Notes to the Consolidated

Financial Statements

1. About our financial statements

General information

These are the consolidated financial statements for ANZBGL (the Company) and its controlled entities (together, the Group or Consolidated Entity) for the

year ended 30 September 2024. The Company is a publicly listed company incorporated and domiciled in Australia with debt listed on securities

exchanges. The Company is a subsidiary of ANZGHL and is regulated by APRA as an ADI. The address of the Company’s registered office and its principal

place of business is ANZ Centre, 833 Collins Street, Docklands, Victoria, Australia 3008. The Group provides banking and financial services to individuals

and business customers and operates in and across 29 markets.

On 7 November 2024, the Directors resolved to authorise the issue of these financial statements. Information in the financial statements is included only

to the extent we consider it material and relevant to the understanding of the financial statements. A disclosure is considered material and relevant if, for

example:

•

the amount is significant in size (quantitative factor);

•

the information is significant by nature (qualitative factor);

•

the user cannot understand the Group’s results without the specific disclosure (qualitative factor);

•

the information is critical to a user’s understanding of the impact of significant changes in the Group’s business during the period - for example,

business acquisitions or disposals (qualitative factor);

•

the information relates to an aspect of the Group’s operations that is important to its future performance (qualitative factor); and

•

the information is required under legislative requirements of the Corporations Act 2001, the Banking Act 1959 (Cth) or by the Group’s principal

regulators, including the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).

This section of the financial statements:

•

outlines the basis upon which the Group’s financial statements have been prepared; and

•

discusses any new accounting standards or regulations that directly impact the financial statements.

Basis of preparation

This financial report is a general purpose (Tier 1) financial report prepared by a ‘for profit’ entity, in accordance with Australian Accounting Standards

(AASs) and other authoritative pronouncements of the Australian Accounting Standards Board (AASB), the Corporations Act 2001, and International

Financial Reporting Standards (IFRS) and interpretations published by the International Accounting Standards Board (IASB).

We present the financial statements of the Group in Australian dollars, which is the Company’s functional and presentation currency. We measure the

financial statements of each entity in the Group using the currency of the primary economic environment in which that entity operates (the functional

currency). We have rounded values to the nearest million dollars ($m), unless otherwise stated, as permitted under the ASIC Corporations (Rounding in

Financial/Directors Report) Instrument 2016/191.

Certain comparative amounts have been restated to conform with the basis of preparation in the current year.

Basis of measurement and presentation

The financial information has been prepared in accordance with the historical cost basis - except the following assets and liabilities which we have stated

at their fair value:

•

derivative financial instruments and in the case of fair value hedging, a fair value adjustment made to the underlying hedged item;

•

financial instruments held for trading;

•

financial assets and financial liabilities designated at fair value through profit or loss (FVTPL); and

•

financial assets at fair value through other comprehensive income (FVOCI).

In accordance with AASB 119 Employee Benefits we have measured defined benefit obligations using the Projected Unit Credit Method.

Basis of consolidation

The consolidated financial statements of the Group comprise the financial statements of the Company and all its subsidiaries. An entity, including a

structured entity, is considered a subsidiary of the Group when we determine that the Company has control over the entity. Control exists when the Group

is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the

entity. We assess power by examining existing rights that give the Company the current ability to direct the relevant activities of the entity. We have

eliminated, on consolidation, the effect of all transactions between entities in the Group.

Australia and New Zealand Banking Group Limited 2024 Annual Report

86

1. About our financial statements (continued)

Foreign currency translation

Transactions and balances

Foreign currency transactions are translated into the relevant functional currency at the exchange rate prevailing at the date of the transaction. At the

reporting date, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the relevant spot rate. Any

foreign currency translation gains or losses that arise are included in profit or loss in the period they arise.

We measure translation differences on non-monetary items classified as FVTPL and report them as part of the fair value gain or loss on these items. For

non-monetary items classified as investment securities measured at FVOCI, translation differences are included in other comprehensive income.

Financial statements of foreign operations that have a functional currency that is not Australian dollars

The financial statements of our foreign operations are translated into Australian dollars for consolidation into the Group financial statements using the

following method:

Foreign currency item Exchange rate used

A

ssets and liabilities The reporting date rate

Equity The initial investment date rate

Income and expenses The average rate for the period – but for a significant transaction if we believe the average rate is not reasonable,

t

hen we use the rate at the date of the transaction

Exchange differences arising from the translation of financial statements of foreign operations are recognised in the foreign currency translation reserve in

equity. When we dispose of a foreign operation, the cumulative exchange differences are transferred to profit or loss.

