AUSTRALIA Weekly performance 4% 2% % -2% -4% -6% -8% -1% Source: IRESS, August 212 Rolling monthly performance 8% 6% 4% 2% % -2% -4% -6% Source: IRESS, August 212 Rolling yearly performance % 15% 5% -5% -15% 2.1%.7%.6% NAB ANZ WBC Avg Majors 7.3% 7.2% Source: IRESS, August 212 -.2% -.5% ANZ WBC BOQ Avg Majors 24.8% 22.9% ANZ WBC Avg Majors 5.% 4.% 3.7% 3.3% 18.1% 15.9% Sector recommendation and TSRs Source: Macquarie Research, August 212-3.1% -4.3% -9.1% XJO BOQ CBA BEN -2.3% -3.5% NAB XJO CBA BEN 8.6% 7.7% 3.5% -12.2% CBA NAB BOQ XJO BEN Sector Rec. vs. S&P 2: Expected 12 month absolute TSRs: Stock Recommendation Div. Yield Target Price TSR ANZ Outperform 5.8% $26.98 13.8% NAB Outperform 7.2% $27.22 15.1% WBC Neutral 6.7% $23.6 2.1% BEN Neutral 7.8% $9.28.1% CBA Underperform 6.4% $48.19-6.2% BOQ Underperform 7.% $6.85-3.% Reporting Wrapped Up (and down) Reporting season business banks outperform the retail banks The sector reported their full year results (CBA, BEN), quarterly updates (ANZ, NAB) and APS33 Pillar 3 disclosures (ANZ, CBA, NAB, WBC) this month. As expected the business banks (whilst limited disclosure) outperformed the retail banks, with positive HoH earnings growth from ANZ (+3.6%) and NAB (+1.3%), and negative HoH growth from the retail banks CBA (-1.1%) and BEN (-7.3%). The distinctions with difference this reporting season were the banks ability to offset the challenges to the revenue line (subdued credit growth, high funding costs, deposit competition, and increased markets volatility). Sourcing revenues from growth areas (e.g. Asia, Business Banking) and maintaining a hard cost line offset the challenges and led to earnings momentum. ANZ and NAB were the outperformers. Asset quality stuck in the clouds, but no deterioration NPL balances improved slightly calendar year to date, though they remain stuck at elevated levels. We are however seeing a shift in risk within operating segments. CBA has seen an uptick in NPLs in their core business (housing), whilst WBC has seen a shift in risk out of housing into non-housing assets. Despite the slight improvement in NPLs we still remain cautious on the asset quality front. Funding markets open for now Global funding markets appear to be back open (at a reasonable price) for now. Despite the majors having completed their FY12 funding commitments, the banks are working through their FY13 commitments while the markets are willing. NAB priced a 4yr A$1b unsecured note at 11bp over BBSW, compared to the swapped back price of the WBC s US$1.b 5yr unsecured note earlier in the month at 158bp over BBSW. Major Banks outperformed the market this week The average of the Majors outperformed the market this week. The majors were down -.2% vs. S&P ASX 2 -.5%. Weekly share price performance: NAB 2.1%, ANZ.7%, WBC.6%, BOQ -3.1%, CBA -4.3%, BEN -9.1%. For the month-ending 24 August 212 the majors outperformed the S&P ASX2. Monthly share price performance: ANZ 7.3%, WBC 7.2%, NAB 3.7% and CBA -2.3%. The S&P ASX 2 was up 3.3% vs. the majors 4.%. For the year-ending 24 August 212, the major Australian banks outperformed the S&P ASX 2 by 14.5%. Yearly share price performance: ANZ 24.8%, WBC 22.9%, CBA 15.9% and NAB 8.6%. The S&P ASX 2 was up 3.5%. 24 August 212 Macquarie Securities (Australia) Limited Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website www.macquarie.com/disclosures.
