cash profit/(loss) before credit impairment and income tax -3% 1% -36% 5% -11%
Credit impairment (charge)/release large 14% large n/a -33%
Cash profit/(loss) before income tax -3% 1% -37% 5% -11%
Income tax expense -2% -1% -35% large -9%
Cash profit/(loss) -3% 2% -38% 24% -12%
Individually assessed credit impairment charge/(release) -70% -62% n/a n/a -63%
Collectively assessed credit impairment charge/(release) large -78% large n/a -67%
Net loans and advances 0% 1% 5% large 2%
Customer deposits 3% -7% 12% -18% 6%
Risk weighted assets -5% 3% -10% -7% -3%
DIVISIONAL RESULTS
Institutional
Mark Whelan
67
Analysis of Markets operating income
1
Half Year Full Year
Composition of Markets operating income by product
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Foreign Exchange 352 394 -11%
746 777 -4%
Rates 164 232 -29%
396 347 14%
Credit and Capital Markets 120 125 -4%
245 188 30%
Commodities 45 118 -62%
163 115 42%
Franchise Revenue 681 869 -22%
1,550 1,427 9%
Balance Sheet
2
247 284 -13%
531 626 -15%
Derivative valuation adjustments
3
44 59 -25%
103 54 91%
Markets operating income 972 1,212 -20%
2,184 2,107 4%
1.
Markets operating income includes Net interest income and Other operating income.
2.
Balance Sheet represents hedging of interest rate risk on the Group’s loan and deposit books and the management of the Group’s liquidity portfolio.
3.
Includes funding and credit valuation adjustments net of associated hedges.
Half Year Full Year
Composition of Markets operating income by geography
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Australia 330 368 -10%
698 629 11%
International and PNG
1
528 713 -26%
1,241 1,228 1%
New Zealand 114 131 -13%
245 250 -2%
Markets operating income 972 1,212 -20%
2,184 2,107 4%
1.
Comprises the countries outside of Australia and New Zealand that form part of the Institutional division. This includes Asia, Papua New Guinea, Europe & America.
DIVISIONAL RESULTS
Institutional
Mark Whelan
68
Market risk
Market risk stems from the Group’s trading and balance sheet management activities and the impact of changes and correlations between interest rates,
foreign exchange rates, credit spreads, commodities, equities and the volatility within these asset classes.
The Group manages and controls market risk using Value at Risk (VaR), sensitivity analysis and stress testing. VaR measures the Group’s possible daily
loss based on historical market movements.
The Group’s VaR approach for both traded and non-traded risk is historical simulation using changes in market rates, prices and volatilities over the
previous 500 business days to calculate standard VaR and a 1-year stressed period to calculate stressed VaR.
VaR is measured at 99% confidence interval which means there is a 99% chance that a loss will not exceed the VaR for relevant holding period.
Traded market risk (excl. Suncorp Bank)
Below are aggregate VaR exposures at a 99% confidence level covering both physical and derivative trading positions for the Group’s (excluding
Suncorp Bank) principal trading centres. Suncorp Bank traded market risk is not material and not disclosed separately.
99% confidence level (1 day holding period)
High for Low for Avg for
High for Low for Avg for
As at year year year
As at year year year
Sep 24
$M
Sep 24
$M
Sep 24
$M
Sep 24
$M
Sep 23
$M
Sep 23
$M
Sep 23
$M
Sep 23
$M
Value at Risk at 99% confidence
Foreign exchange 3.2 11.5 2.2 5.0 2.8 6.2 1.6 3.0
Interest rate 6.4 19.2 4.8 8.7 6.7 18.3 5.1 8.5
Credit 5.7 8.1 4.2 6.7 5.9 7.7 2.5 4.5
Commodities 3.3 5.0 1.8 2.9 4.0 6.6 1.8 3.0
Equity - - - - - - - -
Diversification benefit
1
(9.9) n/a n/a (10.2) (9.7) n/a n/a (8.1)
Total VaR 8.7 22.5 8.0 13.1 9.7 18.2 7.2 10.9
Non-traded interest rate risk (excl. Suncorp Bank)
Non-traded interest rate risk is managed by Markets and relates to the potential adverse impact of changes in market interest rates on future net interest
income for the Group and current valuation of the banking book. Interest rate risk is reported using various techniques including VaR and scenario
analysis based on a 1% rate shock. Suncorp Bank non-traded interest rate risk is not material and not disclosed separately.
99% confidence level (1 day holding period)
High for Low for Avg for
High for Low for Avg for
As at year year year As at year year year
Sep 24
$M
Sep 24
$M
Sep 24
$M
Sep 24
$M
Sep 23
$M
Sep 23
$M
Sep 23
$M
Sep 23
$M
Value at Risk at 99% confidence
Australia 97.7 97.7 70.8 78.9 81.2 93.2 72.0 82.2
New Zealand
27.4 28.2 24.3 25.9 35.3 35.3 26.1 31.1
Rest of World
32.9 39.5 29.0 34.8 32.2 32.8 23.2 27.9
Diversification benefit
1
(63.0) n/a n/a (46.9) (52.6) n/a n/a (45.6)
Total VaR 95.0 99.5 81.3 92.7 96.1 101.5 86.4 95.6
Impact of 1% rate shock on the next 12 months’ net interest income
2
As at
Sep 24 Sep 23
As at period end 0.68% 0.96%
Maximum exposure 1.20% 1.17%
Minimum exposure 0.27% 0.38%
Average exposure (in absolute terms) 0.78% 0.80%
1.
The diversification benefit reflects risks that offset across categories. The high and low VaR figures reported for each factor did not necessarily occur on the same day as the high and low
VaR reported for the Group as a whole. Consequently, a diversification benefit for high and low would not be meaningful and is therefore omitted from the table.
2.
Modelled 1% overnight parallel positive shift in the yield curve to determine the potential impact on Net interest income over the next 12 months. This is a standard risk measure which
assumes the parallel shift is reflected in all wholesale and customer rates.
DIVISIONAL RESULTS
New Zealand
Antonia Watson
69
Table reflects NZD for New Zealand (AUD results shown on page 73)
Half Year Full Year
Sep 24
NZD M
Mar 24
NZD M Movt
Sep 24
NZD M
Sep 23
NZD M Movt
Net interest income 1,716 1,692 1%
3,408 3,415 0%
Other operating income 209 224 -7%
433 443 -2%
Operating income 1,925 1,916 0%
3,841 3,858 0%
Operating expenses (763) (729) 5%
(1,492) (1,408) 6%
Cash profit before credit impairment and income tax 1,162 1,187 -2%
2,349 2,450 -4%
Credit impairment (charge)/release (26) (4) large
(30) (122) -75%
Cash profit before income tax 1,136 1,183 -4%
2,319 2,328 0%
Income tax expense (322) (331) -3%
(653) (652) 0%
Cash profit 814 852 -4%
1,666 1,676 -1%
Balance Sheet
Net loans and advances 134,399 132,608 1%
134,399 130,868 3%
Other external assets 3,840 3,664 5%
3,840 3,603 7%
External assets 138,239 136,272 1%
138,239 134,471 3%
Customer deposits 109,810 108,789 1%
109,810 106,431 3%
Other deposits and borrowings 4,147 7,208 -42%
4,147 6,054 -31%
Deposits and other borrowings 113,957 115,997 -2%
113,957 112,485 1%
Other external liabilities 16,850 17,358 -3%
16,850 19,565 -14%
External liabilities 130,807 133,355 -2%
130,807 132,050 -1%
Risk weighted assets 67,551 72,778 -7%
67,551 76,196 -11%
Average gross loans and advances 134,160 132,438 1%
133,299 129,656 3%
Average deposits and other borrowings 115,566 114,514 1%
115,040 110,940 4%
Net funds management income 101 99 2% 200 194 3%
Funds under management 39,663 40,514 -2% 39,663 37,108 7%
Average funds under management 39,945 38,745 3% 39,255 36,681 7%
Ratios
Return on average assets 1.19% 1.26%
1.22% 1.26%
Net interest margin 2.57% 2.56%
2.57% 2.64%
Operating expenses to operating income 39.6% 38.0%
38.8% 36.5%
Operating expenses to average assets 1.11% 1.08%
1.09% 1.06%
Individually assessed credit impairment charge/(release) 31 14 large
45 29 55%
Individually assessed credit impairment charge/(release) as a % of
average GLA
1
0.05% 0.02%
0.03% 0.02%
Collectively assessed credit impairment charge/(release) (5) (10) -50%
(15) 93 large
Collectively assessed credit impairment charge/(release) as a % of
average GLA
1
(0.01%) (0.02%)
(0.01%) 0.07%
Gross impaired assets 171 130 32%
171 131 31%
Gross impaired assets as a % of GLA 0.13% 0.10%
0.13% 0.10%
Total FTE 6,756 6,754 0%
6,756 6,766 0%
1.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
Performance September 2024 v September 2023
Lending volumes increased driven by home loan growth, partially offset by
contraction in business lending.
Net interest margin decreased driven by unfavourable deposit margin
and unfavourable deposit mix with a shift towards lower margin term
deposits. This was partially offset by lower net funding costs and higher
earnings on capital.
Other operating income decreased driven by a gain on disposal of data
centres in New Zealand in the September 2023 full year.
Operating expenses increased driven by inflationary pressure and higher
restructuring expense, partially offset by benefits from productivity
initiatives.
Credit impairment charge decreased driven by lower collectively
assessed credit impairment flows, partially offset by higher individually
assessed credit impairment due to higher new impairment flows mainly in
the Business & Agri portfolio.
Performance September 2024 v March 2024
Lending volumes increased driven by home loan growth.
Net interest margin increased driven by favourable home loan lending
margins and higher earnings on capital. This was mostly offset by
unfavourable deposit margin and unfavourable deposit mix with a shift
towards lower margin term deposits.
Other operating income decreased driven by timing of card incentives
and seasonality of fees.
Operating expenses increased driven by inflationary pressure and higher
restructuring expense, partially offset by benefits from productivity
initiatives.
Credit impairment charge increased driven by higher individually
assessed credit impairment due to higher new impairment flows in the
Business & Agri portfolio, partially offset by lower collectively assessed
credit impairment.
DIVISIONAL RESULTS
New Zealand
Antonia Watson
70
Individually assessed credit impairment charge/(release) Half Year Full Year
Sep 24
NZD M
Mar 24
NZD M Movt
Sep 24
NZD M
Sep 23
NZD M Movt
Personal 14 9 56%
23 18 28%
Home Loans 4 - n/a
4 5 -20%
Other 10 9 11%
19 13 46%
Business & Agri 17 5 large 22 11 100%
Individually assessed credit impairment charge/(release) 31 14 large 45 29 55%
Collectively assessed credit impairment charge/(release) Half Year Full Year
Sep 24
NZD M
Mar 24
NZD M Movt
Sep 24
NZD M
Sep 23
NZD M Movt
Personal (53) 13 large
(40) 31 large
Home Loans (13) 18 large
5 35 -86%
Other (40) (5) large
(45) (4) large
Business & Agri 48 (23) large 25 62 -60%
Collectively assessed credit impairment charge/(release) (5) (10) -50%
(15) 93 large
Net loans and advances As at Movement
Sep 24
NZD M
Mar 24
NZD M
Sep 23
NZD M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Personal 110,447 108,721 106,444
2% 4%
Home Loans 108,806 107,111 104,867
2% 4%
Other 1,641 1,610 1,577
2% 4%
Business & Agri 23,952 23,887 24,424 0% -2%
Net loans and advances 134,399 132,608 130,868
1% 3%
Customer deposits As at Movement
Sep 24
NZD M
Mar 24
NZD M
Sep 23
NZD M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Personal 91,814 90,493 88,086
1% 4%
Business & Agri 17,996 18,296 18,345 -2% -2%
Customer deposits 109,810 108,789 106,431
1% 3%
DIVISIONAL RESULTS
New Zealand
Antonia Watson
71
September 2024 Full Year
Personal
NZD M
Business
& Agri
NZD M
Central
Functions
NZD M
Total
NZD M
Net interest income 2,383 1,013 12 3,408
Other operating income 386 47 - 433
Operating income 2,769 1,060 12 3,841
Operating expenses (1,212) (276) (4) (1,492)
Cash profit before credit impairment and income tax 1,557 784 8 2,349
Credit impairment (charge)/release 17 (47) - (30)
Cash profit before income tax 1,574 737 8 2,319
Income tax expense (444) (207) (2) (653)
Cash profit 1,130 530 6 1,666
Individually assessed credit impairment charge/(release) 23 22 - 45
Collectively assessed credit impairment charge/(release) (40) 25 - (15)
Net loans and advances 110,447 23,952 - 134,399
Customer deposits 91,814 17,996 - 109,810
Risk weighted assets 42,861 21,776 2,914 67,551
September 2023 Full Year
Net interest income 2,385 1,014 16 3,415
Other operating income 381 55 7 443
Operating income 2,766 1,069 23 3,858
Operating expenses (1,148) (242) (18) (1,408)
Cash profit before credit impairment and income tax 1,618 827 5 2,450
Credit impairment (charge)/release (49) (73) - (122)
Cash profit before income tax 1,569 754 5 2,328
Income tax expense (440) (210) (2) (652)
Cash profit 1,129 544 3 1,676
Individually assessed credit impairment charge/(release) 18 11 - 29
Collectively assessed credit impairment charge/(release) 31 62 - 93
Net loans and advances 106,444 24,424 - 130,868
Customer deposits 88,086 18,345 - 106,431
Risk weighted assets 48,540 25,518 2,138 76,196
September 2024 Full Year v September 2023 Full Year
Net interest income 0% 0% -25% 0%
Other operating income 1% -15% large -2%
Operating income 0% -1% -48% 0%
Operating expenses 6% 14% -78% 6%
Cash profit before credit impairment and income tax -4% -5% 60% -4%
Credit impairment (charge)/release large -36% n/a -75%
Cash profit before income tax 0% -2% 60% 0%
Income tax expense 1% -1% 0% 0%
Cash profit 0% -3% large -1%
Individually assessed credit impairment charge/(release) 28% large n/a 55%
Collectively assessed credit impairment charge/(release) large -60% n/a large
Net loans and advances 4% -2% n/a 3%
Customer deposits 4% -2% n/a 3%
Risk weighted assets -12% -15% 36% -11%
DIVISIONAL RESULTS
New Zealand
Antonia Watson
72
September 2024 Half Year
Personal
NZD M
Business
& Agri
NZD M
Central
Functions
NZD M
Total
NZD M
Net interest income 1,213 498 5 1,716
Other operating income 186 22 1 209
Operating income 1,399 520 6 1,925
Operating expenses (622) (142) 1 (763)
Cash profit before credit impairment and income tax 777 378 7 1,162
Credit impairment (charge)/release 39 (65) - (26)
Cash profit before income tax 816 313 7 1,136
Income tax expense (231) (88) (3) (322)
Cash profit 585 225 4 814
Individually assessed credit impairment charge/(release) 14 17 - 31
Collectively assessed credit impairment charge/(release) (53) 48 - (5)
Net loans and advances 110,447 23,952 - 134,399
Customer deposits 91,814 17,996 - 109,810
Risk weighted assets 42,861 21,776 2,914 67,551
March 2024 Half Year
Net interest income 1,170 515 7 1,692
Other operating income 200 25 (1) 224
Operating income 1,370 540 6 1,916
Operating expenses (590) (134) (5) (729)
Cash profit before credit impairment and income tax 780 406 1 1,187
Credit impairment (charge)/release (22) 18 - (4)
Cash profit before income tax 758 424 1 1,183
Income tax expense (213) (119) 1 (331)
Cash profit 545 305 2 852
Individually assessed credit impairment charge/(release) 9 5 - 14
Collectively assessed credit impairment charge/(release) 13 (23) - (10)
Net loans and advances 108,721 23,887 - 132,608
Customer deposits 90,493 18,296 - 108,789
Risk weighted assets 49,093 21,421 2,264 72,778
September 2024 Half Year v March 2024 Half Year
Net interest income 4% -3% -29% 1%
Other operating income -7% -12% large -7%
Operating income 2% -4% 0% 0%
Operating expenses 5% 6% large 5%
Cash profit before credit impairment and income tax 0% -7% large -2%
Credit impairment (charge)/release large large n/a large
Cash profit before income tax 8% -26% large -4%
Income tax expense 8% -26% large -3%
Cash profit 7% -26% large -4%
Individually assessed credit impairment charge/(release) 56% large n/a large
Collectively assessed credit impairment charge/(release) large large n/a -50%
Net loans and advances 2% 0% n/a 1%
Customer deposits 1% -2% n/a 1%
Risk weighted assets -13% 2% 29% -7%
DIVISIONAL RESULTS
New Zealand
Antonia Watson
73
Table reflects AUD for New Zealand (NZD results shown on page 69)
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 1,571 1,572 0%
3,143 3,149 0%
Other operating income 191 208 -8%
399 409 -2%
Operating income 1,762 1,780 -1%
3,542 3,558 0%
Operating expenses (699) (677) 3%
(1,376) (1,299) 6%
Cash profit before credit impairment and income tax 1,063 1,103 -4%
2,166 2,259 -4%
Credit impairment (charge)/release (24) (4) large
(28) (112) -75%
Cash profit before income tax 1,039 1,099 -5%
2,138 2,147 0%
Income tax expense (294) (308) -5%
(602) (601) 0%
Cash profit 745 791 -6%
1,536 1,546 -1%
Consisting of:
Personal 535 507 6%
1,042 1,041 0%
Business & Agri 206 283 -27%
489 501 -2%
Central Functions 4 1 large
5 4 25%
Cash profit 745 791 -6%
1,536 1,546 -1%
Balance Sheet
Net loans and advances 123,504 121,625 2%
123,504 121,824 1%
Other external assets 3,528 3,361 5%
3,528 3,354 5%
External assets 127,032 124,986 2%
127,032 125,178 1%
Customer deposits 100,907 99,779 1%
100,907 99,076 2%
Other deposits and borrowings 3,811 6,611 -42%
3,811 5,635 -32%
Deposits and other borrowings 104,718 106,390 -2%
104,718 104,711 0%
Other external liabilities 15,485 15,920 -3%
15,485 18,213 -15%
External liabilities 120,203 122,310 -2%
120,203 122,924 -2%
Risk weighted assets 62,075 66,750 -7%
62,075 70,930 -12%
Average gross loans and advances 122,770 123,073 0%
122,922 119,554 3%
Average deposits and other borrowings 105,751 106,417 -1%
106,084 102,296 4%
Net funds management income 93 92 1%
185 179 3%
Funds under management 36,448 37,159 -2%
36,448 34,545 6%
Average funds under management 36,553 36,005 2%
36,200 33,823 7%
Ratios
Return on average assets 1.19% 1.26%
1.22% 1.26%
Net interest margin 2.57% 2.56%
2.57% 2.64%
Operating expenses to operating income 39.6% 38.0%
38.8% 36.5%
Operating expenses to average assets 1.11% 1.08%
1.09% 1.06%
Individually assessed credit impairment charge/(release) 28 14 100%
42 26 62%
Individually assessed credit impairment charge/(release) as a % of
average GLA
1
0.05% 0.02%
0.03% 0.02%
Collectively assessed credit impairment charge/(release) (4) (10) -60%
(14) 86 large
Collectively assessed credit impairment charge/(release) as a % of
average GLA
1
(0.01%) (0.02%)
(0.01%) 0.07%
Gross impaired assets 158 119 33%
158 122 30%
Gross impaired assets as a % of GLA 0.13% 0.10%
0.13% 0.10%
Total FTE 6,756 6,754 0%
6,756 6,766 0%
1.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
DIVISIONAL RESULTS
Suncorp Bank
Bruce Rush
74
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 251 - n/a
251 - n/a
Other operating income 6 - n/a
6 - n/a
Operating income 257 - n/a
257 - n/a
Operating expenses
1
(188) - n/a
(188) - n/a
Cash profit before credit impairment and income tax 69 - n/a
69 - n/a
Credit impairment (charge)/release
2
(243) - n/a
(243) - n/a
Cash profit/(loss) before income tax (174) - n/a
(174) - n/a
Income tax (expense)/benefit 52 - n/a
52 - n/a
Cash profit/(loss) (122) - n/a
(122) - n/a
Balance Sheet
Net loans and advances 70,871 - n/a
70,871 - n/a
Other external assets
3
16,314 - n/a
16,314 - n/a
External assets 87,185 - n/a
87,185 - n/a
Customer deposits 54,715 - n/a
54,715 - n/a
Other external liabilities 26,895 - n/a
26,895 - n/a
External liabilities 81,610 - n/a
81,610 - n/a
Risk weighted assets 33,422 - n/a
33,422 - n/a
Average gross loans and advances
4
23,832 - n/a
11,916 - n/a
Average deposits and other borrowings
4
20,976 - n/a
10,488 - n/a
Ratios
Return on average assets (0.84%) n/a
(0.84%) n/a
Net interest margin 1.93% n/a
1.93% n/a
Operating expenses to operating income 73.2% n/a
73.2% n/a
Operating expenses to average assets 1.30% n/a
1.30% n/a
Individually assessed credit impairment charge/(release) (1) - n/a
(1) - n/a
Individually assessed credit impairment charge/(release) as a % of average GLA
5
(0.01%) n/a
(0.01%) n/a
Collectively assessed credit impairment charge/(release)
2
244 - n/a
244 - n/a
Collectively assessed credit impairment charge/(release) as a % of average GLA
2,5
2.05% n/a
2.05% n/a
Gross impaired assets 66 - n/a
66 - n/a
Gross impaired assets as a % of GLA 0.09% n/a
0.09% n/a
Total FTE 2,798 - n/a
2,798 - n/a
1.
Includes $36 million accelerated amortisation expense on alignment to the Group’s software capitalisation policy.
2.
Includes $244 million credit impairment charge recognised on performing loans and advances. In accordance with Australian Accounting Standards requirements, the Group consolidated
Suncorp Bank’s loans and advances on 31 July 2024, however the Group was not permitted to recognise an allowance for ECL on the performing loans and advances, leading to a
proportional reduction in acquisition-related goodwill that would otherwise have been recognised. Subsequently, the Group was required to recognise a collectively assessed allowance for
ECL estimated using the Group’s ECL methodologies, with a corresponding charge recognised in the Group’s Income Statement.
3.
Includes provisional value of goodwill of $1,402 million, refer to Note 8 Suncorp Bank acquisition for further information.
4.
Based on 2 months of balances from the date of acquisition.
5.
Credit impairment charge/(release) used in the ratio relates to gross loans and advances and off-balance sheet commitments - undrawn and contingent liabilities.
DIVISIONAL RESULTS
Pacific
Antonia Watson
75
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Net interest income 60 63 -5%
123 123 0%
Other operating income 47 44 7% 91 85 7%
Operating income 107 107 0% 214 208 3%
Operating expenses (68) (70) -3% (138) (145) -5%
Cash profit before credit impairment and income tax 39 37 5% 76 63 21%
Credit impairment (charge)/release 2 6 -67% 8 28 -71%
Cash profit before income tax 41 43 -5% 84 91 -8%
Income tax expense (11) (11) 0% (22) (18) 22%
Non-controlling interests (1) (1) 0% (2) (2) 0%
Cash profit 29 31 -6% 60 71 -15%
Balance Sheet
Net loans and advances 1,665 1,678 -1% 1,665 1,684 -1%
Customer deposits 3,565 3,657 -3% 3,565 3,719 -4%
Risk weighted assets 3,588 3,620 -1% 3,588 3,772 -5%
Total FTE 985 972 1% 985 1,013 -3%
Group Centre
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Share of associates' profit/(loss) 21 84 -75% 105 221 -52%
Operating income (other) 260 149 74% 409 216 89%
Operating income 281 233 21% 514 437 18%
Operating expenses (615) (526) 17% (1,141) (1,083) 5%
Cash profit/(loss) before credit impairment and income tax (334) (293) 14% (627) (646) -3%
Credit impairment (charge)/release (2) - n/a (2) 1 large
Cash profit/(loss) before income tax (336) (293) 15% (629) (645) -2%
Income tax (expense)/benefit 51 55 -7% 106 140 -24%
Non-controlling interests (20) (13) 54% (33) (26) 27%
Cash profit/(loss) (305) (251) 22% (556) (531) 5%
Risk weighted assets 18,200 14,187 28% 18,200 8,210 large
Total FTE 11,433 11,401 0% 11,433 11,370 1%
DIVISIONAL RESULTS
76
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PROFIT RECONCILIATION
77
CONTENTS Page
Adjustments between statutory profit and cash profit 78
Explanation of adjustments between statutory profit and cash profit 78
Reconciliation of statutory profit to cash profit 79
PROFIT RECONCILIATION
78
Non-IFRS information
Statutory profit is prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, which comply with
IFRS. The Group provides additional measures of performance in the Results Announcement which are prepared on a basis other than in accordance
with accounting standards. The guidance provided in ASIC Regulatory Guide 230 has been followed when presenting this information.
Adjustments between statutory profit and cash profit
Cash profit represents the Group’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group and
divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory
profit (refer to Definitions on pages 111 to 113 for further details). The adjustments made in arriving at cash profit are included in statutory profit which is
subject to audit within the context of the external auditor’s audit of the ANZGHL 2024 Annual Report. Cash profit is not subject to audit by the external
auditor. The external auditor has informed the Audit Committee that cash profit adjustments have been determined on a consistent basis across each
period presented.
Half Year
Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Statutory profit attributable to shareholders of the Company 3,128 3,407 -8% 6,535 7,106 -8%
Adjustments between statutory profit and cash profit
Economic hedges 67 197 -66% 264 217 22%
Revenue and expense hedges (22) (52) -58% (74) 90 large
Total adjustments between statutory profit and cash profit 45 145 -69% 190 307 -38%
Cash profit 3,173 3,552 -11% 6,725 7,413 -9%
Explanation of adjustments between statutory profit and cash profit
Economic hedges
The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in accordance with accounting standards, result
in fair value gains and losses being recognised in the Income Statement. This includes gains and losses arising from approved classes of derivatives
not designated in accounting hedge relationships but which are considered to be economic hedges, as well as ineffectiveness from designated
accounting hedges.
Economic hedges comprise:
Derivatives (primarily cross currency interest rate swaps) used to convert the proceeds of foreign currency debt issuances into floating rate
Australian dollar and New Zealand dollar debt that do not qualify for hedge accounting. The main drivers of these fair value movements are
currency basis spreads and Australian dollar and New Zealand dollar fluctuations against other major funding currencies.
Economic hedges of select structured finance and specialised leasing transactions that do not qualify for hedge accounting. The main drivers of
these fair value adjustments are movements in the Australian and New Zealand term structure of interest rates.
Ineffectiveness arising from differences in certain factors between the hedged items and the hedging instruments.
The Group removes the fair value adjustments from cash profit since the profit or loss will reverse over time to match with the profit or loss from the
underlying hedged item.
In the September 2024 full year, losses on economic hedges relate to funding-related swaps, principally from narrowing USD/EUR currency basis
spreads and the weakening of the USD against the AUD. Further losses were driven by the impact of falling AUD and NZD yield curves on net pay
fixed economic hedge positions.
Revenue and expense hedges
The Group enters into economic hedges to manage exposures from larger foreign exchange denominated revenue and expense streams, primarily
NZD and USD (and USD correlated). The gain on revenue and expense hedges in the September 2024 full year was mainly due to the appreciation
of AUD against the USD and NZD.
PROFIT RECONCILIATION
79
Reconciliation of statutory profit to cash profit
Adjustments to statutory profit
Statutory profit
Economic
hedges
Revenue and
expense
hedges
Total
adjustments to
statutory profit Cash profit
$M $M $M $M $M
September 2024 Full Year
Net interest income 16,069 - - - 16,069
Other operating income 4,478 368 (106) 262 4,740
Operating income 20,547 368 (106) 262 20,809
Operating expenses (10,741) - - - (10,741)
Profit/(Loss) before credit impairment and tax 9,806 368 (106) 262 10,068
Credit impairment (charge)/release (406) - - - (406)
Profit/(Loss) before income tax 9,400 368 (106) 262 9,662
Income tax (expense)/benefit (2,830) (104) 32 (72) (2,902)
Non-controlling interests (35) - - - (35)
Profit/(Loss) 6,535 264 (74) 190 6,725
September 2023 Full Year
Net interest income 16,574 - - - 16,574
Other operating income 3,897 305 129 434 4,331
Operating income 20,471 305 129 434 20,905
Operating expenses (10,139) - - - (10,139)
Profit/(Loss) before credit impairment and tax 10,332 305 129 434 10,766
Credit impairment (charge)/release (245) - - - (245)
Profit/(Loss) before income tax 10,087 305 129 434 10,521
Income tax (expense)/benefit (2,953) (88) (39) (127) (3,080)
Non-controlling interests (28) - - - (28)
Profit/(Loss) 7,106 217 90 307 7,413
Adjustments to statutory profit
Statutory profit
Economic
hedges
Revenue and
expense
hedges
Total
adjustments to
statutory profit Cash profit
$M $M $M $M $M
September 2024 Half Year
Net interest income 8,170 - - - 8,170
Other operating income 2,232 91 (31) 60 2,292
Operating income 10,402 91 (31) 60 10,462
Operating expenses (5,526) - - - (5,526)
Profit/(Loss) before credit impairment and tax 4,876 91 (31) 60 4,936
Credit impairment (charge)/release (336) - - - (336)
Profit/(Loss) before income tax 4,540 91 (31) 60 4,600
Income tax (expense)/benefit (1,391) (24) 9 (15) (1,406)
Non-controlling interests (21) - - - (21)
Profit/(Loss) 3,128 67 (22) 45 3,173
March 2024 Half Year
Net interest income 7,899 - - - 7,899
Other operating income 2,246 277 (75) 202 2,448
Operating income 10,145 277 (75) 202 10,347
Operating expenses (5,215) - - - (5,215)
Profit/(Loss) before credit impairment and tax 4,930 277 (75) 202 5,132
Credit impairment (charge)/release (70) - - - (70)
Profit/(Loss) before income tax 4,860 277 (75) 202 5,062
Income tax (expense)/benefit (1,439) (80) 23 (57) (1,496)
Non-controlling interests (14) - - - (14)
Profit/(Loss) 3,407 197 (52) 145 3,552
PROFIT RECONCILIATION
80
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
81
CONTENTS Page
Condensed Consolidated Income Statement 82
Condensed Consolidated Statement of Comprehensive Income 83
Condensed Consolidated Balance Sheet 84
Condensed Consolidated Cash Flow Statement 85
Condensed Consolidated Statement of Changes in Equity 86
Notes to Condensed Consolidated Financial Statements 87
CONDENSED CONSOLIDATED INCOME STATEMENT
ANZ Group Holdings Limited
82
Half Year
Full Year
Note
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Interest income 30,828 29,811 3% 60,639 49,904 22%
Interest expense (22,658) (21,912) 3% (44,570) (33,330) 34%
Net interest income 1 8,170 7,899 3% 16,069 16,574 -3%
Other operating income 1 2,137 2,114 1% 4,251 3,568 19%
Net income from insurance business 1 74 48 54% 122 108 13%
Share of associates' profit/(loss) 1 21 84 -75% 105 221 -52%
Operating income 10,402 10,145 3% 20,547 20,471 0%
Operating expenses 2 (5,526) (5,215) 6% (10,741) (10,139) 6%
Profit before credit impairment and income tax 4,876 4,930 -1% 9,806 10,332 -5%
Credit impairment (charge)/release 5 (336) (70) large (406) (245) 66%
Profit before income tax 4,540 4,860 -7% 9,400 10,087 -7%
Income tax expense (1,391) (1,439) -3% (2,830) (2,953) -4%
Profit for the period 3,149 3,421 -8% 6,570 7,134 -8%
Comprising:
Profit attributable to shareholders of the Company 3,128 3,407 -8% 6,535 7,106 -8%
Profit attributable to non-controlling interests 7 21 14 50% 35 28 25%
Earnings per ordinary share (cents)
Basic 3 104.4 113.5 -8% 217.9 237.1 -8%
Diluted 3 103.1 111.5 -8% 215.1 227.4 -5%
Dividend per ordinary share (cents) 83 83 0% 166 175 -5%
The notes appearing on pages 87 to 98 form an integral part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
ANZ Group Holdings Limited
83
Full Year
Sep 24
$M
Sep 23
$M Movt
Profit for the period
6,570 7,134 -8%
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Investment securities - equity securities at FVOCI (25) (27) -7%
Other reserve movements
1
(17) (80) -79%
Items that may be reclassified subsequently to profit or loss
Foreign currency translation reserve (930) 718 large
Cash flow hedge reserve 2,069 235 large
Other reserve movements (774) (36) large
Income tax attributable to the above items (388) (23) large
Share of associates' other comprehensive income
2
(23) 31 large
Total comprehensive income for the period 6,482 7,952 -18%
Comprising total comprehensive income attributable to:
Shareholders of the Company 6,457 7,897 -18%
Non-controlling interests
1
25 55 -55%
1.
Includes foreign currency translation differences attributable to non-controlling interests of $10 million (Sep 23 full year: $27 million).
2.
Share of associates’ other comprehensive income, that may be reclassified subsequently to profit or loss, includes:
Sep 24
full year
$M
Sep 23
full year
$M
FVOCI reserve gain/(loss) (10) 25
Defined benefits gain/(loss) (13) 6
Total (23) 31
The notes appearing on pages 87 to 98 form an integral part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEET
ANZ Group Holdings Limited
84
As at Movement
Assets Note
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Cash and cash equivalents
1
150,967 137,699 168,154 10% -10%
Settlement balances owed to ANZ 5,484 3,809 9,349 44% -41%
Collateral paid 10,090 8,241 8,558 22% 18%
Trading assets 45,755 42,442 37,004 8% 24%
Derivative financial instruments 54,370 47,481 60,406 15% -10%
Investment securities 140,549 118,055 97,429 19% 44%
Net loans and advances 4 803,382 715,171 707,044 12% 14%
Regulatory deposits 665 696 646 -4% 3%
Investments in associates 1,444 1,419 2,349 2% -39%
Current tax assets 46 294 114 -84% -60%
Deferred tax assets 3,254 3,149 3,348 3% -3%
Goodwill and other intangible assets 5,511 3,998 4,058 38% 36%
Premises and equipment 2,222 2,005 2,053 11% 8%
Other assets 5,376 5,240 5,131 3% 5%
Total assets 1,229,115 1,089,699 1,105,643 13% 11%
Liabilities
Settlement balances owed by ANZ 16,188 15,026 19,267 8% -16%
Collateral received 6,583 7,409 10,382 -11% -37%
Deposits and other borrowings 6 903,554 806,737 814,711 12% 11%
Derivative financial instruments 55,254 42,728 57,482 29% -4%
Current tax liabilities 360 201 305 79% 18%
Deferred tax liabilities 78 78 82 0% -5%
Payables and other liabilities 17,851 17,094 15,097 4% 18%
Employee entitlements 646 580 569 11% 14%
Other provisions 1,585 1,663 1,717 -5% -8%
Debt issuances 156,388 127,109 116,014 23% 35%
Total liabilities 1,158,487 1,018,625 1,035,626 14% 12%
Net assets 70,628 71,074 70,017 -1% 1%
Shareholders' equity
Ordinary share capital 7 28,182 29,033 29,082 -3% -3%
Reserves 7 (1,774) (1,466) (1,735) 21% 2%
Retained earnings 7 43,449 42,739 42,148 2% 3%
Share capital and reserves attributable to shareholders of the Company 69,857 70,306 69,495 -1% 1%
Non-controlling interests 7 771 768 522 0% 48%
Total shareholders' equity 70,628 71,074 70,017 -1% 1%
1.
Includes Settlement balances owed to ANZ that meet the definition of Cash and cash equivalents.
The notes appearing on pages 87 to 98 form an integral part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
ANZ Group Holdings Limited
85
Full Year
Sep 24
$M
Sep 23
$M
Profit after income tax 6,570 7,134
Adjustments to reconcile to net cash provided by/(used in) operating activities:
Allowance for expected credit losses
406 245
Depreciation and amortisation 926 923
(Gain)/loss on sale of premises and equipment - 43
Net derivatives/foreign exchange adjustment 3,244 3,505
(Gain)/loss on sale from divestments 21 (29)
Other non-cash movements 21 (74)
Net (increase)/decrease in operating assets:
Collateral paid (1,968) 4,143
Trading assets
1
(3,204) (5,888)
Net loans and advances (33,546) (27,639)
Other assets (294) (1,706)
Net increase/(decrease) in operating liabilities:
Deposits and other borrowings 41,945 21,601
Settlement balances owed by ANZ (2,905) 5,278
Collateral received (3,368) (5,848)
Other liabilities
1
2,104 4,800
Total adjustments 3,382 (646)
Net cash provided by/(used in) operating activities
2
9,952 6,488
Cash flows from investing activities
Acquisition of Suncorp Bank, net of cash acquired
(4,914) -
Investment securities assets:
Purchases (84,777) (52,030)
Proceeds from sale or maturity 47,542 41,401
Proceeds from divestments, net of cash disposed 668 558
Net movement in shares in controlled entities - (10)
Net investments in other assets (640) (605)
Net cash provided by/(used in) investing activities (42,121) (10,686)
Cash flows from financing activities
Deposits and other borrowings (repaid) / drawn down (1,014) (11,105)
Debt issuances:
3
Issue proceeds 50,604 44,182
Redemptions (25,367) (23,985)
Dividends paid
4
(5,252) (4,380)
On-market purchase of treasury shares (126) (21)
Repayment of lease liabilities (309) (306)
Share buy-back (883) -
ANZ Bank New Zealand Perpetual Preference Shares 252 -
Net cash provided by/(used in) financing activities 17,905 4,385
Net increase/(decrease) in cash and cash equivalents (14,264) 187
Cash and cash equivalents at beginning of period 168,154 168,132
Effects of exchange rate changes on cash and cash equivalents (2,923) (165)
Cash and cash equivalents at end of period 150,967 168,154
1.
Certain items were reclassified from Other liabilities to Trading assets to better reflect the movement in operating assets and operating liabilities. Comparatives have been restated
(Sep 23 full year: reduction to Trading assets and an increase in Other liabilities of $5,865 million).
2.
Net cash provided by/(used in) operating activities includes interest received of $59,618 million (Sep 23 full year: $48,345 million), interest paid of $43,476 million (Sep 23 full year:
$30,707 million) and income taxes paid of $2,925 million (Sep 23 full year: $3,501 million).
3.
Non-cash movements on debt issuances include a gain of $711 million (Sep 23 full year: $2,084 million loss) from unrealised movements primarily due to fair value hedge adjustments and
foreign exchange differences.