Fiduciary activities

The Group provides fiduciary services to third parties including custody, nominee and trustee services. This involves the Group holding assets on behalf of

third parties and making decisions regarding the purchase and sale of financial instruments. If the Group is not the beneficial owner or does not control the

assets, then we do not recognise these transactions in these financial statements, except when required by accounting standards or another legislative

requirement.

Key judgements and estimates

In the process of applying the Group’s accounting policies, management has made a number of judgements and applied estimates and

assumptions about past and future events. Further information on the key judgements and estimates that we consider material to the financial

statements are contained within each relevant note to the financial statements.

The global economy continues to face challenges associated with inflation and interest rate uncertainties, continuing trade and geopolitical

tensions, and impacts from climate change, which contribute to an elevated level of estimation uncertainty involved in the preparation of these

financial statements.

The Group is exposed to climate risk either directly through its operations or indirectly, for example, through lending to customers. Climate risk

may also be a driver of other risks within our risk management framework. Our most material climate risks arise from lending to business and

retail customers, which contributes to credit risk.

The Group has made various accounting estimates in this Financial Report based on forecasts of economic conditions which reflect

expectations and assumptions at 30 September 2024 about future events considered reasonable in the circumstances. Thus, there is a

considerable degree of judgement involved in preparing these estimates. Actual economic conditions are likely to be different from those

forecast since anticipated events frequently do not occur as expected, and the effect of these differences may significantly impact accounting

estimates included in these financial statements. The significant accounting estimates impacted by these forecasts and associated

uncertainties are predominantly related to expected credit losses and recoverable amounts of non-financial assets.

The impact of these uncertainties on each of these accounting estimates is discussed in the relevant notes in this Financial Report, along with

assumptions and judgements made in relation to other key estimates. Readers should consider these disclosures in light of the inherent

uncertainties described above.

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1. About our financial statements (continued)

Accounting standards adopted in the period

Accounting policies have been consistently applied to all periods presented, unless otherwise noted.

AASB 17 Insurance Contracts

On 1 October 2023, the Group adopted AASB 17 Insurance Contracts (AASB 17) which established principles for the recognition, measurement,

presentation, and disclosure of insurance contracts, and replaced AASB 4 Insurance Contracts and AASB 1023 General Insurance Contracts. 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 (2023: $8 million), an increase in total assets (2023: $22 million), and an

increase in total liabilities (2023: $51 million) in the Australia Retail division. These adjustments were primarily driven by the impact of changes in the

pattern of recognition of revenue on insurance contracts issued, changes in the pattern of recognition of the net cost of reinsurance and the valuation of

profit commissions on reinsurance contracts held.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction

AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction amends

AASB 112 Income Taxes. It clarifies that entities are required to recognise deferred tax on transactions for which there is both an asset and a liability and

that give rise to equal taxable and deductible temporary differences which may apply to leases and decommissioning or restoration obligations. This

amendment was effective for the Group from 1 October 2023 and did not have a material impact on the Group.

International Tax Reform – Pillar Two Model Rules

The Organisation for Economic Co-Operation and Development published the Pillar Two Model Rules in December 2021 which are designed to ensure

large multinational enterprises pay a minimum level of tax of 15% in each of the jurisdictions where they operate. A number of countries in which the

Group operates have implemented or announced the proposed implementation of the Pillar Two rules including Australia.

As at 30 September 2024, Pillar Two draft legislation has been released in Australia but is not yet enacted or substantially enacted. The Australian Pillar

Two rules, if enacted, will be effective for the Group from 1 October 2024.

In anticipation of the legislation being enacted, the AASB issued AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Return

– Pillar Two Model Rules in June 2023. The Group has applied the mandatory exemption included in para.4A of this standard and has not recognised or

disclosed any associated deferred taxes.

The Group has assessed the potential impact of the Pillar Two legislation. Based on this analysis as at the reporting date and having regard to the

historical and reasonably estimable data, the Group is not expected to have a material Pillar Two tax exposure.