FY12 reporting and Pillar 3 updates The sector reported their full year results (CBA, BEN), quarterly updates (ANZ, NAB) and APS33 Pillar 3 disclosures (ANZ, CBA, NAB, WBC) this month. As expected the business banks (whilst limited disclosure) outperformed the retail banks. The distinctions with difference this reporting season were the banks ability to offset the challenges to the revenue line (subdued credit growth, high funding costs, deposit competition, and increased markets volatility). Sourcing revenues from growth areas (e.g. Asia, Business Banking) and maintaining a hard cost line offset the challenges and led to earnings momentum. ANZ and NAB were the outperformers. Fig 1 Summary of CBA and BEN 2H12 earnings and key indicators CBA BEN $m 1H12 2H12 HoH Growth $m 1H12 2H12 HoH Growth NII 6,551 6,513 -.6% NII 475 469-1.3% Non-NII 3,554 3,439-3.2% Non-NII 133 149 12.7% Operating Expenses 4,62 4,594 -.2% Operating Expenses 358 374 4.5% BDD Expenses 545 544 -.2% BDD Expenses 16 17 5.1% Cash NPAT 3,576 3,537-1.1% Cash NPAT 159 147-7.3% RoE (Cash) 18.4% 17.% -1.4% RoE (Cash) 7.7% 7.% -.8% Cash EPS (cps) 219 214-2.2% Cash EPS (cps) 43 37-13.4% Dividend Yield 4.9% 7.% 2.1% Dividend Yield 6.9% 6.9%.% Source: Company data, Macquarie Research, August 212 Business banks outperformed retail banks Business banks outperformed the retail banks this reporting season, with positive HoH earnings growth from ANZ (+3.6%) and NAB (+1.3%), and negative HoH growth from the retail banks CBA (-1.1%) and BEN (-7.3%). Margin performance was varied. The quarterly trading updates revealed broadly flat margins in 3Q12, whilst the timing of asset re-pricing appeared a little too late to lift the 2H12 margins for CBA and BEN. Fig 2 Business banks outperforming the retail banks HoH ($b) 6-months to Dec-11 6-months to Jun-12 HoH Growth ANZ 2.9 3. 3.6% CBA 3.6 3.5-1.1% NAB 2.8 2.8 1.3% WBC* 3.1 3.2 2.% BEN.16.15-7.3% Source: Company data, Macquarie Research, August 212 WBC growth figures are 6months Sept-11 and 6-months to Mar-12 given they do not report quarterly trading updates The majors are well on the road to Basel III regulatory targets Capital generation was modest in the half (quarter), with the timing and magnitude of dividend payments portraying the banks in different lights on a Basel 2.5 and Basel III basis due to differences in regulatory treatments (Basel 2.5, accrual basis; Basel III, cash basis). CBA generated 14bp of core tier 1 capital 2H12 on a Basel 2.5 basis, placing the bank s capital levels below 1H12 capital levels of peers CBA (7.82%), NAB (8.5%), WBC (8.2%) and ANZ (8.92%). On an APRA basis, CBA remains the lowest of peers, CBA (7.5%), NAB (7.58%), WBC (7.74%) and ANZ (7.8%). On a fully harmonised basis, CBA capital levels look much more attractive (9.8%), NAB (9.28%), ANZ (9.8%) and WBC (1.29%). 24 August 212 2
Fig 3 Capital Comparison, the majors on track to meeting the proposed Basel III (APRA) targets c8%. 11.% 1.5% 1.% 9.5% 9.% 8.5% 8.% 7.5% 7.% 6.5% 6.