ANZ National Bank Limited MEDIA BACKGROUND PACK To accompany the General Disclosure Statement for nine months ended 3 June 28 Graham Hodges, Chief Executive Officer 28 August 28
ANZ National Bank Limited New Zealand s largest bank Assets of NZ$114.9 billion as at 3 June 28 and NPAT of NZ$96m for 9 months ended 3 June 28 33% of total New Zealand registered bank assets, ~38% share of revenue NZ$ m 12 9 Consistent strong profit (Profit after tax) 917 172 1168 848 96 Employs ~9,5 people (FTE) 6 Serves ~1.9 million customers 3 316 branches and 746 ATMs Credit rating: AA (Standard & Poor s), Aa2 (Moody s) & AA- (Fitch) Earnings well-balanced across a spread of businesses*: - 39% Retail Banking - 24% Relationship Banking - 21% Institutional - 16% Other FY '5 FY '6 FY '7 June '7* June '8* *for 9 months ended June ANZ National Bank is well positioned Leading share in all customer segments Solid profit result High quality asset book Diversified funding sources Strong capital ratios and liquidity *General Disclosure Statement basis, June 28 PAGE 1 of 5
Underlying cash profit up 1% over same period last year Strong headline profit growth PBP 19% NZ$m 1,527 1,285 NPAT 13% 96 848 and solid underlying cash profit. 9 months ended June (NZ$m) 27 28 Growth (PCP) Headline NPAT (per GDS) 848 96 13% Adjusting for non-core items: Visa IPO (85) NZ$ m PBP NPAT 9 months ended June 7 9 months ended June 8 Provisions rising from low levels in a challenging environment 22 17 12 7 2-3 -8 121 18 Total Provision Charge 74 167 FY5 FY6 FY7 9 months ended June Pre-IFRS Post-IFRS 8 CP Recoveries New IPs Total Sale of Esanda Fleetpartners (76) Net Hedge ineffectiveness (8) Deferred Taxation Movements 27 (9) Underlying Cash Profit 791 Business Unit Performances: 4 87 1% Institutional: exceptionally strong performance Relationship banking: solid performance in rural and business sectors Retail: deposit margin squeeze and higher provisions impacting profit PAGE 2 of 5
Non-performing loans and arrears up, but portfolio well secured Non-performing loans are increasing, reflecting the more difficult economic environment Rise in arrears is largely in the secured portfolio which historically has lower loss rates Collective provisioning of NZ$486m (.5% of Gross Loans) provides good loss coverage on diversified business mix Non-Performing Loan balances NZ$m % of GLA 4.5% 3.4%.3% 2.2% 1.1%.% 1H5 2H5 1H6 2H6 1H7 2H7 1H8 Jun- 8 Non-Performing Loans % of Gross Lending Assets (RHS) Arrears are up but loss rates are mitigated by security Basel II Asset Class Gross Loans and Advances 9 days past due Individual Provision Charge* Annualised Loss Rate* NZ$m NZ$m % of GLA NZ$m % of GLA Retail Mortgages 49,574 169.34% 12.3% Other Retail Small Business) (Personal & 5,395 46.85% 76 1.88% Corporate Exposures 41,234 39.1% 18.6% Total ANZ National 96,23 254.26% 16.15% * for nine months ended June 28 PAGE 3 of 5
ANZ National Bank is strong, sound and well capitalised 4.% 7.71% Strong capital ratios (June 28) 8.42% 8.% 11.39% 12.43% Solid profit result Very strong capital position Over NZ$6 billion of available liquidity Diverse funding base with ongoing access to global funding sources Strong support for deposits and bond issues from the local market Tier 1 Capital RBNZ Minimum ANZ National Bank under RBNZ framework Total Capital ANZ National Bank under APRA framework (estimate) ANZ Banking Group (and ANZ National Bank) has a credit rating that puts it amongst the highest rated banks in the world*: ANZ Banking Group is one of only 28 banking groups globally rated AA or better by Standard & Poor s Standard & Poor s rate over 2, banks internationally The four major New Zealand banks share the same AA rating as their Australian parent bank *ANZ National analysis PAGE 4 of 5
The economic outlook is subdued, but there are areas of support The RBNZ, having raised rates between 23 and 27, cut the OCR in July 28 1 % International Central Bank Interest Rates.9 A weaker NZD will help exporters 1. 8 6 4 NZ AU UK EU.8.7.6 NZD/AUD (right scale).9.8.7 2 US 99 1 3 5 7 9.5.4 NZD/USD (left scale) 1 2 3 4 5 6 7 8 9 1.6.5 3. 2.2 1.4.6 -.2-1. -1.8-2.6 Fiscal policy will lend support to the economy into 29 Fiscal impulse % of GDP Expansionary Contractionary Budget 28 forecast 96 98 2 4 6 8 1 12 Prospects for growth remain subdued but financial stabilisers have begun to work. Improved economic momentum expected in 29, as cyclical stabilisation measures, increased infrastructure spending, the recovering export sector, and tax cuts for the household sector provide support to the economy. The global economic environment, while uncertain, is likely to remain supportive. Sources: Statistics NZ; Reuters; NZ Treasury; ANZ National Bank PAGE 5 of 5