Accounting standards not early adopted

A number of new standards, amendments to standards and interpretations have been published but are not mandatory for the financial statements for

the year ended 30 September 2024 and have not been applied by the Group in preparing these financial statements. Further details of these are set out

below.

AASB 18 Presentation and Disclosure in Financial Statements

In June 2024, the AASB issued AASB 18 Presentation and Disclosure in Financial Statements (AASB 18) which updates and replaces requirements for the

presentation and disclosure of information in financial statements. AASB 18 introduces new defined subtotals to be presented in the consolidated Income

Statement, disclosure of management-defined performance measures and requirements for grouping of information. This standard will be effective for

the financial year beginning 1 October 2027. We are currently assessing the impact of adopting this standard.

Classification and measurement amendments to AASB 9 Financial Instruments

In July 2024, the AASB issued AASB 2024-2 Amendments to Australian Accounting Standards - Classification and Measurement of Financial Instruments

which amends requirements related to settling financial liabilities using an electronic payment system and assessing contractual cash flow characteristics

of financial assets with environmental, social and corporate governance and similar features. The amendments will be effective for the financial year

beginning 1 October 2026. We are currently assessing the impact of adopting the amendments.

Lease Liability in a Sale and Leaseback

AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback amends AASB 16 Leases and specifies the

accounting for variable lease payments by seller-lessees in sale and leaseback transactions. The amendment is effective from 1 October 2024 and will

not have a material impact on the Group.

Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

88

2.

Net interest income

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Interest income by type of financial asset
Financial assets at amortised cost	51,178	44,305	39,777	35,000
Investment securities at FVOCI
	4,539	2,615	3,966	2,235
Trading assets
	2,217	1,654	1,954	1,413
Financial assets at FVTPL
	2,744	1,355	2,821	1,449
External interest income
	60,678	49,929	48,518	40,097
Controlled entities' income	-	-	1,350	1,047
Interest income
	60,678	49,929	49,868	41,144
Interest expense by type of financial liability
Financial liabilities at amortised cost	(41,472)	(31,343)	(34,130)	(26,016)
Securities sold short
	(649)	(451)	(615)	(392)
Financial liabilities designated at FVTPL
	(2,131)	(1,214)	(1,977)	(1,104)
External interest expense
	(44,252)	(33,008)	(36,722)	(27,512)
Controlled entities' expense	-	-	(1,511)	(1,161)
Interest expense
	(44,252)	(33,008)	(38,233)	(28,673)
Major bank levy	(389)	(353)	(389)	(353)
Net interest income	16,037	16,568	11,246	12,118

Recognition and measurement

Net interest income

Interest income and expense

We recognise interest income and expense in net interest income for all financial instruments, including those classified as held for trading,

assets measured at FVOCI, and assets and liabilities designated at FVTPL. We use the effective interest rate method to calculate the amortised

cost of assets held at amortised cost and to recognise interest income on financial assets measured at amortised cost and FVOCI. The effective

interest rate is the rate that discounts the stream of estimated future cash receipts or payments over the expected life of the financial instrument

or, when appropriate, a shorter period, to the net carrying amount of the financial asset or liability. For assets subject to prepayment, we

determine their expected life on the basis of historical behaviour of the particular asset portfolio taking into account contractual obligations and

prepayment experience.

We recognise fees and costs, which form an integral part of the financial instrument (for example loan origination fees and costs), using the

effective interest rate method. These are presented as part of interest income or expense depending on whether the underlying financial

instrument is a financial asset or financial liability.

Major Bank Levy

The Major Bank Levy Act 2017 (levy or major bank levy) applies a rate of 0.06% to certain liabilities of ANZBGL. The levy represents a finance

cost, and it is presented as interest expense in the Income Statement.

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3.