% Basel 2.5 Basel III (APRA) Basel III (Fully Harmonised) ANZ* CBA* NAB* WBC* Source: Company data, Macquarie Research, August 212 *As at ANZ (Basel 2.5, Mar-12; Basel 3, Jun-12), CBA (Jun-12), NAB (Basel 2.5, Jun-12; Basel 3, Mar-12), WBC (Basel 2.5, Jun-12; Basel 3, Mar-12) Asset Quality NPL balances declined slightly, but they are still stuck at elevated levels Impaired asset and past due balances remain broadly flat at the elevated GFC levels in 212. This trend however is not consistent across all asset segments: ANZ s NPL (Impaired Assets + 9 days past due) growth was down -2.4% HoH, with reductions in both Housing and Non-Housing NPL s. CBA s NPL balance declined -4.5% HoH. The change was driven by declining business NPL s and a 1% increase in housing NPLs. NAB s NPL balance remained broadly flat HoH. The bank however saw a mix shift in exposures, with housing NPLs increasing 1% HoH and business NPLs declining 3%. WBC s NPL balance was broadly flat HoH. The bank however saw a shift in NPL exposure, out of low risk housing into higher risk non-housing segments. Overall impaired assets were broadly flat HoH and past dues down 2% HoH. Fig 4 Impaired Asset balances broadly flat.total impaired assets:exposures declining Fig 5 Past due balances broadly flat..total past dues balances:exposures declining $(m) 8, 7, 6, 5, 4, 3, 2, Dec-8 Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Source: Company data, Macquarie Research, August 212 Source: Company data, Macquarie Research, August 212 1 ANZ CBA NAB WBC Total Impaired/Exposures (RHS) bp 9 8 7 6 5 4 3 2 1 $(m) 4, 3,5 3, 2,5 2, 1,5 1, 5 Dec-8 Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 ANZ CBA NAB WBC Total Past Dues/Exposures (RHS) bp 5 45 4 35 3 2 24 August 212 3
Sep-9 Oct-9 Nov-9 Dec-9 Jan-1 Feb-1 Mar-1 Apr-1 May-1 Jun-1 Jul-1 Aug-1 Sep-1 Oct-1 Nov-1 Dec-1 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Macquarie Private Wealth Despite the slight improvement in NPLs we still remain cautious on the asset quality front. In our opinion banks are still cautious with respect to asset quality, given their improved coverage ratios calendar year to date despite the slight decline in NPL balances. Fig 6 Coverage (Specific Provisions/NPLs) the majors still remain cautious, with coverage increasing over the last 12months. 31% 29% 27% % 23% 21% 19% 17% 15% WBC ANZ CBA NAB Average Source: Company data, Macquarie Research, August 212 Our caution toward asset quality is highlighted by CBA experiencing more net downgrades than upgrades over the past 2 years. We are likely to see capital intensity increasing not only for CBA but also for the majors. Fig 7 Net downgrades > upgrades Source: CBA, Macquarie Research, August 212 24 August 212 4
Share price performance Fig 8 CBA share price Fig 9 ANZ share price 12 11 1 12 11 1 9 8 Market Majors CBA 9 8 Market Majors ANZ 7 7 Source: IRESS, Macquarie Research, August 212 Source: IRESS, Macquarie Research, August 212 Fig 1 NAB share price Fig 11 WBC share price 12 Market Majors NAB 12 Market Majors WBC 11 11 1 1 9 9 8 8 7 7 Source: IRESS, Macquarie Research, August 212 Source: IRESS, Macquarie Research, August 212 Fig 12 BEN share price Fig 13 BOQ share price 12 Market 2 Regionals BEN 12 Market 2 Regionals BOQ 11 11 1 9 1 9 8 8 7 7 6 6 5 Source: IRESS, Macquarie Research, August 212 Source: IRESS, Macquarie Research, August 212 24 August 212 5