4.
Cash outflow for shares purchased to satisfy the dividend reinvestment plan are classified in Dividends paid.
The notes appearing on pages 87 to 98 form an integral part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
ANZ Group Holdings Limited
86
Ordinary
share
capital Reserves
Retained
earnings
Share capital
and reserves
attributable to
shareholders of
the Company
Non-
controlling
interests
Total
shareholders'
equity
$M $M $M $M $M $M
As at 1 October 2022 28,797 (2,606) 39,716 65,907 494 66,401
Impact on transition to AASB 17 - - (37) (37) - (37)
Profit or Loss for the year - - 7,106 7,106 28 7,134
Other comprehensive income for the period - 865 (74) 791 27 818
Total comprehensive income for the period - 865 7,032 7,897 55 7,952
Transactions with equity holders in their capacity as equity holders:
Dividends paid - - (4,559) (4,559) (27) (4,586)
Dividend reinvestment plan
1
206 - - 206 - 206
Other equity movements:
Employee share and option plans 79 - - 79 - 79
Other items - 6 (4) 2 - 2
As at 30 September 2023 29,082 (1,735) 42,148 69,495 522 70,017
Profit or Loss for the year - - 6,535 6,535 35 6,570
Other comprehensive income for the period - (58) (20) (78) (10) (88)
Total comprehensive income for the period - (58) 6,515 6,457 25 6,482
Transactions with equity holders in their capacity as equity holders:
Dividends paid - - (5,220) (5,220) (32) (5,252)
Dividend reinvestment plan
1
- - - - - -
Share buy-back
2
(883) - - (883) - (883)
Other equity movements:
Employee share and option plans (17) 25 4 12 - 12
ANZ Bank New Zealand Perpetual Preference Shares
3
- - (4) (4) 256 252
Other items - (6) 6 - - -
As at 30 September 2024 28,182 (1,774) 43,449 69,857 771 70,628
1.
No shares were issued under the dividend reinvestment (DRP) plan for the 2024 interim dividend (2023 final dividend: nil; 2023 interim dividend: nil; 2022 final dividend: 8.4 million). On-
market share purchase for the DRP was $535 million for the September 2024 full year (Sep 23 full year: $326 million).
2.
The Company commenced a $2 billion on-market share buy-back on 3 July 2024. This resulted in 30 million shares ($883 million) being cancelled during the September 2024 full year and a
further 1.2 million shares ($36 million) being cancelled after 30 September 2024 in respect of purchase orders placed but not settled at 30 September 2024.
3.
Perpetual preference shares issued by ANZ Bank New Zealand Limited, a member of the Group, are considered non-controlling interests to the Group. Refer to Note 7 Shareholders’ equity
for further information.
The notes appearing on pages 87 to 98 form an integral part of the Condensed Consolidated Financial Statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
87
Basis of Preparation
These Condensed Consolidated Financial Statements should be read in conjunction with 2024 ANZGHL Annual Report (when released) and any public
announcements made by ANZGHL and its controlled entities (the Group) for the year ended 30 September 2024 in accordance with the continuous
disclosure obligations under the Corporations Act 2001 and the ASX Listing Rules.
1. Income
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
Interest income 30,828 29,811 3% 60,639 49,904 22%
Interest expense (22,461) (21,720) 3% (44,181) (32,977) 34%
Major bank levy (197) (192) 3% (389) (353) 10%
Net interest income 8,170 7,899 3% 16,069 16,574 -3%
Other operating income
i) Fee and commission income
Lending fees
1
213 207 3% 420 397 6%
Non-lending fees 1,165 1,169 0% 2,334 2,312 1%
Commissions 38 37 3% 75 85 -12%
Funds management income 116 125 -7% 241 246 -2%
Fee and commission income 1,532 1,538 0% 3,070 3,040 1%
Fee and commission expense (519) (566) -8% (1,085) (1,087) 0%
Net fee and commission income 1,013 972 4% 1,985 1,953 2%
ii) Other income
Net foreign exchange earnings and other financial instruments income
2
1,054 1,112 -5% 2,166 1,536 41%
Release of foreign currency translation reserve on dissolution of entities 2 20 -90% 22 43 -49%
Loss on disposal of data centres in Australia - - n/a - (43) -100%
Loss on disposal of investment in AmBank - (21) -100% (21) - n/a
Other 68 31 large 99 79 25%
Other income 1,124 1,142 -2% 2,266 1,615 40%
Other operating income 2,137 2,114 1% 4,251 3,568 19%
Net income from insurance business 74 48 54% 122 108 13%
Share of associates' profit/(loss) 21 84 -75% 105 221 -52%
Operating income 10,402 10,145 3% 20,547 20,471 0%
1.
Lending fees exclude fees treated as part of the effective yield calculation in interest income.
2.
Includes fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges entered into to manage interest rate and foreign exchange risk,
ineffective portions of cash flow hedges, and fair value movements in financial assets and liabilities measured and/or designated at fair value through profit or loss.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
88
2. Operating expenses
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
i) Personnel
Salaries and related costs 2,762 2,744 1% 5,506 5,180 6%
Superannuation costs 227 219 4% 446 396 13%
Equity-settled share-based payments 67 74 -9% 141 105 34%
Other 60 25 large 85 81 5%
Personnel 3,116 3,062 2% 6,178 5,762 7%
ii) Premises
Rent 37 37 0% 74 71 4%
Depreciation 207 200 4% 407 410 -1%
Other 94 84 12% 178 177 1%
Premises 338 321 5% 659 658 0%
iii) Technology
Depreciation and amortisation 264 241 10% 505 505 0%
Subscription licences and outsourced services 606 549 10% 1,155 1,007 15%
Other 147 108 36% 255 188 36%
Technology 1,017 898 13% 1,915 1,700 13%
iv) Restructuring 94 141 -33% 235 169 39%
v) Other
Advertising and public relations 117 93 26% 210 191 10%
Professional fees 433 337 28% 770 861 -11%
Freight, stationery, postage and communication 92 78 18% 170 175 -3%
Card processing fees 54 54 0% 108 104 4%
Other 265 231 15% 496 519 -4%
Other 961 793 21% 1,754 1,850 -5%
Operating expenses 5,526 5,215 6% 10,741 10,139 6%
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
89
3. Earnings per share
Half Year Full Year
Sep 24 Mar 24 Movt Sep 24 Sep 23 Movt
Earnings per share
Basic earnings per share (cents) 104.4 113.5 -8% 217.9 237.1 -8%
Diluted earnings per share (cents) 103.1 111.5 -8% 215.1 227.4 -5%
Reconciliation of earnings used in earnings per share calculations
Basic:
Profit for the period ($M) 3,149 3,421 -8% 6,570 7,134 -8%
Less: Profit attributable to non-controlling interests ($M) 21 14 50% 35 28 25%
Earnings used in calculating basic earnings per share ($M) 3,128 3,407 -8% 6,535 7,106 -8%
Diluted:
Earnings used in calculating basic earnings per share ($M) 3,128 3,407 -8% 6,535 7,106 -8%
Add: Interest on convertible subordinated debt ($M) 203 217 -6% 420 332 27%
Earnings used in calculating diluted earnings per share ($M) 3,331 3,624 -8% 6,955 7,438 -6%
Reconciliation of weighted average number of ordinary shares (WANOS)
used in earnings per share calculations
1
WANOS used in calculating basic earnings per share (M) 2,995.5 3,001.3 0% 2,998.4 2,997.2 0%
Add: Weighted average dilutive potential ordinary shares (M)
2
234.7 248.1 -5% 235.6 273.3 -14%
WANOS used in calculating diluted earnings per share (M) 3,230.2 3,249.4 -1% 3,234.0 3,270.5 -1%
1.
WANOS excludes the weighted average number of treasury shares held in ANZEST Pty Ltd of 5.4 million for the September 2024 half and 5.3 million for the September 2024 full year
(Mar 24 half: 5.3 million; Sep 23 full year: 4.1 million).
2.
Dilutive potential ordinary shares include convertible subordinated debt and share based payments (options, rights, and deferred shares).
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
90
4. Net loans and advances
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Australia
Overdrafts 4,685 4,031 4,190 16% 12%
Credit cards outstanding 5,565 5,607 5,625 -1% -1%
Commercial bills outstanding 4,401 4,557 4,682 -3% -6%
Term loans - housing 382,030 314,103 304,133 22% 26%
Term loans - non-housing 190,616 173,114 169,046 10% 13%
Other 919 927 961 -1% -4%
Total Australia 588,216 502,339 488,637 17% 20%
New Zealand
Overdrafts 1,003 850 906 18% 11%
Credit cards outstanding 1,142 1,163 1,174 -2% -3%
Term loans - housing 102,099 100,407 99,928 2% 2%
Term loans - non-housing 35,613 36,487 37,557 -2% -5%
Total New Zealand 139,857 138,907 139,565 1% 0%
Rest of World
Overdrafts 421 530 456 -21% -8%
Credit cards outstanding 6 6 6 0% 0%
Term loans - housing 425 431 430 -1% -1%
Term loans - non-housing 74,405 73,184 78,205 2% -5%
Other 5 115 331 -96% -98%
Total Rest of World 75,262 74,266 79,428 1% -5%
Subtotal 803,335 715,512 707,630 12% 14%
Unearned income
1
(515) (494) (515)
4% 0%
Capitalised brokerage and other origination costs
1
4,237 3,642 3,475 16% 22%
Gross loans and advances 807,057 718,660 710,590 12% 14%
Allowance for ECL (refer to Note 5) (3,675) (3,489) (3,546) 5% 4%
Net loans and advances 803,382 715,171 707,044 12% 14%
1.
Amortised over the expected life of the loan.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
91
5. Allowance for expected credit losses
Suncorp Bank acquisition related adjustment
The collectively assessed credit impairment charge for the September 2024 half and September 2024 full year includes $244 million for Suncorp Bank’s
performing loans and advances. In accordance with Australian Accounting Standards requirements, the Group consolidated Suncorp Bank’s loans and
advances on 31 July 2024, however the Group was not permitted to recognise an allowance for ECL on the performing loans and advances, leading to a
proportional reduction in acquisition-related goodwill that would otherwise have been recognised. Subsequently, the Group was required to recognise a
collectively assessed allowance for ECL estimated using the Group’s ECL methodologies, with a corresponding charge recognised in the Group’s Income
Statement.
As at
Sep 24 Mar 24 Sep 23
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
Net loans and advances at
amortised cost
3,372 303 3,675 3,169 320 3,489 3,180 366 3,546
Off-balance sheet commitments -
undrawn and contingent facilities
841 5 846 844 5 849 817 10 827
Investment securities - debt securities
at amortised cost
34 - 34 33 - 33 35 - 35
Total 4,247 308 4,555 4,046 325 4,371 4,032 376 4,408
Other Comprehensive Income
Investment securities - debt securities
at FVOCI
1
20 - 20 17 - 17 15 - 15
1.
For FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in Other comprehensive income with a
corresponding charge to profit or loss.
The following tables present the movement in the allowance for ECL.
Net loans and advances at amortised cost
Allowance for ECL is included in Net loans and advances.
Stage 3
Stage 1
$M
Stage 2
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
As at 1 October 2022 1,141 1,548 360 533 3,582
Transfer between stages 148 (138) (94) 84 -
New and increased provisions (net of releases) (73) 202 61 388 578
Write-backs - - - (212) (212)
Bad debts written-off (excluding recoveries) - - - (409) (409)
Foreign currency translation and other movements
1
11 12 2 (18) 7
As at 30 September 2023 1,227 1,624 329 366 3,546
Transfer between stages 129 (144) (49) 64 -
New and increased provisions (net of releases) (119) 64 120 137 202
Write-backs - - - (80) (80)
Bad debts written-off (excluding recoveries) - - - (146) (146)
Foreign currency translation and other movements
1
(5) (6) (1) (21) (33)
As at 31 March 2024 1,232 1,538 399 320 3,489
Transfer between stages 140 (156) (54) 70 -
New and increased provisions (net of releases)
2
(84) 273 94 191 474
Write-backs - - - (97) (97)
Bad debts written off (excluding recoveries) - - - (170) (170)
Foreign currency translation and other movements
1
(12) (2) 4 (11) (21)
As at 30 September 2024 1,276 1,653 443 303 3,675
1.
Other movements include the impact of discounting on expected cash flows for individually assessed allowances for ECL and the impact of divestments completed during the period.
2.
Includes Suncorp Bank acquisition related collectively assessed allowance for ECL. Under accounting standards, these were initially recognised as Stage 1, and where relevant moving to
Stage 2 after the date of acquisition, all presented within New and increased provisions (net of releases).
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
92
5. Allowance for expected credit losses, cont’d
Off-balance sheet commitments - undrawn and contingent facilities
Allowance for ECL is included in Other provisions.
Stage 3
Stage 1
$M
Stage 2
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
As at 1 October 2022 593 144 29 9 775
Transfer between stages 31 (29) (4) 2 -
New and increased provisions (net of releases) - 46 (1) 2 47
Write-backs - - - (4) (4)
Foreign currency translation and other movements
1
6 1 1 1 9
As at 30 September 2023 630 162 25 10 827
Transfer between stages 18 (16) (2) - -
New and increased provisions (net of releases) 7 22 1 - 30
Write-backs - - - (5) (5)
Foreign currency translation (2) (1) - - (3)
As at 31 March 2024 653 167 24 5 849
Transfer between stages 16 (15) (1) - -
New and increased provisions (net of releases) 3 5 2 3 13
Write-backs - - - (2) (2)
Foreign currency translation (14) (1) 2 (1) (14)
As at 30 September 2024 658 156 27 5 846
1.
Other movements include the impact of divestments completed during the period.
Investment securities - debt securities at amortised cost
Allowance for ECL is included in Investment securities.
Stage 3
Stage 1
$M
Stage 2
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
As at 30 September 2023 35 - - - 35
As at 31 March 2024 33 - - - 33
As at 30 September 2024 34 - - - 34
Investment securities - debt securities at FVOCI
For FVOCI assets, the allowance for ECL does not alter the carrying amount which remains at fair value. Instead, the allowance for ECL is recognised in
Other comprehensive income with a corresponding charge to profit or loss.
Stage 3
Stage 1
$M
Stage 2
$M
Collectively
assessed
$M
Individually
assessed
$M
Total
$M
As at 30 September 2023 15 - - - 15
As at 31 March 2024 17 - - - 17
As at 30 September 2024 20 - - - 20
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
93
5. Allowance for expected credit losses, cont’d
Credit impairment charge/(release) analysis
Half Year Full Year
Sep 24
$M
Mar 24
$M Movt
Sep 24
$M
Sep 23
$M Movt
New and increased provisions (net of releases)
1,2
- Collectively assessed 230 32 large 262 152 72%
- Individually assessed 264 201 31% 465 476 -2%
Write-backs
3
(99) (85) 16% (184) (216) -15%
Recoveries of amounts previously written off (59) (78) -24% (137) (167) -18%
Total credit impairment charge/(release) 336 70 large 406 245 66%
1.
Includes the impact of transfers between collectively assessed and individually assessed.
2.
New and increased provisions (net of releases) includes:
Sep 24 half Mar 24 half Sep 24 full year Sep 23 full year
Collectively
assessed
$M
Individually
assessed
$M
Collectively
assessed
$M
Individually
assessed
$M
Collectively
assessed
$M
Individually
assessed
$M
Collectively
assessed
$M
Individually
assessed
$M
Net loans and advances at amortised cost 213 261 1 201 214 462 106 472
Off-balance sheet commitments 10 3 30 - 40 3 43 4
Investment securities - debt securities at
amortised cost
4 - (1) - 3 - (1) -
Investment securities - debt securities at FVOCI 3 - 2 - 5 - 4 -
Total 230 264 32 201 262 465 152 476
3.
Consists of write-backs in Net loans and advances at amortised cost of $97 million for the September 2024 half and $177 million for the September 2024 full year (Mar 24 half: $80 million;
Sep 23 full year: $212 million), and Off-balance sheet commitment of $2 million for the September 2024 half and $7 million for the September 2024 full year (Mar 24 half: $5 million;
Sep 23 full year: $4 million).
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
94
Key judgements and estimates
The key judgements and assumptions in estimating collectively assessed ECL is presented below. Refer to 2024 ANZGHL Annual Report Note 14
Allowance for expected credit losses fur further details.
Base case economic forecast assumptions
The economic drivers of the base case economic forecasts, reflective of ANZ Economics’ view of future macro-economic conditions, used at 30
September 2024 are set out below. For years beyond the near-term forecasts below, the ECL models apply simplified assumptions for the economic
conditions to calculate lifetime loss. There is a high level of estimation uncertainty when forming these forecasts.
The base case economic forecasts have been updated to reflect a moderation in inflation and an easing in labour market conditions in both Australia and
New Zealand. Both economies are forecast to continue to grow below trend. Despite increased household disposable incomes, limited flow-through to
household consumption is forecast.
Probability weightings
Probability weightings for each scenario are determined by management considering the risks and uncertainties surrounding the base case economic
scenario including the uncertainties described above.
The assigned probability weightings in Australia, New Zealand and Rest of World are subject to a high degree of inherent uncertainty and therefore the
actual outcomes may be significantly different to those projected. The Group considers these weightings in each geography to provide estimates of the
possible loss outcomes and taking into account short and long term inter-relationships within the Group’s credit portfolios. The average weightings
applied across the Group are set out below:
Sep 24 Mar 24 Sep 23
Group
Base
46% 46% 46%
Upside
1% 0% 0%
Downside
40% 41% 41%
Severe downside 13% 13% 13%
ECL - Sensitivity analysis
Given inherent economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future periods, ECL
reported by the Group should be considered as a best estimate within a range of possible estimates.
The table below illustrates the sensitivity of the Group’s allowance for collectively assessed ECL to key factors used in determining it at
30 September 2024:
Balance
Sheet
$M
Impact
$M
If 1% of stage 1 facilities were included in stage 2 4,328
81
If 1% of stage 2 facilities were included in stage 1 4,241
(6)
100% upside scenario
1,502 (2,745)
100% base scenario 1,951 (2,296)
100% downside scenario 3,580 (667)
100% severe downside scenario 10,142 5,895
Forecast calendar year
2024 2025 2026
Australia
GDP (annual % change) 1.2 2.0 2.4
Unemployment rate (annual average) 4.1 4.4 4.3
Residential property prices (annual % change) 7.3 5.5 5.5
Consumer price index (annual % change) 3.3 2.9 2.7
New Zealand
GDP (annual % change) -0.1 0.8 2.2
Unemployment rate (annual average) 4.7 5.4 5.4
Residential property prices (annual % change) -1.0 4.5 5.0
Consumer price index (annual % change) 3.1 2.2 1.8
Rest of World
GDP (annual % change) 2.3 1.5 1.9
Consumer price index (annual % change) 3.1 2.4 2.1
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
95
6. Deposits and other borrowings
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Australia
Certificates of deposit 34,011 30,572 33,613 11% 1%
Term deposits 102,413 86,857 79,518 18% 29%
On demand and short term deposits 308,130 283,155 278,014 9% 11%
Deposits not bearing interest 39,964 19,955 20,856 large 92%
Deposits from banks and securities sold under repurchase agreements 44,953 38,425 42,493 17% 6%
Commercial paper and other borrowings 46,283 42,060 31,013 10% 49%
Total Australia 575,754 501,024 485,507 15% 19%
New Zealand
Certificates of deposit 1,079 1,800 2,167 -40% -50%
Term deposits 54,500 52,762 50,451 3% 8%
On demand and short term deposits 56,038 55,569 56,479 1% -1%
Deposits not bearing interest 14,586 15,825 16,438 -8% -11%
Deposits from banks and securities sold under repurchase agreements 3,207 3,912 4,123 -18% -22%
Commercial paper and other borrowings 1,304 3,152 2,098 -59% -38%
Total New Zealand 130,714 133,020 131,756 -2% -1%
Rest of World
Certificates of deposit 7,116 6,723 6,139 6% 16%
Term deposits 116,603 100,919 117,924 16% -1%
On demand and short term deposits 17,423 20,569 21,827 -15% -20%
Deposits not bearing interest 5,554 5,479 5,612 1% -1%
Deposits from banks and securities sold under repurchase agreements 50,390 39,003 45,946 29% 10%
Total Rest of World 197,086 172,693 197,448 14% 0%
Deposits and other borrowings
1
903,554 806,737 814,711 12% 11%
1.
Customer deposits balance of $715,211 million (Mar 24: $641,090 million; Sep 23: $647,119 million) includes Term deposits, On demand and short term deposits and Deposits not bearing
interest.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
96
7. Shareholders’ equity
Shareholders' Equity
As at Movement
Shareholders' equity
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Ordinary share capital
28,182 29,033 29,082
-3% -3%
Reserves
Foreign currency translation reserve
1
(360) 192 570 large large
Share option reserve
108 74 83 46% 30%
FVOCI reserve
(1,078) (590) (494) 83% large
Cash flow hedge reserve
(422) (1,120) (1,872) -62% -77%
Transactions with non-controlling interests reserve
(22) (22) (22)
0% 0%
Total reserves
(1,774) (1,466) (1,735) 21% 2%
Retained earnings
43,449 42,739 42,148
2% 3%
Share capital and reserves attributable to shareholders of the Company
69,857 70,306 69,495 -1% 1%
Non-controlling interests
771 768 522 0% 48%
Total shareholders' equity
70,628 71,074 70,017
-1% 1%
1.
As a result of the closure of a number of international entities, the associated foreign currency translation reserve was recycled from Other comprehensive income to Income Statement,
resulting in a $2 million gain recognised in Other operating income in Sep 24 half and $22 million gain for the September 2024 full year (March 2024 half: $20 million gain, Sep 23 full year:
$43 million gain).
Ordinary Share Capital
Half Year
Full Year
Ordinary shares
Sep 24
No.
Mar 24
No.
Sep 24
No.
Sep 23
No.
Opening balance 3,007,510,678 3,005,286,886 3,005,286,886 2,989,923,751
Share buy-back
1
(29,749,466) - (29,749,466) -
Bonus option plan 1,655,048 2,223,792 3,878,840 3,577,526
Dividend reinvestment plan issuances - - - 8,406,978
Employee share and option plans - - - 3,378,631
Closing balance 2,979,416,260 3,007,510,678 2,979,416,260 3,005,286,886
Less: Treasury shares (5,352,012) (5,572,694) (5,352,012) (4,044,925)
Closing balance 2,974,064,248 3,001,937,984 2,974,064,248 3,001,241,961
1.
The Company commenced a $2 billion on-market share buy-back on 3 July 2024. This resulted in 30 million shares ($883 million) being cancelled in September 2024 half and a further
1.2 million shares ($36 million) being cancelled after 30 September 2024 in respect of purchase orders placed but not settled at 30 September 2024.
Non-Controlling Interests
Profit attributable to
non-controlling interests
Equity attributable to
non-controlling interests
Dividend paid to
non-controlling interests
Half Year Full Year As at Half Year Full Year
Sep 24
$M
Mar 24
$M
Sep 24
$M
Sep 23
$M
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
$M
Mar 24
$M
Sep 24
$M
Sep 23
$M
ANZ Bank New Zealand PPS
1
19 13 32 26 758 757 512 19 13 32 26
Other non-controlling interests 2 1 3 2 13 11 10 - - - 1
Total 21 14 35 28 771 768 522 19 13 32 27
1.
During the March 2024 half, ANZ Bank New Zealand Limited issued $256 million (NZD 275 million) of PPS.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
97
8. Suncorp Bank acquisition
On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. Suncorp Bank provides
banking and related services to retail, commercial, small and medium enterprises and agribusiness customers in Australia. The transaction was
undertaken to accelerate the growth of the Group’s retail and commercial businesses while also improving the geographic balance of its business in
Australia.
Assets acquired and liabilities assumed as at acquisition date are disclosed on a provisional basis, with goodwill of $1,402 million recognised and
allocated to the Suncorp Bank division, pending completion of the final consideration payable, and the purchase price allocation (PPA).
Provisional goodwill is attributable to the assembled workforce and expected synergies arising from the economies of scale from the integration and
consolidation of platforms and funding benefits. It will not be deductible for tax purposes.
The provisional balances are pending the completion of the PPA exercise that commenced following completion on 31 July 2024 but remains in progress
at the date of this report. At 30 September 2024, the most significant adjustments have been the elimination of the pre-acquisition allowance for ECL,
capitalised brokerage and other origination costs, and related deferred tax balances. The PPA exercise will identify the acquired tangible and intangible
assets and assumed liabilities and measure their acquisition-date values. The Group expects that on completion of the PPA in the 2025 financial year,
the acquired assets (including loans and advances and intangible assets) and assumed liabilities (including deposits and debt issuances) will be restated
to their acquisition-date values with a corresponding adjustment to goodwill.
Assets acquired and liabilities assumed as at acquisition date (provisional)
31 July 2024
$M
Assets
Cash and cash equivalents
1,333
Collateral paid
80
Trading assets
2,307
Derivative financial instruments
310
Investment securities
9,920
Gross loans and advances
69,745
Deferred tax assets
48
Intangible assets
103
Other assets 431
Total assets 84,277
Liabilities
Collateral received 48
Deposits and other borrowings 62,438
Derivative financial instruments 279
Payables and other liabilities 731
Provisions 89
Debt issuances 15,847
Total liabilities 79,432
Net assets acquired 4,845
Cash consideration paid
1,2
6,247
Provisional value of goodwill 1,402
1.
Subject to final completion activities.
2.
The cash consideration of $6.2 billion includes payment for Suncorp Bank's Tier 2 notes ($606 million) and Capital Notes ($564 million).
Included in the Consolidated Income Statement and Statement of Comprehensive Income since 31 July 2024 is operating income of $257 million and net
loss after tax of $122 million in respect of the acquired business. Had Suncorp Bank been acquired on 1 October 2023, the operating income and profit
after tax of the combined Group for the twelve months ended 30 September 2024 was estimated to be ~$21,600 million and ~$6,800 million respectively.
The Group incurred acquisition related costs of $17 million during the September 2024 half and $21 million during the September 2024 full year (Mar 24
half: $4 million; Sep 23 full year: $12 million) on legal fees and due diligence costs, recognised in Other operating expenses in the Income Statement.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
98
9. Contingent liabilities and contingent assets
Contingent Liabilities and Contingent Assets
There are outstanding court proceedings, claims and possible claims for and against the Group. Where relevant, expert legal advice has been obtained
and, in the light of such advice, provisions and/or disclosures as deemed appropriate have been made.
Refer to Note 34 of the 2024 ANZGHL Annual Report for a description of contingent liabilities and contingent assets as at 30 September 2024.
10. Significant events since balance date
Other than matters outlined in the 2024 ANZGHL Annual Report, there have been no significant events from 30 September 2024 to the date of signing
this report.
SUPPLEMENTARY INFORMATION
99
CONTENTS Page
Capital management 100
Average balance sheet and related interest 104
Select geographical disclosures 109
Exchange rates 110
SUPPLEMENTARY INFORMATION
100
Capital management
The disclosures below represent the position for ANZ BH Pty Ltd as the head of ANZ’s Level 2 banking group. The capital position for ANZGHL, the head
of the Level 3 conglomerate group, is outlined on page 45.
As at
Movement
Qualifying Capital
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Tier 1
Shareholders' equity and non-controlling interests 68,760 70,202 69,085 -2% 0%
Prudential adjustments to shareholders' equity Table 1 (721) (648) (396) 11% 82%
Gross Common Equity Tier 1 capital 68,039 69,554 68,689 -2% -1%
Deductions Table 2 (13,570) (11,142) (10,895) 22% 25%
Common Equity Tier 1 capital 54,469 58,412 57,794 -7% -6%
Additional Tier 1 capital Table 3 8,207 8,297 8,232 -1% 0%
Tier 1 capital 62,676 66,709 66,026 -6% -5%
Tier 2 capital Table 4 29,189 28,223 24,959 3% 17%
Total qualifying capital 91,865 94,932 90,985 -3% 1%
Capital adequacy ratios (Level 2)
Common Equity Tier 1 12.2% 13.5% 13.3%
Tier 1 14.0% 15.4% 15.2%
Tier 2 6.5% 6.5% 5.8%
Total capital ratio 20.6% 21.9% 21.0%
Risk weighted assets Table 5 446,582 432,779 433,327 3% 3%
SUPPLEMENTARY INFORMATION
101
Capital management, cont’d
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Table 1: Prudential adjustments to shareholders' equity
Shareholders' equity attributable to deconsolidated entities (278) (225) (253) 24% 10%
Deferred fee revenue including fees deferred as part of loan yields 426 409 430 4% -1%
Non-controlling interests and other deductions (869) (832) (573) 4% 52%
Total (721) (648) (396) 11% 82%
Table 2: Deductions from Common Equity Tier 1 capital
Unamortised goodwill & other intangibles (excluding ANZ New Zealand
Investments Holdings Ltd)
(4,273) (2,936) (2,977) 46% 44%
Intangible component of investments in ANZ New Zealand Investments
Holdings Ltd
(63) (69) (71) -9% -11%
Capitalised software (1,015) (902) (913) 13% 11%
Capitalised expenses (including loan and lease origination fees) (2,337) (2,240) (2,099) 4% 11%
Applicable deferred net tax assets (3,112) (2,716) (2,579) 15% 21%
Expected losses in excess of eligible provisions Table 8 (210) (282) (272) -26% -23%
Investment in other insurance subsidiaries (225) (225) (225) 0% 0%
Investment in ANZ New Zealand Investments Holdings Ltd (52) (45) (46) 16% 14%
Investment in associates (1,415) (1,405) (2,321) 1% -39%
Other equity investments (1,032) (1,168) (925) -12% 12%
Cash flow hedge reserve and other deductions 164 846 1,533 -81% -89%
Total (13,570) (11,142) (10,895) 22% 25%
Table 3: Additional Tier 1 capital
ANZ Capital Notes 4 - - 1,621 n/a large
ANZ Capital Notes 5 931 930 929 0% 0%
ANZ Capital Notes 6 1,490 1,490 1,489 0% 0%
ANZ Capital Notes 7 1,300 1,299 1,298 0% 0%
ANZ Capital Notes 8 1,485 1,484 1,483 0% 0%
ANZ Capital Notes 9 1,680 1,678 - 0% n/a
ANZ Capital Securities 1,391 1,434 1,412 -3% -1%
Regulatory adjustments and deductions (70) (18) - large n/a
Total 8,207 8,297 8,232 -1% 0%
`
Table 4: Tier 2 capital
General reserve for impairment of financial assets 1,712 1,609 1,776 6% -4%
Term subordinated debt notes 28,584 26,754 23,707 7% 21%
Regulatory adjustments and deductions (1,107) (140) (524) large large
Total 29,189 28,223 24,959 3% 17%
SUPPLEMENTARY INFORMATION
102
Capital management, cont’d
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Table 5: Risk weighted assets
On balance sheet 293,523 277,535 272,493 6% 8%
Commitments 41,125 41,424 47,701 -1% -14%
Contingents 11,199 11,800 12,260 -5% -9%
Derivatives 15,338 17,688 16,587 -13% -8%
Total credit risk weighted assets Table 6 361,185 348,447 349,041 4% 3%
Market risk - Traded 7,823 11,863 10,264 -34% -24%
Market risk - IRRBB 23,052 26,200 31,703 -12% -27%
Operational risk 49,650 43,274 42,319 15% 17%
Total risk weighted assets 441,710 429,784 433,327 3% 2%
RWA adjustment for the IRB capital floor 4,872 2,995 - 63% n/a
Total risk weighted assets including floor adjustment 446,582 432,779 433,327 3% 3%
As at Movement
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
Table 6: Credit risk weighted assets by Basel asset class
Subject to Advanced IRB approach
Corporate
62,853 60,362 62,668
4% 0%
Residential mortgage
90,924 101,338 96,290
-10% -6%
Retail SME
9,724 9,538 9,684
2% 0%
Qualifying revolving retail
3,235 3,344 3,243
-3% 0%
Other retail
1,624 1,664 1,644
-2% -1%
Credit risk weighted assets subject to Advanced IRB approach
168,360 176,246 173,529
-4% -3%
Credit risk weighted assets subject to supervisory slotting approach
4,242 3,579 3,369
19% 26%
Subject to Foundation IRB approach
Corporate
33,275 35,665 34,819
-7% -4%
Sovereign
11,119 10,856 10,252
2% 8%
Financial institution
29,821 30,122 30,875
-1% -3%
Credit risk weighted assets subject to Foundational IRB approach
74,215 76,643 75,946
-3% -2%
Subject to Standardised approach
Corporate
14,699 5,102 5,611
large large
Sovereign
81 171 165
-53% -51%
Bank
80
Residential mortgage
21,987 1,853 2,065
large large
Other retail
219 92 44
large large
Other assets
4,046 3,790 3,255
7% 24%
Credit risk weighted assets subject to Standardised approach
41,112 11,008 11,140
large large
Credit Valuation Adjustment and Qualifying Central Counterparties
3,847 5,304 4,000
-27% -4%
Exposures of New Zealand banking subsidiaries
66,957 73,186 78,662
-9% -15%
Credit risk weighted assets relating to securitisation exposures
2,452 2,481 2,395
-1% 2%
Total credit risk weighted assets
361,185 348,447 349,041
4% 3%
SUPPLEMENTARY INFORMATION
103
Capital management, cont’d
Collectively and Individually
Assessed Provision
Basel Expected Loss
1
Table 7: Total provision for credit impairment and
Basel expected loss by division
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
$M
Mar 24
$M
Sep 23
$M
Australia Retail 979 1,009 1,017
861 939 855
Australia Commercial 1,182 1,171 1,168
655 651 631
Institutional 1,496 1,546 1,551
851 960 957
New Zealand 590 580 600
787 622 579
Suncorp Bank 248 - -
- - -
Pacific 57 65 72
14 15 16
Group Centre 3 - -
- 1 1
Total provision for credit impairment and expected loss 4,555 4,371 4,408
3,168 3,188 3,039
1.
Only applicable to IRB portfolios.
As at Movement
Table 8: APRA Expected loss in excess of eligible provisions
Sep 24
$M
Mar 24
$M
Sep 23
$M
Sep 24
v. Mar 24
Sep 24
v. Sep 23
APRA Basel 3 expected loss: non-defaulted 2,065 2,014 1,902 3% 9%
Less: Qualifying collectively assessed provision
Collectively assessed provision (4,247) (4,046) (4,032) 5% 5%
Non-qualifying collectively assessed provision 470 423 354 11% 33%
Standardised collectively assessed provision 377 137 131 large large
Non-defaulted excess included in deduction - - - n/a n/a
APRA Basel 3 expected loss: defaulted 1,103 1,174 1,137 -6% -3%
Less: Qualifying individually assessed provision
Individually assessed provision (308) (325) (376) -5% -18%
Additional individually assessed provision for partial write offs (162) (186) (181) -13% -10%
Standardised individually assessed provision 34 31 31 10% 10%
Collectively assessed provision on IRB defaulted (457) (412) (339) 11% 35%
210 282 272 -26% -23%
Shortfall in expected loss not included in deduction - - - NIF n/a
Defaulted excess included in deduction 210 282 272 -26% -23%
Gross deduction 210 282 272 -26% -23%
SUPPLEMENTARY INFORMATION
104
Average balance sheet and related interest
1
Sep 24 Full Year Sep 23 Full Year
Avg bal Int Rate Avg bal Int Rate
$M $M % $M $M %
Loans and advances
Home loans
2
376,975 25,551 6.8% 348,602 19,329 5.5%
Consumer finance
3
12,745 1,084 8.5% 12,317 1,009 8.2%
Business lending
4,5
292,290 18,847 6.4% 289,217 17,860 6.2%
Individual provisions for credit impairment
(330) - n/a (423) - n/a
Total
5
681,680 45,482 6.7% 649,713 38,198 5.9%
Non-lending interest earning assets
Cash and other liquid assets
177,734 7,124 4.0% 197,908 6,432 3.2%
Trading and investment securities
5
163,647 8,021 4.9% 126,885 5,268 4.2%
Other assets
555 12 n/a 573 6 n/a
Total
5
341,936 15,157 4.4% 325,366 11,706 3.6%
Total interest earning assets
6
1,023,616 60,639 5.9% 975,079 49,904 5.1%
Non-interest earning assets
2
148,743 138,749
Total average assets
1,172,359 1,113,828
Interest bearing deposits and other borrowings
Certificates of deposit
43,775 2,083 4.8% 43,167 1,609 3.7%
Term deposits
260,740 13,031 5.0% 236,272 9,710 4.1%
On demand and short term deposits
7
313,743 13,463 4.3% 312,811 9,968 3.2%
Deposits from banks and securities sold under agreement to repurchase
98,684 4,639 4.7% 103,005 3,784 3.7%
Commercial paper and other borrowings
47,005 2,550 5.4% 38,732 1,841 4.8%
Total
763,947 35,766 4.7% 733,987 26,912 3.7%
Non-deposit interest bearing liabilities
Collateral received and settlement balances owed by ANZ
23,294 639 2.7% 20,216 588 2.9%
Debt issuances & subordinated debt
126,205 7,081 5.6% 102,050 4,832 4.7%
Other liabilities
13,471 1,084 n/a 9,903 998 n/a
Total
162,970 8,804 5.4% 132,169 6,418 4.9%
Total interest bearing liabilities
6
926,917 44,570 4.8% 866,156 33,330 3.8%
Non-interest bearing liabilities
7
175,148 179,518
Total average liabilities
1,102,065 1,045,674
Total average shareholders' equity
8
70,294 68,154
1.
Averages used are predominantly daily averages.
2.
Home loans are reported net of average mortgage offset balances of $48,605 million (Sep 23: $43,861 million), which are included in non-interest earning assets. While these balances are
required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s net interest margin.
3.
Consumer finance includes retail products such as credit cards and personal loans, mainly held in the Australia Retail division.
4.
Business lending includes commercial loans to small and mid-sized enterprises, in the Australia Commercial and New Zealand divisions, as well as larger corporate customers in the
Institutional division.
5.
During the September 2024 full year, a component of interest previously included in Business lending was reallocated to Trading and investment securities to better align with the average
balance allocation. Comparative information has been restated to conform to presentation in the September 2024 full year reducing interest in Business lending by $804 million for the
September 2023 full year with a corresponding increase in interest in Trading and investment securities.
6.
Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
7.
On demand and short-term deposits exclude average mortgage offset balances of $48,605 million (Sep 23 full year: $43,861 million), which are included in non-interest bearing liabilities.
8.
Includes non-controlling interests.