Non-interest income

	Consolidated		The Company
	2024	2024	2023	2023
	$m	$m	$m	$m
Fee and commission income
Lending fees
1
	420	397	394	362
Non-lending fees
	2,272	2,275	1,551	1,533
Commissions
	75	85	48	55
Funds management income
	241	246	14	22
External fee and commission income
	3,008	3,003	2,007	1,972
Controlled entities' income	-	-	192	187
Fee and commission income
	3,008	3,003	2,199	2,159
Fee and commission expense	(1,044)	(1,057)	(555)	(553)
Net fee and commission income
	1,964	1,946	1,644	1,606
Other income
Net foreign exchange earnings and other financial instruments income
2
	2,166	1,535	1,941	1,272
Release of foreign currency translation reserve on dissolution of entities
	22	43	-	-
Loss on disposal of data centres in Australia
	-	(43)	-	(32)
Loss on disposal of investment in AmBank
	(21)	-	-	-
Dividends received from controlled entities
	-	-	6,104	2,562
Other
	97	96	102	(7)
Other income
	2,264	1,631	8,147	3,795
Other operating income	4,228	3,577	9,791	5,401
Net income from insurance business	122	108	-	-
Share of associates' profit/(loss)	134	225	-	(18)
Non-interest income
	4,484	3,910	9,791	5,383

1.

Excludes 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 designated at FVTPL.

90 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

90

3. Non-interest income

(continued)

Recognition and measurement

Other operating income

Fee and commission revenue

We recognise fee and commission revenue arising from contracts with customers (a) over time when the performance obligation is satisfied

across more than one reporting period, or (b) at a point in time when the performance obligation is satisfied immediately or is satisfied within

one reporting period.

•

lending fees exclude fees treated as part of the effective yield calculation of interest income. Lending fees include certain guarantee and

commitment fees where the loan or guarantee is not likely to be drawn upon, and other fees charged for providing customers a distinct

good or service that are recognised separately from the underlying lending product.

•

non-lending fees include fees associated with deposit and credit card accounts, interchange fees and fees charged for specific customer

transactions such as international transaction fees. Where the Group provides multiple goods or services to a customer under the same

contract, the Group allocates the transaction price of the contract to distinct performance obligations based on the relative stand-alone

selling price of each performance obligation. Revenue is recognised as each performance obligation is satisfied.

•

commissions represent fees from third parties where we act as an agent by arranging a third party (such as an insurance provider) to

provide goods and services to a customer. In such cases, we are not primarily responsible for providing the underlying good or service to

the customer. If the Group collects funds on behalf of a third party when acting as an agent, we only recognise the net commission

retained as revenue. When the commission is variable based on factors outside our control (such as a trail commission), revenue is only

recognised if it is highly probable that a significant reversal of the variable amount will not be required in future periods.

•

funds management income represents fees earned from customers for providing financial advice and asset management services.

Revenue is recognised either at the point the financial advice is provided or over the period in which the asset management services are

delivered. Performance fees associated with funds management activities are only recognised when it becomes highly probable the

performance hurdle will be achieved.

Net foreign exchange earnings and other financial instruments income

We recognise the following as net foreign exchange earnings and other financial instruments income:

•

exchange rate differences arising on the settlement of monetary items and translation differences on monetary items translated at rates

different to those at which they were initially recognised or included in a previous financial report;

•

fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges that we use to manage

interest rate and foreign exchange risk on funding instruments;

•

the ineffective portions of fair value hedges, cash flow hedges and net investment hedges;

x

immediately upon sale or repayment of a hedged item, the unamortised fair value adjustments to items designated as fair value hedges

and amounts accumulated in equity related to designated cash flow hedges;

•

fair value movements on financial assets and financial liabilities designated at FVTPL or held for trading;

•

amounts released from the FVOCI reserve when a debt instrument classified as FVOCI is sold; and

•

the gain or loss on derecognition of financial assets or liabilities measured at amortised cost

.

Gain or loss on disposal of non-financial assets

The gain or loss on the disposal of assets is the difference between the carrying value of the asset and the proceeds of disposal net of costs.

This is recognised in Other income in the year in which control of the asset transfers to the buyer.

Share of associates’ profit/(loss)

The equity method is applied to accounting for associates. Under the equity method, our share of the after tax results of associates is included

in the Income Statement and the Statement of Comprehensive Income.