Price / Book Bands Fig 14 CBA Price / Book Band Fig 15 ANZ Price / Book Band CBA P/BV Bands 8 3.x 6 2.5x 4 2.x 1.5x 2 1.x.5x Aug-97 Aug- Aug-3 Aug-6 Aug-9 Aug-12 ANZ P/BV Bands 5 4 3.x 2.5x 3 2.x 2 1.5x 1.x 1.5x Aug-97 Aug- Aug-3 Aug-6 Aug-9 Aug-12 Source: Company Data, IRESS, Macquarie Research, August 212 Source: Company Data, IRESS, Macquarie Research, August 212 Fig 16 NAB Price / Book Band Fig 17 WBC Price / Book Band NAB P/BV Bands 6 5 3.x 4 2.5x 3 2.x 1.5x 2 1.x 1.5x Aug-97 Aug- Aug-3 Aug-6 Aug-9 Aug-12 5 45 4 35 3 2 15 1 5 WBC P/BV Bands 3.x 2.5x 2.x 1.5x 1.x.5x 1.x Aug-97 Aug- Aug-3 Aug-6 Aug-9 Aug-12 Source: Company Data, IRESS, Macquarie Research, August 212 Source: Company Data, IRESS, Macquarie Research, August 212 Fig 18 BEN Price / Book Band Fig 19 BOQ Price / Book Band 2 18 16 14 12 1 8 6 4 BEN P/BV Bands 2 BOQ P/BV Bands 1.6x 18 1.4x 1.2x 1.x.8x.6x.4x 2 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Source: Company Data, IRESS, Macquarie Research, August 212 Source: Company Data, IRESS, Macquarie Research, August 212 16 1.8x 14 1.6x 12 1.4x 1 1.2x 1.x 8.8x 6.6x 4 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 24 August 212 6
Global Banks vs. Fig 2 Key Metrics Market Cap Price / Earnings Dividend Yield (%) Price / Book Value RoE (%) Rep. EPS Growth (%) Company Price (US$m) FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 Australian_Banks ANZ $. 7,95 11.8x 11.4x 11.3x 5.6% 5.8% 5.9% 1.8x 1.7x 1.6x 14.9% 15.1% 14.2% 8.8% 3.4% -.9% CBA $ 55.14 91,676 13.1x 12.7x 12.8x 5.8% 6.1% 6.4% 2.4x 2.2x 2.1x 17.2% 17.9% 17.% 1.6% 2.9%.1% NAB $.31 6,79 1.2x 1.1x 1.x 6.8% 7.2% 7.6% 1.5x 1.5x 1.5x 12.9% 11.4% 13.4% 16.3% -.5% 1.1% WBC $ 24.77 79,669 12.2x 12.1x 11.9x 6.3% 6.7% 6.8% 1.8x 1.7x 1.7x 17.5% 14.5% 14.7% 4.4% 1.% 1.6% BEN $ 7.92 3,281 8.7x 1.x 8.5x 7.6% 7.6% 7.8%.8x.8x.8x 8.9% 4.8% 8.6% 37.7% 74.2%.% BOQ $ 7.64 2,464 9.9x 99.2x 1.8x 6.9% 7.% 7.3%.7x.9x.9x 6.8%.8% 7.4% -92.2% 964.6% 5.3% AU Majors 32,33 12.x 11.7x 11.6x 6.1% 6.4% 6.6% 1.8x 1.7x 1.6x 16.% 14.8% 14.4% 9.7% 2.%.6% AU Regionals 5,744 9.3x 54.6x 9.7x 7.2% 7.3% 7.6%.7x.9x.8x 7.9% 2.8% 8.% -27.2% 519.4% 2.7% US_Large_Caps 99,46 12.2x 1.5x 9.5x 1.4% 2.3% 2.9% 1.x.9x.8x 7.8% 8.% 9.4% 53.%.9% 8.8% UK_Banks 276,665 9.1x 8.1x 7.6x 2.2% 2.4% 2.7%.5x.5x.5x 5.9% 3.8% 8.4% -14.6% 4.3% 7.9% EU_Banks 351,167 8.5x 1.5x 8.8x 4.2% 3.5% 4.1%.5x.5x.5x 5.8% 6.1% 6.4% -.1%.1%.1% Canadian_Banks 293,49 11.5x 11.x 1.3x 3.9% 4.2% 4.4% 1.8x 1.6x 1.5x 15.5% 16.5% 15.% 15.4% 13.% 4.1% Japan_Banks 28,46 11.7x 11.x 1.1x 2.1% 2.3% 2.3%.7x.6x.6x 5.% 6.4% 6.1% 18.9% 9.5% -3.7% Korean_Banks 55,481 5.8x 5.8x 6.7x.8% 2.5% 2.5%.6x.6x.6x 12.7% 1.9% 8.4% 43.4% -9.3% -8.5% HK_Banks 27,359 12.x 11.9x 11.2x 3.7% 4.% 4.3% 1.3x 1.2x 1.1x 13.% 11.9% 11.8% 8.6% 1.2% 7.8% China_Banks 586,819 5.8x 5.4x 5.4x 5.5% 5.5% 5.5% 1.2x 1.x.9x 21.7% 19.2% 16.9% 24.9% 4.4% 1.3% Singapore_Banks 53,828 13.9x 12.5x 11.9x 3.2% 3.6% 3.8% 1.5x 1.4x 1.3x 11.2% 12.% 11.3%.%.1%.% Malaysia_Banks 52,851 14.5x 13.8x 12.5x 3.% 3.1% 3.8% 2.2x 2.x 1.9x 16.2% 15.5% 15.5%.2%.1%.1% Indonesian_Banks 76,233 15.8x 14.6x 13.x 1.2% 2.1% 2.4% 3.4x 2.8x 2.3x 26.1% 23.3% 22.5%.2% 13.6% 14.1% Thai_Banks 54,17 14.4x 11.8x 1.3x 2.3% 3.1% 3.7% 1.9x 1.7x 1.5x 13.3% 19.6% 19.6% 11.9% 44.2% 13.6% Philippine_Banks 26,223 12.3x 1.5x 9.4x 2.1% 2.1% 2.1% 1.7x 1.4x 1.3x 14.5% 14.% 14.% 11.6% 1.7% 1.8% Indian_Banks 112,451 8.5x 7.x 6.5x 2.2% 2.2% 2.2% 1.3x 1.1x 1.x 17.4% 17.9% 17.% 19.6% 18.% 1.6% Taiwan_Banks 38,164 15.3x 12.1x 11.x 1.8% 2.2%.% 1.1x 1.x 1.x 7.9% 8.8% 8.2%.2%.2%.% Note: Based on data for Macquarie Research coverage of 28 banks stocks in Europe, UK, Asia, US, Canada, Australia, Japan and South Africa. Prices as at 24 August 212 Source: Macquarie Research, August 212 Fig 21 NAB vs. UK Bank Index Indexed at 1 13% 12% 11% 1% 9% 8% 7% NAB UK Bank Index 6% Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Source: Bloomberg, IRESS, Macquarie Research, August 212 Fig 22 ANZ vs. Asian Bank Index Indexed at 1 14% 13% 12% 11% 1% 9% 8% ANZ 7% Asian Bank Index 6% Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Source: Bloomberg, IRESS, Macquarie Research, August 212 24 August 212 7