SUPPLEMENTARY INFORMATION
105
Average balance sheet and related interest
1
, cont’d
Sep 24 Full Year Sep 23 Full Year
Avg bal Int Rate Avg bal Int Rate
$M $M % $M $M %
Loans and advances
2
Australia
468,256 31,025 6.6% 433,607 25,190 5.8%
New Zealand
3
139,388 9,379 6.7% 137,038 7,987 5.8%
Rest of World
4
74,036 5,078 6.9% 79,068 5,021 6.4%
Total
681,680 45,482 6.7% 649,713 38,198 5.9%
Trading assets and investment securities
Australia
85,316 4,123 4.8% 62,360 2,503 4.0%
New Zealand
3
17,416 906 5.2% 16,824 771 4.6%
Rest of World
4
60,915 2,992 4.9% 47,701 1,994 4.2%
Total
163,647 8,021 4.9% 126,885 5,268 4.2%
Total interest earning assets
5
Australia
636,908 39,067 6.1% 596,032 31,320 5.3%
New Zealand
169,156 10,996 6.5% 166,979 9,419 5.6%
Rest of World
217,552 10,576 4.9% 212,068 9,165 4.3%
Total
1,023,616 60,639 5.9% 975,079 49,904 5.1%
Total average assets
Australia
727,938 669,528
New Zealand
182,035 181,008
Rest of World
262,386 263,292
Total average assets
1,172,359 1,113,828
Interest bearing deposits and other borrowings
6
Australia
451,984 20,955 4.6% 418,513 14,740 3.5%
New Zealand
117,374 5,635 4.8% 112,108 4,148 3.7%
Rest of World
194,589 9,176 4.7% 203,366 8,024 3.9%
Total
763,947 35,766 4.7% 733,987 26,912 3.7%
Total interest bearing liabilities
5
Australia
574,048 27,719 4.8% 511,840 19,252 3.8%
New Zealand
136,716 6,805 5.0% 133,701 5,343 4.0%
Rest of World
216,153 10,046 4.6% 220,615 8,735 4.0%
Total
926,917 44,570 4.8% 866,156 33,330 3.8%
Total average liabilities
Australia
675,546 608,340
New Zealand
162,763 162,520
Rest of World
263,756 274,814
Total average liabilities
1,102,065 1,045,674
Total average shareholders' equity
Ordinary share capital, reserves, retained earnings and non-controlling interests
70,294 68,154
Total average shareholders' equity
70,294 68,154
Total average liabilities and shareholders' equity
1,172,359 1,113,828
1.
Averages used are predominantly daily averages.
2.
Home loans are reported net of average mortgage offset balances of $48,605 million (Sep 23: $43,861 million), which are included in non-interest earning assets. While these balances are
required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s net interest margin.
3.
During the September 2024 full year, a component of interest in New Zealand previously included in Loans and advances was reallocated to Trading and investment securities to better align
with the average balance allocation. Comparative information has been restated to conform to presentation in the September 2024 full year reducing interest in Loans and advances by $264
million for the September 2023 full year with a corresponding increase in interest in Trading and investment securities.
4.
During the September 2024 full year, a component of interest in Rest of World previously included in Loans and advances was reallocated to Trading and investment securities to better
align with the average balance allocation. Comparative information has been restated to conform to presentation in the September 2024 full year reducing interest in Loans and advances by
$540 million for the September 2023 full year with a corresponding increase in interest in Trading and investment securities.
5.
Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
6.
On demand and short-term deposits exclude average mortgage offset balances of $48,605 million (Sep 23: $43,861 million), which are included in non-interest bearing liabilities.
SUPPLEMENTARY INFORMATION
106
Average balance sheet and related interest
1
, cont’d
Sep 24 Half Year Mar 24 Half Year
Avg bal Int Rate Avg bal Int Rate
$M $M % $M $M %
Loans and advances
Home loans
2
389,578 13,434 6.9% 364,372 12,117 6.7%
Consumer finance
3
12,771 545 8.5% 12,718 539 8.5%
Business lending
4
297,336 9,493 6.4% 287,245 9,354 6.5%
Individual provisions for credit impairment (307) - n/a (353) - n/a
Total 699,378 23,472 6.7% 663,982 22,010 6.6%
Non-lending interest earning assets
Cash and other liquid assets 157,357 3,052 3.9% 198,112 4,072 4.1%
Trading assets and investment securities 174,331 4,297 4.9% 152,962 3,724 4.9%
Other assets 545 7 n/a 565 5 n/a
Total 332,233 7,356 4.4% 351,639 7,801 4.4%
Total interest earning assets
5
1,031,611 30,828 6.0% 1,015,621 29,811 5.9%
Non-interest earning assets
2
150,112 147,375
Total average assets 1,181,723 1,162,996
Interest bearing deposits and other borrowings
Certificates of deposit 42,503 1,019 4.8% 45,046 1,064 4.7%
Term deposits 258,196 6,436 5.0% 263,285 6,595 5.0%
On demand and short term deposits
6
315,823 6,927 4.4% 311,662 6,536 4.2%
Deposits from banks and securities sold under agreement to repurchase 93,909 2,316 4.9% 103,459 2,323 4.5%
Commercial paper and other borrowings 46,334 1,240 5.4% 47,677 1,310 5.5%
Total 756,765 17,938 4.7% 771,129 17,828 4.6%
Non-deposit interest bearing liabilities
Collateral received and settlement balances owed by ANZ 24,102 315 2.6% 22,486 324 2.9%
Debt issuances & subordinated debt 136,440 3,879 5.7% 115,969 3,202 5.5%
Other liabilities 13,722 526 n/a 13,220 558 n/a
Total 174,264 4,720 5.4% 151,675 4,084 5.4%
Total interest bearing liabilities
5
931,029 22,658 4.9% 922,804 21,912 4.7%
Non-interest bearing liabilities
6
180,988 169,309
Total average liabilities 1,112,017 1,092,113
Total average shareholders' equity
7
69,706 70,883
1.
Averages used are predominantly daily averages.
2.
Home loans are reported net of average mortgage offset balances of $50,650 million (Mar 24 half: $46,560 million), which are included in non-interest earning assets. While these balances
are required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s net interest margin.
3.
Consumer finance includes retail products such as credit cards and personal loans, mainly held in the Australia Retail division.
4.
Business lending includes commercial loans to small and mid-sized enterprises, in the Australia Commercial and New Zealand divisions, as well as larger corporate customers in the
Institutional division.
5.
Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
6.
On demand and short-term deposits exclude average mortgage offset balances of $50,650 million (Mar 24 half: $46,560 million), which are included in non-interest bearing liabilities.
7.
Includes non-controlling interests.
SUPPLEMENTARY INFORMATION
107
Average balance sheet and related interest
1
, cont’d
Sep 24 Half Year Mar 24 Half Year
Avg bal Int Rate Avg bal Int Rate
$M $M % $M $M %
Loans and advances
2
Australia 486,678 16,232 6.7% 449,835 14,793 6.6%
New Zealand 138,824 4,715 6.8% 139,952 4,664 6.7%
Rest of World 73,876 2,525 6.8% 74,195 2,553 6.9%
Total 699,378 23,472 6.7% 663,982 22,010 6.6%
Trading assets and investment securities
Australia 91,854 2,266 4.9% 78,777 1,858 4.7%
New Zealand 18,106 461 5.1% 16,727 444 5.3%
Rest of World 64,371 1,570 4.9% 57,458 1,422 4.9%
Total 174,331 4,297 4.9% 152,962 3,724 4.9%
Total interest earning assets
3
Australia 645,682 20,046 6.2% 628,133 19,021 6.1%
New Zealand 168,307 5,502 6.5% 170,005 5,494 6.5%
Rest of World 217,622 5,280 4.9% 217,483 5,296 4.9%
Total 1,031,611 30,828 6.0% 1,015,621 29,811 5.9%
Total average assets
Australia 739,658 716,218
New Zealand 181,354 182,716
Rest of World 260,711 264,062
Total average assets 1,181,723 1,162,996
Interest bearing deposits and other borrowings
4
Australia 453,282 10,736 4.7% 450,686 10,220 4.5%
New Zealand 117,156 2,841 4.8% 117,591 2,794 4.8%
Rest of World 186,327 4,361 4.7% 202,852 4,815 4.7%
Total 756,765 17,938 4.7% 771,129 17,829 4.6%
Total interest bearing liabilities
3
Australia 585,151 14,444 4.9% 562,945 13,275 4.7%
New Zealand 136,125 3,402 5.0% 137,306 3,403 5.0%
Rest of World 209,753 4,812 4.6% 222,553 5,234 4.7%
Total 931,029 22,658 4.9% 922,804 21,912 4.7%
Total average liabilities
Australia 694,206 656,885
New Zealand 162,205 163,322
Rest of World 255,606 271,906
Total average liabilities 1,112,017 1,092,113
Total average shareholders' equity
Ordinary share capital, reserves, retained earnings and non-controlling interests 69,706 70,883
Total average shareholders' equity 69,706 70,883
Total average liabilities and shareholder's equity 1,181,723 1,162,996
1.
Averages used are predominantly daily averages.
2.
Home loans are reported net of average mortgage offset balances of $50,650 million (Mar 24 half: $46,560 million), which are included in non-interest earning assets. While these balances
are required to be grossed up under accounting standards, they are netted down for the calculation of customer interest payments and the calculation of the Group’s net interest margin.
3.
Intra-group interest earning assets and interest income and Intra-group interest earning liabilities and interest expense have been eliminated.
4.
On demand and short-term deposits exclude average mortgage offset balances of $50,650 million (Mar 24 half: $46,560 million), which are included in non-interest bearing liabilities.
SUPPLEMENTARY INFORMATION
108
Average balance sheet and related interest, cont’d
Half Year
Full Year
Gross earnings rate
1
Sep 24
%
Mar 24
%
Sep 24
%
Sep 23
%
Australia 6.26 6.20 6.23 5.41
New Zealand 6.54 6.46 6.50 5.64
Rest of World 5.04 5.23 5.14 4.61
Group 5.98 5.87 5.92 5.12
Net interest spread and net interest margin analysis as follows:
Half Year
Full Year
Australia
1
Sep 24
%
Mar 24
%
Sep 24
%
Sep 23
%
Net interest spread 1.22 1.21 1.22 1.38
Interest attributable to net non-interest bearing items 0.44 0.42 0.42 0.47
Net interest margin - Australia 1.66 1.63 1.64 1.85
New Zealand
1
Net interest spread 1.48 1.48 1.48 1.61
Interest attributable to net non-interest bearing items 0.88 0.86 0.87 0.73
Net interest margin - New Zealand 2.36 2.34 2.35 2.34
Rest of World
1
Net interest spread 0.45 0.52 0.48 0.64
Interest attributable to net non-interest bearing items 0.33 0.26 0.30 0.21
Net interest margin - Rest of World 0.78 0.78 0.78 0.85
Group
Net interest spread 1.11 1.12 1.12 1.27
Interest attributable to net non-interest bearing items 0.47 0.44 0.45 0.43
Net interest margin 1.58 1.56 1.57 1.70
Net interest margin (excl. Markets business unit) 2.38 2.33 2.35 2.39
1.
Geographic gross earnings rate, net interest spread and net interest margin are calculated gross of intra-group items (Intra-group interest earning assets and associated interest income and
intra-group interest bearing liabilities and associated interest expense).
SUPPLEMENTARY INFORMATION
109
Select geographical disclosures
The following divisions operate across the geographic locations illustrated below:
Australia Retail division - Australia
Australia Commercial division - Australia
Institutional division - Australia, New Zealand and Rest of World
New Zealand division - New Zealand
Suncorp Bank division - Australia
Pacific division - Rest of World
Group Centre division - Australia, New Zealand and Rest of World
The Rest of World geography includes all geographies in which the Group operates outside of Australia and New Zealand. This includes Asia, Pacific,
Europe & America.
Australia
$M
New Zealand
$M
Rest of World
$M
Total
$M
September 2024 Full Year
Statutory profit/(loss) attributable to shareholders of the Company 3,553 1,928 1,054 6,535
Cash profit/(loss) 3,536 2,107 1,082 6,725
Net loans and advances 588,947 139,644 74,791 803,382
Customer deposits 450,507 125,124 139,580 715,211
Risk weighted assets 296,501 82,771 67,310 446,582
September 2023 Full Year
Statutory profit/(loss) attributable to shareholders of the Company 3,851 1,969 1,286 7,106
Cash profit/(loss) 4,072 2,086 1,255 7,413
Net loans and advances 488,859 139,286 78,899 707,044
Customer deposits 378,388 123,368 145,363 647,119
Risk weighted assets 268,405 94,446 70,476 433,327
September 2024 Half Year
Statutory profit/(loss) attributable to shareholders of the Company 1,734 964 430 3,128
Cash profit/(loss) 1,665 1,034 474 3,173
Net loans and advances 588,947 139,644 74,791 803,382
Customer deposits 450,507 125,124 139,580 715,211
Risk weighted assets 296,501 82,771 67,310 446,582
March 2024 Half Year
Statutory profit/(loss) attributable to shareholders of the Company 1,819 964 624 3,407
Cash profit/(loss) 1,871 1,073 608 3,552
Net loans and advances 502,745 138,647 73,779 715,171
Customer deposits 389,967 124,156 126,967 641,090
Risk weighted assets 275,841 88,058 68,880 432,779
New Zealand geography (in NZD)
Half Year Full Year
Sep 24
NZD M
Mar 24
NZD M Movt
Sep 24
NZD M
Sep 23
NZD M Movt
Net interest income 2,174 2,142 1%
4,316 4,239 2%
Other operating income 348 382 -9%
730 774 -6%
Operating income 2,522 2,524 0%
5,046 5,013 1%
Operating expenses (901) (859) 5%
(1,760) (1,659) 6%
Cash profit before credit impairment and income tax 1,621 1,665 -3%
3,286 3,354 -2%
Credit impairment (charge)/release (11) (33) -67%
(44) (183) -76%
Cash profit before income tax 1,610 1,632 -1%
3,242 3,171 2%
Income tax expense and non-controlling interests (479) (477) 0%
(956) (909) 5%
Cash profit 1,131 1,155 -2%
2,286 2,262 1%
Adjustments between statutory profit and cash profit (78) (117) -33%
(195) (127) 54%
Statutory profit 1,053 1,038 1%
2,091 2,135 -2%
Individually assessed credit impairment charge/(release) 39 3 large
42 60 -30%
Collectively assessed credit impairment charge/(release) (28) 30 large
2 123 -98%
Net loans and advances 151,963 151,167 1%
151,963 149,627 2%
Customer deposits 136,163 135,367 1%
136,163 132,528 3%
Risk weighted assets 90,069 96,005 -6%
90,069 101,458 -11%
Total FTE 7,003 7,185 -3%
7,003 7,244 -3%
SUPPLEMENTARY INFORMATION
110
Exchange rates
Major exchange rates used in the translation of foreign subsidiaries, branches, investments in associates and issued debt are as follows:
Balance sheet Profit & Loss Average
As at Half Year Full Year
Sep 24 Mar 24 Sep 23 Sep 24 Mar 24 Sep 24 Sep 23
Chinese Renminbi 4.8622 4.7035 4.7265 4.7862 4.7167 4.7512 4.6950
Euro 0.6209 0.6040 0.6112 0.6110 0.6054 0.6082 0.6238
Pound Sterling 0.5178 0.5157 0.5286 0.5188 0.5216 0.5202 0.5430
Indian Rupee 58.086 54.256 53.723 55.535 54.403 54.963 54.798
Indonesian Rupiah 10,493 10,331 10,017 10,603 10,235 10,416 10,130
Japanese Yen 98.272 98.515 96.409 101.163 96.880 98.975 92.368
Malaysian Ringgit 2.8468 3.0773 3.0319 3.0471 3.0822 3.0645 3.0140
New Taiwan Dollar 21.938 20.829 20.876 21.481 20.702 21.084 20.664
New Zealand Dollar 1.0882 1.0903 1.0742 1.0929 1.0761 1.0844 1.0845
Papua New Guinean Kina 2.7165 2.4549 2.3692 2.5569 2.4413 2.4977 2.3593
United States Dollar 0.6933 0.6508 0.6468 0.6644 0.6543 0.6593 0.6657
DEFINITIONS
111
AASB means Australian Accounting Standards Board. The term ‘AASB’ is commonly used when identifying Australian Accounting Standards issued by
the AASB.
ADI means Authorised Deposit-taking Institution as defined by APRA.
ANZ Bank Group means ANZ BH Pty Ltd and each of its subsidiaries, including ANZBGL and ANZ Bank New Zealand.
ANZBGL means Australia and New Zealand Banking Group Limited.
ANZBGL Group means ANZBGL and each of its subsidiaries.
ANZ Bank New Zealand means ANZ Bank New Zealand Limited.
ANZ Economics means ANZ Research Economics, a business unit within ANZ which conducts analysis of key economic inputs and developments and
assessment of the potential impacts on the local, regional and global economies.
ANZGHL means ANZ Group Holdings Limited.
ANZGHL Group means ANZGHL and each of its subsidiaries, including ANZ BH Pty Ltd, ANZ Group Services Pty Ltd and ANZ NBH Pty Ltd.
ANZ Non-Bank Group means ANZ NBH Pty Ltd and each of its subsidiaries, including ANZ’s beneficial interests in the 1835i trusts and non-controlling
interests in the Worldline merchant acquiring joint venture, and ANZ Group Services Pty Ltd.
APRA means Australian Prudential Regulation Authority.
APS means ADI Prudential Standard.
ASX means Australian Securities Exchange.
AT1 means Additional Tier 1 capital.
Basel Harmonisation ratios are the Group’s interpretation of Basel Calculation of RWA for credit risk regulations documented in the Basel Framework
and the ‘Australian Banking Association Basel 3.1 Capital Comparison Study’ (Mar 2023).
Board means ANZGHL Board of Directors.
Cash and cash equivalents comprise coins, notes, money at call, balances held with central banks, liquid settlement balances (readily convertible to
known amounts of cash which are subject to insignificant risk of changes in value) and securities purchased under agreements to resell (reverse
repurchase agreements) in less than three months.
Cash profit is an additional measure of profit which is prepared on a basis other than in accordance with accounting standards. Cash profit represents
the Group’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group and divisional performance
against prior periods and against peer institutions. To calculate cash profit, the Group excludes non-core items from statutory profit as noted below.
These items are calculated consistently period on period so as not to discriminate between positive and negative adjustments.
Gains and losses are adjusted where they are significant, or have the potential to be significant in any one period, and fall into one of three categories:
1. gains or losses included in earnings arising from changes in tax, legal or accounting legislation or other non-core items not associated with the core
operations of the Group;
2. economic hedging impacts and similar accounting items that represent timing differences that will reverse through earnings in the future; and
3. accounting reclassifications between individual line items that do not impact reported results, such as credit risk on impaired derivatives.
Cash profit is not a measure of cash flow or profit determined on a cash accounting basis.
Collectively assessed allowance for expected credit loss represents the expected credit loss, which incorporates forward-looking information and
does not require an actual loss event to have occurred for a credit loss provision to be recognised.
Company means ANZGHL.
Credit risk is the risk of financial loss resulting from the failure of the Group’s customers and counterparties to honour or perform fully the terms of a loan
or contract.
Credit risk weighted assets (credit RWA) represent assets which are weighted for credit risk according to a set formula as prescribed in APS 112/113.
Customer deposits represent term deposits, other deposits bearing interest, deposits not bearing interest and borrowing corporations’ debt excluding
securitisation deposits.
Dividend payout ratio is the total ordinary dividend payment divided by profit attributable to shareholders of the Company.
Embedded losses - In relation to interest rate risk in the banking book, APRA requires ADIs to give consideration to embedded gains or losses in
banking book items that are not accounted for on a marked-to-market basis when determining regulatory capital. The embedded loss or gain measures
the difference between the book value and the economic value of banking book activities at a point in time.
Expected credit losses (ECL) – The determination of the ECL is dependent on credit deterioration since origination, according to the following three-
stage approach:
- Stage 1: At the origination of a financial asset, and subsequently where there has not been a Significant Increase in Credit Risk (SICR) since
origination, an allowance for ECL is recognised reflecting the expected credit losses resulting from default events that are possible within the next 12
months from the reporting date. For instruments with a remaining maturity of less than 12 months, expected credit losses are estimated based on
default events that are possible over the remaining time to maturity.
- Stage 2: Where there has been a SICR since origination, an allowance for ECL is recognised reflecting expected credit losses resulting from all
possible default events over the expected life of a financial instrument. If credit risk were to improve in a subsequent period such that the increase in
credit risk since origination is no longer considered significant, the exposure returns to a Stage 1 classification with ECL measured accordingly.
- Stage 3: Where there is objective evidence of impairment, an allowance equivalent to lifetime ECL is recognised.
Exposure at default (EAD) means the expected balance sheet exposure at default taking into account repayments of principal and interest,
expected additional drawdowns and accrued interest.
DEFINITIONS
112
Funding for Lending Programme (FLP) refers to three-year funding announced by the RBNZ in November 2020 and offered to New Zealand banks,
which aimed to lower the cost of borrowing for New Zealand businesses and households.
GDP means gross domestic product.
Group means ANZGHL and each of its subsidiaries, including ANZ BH Pty Ltd, ANZ Group Services Pty Ltd and ANZ NBH Pty Ltd.
Gross loans and advances (GLA) is made up of loans and advances, capitalised brokerage and other origination costs less unearned income.
Impaired assets are those financial assets where doubt exists as to whether the full contractual amount will be received in a timely manner, or where
concessional terms have been provided because of the financial difficulties of the customer.
Impaired loans comprise drawn facilities where the customer’s status is defined as impaired.
Individually assessed allowance for expected credit losses is assessed on a case-by-case basis for all individually managed impaired assets taking
into consideration factors such as the realisable value of security (or other credit mitigants), the likely return available upon liquidation or bankruptcy, legal
uncertainties, estimated costs involved in recovery, the market price of the exposure in secondary markets and the amount and timing of expected
receipts and recoveries.
Interest rate risk in the banking book (IRRBB) relates to the potential adverse impact of changes in market interest rates on the Group’s future net
interest income. The risk generally arises from:
1. Repricing and yield curve risk - the risk to earnings or market value as a result of changes in the overall level of interest rates and/or the relativity of
these rates across the yield curve;
2. Basis risk - the risk to earnings or market value arising from volatility in the interest margin applicable to banking book items; and
3. Optionality risk - the risk to earnings or market value arising from the existence of stand-alone or embedded options in banking book items.
IRB means internal ratings-based.
Probability of default (PD) means the estimate of the likelihood that a borrower will default over a given period.
Level 1 in the context of APRA supervision, means ANZBGL consolidated with certain approved subsidiaries.
Level 2 in the context of APRA supervision, means consolidated ANZ Bank Group, excluding insurance and funds management entities, commercial
non-financial entities and certain securitisation vehicles.
Level 3 in the context of APRA supervision, means ANZGHL Group, the conglomerate group at the widest level.
Loss given default (LGD) means the expected loss in the event of the borrower defaulting, expressed as a percentage of the facility's EAD,
taking into account direct and indirect recovery costs.
Net interest margin is net interest income as a percentage of average interest earning assets.
Net loans and advances represent gross loans and advances less allowance for expected credit losses.
Net Stable Funding Ratio (NSFR) is the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF) defined by
APRA. The amount of ASF is the portion of an ADI capital and liabilities expected to be a reliable source of funds over a one year time horizon. The
amount of RSF is a function of the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs must maintain
an NSFR of at least 100%.
Net tangible assets equal share capital and reserves attributable to shareholders of the Company less unamortised intangible assets (including goodwill
and software).
NZX means New Zealand’s Exchange.
RBA means Reserve Bank of Australia, Australia’s central bank.
RBNZ means Reserve Bank of New Zealand, New Zealand’s central bank.
Regulatory deposits are mandatory reserve deposits lodged with local central banks in accordance with statutory requirements.
Return on average assets is the profit attributable to shareholders of the Company, divided by average total assets.
Return on average ordinary shareholders’ equity is the profit attributable to shareholders of the Company, divided by average ordinary shareholders’
equity.
Risk weighted assets (RWA) are risk weighted according to each asset’s inherent potential for default and what the likely losses would be in the case of
default. In the case of non-asset backed risks (i.e. market and operational risk), RWA is determined by multiplying the capital requirements for those risks
by 12.5.
Settlement balances owed to/by ANZ represent financial assets and/or liabilities which are in the course of being settled. These may include trade
dated assets and liabilities, vostro accounts and securities settlement accounts.
Term Funding Facility (TFF) refers to three-year funding announced by the RBA on 19 March 2020 and offered to ADIs in order to support lending to
Australian businesses at low cost. The TFF was closed to drawdowns on 30 June 2021.
Term Lending Facility (TLF) refers to three to five-year funding offered by the RBNZ between May 2020 and July 2021 to promote lending to New
Zealand businesses.
DEFINITIONS
113
Description of divisions
On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. The transaction was
undertaken to accelerate the growth of the Group’s retail and commercial businesses while also improving the geographic balance of its business in
Australia. The reported results for the September 2024 half and September 2024 full year include 2 months results for Suncorp Bank from the date of
acquisition, presented as Suncorp Bank division throughout the Results Announcement.
The Group operates on a divisional structure with seven divisions: Australia Retail, Australia Commercial, Institutional, New Zealand, Suncorp Bank,
Pacific, and Group Centre.
Australia Retail
The Australia Retail division provides a full range of banking services to Australian consumers. This includes Home Loans, Deposits, Credit Cards and
Personal Loans. Products and services are provided via the branch network, home loan specialists, contact centres, a variety of self-service channels
(digital and internet banking, website, ATMs and phone banking) and third-party brokers.
Australia Commercial
The Australia Commercial division provides a full range of banking products and financial services, including asset financing, across the following
customer segments: SME Banking (small business owners and medium commercial customers), and Diversified & Specialist Businesses (large
commercial customers, and high net worth individuals and family groups). It also includes run-off businesses (Central Functions).
Institutional
The Institutional division services institutional and corporate customers, and governments across Australia, New Zealand and International (including
PNG) via the following business units:
Transaction Banking provides customers with working capital and liquidity solutions including documentary trade, supply chain financing, commodity
financing as well as cash management solutions, deposits, payments and clearing.
Corporate Finance provides customers with loan products, loan syndication, specialised loan structuring and execution, project and export finance,
debt structuring and acquisition finance, and sustainable finance solutions.
Markets provides customers with risk management services in foreign exchange, interest rates, credit, commodities and debt capital markets in
addition to managing the Group's interest rate exposure and liquidity position.
Central Functions consists of enablement functions that help deliver payments services, operational support and digital capability across both the
Institutional division and the wider enterprise.
New Zealand
The New Zealand division comprises the following business units:
Personal provides a full range of banking and wealth management services to consumer and private banking customers. We deliver our services via
our internet and app-based digital solutions and network of branches, mortgage specialists, private bankers and contact centres.
Business & Agri provides a full range of banking services through our digital, branch and contact centre channels, and traditional relationship banking
and sophisticated financial solutions through dedicated managers. These cover privately owned small, medium and large enterprises, the agricultural
business segment, government and government-related entities.
Central Functions includes treasury and back-office support functions.
Suncorp Bank
The Suncorp Bank division provides banking and related services to retail, commercial, small and medium enterprises and agribusiness customers in
Australia.
Pacific
The Pacific division provides products and services to retail and commercial customers (including multi-nationals), and to governments located in the
Pacific region excluding PNG which forms part of the Institutional division.
Group Centre
Group Centre division provides support to the operating divisions, including technology, property, risk management, financial management, treasury,
strategy, marketing, human resources, corporate affairs, and shareholder functions. It also includes minority investments in Asia and interests in the ANZ
Non-Bank Group.
ASX APPENDIX 4E - CROSS REFERENCE INDEX
114
Page
Details of the reporting period and the previous corresponding period (4E Item 1) ............................................................................................................. 2
Results for Announcement to the Market (4E Item 2) ........................................................................................................................................................ 2
Statement of Comprehensive Income (4E Item 3) ..................................................................................................................................................... 82, 83
Statement of Financial Position (4E Item 4) ..................................................................................................................................................................... 84
Statement of Cash Flows (4E Item 5) .............................................................................................................................................................................. 85
Statement of Changes in Equity (4E Item 6) .................................................................................................................................................................... 86
Dividends and dividend dates (4E Item 7) ......................................................................................................................................................................... 2
Dividend Reinvestment Plan (4E Item 8) ........................................................................................................................................................................... 2
Net Tangible Assets per security (4E Item 9) .................................................................................................................................................................. 13
Accounting standards used by foreign entities (4E Item 13) ......................................................................................................................... Not applicable
Commentary on results (4E Item 14) ............................................................................................................................................................................... 17
Statement that accounts are being audited (4E Item 15) ................................................................................................................................................... 3
Additional information supporting the Appendix 4E disclosure requirements (Items 10, 11, 12) can be found in the 2024 ANZGHL Annual Report:
For details of entities over which the control has been gained or lost during the year ended 30 September 2024 (4E Item 10), refer to Note 27
Controlled Entities in the 2024 ANZGHL Annual Report.
For details of associates and joint venture entities (4D Item 11), refer to Note 28 Investment in Associates in the 2024 ANZGHL Annual Report.
For other significant information (4E Item 12), refer to the 2024 ANZGHL Annual Report.
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ANZ Group Holdings Limited 9/833 Collins Street Docklands Victoria 3008 Australia ABN 16 659 510 791
2024
Full Year
Results
Full year ended 30 September 2024
Results Presentation and Investor Discussion Pack
8 November 2024
Approved for distribution by ANZ’s Continuous Disclosure Committee
Important information
Forward-looking statements
The material in this presentation contains general background information about the Group’s activities current as at 7 November 2024. It is information given in
summary form and does not purport to be complete.
It is not intended to be and should not be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial
situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.
This presentation may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations with respect to the
Group’s business operations, market conditions, results of operations and financial condition, capital adequacy, sustainability objectives or targets, specific provisions
and risk management practices. When used in the presentation, the words ‘forecast’, ‘estimate’, 'goal', 'target', 'indicator', 'plan', 'pathway', ‘ambition’, ‘modelling’,
‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to the Group and its
management, are intended to identify forward-looking statements or opinions. Those statements are usually predictive in character; or may be affected by inaccurate
assumptions or unknown risks and uncertainties or may differ materially from results ultimately achieved. As such, these statements should not be relied upon when
making investment decisions. These statements only speak as at the date of publication and no representation is made as to their correctness on or after this date.
Forward-looking statements constitute ‘forward-looking statements’ for the purposes of the United States Private Securities Litigation Reform Act of 1995. The Group
does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date
hereof to reflect the occurrence of unanticipated events.
It also contains climate-related statements. Those statements should be read with the important notices in relation to the uncertainties, challenges and risks associated
with climate-related information included at the end of this presentation pack
2
Contents
1
CEO presentation
2
CFO presentation
3
Corporate profile, Group &
divisional performance
4
Treasury
5
Risk management & Housing
3
6
ESG disclosures &
shareholder information
2024 Full Year Results
Shayne Elliott
Chief Executive Officer
A pivotal year for ANZ
Completed the sale of AmBank shares
Completed the purchase of Suncorp Bank
Record result from Institutional
Gaining momentum in ANZ Plus
1.All data 30 Sep 2024. R&C: Australia Retail and Australia Commercial divisions
5
Customers, m
Suncorp Bank acquisition - delivering scale in Aus. Retail & Commercial
1
ANZ R&CANZ R&C &
Suncorp Bank
7.0
8.2
+17%
293
348
ANZ R&CANZ R&C &
Suncorp Bank
+19%
398
468
ANZ R&CANZ R&C &
Suncorp Bank
+18%
Customer deposits, $b
Net loans and adv, $b
7
9
14
FY16FY20FY24
Institutional Return on Equity, %ANZ Plus deposits, $b
1
9
16
Sep 22Sep 23Sep 24
Customer
segments
Dual Platform Future – resilient, low cost, agile
1.Onboarding Net Promoter Score of 57 (Sep 24), 56 (Mar 24), 56 (Sep 23)
2.Coalition Greenwich (formerly Peter Lee Associates), 2024 Large Corporate and Institutional Transaction Banking Survey, Australi a
3.Coalition Greenwich (formerly Peter Lee Associates), 2024 Large Corporate and Institutional Transaction Banking Survey, New Zealand
6
Retail
Small
business
Mid-sized
corporates
Large
corporates
Financial
institutions
Multinational
corporations
ANZ Transactive Global
Secure, configurable platform offering seamless access to core banking services
such as Cash Mgt, FX, Trade Finance, Loans, Commercial Cards, Data Insights
ANZ Plus
Contemporary digital platform with features designed to
help customers improve their financial wellbeing
#1
#1 Market Penetration for Overall Transactional Banking 2016-24 (Aus)
2
#1 Market Penetration for Overall Transactional Banking 2010-24
(NZ)
3
#1 Transaction Banking Product Development and Innovation 2023-24 (Aus)
2
Consistently high onboarding NPS
1
Launched My Accounts, leveraging Open Banking
allowing customers to import balances and
transaction details from other Australian banks
Financial performance
Cash Profit, $mEarnings per share, centsDividend per share, cents
1.Suncorp Bank acquisition accounting includes accelerated software amortisation charge of $36m ($25m after tax) and a Collectively Assessed Credit Impairment Charge (CIC) of $244m ($171m after tax)
2.Excludes additional dividend of 13 cents
7
6,198
6,515
7,413
6,921
FY21FY22FY23FY24
(ex acq.
accounting)
1
+12%
217
229
247
231
FY21FY22FY23FY24
(ex acq.
accounting)
1
+14 cents
142
146
162
FY21FY22FY23
2
FY24
166
+24 cents
Suncorp Bank - strong growth since 2022 announcement
1
Customer numbers, m
% of gross credit exposures
Customer deposits, $bHousing lending, $bBusiness lending, $bGross impaired assets
1.On 18 July 2022, ANZ announced an agreement to acquire Suncorp Bank from Suncorp Group Limited. On 31 July 2024, ANZ confirmed it had completed its acquisition of Suncorp Bank
8
12
13
Jun 22Sep 24
+8%
48
55
Jun 22Sep 24
+14%
1.20
1.26
Jun 22Sep 24
+5%
50
58
Jun 22Sep 24
+16%
Jun 22Sep 24
0.18%
0.07%
-61%
“Our strategy is to
improve the financial
wellbeing and
sustainability of customers
through excellent
services, tools and
insights.”
In particular, we want to help customers
Save for, buy and own
a liveable home
Start or buy and sustainably
grow their business
Move capital and goods around
the region and sustainably grow
their business
Progress of ANZ Plus
Foundation BuildRapid ExpansionFuture Ready
Increased investment on engaging propositions and
financial wellbeing features
Engaging
customers
at scale
FY21 – FY23FY24FY25-FY26FY27+
The bank we’re building: ANZ Plus
1.Production releases required to deliver customer features across assets (both in Production and Non-production environments)
10
ANZ Plus - rapidly launching new features and propositions
Manage my Money
Launch
ANZ Plus launch
(Mar 22)
Buy & Own a
Home Launch
(Nov 23)
191
323
799
FY22FY23FY24
Avg production releases per month
1
50
462
848
Sep 22Sep 23Sep 24
Customers, 000’s
Add Ons
(Dec 23)
Round Ups
(Nov 23)
Joint Accounts
(Apr 24)
My Accounts
(Sep 24)
ANZ Plus
Flex Saver
(Oct 24)
Growing ANZ Plus customers, deepening engagement
1.% of New to Bank Customers (Monthly) as a % of total customers joining in the month of Sep 24
2.Number of customers that have used at least one Financial Wellbeing (FWB) feature – goals, card controls, roundups, etc
3.Deposit of at least $2k of salary (monthly) or $6k of salary (in 3 months) & make 4+ transactions (monthly)
11
More attractive
(Greater propensity to join)
More engaging
(Higher customer lifetime value)
$9b
$13b
$16b
462k
660k
848k
Sep 23Mar 24Sep 24
CustomersDeposits
~50%
new to
bank
1
Customers engaged with a FWB feature
2
Main bank customer
3
211k
308k
399k
Sep 23Mar 24Sep 24
+89%
Sep 23Mar 24Sep 24
58%58%58%
ANZ Plus – Delivering shareholder value
1.FY24 - ANZ Plus deposit costs only. Cost to serve based on variable costs including distribution, operations and product costs
12
More efficient
(Faster to deploy, lower cost to onboard, serve & engage)
More secure
(More resilient systems & services)
Cost to acquire
1
Cost to serve
1
PayID registrations
ANZANZ Plus
FY23
ANZ Plus
FY24
-40%
-45%
ANZANZ Plus
FY23
ANZ Plus
FY24
-20%
-35%
57k
83k
137k
Sep 23Mar 24Sep 24
ANZ My Accounts
Seeing other banks?
View your accounts
in the ANZ Plus app.
My Accounts lets you add and view your eligible
accounts from other banks in the ANZ Plus app.
1
1. Only eligible accounts shown. Amounts shown may not reflect your personal situation or money available to spend. SeeANZ Plus App T&Csfor more information. Information on third party accounts is sourced from those third parties
with your consent. Third parties have not endorsed the My Accounts feature.