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4. Operating expenses

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Personnel
Salaries and related costs	5,475	5,157	3,938	3,791
Superannuation costs
	443	396	368	335
Equity-settled share-based payments
	139	105	124	92
Other
	83	78	53	62
Personnel
	6,140	5,736	4,483	4,280
Premises
Rent	74	71	52	50
Depreciation
	436	437	332	338
Other
	178	176	123	123
Premises
	688	684	507	511
Technology
Depreciation and amortisation	501	501	416	455
Subscription licences and outsourced services
	1,155	1,007	782	695
Other
	238	178	174	144
Technology
	1,894	1,686	1,372	1,294
Restructuring	235	169	190	146
Other
Advertising and public relations	200	176	158	133
Professional fees
	766	857	716	795
Freight, stationery, postage and communication
	170	175	126	128
Card processing fees
	107	104	103	101
Other
	469	500	1,122	1,100
Other
	1,712	1,812	2,225	2,257
Operating expenses	10,669	10,087	8,777	8,488

92 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

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4. Operating expenses (continued)

Recognition and measurement

Operating expenses

Operating expenses are recognised as services are provided to the Group, over the period in which an asset is consumed, or once a liability is

created.

Salaries and related costs - annual leave, long service leave and other employee benefits

Wages and salaries, annual leave and other employee entitlements expected to be paid or settled within twelve months of employees

rendering service are measured at their nominal amounts using remuneration rates that the Group expects to pay when the liabilities are

settled.

We accrue employee entitlements relating to long service leave using an actuarial calculation. It includes assumptions regarding staff

departures, leave utilisation and future salary increases. The result is then discounted using market yields at the reporting date. The market

yields are determined from a blended rate of high quality corporate bonds with terms to maturity that closely match the estimated future cash

outflows.

If we expect to pay short term cash bonuses, then a liability is recognised when the Group has a present legal or constructive obligation to pay

this amount (as a result of past service provided by the employee) and the obligation can be reliably measured.

Personnel expenses also include share-based payments which may be cash or equity settled. We calculate the fair value of equity settled

remuneration at grant date, which is then amortised over the vesting period, with a corresponding increase in share capital or the share option

reserve as applicable. When we estimate the fair value, we take into account market vesting conditions, such as share price performance

conditions. We take non-market vesting conditions, such as service conditions, into account by adjusting the number of equity instruments

included in the expense.

After the grant of an equity-based award, the amount we recognise as an expense is reversed when non-market vesting conditions are not

met, for example an employee fails to satisfy the minimum service period specified in the award due to resignation, termination or notice of

dismissal for serious misconduct. However, we do not reverse the expense if the award does not vest due to the failure to meet a market-

based performance condition.

Further information on share-based payment schemes operated by the Group during the current and prior year is included in Note 30

Employee share and option plans.

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5. Income tax

Income tax expense

Reconciliation of the prima facie income tax expense on pre-tax profit with the income tax expense recognised in profit or loss:

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Profit before income tax
	9,446	10,146	12,134	8,938
Prima facie income tax expense at 30%	2,834	3,044	3,640	2,681
Tax effect of permanent differences:
Share of associates' (profit)/loss	(41)	(68)	-	5
Interest on convertible instruments
	124	92	124	92
Overseas tax rate differential
	(156)	(163)	(93)	(95)
Provision for foreign tax on dividend repatriation
	36	41	33	35
Rebatable and non-assessable dividends
	-	-	(1,831)	(769)
Other
	(1)	(2)	(8)	23
Subtotal
	2,796	2,944	1,865	1,972
Income tax (over)/under provided in previous years	20	1	14	(8)
Income tax expense
	2,816	2,945	1,879	1,964
Current tax expense	3,063	2,891	1,956	2,012
Adjustments recognised in the current year in relation to the
current tax of prior years
	20	1	14	(8)
Deferred tax expense/(income) relating to the origination and
reversal of temporary differences
	(267)	53	(91)	(40)
Income tax expense
	2,816	2,945	1,879	1,964
Australia	1,481	1,644	1,476	1,568
Overseas	1,335	1,301	403	396
Income tax expense
	2,816	2,945	1,879	1,964
Effective tax rate	29.8%	29.0%	15.5%	22.0%