Australian share prices relative to inverted CDS spreads Fig 23 CBA share price relative to 5-year CDS spread Fig 24 ANZ share price relative to 5-year CDS spread $ $ 7 3 6 5 4 3 2 1 Negative correlation coefficient =.35 5 1 15 2 2 15 1 5 Negative correlation coefficient =.45 5 1 15 2 Nov-7 Aug-8 May-9 Feb-1 Oct-1 Jul-11 Apr-12 Nov-7 Aug-8 May-9 Feb-1 Oct-1 Jul-11 Apr-12 CBA Stock Price (LHS) CBA 5 Yr CDS Spread (RHS) - inverted ANZ Stock Price (LHS) ANZ 5 Yr CDS Spread (RHS) - inverted Source: Bloomberg, Macquarie Research, August 212 Source: Bloomberg, Macquarie Research, August 212 Fig NAB share price relative to 5-year CDS spread Fig 26 WBC share price relative to 5-year CDS spread $ $ 45 35 4 35 3 2 15 1 5 Negative correlation coefficient =..7 Nov-7 Aug-8 May-9 Feb-1 Oct-1 Jul-11 Apr-12 5 1 15 2 3 2 15 1 5 Negative correlation coefficient =.67 Nov-7 Aug-8 May-9 Feb-1 Oct-1 Jul-11 Apr-12 5 1 15 2 NAB Stock Price (LHS) NAB 5 Yr CDS Spread (RHS) - inverted WBC Stock Price (LHS) WBC 5 Yr CDS Spread (RHS) - inverted Source: Bloomberg, Macquarie Research, August 212 Source: Bloomberg, Macquarie Research, August 212 24 August 212 8
Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie First South - South Africa Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3 index return Neutral (Hold) return within 5% of Russell 3 index return Underperform (Sell) return >5% below Russell 3 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 6 1% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 4 6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3 4% in a year. Low medium stock should be expected to move up or down at least 3% in a year. Low stock should be expected to move up or down at least 15 % in a year. * Applicable to Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 3 June 212 AU/NZ Asia RSA USA CA EUR Outperform 55.67% 61.% 53.43% 42.58% 69.23% 46.6% (for US coverage by MCUSA, 9.5% of stocks followed are investment banking clients) Neutral 3.5% 22.11% 36.99% 52.41% 28.2% 33.69% (for US coverage by MCUSA, 8.14% of stocks followed are investment banking clients) Underperform 13.83% 16.89% 9.59% 5.1% 2.75% 19.71% (for US coverage by MCUSA,.45% of stocks covered are investment banking clients) Company Specific Disclosures: Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. Analyst Certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN 94 122 169 279, AFSL No. 31862) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General Disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN 58 2 832 126, AFSL No. 238947) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN 41 2 574 923, AFSL No. 23754) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN 46 8 583 542, AFSL No. 23752) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989. Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. 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We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. 24 August 212 9