The bank we’re building: ANZ Transactive Global
Institutional customer deposits, $bPayment & Cash Management revenue, $m
1.Primary propositions are core banking capabilities, enabling our customers to make / receive payments to their beneficiaries directly via ANZ
2.Platform Services enable our customers to offer ANZ’s services to their customers under their own brand, with key ANZ banking Platform Services including Correspondent Banking, Agency Services, Real Time Payments and Client Monies
3.Global Finance Best Treasury & Cash Management Banks awards 2024
133
154
110
110
Sep 21Sep 24
243
264
3% CAGR
687
1,349
187
468
FY21FY24
874
1,817
28% CAGR
Primary propositions
1
Platforms
2
+5%
flat
CAGR
Markets / other
Payments and Cash Management (PCM)
Leadership in Payments, underpinned
by sustained investment in ANZ
Transactive Global
Best Bank for Payments Globally 2024
3
Best Bank for Payments in Asia Pacific 2024
3
Best Bank for Cash Management in
Australia2021–24
3
Best Bank for Cash Management in New
Zealand2021–24
3
+25%
+36%
CAGR
14
Payments offering has strengthened, underpinned by Transactive
1.Number of payments
2.Subset of total payments
3.Platform Cash Management accounts
15
Institutional platform performance
Payments
1
, m
Direct integration payments
1,2
, m
Client Monies, Accounts
3
, k
Real time payments (NPP Agency)
1,2
, m
229
360
2H212H24
+16% CAGR
89
154
2H212H24
+20% CAGR
11
27
2H212H24
+35% CAGR
268
432
Sep 21Sep 24
+17% CAGR
FY24 priorities
Grow ANZ Plus
customers, deepen
engagement
Continue to run the
Group prudently
Invest more in
Commercial strategy
Complete the acquisition
of Suncorp Bank
Further improve
productivity
Invest to build and sustain
contemporary digital
capabilities
16
FY25 priorities
17
Maintain a purpose-led
culture, focus on non-
financial risk
Remain focused on
productivity
Deliver strong and
sustainable financial
outcomes
Make ANZ Plus
more successful
Improve platform
excellence
Drive value
from Suncorp Bank
2024 Full Year Results
Farhan Faruqui
Chief Financial Officer
Overview
Revenue, $mProfit before provisions, $mCash profit, $m
1.Suncorp Bank acquisition accounting includes accelerated software amortisation charge of $36m
2.Suncorp Bank acquisition accounting includes accelerated software amortisation charge of $36m ($25m after tax) and a Collectively Assessed Credit Impairment Charge of $244m ($171m after tax)
19
6,198
6,515
7,413
6,921
FY21FY22FY23FY24
(ex acq.
accounting)
2
+12%
8,396
8,968
10,766
10,104
FY21FY22FY23FY24
(ex acq.
accounting)
1
+20%
17,447
18,547
20,905
20,809
FY21FY22FY23FY24
+19%
Suncorp Bank acquisition
FY24 impact on ANZ Group Financials
Acquisition completed 31 July 2024
1.Suncorp Bank acquisition accounting includes accelerated software amortisation charge of $36m ($25m after tax) and a Collectively Assessed Credit Impairment Charge of $244m ($171m after tax)
20
FY24, $mANZ excluding
Suncorp Bank
Suncorp Bank
(2 months earnings)
ANZ total
(ex acq. accounting)
Suncorp Bank
acq. accounting
1
ANZ total
Group
Total income20,55225720,809-20,809
Operating expenses10,55315210,7053610,741
Profit / (loss) Before Provisions9,99910510,104(36)10,068
Credit impairment charge / (release)163(1)162244406
Cash Profit / (Loss)6,847746,921(196)6,725
Net Loans and Adv. (Sep 24) $b732.570.9803.4n/a803.4
Customer Deposits (Sep 24) $b660.554.7715.2n/a715.2
BankingMarketsGroup Centre
% of Group
revenue
~90%~10%Not material
% of Group
expenses
~80%~10%~10%
% of Group
capital
~70%~10%~20%
ANZ Group overview
ANZ Group Holdings
21
Aus Retail
Aus Commercial
Institutional ex
Markets
New Zealand
Pacific
Suncorp Bank
Customer
franchise
Balance sheet
Central functions
Non-Bank Group
Banking (~90% of Group revenue)
•Managed to optimise NIM and ROE
•Lending, trade, deposits, payments services
Markets (~10% of Group revenue)
•Managed for revenue and to optimise ROE
•Intermediary for risk management solutions
•Complementary to the Banking business
Group Centre
•Managed for cost efficiency and capital optimisation
•Provides operational support and treasury functions
Minority
investments in Asia
Financial performance
excluding Suncorp Bank
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
2.Markets includes $1,550m in Customer Franchise, $531m Balance Sheet and $103m derivative valuation adjustments
3.Elimination of Intercompany deposits primarily relating to the announced share buyback
4.At a business unit level, capital is allocated based on regulatory capital. At the Group level, this is based on the ordinary shareholders' equity (excluding non-controlling interests)
22
FY24 $mBanking
1
MarketsGroup CentreTotal
Revenue17,8542,184
2
51420,552
Profit / (loss) before provisions9,6161,010(627)9,999
Cash Profit / (loss) after tax6,686717(556)6,847
Avg balance sheet, $b
Interest earning assets625336501,011
Customer deposits547114(1)
3
660
Risk weighted assets3595514428
Key ratios, %
Net Interest Margin2.48n/an/a1.57
Cost to Income ratio4654n/a51
Return on risk weighted assets1.861.31n/a1.59
ROE
4
~15~11n/a10
Banking
1
performance and metrics
excluding Suncorp Bank
Revenue, $m
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
2.Net Interest Income divided by Average Credit Risk Weighted Assets
3.Banking revenue divided by total Group FTE, excluding Suncorp Bank
23
Avg. Interest Earning Assets, $b
Revenue per total FTE
3
, $000
Risk adjusted margins
2
, %
Cost to income ratio, %
425
455
451
452
FY22FY23FY242H24
(Annualised)
4.44
5.15
5.10
5.17
FY22FY23FY242H24
577
607
625
630
FY22FY23FY242H24
45
43
46
46
FY22FY23FY242H24
Profit before
Provisions, $m
Cash profit, $m
1,174
1,197
986
1,013
1,510
1,494
1,103
1,063
37
1H24
39
2H24
4,810
4,806
0%
794
813
665
677
1,080
1,061
791
745
31
1H24
29
2H24
3,361
3,325
-1%
2,909
2,978
1,749
1,757
2,357
2,348
1,780
1,762
107
1H24
107
2H24
8,902
8,952
1%
Aus. RetailAus. CommercialInstitutional ex MarketsNew ZealandPacific
Net interest margin (NIM)
Banking
1
net interest income & NIMGroup NIM, bps
1.Excludes Suncorp Bank. Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
24
13,218
14,053
16,061
15,525
238
244
265
248
FY21FY22FY23FY24
NIM, bpsNet Interest Income, $m
156
158158
4
2
1
1H24Assets
pricing
Deposits
pricing
Wholesale
funding
Assets &
funding
mix
Capital &
replicating
portfolio
2H24 ex
impact of
Markets &
Suncorp
Bank
Impact of
Suncorp
Bank
Impact of
Markets
activities
2H24
-1
-2
-1
-1
+17%
Group ex
Markets
2.38%
Group ex
Markets
2.33%
Banking
1
deposit composition and PCM operational efficiency
excluding Suncorp Bank
Banking customer deposits, $b
Customer deposits, $b
Digital payments
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
25
8%
29%
26%
37%
Sep 23
9%
29%
27%
35%
Mar 24
9%
29%
27%
35%
Sep 24
535
543
552
+3%
TransactSavingsTerm DepositsOffset
Sep 23Sep 24
106
110
~90% of operational/at-call
deposits are negotiated or
contractually - linked to
interest rate changes
306
323
400
608
653
701
FY19FY20FY21FY22FY23FY24
+129%
Sep 19Sep 20Sep 21Sep 22Sep 23Sep 24
102
124
133
153
153
154
+51%
Customer deposits
Payments and Cash Management (PCM)
-22%
Operating costs per customer deposit
Operational/at-call
deposits, $b
Cost per digital payment
-45%
Number of digital payments, m
Migrated
off legacy
system
Markets income – Customer franchise
1
Customer franchise income driven by higher customer flow
Indexed data, FY21 = 100
Markets income composition – Customer Franchise, $m
26
307
324
407
394
181
158
232
128
43
139
1H21
53
32
1H22
80
112
1H23
118
125
1H24
617590
757
869
12% CAGR
Foreign ExchangeRatesCommoditiesCredit and Capital Markets
263
381
370
352
124
111
189
164
120
32
60
2H21
30
53
2H22
35
76
2H23
45
2H24
479
575
670681
12% CAGR
Second Half Performance
First Half Performance
1.Excludes: Balance Sheet Trading and Derivative Valuation Adjustments
100
197
0
100
200
300
FY21FY22FY23FY24
100
213
FY21FY22FY23FY24
100
162
100
200
300
FY21FY22FY23FY24
FX turnover (short term)
Reverse repo volume (Rates)
FX and interest rates options activityCommodity derivative activity
100
151
FY21FY22FY23FY24
10,139
10,447
10,553
414
291
106
FY23Wage &
vendor
inflation
Strategic
initiatives
ProductivityFY24
underlying
OtherFY24
-397
+3%
Group operating expenses
excluding Suncorp Bank
$m
Productivity outcomes, $m
Cumulative savings
1.Full Time Equivalent (FTE) employees
27
incl. Cloud
and ANZ
Plus dual
run costs
Highest
annual
productivity
delivered
incl.
restructuring
and Suncorp
Bank
integration /
migration to
ANZ Plus
40,342
40,262
39,572
Sep 23Mar 24Sep 24
-2%
0
300
600
900
1,200
1,500
1,800
FY19FY20FY21FY22FY23FY24
Employees (FTE)
1
+4%
1
st
Half (1H24 vs 2H23)2
nd
half (2H24 vs 1H24)
Half year expense growth1%2%
Investment spend
excluding Suncorp Bank
Total spend, $m
1.Investment spend includes allocation of funds towards initiatives that support substantial changes and does not include those that are smaller and/or more routine in nature. Investment spend has been re-classified to reflect this investment
spend definition
28
63%
30%
7%
1,529
FY24
2,024
Investment spend re-classified as BAU
Investment spend
1
Growth & simplification
Regulatory, compliance & risk
Asset lifecycle mgt
FY23FY24
Investment spend expensed, %83%81%
Investment spend expensed, $m1,2401,243
Capitalised Software balance, $m919956
Amortisation expense, $m320284
Avg amortisation period (years)2.83.4
Portfolio quality
excluding Suncorp Bank
Individual Provision loss rate
1
, bps
1.Source: ANZ analysis of loss rate and risk-intensity data sourced from publicly available company financials. Peer bank categorisation of losses between IP and CP has been aligned to ANZ’s approach to aid comparability
2.FY24 EOP. Risk Weighted Assets as a % of Exposure at Default. Based on AIRB (Advanced Internal Rating-Based exposures), excludes lower risk portfolios (Sovereigns and Mortgages) and NZ (due to consolidated disclosures)
3.Includes Gross Impaired Assets and Hardship accounts. ANZ delinquencies are calculated on a missed payment basis for amortising and Interest Only loans
29
0.00
0.05
0.10
0.15
0.20
FY20FY21FY22FY23FY24
ANZPeer 1Peer 2Peer 3
Risk-intensity (AIRB Corporate, Bank, FI, Retail ex Mortgages)
1,2
Consumer portfolio 90+ Days past due
3
% of GLAs
0.0
0.4
0.8
1.2
Sep
20
Sep
21
Sep
22
Sep
23
Sep
24
Aus. Home LoansAus. Consumer CardsNZ Home Loans
41%
47%
49%
51%
ANZPeer 2Peer 3Peer 1
Portfolio quality
excluding Suncorp Bank
Collective Provision (CP) balance and CP/CRWA coverage, bpsPerforming loans coverage (Stage 1 & 2 CP/exposures)
1
Non-performing loans (Stage 3 CP & IP exposures)
1
1.FY24 EOP. Exposures include ECL gross loans and advances, credit commitments and contingent facilities. Based on ANZ analysis of data sourced from publicly available company financials
5,008
4,195
3,853
4,032
3,999
1.39%
Sep 20
1.22%
Sep 21
1.07%
Sep 22
1.16%
Sep 23
1.21%
Sep 24
CP balance (ex Suncorp Bank)CP coverage ratio
0.33%
0.37%
0.41%
0.42%
Peer 3ANZPeer 1Peer 2
0.74%
0.84%
1.05%1.05%
ANZPeer 1Peer 2Peer 3
$7b
$10b
$10b
$11b
Non performing exposures as a % of total exposures
Non performing exposures $b
30
Capital
ANZBGL - APRA Level 2 Common Equity Tier 1 (CET1) ratio – 2H24 Movement, %
1.Excluding the capital for the remaining share buy-back
31
13.50
12.20
12.24
0.74
0.12
0.05
0.04
Mar 24Cash ProfitUnderlying
RWA
(ex FX)
Net dividendCapital
deductions,
RWA Initiatives
& Others
Sale of
remaining
AmBank
stake
Suncorp Bank
acquisition
Share BuybackSep 24Surplus NOHC
Capital
1
Sep 24
pro forma
-0.08
-0.58
-1.09
-0.46
Level 1
13.3%
Level 1
12.6%
Level 1
12.7%
Continued focus on capital efficiency
1.Net Suncorp Bank impact equals 109pts (133pts less 24pts of IRB floor benefit)
6.1
2.2
0.9
Generation
9.2
5.3
1.2
2.0
Usage
8.5
Completed the sale of AmBank
•Divested ownership in AmBank
Model updates (including floor)
•Australia & NZ mortgages
•NZ Agri portfolio
•Other capital reform related
Organic capital generation
•Incl. $6.7b Cash Profit
•Other organic capital impacts
Buyback
•$2b announced buy back
Growth & other usage
•CRWA & Non CRWA movement
•Various capital impacts
Dividend
•Interim and full year dividends
FY24 capital efficiency, $b
In addition, Suncorp Bank acquisition utilised 133bps of capital funded with existing CET1 excess
1
32
Suncorp Bank acquisition
Customer deposits, $b
1.Based on Suncorp Bank FY22 reporting period ended 30 June 2022
33
Core operations
Technology
Projects
Enablement
Other
21
21
16
18
11
16
Jun 22Sep 24
48
55
+14%
TransactSavingsTerm Deposits
FY22
1
FY24
>2x
Potential FY25 synergies by category, $
Deposit revenue
Summary
Banking
1
revenue, $m
Indexed data, FY21 = 100Individual Provision loss rate
2
, bpsCumulative productivity savings, $b
Markets customer flow
Cost and productivity outcomesCredit quality
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
2.Source: ANZ analysis of loss rate data sourced from publicly available company financials. Peer bank categorisation of losses between IP and CP has been aligned to ANZ’s approach to aid comparability
34
2,909
2,978
1,749
1,757
2,357
2,348
1,780
1,762
107
1H24
107
2H24
8,902
8,952
+1%
Aus. Retail
Aus Comm.
Instit. ex Markets
NZ
Pacific
0.0
0.3
0.6
0.9
1.2
1.5
1.8
FY19FY20FY21FY22FY23FY24
0.00
0.05
0.10
0.15
0.20
FY20FY21FY22FY23FY24
ANZ
Peer 1
Peer 2
Peer 3
FX turnover
(short term)
Reverse repo
volume (Rates)
FX and interest rates
options activity
Commodity derivative
activity
100
162
FY21FY22FY23FY24
100
197
50
100
150
200
250
300
FY21FY22FY23FY24
100
213
FY21FY22FY23FY24
100
151
FY21FY22FY23FY24
2024 Full Year Results
Investor Discussion Pack
Corporate profile, Group & divisional performance
Our history and corporate profile
Employees and
customers
Balance Sheet
ANZ ownership
36
•>42,000 ANZ people across 29 markets
•>9m customers across Retail, Commercial, Institutional
•Assets of $1,229b, incl. $803b in net loans and advances
•Liabilities of $1,158b, incl. $715b in customer deposits
•Market capitalisation of $91b
•Shareholding: ~41% retail; 59% institutional (based on
issued capital)
ANZ traces its origins to the Bank of Cornwall, which opened in Launceston, Australia in
1828 and commenced operations in New Zealand in 1840.
ANZ is one of the top ten largest listed companies in Australia by market capitalisation and
one of four major banks in Australia and the largest bank in New Zealand (by total assets).
All numbers as at 30 September 2024
Our purpose and strategy
Save for, buy and own a
liveable home
Start or buy and sustainably
grow their business
Move capital and goods around
the region and sustainably grow
their business
Improving the financial wellbeing of our people, customers and communities
by helping them make the most of their money throughout their lives
Supporting household, business and financial practices that improve
environmental sustainability; and
Improving the availability of sustainable and affordable housing options for all
Australians and New Zealanders.
37
Our purpose is to shape a world where people and communities thrive. It
explains ‘why’ we exist and drives everything we do at ANZ, including the
choices we make each day about those we serve and how we operate.
Through our purpose we have elevated three areas facing significant societal challenges
aligned with our strategy and our reach, which include commitment to:
We bring our purpose to life through our
strategy: to improve the financial
wellbeing and sustainability of customers
through excellent services, tools and
insights that engage and retain them, and
help positively change their behaviour.
In particular, we want to help customers:
Supporting our stakeholders
1.Based on total Cash profit for the Group including gross interest income and other operating income, net of credit impairment charges and non-controlling interests
Our customers & debt (fixed income) investors
Paying interest to our customers and debt investors, enabling us to
provide lending and related services to our customers
Our shareholders
Paying dividends to superannuation funds and other equity investors
and increasing equity to reinvest in the company’s future
Our suppliers and other partners
Technology, property and other products and services to help
support our customers
Government
Paying taxes and Major Bank Levy, supporting our broader community
Our people
Employing >42,000 staff, paying salaries and investing in their skills
68%
10%
7%
4%
10%
1%
Our customers & debt investors
Our people
Our suppliers and other partners
Income tax
Major bank levy
Shareholders
Distribution of
FY24 Revenue
1
38
Delivering shareholder returns
Dividend per share (DPS), centsEarnings per share (EPS), cents
1.The final dividend comprised an 81 cents dividend partially franked and an additional one-off unfranked dividend of 13 cents
39
70
72
81
83
72
74
94
83
FY21FY22FY23
1
FY24
142
146
175
166
Final DPSInterim DPS
105
110
128
118
113
119
120
106
FY21FY22FY23FY24
218
229
247
224
Final EPSInterim EPS
Total operating income & expenses
including Suncorp Bank
Total income, $b
40
14.9
16.6
16.1
1.9
1.9
1.9
1.9
2.3
0.2
0.7
0.9
FY22
0.3
0.2
FY23
0.4
0.1
FY24
18.5
20.9
20.8
FTE by geography, ‘000Total expenses, $b
1.8
1.9
1.8
5.3
5.8
6.2
0.7
0.7
0.7
1.6
1.7
1.9
0.1
FY22
0.2
FY23
0.2
FY24
9.6
10.1
10.7
19.4
7.3
12.7
Sep 22
19.6
7.3
13.0
Mar 23
19.6
7.2
13.5
Sep 23
19.3
7.2
13.7
Mar 24
21.3
7.0
14.1
Sep 24
39.4
39.8
40.3
40.3
42.4
Australia
New Zealand
Rest of the World
Other
Share of Associates profit
Markets OOI
Net fee & comm.
NII
7.9
8.2
0.9
1.0
1.3
1.0
0.2
0.1
1H24
0.3
0.0
2H24
10.3
10.5
Restructuring
Technology
Premises
People
Other
0.8
1.0
3.1
3.1
0.3
0.3
0.9
1.0
0.1
1H24
0.1
2H24
5.2
5.5
Total balance sheet composition
including Suncorp Bank
Exposure at default
1
, EOP $bRisk weighted assets, EOP $b
Net loans & advances, EOP $b
Customer deposits, EOP $b
1.EAD excludes amounts for ‘Securitisation’, and for ‘Other assets’ prior to March 2023 (included from March 2023 due to the implementation of APRA’s new capital framework). EAD data provided is on a Post CRM basis, net of credit risk
mitigation such as guarantees, credit derivatives, netting and financial collateral
41
7%
12%
45%
6%
29%
Sep 22
6%
12%
46%
6%
30%
Sep 23
7%
3%
11%
43%
6%
30%
Sep 24
1,152
1,163
1,260
Australia RetailAustralia CommercialInstitutionalNew ZealandOtherSuncorp Bank
2%
13%
46%
12%
28%
Sep 22
3%
16%
40%
11%
30%
Sep 23
7%
5%
14%
37%
10%
27%
Sep 24
455
433
447
0%
17%
31%
9%
43%
Sep 22
0%
17%
30%
9%
44%
Sep 23
9%
0%
15%
26%
8%
42%
Sep 24
672
707
803
1%
15%
42%
18%
24%
Sep 22
1%
15%
41%
18%
25%
Sep 23
8%
0%
14%
37%
16%
25%
Sep 24
620
647
715
Suncorp Bank - strong growth since 2022 announcement
Total customer deposits, $bHome Lending, $bBusiness lending, $bGross impaired assets
42
4
5
5
5
3
3
Jun 22Sep 24
12
13
+8%
21
16
18
11
16
Jun 22
21
Sep 24
48
55
+14%
36
40
14
18
Jun 22Sep 24
50
58
+16%
Transact
Savings
Term DepositsOwnerInvestorAgribusiness
Commercial
SME
90+ days past due (DPD)
On 18 July 2022, ANZ announced an agreement to acquire Suncorp Bank from Suncorp Group Limited. On 31 July 2024, ANZ confirmed it had completed its acquisition of Suncorp Bank
0.37%
0.58%
0.17%
0.09%
Jun 22Sep 24
0.46%
0.75%
Retail lendingBusiness lending
Jun 22Sep 24
0.18%
0.07%
-61%
as a % of gross credit exposures
Banking
1
MarketsGroup CentreTotal
FY24, $mvs FY23FY24, $mvs FY23FY24, $mvs FY23FY24, $mvs FY23
Total income17,854-3%2,184+4%514+18%20,552-2%
Operating expenses8,238+4%1,174+1%1,141+5%10,553+4%
Profit / (loss) before credit
impairment charge
9,616-8%1,010+7%(627)-3%9,999-7%
Credit impairment charge151-35%10-29%2
Lrg
163-33%
Cash Profit / (loss)6,686-8%717+8%(556)+5%6,847-8%
Net loans & advances685,596+3%47,563+5%(648)+29%732,511+4%
Customer deposits552,306+3%109,666-3%(1,476)
Lrg
660,496+2%
Full Year 2024 – Overview of financial performance
excluding Suncorp Bank
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
43
Second Half 2024 – Overview of financial performance
excluding Suncorp Bank
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
44
Banking
1
MarketsGroup CentreTotal
2H24, $mvs 1H242H24, $mvs 1H242H24, $mvs 1H242H24, $mvs 1H24
Total income8,952+1%972-20%281+21%10,205-1%
Operating expenses4,146+1%577-3%615+17%5,338+2%
Profit / (loss) before credit
impairment charge
4,8060%395-36%(334)+14%4,867-5%
Credit impairment charge83+22%8
Lrg
2
Lrg
93+33%
Cash Profit / (loss)3,325-1%275-38%(305)+22%3,295-7%
Net loans & advances685,596+2%47,563+5%(648)+2%732,511+2%
Customer deposits552,306+2%109,666+12%(1,476)
Lrg
660,496+3%
FY24, $mAustralia
Retail
Australia
Commercial
New Zealand (NZD)
(Personal and
Business)
Institutional
(ex Markets)
Pacific
$vs FY23$vs FY23$vs FY23$vs FY23$vs FY23
Total income5,887-8%3,506-2%3,8410%4,705+2%214+3%
Operating expenses3,516+2%1,507+6%1,492+6%1,701+9%138-5%
Profit before credit
impairment charge
2,371-19%1,999-8%2,349-4%3,004-2%76+21%
Cash profit1,607-17%1,342-7%1,666-1%2,141-6%60-15%
Net Interest Margin1.91%-31bps2.59%-11bps2.57%-7bps2.38%+7bps
Not materialNot material
Risk Adjusted Margin
(Net Interest Income / Avg credit RWA)
4.97%-98bps8.69%+10bps5.80%+4bps3.68%+48bps
Not materialNot material
Risk Adjusted Returns
(
Net profit after tax / Avg total RWA)
1.26%-32bps2.88%0bps2.33%+4bps1.86%+15bps
Not materialNot material
Full Year 2024 – Banking
1
excluding Suncorp Bank
45
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
2H24, $mAustralia
Retail
Australia
Commercial
New Zealand (NZD)
(Personal and
Business)
Institutional
(ex Markets)
Pacific
$vs 1H24$vs 1H24$vs 1H24$vs 1H24$vs 1H24
Total income2,978+2%1,7570%1,9250%2,3480%107+0%
Operating expenses1,781+3%744-2%763+5%854+1%68-3%
Profit before credit
impairment charge
1,197+2%1,013+3%1,162-2%1,494-1%39+5%
Cash profit813+2%677+2%814-4%1,061-2%29-6%
Net Interest Margin1.89%-5bps2.59%-1bp2.57%+1bp2.36%-3bps
Not materialNot material
Risk Adjusted Margin
(Net Interest Income / Avg credit RWA)
5.03%+11bps8.69%-1bps6.06%+50bps3.70%+4bps
Not materialNot material
Risk Adjusted Returns
(
Net profit after tax / Avg total RWA)
1.30%+7bps2.94%+11bps2.34%+2bps1.86%+3bps
Not materialNot material
Second Half 2024 – Banking
1
excluding Suncorp Bank
46
1.Banking includes Australia Retail, Australia Commercial, New Zealand Division, Institutional (excluding Markets), Pacific
Banking - Net loans and advances
excluding Suncorp Bank
Australia Retail, $bAustralia Commercial
1
, $b
New Zealand, NZDb Institutional, $b
1.Prior period divisional comparative information was restated to reflect customer re-segmentation within the Australia Commercial division to better meet the needs of our customers during the September 2024 half
47
25
1
102
Mar 23
25
1
105
Sep 23
24
2
107
Mar 24
24
2
108
Sep 24
128
131
133
134
+1%
Home Loans
Other Personal
Business
6
295
Mar 23
6
306
Sep 23
6
316
Mar 24
6
327
Sep 24
301
312
322
333
+3%
Home Loans
Cards, Personal Loans & Other
1
32
27
Mar 23
1
34
27
Sep 23
0
37
27
Mar 24
0
38
27
Sep 24
60
62
64
65
+2%
SME Banking
Diversified & Specialist Businesses
Central Functions
148
41
19
Mar 23
145
45
20
Sep 23
143
45
18
Mar 24
145
47
18
Sep 24
208
210
206
210
+2%
Corporate Finance
Markets
Transaction Banking
Banking - Customer deposits
excluding Suncorp Bank
Australia Retail, $bAustralia Commercial
1
, $b
New Zealand, NZDb Institutional, $b
48
23
22
21
21
62
65
67
69
27
33
37
37
44
45
47
50
Mar 23Sep 23Mar 24Sep 24
156
165
172
177
+3%
Transact
Savings
Term Deposits
Offset
29
26
26
24
57
57
57
58
2733
34
Mar 23
30
Sep 23Mar 24Sep 24
113
113
116
116
0%
Transact
Savings
Term Deposits
41
39
37
22
21
21
42
46
49
52
Mar 23Sep 23
21
39
Mar 24Sep 24
105
106
109
110
+1%
Transact
Savings
Term Deposits
103
106
107
110
46
46
43
43
128
113
98
110
1
Mar 23
1
Sep 23
1
Mar 24
1
Sep 24
278
266
249
264
+6%
PCM
2
Term Deposits
3
Markets
Other
1.Prior period divisional comparative information was restated to reflect customer re-segmentation within the Australia Commercial division to better meet the needs of our customers during the September 2024 half
2.Payments & Cash Management
3.Excluding Markets Business Unit
Australia Retail
1.Everyday Banking, Wealth & Business accounts sold through Retail channels (excludes Home Loans)
2.% of customers (in-use transaction or savings accounts that are eligible for digital access) who have logged on to ANZ App or ANZ Internet Banking in the last 30 days
3.ANZ Classic customers
4.ANZ Classic and ANZ Plus customers
49
Users, ‘000s
3,700
3,800
3,900
4,000
4,100
4,200
Sep
21
Mar
22
Sep
22
Mar
23
Sep
23
Mar
24
Sep
24
Increasing Digitally active users
Sustaining momentum
•ANZ Plus customers increased 84% with over $7bn additional FUM
•Improved Home Lending capability enabling growth of 1.3x system
•Increased personalised messaging supported two-year high in brand consideration
•Sustainable productivity contained cost growth to 2%, largely self-funding Plus costs
Deepening customer engagement through innovation
•Launched features to drive engagement – ANZ Circle; view ‘My Accounts’ in ANZ Plus
•Cashrewards members grew 9% to 2.4 million, with members benefiting from almost $50m of
cashback
•71% of accounts opened through digital channels
1
, with 84% of customers regularly engaging digitally
2
Enhancing customer care and protection
•Using AI and latest technology to deliver a 46%
3
reduction in customer scam losses
•Our people & systems prevented customers losing >$140 million
4
to fraud and scams
•Multi-faceted approach – customer education, mule detection capability, personalised customer
warning messages on high-risk transactions, AI detection of scams
Metrics apply to FY24 unless stated otherwise
Australia Retail
Everyday Banking – improved capability driving momentum
Attract & seamlessly onboard new customersEngaging customers through personalisation
Enhancing digital experience & customer protection
Providing effortless service across multiple channels
1.% of New to Bank Customers as a % of total customers joining in Q4 FY24
2.Join episode based on 12-month score at Sep-24
3.Applicable servicing volumes
4.Score as at Aug 24
5.Coaching interaction episode based on 12-month score at Sep 24
50
Join ANZ Plus | Join ANZ Plus digitally in ~3mins with Selfie ID.
50%
1
of new-to-bank customers onboarded through ANZ
Plus with an NPS of +57
2
Enhanced online application experience reducing time to
decision | led to increase in acquisition market share across
both Credit Cards (+4%) and Personal Loans (+1%) in FY24
Launched ANZ Circle | rewarding ANZ Visa cardholders with
priority access to event pre-sales, best in market Hoyts movie
prices and other exclusive offers – >1.5m customers have
actively engaged since launch in September
Personalised digital interactions & nudges | meeting
customers needs at the right moment through tailored and
personalised content and offers – over 300 million interactions in
FY24
View ‘My Accounts’ in ANZ Plus | industry leading feature
giving customers a consolidated view of their bank accounts
held with ANZ and other financial institutions
ANZ Falcon | enhanced technology working around the
clock to recognise, flag and identify suspicious transactions
Message Us | messaging used to engage customers for over
50%
3
of servicing with AI embedded containment of interactions
– Customer NPS >50
4
Video Call with a Coach | Australian-first service enables ANZ
Plus customers to book a secure 1-on-1 session with a Coach,
scoring an NPS of +57
5
Australia Retail
Home Loans – ongoing improvement in home buying experience
51
•New tools & training: new CRM for mobile salesforce, launched brokerology training program, new
pricing & serviceability calculators
•New broker segmentation model: tailored service offering driving better broker experience
•Proprietary salesforce: growing capacity and effectiveness, deepening customer relationships
•HLQ Platform: use of AI to automate operational tasks and reduce manual handling
•ANZ eSign: digital acceptance and settlement loan documentation
•Valuations: increased use of automated valuations to drive speed and efficiency
•Simplified policy suite (e.g. PAYG): improving customer, banker & broker experience
•Low risk LMI waiver: targeted risk-based policy innovation for selected customer cohorts
•Capital optimisation: delivered model enhancements that reduced risk-weight intensity
Broker NPS
at Sep-24
+32
1.3x
<3 days
1.7x
Time to First Decision
Deals via BML (FY24 Avg)
Lending growth in
FY24
vs APRA system
Investor lending
growth in FY24
vs APRA system
Customers ahead on
home loan
repayments
Enhanced experience
for customers and
brokers
Greater automation
within application
processing,
increasing
operational capacity
Ongoing policy
enhancement and
simplification
>80%
Auto approvals via
branch network
82%
Proposition
Process
Policy
ANZ Plus
Capability to deliver compelling customer propositions at pace
New Digital Banking Platform- leveraging best-in-class global
partners
Highly reuseable
1500+ re-useable business services
leveraged for product & proposition
expansion
Open & adaptable
systems architecture with
a high degree of flexibility
Cloud-based
20 new platforms – partnering
with globally leading service
providers
Identity &
biometrics
Safer, secure and
resilient
Ecosystem
Flexible architecture
allowing 3
rd
party
partners
Pricing &
Offers
Attractive &
personalised
Risk & Controls
Automated
monitoring across
the platform
Products
Highly automated
processes, intuitive
& easy
Data & Analytics
Real time analytics &
actionable insights
Channels
Unified experience,
connected through
chat, voice & video
Customer
Relationship
Management
360 degree
view
Foundation Build
FY21 – FY23
FY24
FY27+
Rapid ExpansionFuture Ready
ANZ Plus is now able to rapidly launch new features and propositions
Significant
investment in
underlying end-to-
end digital
technology platform
Majority of the investment on rapidly
expanding engaging positions and
financial wellbeing features
Progress of ANZ Plus
Manage my
Money Launch
Buy & Own a
Home Launch
Introduced new FWB features:
•Round Ups, Add Ons
•Joint Accounts
•My Accounts
•ANZ Plus Flex Saver
ANZ Plus engaging
customers at scale
with a lower cost to
operate
FY25-26
52
ANZ Plus
Rapidly launching new features and propositions
Leading ecosystem capabilities
More attractive, more engaging
Fully digital end-to -end
Lower cost to acquire & serve
Faster change and delivery
More efficient, more secure
53
My Accounts | First major bank to
leverage Open-Banking data-in
•Consolidated view of your accounts at other
financial institutions within the ANZ Plus app
•Launched in September, ~50k customers
have interacted with this feature
Joint Accounts | A fully digital joint
account join experience
•Customers onboarded within minutes with
no need to visit a branch
•Launched in April, joint accounts are now
~10% of newly opened accounts
Round Ups | Financial Wellbeing
feature built and deployed in 6 weeks
•Supporting Financial Wellbeing by rounding up
purchases and transferring the excess to
savings
•57k customers currently using the feature,
growing by ~5k per month
Add Ons | Framework for rapid
integration with external partners
•Enabled rapid integration of partner
experiences for richer customer interactions
•Customers can now access Qantas Frequent
Flyer, Cashrewards & Visa International ATM
locators
Add Ons | Framework for rapid
integration with external partners
Home Loans | A bank integrated fully
digital home loan experience
•Digital statement of position and automated
property valuations, for a faster credit
process
•Customers canmanageoffsetactivation for
eligible ANZ Plus accounts from within the
app
Scam Safe | The highest default
fraud & scam protection settings
•Enhanced security controls designed
toreduce likelihood of customer fraud and
scam rate by 25x
•99%+ of customers have either retained the
default protections or added to them
Australia Commercial
1.Including Commercial customer revenue in Institutional and Retail
2.4Q24 v 4Q23
3.ANZ and Worldline hold 49% and 51% interest respectively
54
Customer contribution
•24% of total group revenue
1
•~66% of customers have at least one Retail product
•~71% of Australian based Transactive Global users are Commercial customers
Investment and innovation
•~1/3 eligible SME customer transaction account openings occurred digitally
•GoBiz streamlined origination channel now includes term loans, overdrafts, asset finance, corporate
cards and broker referrals
•National Business Centre enhancements and improved data driven leads resulted in a 28% increase in
Retail to Commercial referrals
2
and continued uplift in sales conversion
•~60% reduction in ANZ Worldline
3
merchant onboarding time for SME customers
Strength
•~$1.80 in deposits for every $1.00 in loans
•~83% of exposures are fully secured
•Revenue on RWA 7.54%, up 36bps vs FY23
Growth Rates FY24 vs FY23 / Sep 24 vs Sep 23
0
100
200
300
400
500
600
700
800
900
1,000
1,100
Sep
22
Nov
22
Jan
23
Mar
23
May
23
Jul
23
Sep
23
Nov
23
Jan
24
Mar
24
May
24
Jul
24
Sep
24
Drawn FUM $m
Applications #
Momentum in digital solution
GoBiz applications & drawn FUM, indexed data
Sep 22 = 100
Australia Commercial
Creating a simpler, more secure and profitable Commercial Bank
55
2018
2022 / 2023
Ceased Consumer
Asset Finance
(~$2.5b Lend.)
Ceased Stand Alone
Third Party Asset Finance
(~$1.5b Lend.)
Sale of Investment Lending and
Affluent Advice businesses
(~$50m Rev. p/a & ~$0.7b Lend.)
Sale of Esanda
Retail & Wholesale
(~$8.0b Lend.)
2021
2015 / 16
Australia Commercial - changes to simplify the business and bring the best of ANZ to our customers
58.3
65.0
Sep 17Sep 24
+11%
81.9
116.3
Sep 17Sep 24
+42%
1.20
1.34
FY17FY24
+12%
Growth
(Lending, $b)
Stability
(Deposits, $b)
Profitability
(NPAT, $b)
Security
(Fully Secured Lending)
Sep 17Sep 24
68%
83%
+15%
2024
Realigned customer volumes /
relationships to Retail and Insto
(~$2.8b Dep. & ~$0.3b Lend.)