94 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

94

5. Income tax (continued)

Deferred tax assets and liabilities

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Deferred tax assets balances comprise temporary differences attributable to:
Amounts recognised in the Income Statement:
Collectively assessed allowances for expected credit losses	1,216	1,128	898	897
Individually assessed allowances for expected credit losses
	86	102	60	79
Provision for employee entitlements
	330	294	252	243
Other provisions
	261	263	196	209
Software
	1,014	917	894	781
Lease liabilities
1
	523	513	416	446
Other
1
	221	231	165	181
Total
	3,651	3,448	2,881	2,836
Amounts recognised directly in Other Comprehensive Income:
Cash flow hedge reserve	217	818	217	789
FVOCI reserve
	245	29	243	29
Other reserves
	2	-	1	(2)
Total	464	847	461	816
Total deferred tax assets (before set-off)
1
	4,115	4,295	3,342	3,652
Set-off of deferred tax balances pursuant to set-off provisions
1
	(813)	(897)	(592)	(664)
Net deferred tax assets
	3,302	3,398	2,750	2,988

	2024	2023	2024	2023
	$m	$m	$m	$m
Deferred tax liabilities balances comprise temporary differences attributable to:
Amounts recognised in the Income Statement:
Finance leases	11	95	5	6
Right-of-use assets
1
	446	442	352	389
Other
	323	303	238	212
Total
	780	840	595	607
Amounts recognised directly in Other Comprehensive Income:
Foreign currency translation reserve	1	36	1	36
Cash flow hedge reserve
	32	17	1	7
FVOCI reserve
	15	17	13	19
Defined benefit obligations
	42	47	36	42
Other reserves
	7	-	7	-
Total
	97	117	58	104
Total deferred tax liabilities (before set-off)
1
	877	957	653	711
Set-off of deferred tax balances pursuant to set-off provisions
1
	(813)	(897)	(592)	(664)
Net deferred tax liabilities
	64	60	61	47

1.

Prior period balances have been restated to reflect the adoption of amendments to AASB 112 Income Taxes related to right-of-use assets and lease liabilities that arise from a single transaction.

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5. Income tax (continued)

Tax consolidation

The Company and all its wholly owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. ANZGHL is the head

entity of the tax-consolidated group. We recognise each of the following in the separate financial statements of members of the tax consolidated group

on a ‘group allocation’ basis: tax expense/income, and deferred tax liabilities/assets that arise from temporary differences for members of the tax-

consolidated group. ANZGHL (as head entity of the tax-consolidated group) recognises current tax liabilities and assets of the tax-consolidated group.

Under a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by each

member of the tax-consolidated group in relation to the tax contribution amounts paid or payable between members of the tax-consolidated group and

the head entity ANZGHL.

Members of the tax-consolidated group have also entered into a tax sharing agreement that provides for the allocation of income tax liabilities between

the entities were the head entity to default on its income tax payment obligations

.

Unrecognised deferred tax assets and liabilities

Unrecognised deferred tax assets related to unused realised tax losses (on revenue account) total $10 million (2023: $1 million) for the Group and nil

(2023: nil) for the Company.

Unrecognised deferred tax liabilities related to additional potential foreign tax costs (assuming all retained earnings in offshore branches and subsidiaries

are repatriated) total $251 million (2023: $286 million) for the Group and $27 million (2023: $30 million) for the Company.

Recognition and measurement

Income tax expense

Income tax expense comprises both current and deferred taxes and is based on the accounting profit adjusted for differences in the

accounting and tax treatments of income and expenses (that is, taxable income). We recognise tax expense in profit or loss except when the

tax relates to items recognised directly in equity and other comprehensive income, in which case we recognise the tax directly in equity or

other comprehensive income respectively.

Current tax expense

Current tax is the tax we expect to pay on taxable income for the year, based on tax rates (and tax laws) which are enacted at the reporting

date. We recognise current tax as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax assets and liabilities

We account for deferred tax using the balance sheet method. Deferred tax arises because the accounting income is not always the same as

the taxable income. This creates temporary differences, which usually reverse over time. Until they reverse, we recognise a deferred tax asset,

or liability, on the balance sheet. We measure deferred taxes at the tax rates that we expect will apply to the period(s) when the asset is

realised, or the liability settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the reporting date.

We offset current and

deferred tax assets and liabilities only to the extent that:

• they relate to income taxes imposed by the same taxation authority;

• there is a legal right and intention to settle on a net basis; and

•

it is allowed under the tax law

of the relevant jurisdiction.

Key judgements and estimates

Judgement is required in determining provisions held in respect of uncertain tax positions. The Group estimates its tax liabilities based on its

understanding of the relevant law in each of the countries in which it operates and seeks independent advice where appropriate.