2022
Established Merchants
JV with global partner
(~$140m Rev. p/a)
Australia Commercial
Customer Proposition, Experience and Quality
Simplifying customer experienceRaising quality deposits
Digital driving efficiencyDeepening customer
relationships
Solving more customer needs
Digital solutions enhancing
customer experience
Accelerating volume growthStrength and return
1.Australia based Transactive Global users
56
63%
78%
Sep 23Sep 24
SME Retail applications via streamlined
processes
Sep 23Sep 24
2.9x
FUM in digitally opened transaction
accounts
1H242H24
-11%
GoBiz cost to originate
Sep 23Sep 24
56%
69%
66%
71%
Commercial Customers with a Retail Product
Transactive Global
1
Commercial customer users
FY23FY24
+88%
NTB GoBiz customers returning for
additional requirements
1H242H24
3.5x
Messages closed via Message UsExpansion of GoBiz proposition driving
an increase in FUM drawn
FY23FY24
2.2x
2.88%2.88%
7.18%
7.54%
FY23FY24
NPAT / Avg RWARev. / Avg RWA
New Zealand
1.McCulley Research (first choice or seriously considered); six month rolling average September 2024
57
Market Strength
•#1 market position in New Zealand, incl. Home Loans, Agri and KiwiSaver
•#1 Brand Consideration
1
among banks in NZ
•Canstar Bank of the Year in Small Business and Business Credit Cards for the 5th consecutive year, and for Small Business
Merchant Services
Digital Engagement
•Digitally active customers ~1.8m , up 3.9% on September 2023
•First to market in New Zealand, the ANZ Dynamic Security Code offers safer online shopping with a frequently changing code
instead of the static CVV code
•Over 13 million Two-Factor Authentication messages and over 1 million ANZ Fraud Check messages sent to customers to
validate transactions
Customer Engagement
•Reached 100k KiwiSaver members making $2.5 billion in first home withdrawals
•Over 7.7 million customer education communications sent about scams and delivered over 110 sessions with more
vulnerable customers directly
•The HOWTWO Small Business Programme offers two years fee-free on the Start Up package, insights from Dot Loves Data,
and a check-in call from a Business Banking Specialist to support customers beyond their first two years
Market Strength
Brand Consideration
1
, %
50
51
52
54
54
FY16FY18FY20FY22FY24
New Zealand division
Balance sheet and financial strength
Housing
1
Business
2
Agri
Credit qualityExposures
3
Balanced Financial Performance
58
ANZ Performance, NZDb
ANZ Performance, NZDb
ANZ Performance, NZDb
Mar 23Sep 23Mar 24Sep 24
104.6
107.3
109.5
111.1
Owner OccupiedResidential Investment Loan
Mar 23Sep 23Mar 24Sep 24
7.3
6.9
6.6
6.6
Other lendingCommercial Property
Mar 23Sep 23Mar 24Sep 24
15.115.1
15.0
15.2
DairySheep, cattle and grainOther
1.Housing includes business loans secured by residential properties
2.Business excludes business loans secured by residential properties
3.Credit Risk Weighted Assets impacted by the implementation of the new NZ Agri credit model in 1H24 and a Mortgage credit model change in 2H24
Total Provision Charge/(Release), NZDm
72
21
31
19
10
1H232H23
14
-10
1H24
-5
2H24
82
40
4
26
Individual ProvisionCollective Provision
Credit Risk Weighted Assets (CRWA) EOP &
intensity, NZDb
62
63
60
54
41.7%
41.9%
39.3%
34.9%
Mar 23Sep 23Mar 24Sep 24
CRWATotal CRWA/EAD
Net Interest Income / Avg Credit Risk Weighted
Assets (CRWA), %
1H232H231H242H24
6.16%
5.42%
5.57%
6.06%
Institutional
1.No.1 Relationship Strength Index in the Coalition Greenwich Large Corporate & Institutional Relationship Banking surveys, Australia 2005–06, 2008, 2010, 2011, 2014–21, 2023–24 (equal No.1 in 2010) (Coalition Greenwich, a division of
Crisil, and formerly known as Peter Lee & Associates), and in the Peter Lee Associates Large Corporate & Institutional Relationship Banking surveys, New Zealand 2010–23. No.1 Overall Relationship Quality in the Coalition Greenwich Voice
of Client – Asian Large Corporate Banking Study, 2017–23
2.Source: Peter Lee Associates
3.Represents FY24 performance ranking under the current business structure versus prior financial years since ANZ Institutional transformation in FY16
59
Return on Equity
FY21FY22FY23FY24
10%
9%
13%
14%
Key MetricsFY24
Rank
3
(FY24 performance
vs prior financial
years)
Revenue$6.89bHighest
Cash profit$2.86b2
nd
highest
Return on equity14.0%Highest
Cost to income ratio41.7%2
nd
lowest
Risk adj NIM (ex Markets)3.68%Highest
Revenue / avg risk weighted assets4.05%Highest
Leading Institutional Franchise
•#1 Institutional and Corporate Bank across Australia, NZ andAsia
1
•Deep, long-term relationships with core customers who value our network and capabilities (~60%
customers use multiple products)
•We operate in 29 markets including 13 across Asia
Unique Markets and Payments Capability
•#1 Transaction Banking Lead Bank and market penetration (AUS/NZ)
2
•#1 FX penetration and market share with Australia corporates
2
with digital comprising ~90% of volume
•Invested $1.4b+ in technology & payment systems over 8 years
Sustainable Financial Returns
•Well diversified business across both product & region
•Resilient credit quality, with 77% of exposures investment grade
•Moderate downside to lower interest rates
Institutional
Summary
Customer franchise revenue
1
, $mCore lending
2,3
, $bRisk intensity (ex Markets)
Customer franchise revenue¹ mix, %Operational / at-call deposits, $bReturn on equity, %
60
1.Excludes: Balance Sheet Trading and Derivative Valuation Adjustments
2.Represents Corporate Finance and Trade & Supply Chain
3.Lending risk adjusted NIM is calculated as net interest income divided by average Credit Risk Weighted Assets (CRWA) for Corporate Finance and Trade & Supply Chain
4.Margins represents half year average
2,257
2,344
2,627
2,857
2,868
2,681
2,046
2,319
3,198
3,387
FY19FY21FY22FY23FY24
4,938
4,390
4,946
6,055
6,255
LendingNon-lending
134
163
159
156
161
1.52%
1.32%
Sep 19
1.94%
1.48%
Mar 23
2.27%
1.50%
Sep 23
2.36%
1.51%
Mar 24
2.41%
1.51%
Sep 24
56%
17%
28%
FY21
48%
15%
37%
FY24
Aus. & PNG
New Zealand
International
36%
64%
FY21
41%
59%
FY24
Financial institutions
Other
Geography, %
Segment, %
72%
52%
Sep 19
78%
42%
Mar 23
78%
40%
Sep 23
78%
40%
Mar 24
77%
41%
Sep 24
235
276
271
260
260
Investment grade (EAD)
Non investment grade (EAD)
Credit RWA/EAD
9%
14%
13%
15%
13%
2H191H232H231H242H24
70
102
105
106
110
0.79%
Sep 19
0.82%
Mar 23
0.87%
Sep 23
0.87%
Mar 24
0.83%
Sep 24
Operational / at-call volume (fx adjusted)Deposit NIM (%)
4
Lending volume (fx adjusted)
Lending risk adjusted NIM (%)
4
Lending NIM (%)
4
Institutional
Payments and cash management
1.Deposit NIM represents net interest income divided by net internal assets for Payments and Cash Management. Margins represents half year average
PCM deposit volumes & margins
1
Change vs
pre-pandemic
2H24 vs 2H19
Volumes
+$52b, +51%
Balance, $b
Balance by rate sensitivity
(excluding Term Deposits)
Zero/low-rate deposits
(by currency)
13
97
Sep 24
110
Contracted or negotiated
Zero/low-rate deposits
Customer rate
changes largely
in-line with cash
rate changes
(Minimal margin
impact from rate
cuts)
~5
~2
~6
Sep 24
~13
AUDNZDUSD
Low-rate deposits
where the customer
rate does not change
in line with cash rate
changes (margin
impact from rate cuts)
The relationship between cash rates and deposit margins is not linear and can be impacted
by changes in deposit mix and deposit price competition
16
16
17
17
14
16
16
16
16
48
71
74
74
77
31
46
46
43
44
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0
20
40
60
80
100
120
140
160
180
200
220
240
0.79%
9
Sep 19
0.82%
Mar 23
0.87%
Sep 23
0.87%
Mar 24
0.83%
Sep 24
102
149
152
150
154
Deposit margin
Term deposits
Operational / at-call (Aus. & PNG)
Operational / at-call (International)
Operational / at-call (NZ)
Margins
+4bps
61
Institutional
Digital platforms- scalable operating leverage, capital light
62
Payments
1
mmPlatform cash mgt. accounts
3
, kNPP agency, m
Direct integration payments
1,2
Real time payments
1,2
Client monies
•Payments made by customers to their
suppliers and employees through our
digital channels.
•Covers payments initiated viaWeb &
Mobile, direct integration with ANZ or via
agency agreements whereby ANZ clears
payments on behalf of other banks.
•Automated payments initiated via direct
integration between the banks and our
customers’ systems.
•Enables a high degree of automation and
control for customers, replacing manual
processes with a scalable alternative that
removes the need for human
intervention.
Platform initiatives are enabling additional revenue opportunities within ANZ Payments & Cash Management
162
229
313
333
360
2H202H212H222H232H24
8%
64
89
115
133
154
2H202H212H222H232H24
16%
•A service whereby ANZ clears & settles
real-time payments for customers of
Appointer banks on their behalf.
•Powering other banks’ customers with
real-time payments.
5
11
18
22
27
2H202H212H222H232H24
23%
•Deposit management for entities
holding funds on behalf of their clients.
•Supporting CX in provision of client
money accounts to activate
services/transactions.
Deposit Balance
4
, $b
112268343430432
2.4
3.5
3.7
4.4
4.1
Sep 20Sep 21Sep 22Sep 23Sep 24
0.4%
1.Number of payments
2.Subset of total payments
3.Platform Cash Mgt. Accounts- Note: Reduction between September 2023 and September 2024 includes one-off bulk closure of ~45k inactive accounts in 1H24
4.Total deposit balances in Australia virtual client monies accounts
Institutional
Financial metrics
1.Risk adjusted NIM represents Institutional ex Markets net interest income divided by average Credit Risk Weighted Assets
Total InstitutionalAus. & PNGNew ZealandInternational
$’m
2H24
Actual
Vs.
1H24
(HoH)
Vs.
2H23
(PcP)
2H24
Actual
Vs.
1H24
(HoH)
Vs. 2H23
(PcP)
2H24
Actual
Vs.
1H24
(HoH)
Vs.
2H23
(PcP)
2H24
Actual
Vs.
1H24
(HoH)
Vs.
2H23
(PcP)
Income
3,320-7%1%1,631-2%1%475-5%-1%1,214-13%1%
Expenses
1,431-1%3%706-1%0%1163%3%609-2%8%
Total provision charge
(4)-33%-33%(4)Lrg(Lrg)(14)(Lrg)(Lrg)14(Lrg)(Lrg)
Cash profit
1,336-12%-2%643-3%5%2694%7%424-29%-15%
Customer deposits ($b)
2646%-1%1062%4%24-1%0%13411%-4%
Operational / at-call deposits
1103%3%775%5%173%4%160%2%
Net loans and advances ($b)
2102%0%1213%4%16-5%-8%731%-5%
RWA EOP ($b)
167-3%-5%87-3%-3%21-3%-12%60-2%-5%
Risk adjusted NIM ex Mkts
1
(%)
3.70%3bps19bps3.64%-9bps4bps3.84%13bps37bps3.73%18bps32bps
ROE (%)
13%-2%1%13%0%1%15%1%2%14%-5%-1%
63
2024 Full Year Results
Investor Discussion Pack
Group Treasury
ANZ Bank Group key capital ratios (%)Sep 23Mar 24Sep 24
Level 2 CET1 capital ratio
13.313.512.2
Level 2 CET1 HoH mvmt
+16 bps+16 bps-130 bps
Additional Tier 1 capital ratio
1.91.91.8
Tier 1 capital ratio
15.215.414.0
Tier 2 capital ratio
5.86.56.5
Total regulatory capital ratio
21.021.920.6
Leverage ratio
5.45.44.7
Risk weighted assets
$433b$433b$447b
Level 1 CET1 capital ratio
3
13.113.312.6
Level 1 CET1 HoH mvmt
+23 bps+18 bps-72 bps
Level 2 vs Level 1 mvmt
-7 bps-2 bps-58 bps
Level 1 risk weighted assets
3
$368b$371b$372b
Basel Harmonised ratios (%)
Leverage ratio
6.06.05.2
Level 2 CET1 capital ratio
19.719.717.6
ANZ Group capital
ANZ Group capital composition, $b
1.Sep 24 capital composition excludes an additional $2.8b of RBNZ compliant capital in ANZ New Zealand
2.Sep 24 Common Equity Tier 1 (CET1) of $56.3b includes $1.3b of NOHC surplus capital and $0.6b of Non-Bank Group Capital. The NOHC surplus capital of $1.3b includes the ~$1.1b capital for the remaining share buy-back
3.Level 1 comparatives have been restated with updated Operational Risk RWA
65
24.1
25.0
28.2
29.2
8.2
8.2
8.3
8.2
58.4
58.7
59.3
Mar 23Sep 23Mar 24
56.3
2
Sep 24
90.6
91.9
95.8
93.7
1
Common Equity Tier 1 (CET1)Additional Tier 1 (AT1) Tier 2
Regulatory capital
ANZ Bank Group capital
APRA Level 2 Common Equity Tier 1 (CET1) ratio – 2H24 Movement, %
1.Excluding the capital for the remaining share buy-back
66
13.50
12.20
12.24
0.74
0.12
0.05
0.04
Mar 24Cash ProfitUnderlying
RWA (ex FX)
Net dividendCapital
deductions, RWA
Initiatives & Other
Sale of remaining
AmBank stake
Suncorp Bank
acquisition
Share BuybackSep 24Surplus NOHC
Capital
1
Sep 24 pro forma
-0.08
-0.58
-1.09
-0.46
L1 13.3L1 12.7
L1 12.6
•Level 2 CET1 ratio of 12.2% (Level 1 (L1) CET1 ratio of 12.6%). This is above APRA’s expectation of an 11% - 11.5% operating range
•Underlying RWA growth primarily driven by lending growth in the Australia Retail and Institutional divisions, partially offset by lower IRRBB RWA reflecting decreases in embedded losses and
reduction in market risk RWA
•RWA initiatives include mortgage PD/LGD RWA modelling changes, partially offset by higher capital deductions, higher IRB capital floor and additional Operational Risk RWA overlay
•Suncorp Bank acquisition impact includes Expected Credit Loss (ECL) Completion Accounting adjustment and recent Suncorp Bank balance sheet growth (~2 pts)
ANZ Group dividend
•Final dividend of 83 cents per share partially franked at 70%, ~74% Full Year DPOR on Cash NPAT basis
Regulatory capital – risk weighted assets
Risk weighted assets – Level 2, $b
Risk weighted assets – IRRBB, $b
67
6.4
2.7
30.6
3.4
5.0
Mar 24CRWA FX
impacts
Mar 24
FX adjusted
Divisional LendingRisk ImpactsOther CRWASuncorp CRWASuncorp
non-CRWA
Market Risk &
IRRBB RWA
Other (Additional
Op. Risk overlay
& IRB Floor adj.)
2H24
433
-2.8
430
-24.2
-7.3
447
-10
0
10
20
30
40
Sep 21Mar 22Sep 22Mar 23Sep 23Mar 24Sep 24
18.0
33.4
38.1
31.9
31.7
26.2
23.1
Embedded Gains/LossesRepricing & Yield Curve RiskBasis & Optionality Risk
Total Credit RWA increase +$12.7b
Capital ratios on a Basel Harmonised basis
Level 2 capital ratio (APRA vs Basel Harmonised)
1
, %
1.IRB capital floor of ~$5b not adjusted in Basel Harmonised ratios
68
13.3
19.7
13.5
19.7
12.2
17.6
1.9
2.5
1.9
2.5
1.8
2.3
5.8
7.6
6.5
8.5
6.5
8.3
APRABasel
Harmonised
APRABasel
Harmonised
APRABasel
Harmonised
21.0
29.8
21.9
30.7
20.6
28.2
Common Equity Tier 1Additional Tier 1Tier 2
Sep 23Mar 24Sep 24
APRA Level 2 CET1 ratio – 30 September 2024
12.2%
Australia
Residential
Mortgages
APRA requires cohort specific multipliers (i.e. 1.4x for Owner Occupier
Principal and Interest & 1.7x for all Other mortgage types) and other
adjustments that are not imposed by Basel
+1.05%
IRB Scaling
Factor
APRA requires a scaling factor of 1.1 times for all Risk Weighted Assets,
unlike Basel
+0.86%
New Zealand
Exposures
APRA requires the use of Reserve Bank of New Zealand (RBNZ) capital rules
to calculate the Credit Risk Weighted Assets for all New Zealand subsidiary
credit exposures, which are generally more conservative than the Basel rules
+0.85%
Equity
Investments &
DTA
APRA requires 100% deduction from CET1, unlike Basel +0.86%
IRRBB RWAAPRA includes IRRBB in Pillar 1 RWA, which is not a requirement under Basel+0.70%
Non-NZ Non-
Retail Loss
Given Default
APRA specifies non-retail LGDs that are lower than Basel for sovereigns (5%
or 25%) and critical infrastructure operators (25%), but higher for other
general corporate exposures (50%)
+0.48%
Other Risk
Weighted
Assets
Includes impact of reversing APRA required 1.5x scalar for IPRE exposures
and conservative supervisory slotting risk weights for project, object and
commodity finance
+0.25%
Other Capital
Includes impact of reversing APRA required deductions from CET1 for
capitalised expenses & deferred fee income
+0.36%
Basel Harmonised CET1 ratio - 30 September 2024
17.6%
4.50%
6.00%
3.75%
2.50%
1.00%
1.00%
1.50%
6.50%
7.75%
~1%
Current Capital Requirements
~1%
Proposed Capital Requirements
(January 2027)
Minimum Prudential
Capital Requirements (PCR)
Capital Conservation
Buffer (CCB)
D-SIBs (CCB)
Countercyclical Capital Buffer (CCyB)
1
Additional Tier 1
Tier 2
18.25%18.25%
Regulatory capital update:
APRA’s Additional Tier 1 (AT1) discussion paper
Updated minimum APRA capital requirements including buffers
1.The CCyB is calculated on a bank’s Australian assets only. The final CCyB requirement will reduce based on a bank’s international exposures
2.Profile is AUD equivalent based on historical FX. AT1 securities profiled to the first call date. No redemption may be made without the prior written approval of APRA. Approval is at the discretion of APRA and may or may not be
given. There can be no certainty that APRA will provide its prior written approval for any such redemption. Holders should not expect that APRA’s approval will be given for any redemption if requested by ANZ
•APRA released a discussion paper in September 2024,
proposing changes to phase out AT1
•The proposal is to replace the current requirement for 1.5%
of AT1 with 1.25% of Tier 2 capital (Tier 2) and 0.25% of
Common Equity Tier 1 capital (CET1)
•The changes are proposed to come into effect from January
2027
•Existing AT1 are proposed to be grandfathered as Tier 2
until their first scheduled call date
Total Capital Ratio
unchanged
CET1
+0.25%
Tier 2
Requirements
+1.25%
AT1 First call date profile
2
Notional amount A$b
CN5
0.9
FY25
CS
1.3
FY26FY27
CN6
1.5
FY28
CN7
1.3
FY29
CN8
1.5
FY30
CN9
1.7
FY31
AUDUSD
Proposed changes to simplify the capital framework
PCR
+1.50%
CCB
-1.25%
69
Balance sheet structure
1
Balance sheet composition, Sep 24NSFR movement, %
NSFR composition, Sep 24
1.NSFR Required Stable Funding (RSF) and Available Stable Funding (ASF) categories and all figures shown are on a Level 2 basis per APRA prudential standard APS210
2.‘Other’ includes Off Balance Sheet, Derivatives, Other Assets and Capital
3.‘Other’ includes Sovereign and non-operational FI Deposits
4.‘Other’ includes Off Balance Sheet, Derivatives and Fixed Assets
5.‘Other’ includes FI/Bank deposits, Repo funding and other short dated liabilities
6.Includes Central Bank Term Funding (RBNZ FLP/TLF)
70
3.1
2.6
Deposits
& Repo
Funding
Wholesale
Debt
LoansTFF
Unwind
Impact
Securities
&
Secured
Lending
FX &
Other
2
Sep 24Suncorp
116.3
-3.7
-1.0
-0.6
-0.3
-0.3
116.1
Sep 23
Capital
Retail/SME
Corporate/PSE/Operational
Wholesale Funding & Other
3
Available
Stable Funding
Residential Mortgages
65% RSF factor
Other Loans
Liquids & Other
4
Required
Stable Funding
705
607
Liquid and Other Assets
35%
FI Lending 6%
Non-FI Lending
19%
Mortgages
40%
Assets
Offshore Short Term W’sale Debt 5%
Domestic Short Term
Wholesale Debt and
Other Funding
5
19%
Corporate, PSE and Operational
Deposits
23%
Retail and SME Deposits
33%
Long Term Wholesale Debt
6
11%
Capital incl. Hybrids and Tier 2
9%
Funding
Liquidity coverage ratio (LCR) summary
1
1.All figures shown on a Level 2 basis as per APRA Prudential Standard APS210
2.LCR surplus excludes surplus liquids considered non-transferrable across the Group. As at 30 September 2024, this included $12.5b of surplus liquids held in New Zealand
3.Change in cash outflow impacts on LCR surplus
4.‘Other’ includes off-balance sheet and cash inflows
5.Inclusive of Suncorp Bank
6.Comprised of HQLA2 and Alternative Liquid Assets (ALA)
71
Movement in average LCR surplus
2
, $b
LCR composition
5
, Average FY24 $b
62
67
68
4
2
4
1
FY23
LCR
surplus
Liquid
Assets
Retail/
SME
3
Corp/
FI/ PSE
3
Wholesale
Funding
3
Other
4
FY24
LCR
surplus
SuncorpFY24
LCR
surplus
incl.
Suncorp
-2
-3
FY24
Avg LCR 133%
FY23
Avg LCR 130%
Other LCR Liquids
6
HQLA1
Offshore central bank
cash to support short-
dated FI non-op deposits
Liquid Assets
Wholesale funding
Customer deposits
& other
4
Offshore short-dated
FI non-op Deposits
Net Cash Outflow
274
206
Offshore short-dated Financial
Institution (FI) deposits are
typically placed with Central
Banks.
Whilst this has no effect on
LCR $ surplus, the LCR ratio
reduces by ~12% (i.e. dilutive
to the ratio)
Pro forma FY24 LCR ~145%
Term wholesale funding
1
Portfolio composition, Sep 24
FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY26FY27FY28FY29FY30FY31FY32+
35
27
25
26
28
21
18
44
45
27
36
29
18
15
2
5
10
Senior UnsecuredCovered BondsTier 2RMBSTFFNZ FLP / TLF
Credit rating upgrades from all three major rating agencies in FY24
ANZ has access to a diverse range of wholesale funding
Product
Currency
72
•FY24 term funding issuance of $42b
2
, with a further $3b issued in FY24 by
Suncorp Bank pre-acquisition
•Expected FY25 term funding needs of ~$35b across ANZ
3
(~$30b) and
Suncorp Bank (~$4-6b)
•ANZ continues to benefit from favourable conditions in the domestic market,
issuing ~40% of term debt domestically in FY24
•ANZ’s future term funding issuance depends on market conditions, balance
sheet needs and exchange rates, amongst other factors
ANZ Banking Group LtdANZ New ZealandSuncorp Bank
SeniorTier 2SeniorTier 2Senior
S&PAA- A- (+1)AA-A (+1)AA- (+1)
Moody’sAa2 (+1)A3 (+1)A1A3 Aa2 (+2)
FitchAA- (+1)A-A+Not ratedAA- (+1)
Issuance
Maturities
4
Term funding profile by product (including Suncorp Bank)
1
, $b
45%
32%
20%
3%
Domestic (AUD, NZD)
North America (USD, CAD)
Europe & UK (€, £, CHF)
Asia (JPY, HKD, SGD, CNY)
60%
22%
13%
3%
2%
Senior Unsecured
Tier 2
Covered Bonds
RMBS
NZ FLP / TLF
1.All figures based on historical FX. Excludes unsubordinated debt with shorter tenors (such as 12 to 18 months), APRA compliant Additional Tier 1 capital and ANZ New Zealand Perpetual Preference Shares.
Includes the A$800m ANZ Holdings (New Zealand) Limited Perpetual Subordinated Notes issued in September 2024
2.Includes $4b of pre-funding issued in FY24, for FY25
3.Includes any issuance from ANZ BGL, ANZ New Zealand and ANZ Holdings (New Zealand) Limited
4.Maturity profile is based on the next callable date
1.Source: Bloomberg. All figures based on FX as at 30 September 2024. Excludes unsubordinated debt with shorter tenors (such as 12 to 18 months), Additional Tier 1, FLP/TLF and Callable Structured Notes. RMBS as at 21 October 2024
2.All figures based on historical FX. Excludes unsubordinated debt with shorter tenors (such as 12 to 18 months), APRA compliant Additional Tier 1 capital and ANZ New Zealand Perpetual Preference Shares.
Includes the A$800m ANZ Holdings (New Zealand) Limited Perpetual Subordinated Notes issued in September 2024
3.Maturity profile is based on the next callable date
Suncorp Bank term wholesale funding
Suncorp Bank funding requirements are consistent with prior years
•Post the acquisition in July, Suncorp Bank’s credit ratings were equalised to that of
ANZBGL by each of the key rating agencies (AA-/Aa2/AA-)
•For the interim period that Suncorp Bank remains a separate ADI, Suncorp Bank will
continue to issue wholesale debt to fund its own balance sheet
•Suncorp Bank has expected FY25 term wholesale funding needs of ~$4-6b,
across both unsecured and secured format
•Suncorp Bank’s Tier 2 requirement is expected to continue to be sourced
intra-group from ANZBGL
•Suncorp Bank’s future term funding issuance depends on market conditions,
balance sheet needs and exchange rates, amongst other factors
Post the Suncorp Bank acquisition, ANZ Group continues to have the
lowest term portfolio of peers
1
Term Funding Outstandings, Sep 24 A$b
107
16
15
ANZ
129
15
Peer 1
143
18
Peer 2
146
16
Peer 3
138
144
161
163
Australian EntityNZ SubsidiarySuncorp Bank
Suncorp Bank wholesale funding portfolio composition, Sep 24
AUD Senior
66%
Issuance
Maturities
3
25
17
19
20
23
13
11
36
38
22
28
22
12
11
9
7
5
4
4
5
4
4
4
4
5
4
5
5
4
3
FY16FY17
3
3
FY18
3
FY19
2
3
FY20FY21
3
FY22FY23
2
FY24
2
FY25FY26
3
FY27
3
2
FY28
2
3
FY29FY30
3
FY31
0
1
FY32+
35
27
25
26
28
21
18
44
45
27
36
29
18
15
2
5
10
ANZBGLANZ NZSuncorp Bank
ANZ Group term funding profile by issuer
2
, $b
AUD
Covered
Bonds
18%
AUD
RMBS
16%
73
DateIssuerTradeVolume
Sep 24ANZBGL11NC10USD 1,250m
Jul 24ANZBGL15NC10AUD 1,900m
Jul 24ANZNZ10NC5USD 500m
Mar 24ANZBGL10.5NC5.5USD 1,000m
Jan 24ANZBGL10NC5AUD 2,285m
Tier 2 capital
1
ANZ is well placed to meet APRA and RBNZ Tier 2 requirementsTier 2 capital, Notional amount %
•APRA Level 2 Total Capital ratio is 20.6%. On a Basel Harmonised basis, total capital ratio is
28.2%
•Current APRA Level 2 Tier 2 ratio is 6.5% (in line with the January 2026 requirement)
•ANZBGL issued $7.5b of Tier 2 in FY24. Expected FY25 Tier 2 requirements of ~$6-7b
(subject to the finalisation of APRA’s AT1 proposals)
•ANZ NZ has an RBNZ compliant Tier 2 requirement of 2%, with a current Tier 2 ratio of 2.1%
•Following credit rating upgrades during the year, ANZBGL’s Tier 2 bonds are now rated in the
“A” category by all three major rating agencies
•ANZBGL and ANZ NZ Tier 2 calls remain subject to APRA or RBNZ approvals respectively
Tier 2 capital amortisation profile
2
, A$b
1.Profile is AUD equivalent based on historical FX. Excludes the A$800m ANZ Holdings (New Zealand) Limited Perpetual Subordinated Notes issued to fund ANZ NZ Perpetual Preference Shares that qualify as RBNZ AT1 issued in September
2024. Comprises Tier 2 capital in the form of capital securities only (i.e. does not include other Tier 2 capital such as eligible General reserve for impairment of financial assets). ANZ NZ Tier 2 does not constitute APRA compliant regulatory
capital
2.Amortisation profile is modelled based on scheduled first call date for callable structures and in line with APRA’s amortisation requirements for bullet structures
74
84%
16%
Callable
Bullet
40%
36%
14%
3%
3%
2%
2%
USD
AUD
EUR
GBP
JPY
SGD
NZD
FY25FY26FY27FY28FY29FY30FY31FY32+
3.9
4.4
3.3
3.3
5.8
0.4
2.4
6.3
CallableBullet AmortisationANZ NZ (Callable)
Recent Tier 2 Transactions
AustraliaNew Zealand
2H210.85%0.99%
1H220.84%1.13%
2H221.32%1.53%
1H231.90%1.93%
2H232.16%2.43%
1H242.35%3.06%
2H242.49%3.57%
AustraliaNew ZealandInternational
Volume ($A)~77b~28b~11b
4
Volume Change (YoY)~10b decrease~2b decreaseflat
Target DurationRolling 3 to 5 yearsVarious
Proportion Hedged~82%~92%Various
Capital and Replicating Deposits Portfolio
1
Includes unhedged component
Australia, %Portfolio earnings rate, Average %
New Zealand, %Capital & replicating deposits portfolio
1.Excludes Suncorp Bank Capital and Replicating Deposits
2.Portfolio Earnings Rate is a combination of term swap rates (hedged component) and 3mth BBSW (unhedged)
3.Proxy for hedged investment rate
4.This balance comprises of various currencies of which ~40% is USD
75
0
1
2
3
4
5
Sep
22
Nov
22
Jan
23
Mar
23
May
23
Jul
23
Sep
23
Nov
23
Jan
24
Mar
24
May
24
Jul
24
Sep
24
Portfolio Earnings Rate
2
3m BBSW (Monthly Average)5 Year AUD Swap Rate
3
0
2
4
6
Sep
22
Nov
22
Jan
23
Mar
23
May
23
Jul
23
Sep
23
Nov
23
Jan
24
Mar
24
May
24
Jul
24
Sep
24
Portfolio Earnings Rate
2
3m BKBM (Monthly Average)5 Year NZD Swap Rate
3
Quarter 4 CY2024CY2025CY2026Implementation Date
APRA Additional Tier 1 Discussion Paper
Consultation following
feedback
2027 (TBC)
Loss-Absorbing Capacity (LAC)2026
Comprehensive review of APS210 (Liquidity) ConsultationImplementation (TBC)2026/2027 (TBC)
Recovery and Resolution planning Implementation2024
Interest Rate Risk in the Banking BookImplementation2025
Fundamental Review of the Trading Book
(incl. Counterparty Credit Risk)
Consultation2027 (TBC)
RBNZ Capital Framework2028
RBNZ Crisis Management under the Deposit
Takers Act 2023
Submissions due end of
November
TBC
Capital & liquidity prudential outlook
1
1.Timeline is based on calendar year and is largely based on APRA’s Corporate Plan 2024-2025 (published August 2024)
76
Transition
Transition
2024 Full Year Results
Investor Discussion Pack
Risk Management & Housing
Risk Management disclosures for September 2024 period are presented both including and excluding Suncorp Bank unless otherwise stated
De-risked through portfolio reshaping
Wholesale portfolio, 2H24REL/IRB EAD, 2H24
Regulatory expected loss (REL)
4,5
% of EAD defaulted
5
1.Historical loss rates represent IPC/EAD over the period 2008 to 2019
2.Includes Suncorp Bank
3.Based on Internal Expected Loss (IEL). Sep 24 (18bps) compared to Sep 16 (35bps)
4.Regulatory Expected Loss is an expected loss measure calculated in accordance with Attachment C of APS 113 using regulator-approved models
5.Peers include Australian major banks. Comparison data based on 2H24 Pillar 3 disclosures
6.Wholesale exposures subject to the Internal Ratings Based (IRB) approach, includes Corporate, Financial Institution and Sovereign asset classes
78
7%
29%
24%
24%
40%
40%
42%
9%
10%
9%
14%
21%
21%
1%
Sep 16
2%
3%
Sep 24
1%
3%
Sep 24
2
Other
Sovereigns
Banks & FIs
Residential
Mortgages
Corporate &
Specialised
Lending (SL)
Retail
(ex. Mortgages)
8941,1731,260
~50% reduction in long run loss rate since FY16
3
Total exposures, EAD $b
Historical loss rates
1
, bps
Sovereign~0
Banks & FIs~1
Residential mortgage~3
Corporate &
Specialised Lending
~30
Retail (ex. Mortgages)~110
Total~12
0.28%
0.35%
0.41%
ANZLowest
peer bank
Highest
peer bank
0.31%
0.58%
0.68%
ANZLowest
peer bank
Highest
peer bank
Probability of default distribution, wholesale IRB EAD
6
Sep 24 $b
0
50
100
150
200
250
AAA to AA-A+ to BBB+BBB to BBB-BB+ to B+B to B-CCC+ to CDefault
0.3%
Investment grade 82%
Long run provisions & loss rates
Total credit impairment charge, $m
79
Long run loss rate (internal expected loss
3
), %
ANZ historical loss rates
2
, bps
-900
-600
-300
0
300
600
900
1,200
1,500
1,800
1H162H161H172H171H182H181H192H191H202H201H212H211H222H221H232H231H242H242H24
1
Consumer Individual Provision
Commercial Individual Provision
Institutional Individual Provision
Collective Provision charge / (release)
0
50
100
150
200
250
Sep
90
Sep
93
Sep
96
Sep
99
Sep
02
Sep
05
Sep
08
Sep
11
Sep
14
Sep
17
Sep
20
Sep
22
Sep
24
IP Loss Rate
Median Annual IP Loss Rate (excl. current period)
Division
Sep 21Sep 22Sep 23
Mar 24Sep 24Sep 24
1
Australia Retail0.12 0.11 0.10
0.090.110.11
Australia Commercial0.68 0.56 0.52
0.530.520.52
New Zealand0.13 0.11 0.12
0.130.170.17
Institutional0.25 0.21 0.19
0.210.200.20
Suncorp Bank---
--0.14
Pacific 2.15 2.44 2.17
1.961.96 1.96
Total0.22 0.19 0.17
0.180.190.18
1.Including Suncorp Bank
2.IP Charge as a % of average Gross Loans and Advances (GLA)
3.Internal Expected Loss (IEL) is an internal estimate of the average annualised loss likely to be incurred through a credit cycle. Presented as a % of Gross Loans and Advances (GLA)
3,223
3,300
3,520
3,469
3,658
817
732
530
589
1.17%
1.16%1.16%
1.21%
1.18%
Mar 23Sep 23
526
Mar 24Sep 24Sep 24
1
4,040
4,032
4,046
3,999
4,247
1H232H231H242H242H24
1
Total CP charge
163-11
32-14230
Volume/Mix-41-28
6325210
Change in Risk2430
1699898
Economic forecast & scenario
weights
10071
5-141-141
Additional overlays80-84
-205463
Individual and Collective Credit Impairment (provision) charge
Individual provision (IP) charge / (release), $mCollective provision (CP) charge, $m
1.Including Suncorp Bank
2.Collective Provision as a % of Credit Risk Weighted Assets (CRWA)
3.Annualised loss rate as a % of Gross Loans and Advances (GLA). Total loss rate is inclusive of the collective provision charge
4.Gross Impaired Assets
5.Includes $244m establishment of ECL allowance for performing loans in the Suncorp Bank portfolio. This does not reflect a change in the credit quality of the portfolio and therefore, it is considered a one-time charge
80
201
217
164
223
224
-267
-116
-163
-156
-158
36
1H23
22
2H23
37
1H24
40
2H24
40
2H24
1
123
38
107
106
Ratios1H232H231H242H242H24
1
IP loss rate (bps)
3
-14
1 33
Total loss rate (bps)
3
43
2 39
5
IP balance / GIA
4
35%25%
21%19%18%
Collective provision balance, $m
CP Coverage
2
Additional overlaysModelled ECL
NewIncreasedWritebacks & Recoveries
-30
CP coverage
0.53%1.18%0.34%0.48%
Collective provision (CP) balance
Provision balance by stage, Sep 24
1
$bPortfolio composition and coverage, Sep 24
1
%
1.lncluding Suncorp Bank
2.EAD excludes amounts for the ‘Securitisation’ Basel class, as per APS330. Data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral
CP balance by division $bMar 23Sep 23Mar 24Sep 24Sep 24
1
Australia Retail0.950.950.950.930.93
Australia Commercial1.031.041.051.051.05
Institutional1.451.431.461.441.44
New Zealand0.540.560.540.540.54
Suncorp Bank----0.25
Pacific & Other0.070.050.050.040.04
Total
4.044.034.054.004.25
CP balance by portfolio $bMar 23Sep 23Mar 24Sep 24Sep 24
1
Corporate
1.841.87
1.86
1.811.93
Specialised Lending
0.280.27
0.29
0.320.36
Residential Mortgage
0.820.79
0.81
0.750.84
Retail (ex Mortgages)
0.840.82
0.81
0.840.84
Sovereign / Financial Institution
3
0.260.28
0.28
0.280.28
Total
4.044.03
4.05
4.004.25
0.0
0.5
1.0
1.5
2.0
Stage 1Stage 2Stage 3Stage 3
(IP/CP)
1.97
1.81
0.780.78
0%
50%
100%
Gross Loans
& Advances
Credit RWAExposure at Default
2
Exposure at Default
2
(ex Sovereign & FI)
$807b
$361b$1,260b
$886b
Residential Mortgage
Retail (ex Mortgages)
Corporate & Spec. Lending
Financial Institution
Sovereign
Other
Australia Retail
Australia Commercial
Institutional
New Zealand
Suncorp Bank
Pacific / Other
Individual Provisions
Collective Provisions
81
Expected credit loss – Economic scenarios and modelled outcomes
1.Including Suncorp Bank. The Downside Scenario is specified in terms of an index of economic stress. The economic variables shown represent a characterisation of the scenario to facilitate comparison
2.Subset of a range of economic indicators shown. Economic forecasts also undertaken for international markets
3.12 months to December Year on Year change
4.Annual average: 12 months to December
1,502
1,951
3,580
100%
upside
100%
base case
100%
downside
100%
severe
10,142
1,951
1,707
589
CP balance (ECL)
4,247
Weightings to scenarios to determine CP balance
0.7%46.0%40.5%12.8%
Australia peak impacts of economic scenariosDownsideSevere
GDPLowest over 3 years
-1.8%-4.4%
UnemploymentPeak next 2 years
6.9%10.7%
Resi. property pricesPeak
to trough drop
-8.0%-41.0%
Economic scenariosActualBase case
2
30 September 2024CY2022ACY2023ACY2024FCY2025FCY2026F
Australia
GDP change
3
3.6%
2.0%
1.2%2.0%
2.4%
Unemployment rate
4
3.7%
3.7%
4.1%4.4%
4.3%
Resi. property price change
3
-6.9%
9.1%
7.3%5.5%
5.5%
New Zealand
GDP change
3
2.8%
0.8%
-0.1%0.8%
2.2%
Unemployment rate
4
3.3%
3.7%
4.7%5.4%
5.4%
Resi. property price change
3
-13.0%
-0.7%
-1.0%4.5%
5.0%
New Zealand peak impacts of economic scenariosDownsideSevere
GDPLowest over 3 years
-3.7%-6.8%
UnemploymentPeak next 2 years
6.3%7.5%
Resi. property pricesPeak to trough drop
-19%-35%
Additional overlays
Scenario & weights
100% base case
Sep 24
1
, $m
82
Impaired Assets
Gross impaired assets, $b
By divisionSep 20=100By size of exposure
1.Including Suncorp Bank
By division
0
30
60
90
120
Sep
20
Mar
21
Sep
21
Mar
22
Sep
22
Mar
23
Sep
23
Mar
24
Sep
24
0.0
0.4
0.8
1.2
1.6
2.0
Mar 23Sep 23Mar 24Sep 24Sep
24
1
0.54
0.83
0.63
0.86
0.86
0.17%
0.21%
0.21%
0.22%
0.21%
0
1
2
3
Mar 23Sep 23Mar 24Sep 24Sep
24
1
1.21
1.52
1.52
1.63
1.69
Australia Retail
Australia Commercial
New Zealand
Suncorp Bank
Institutional
Pacific / Other
% of GLA
0
1
2
3
Mar 23Sep 23Mar 24Sep 24Sep
24
1
1.21
1.52
1.52
1.63
1.69
<$10m
$10m to $100m
>$100m
Control List by Limits
Control List by No. of Groups
Gross impaired assets, $b
Control list, Indexed data
New impaired assets, $b
83
Australia
1
& New Zealand 90+ days past due (DPD)
Consumer portfolio
1
90+ DPD as a % of total portfolio balances
1.Excludes Suncorp Bank
2.Includes Gross Impaired Assets and Hardship accounts. ANZ delinquencies are calculated on a missed payment basis for amortising and Interest Only loans. Australia Home Loans 90+ between Mar-20 and Jun-20 excludes eligible Home
Loans accounts that had requested COVID-19 assistance but due to delays in processing had not had the loan repayment deferral applied to the account
84
0.25
0.50
0.75
1.00
1.25
1.50
0.00
Sep
18
Dec
18
Mar
19
Jun
19
Sep
19
Dec
19
Jun
20
Sep
20
Dec
20
Mar
21
Jun
21
Sep
21
Dec
21
Mar
22
Jun
22
Sep
22
Dec
22
Mar
23
Jun
23
Sep
23
Dec
23
Mar
24
Jun
24
Sep
24
Mar
20
Australia Home Loans
2
Australia Consumer CardsNew Zealand Home Loans
Risk Weighted Assets (RWAs) and Exposure at Default
Exposure at Default
1
, $bTotal Risk Weighted Assets, $bCredit Risk Weighted Asset drivers
3
, $b
1.EAD excludes amounts for the ‘Securitisation’ Basel class, as per APS330. Data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral
2.Including Suncorp Bank
3.The attribution of CRWA movements requires assumptions and judgement; different assumptions could lead to different attributions
345
348
348
330330
44
42
38
42
42
43
47
50
4
Mar 23Sep 23
3
Mar 24
0
31
5
Sep 24
31
31
5
Sep 24
2
436
433432
413
447
CRWA
Suncorp Bank CRWA
Mkt. & IRRBB RWA
Operational RWA
IRB Floor adjustment
349.0
330.5
361.2
14.1
2.8
30.6
Sep
23
FXVolume
/ Mix
Risk
Impacts
Model
/
Method
CVASep
24
Suncorp
Bank
Sep
24
2
-4.5
-30.7
-0.2
432
408
251
47
38
Mar 23
448
366
249
48
38
Sep 23
457
354
239
48
38
Mar 24
469
361
231
55
38
Sep 24
529
374
244
55
38
Sep 24
2
1,193
1,163
1,151
1,173
1,260
Residential Mortgage
Sovereign & Financial Institution
Corporate
Specialised Lending
Retail (ex Mortgages)
Other
Risk intensity (CRWA/EAD), %1H232H231H242H242H24
2
Total Group2930302829
Corporate & Specialised4949484850
Retail (ex Mortgages)5353535252
Residential Mortgage2829302526
Sovereign & FI (inc. Bank)1112121111
CRWA “Model/Method” includes implementation of:
•Revised Probability of Default models for Aust.