96 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

96

6. Dividends

Ordinary share dividends

Dividends determined by the Board of the Company are recognised with a corresponding reduction of retained earnings on the dividend payment date.

Accordingly, the final dividend proposed for the current financial year is paid in the following financial year.

			Total
			dividend
Dividends
		Amount
	% of total	per share	$m
Financial Year 2023
2022 final dividend paid
1
		74 cents	2,213
2023 special dividend paid to ANZ BH Pty Ltd
		33 cents	1,000
2023 interim dividend paid to ANZ BH Pty Ltd
		79 cents	2,387
Dividends paid during the year ended 30 September 2023
			5,600
Cash
	96.3%		5,394
Dividend reinvestment plan
2
	3.7%		206
Dividends paid during the year ended 30 September 2023
			5,600
Financial Year 2024
2023 final dividend paid to ANZ BH Pty Ltd
		92 cents	2,771
2024 interim dividend paid to ANZ BH Pty Ltd
		83 cents	2,496
Dividends paid during the year ended 30 September 2024
			5,267
		Amount
			Total
			dividend
Dividends proposed and to be paid after year-end	Payment date	per share	$m
2024 final dividend
	20 December 2024	82 cents	2,472

1.

Fully franked for Australian tax purposes (30% tax rate) and carried New Zealand imputation credits of NZD 9 cents.

2.

Includes on-market share purchases for the DRP of $206 million.

Dividend reinvestment plan and bonus option plan

ANZBGL’s Dividend Reinvestment Plan (DRP) and Bonus Option Plan (BOP) ceased to operate following implementation of the Restructure on 3 January

2023.

Restrictions on the payment of dividends

APRA’s written approval is required before paying dividends on the ordinary shares of the Company if:

• the aggregate dividends exceed the Company’s after tax earnings (in calculating those after tax earnings, we take into account any payments we

made on senior capital instruments) in the financial year to which they relate; or

• the Group’s Common Equity Tier 1 capital ratio falls within capital range buffers specified by APRA.

If the Company fails to pay a dividend or distribution on its ANZ Capital Notes or ANZ Capital Securities on the scheduled payment date, it may (subject to

a number of exceptions) be restricted from resolving to pay or paying any dividend on the Company’s ordinary shares.

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7. Segment reporting

Description of segments

The Group’s operating segments are presented on a basis that is consistent with the information provided internally to the Chief Executive Officer (CEO),

who is the chief operating decision maker. This reflects the way the Group’s businesses are managed, rather than the legal structure of the Group.

We measure the performance of operating segments on a cash profit basis. To calculate cash profit, we exclude items from profit after tax attributable to

shareholders. For 2024 and 2023, the adjustments relate to impacts of economic hedges and revenue and expense hedges which represent timing

differences that will reverse through earnings in the future. Transactions between divisions across segments within the Group are conducted on an arm’s-

length basis and where relevant disclosed as part of the income and expenses of these segments.

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

2024 reported results include 2 months results for Suncorp Bank from the date of acquisition, presented as Suncorp Bank division below.

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, a $8 million increase in profit after tax, a $22 million increase in total assets, and a $51 million increase in total liabilities

in the Australia Retail division.

• Divisional results presentation - prior period divisional comparative information was restated to reflect a number of cost reallocations across the

divisions.

The reportable segments are divisions engaged in providing either different products or services or similar products and services in different geographical

areas. They are as follows:

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).

Institutional

The Institutional division services global institutional and corporate customers, and governments across Australia, New Zealand and International (including

Papua New Guinea (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.

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 a network of branches, mortgage specialists, private bankers and contact centres.

• Business & Agri (previously Business) 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.

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.