Mortgages ($9b), NZ Mortgages ($6.9b) and NZ Rural
($ 2.9b);
•Revised Loss Given Default model for Aust. Mortgages
($5.8b);
•Refinement in processes, data and associated
methodology treatments.
85
1.Including Suncorp Bank
2.EAD excludes amounts for the ‘Securitisation’ Basel class, as per APS330. Data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral
3.Excludes unsecured retail products which are 90+ DPD
Total portfolio composition
Exposure at Default (EAD) distribution
Total Group EAD
Sep 24
1
$1,260b
2
Category
% of Group EAD
2
% of Impaired Assets
to EAD
2
Gross
Impaired
Assets
3
Sep 23Mar 24Sep 24
1
Sep 23Mar 24Sep 24
1
Sep 24
1
Consumer Lending
40.3%41.4%43.6%0.1%0.2%0.2%$950m
Finance, Investment & Insurance
26.4%24.5%22.3%0.0%0.0%0.0%$16m
Business & Property Services
1.6%1.7%1.6%0.2%0.3%0.3%$52m
Manufacturing
4.4%4.1%3.6%0.1%0.1%0.2%$95m
Agriculture, Forestry, Fishing
3.0%3.0%3.2%0.3%0.3%0.4%$142m
Government & Official Institutions
6.1%7.4%8.5%0.0%0.0%0.0%$0m
Wholesale Trade
2.0%2.0%1.8%0.1%0.2%0.1%$24m
Retail Trade
1.5%1.4%1.2%0.5%0.5%0.4%$62m
Transport & Storage
1.6%1.5%1.4%0.1%0.1%0.2%$40m
Commercial Property
5.6%5.7%5.7%0.4%0.3%0.2%$135m
Resources (Mining)
1.1%1.0%0.9%0.1%0.1%0.1%$9m
Electricity, Gas & Water Supply
1.4%1.3%1.3%0.0%0.0%0.0%$2m
Construction
0.7%0.8%0.8%0.5%0.3%0.4%$38m
Other
4.1%4.1%4.1%0.7%0.4%0.2%$127m
Total Group EAD
2
$1,163b
$1,151b$1,260b
0.1%0.1%
0.1%$1,693m
43.6%
22.3%
3.6%
3.2%
8.5%
5.7%
4.1%
1.6%
1.8%
1.2%
1.4%
0.9%
1.3%
0.8%
86
Commercial Property
Outstandings by region, GLA $bOutstandings by sector, %Commercial property collateral
2,3
, %
1.Including Suncorp Bank
2.Figures including Suncorp Bank. Commercial property collateral distribution based on limits (includes drawn and undrawn exposures)
3.Fully Secured: loan amount ≤100% of extended security value; Partially Secured: loan amount >100% of the extended security value
87
37.7
41.1
43.3
47.1
10.9
10.6
9.6
9.6
7.6%
2.3
Sep 22
7.5%
1.7
Sep 23
7.4%
2.0
Sep 24
7.3%
2.0
Sep 24
1
50.9
53.4
54.8
58.6
% of Group GLA
Australia
New Zealand
International
$2.0b International
Asia ex. China$1.4b
China$0.3b
Other$0.3b
25%
18%
30%
18%
9%
Sep 22
24%
19%
29%
19%
8%
Sep 23
24%
20%
28%
20%
8%
Sep 24
25%
20%
27%
19%
8%
Sep 24
1
Retail
Industrial
Offices
Residential
Other
1%
34%
44%
9%
12%
Cash
Backed
&
Sovereign
/ Other
Fully
secured
LVR ≤ 50%
Fully
secured
50% < LVR
≤ 65%
Partially
secured
Unsecured
79% of portfolio well secured
38%
30%
9%
7%
5%
4%
3%
2%
2%
34%
17%
23%
13%
9%
3%
1%
44%
18%
9%
7%
13%
3%
3%
3%
ANZ Institutional portfolio
Size & tenor by market of EAD
1
By market of incorporation, $b Sep 24
Industry composition, EAD
1
Product composition, EAD
1
Market of incorporation, EAD
1
1.EAD excludes amounts for the ‘Securitisation’ Basel class, as per APS330. Data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral
2.International includes Asia Pacific, Europe and America
88
50%
50%
Total
70%
30%
International
2
80%
20%
Asia
80%
20%
China
539
270
125
19
Tenor ≤ 1 YrTenor 1 Yr+
Finance, Investment & Insurance
Government & Official Institutions
Commercial Property
Manufacturing
Wholesale Trade
Electricity Gas & Water Supply
Business & Property Services
Other
Net Loans, Advances & Acceptances
Contingents liabilities, commitments, and
other off-balance sheet exposures
Investment Securities
Cash
Derivatives
Trading Securities
Other
Australia
New Zealand
Japan
Singapore
China
South Korea
Hong Kong (SAR)
Asia - Other
International (Exc. Asia)
Institutional Asia portfolio
Asia portfolio composition, % of EAD
1
Asia
China
China
Asia industry composition, EAD
1
Asia product composition, EAD
1
1.EAD excludes amounts for the ‘Securitisation’ Basel class, as per APS330. Data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral
2.Corporate exposure includes AIRB, FIRB and Standardised Corporate Basel asset class treatments
89
74%
15%
8%
3%
Sep 24
$19.4b
27%
54%
15%
4%
Sep 24
$125b
AAA to AA-A+ to BBB+BBB to BBB-BB+ to BB-
Investment
grade 96%
$8.4b
$7.1b
$5.0b
Sep 20Sep 23Sep 24
69%
11%
4%
4%
5%
Finance, Investment & Insurance
Manufacturing
Wholesale Trade
Government & Official Institutions
Commercial Property
Business & Property Services
Electricity Gas & Water Supply
Communication Services
Other
Asia
Asia
67%
12%
8%
8%
2%
3%
34%
27%
13%
13%
10%
3%
Net Loans, Advances & Acceptances
Cash
Derivatives
Investment Securities
Contingents liabilities,
commitments, and
other off-balance sheet exposures
Other assets
China - Corporate
2
Australia home loans – portfolio overview
excluding Suncorp Bank
Portfolio
1
Flow
Sep 22Sep 23Sep 24FY23FY24
Number of Home Loan accounts
968k958k944k193k
2
177k
2
Total FUM
$283b$304b$324b$89b$89b
Average Loan Size
3
$292k$317k$344k$486k$498k
% Owner Occupied
4
68%68%68%66%62%
% Investor
4
31%31%31%34%38%
% Equity Line of Credit
5
1%1%1%0%0%
% Paying Variable Rate Loan
6
72%84%96%95%99%
% Paying Fixed Rate Loan
6
28%16%4%5%1%
% Paying Interest Only
7
9%9%9%15%17%
% Broker
6,8
55%57%59%64%65%
1. Home Loans portfolio (includes Non-Performing Loans, excludes Offset balances) 2. New accounts includes increase to existing accounts and split loans (fixed and variable components of the same loan) 3. Average loan size for Flow excludes increases to existing
accounts 4. The current classification of Investor vs Owner Occupied is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s obligation to advise ANZ of any change in
circumstances 5. ANZ Equity Manager product is no longer offered for sale as of 31 July 2021 6. Excludes Equity Manager accounts 7. Based on customers that request a specific interest only period and does not include loans being progressively drawn e.g. construction.
Historical ‘Flow’ numbers restated as a result of data quality improvements 8. Historical ‘Portfolio’ numbers restated due to changes in reporting classifications 9. Based on accounts originated in the respective year 10. Unweighted based on # accounts and includes
capitalised LMI premiums 11. Valuations updated to Aug 24 where available. Excludes unknown DLVR 12. Source: APRA Monthly Authorised Deposit-Taking Institutions Statistics (MADIS) to Sep 24 13. Excess repayments based on available redraw and offset. Historical
numbers restated as a result of data quality improvements 14. Offset balances reflect only those balances linked to Home Loan accounts 15. Low Doc lending at ANZ is no longer offered 16. Annualised write-off net of recoveries 17. Based on Gross Loans & Advances
18. Australia Geography includes Australia Retail, Australia Commercial and Institutional Australia
Unless otherwise stated metrics are based on balances
90
Portfolio
1
Sep 22Sep 23Sep 24
Average LVR at Origination
9,10
68%65%66%
Average Dynamic LVR (excl. offset)
10,11
49%49%48%
Average Dynamic LVR (incl. offset)
10,11
43%43%42%
Market share
12
13.0%13.3%13.6%
% Ahead of Repayments
6,13
71%75%82%
Offset Balances
14
$39b$42b$48b
% First Home Buyer
8%8%8%
% Low Doc
15
2%1%1%
Loss Rate
16
0.01%0.01%0.01%
% of Australia Geography Lending
17,18
61%62%63%
% of Group Lending
17
42%43%44%
Australia home loans – portfolio composition
Home loan balance composition
1,2
, $bHome loan balance & lending flow
1
, $b
Home loan growth – ANZ & system
3
, MoM %
190
197
205
212
217
63
65
68
71
74
23
24
25
25
27
3
4
Sep 22
3
3
Mar 23
3
3
Sep 23
3
3
Mar 24
3
3
Sep 24
283
293
304
314
324
OO P&IInv P&IOO I/OInv I/OEquity Manager
304
324
52
26
Sep-23New Sales
excl. Refi-In
Net OFI Refi.Redraw &
Interest
Repay
/ Other
Sep-24
5
-63
0.0
0.5
1.0
Sep
23
Dec
23
Mar
24
Jun
24
Sep
24
APRA System Total HousingANZ Total HousingMajor Bank Growth (ex ANZ)
1.Based on Gross Loans and Advances. Includes Non-Performing Loans
2.The current classification of Investor vs Owner Occupied is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s obligation to advise
ANZ of any change in circumstances. Interest Only (I/O) is based on customers that request a specific interest only period and does not include loans being progressively drawn e.g. construction. ANZ Equity Manager product is no
longer offered for sale as of 31 July 2021
3.Month-on-month growth. Source: APRA Monthly Authorised Deposit-taking Institution Statistics (MADIS)
91
Australia home loans – portfolio composition & flow
By purpose, % of total balances
Portfolio
1,2
Flow
3
68%
68%
68%
31%
31%
31%
1%
Sep 22
1%
Sep 23
1%
Sep 24
Owner Occupied
Investor
Equity Manager
4
65%
66%
62%
35%
34%
38%
0%
FY22
0%
FY23
0%
FY24
35%
36%
35%
34%
33%
33%
15%
15%
16%
6%
10%
Sep 22
6%
10%
Sep 23
6%
10%
Sep 24
VIC/TAS
NSW/ACT
QLD
WA
SA/NT
Portfolio
1
Flow
3
37%
37%
34%
33%
31%
32%
16%
16%
17%
6%
8%
FY22
7%
9%
FY23
7%
10%
FY24
1.Includes Non-Performing Loans
2.The current classification of Investor vs Owner Occupied is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s obligation to advise ANZ
of any change in circumstances
3.Based on drawn month
4.ANZ Equity Manager product is no longer offered for sale as of 31 July 2021
By Location, % of total balances
92
Australia home loans – portfolio composition & flow
By channel, % of total balances
Dynamic LVR – Portfolio
2,3
Origination LVR – Flow
4,5
84%
82%
84%
16%
18%
16%
0%
Sep 22
0%
Sep 23
0%
Sep 24
>80% LVR
80% LVR
<80% LVR
64%
71%
67%
20%
18%
21%
16%
12%
FY22
11%
FY23FY24
55%
57%
59%
45%
43%
41%
Sep 22Sep 23Sep 24
Proprietary
Broker
Portfolio
2,6
Flow
4
58%
64%
65%
42%
36%
35%
FY22FY23FY24
1.Includes capitalised LMI premiums
2.Includes Non-Performing Loans
3.Doesn’t consider offset balances, and excludes unknown DLVR. Valuations updated to Aug 24 where available
4.Based on drawn month
5.Historical ‘Flow’ numbers restated as a result of data quality improvements
6.Excludes Equity Manager accounts. Historical ‘Portfolio’ numbers restated due to changes in reporting classifications
LVR profile
1
, % of total balances
93
Australia home loans- portfolio resilience
Home Loans repayment profile
1,2
Home Loans on time and <1 month ahead profile
2,3
Dynamic LVR based on portfolio balances
1,4
Offset account balances
5
94
0
20
40
OverdueOn Time<1 month
ahead
1-3
months
ahead
3-6
months
ahead
6-12
months
ahead
1-2 years
ahead
>2 years
ahead
Sep 22Sep 23Sep 24
% of accounts ahead of repayments
23%
31%
43%
22%
36%
36%
38%
19%
Sep 22
17%
16%
Sep 23
13%
6%
Sep 24
Investment: Interest payments may receive negative gearing/tax benefits
New Accounts: ≤ 12 months old
Structural: Loans that restrict payments in advance eg. fixed rate loans
Residual
% composition of accounts
0
10
20
30
40
0-60%61- 75%76- 80%81- 90%91- 95%96- 100%100%+
Sep 23Sep 24
>90%
•5.8% of portfolio
•
73% ahead of
repayments
2
•
18% with LMI
NEGATIVE EQUITY
•2% of portfolio (1.4% net of
offset balances
5
)
•72% ahead of repayments
2
•9% with LMI
32
12%
Sep 20
13%
Sep 21
14%
Sep 22
14%
Sep 23
15%
Sep 24
36
39
42
48
Offset balances ($b) (LHS)Offset balances as a % of Home Loan balances (%)
1.Includes Non-Performing Loans
2.Excess repayments based on available redraw and offset. Excludes Equity Manager accounts. Historical numbers restated as a result of data quality improvements
3.The current classification of Investor vs Owner Occupied, is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s obligation to advise
ANZ of any change in circumstances
4.Includes capitalised LMI premiums, doesn’t consider offset balances, and excludes unknown DLVR. Valuations updated to Aug 24 where available
5.Offset balances reflect only those balances linked to Home Loan accounts
Australia home loans - portfolio origination and attributes
Home loans portfolio, Sep 24ANZ Interest rate buffer & floor
ANZ flow borrowing capacity
3,5
, FY24
1.Accounts with missing assessed rate information are grouped into Customer Rate ≤ Assessed Rate based on the assumption that the assessed rate used in the mortgage assessment stage to account for borrower’s ability to repay at
origination should be higher than the current interest rate
2.Buffers are calculated at customer level, incorporating all Retail debts within the customer cluster at ANZ, and all funds avail able in ANZ redraw, offset and transaction and savings accounts
3.Uncommitted Monthly Income (UMI) is determined after income and expense buffers and shading are applied, and based on verified income only
4.The ~$28m 90+ days past due (DPD) represents <0.01% of the total Home Loans portfolio. ANZ delinquencies are calculated on a missed payment basis for amortising and Interest Only loans. Australia Home Loans 90+ between Mar 20
and Jun 20 excludes eligible Home Loans accounts that had requested COVID-19 assistance but due to delays in processing had not had the loan repayment deferral applied to the account
5.Majority of lending ‘at capacity’ is bridging finance while ‘minimal capacity’ reflects the proportion of customers with a borrowing capacity of less than $50 of uncommitted monthly income (UMI)
95
Home loan applications are assessed at the greater of the
customer interest rate plus the interest rate buffer or an
interest rate floor
Feb 20Feb 21Nov 21Current
Floor
5.25% 5.1%
Buffer above
customer rate
+2.5%+3.0%
75
249
Sep 24
Current Rate
≤ Assessed Rate
Current Rate
> Assessed Rate
324
14
61
Sep 24
>80% LVR
80% or
less LVR
75
7
7
Sep 24
No
Yes
14
2
5
Sep 24
No
Yes
7
Total Portfolio ($b)
Lenders mortgage
insurance
Origination LVR profile
Customer has 3
months+ savings
buffer
2
~$2b composition:
• ~$0.5b investor loans
•~$0.9b UMI > $1,000
3
•~$28m 90+ DPD
4
With the rising rate environment, 23% of
customers are now on interest rates higher
than their assessed interest rate
~0.6% of the total portfolio is in the higher
risk category, of which ~48% had
uncommitted monthly income (UMI)
3
>$1k
at assessment
89%
9%
2%
Surplus Capacity
Minimal Capacity
At Capacity
Australia home loans – portfolio performance
Home loans 90+ DPD ( by state)
1,2
Home loans delinquencies
1,2,3,4
% of portfolio segment balances
30+ DPD at September 24 by fixed rate expiry monthHome loans 90+ DPD ( by vintage)
5
,%
1.Includes Gross Impaired Assets and Hardship accounts
2.ANZ delinquencies are calculated on a missed payment basis for amortising and Interest Only loans
3.The current classification of Investor vs Owner Occupied, is based on ANZ’s product category, determined at origination as advised by the customer and the ongoing precision relies primarily on the customer’s obligation to advise ANZ of
any change in circumstances
4.30+ and 90+ between Mar 20 and Jun 20 excludes eligible Home Loans accounts that had requested COVID-19 assistance but due to delays in processing had not had the loan repayment deferral applied to the account
5.Home Loans 90+ days past due (DPD) vintages represent % ratio of ever 90+ delinquent (measured by # accounts), contains credit critical applications with at least 6 months on book
96
0.0
0.5
1.0
1.5
VIC & TASNSW & ACTQLDWASA & NTPortfolio
Sep 21Sep 22Sep 23Sep 24
% of portfolio segment balances
681012141618202224262830323436384042444648
0.0
0.5
1.0
1.5
2.0
2.5
FY16FY17FY18FY19FY20FY21FY22FY23
0
1
2
3
Sep
19
Mar
20
Sep
20
Mar
21
Sep
21
Mar
22
Sep
22
Mar
23
Sep
23
Mar
24
Sep
24
30+ DPD %90+ Owner Occupied90+ Investor
0.0
0.5
1.0
1.5
2.0
Sep 23Oct 23Nov 23Dec 23Jan 24Feb 24Mar 24Apr 24May 24Jun 24Jul 24Aug 24Sep 24
1.3%
1.3%
1.5%
1.8%
1.8%
1.6%
1.4%
1.5%
1.1%
1.3%
1.0%
0.7%
0.8%
30+ DPD by fixed rate expiry month
The chart reflects the 30+ DPD as at Sep 24 for all fixed rate loans that expired in the specified
month e.g. the 30+ DPD as at Sep 24 for all fixed rate loans that expired in Oct 23 is 1.31%.
Portfolio 30+ DPD
Lenders mortgage insurance
excluding Suncorp Bank
September full year 2024 resultsLMI & Reinsurance structure
ANZLMI claims loss ratios remained comparable to peers
1
97
Gross Written Premium ($m)
$89.1m
Net Claims Paid ($m)
$3.4m
Loss Rate (of Loan Exposure - annualised)
1.2bps
ANZLMI uses a diversified panel of reinsurers (10+) comprising a mix of APRA
authorised reinsurers and reinsurers with highly rated security
Reinsurance is comprised of a Quota Share arrangement with reinsurers for
mortgages 90% LVR and above and in addition an Aggregate Stop Loss
arrangement for policies over 80% LVR
Quota Share
4
Arrangement
Aggregate Stop Loss
2
Arrangement on
Net Risk Retained
3
> 80% LVR
> 90% LVR
2024 Reinsurance Arrangement
LVR<80%
Not
LMI
Insured
86%
Not LMI Insured
94%
LMI Insured
6%
Australian Home Loan portfolio LMI and Reinsurance structure at 30 Sep 24
(% New Business FUM Oct 23 to Sep 24)
1.Source: APRA general insurance statistics (loss ratio net of reinsurance) – Last publication of LMI Industry data was December 2022
2.Aggregate Stop Loss arrangement –reinsurer indemnifies ANZLMI for an aggregate (or cumulative) amount of losses in excess of a specified aggregate amount. When the sum of the losses exceeds the pre-agreed amount, the reinsurer
will be liable to pay the excess up to a pre-agreed upper limit
3.Net Risk Retained – risk after accounting for recoveries from Quota Share reinsurance arrangements
4.Quota Share arrangement - reinsurer assumes an agreed reinsured % whereby reinsurer shares all premiums and losses accordingly with ANZLMI
New Zealand home loans – portfolio overview
98
1. Source: RBNZ, market share at NZ Geography level 2. Flow excludes revolving credit facilities 3. Low documentation (Low Doc) lending allowed customers who met certain criteria to apply for a mortgage with reduced income
confirmation requirements. New Low Doc lending ceased in 2007
Unless otherwise stated metrics are based on balances
PortfolioFlow
FY22FY23FY24FY23FY24
% Paying Interest Only
13%11%
11%17%16%
% Paying Principal & Interest
87%89%
89%83%84%
% Broker Originated
47%50%
52%60%61%
Average LVR at Origination
56%55%
56%
Average Dynamic LVR
37%40%
42%
% Low Doc
3
0.22%0.20%
0.18%
Home Loan Loss Rate
0.00%0.00%
0.01%
% of NZ Geography Lending
71%72%
73%
55%
16%
16%
8%
5%
0-60%
61-70%
71-80%
81-90%
90%+
Home loan dynamic basis LVR profile
Housing portfolio by region
44%
11%
7%
12%
25%
1%
Auckland
Wellington
Christchurch
Other Sth Is.
Other Nth Is.
Other
PortfolioFlow
FY22FY23FY24FY23FY24
Number of Home Loan Accounts
538k545k555k50k56k
Total FUM (NZD)
104b107b111b19b21b
Average Loan Size (NZD)
194k197k200k371k382k
Market Share
1
30.4%30.4%
30.4%
% Owner Occupied
76%77%
77%81%79%
% Investor
24%23%
23%19%21%
% Paying Variable Rate Loan
2
11%11%
10%19%14%
% Paying Fixed Rate Loan
2
89%89%
90%81%86%
OurESGapproach
and related disclosures
Environmental,SocialandGovernance(ESG)
reporting
| ANZ
ESG
ShareholderCentre| ANZ
Climate
change| ANZ
ANZ
2023ModernSlaveryStatement
AtANZ,ourpurposeis toshapea worldwherepeople and
communitiesthrive.
IntegratingESGandpurposeintoourstrategyhas createdan
opportunityforustobetterserveour customersandgenerate
long-termshareholdervalue
.
OurESGapproachis focusedonrespondingtothefivekey
materialsissues:
Housing
Ethics,conductand
culture
Environmental
sustainability
Informationsecurity
Financialwellbeing
Responsiblecustomer
engagement
Accessingaffordable housing| ANZ
Financial
wellbeing| ANZ
99
Shareholder centre and investor relations contacts
100
Group Investor RelationsRetail investorsDebt investors
Jill Campbell
Group General Manager
Investor Relations
+61 3 8654 7749
+61 412 047 448
jill.campbell@anz.com
Cameron Davis
Executive Manager
Investor Relations
+61 3 8654 7716
+61 421 613 819
cameron.davis@anz.com
Pavita Sivakumar
Senior Manager
Investor Relations
+61 3 8655 2597
+61 466 848 027
pavita.sivakumar@anz.com
Michelle Weerakoon
Manager
Shareholder Services & Events
+61 3 8654 7682
+61 411 143 090
michelle.weerakoon@anz.com
David Goode
Head of
Debt Investor Relations
+61 410 495 399
david.goode@anz.com
Steve Aquilina
Associate Director
Debt Investor Relations
+61 447 744 542
steven.aquilina@anz.com
ANZ Shareholder Centre
https://www.anz.com/shareholder/centre/
ANZ Debt Investors Centre
https://www.anz.com/debtinvestors/centre/
---
Summary of key financial information
ANZ New Zealand
Sep 24Mar 24Sep 24Sep 23
NZ$mNZ$mNZ$m%NZ$mNZ$mNZ$m%
Net interest income2,174 2,142 32 1%4,316 4,239 77 2%
Other operating income348 382 (34)-9%730 774 (44)-6%
Operating income2,522 2,524 (2)0%5,046 5,013 33 1%
Operating expenses(901)(859)(42)5%(1,760)(1,659)(101)6%
Profit before credit impairment and income tax1,621 1,665 (44)-3%3,286 3,354 (68)-2%
Credit impairment release/(charge)(11)(33)22 -67%(44)(183)139 -76%
Profit before income tax1,610 1,632 (22)-1%3,242 3,171 71 2%
Income tax expense(458)(463)5 -1%(921)(882)(39)4%
Non-controlling interests
1
(21)(14)(7)50%(35)(27)(8)30%
Cash profit1,131 1,155 (24)-2%2,286 2,262 24 1%
Economic hedges
2
(78)(117)39 -33%(195)(127)(68)54%
Statutory profit
1
1,053 1,038 15 1%2,091 2,135 (44)-2%
Comprising:
Personal585 545 40 7%1,130 1,129 1 0%
Business & Agri225 305 (80)-26%530 544 (14)-3%
Central Functions4 2 2 100%6 3 3 100%
New Zealand Division814 852 (38)-4%1,666 1,676 (10)-1%
Institutional293 280 13 5%573 542 31 6%
Group Centre24 23 1 4%47 44 3 7%
Cash profit1,131 1,155 (24)-2%2,286 2,262 24 1%
Economic hedges
2
(78)(117)39 -33%(195)(127)(68)54%
Statutory profit
1
1,053 1,038 15 1%2,091 2,135 (44)-2%
1. Non-controlling interests and Statutory profit
2. Economic hedges
Half yearFull year
Fair value gains and losses are recognised in the Income Statement on economic hedges used to manage interest rate and foreign
exchange risk. The mark to market adjustments on these derivatives, not designated in an accounting hedge, are removed from
cash profit as the fair value gains or losses will reverse over time to match the profit or loss on the hedged item.
Profit attributable to non-controlling interests comprises dividends paid to holders of NZX listed preference shares issued by ANZ
Bank New Zealand Ltd. Statutory profit shown above is that attributable to shareholders of ANZ Group Holdings Ltd.
MovementMovement
=== IR PAGE TRANSCRIPT: 2024 Full Year Results Announcement Transcript ===
ANZ 2024 Full Year Results
08 November 2024
Page 1 of 46
Start of Transcript
Jill Campbell: Hi. Good morning, everybody. Thanks for joining us for the presentation of
our full year financial 2024 results. We're presenting this morning from our offices in
Melbourne which stands on the lands of the Wurundjeri people.
On behalf of the ANZ team speaking today, I pay my respects to Elders past and present,
and I also extend my respects to any Aboriginal and Torres Strait Islander people joining
us for today's presentation.
Our result materials were lodged this morning with the ASX. They are also available on
the ANZ website in the shareholder centre. A reply of this presentation, including the Q&A,
will be available on our website shortly after we finish.
The results presentation material and the presentation being broadcast today may contain
forward looking statements or opinions, and in that regard, I draw your attention to the
disclaimer in the front of the results slide pack.
Our CEO, Shayne Elliott, and CFO, Farhan Faruqui, will present for around 35 minutes.
After that, I'll go through the Q&A procedure before we move to questions. But ahead of
that, a reminder that if you do want to ask questions, you can only do that via the phone.
With that, over to you, Shayne.
Shayne Elliott: Hey, good morning. 2024 was pivotal for ANZ. First, we completed the
purchase of Suncorp Bank and the bank we bought is performing even better than when
we announced the deal over two years ago. We're confident synergies will be larger and
earlier than planned.
Second, we completed the sale of AmBank shares, contributing to one of our largest
buybacks which has already reduced our share count by 30 million, and more coming.
Third, Institutional delivered another record result on the back of our industry leading
platform, Transactive. Record revenues, record profit before provisions, and record return
on equity.
Finally, ANZ Plus emerged as a key competitive strength. In just two years, Plus has
achieved 1% share of all retail deposits across Australia, purely through customers opting
in.
It's already home to nearly one in five of our active Australian retail customers, with high
levels of engagement, industry leading net promotor scores, best in class security, and all
at a substantially lower cost to acquire and serve.
ANZ 2024 Full Year Results
08 November 2024
Page 2 of 46
Strategically, we've long believed that banking is challenged by greater customer
regulatory and community expectations, sharper competition, and higher costs. That's
why we're moving to lower cost adaptable platforms that deliver better financial wellbeing
and sustainability outcomes for customers.
Our migration from an uncoordinated ageing set of systems and processes to a
contemporary dual platform business is well progressed, where all customers from ANZ
and Suncorp from anywhere globally, irrespective of size, needs, or complexity, will be
using Plus or Transactive.
This delivers resilience, lower cost, and the ability to bring new propositions to market
faster than others which will drive growth and market share. We've invested around $2.5
billion in platforms and tools over the past five years, completing the foundational tech
stack at both Plus and Transactive. That investment is delivering now.
2024 was our second highest revenue ever. Basically, flat with our record 2023 result on a
constant currency basis. Lending, deposit, and transaction volumes grew strongly with
well managed margins.
Now, looking through the acquisition accounting, cash earnings and earnings per share
were up strongly over two and three years, enabling better dividends for shareholders.
Customer deposits increased 11% year on year from onboarding Suncorp Bank plus
organic growth.
We now have the second largest customer deposit base of any Australian bank. We
increased lending similarly, with a step up of $102 billion in gross lending assets, up 15%
FX adjusted.
Credit losses remain low, reflecting local industry trends but ANZ is consistently
outperforming due to derisking, and we believe this is sustainable. Capital efficiency
programs released around $30 billion of risk weighted assets and several debt ratings were
upgraded during the year.
So, in addition to our strengthening number 1 positions in Institutional and New Zealand,
we now occupy a clear and growing number 3 position in Australian Retail. Shareholders
received total returns of 27% over the year and approximately 50% across the last two
financial years.
It's pleasing to announce a final year dividend of 83 cents per share, franked at 70% which
is higher than the first half.
ANZ 2024 Full Year Results
08 November 2024
Page 3 of 46
Now, just a quick update on the bank we've bought and how this supports the bank we're
building. Our investment in Suncorp Bank was to build scale and provide a platform for
growth in Queensland, Australia's fastest growing state and youngest demographic.
In August, we welcomed 3000 Suncorp Bank colleagues and 1.2 million customers. From
the outset, the business has exceeded expectations. This is a quality business, with
significant upside when combined with the power of ANZ's technology and scale.
Now, in the two years since announcement, the bank we bought did not stand still, it just
got better. Customer numbers, loans, deposits grew, and impaired assets fell. We've
welcomed a highly engaged workforce. They're excited about the opportunity a larger
bank with better technology and access to 29 Markets brings to their customers and their
careers.
Now, a few months in, we've already had some early wins. So, three simple examples. In
the very first week, we approved a $100 million loan in 24 hours rather than the weeks
that they were used to as the benefits of a bank-owned bank became clear.
Second, we quickly reset their risk appetite, allowing faster growth. Reflecting the benefit
of being part of a larger, more diversified portfolio. Third, we've seen wholesale funding
costs improve by 10 to 15 basis points as the market priced in the benefits of ANZ's
ownership. That will save 10’s of millions every year once that's rolled through the book.
Now, they're just a few examples of why we're more confident that synergies will be larger
and earlier. We're going to provide more details at the first half results next year.
Now turning to the bank we're building. In four years, ANZ turns 200. Now, less than 42
months away, we aspire for ANZ to be radically better as we celebrate our bicentenary.
While the environment will continue to evolve, at this point, it's our ambition that well
before then, any individual in Australia will be able to join Plus and fulfil their everyday
banking and home ownership needs.
Plus will be the only way to join ANZ for retail customers from 2027. Cognitive
technologies like generative AI will be embedded within Plus, helping customers make
more of their money.
Those prototypes are already under development with our AI partner in Palo Alto. By the
end of '28, our Australian Retail customers, including Suncorp, will be migrated and
enjoying Plus.
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08 November 2024
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Small businesses will also be able to join Plus and fulfil their needs in a rich and engaging
way using AI and advanced analytic tools to help them run their businesses better. All of
our midsize corporates within Commercial will have already migrated to Transactive,
mostly before 2026.
So, there'll be a progressive decommissioning of channels, systems, and processes at ANZ
and Suncorp along the way. That will accelerate from 2026. Our dual platform vision will
be a firm reality.
Now, key to this is Plus, which is experiencing exponential expansion and growth. This
financial year, Plus customers grew 84% to nearly 850,000 with 48% first time ANZ
customers.
We welcome around 30,000 onto Plus every month. Roughly 50/50 new and existing
customers. Transaction numbers grew much faster. Almost 300% year on year. Three
and a half times faster than the customer number growth which demonstrates how quickly
our new customers adopt Plus for everyday needs.
In fact, 58% of Plus customers now consider ANZ as a main financial Institution. Which
means that they're either depositing their salaries or they're using it regularly for
payments. As a result, deposits grew 70% to almost $16 billion, with average saving
balances stable at around $19,000.
Now, interestingly, despite changes to our deposit conditions and pricing, deposit growth
this October was 22% higher than last October. Now, in line with our financial wellbeing
strategy, almost half of Plus customers use at least one financial wellbeing feature, such as
roundups, or card, or crypto controls, and with many using more than one.
More than a third are actively pursuing a savings goal. So, customers aren't just joining
plus, they're actively embracing it. Irrespective of platform, Retail and Commercial
customer engagement has improved dramatically based on investments we've made in
personalisation.
In 2024, we increased personalised messages by sevenfold to almost 300 million,
supporting a 20% uplift in digital sales and a two year high in brand consideration. We
continued to add Plus features, enriching the experience and smoothing the path to
migration, including the ability to move billers and payees from ANZ's existing app to Plus
at the touch of a button, which has long been a point of friction for customers migrating or
changing bank.
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08 November 2024
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We've launched joint accounts and offsets, which are critical as we accelerate Plus home
loans. We launched a richer set of savings products, including conditional bonus deposits.
We integrated cash rewards, Australia's number one cashback provider with 2 million
members which we fully own, bringing savings to customers at a time when many are
looking to make their money go further.
Roundups. Delivered in just six weeks and already used by 14% of Plus customers who
have saved more than $12 million from this simple tool. Simple but we remain the only
major bank to offer it. Again, showing the value of the tech stack investment.
These features are great for customers but importantly, they lay the foundations for the
smooth transition of ANZ and Suncorp customers to Plus which is now 35% cheaper to
serve - a significant improvement from 20% cheaper a year ago, which really shows the
benefits of scale.
But the most exciting feature is the most recent, ANZ My Accounts. This is the first time a
major Australian bank has leveraged open banking, allowing customers to import balances
and transaction details from any other Australian bank to get a consolidated view of their
financials. Now launched quietly just seven weeks ago, already more than 50,000
customers have explored it. It's an important additional step to help make ANZ Plus their
home bank. We're excited about the capabilities from here, particularly leveraging AI and
advanced analytics.
Look, given strong momentum, we're working really hard and hope to begin scaled
migration of existing ANZ save and transact customers to Plus, in the next six to nine
months. They'll be moving to a simpler, safer, digital-first AI enhanced proposition,
enabling us to deepen relationships and decommission legacy products, channels and
platforms.
Well before Plus, we were investing in Institutional Payments and Cash Management,
including a platform which is now the market leader - Transactive Global. I can't
emphasise enough how important payments capability is, to Institutional. Helping
companies move and manage money is core to our relationships.
When you are a company's payments bank, it's the equivalent of being a main financial
Institution for a retail customer. It's the basis for longer, broader relationships, driving
higher customer value and higher returns, not just in payments, but across the board,
including lending and Markets.
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08 November 2024
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That's why innovation and technology leadership matters. So, if Plus is the key platform for
retail and small business customers, Transactive is our key platform for larger businesses
and multinationals. Put simply it's the banking app for corporate treasurers and business
owners.
It attracts and retains deposits by offering a secure digital banking platform, integrating
features such as Falcon, which allows businesses to move and manage money, make
payments and foreign exchange transactions, manage trade finance, loans, commercial
cards, and importantly receive data insights all on a mobile app.
What started with single sign-on accounts in 2014 has developed significantly with digital
payment volume growing 117% since 2020 and the cost per payment falling 45%, about
10% every year.
Transactive is the backbone of Institutional success, and it's extending its impact. We
already deliver the power of Transactive to midsize corporates in our Commercial business.
They make up 71% of the active users, having grown almost a third since 2021 and they
generate about 12% of our Australian payment volumes.
Now underpinned by Transactive, our overall payments offering keeps getting stronger.
Technology leadership has allowed us to provide clearing services to more than 90% of the
world's globally systemically important banks, and capture around 60% of the market for
Aussie and Kiwi dollar clearing. We won more mandates this year, which will see that share
increase further.
More generally, payments continues to be fast evolving with ANZ right at the forefront
given our unmatched network and sustained investment in Plus and Transactive. We led
with NPP and we're now leading with PayTo, which is revolutionising Australian payments.
ANZ is the only bank to have activated PayTo across all segments and channels. Now let
me just bring this to life. Using ANZ PayTo, customers can already purchase international
flights through one of the world's largest airlines instantly and safely without credit card
fees.
We've also tested PayTo with a major global car company, which will allow people to buy a
new car at low cost using our natively built platform. So, no need for cumbersome bank
transfers or checks and all done securely in real time, reducing the risk of error and scams.
We're also leveraging our leadership in tokenisation. Now, you may not realise that after
superannuation gets paid, it can take weeks to be invested. We completed a
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08 November 2024
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groundbreaking tokenisation pilot with two major super funds and a clearinghouse to
reduce that to seconds, putting hundreds if not thousands of investment dollars in the
hands of regular hardworking people faster so they can generate better returns.
It also allows the Super funds to instantly reconcile member accounts, saving time and
money. These innovations are transforming ANZ, delivering higher revenue and share, and
it's pleasing to see this recognised with ANZ named as the best bank for payments globally
by Global Finance Magazine.
Institutional now generates much of its income from these low risk, low capital processing
businesses, which is helping drive a doubling in its return on equity since 2016. That's just
not possible without sustained investment and a disciplined commitment to a market
leading platform, which we're now applying to other parts of the Bank, including ANZ Plus.
At the first half, I outlined six priorities, and we've made substantial progress across the
board. Looking ahead, the FY25 priorities agreed with the Board include first, ensuring that
we retain an engaged purpose-led culture, driving better customer outcomes, and
strengthening the management of non-financial risk.
Second, delivering strong financials focused on sustainable growth and returns. Third,
driving value from Suncorp Bank, capturing the synergies, managing costs, and growing
high value customer deposits. Fourth, making ANZ Plus even more successful, launching
relevant features that will support migration, adding customers, deepening their
engagement, and launching our first scaled migration.
Fifth, continuing to improve platform excellence, functionality and resilience. Finally,
remaining focused on productivity.
Now I'd like to stress that we are committed to addressing the concerns raised around
non-financial risk management, getting those changes embedded to improve the way we
manage the Bank, and have the capital overlay removed.
Now before closing, I would like to take you back to 2016 when we were first to talk about
the need to build a simpler, better bank. We sold more than 30 businesses. We
decommissioned products, we streamlined processes. We radically reduced our
Institutional customer base. We took out a bunch of costs, and we built a stronger
de-risked balance sheet.
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08 November 2024
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That work continues but in 2024, we pivoted to the next phase of simplification, the
simplification of our technology to a dual platform future. We're well advanced and this
phase will be even more powerful and the advantages harder to replicate.
I've referenced AI and advanced analytics several times this morning, and that's
deliberate. Like the web, mobile, and cloud revolutions, AI will fundamentally change the
way we operate, serve customers, and compete. In our view, the impact will be more
profound.
It will drive a step change in productivity, but more importantly, it can drive competitive
advantage. Every bank will use out of the box copilots, and they'll use them well. These
are tactical tools that will be table stakes, and the advantages will be competed away to
the benefit of customers.
No different than how we all use Microsoft Office today, but the competitive advantage
accrues to those who engineer strategic solutions using AI and intelligent automation into
their propositions and into critical operations. That's only possible for the few who've
invested in building the contemporary technology and data platforms required.
You can't build a skyscraper on sand, and you can't build it overnight. We have built that
stack in Plus and Transactive. The foundations are complete, and we are ready to leverage
them. We have a team of some 7,000 engineers, mostly writing software that millions of
our customers use daily.
At peak, every second of the day, more than 200 customers look at their bank accounts
and 300 payments are made, all done through the solutions our team engineers. We have
systematically been giving modern tools to our engineers to help them, to help them write
software faster, better, safer, because the better the tools, the better our engineers are.
We added GitHub Copilot over a year ago, and all our leading engineering teams use it
daily. As a result, more than 7% of the code written at ANZ in the last six months was
written by AI and that number will only increase.
So, unlike peers who will continue struggling with multiple legacy, high cost, and
ponderous platforms, our ambition is to have the simplest contemporary platforms
powered by the best partners. Partners like Salesforce, ServiceNow, Adobe, AWS and Zafin
but augmented by leading internal innovation.
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08 November 2024
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Getting that right, allows us to better serve customers, help them for longer at
substantially lower cost with faster deployment, unlocking the real benefits of
simplification. With that, I'll hand over to Farhan.
Farhan Faruqui: Thank you, Shayne and good morning, everyone. As Shayne mentioned,
2024 has been a pivotal year in terms of progress on strategic goals. Our financial
performance this year showed resilience coming off a record year for the sector in FY23.
When we look through what was in many ways a highly unusual year, our trends have
been consistently strong. Since FY21, Group revenue has increased 19% with profit before
provisions up 20% and cash profit up 12%. This has been delivered in an environment
characterised by inflation, heightened competition, and macro uncertainty.
In addition, we have taken steps in the year to optimise Group ROE, including the
divestment of our stake in AmBank, continuing the announced on-market share buyback
and finally being able to deploy capital raised in '22 towards Suncorp Bank.
This builds on the work we have done since 2016 to optimise capital allocation and
productivity, including exiting of non-core businesses such as Asia Retail, partnerships,
wealth, insurance and dealer finance, reshaping Institutional to optimise ROE, and reduce
risk, with the business achieving a record ROE this year and delivering over $1.7 billion in
cumulative cost savings.
Ju st to put this in perspective, this is equivalent to about 16% of our current expense
base. Collectively, these initiatives have given us the capacity to invest in value-accretive
opportunities, which have added capability and scale such as Transactive and ANZ Plus, as
well as the acquisition of Suncorp Bank, while returning capital to shareholders via
buybacks and dividends.
Suncorp Bank joined the Group on 1 August this year. Therefore, our financial results
include two months of Suncorp Bank earnings, as well as acquisition related adjustments,
which we announced last week.
Group revenue for the year on a constant currency basis was broadly flat compared to a
record FY23. This was driven by strong ANZ performance with only two months of Suncorp
Bank financials included in FY24 results.
Additionally, the acquisition has increased scale in both our Retail and Commercial
businesses, and on a consolidated basis, ANZ now holds the second highest customer
deposit base relative to our domestic peers.
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08 November 2024
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It's important to mention that the second half of FY24 includes two months of Suncorp
Bank expenses affecting both half-on-half and year-on-year comparisons. I realise that
comparisons this year are somewhat complicated by the Suncorp Bank acquisition and the
accounting adjustments that were required.
So to be clear, the Group cash profit for the FY24 year, excluding the accounting
adjustments, which were one-off, was $6.92 billion. I will provide further detail on Suncorp
Bank later in my remarks, but I will now focus on the ANZ financial performance excluding
the contribution from Suncorp Bank. I will begin by discussing our business and this year's
performance in a way that aligns with how we think about the Group.
Essentially, ANZ consists of two main businesses, Banking and Markets. Around 90% of
our revenue comes from our Banking business, which offers lending, trade deposits, and
payment services to 11 million Retail and Commercial customers in Australia and New
Zealand, and around 6,500 Institutional customers globally.
We manage this business to optimise net interest margin, and return on equity. Our
MMarkets business comprises the remaining 10% of Group revenue and acts as an
intermediary to provide risk management solutions in areas such as rates, credit, foreign
exchange, and commodities to our retail and corporate customers. It is complementary to
our Banking business, deepening relationships and lifting average customer returns.
We manage the MMarkets business to optimise revenue and ROE. We also operate a Group
centre, which is similar in size to the corporate centres of our domestic peers. It manages
shared services which do not lend themselves to being allocated to operating divisions,
such as costs related to central functions like financial policy control and risk modelling, as
well as capital associated with our Asian partnerships.
Completion of the Suncorp Bank acquisition, together with the share buyback currently
underway, which was partly funded by the sale of our AmBank shareholding, reduced
capital held in the Group centre by approximately $6 billion. This, therefore, had the effect
of reducing capital allocated to non-operating investments.
We remain focused on optimisation opportunities here, including further asset disposals
and completing the $2 billion share buyback.
In aggregate, our Banking business is producing attractive cost to income and margin
outcomes that are comparable to or better than our major domestic peers. These returns
are underpinned by a relatively high proportion of low risk, high return banking activity,
including liability led businesses.
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08 November 2024
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These businesses support ANZ's strong customer funding base and include our Payments
and Cash Management business with $110 billion of operational deposits. In Australia
Commercial, with a $116 billion book of relatively low-cost deposits, $55 billion of which is
surplus funding that supports our Australia Retail loan book.
On the asset side, we have de-risked our portfolio over several years while lifting credit
margins to improve our return on risk. In addition to attractive returns, our Banking
business has also delivered strong growth over time, with a particular focus on higher
marginal ROE areas.
Over the last five years, for example, 9% per annum deposit volume growth in Payments
and Cash Management and 5% per annum growth in pre-provision profit in New Zealand.
Moving to our banking business performance, revenue is higher, half-on-half, underpinned
by average interest earning asset growth across all divisions and continued margin
discipline with the second half of FY24 seeing the highest risk-adjusted margin in a decade.
On a constant currency basis all our businesses grew revenue in the half. Profit before
provision was flat, with a continued focus on productivity resulting in a stable cost to
income outcome, despite inflationary pressures.
As I mentioned earlier, we manage the Banking business to optimise net interest margin
and return on equity. Our banking NIM of 248 basis points for this year, compares
favourably to the trend from FY21 to FY24.
I will speak and focus on banking NIM trends in future results but for continuity today we
have provided a waterfall explaining the changes in Group headline NIM for the second
half, which was up two basis points, half-on-half.
Let me point out the key changes. Minimal impact from home loan growth across both the
Australian and New Zealand mortgage books, back book repricing in Australia continued to
slow over the course of the half while in New Zealand, front book margins improved.
Continued competition and deposits across our businesses but the impact in the half is
largely felt in New Zealand. However, in New Zealand asset and deposit margin
movements largely offset each other. Some residual wholesale funding impacts from
retiring TFF funding, which in conjunction with the modest increase in short-term basis
spreads, drove one basis point of compression.
Liability mix shifts, which have been a significant factor for the sector over several halves
has slowed substantially and our deposit mix was unchanged in the half. Increase of four
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08 November 2024
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basis points from asset and funding mix, partly due to lower cash balances in Group
treasury.
Finally, completion of the Suncorp transaction reduced capital volume in the second half.
As a result, ITOC volumes in the half were lower but we benefitted from rolling maturities
at higher rates on our capital and replicating hedges, which will continue to provide a
benefit in FY25.
Moving to banking deposits, customer deposits grew 3% organically year-on-year with mix
stable in the second half. Including Suncorp Bank, our total customer deposit base is now
the second largest amongst the major banks. We acknowledge that continued competition
and rate cycle uncertainties represent a challenge for the banking sector.
In response to this backdrop, we have made significant investments in developing two
scalable platforms, Transactive and Plus, which we'll see ANZ become a simpler two
platform bank with lower unit costs per dollar of FUM. That in turn, reduces the Group's
sensitivity to further margin pressures from rates or competition.
In Payments and Cash Management for example, the $1.2 billion we have invested in
developing scale and capability has driven a 22% reduction in the unit cost of FUM over
the last five years. During the same period, PCM deposits increased 51% and digital
payments increased 129%.
This is a high performing business powered by multi-year investments, strong regional
footprint, and a high-quality global customer franchise, making the business resilient and
difficult to replicate.
Similar to our PCM business, the investment in developing the Plus platform has delivered
a 45% lower cost to acquire and 35% lower cost to serve to date relative to ANZ's Cl assic
platform. These benefits will continue to improve, with scaled migration to Plus starting in
calendar year '25 , and by structurally reducing our unit cost of FUM, all else equal, we can
generate the same earnings and ROE in a lower interest rate environment, making our
business more resilient across the cycle.
As I mentioned earlier in my remarks, we manage the Market's business for total revenue
to optimise return on equity and on these measures, MMarkets delivered another strong
result in FY24, with total customer revenue up circa 9% year-on-year, supported by strong
volume growth. We ended the year with strong momentum, with our fourth quarter one of
the strongest ends to the year in a number of years.
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08 November 2024
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Similar to the approach we have taken in our banking business, we have invested at scale
in Markets to create resilience against spread and margin compression over time in order
to maintain an attractive return on equity, which has averaged 11% over the last five
years. For example, in our highly profitable FX business, the benefits of increased
digitisation are clear. The business processes 7,000 FX price updates per second and FX
turnover is about 60% higher than it was three years ago, with over 90% of flows now
being digital.
Now to expenses. We have maintained our strong track record of cost management with a
3% underlying cost increase for the year, despite ongoing inflation, while sustaining our
strategic investment spend. The primary drivers of cost growth were increases in salary
and third-party vendor costs which moderated slightly compared to the prior year. Second
half expenditures increased 2%, driven by seasonality, and acceleration of Suncorp Bank
integration post-completion.
We continue to support our strategic priorities, enhancing our technology capacity and
capability to drive sustainable growth. To create capacity for these investments, we
maintained a sharp focus on productivity, achieving our highest ever full year benefit of
nearly $400 million. Outside of underlying cost movements, two areas of uplift were
restructuring costs and Suncorp integration. Restructuring was in support of a net
reduction of 800 FTE in FY24, which represents our largest annual organic FTE reduction
since 2018.
ANZ has had an investment spend of around $2 billion per annum for the last there years.
This included the build of the Transactive platform, the technology stack, barring ANZ Plus
and the BS 11 regulatory program in New Zealand along with some other strategic
programs like cloud migration. These programs have now met key milestones or have
been completed such as in the case of BS 11. It is now appropriate for a portion of the
associated expenditures to be allocated to BAU run costs.
Going forward therefore, we will report against an annual baseline investment spend of
around $1.5 billion for ANZ ex Suncorp Bank. Importantly, with an OpEx rate of over 80%,
we continue to pay for our spend up front and as a result, depreciation and amortisation
was unchanged year-on-year and we continue to have the lowest software capitalisation
balance of our peers.
Moving to credit quality, for the third year in a row we had a peer-leading IP loss rate of
two basis points, with an IP charge of $106 million in the half. That is less than a third of
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08 November 2024
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the peer average loss rate. Our IP loss rate has remained lower than our peers for the past
three years, in part reflecting a benign credit environment, but more so because of years
of proactive derisking.
This derisking is evident in the embedded credit risk in our lending portfolio today. Setting
aside residential mortgages, which are well secured, and sovereign exposures which have
low expected loss rates, the average risk weight on our corporate FI and non-mortgage
retail portfolios, which you can see on the top right-hand side of this slide, is well below
peers. That's in line with our impairment charge experience.
Moving to portfolio trends, consistent with the broader banking sector and following
several years of historically low levels of home loan delinquency trends, we are seeing
some pockets of weakness. This uptick is off a low base and improved analytics of our
customer data is allowing us to more proactively identify customers in hardship and
engage with them to identify solutions.
Importantly though, these portfolios remain well secured, with a dynamic LVR of 42% in
both the Australian and New Zealand home loan books. Borrowers who are 90 days past
due and in negative equity, represent 0.04% of the total home loan portfolio, implying
limited risk of loss.
Our collective provision balance was steady at $4 billion for ANZ ex Suncorp Bank, but our
coverage levels for the Group moved up five basis points to 1.21% post new home loan PD
and LDG models implemented during the half, which now more appropriately reflect the
underlying portfolio risk.
When looking at CP coverage, it is important to consider the split of the loan book between
performing and non-performing. As you can see on the top right-hand side, the CP
coverage for our performing exposures, which comprise over 99% of our portfolio is
comparable to peers. On the bottom right-hand side, you can see that we have a lower
proportion of our exposures in default relative to peers. Given the above, and our lower
risk intensity portfolio, we are confident that we remain appropriately provided.
Moving to capital and capital management, ANZ's capital position remains strong with a
CET1 ratio of 12.2%. This is net of the impact of the Suncorp acquisition and the full
impact of the $2 billion share buyback which are captured in the 12.2%. At the end of the
financial year, we had completed around half of the buyback and expect to complete the
remaining portion by the end of first half 2025.
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08 November 2024
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Capital efficiency is a priority for our Board and management, and in addition to strong
organic capital generation in the half and the year, capital benefits emerged from the sale
of AmBank, which released $900 million of centrally held capital, as well as the updated
risk models especially for our mortgage books, which now more appropriately reflect the
underlying risk of these portfolios.
In aggregate, this generated $9.2 billion of capital. This has been deployed into return
accretive growth, the buyback on foot and dividends of $5.3 billion. The capital generation
and usage here shown does not include Suncorp Bank as the capital was already set aside
at the start of the year.
Shayne spoke to the momentum in the Sun business, which has led to a step up in pre-
synergy shareholder value, largely driven by Suncorp customer deposits up 14% and
deposit revenue doubling since we announced the acquisition in July 2022. A dedicated
team worked throughout the two-year period, from announcement to finalisation, to
prepare for the day-one transition of the Suncorp Bank business, including its people, into
ANZ.
This work has meant that the transition could be accomplished promptly once the final
approvals came through and importantly, this quite complex program of work went
smoothly. As we progress our work on integration, we believe we will be able to drive more
value from Suncorp Bank and sooner than we had initially anticipated.
My remarks today have been largely on an ANZ excluding-Suncorp basis given the
relatively brief period of ownership. While we're not providing a forecast, my second slide
should help you to consider the end of financial year position for the consolidated Group.
Based on ANZ's ex Suncorp Bank FY24 results and the annualised Suncorp Bank results
based on two months of our ownership, the FY24 baseline would be approximately $22.1
billion revenue and $11.45 billion cost for the consolidated Group, which equates to a
broadly similar CTI outcome to that for the ANZ Group excluding Suncorp Bank in FY24.
We'll speak further about Suncorp Bank performance, investment spend, and synergies, at
the first half 2025 results.
In closing, we are well positioned as we move into FY25, exiting 2024 with a good
momentum across our Banking and Markets businesses. My key focuses here remains on
continuing to deliver strong financial outcomes through a focus on productivity and
profitability, driving value from the Suncorp Bank transaction and strong capital and
balance sheet management.
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08 November 2024
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Thank you and with that I'll hand back to Jill for Q&A.
Jill Campbell: Thanks Farhan and Shayne. Now you've been through this Q&A procedure
many, many times, I don't need to bore you with that, but just for old time's sake, I'll
hand back to the operator shortly, she will give you the instructions as to how to ring
through, she'll turn to the first question and the questions thereafter. If you could try to
keep your questions to two; if there are any we don't get to, you can ring Cameron,
myself, Pavita this afternoon and we'll help work through those.
So with that, [Rachel], I'll hand back to you to start the questions, and I think the first
one's from Jon Mott.
Operator: Thank you. If you wish to ask a question, please press star/one on your
telephone and wait for your name to be announced. If you wish to cancel your request,
please press star/two. Your first question is from Jonathan Mott with Barrenjoey. Please go
ahead.
Jonathan Mott: (Barrenjoey, Analyst) Thank you. First question to Shayne, you spent quite
a lot of time talking about Plus and Transactive and you put some numbers out. I just
wanted to consolidate them and make sure everyone's on the same page with how this is
all going. So, $2.5 billion has being spent so far on Plus and Transactive, you're saying
that it's 35% cheaper to serve the customers and you're going to start decommissioning
your old systems from 2026, but then really kick in in 2027.
So, I wanted to get a feel for that, because it would imply, as you start to decommission
these systems and move everyone over, costs are rising in the next year or two, but you
should get absolute cost reduction from 2027 onwards to offset the NIM pressure that
you're anticipating as AI and everything else kicks in. Is that correct? I just wanted to get
that feel for the outer years.
Shayne Elliott: Yes, thanks Jonathan, it's a good question. So strategically and
directionally, yes that is correct, that is the ambition that we have and that's the plans that
we have in place, right? So, we need to complete the build out of Plus in particular.
Transactive is largely fit for purpose, number one in market, yes of course we need to add
things to it, but that's largely kind of done.
Plus, we've still got some work to do because we need to round out and particularly get
cards, term deposits and the broker channel onto that and that's going to be over the next
out towards 2026 and we also need to enable small businesses with an ABN to be able to
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08 November 2024
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join. That prototype is already in place now but we've got to get all that so we can migrate
the customers.
But your timing is right. We expect that cost-to-serve number to continue to improve, so it
was 20% cheaper a year ago, it's now 35%. Look, don't ask me for what the end state is, I
don't know, but we'd expect that gap to grow.
In terms of the investment required to get there, to do all that what I've just talked about,
let me put migration aside just for a second and Suncorp, the core basic – what we're
saying that is essentially in our run rate now, yes? Okay, there'll be a little bit of inflation
in there, but for all intents and purposes, within the spend rate and investment rate we
have now for Plus and Transactive, we should be able to achieve those ambitions, and any
sort of uplift will be reasonably modest.
But you might want to talk a little bit more, Farhan, in terms of the – because 2027, to be
fair, it's hard to....
Farhan Faruqui: 2027 is hard, Jonathan and as you know, there are lots of moving parts
here. But I think if you look forward for the next year or so, we'll probably see some
moderation of inflation in terms of the cost around salary and wages, et cetera. Vendor
inflation is hard to call because it depends on contract maturities, et cetera, but we expect
that to continue.
We'll probably see similar levels of restructuring costs because we are focused on
productivity, it's going to continue, and we'll probably see slightly more elevation in terms
of cost around Suncorp integration and migration as we start to prepare for that transition
of customers from Suncorp onto Plus.
So all in all, we saw 3% underlying, 4% if you include restructuring and Suncorp
integration costs, we expect costs next year to be in the similar range, with the mix
changing a little bit in terms of where the inflation and impacts are, but broadly speaking,
that's a reasonable estimate to think about for 2025. Then as Shayne said, over the next
two or three years we'll hopefully look to getting those synergies which we'll hope to offset
that cost.
Shayne Elliott: But the broader point that you said, yes, the strategy here basically says
when you think about Retail banking in Australia, which the industry is under massive
profit challenge, and we talked about why and you all know that. The only, in our view, the
only path forward is to get onto substantially lower cost, more nimble platforms and we
have one.
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So we're making really good progress, we've got to get our customers onto this so that we
can decommission the old, so that we now have in absolute basis, to your point, for retail
and small business later, a lower absolute cost base for running the business. Because
that, when you think about the whole, the economic profit pool and the things that we get
to control, we're a price taker and many of those, we've got our cost to funds, all those
other things, operational costs is one of those ones that we really do have the ability to
manage and do better.
That gives us obviously a step advantage and we think that that is actually going to be
much harder for others to replicate, particularly if you're starting from scratch now.
Jonathan Mott: (Barrenjoey, Analyst) Thank you. The second question if I could and this
goes to slide 32, which is capital efficiency and one line that really sticks out to me is the
$2.2 billion that you've generated in excess capital from model updates, one of my pet
topics. If you think about that, it's about a third of the profit of the Group was generated
equivalent of from model updates, it generated more capital than the profit from Retail,
Commercial and New Zealand divisions and it more than offset the credit risk weighted
assets that you got coming over from Suncorp Bank which have 1.2 million customers.
So, when we step back and think about this, the Banks are very reliant on models. How do
we get confident that the old models were so wrong, in effect, they were out by so far and
that the new models, we're not going to see this constant change, that you're so reliant. If
you look at it, the organic capital generation didn't cover the dividend and growth of
business. Do you need more model updates to be able to pay the dividend going forward?
Farhan Faruqui: Good question. I think that there are obviously changes in the risk profile
of our portfolio and the environment that we take into account as we look at our models
and frankly, our models and our mortgage risk weights were pretty much out of line with
the rest of our peers. So effectively what's happened is we've just come back into line in
terms of where we are relative to our peers. So that better reflects the quality of risk
below.
Underlying, that will continue to, depending on how the underlying portfolios perform and
the front book, we hope that will continue to improve. We don't think that is – we do
generate enough organic profit, Jonathan, as well as have some capital position right now
to continue to pay dividends, et cetera, so we don't think that's likely to be affected. That's
therefore the reason why we announced effectively flat dividends through last half at $0.83
per share.
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The foundation of our dividend philosophy is driven by the Board and the management's
focus on making sure that we have a stable dividend outcome. IF we felt that that was not
sustainable, we would have had a different outcome this half on dividends.
Jonathan Mott: (Barrenjoey, Analyst) Thank you.
Operator: Your next question comes from Ed Henning with CLSA. Please go ahead.
Ed Henning: (CLSA, Analyst) Hi, thanks for taking my questions. Just following on, first
one just on ANZ Plus, look fully understand future benefits of lower cost-to-serve, but can
you just touch on the near term, the impact of the migration and the cost of that? Will
there be any revenue impact from that when you've got to migrate onto potentially higher
costing products on the revenue side? Can you just touch on thoughts on any attrition as
you migrate your Suncorp customers across, is the first question?
Shayne Elliott: Yes, I'll start and then I'll get – so they're really great questions, actually,
Ed. So what we need to do is we're upgrading or use the word migrating, our customers
across from essentially – essentially, from a digital platform that they know and love today
and what we internally now affectionately call ANZ Classic and we need to move them
across into this much better platform that has better functionality, better features, and
from a shareholder point, it just happens to be much lower cost and easier to run.
In doing so, what we need to do is, and I refer to it, we need to make that as seamless as
possible, yes? What we're working on and the things that I reference in there, things like
My Accounts allow that. I didn’t get into some of the detail, but not using open banking,
using some of our own technology, we've already allowed that look through from ANZ Plus
to see all your existing ANZ Classic accounts.
What we're working on is literally touch of a button to move those across. So, we're going
to make that as frictionless as we can, as easy as we can and we obviously have plans as
we develop, when we get to home loans and cards and all those other things as well, that
philosophy of making this an upgrade experience as seamless as possible.
So in that world, we don’t think the attrition risk is high. There'll be some, clearly, but we
think it's really, really modest. The reason we said we're going to start scaled migration or
mass in the next six to nine months is to test and learn. So we'll start really, really small, I
don't know, 1,000 or a couple, 5,000, whatever, customers, start small, see what
happens, right? Of course, that's really important learnings because it's not just the six
million ANZ customers we need to move, it's the one million Suncorp customers as well.
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So that's the approach we'll take. We are really confident, though, with the technology
tools we have today to make that seamless and radically limit attrition. Now there's some
good data, we're not the only – we're not Robinson Crusoe in this thing globally. Our
approach is slightly different and Plus is, we think, better than what others have had, but
there are cases around the world where we can look at and learn from their experience.
Whether it's through acquisition, so there's been a lot of bank acquisitions in the US where
they've migrated customers, or whether it's through these new platforms which we've also
seen and that experience has given us some benchmarks of what to expect in terms of
attrition and we think we can do better than that, so it's built into our models. That
shouldn’t be a big issue.
Your question about profitability is a really awesome and excellent one. In order to move
or migrate our customers across, we need to have an equivalency of products and
services. So I mention there, for example, we've just launched a conditional bonus
product, one of these behavioural bonus product savings, so i.e. you get a low rate of
interest and if you're savings goes up by $100, if your balance goes up by $100 a month,
you get a bonus. We didn't have one of those in Plus, but we need it for the future.
We need it because customers like it, so people want that and we have an embedded book
in our back book that is already on that product or a product that looks like it, we need to
move across. So that's what we're doing. So, we will be able to preserve profitability more
or less, we're not going to have it perfect every single dollar in terms of revenue, there'll
be a little bit of attrition, but we think – well, we know the cost benefits radically outweigh
that in terms of the benefits of that move. So that's built into our modelling but obviously
we have to test and learn around that.
Farhan Faruqui: The only thing I would add to what Shayne said, Ed, is it's not likely to
have any significant impact for FY25, because the migration will really, in terms of scale,
will only start in the course of calendar year 2025. So, I would not think of FY25 as being a
definitive year in terms of revenue or cost impact.
Ed Henning: (CLSA, Analyst) No worries. Just to clarify on that, as you move some people
across, they might be going on to some higher rates. There could be a little bit of near-
term revenue pressure but obviously, the cost benefits outweigh once they come through,
is that how to think about it?
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Shayne Elliot: Could be. I mean it will be swings and roundabouts. Look, it could be - as I
said, what we’ve got to do, we’ve got to have that - you’re right to raise it, but we’ve got
to have the equivalency of product structure.
So all of the - people who have the products today have to have a home to go to. There
has to be something that is the equivalent, and that quite rightly - by law we have to be
able to do that. Obviously, that should be at the same levels of revenue and the same
levels of margin - more or less, yes.
So there should not be a radical difference from a revenue perspective in terms of the
margin differences because we’re literally doing a like-for -like transition. We have term
deposits over here, we’ll have term deposits here. If the margin was X, it will be X here,
more or less, yes?
So we’re not moving people from a margin structure today to a radically different one that
is lower. That - and I understand when we first launched Plus there were some questions
because the product offering we had in Plus originally was simple, as it was supposed to
be. It was really - and everybody assumed that was it.
Well, clearly that is not it and we will have the richness of features and pricing and choice
that customers want in Plus, just as we have today. What we’re hoping is we can make it a
bit simpler than it is today. We think there is too much product differentiation, there is too
much product choice for our customers over here, and that actually causes some
confusion.
So, we do want to simplify, but anyway, I think I got the point across. The essence of this
is not radically different in terms of profitability on a revenue side but radically different on
a cost side.
Farhan Faruqui: Yes, just to - sorry. I don’t want to keep...
Shayne Elliot: Well, we love talking about this.
Farhan Faruqui: Yes, we love talking about this and so be prepared to listen for a bit more.
We - the idea of ANZ Plus was, of course, to build a modern, contemporary, leading digital
technology but it was designed not just from a cost perspective, it was designed to ensure
that we get more market share, and we get more engagement of our customers, and we
get better customer experience to our customers. Including on the financial well-being
perspective.
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So, the goal, of course, is to increase revenue and market share as a result of that, but
deliver that, that services, those products, and those propositions more efficiently because
of the cost structure that Shayne outlined.
So overall, irrespective of what happens to margins, and margins could move because of
market, environment, and competition, they should be - it just builds - the cost base just
builds more resilience in the terms of maintaining earnings.
Shayne Elliot: So, the way we do it internally, for those listening, is we - this concept of
customer lifetime value. So, we think about the lifetime value of a customer and so the
ways, from a shareholder’s point of view, to do better; we need more customers, and we
need to have broader relationships with those customers. That they’re doing more things
with us, and we need to lengthen the time they stay.
The way we do that, is by having really obviously compelling propositions, but giving
people better and better tools to do better with their money. Whether that’s round-ups or
card controls, or crypto controls, or cash rewards, or whatever it might be, so that people
are using and staying.
We know there is a very, very direct correlation between usage and lifetime value and
that’s what the platform is designed to build anyway.
Ed Henning: (CLSA, Analyst): Thank you for that detailed answer. Just a second question.
You talked before about the risk appetite in Suncorp and increasing the risk appetite. Can
you just run through what you’ve done there and does that mean you potentially see a
little bit more growth coming through Suncorp in the near term if you think of that as
standalone?
Shayne Elliot: Yes. Again, excellent question. So - and Bruce is here actually who runs
Suncorp Bank for us, part of the team. Really, really early on, I literally think we might
have been in the first week or so, we - as you would imagine, we had a team meeting with
our Team and with our new friends from Suncorp.
They were going through the way they think about stuff and this issue - they raised a
point, within Suncorp Group context, within Suncorp Bank and the capital and the way
they think about risk, they had adopted a certain level of risk appetite.
So, the example was they had put a cap, or a speed limit, on the proportion of home loans
that they were willing to write in the investor space and we all know that investor home
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loans, typically, have slightly higher returns for a whole bunch of reasons. That’s true
across the industry, right?
They had put a cap on which was entirely reasonable for a bank with 2.5% market share in
their capital and part of a bigger [unclear]. So, it was entirely reasonable in that context.
We said, well, you’re not in that context anymore. You are now in the context of a $1.3
trillion balance sheet, and we have a lot more diversification and we think about that
differently.
Putting a sublimit just for that brand of whatever the cap was doesn’t really make sense.
So, we need to rethink that. So, we changed the cap. We didn’t remove it, we changed
that cap. That allowed Bruce and the team to be more assertive.
They didn’t really need to change anything in terms of their proposition with customers,
but they were able to welcome in more customers. That’s the sort of thing we’re talking
about Ed. It’s just a - you’re putting a different lens on now that you’re thinking about it in
the context of this broader diversified risk group.
So that’s the sort of things that we did and again, I’m not putting words into Bruce’s
mouth, but I think the team at Suncorp have been pleasantly surprised at how quickly we
can do those things, you know? We were able, literally, to make that decision on the spot
and do that to the benefit of Suncorp Bank customers.
Yes, it should lead to faster growth in the right areas.
Ed Henning: (CLSA, Analyst): Okay. Great. Thank you very much.
Operator: Your next question comes from Richard Wiles, Morgan Stanley. Please, go
ahead.
Richard Wiles: (Morgan Stanley, Head of Research) Thank you and good morning. Shayne,
do you think the outlook for revenue growth is better across your Australian Retail and
Commercial banking divisions, or your Institutional and New Zealand division?
Can you make some comments on the outlook for margins in Institutional and New
Zealand, please?
Shayne Elliot: You always pose a tough one, Richard.
Farhan Faruqui: You’re asking Shayne to pick...
Shayne Elliot: My favourite child.
Farhan Faruqui: ...a favourite child. Yes [laughs].
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Shayne Elliot: Well, you probably know better than me actually in terms of the forecast.
The reality is look, Australian Retail is challenged, and I don’t think it’s challenged for ANZ
in particular, I think the industry is challenged.
It’s probably, if you looked across - while Institutional is always competitive because It’s
much more global and the barriers to entry are much lower, we’re kind of used to that. So,
it’s in our DNA. We kind of know that that’s part of the way we run the business and we’ve
been doing that for a long, long, long time.
That is a very different outcome in retail. Which is for - you know better than anybody, for
a long time that hasn’t been the case and it’s relatively - in the scheme of banking history,
it’s a relatively new phenomenon that it is so desperately competitive, and the margins
have reduced. So, revenue growth in retail is extraordinarily tough.
That’s why - and it’s not like that has been a shock, it’s come fast and quick and that’s
why we took the decision to move onto the lower cost, more nimble platforms in ANZ Plus.
So that’s actually what we’ve done.
So that - I think Australia Retail is probably the most challenged across [unclear].
Commercial, much less so. I mean, it’s still - everybody has challenges but in Commercial
there is still underlying growth opportunities.
They’re particularly for ANZ because while there’s a lot of focus and everybody - it’s
everybody’s new favourite part of banking.
Our strategy is quite different in many aspects to our peers who are largely lending-led.
We are much more in the deposit and transactional end we are much more focused on the
small part of that. Start-ups, relatively microbusinesses, those sorts of things, who don’t
typically have big borrowing needs, while others tend to be focused more on lending. So,
it’s slightly different.
So, we do see growth opportunities there, and do you want to talk about the actual - the
outlook for New Zealand and...
Farhan Faruqui: Yes, sure. Look, I think, Richard, and I know that you’re basically asking
one question hoping to get three or four things answered but I’ll try my best to meet your
expectations.
So, while I agree with Shayne that the Australian Retail business is challenged, the fact is
that coming off what has been a very volatile period with rates shifting, et cetera, and shift
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in liabilities and move from fixed to floating, and all the things that happened in the retail
space over the last 18 months, which was quite a bit.
The fact is, that on a half-on-half basis, Australia Retail grew revenue, and I think that
suggests that things are stabilising, which they are from a NIM perspective as well as from
a mix shift perspective and from a back book repricing perspective et cetera.
So, I don’t think that we should - I don’t think it’s fair to assume that Australia Retail will
not grow next year, it will be a function of what’s happening with the environment,
obviously, as we continue but I certainly think it’s a lot more stable today than it was six to
12 months ago.
I think as Shayne suggested, Institutional is a question around PCM as well as market
performance. We now have a new Government, and soon to be a new Government in the
United States that will drive rate environment and that will drive volatility. So, to some
extent that could be a big, big positive for the Institutional business, but we have to wait
and see.
New Zealand has actually been interesting, because New Zealand has had some
competition around deposits, particularly over the last one half, but those deposit issues
are more balanced today and we’ve actually seen some improvement in terms of front
book margins. So, I think New Zealand probably has good prospects going forward. The
fourth quarter was pretty steady.
The other point I would make from a NIM perspective is that replicating benefits will
continue for us going into next year as you know because of the fact that our hedging was
out to five years. So, we continue to see those maturing tranches supporting our NIM as
well.
So, look, overall, I think we’re probably more stable with some positive prospects but,
obviously, Richard, as you know the environment can change that we continue to be very
vigilant to make sure we manage the margins dynamically.
Richard Wiles: (Morgan Stanley, Head of Research) Okay. Thank you. Just my second
question is another one on ANZ Plus. I just want to get a bit of an understanding for how
many customers need to migrate.
I mean, you say on Slide 10 that there are 850,000 customers on Plus, and half of them
are new to the bank so that suggests a bit over 400,000 have migrated. I think, Shayne,
you also said ANZ Plus is - now accounts for one in five active ANZ retail customers.
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Does this mean you’ve got another 1.5 million to 2 million customers to migrate or have
you got 5 or 6 million to migrate?
Shayne Elliot: Yes, totally fair. So the big - we’ve got essentially 5.5 million to migrate
from Australia Retail and, obviously, the 1 million from Suncorp. So, let’s not forget them.
So that’s true.
What the point is then, not all those customers are equal in complexity or need. So, when
you break the - [this assumes it] is 6 million, roughly. Of the 6 million customers we have
in ANZ today, just roughly, about a million, a million and a half, you and I would probably
think of as dormant or inactive.
So, yes, they have some money in their account, they don’t really use it, et cetera, et
cetera. You’re migrating them and they’re typically relatively simple accounts, savings
accounts or something like that. Relatively simply. So, in terms of active customers, now
you’re down into that 4.5 million, we need to move all of them.
What we’ve done is we break them into different cohorts. There are some customers that
have really simple needs, actually, about half of them - call it 2 million, all they do is have
a savings and transactions account and a debit card. They don’t have a credit card, they
don’t have a home loan. Those customers is where we start, because we satisfy them now.
They would be very happy on Plus today and as we said, many have decided that on their
own. Your number is about right. About 400,000 have already made up their own mind
and figured it out for themselves and moved.
That doesn’t mean that all that 400,000 are just simple. It might be somebody like me.
I’ve moved my day-to-day there, but I’ve left my home loan in classic. Your answer is, we
really got to move all 6 million, plus a million.
Suncorp, we start - the bit we start next year is focusing on that 2 million that are really
simple, save and transact. Where we start within the 2 million, those that we can see don’t
go to a branch, use - are very comfortable on mobile, et cetera.
So, we’re going to use the ones that we think it’s appropriate for. So that’s sort of the
challenge and that’s why it’s not something we can do over a weekend, it’s not an
upgrade. It’s going to take some time, and we’ll do it in waves. We start, as I said, in six
to nine months on a relatively big scale.
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Did I answer your question? I mean, that’s sort of the scale of the challenge. That’s why
the plan is we will move everybody. So today you can join ANZ Plus or you can join ANZ
Classic. From ’27 onwards, yes, about then, you won’t be able to join ANZ Classic.
We’ll say, no, no, we’ll have all the functionality that you need in Plus, and if you walk in
the door in a branch, you come online, whatever, you - the option will be Plus. We’ll have
some people using Classic and we will move them all across and the idea is to have
everybody across by the end of 2028, irrespective of how complex their needs are, what
they do, how active and all that, all six will have moved and the 1 million Suncorp
customers will be in the middle of all that as well.
Farhan Faruqui: But I think just from a pure financial cost lens on that, Richard, obviously
when we move the million customers from Suncorp Bank onto ANZ Plus, that will have cost
benefits obviously because we will not be operating three technology stacks for retail
customers at that point.
Obviously as we scale the migration, whether - starting from this year, over the next two,
three years, as we scale the migration of customers from Classic to Plus, you will start to
see incremental cost benefits coming through because you won't need the same level of
manual intervention, you won't need as much manual approvals, manual servicing, et
cetera.
So, it doesn’t mean that if you don’t - if you haven’t migrated the last customer until '28,
we don’t see any benefits until then. You will start to see those benefits come through
from Suncorp as well on retail.
Shayne Elliott: Yes, and I mean - I know this goes without saying but it's probably worth
just making the point. The beauty of these platforms, whether it's Transactive or Plus, is
scale, and the scalability.
So, the cost of running Plus for 1 million customers, two, four, five, six, seven, or 10
million customers is pretty much the same. Not quite but the variable cost is de minimis
because the platforms are, to some extent, kind of infinitely scalable.
Where the marginally cost comes in, sure, we need to have more coaches. You know,
because there's still a human-supported element. Yes, of course, there will be some of
that.
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But particularly when you think about something like Suncorp, if we say that the marginal
- the cost to serve is 35% lower in Plus versus Classic, it's even bigger when you think
about the benefit from a Suncorp position.
You know? Because we - and so that's why we're excited about the opportunity. Yes,
there's some risks here obviously. Yes, like Ed's question, yes, attrition, matching,
margin, all that sort of stuff. But we have a plan, and we have a future that's really
exciting and that cost advantage is going to be really significant.
The faster we get there safely, the better. That's why we've tried to give you a sense of
timetable today so that we can assure you. Then to Farhan's point, we don’t wait until the
end to get the benefits. There will be a progressive drop of some of those
decommissioning, although it's fair to say that really only starts in a material way in 2026
and starts ramping up in '27.
Richard Wiles: (Morgan Stanley, Head of Research): Thanks for more detail, that's great.
Shayne Elliott: Thank you.
Operator: Your next question comes from Carlos Cacho with Macquarie. Please go ahead.
Carlos Cacho: (Macquarie, Analyst) Thanks for the opportunity to ask a question. First of
all, just looking at the margin impact of liquids, I was hoping you could give a bit more
guidance on what the impact was to the reduction in liquids over the half and how much of
that minus - that plus four from asset and funding mix was driven by the change in liquids
over the half.
Farhan Faruqui: So, because we - a fair point of that four basis points was driven by the
liquid's movement. Look, at the end of the day, liquids are in both treasury and Markets.
We look to optimise opportunities every half, every day, in terms of where we should move
the liquidity in order to get the best value for it.
This half, it so happened, it was a bigger move from treasury to Markets because we had
opportunities offshore. Still low risk. Still counts as part of our HQLA and still qualifies for
LCR et cetera. But there's just those opportunities, whenever we can find them, we
continue to move them.
That could change next half because we might find better opportunities back home. So,
it's a function of environment and the opportunities but I would argue that of the four
basis points, a fairly substantial part was driven by that.
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Carlos Cacho: (Macquarie, Analyst) In terms of the impact on - it's neutral for revenue
[unclear]...
Farhan Faruqui: It is. It is.
Carlos Cacho: (Macquarie, Analyst) ...margin without change?
Farhan Faruqui: I mean broadly neutral for revenue. But beneficial because of the fact
that ex-Markets, it's - it reduces the denominator, so it improves the NIM. Yes.
Carlos Cacho: (Macquarie, Analyst) Then secondly just around the replicating portfolio, it
looks like you've had a reduction in the portfolio in both Australia and New Zealand.
You've had an increase in the hedge portion. Can you maybe talk us through those
changes? It doesn’t seem like there's been a big change in your deposit mix looking at the
slides.
Is there a bit of a change in customers you now consider to be rate sensitive? Or what's
driving that shift?
Farhan Faruqui: The shift in what again, sorry, Carlos? Can you ask...
Carlos Cacho: (Macquarie, Analyst) In the replicating portfolio. You had a decrease in the
volumes in the portfolio but an increase in the hedge rate, but it looks like the deposit mix
didn’t really change much.
Farhan Faruqui: No, you're right. So, the deposit mix didn’t change much in the half.
Now, to be fair, the deposit mix as a portfolio didn’t change. There are of course
movements within each different division and business where people are looking to change
yields and change products. But overall, you're right, deposit mix did not change.
But what did change from a replicating perspective was that the Suncorp Bank capital was
paid at the end of July/early August. So that reduced the average balance of [IToC] for
the second half.
The buyback also reduced some of that. So, there's a bit of a changes that happened in
the course of the second half which caused volumes overall to be less than what they were
in the first half.
But you also then got the benefit, as I mentioned in my remarks, of the hedges coming
through, providing a tailwind from a rates perspective. So, it was a bit of a volume mix
and rate impact, in the second half.
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The reason I'm calling that out is the fact that it was a very peculiar half from that
perspective. Not driven by underlying customer deposits, et cetera, but because of these
other movements.
Carlos Cacho: (Macquarie, Analyst) Then just on - does Suncorp have any impact on that
replicating portfolio going forward?
Farhan Faruqui: No. This was just the fact that we had capital set aside for Suncorp and
we obviously paid it. Reduced the balance, yes.
Carlos Cacho: (Macquarie, Analyst) Great. Thank you.
Farhan Faruqui: But they have their own portfolio obviously and they have capital and
replicating tailwinds there as well. They do similar hedging as we do.
Carlos Cacho: (Macquarie, Analyst) Okay. That's not consolidated into the disclosures...
[Over speaking]
Farhan Faruqui: The numbers we gave you were for the - on the NIM walk were basically
ex-Suncorp, yes - ex-Suncorp Bank, sorry.
Carlos Cacho: (Macquarie, Analyst) I'm just looking at the slide 75 which has the detail of
Australia and New Zealand. Is that ex-Sun for the moment?
Farhan Faruqui: No, so there is - just let me make sure I get to the right slide.
Shayne Elliott: Yes, yes. There’s 75. It says on the footnote, it says excludes Suncorp
Bank
Farhan Faruqui: Yes, yes. That excludes it, correct, yes.
Shayne Elliott: We’ll obviously consolidate going forward, it’s just that it looked weird
because of the two months, but once it’s – going forward it will be.
Farhan Faruqui: Yes.
Carlos Cacho: (Macquarie, Analyst): Thanks.
Operator: Next question comes from Matt Dunger with Bank of America. Please go ahead.
Matt Dunger: (Bank of America, Analyst) Yes, thank you gentlemen for taking my
question. Just looking at Slides 60, 61 and around the Institutional bank margins, you
flagged that the cost of those PCM deposits, the margins on those are back around pre-
COVID levels and a pretty low exposure to zero and low-rate deposits.
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Are you telling us that the Institutional net interest margin compression should be minimal
on those deposits going forward, given we’re almost back at pre-COVID levels and most
the compression could come from the lending side?
Shayne Elliott: Yes, essentially that’s what it says. Again, it’s a good question. I mean,
what we’re trying to show here is, and I understand that it’s now always easy to
understand [the split], but the whole point about transactive and the way that we generate
those deposits and the way that we go about, they’re what we call – they’re contractual
deposits. They’re essentially benchmark plus or minus.
When the benchmark moves, it doesn’t change our margin, yes, so their contracted. Now
they’re not contracted forever, so it’s a little bit like having a fixed rate home loan, it’s kind
of the same thing. It just means that when rates change, they don’t immediately impact
our business because 90% of that book on PCM is on a contracted term, so they’re not
sensitive to rates.
To your point, yes, the 10% is the sort of free cash flow piece or the transactional piece at
the bottom, yes, that is subject to rates, so you don’t get that immediate impact of rate
cuts don’t translate in to Day 1 into margin pressure on the PCM or the payments and cash
management piece of deposit. That’s what that’s talking through.
If there is going to be changes on the asset side, whatever that might be, I mean that will
depend on pricing and the lending Markets.
Farhan Faruqui: Yes, I think I will just say Matt, just to add to what Shayne said, which is
absolutely right, that there is that low sensitivity because the free fund component if you
like of PCM is about 10%, as Shayne mentioned, but the only thing I wanted to add to
Shayne’s comments is that the customer’s behaviour is not siloed, so it’s not just rates go
down therefore the volumes, there could be changes in volumes on the deposit side, there
could be changes in borrowing behaviour, investment behaviour, market risk impacts that
come from what’s happening in the environment.
It's sort of hard to say, well, you know, if rates go down X, revenue goes down Y, because
there are so many other factors that can play out here.
But your question, broadly speaking, yes. We don’t get – the deposit betas on
Institutional on PCM is extremely high and that’s why you don’t get as much volatility as
you would think you would if rates go down.
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Matt Dunger: (Bank of America, Analyst) Understood, thank you very much. If I could just
follow up to ask about the non-financial risk practices which you’ve addressed today.
Understand you have the APRA capital add-on, an independent review underway. Shayne,
what timeline are you looking at to resolve these issues and what additional programs of
work might be required from here?
Shayne Elliott: Yes, okay. Good question. We already a program of work around non-
financial risk. That’s been on a radar for a period of time. Expectations around that, quite
rightly, from ourselves, our Board, but also from regulators around non-financial risk have
changed materially in our lifetime, quite understandably.
We already had a program of work, an uplift program around non-financial risk and yes,
absolutely no excuses here, it’s a little bit more complicated when you’re in a global
organisation like us and the diversified nature of our business. Again, not an excuse, but
it’s a little bit harder to do.
We had a program of work, it’s fully funded, it’s a reasonable amount of money that we’re
putting into that program, it’s part of our investment slate today. Some of that involves
new technology and new tools, so that piece is well underway, but then there’s the – and I
don’t want to undervalue the term, there’s sort of that cultural element of then actually
using these tools well, these dashboards, these tools, these reporting mechanisms, to
actually manage the non-financial risk.
We’re making progress. We felt we were making really good progress, and I think we
were, and I think we’ve got really strong evidence, but we’ve been let down in a couple of
areas and so the regulator quite rightly called us out on that and said, you’re not making
sufficient progress, and they were right.
We’ve gone back, had a look, and we’re going to uplift that program. That uplift in the
program doesn’t actually require a meaningful uplift in spend. It’s not about the money,
it’s more about the cultural implementation of this – training, using, rolling these things
out, making it part of our daily habits around the way we think about non-financial risk,
just like we do a really, really good job on financial, so it shouldn’t result in really a
material uplift in cost.
In terms of the reviews that are happening, in order to do some of that Oliver Wyman
review and there will be a bunch of other bits and pieces we’ll do and those are good
things, right? But those reviews are – we’re talking here like single millions of dollars
again to do and, even when you add it up, it’s not going to be a material cost. It’s more
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about cultural embedment and leadership from me and my team to really make this a
priority and get it done.
Timing is a hard one. I’m really confident we can get the work done around actually
making us better as a bank in terms of the way we identify, manage and mitigate these
risks, so I’m confident we’re making progress. We are, we are making progress there.
In terms of getting – I think your question is really, when does the capital overlay come?
Look, that’s a matter for APRA obviously. It’s on us to go and show them that we’ve
adopted the tools, we’ve embedded them properly and we’ve got the data to show that it
really is changing the way we do that. That is not going to happen in the next financial
year, I think. Now, I don’t know when that will happen, but it is not going to happen in
FY25, because we’ve got a lot of wood to chop there to get that done and then we actually
have to evidence over a period of time so that APRA have confidence that it has truly made
a change for the better.
Matt Dunger: (Bank of America, Analyst) Understood. Thank you very much.
Shayne Elliott: Thank you.
Operator: Your next question comes from Brian Johnson with MST Marquee. Please go
ahead.
Brian Johnson: (MST Marquee, Analyst) Fantastic, and thanks very much for the
opportunity to ask a question. Also, on the disclosures generally which are pretty good in
a very confusing timeline of results with the acquisition.
Two questions if I may. I’d like to just to back to one of the issues Jon Mott raised, but
perhaps ask it slightly differently. If we have a look at Page 35 of the result, we can see
that the new impaired assets went up half-on-half, but the loan loss charge stayed low
which, to me, feels like it’s telling you quite logically, the loss in event of default is quite
low because asset values have generally risen, which I think – would I be right in thinking
that actually flows into those capital models?
What I’d like to understand is, just if asset values were to fall, particularly house prices,
not only do we get a higher provisioning charge, but do we also get the models reversed
and we get a higher capital requirement? Do we get kind of double procyclical leverage on
the way up and double on the way down?
Shayne Elliott: Do you want to – Kevin, do you want to have a go at that one? I’m just
saying I don’t want to misspeak on this Brian.
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Kevin Corbally: Would you mind if we get him to repeat the question?
Shayne Elliott: The question is – let me try to paraphrase it, Brian and you tell if I’ve
nailed it. Basically, what Brian is asking, which is – I forget the page in the document is
that it would appear that while impaired assets have gone up, the reason the provisions
haven’t is because they’re well secured. So, the question is, if property prices were fall –
and has that been part of what’s led to the RWA release in terms of the model
improvement, and so his question is, if property values were to fall substantially, fine, we
might get a provision uplift. Do we also get a double whammy that the capital models
themselves, the risk weightings, would also change? Then that’s sort of the essence of
question, [i.e. is there] double jeopardy?
Kevin Corbally: Simple answer...
Brian Johnson: (MST Marquee, Analyst) I just want [unclear] summarising myself.
Kevin Corbally: Simply the question, the primary reason for the increase in the impaired
assets, about three-quarters of it was to do with the introduction of Suncorp into the
business. That’s the primary reason why the impaired assets have gone up.
The rest is essentially a combination of small amount [in mortgages] in Australia, a small
amount in New Zealand in mortgages and also a small amount across the commercial
book. It’s not actually really a reflection of a significant increase in impairment per se
across the book.
Shayne Elliott: But does it – I guess the question, Kevin, does it feed into – if asset prices
fell, let’s just imagine there was a 20%/30% fall in house prices or something, does that –
we all understand how that affects the [CP] does that affect the risk ratings? Because we
obviously got a capital benefit with the lower risk weightings, because we obviously got a
capital benefit with the lower risk weightings.
Kevin Corbally: Correct.
Shayne Elliott: Would it affect it in a negative sense, I think is Brian’s question.
Kevin Corbally: Logically it would.
Shayne Elliott: The question will be degree.
Brian Johnson: (MST Marquee, Analyst) Kevin, just on that, sorry. I apologise, but Page
35 says, new impaired assets. That delta which has gone from 630 in the first half up to
859, that’s primarily driven by the acquired Suncorp impaired assets as opposed to
genuine new ones.
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Kevin Corbally: Correct. Three-quarters of it is Suncorp.
Brian Johnson: (MST Marquee, Analyst) Fantastic, thank you.
Kevin Corbally: There are also some restructures in there too as well, but it’s
predominantly Suncorp and some restructures.
Brian Johnson: (MST Marquee, Analyst) Fantastic, okay. The next one, if I may. Shayne,
during the ESG briefing, you briefly mentioned that the ROEs on the total home loan book
were barely above the cost of capital from memory.
Shayne Elliott: Yes.
Brian Johnson: (MST Marquee, Analyst) When you think that the home loan book has got
two components – it’s got the good stuff originated by the branches and the stuff
originated by the brokers, who get pretty big margins.
I’d like to phrase this in the context that three of your peers are now talking about the
need to do something on the branch versus proprietary channel, but if you actually have a
look at Slide 90, we can see that basically the percentage of the book has gone from 57%
to 59% over the year, but the flow has actually gone from 64% to 65% and, from
memory, Suncorp’s flow is about 75%.
Shayne Elliott: Yes.
Brian Johnson: (MST Marquee, Analyst) Can I just confirm those comments that you made
before, the ROE on the front book home lending through the mortgage broker is probably
below your cost of capital, because that’s what it would appear to be when I look at the
retail banking margin, which fell.
I’m sorry, this is a long-winded question, but I can also see the NIM relative to the risk
weighted assets expanded half on half.
Shayne Elliott: Yes.
Brian Johnson: (MST Marquee, Analyst) Is that kind of telling me that basically a fair bit of
what we can see is this, perhaps even this procyclicality flowing through, where the
brokers and the customers are getting the benefit rather than ANZ, and should you be
changing your mix?
Shayne Elliott: We go where our customers go and it’s not – we can change our mix by
just saying, no, to a whole bunch of business, right? I mean – and I know that’s not your
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question, but – so when we say, changing our mix, our customers – the market is choosing
to go to brokers. 75% of the market goes through brokers.
Now, we can sit here and say – we could just say, we don’t want to compete, we only want
to compete in 25% of the market. Well, we’d have a really, really small bank, right? So,
we had to find a way to have a proposition that is profitable in, irrespective of channel.
Hence, Plus. I mean, that is what we are doing.
Now, we don’t think that the answer is to go and build more branches. We don’t think
that, because our customers don’t want to use them and so that is not the answer. The
bigger philosophical question you are asking, I 100% agree with. Again, we’ve talked
about profitability on home loans every call, as we should, because it’s a really important
point.
If you do it on a fully allocated basis, and again, we can argue whether that’s right or
wrong, fully allocate – you allocate the cost of everything, branches, brokers, blah blah
blah. Home loans are below the cost of capital, but the marginal cost, because a lot of
that cost is fixed cost, obviously the thinks like the branch network, but if you look at the
marginal returns, the marginal returns on proprietary and broker are at or above cost of
capital, kind of depending on investor/owner et cetera, et cetera.
We run our business on that marginal basis. We don’t ignore the fully allocated, buy we
run it on that marginal. What’s the marginal costs of funds, what’s the marginal operating
cost, what’s the marginal brokerage, cash backs, all of that sort of stuff et cetera. That’s
how we run our pricing.
The bigger question you’re asking, which is absolutely on our mind, is the only way
forward – we don’t get to control pricing. We are a price-taker, as we should be, and we
don’t see that’s really fundamentally going to change. When you look at the P&L, the risk
base is the risk base, we don’t want to be out of market on risk, we don’t want to take
more risk or do low doc or anything like that, so we’re not really going to get any change
or material difference there. It really comes down to your cost lines, and these two costs.
You know this. There are two costs that go into manufacturing a home loan – the cost of
the money and the cost of the operations.
Our future on Plus is designed to lower the cost of both. It’s to lower the cost of
operations, and we’ve showed you the numbers. I accept it’s on save and transact and we
haven’t got to home loans yet, we’ve got Plus as a substantially lower cost to operate, tick,
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that’s good, and we believe by making a more engaging platform, over time, not tomorrow
morning, but over time, we will get a lower cost of funds there as well.
What is important, and I think, I mean what’s important here, we now have the second
largest customer deposit base in Australia, of an Australian bank, right? Now, what we
need to do – what we don’t have is the lowest cost customer base in Australia. That’s the
work we need to do.
Brian Johnson: (MST Marquee, Analyst) Should you be differentially pricing between your
digital home loan and the broker?
Shayne Elliott: Yes. Yes, we should. I mean, it’s funny you say that. It’s not funny. No,
no, it’s funny you say that. Maile and I were literally having this conversation yesterday.
Literally, absolutely. We’re not there yet and we’re not there yet because we’re not
sufficiently scaled to be able to make that meaningful, but philosophically, of course we
should and of course we should have channel differences when – if there’s literally a
different cost to operate, I think that’s only reasonable.
But what we need to do – so that is something, but it’s not, again, it’s not in the pipeline
for right now, but absolutely I would imagine that’s the case. If you look globally at other
worlds were – we look on the US with rocket mortgages and things like that, absolutely,
digital you would imagine to be more assertively priced. But still be, I think you can do
that and still be higher profit margins for the provider, i.e. the Bank. I don’t think that all
gets competed away.
Farhan Faruqui: Brian, just to clarify on a couple of things, just two data points to add to
what Shayne said. I mean, if you think about our business this year, our NLAs went up
6%, our cost in the retail business went up too, so there is a scale benefit, which is why
we look at the marginal cost as Shayne was saying.
The other point I would just highlight, is that the five basis point reduction in margin. Part
of it, of course, is still the coming through of previous halves adjustments, et cetera,
around asset and deposit pricing, but almost two basis points of the five was perversely
actually because of the fact that we had lower RWAs because of the change in the PD and
LGD models and the [rec] capital allocated or the [rec] capital earnings that retail got were
basically moved back to group centre, because they were using less regulatory capital. In
some ways, that NIM reduction was actually ROE accretive, but it perversely showed
[unclear].
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Shayne Elliott: Now, just to extend our enthusiasm for Plus, Maile would like to just make
a few comments.
Maile Carnegie: Thanks, Brian. I think one of the things that we don’t spend enough time
on as an industry is actually, we talk in a very blunt way about the fact that - are brokers
more or less profitable than proprietary channels?
I think the thing that people don’t spend enough time is really getting under the hood and
saying, why are brokers kind of slightly less profitable than proprietary? It’s actually not
necessarily the commission that is being paid. When you really look it, the key drivers of
that profitability difference are a combination of how long a broker customer is on your
book and how engaged that customer is in your products beyond just a home loan.
Again, we talk a lot about the Plus savings and transaction account, but what we don’t talk
– we’re basically rebuilding almost everything else as well. That includes things like our
broker portal and how we’re going to interface and be able to partner better with our
brokers, so actually, if you really want to improve margins in home loans, yes, you need to
get your overall cost-to-serve and cost-to-acquire down, which again Plus is going to
deliver on, but then specifically for brokers we are starting to look at building propositions
to partner with them about how do you fix those underlying drivers of the profitability
difference, which as I said it not necessarily the commission, it’s actually the engagement
with those customers.
Shayne Elliott: Thanks Maile.
Brian Johnson: (MST Marquee, Analyst) Thank you.
Operator: Your next question comes from John Storey with UBS. Please go ahead.
John Storey: (UBS, Analyst) Thanks so much and thanks for giving me the chance to ask a
question. I appreciate the opportunity.
Shayne, I’ve only actually got one. I appreciate it’s been a long call too. I see your
Institutional business had an exceptional performance during the year. I just wanted to
drill down a little bit more into the Markets business, and particularly the franchise revenue
for the second half of the year that was down 22%.
I just wanted to get a view from you if there’s been any change in risk appetite within the
Markets division and, more importantly, I wanted to get a sense what are clients saying
and what’s happening with the actual client franchise itself.
Shayne Elliott: Sure.
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John Storey: (UBS, Analyst) Caveat that with, I read the comments around the seasonality
in terms of market, so maybe just a little bit broader that than would be appreciated.
Thanks.
Shayne Elliott: Yes, sure. It’s a very reasonable question, John. Obviously, I won’t focus
more on the seasonality, but that’s real, so that’s not unusual for the second half to be
lower and I think there are some slides in there that show that. In fact, the fourth quarter
was the strongest we’ve had in eight years.
But looking through and talking more contextually about – and I assume you’re relating,
you’re trying to link this back to the market related issues and whether that’s actually had
an impact on our franchise, I mean, the short answer to that is, no.
Our customers have been really supportive, and I think again it speaks to the diversity of
our business. I’m not diminishing the issues that we’ve had, they’re serious and we have
to deal with them. But they are in the context of our Markets business, it’s a relatively
small part of the overall business. Remember, that business, this is in our – those issues
relate to rates trading in our Sydney dealing room. We do operate a 30-country network.
In fact, our largest Markets business is in Asia. It’s in Singapore actually. It’s our largest
dealing room.
The diversification of the business has helped, but even here in Australia where those
issues have been more prominent, the reality is, no we haven’t. Obviously, we’ve had
questions. Obviously, quite rightly, people have asked question about our conduct and the
way we run our Markets business, but the business itself is in good shape. We’ve got work
to do there to get these issues behind us and we're doing that. Obviously, there's been a
little bit of a morale hit in the team as you can imagine.
So, we're working really hard. Mark's doing a great job on that with Ange, who runs the
business but the short answer to your question is no, and we don't - we haven't seen any
impact on the overall flow, customers or the general business.
What is impacting the business isn't really to do with customer engagement, clearly just
volatility in the business and there's a lot of uncertainty at the moment. That can be good
or bad but that's what's really impacting the revenue base at the moment, as opposed to
any material or even noticeable change in customer engagement.
In terms of your risk appetite, a good question as well. We haven't changed our risk
appetite. The appetite is set. We go through that with the Board. We haven't changed the
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appetite but as I say, they are fully resourced and capable of satisfying the needs of our
customers and generating the kinds of returns that we desire from that business.
John Storey: (UBS, Analyst) Excellent. Thanks Shayne.
Shayne Elliott: Thank you.
Operator: Your next question comes from Andrew Triggs with J.P. Morgan. Please go
ahead.
Andrew Triggs: (J.P. Morgan, Analyst) Thanks. Good morning. Just to follow up on Matt
Dunger's question actually on slide 60, Shayne or Farhan, what actually drove the
compression in deposit NIM do you think in the half, given you said high deposit beta and
really rate cuts didn't start happening, apart from New Zealand until right at the tail end of
the half?
Farhan Faruqui: So Andrew, the customer deposit NIM was largely felt, as I said in the
second half in New Zealand. That's where we had a bit more pricing competition in the
course of the second half. So particularly on TDs. That has moderated towards the end of
the second half but that's largely what impacted deposit pricing NIM.
On the mix side, as I said, the mix changes or the shifts in retail have largely slowed but
we continue to see the high beta impact of some of the Institutional PCM book because as
corporate customers move deposits around. Largely I would say second half pricing impact
was New Zealand, it has moderated since then.
Andrew Triggs: (J.P. Morgan, Analyst) Thanks Farhan. The previous half, you had a
footnote saying that in periods of zero rate interest rate policy deposit margins would
range between 75 basis points and 90.
It's sitting at the middle of that range at the moment. Why wouldn't we expect it to fall
towards the lower end of the range, especially as US Fed funds rate falls and the RBA cash
rate?
Farhan Faruqui: Look, I think that it is reasonable to expect that there will be some impact
on NIM as a result of what happens in the rate cycle, the timing of which remains
unknown.
As I said earlier, Andrew, I think we've got to look at the business more holistically rather
than looking at it purely from a lens of rates because if you think about the PCM business,
as I mentioned - I'll repeat it for the sake of repetition - but it has 51% growth in volume
over the last five years and we've seen 22% reduction in cost per dollar of FUM.
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I think that ultimately plays into the fact that it's a far more resilient business, probably
much more resilient than some of our peers if you like because of that investment that
we've made. We are continuing to win new business in payments and cash money
management.
So you're right, if the rates turn across globally, then it has some impact on NIM but on
the other hand, you get better volume and better quality of [unclear].
Shayne Elliott: I think it goes to a really important strategic - and it's the same for Plus
and Transactive. What we're saying here is what we are moving to as we build these
platforms is we will always have exposure around NIM. That's what we do for a living. So,
we understand that.
What we're trying to do is desensitise that a little bit by controlling the things we can
control, which is actually looking to what's the operational cost associated with generating
those deposits. That's why moving to lower cost platforms like Transactive, and that's why
I talked about where the volume is going.
Over the last - the average - the cost, the operational cost and per payment, if you will, is
coming down at a rapid rate. It's the same thing we're seeing in Plus. That gives you more
profitability buffer and less sensitivity to NIM in the purest sense of the term. That's the
direction we're going for both businesses. It doesn't remove it, but it reduces that. We're
not just exposed to the NIM and being on those lower cost platforms [unclear] helps.
Farhan Faruqui: That's evidenced as well, Andrew, if you look at slide 61. You don't get as
much benefit on the way up and you get not as much damage on the way down because of
the fact that these do operate at high betas. As Shayne mentioned, 90% of this is
contracted so it just moves with the rates, but the margin r emains consistent.
Andrew Triggs: (J.P. Morgan, Analyst) Thank you. Just a related question to Shayne, I
guess you've mentioned a couple of times on the call that you now have the second largest
deposit base of the majors, but that position is largely due to market deposits and also
PCM deposits in Asia.
I guess my question is what gives you the comfort that that mismatch, I guess, between
having a big Australian/New Zealand home loan and commercial loan book and
Institutional loan book is somewhat mismatched with liability spreads that are driven by
offshore trends?
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Shayne Elliott: Yeah, I get it and again, it's not about - remember the reason we now have
the second largest deposit base isn't actually because of market TDs. It's because of
Suncorp. That's what really tipped us over in the edge.
I mean those TDs in Markets; they are what they are. They are great, they're very
profitable, they're a high return business for us. You're quite right, a lot of those deposits
in Markets, they're not fungible and they don't provide the same liquidity support as say
retail deposits.
So, what we're really talking about is if you think through the customer franchise benefit
really came from Suncorp. I mean if we cut through and really say, what did we buy with
Suncorp Bank? We bought a great franchise but what we bought was $58 billion worth of
deposits. Th ose deposits are extremely valuable and really, really high quality and come at
relatively low cost.
I get your point. We manage the liquidity sensibly and it's not that we've changed our
mind around how we use Institutional deposits to fund anything else. Obviously, there's
some barriers in doing that but we've actually improved the quality of our franchise, our
deposit base and it's now more skewing more to retail with the Suncorp acquisition, which
is really, really valuable.
Let's be honest, that's been a weakness at ANZ over a long period of time. We've had a
structurally weak position when it came to retail deposits for 30 years. Plus, Suncorp these
things are designed to rectify that over the long term and it's great to see that we're
making progress.
Farhan Faruqui: Of course, we get the optionality because of the fact that we have surplus
deposits in Commercial which are growing and the third-party deposits, which are reflected
in Markets and we're not - don’t show up in Retail, but are used to fund Retail and then of
course, we have Wholesale funding. So, we have a bit of a mix to optimise the cost of
funding but as Shayne said, I think this will particularly get accelerated once we have Plus
at scale.
Andrew Triggs: (J.P. Morgan, Analyst) Thank you.
Operator: Your next question comes from Jeff Cai with Jarden. Please go ahead.
Jeff Cai: (Jarden Australia, Analyst) Good morning and thank you. Look a question on
Suncorp Bank, if I annualise the Suncorp Bank costs, the cost base looks to be about $900
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per year, that's about $100 million higher than what Suncorp had. Can you talk through
why that's the case? I understand there's some timing issues involved.
Farhan Faruqui: Yes, so Jeff, once we – I think first of all, just to put this in perspective,
we didn't really buy an entity, we didn't buy a bank on its own, we bought effectively a
spinoff of a bank within a group, therefore there were, as you know, a number of services
et cetera that were being delivered by Suncorp Group into Suncorp Bank. As we
transitioned into day one, i.e. when we became owner of the Bank, some of those services,
technology, people, central functions, finance, risk, talent and culture, you name it, a lot of
those things had to be rebuilt at Suncorp Bank or provided by ANZ Group into Suncorp
Bank.
That obviously elevates cost right at the beginning but hopefully as we get synergies and
as we start to move more of those services into the ANZ Group scale, then those costs will
start to reduce. So, there is going to be an uplift temporarily, Jeff, until some of those TSA
and transition into Group services occur, which is going to happen over the next 12 to 24
months. We'll start to see some of those synergies come in 2025, but probably more
thereafter.
Jeff Cai: (Jarden Australia, Analyst) Okay, got it. Then very quick question on slide 24 on
the deposit pricing buckets, to what extent do you see that part can be a tailwind to
margins going forward? It sounds like some of the pressure in New Zealand is easing and
what we're seeing in terms of deposit competition in Australia is also easing. Just
interested in how you think about that piece going forward.
Farhan Faruqui: Look I think the asset and deposit competition isn't going to disappear,
but as I said, it's moderating. So, we don't think that those are going to be as much of
headwinds as we've seen over the last 12 months. Wholesale funding hopefully will
improve, I mean as I said, part of this has been the unwind of DFS, which on a half-on-half
basis, will hopefully be less of a headwind. Asset and funding mix will move depending on
how customer behaviour changes and where we look to position our liquids.
But capital and replicating portfolio will remain positive, so I would basically say, look,
there's going to be modest pressure across all of those areas, but more manageable and
because of the diversification of our business, just a bit more optionality for us.
Jeff Cai: (Jarden Australia, Analyst) Thank you, got it.
Operator: Your next question comes from Brendan Sproules with Citi. Please go ahead.
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Brendan Sproules: (Citi, Analyst) Good morning, I just have one question given we've had
quite a long conference call. Just in relation to New Zealand banking NIMs, the Reserve
Bank in recent months has made comments around how the banking sector has been able
to expand its NIM 30 or 40 basis points during the tightening cycle.
I wonder if you can make some comments around your NIM as we go through this rate
cutting cycle and where there has been structural change to the NIM or has this been a
cyclical phenomenon and we can expect that 30 to 40 basis point gain to [rat] over time?
Shayne Elliott: So, as you know, I'm on the New Zealand Board and we're obviously
actively engaged in the New Zealand business, which is a really important one for us. I
mean, yes, there's been more intense scrutiny around the New Zealand banking system,
which is sort of replicating what Australia has been through maybe a couple of years ago.
So parliament, regulators asking questions and wanting to understand the profitability and
whether the profitability of Australian banks is fair and reasonable. Our CEO there, Antonia
Watson and our Chairman, Scott St John actually appeared recently in front of a
parliamentary committee on that.
I think the facts kind of speak for themselves actually. When you look at the margins, if
you just look at banking margins, the banking margins in New Zealand are almost
precisely the same as they are here in Australia on a like-for -like basis, so there's not
really anything in that to see. What's different, to your point, though, is the drivers are
different and the reason the drivers are different, I mean I don't want to oversimplify it,
but one of the reasons is it's a fixed rate home loan market, as opposed to floating.
So, it just means that – and a fixed rate in the sense and you know this, that the average
tenor of a home loan there is – people have one, two, three year fixed, as opposed to here
where most people are variable and that just means that the way rates role through the
book is very different. You get a delayed reaction on the asset side.
So that's kind of it really, I don't think it's any more complicated than that. I don't think
there's any fundamental other drivers that suggest any different outcome, you just get this
– it's almost like there some ballast in the system and it just means those things roll
through slower, both plus and minus, because of the fixed rate nature of it.
Brendan Sproules: (Citi, Analyst) Maybe if I could just follow up on that, Shayne, I mean
it's a very good point you make and I think the Reserve Bank comments were that they
had to actually push their cash rate higher than they might have wanted to because partly
because of that dynamic, that the mortgage rate just didn't keep up. So therefore, do you
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expect on the way down as they cut that you'll get the opposite, that the Reserve Bank will
have to push it lower because you just won't get the fall in the mortgage rate which
obviously will affect your overall deposit profitability?
Shayne Elliott: It's a great question and the short answer, who knows? But I think it's a
very perceptive point in the sense that it may well be. I mean I think it stands to reason, if
the conditions are the same, the transmission mechanism in Australia is more immediate,
it's slower in New Zealand for the reasons we talked about, therefore it stands to reason if
you're the Reserve Bank, if you want to put more money in people's pockets in New
Zealand, you probably have to cut more than you do in Australia. So, I think that's true, all
else being equal.
But there's one other factor that's an interesting one and again, I don't have perfect data
on this, but literally again we were talking about it yesterday with Antonia, is what while
New Zealand's a fixed rate market and historically that has meant that people roll their
fixed rate for two years on their home loan or three years, that's come in radically. So, at
the moment more and more people are writing a fixed home loan for six months.
So what I don't have in front of me at the moment, but something we can certainly follow
up and look at, is what's the average tenor – now obviously there's a back book, which will
be more like the two-ish years, but at the front book it seems like that's shortening really
fast and so that's another factor that the Reserve Bank will be thinking about. I don't know
what the average tenor is in that fixed book in the back book off the top of my head, but
we can certainly get those numbers out to the market. So, I think that will be a factor as
well.
But your broader proposition, I think, is correct, that New Zealand has to do harder work
on the way up and down, that will have an impact on us, but as I said, what it has an
impact on margins, it also flows through slower for us as well. So, it's kind of swings and
roundabouts, if you will.
Farhan Faruqui: That's right.
Brendan Sproules: (Citi, Analyst) Okay, thank you.
Operator: There are no further questions at this time. I'll now hand back to Shayne for
closing remarks.
Shayne Elliott: Look, I'm not going to say anything other than thank you, thank you for
the thoughtful questions and hopefully you found the presentation useful. I know Jill,
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Farhan and the team will be speaking to many of you later in the day and we're always
available to take further questions. Thank you.
Farhan Faruqui: Thank you.
End of Transcript
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