98 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

98

7. Segment reporting (continued)

Operating segments

	Australia
	Retail
		Australia
		Commercial
			Institutional
				New
				Zealand
					Suncorp
					Bank
						Pacific
							Group
							Centre
								Group
								Total
Year ended 30 September 2024	$m	$m	$m	$m	$m	$m	$m	$m
Net interest income
	5,223	3,164	3,741	3,143	251	123	392	16,037
Net fee and commission income	531	300	740	399	6	14	(26)	1,964
Net income from insurance business	122	-	-	-	-	-	-	122
Other income
1,2
	11	42	2,408	-	-	77	(12)	2,526
Share of associates’ profit/(loss)
	-	-	-	-	-	-	134	134
Other operating income
	664	342	3,148	399	6	91	96	4,746
Operating income
1,2
	5,887	3,506	6,889	3,542	257	214	488	20,783
Operating expenses	(3,516)	(1,507)	(2,875)	(1,376)	(188)	(138)	(1,069)	(10,669)
Cash profit/(loss) before credit impairment
and income tax
	2,371	1,999	4,014	2,166	69	76	(581)	10,114
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	(583)	9,708
Income tax (expense)/benefit
1,2
	(693)	(577)	(1,166)	(602)	52	(22)	120	(2,888)
Non-controlling interests
	-	-	-	-	-	(2)	(33)	(35)
Cash profit/(loss)
	1,607	1,342	2,858	1,536	(122)	60	(496)	6,785
Economic hedges
1
								(264)
Revenue and expense hedges
2
								74
Profit after tax attributable to shareholders
								6,595
Includes non-cash items:
Share of associates’ profit/(loss)	-	-	-	-	-	-	134	134
Depreciation and amortisation
	(56)	(6)	(171)	(107)	(46)	(9)	(550)	(945)
Equity-settled share-based payment expenses
	(6)	(5)	(97)	(5)	-	(1)	(25)	(139)
Credit impairment (charge)/release
	(71)	(80)	10	(28)	(243)	8	(2)	(406)

	Australia
	Retail
		Australia
		Commercial	Institutional
				New
				Zealand
					Suncorp
					Bank
					3
						Pacific
							Group
							Centre
								Group
								Total
Financial position
	$m
		$m	$m	$m	$m	$m	$m	$m
Goodwill
	100	-	1,245	1,596	1,402	-	-	4,343
Investments in associates
	-	-	-	-	-	-	1,415	1,415
Total external assets
	335,356	65,456	574,998	127,032	87,185	3,162	36,396	1,229,585
Total external liabilities
	180,801	122,029	460,053	120,203	81,610	3,686	192,443	1,160,825

1.

The cash profit adjustment for economic hedges applies to the Institutional, New Zealand and Group Centre divisions with $368 million loss recognised in Other operating income and $104 million benefit

recognised in Income tax expense.

2.

The cash profit adjustment for revenue and expense hedges applies to the Group Centre division with $106 million gain recognised in Other operating income and $32 million expense recognised in

Income tax expense.

3.

Assets acquired and liabilities assumed are disclosed on a provisional basis. Refer to Note 34 Suncorp Bank acquisition for further information.

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99

7. Segment reporting (continued)

Operating segments (continued)

	Australia
	Retail
		Australia
		Commercial	Institutional
				New
				Zealand
					Suncorp
					Bank
						Pacific
							Group
							Centre
								Group
								Total
Year ended 30 September 2023	$m	$m	$m	$m	$m	$m	$m	$m
Net interest income	5,709	3,224	4,040	3,149	-	123	323	16,568
Net fee and commission income	546	322	685	398	-	19	(24)	1,946
Net income from insurance business	108	-	-	-	-	-	-	108
Other income
1,2
	16	43	2,009	11	-	66	(80)	2,065
Share of associates’ profit/(loss)	-	-	-	-	-	-	225	225
Other operating income	670	365	2,694	409	-	85	121	4,344
Operating income
1,2
	6,379	3,589	6,734	3,558	-	208	444	20,912
Operating expenses	(3,461)	(1,423)	(2,728)	(1,299)	-	(145)	(1,031)	(10,087)
Cash profit/(loss) before credit impairment
and income ta
x
	2,918	2,166	4,006	2,259	-	63	(587)	10,825
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	(586)	10,580
Income tax (expense)/benefit
1,2
	(845)	(619)	(1,137)	(601)	-	(18)	148	(3,072)
Non-controlling interests	-	-	-	-	-	(2)	(26)	(28)
Cash profit/(loss)	1,938	1,440	2,949	1,546	-	71	(464)	7,480
Economic hedges
1
								(217)
Revenue and expense hedges
2
								(90)
Profit after tax attributable to shareholders								7,173
Includes non-cash items:
Share of associates’ profit/(loss)	-	-	-	-	-	-	225	225
Depreciation and amortisation	(77)	(5)	(164)	(105)	-	(10)	(580)	(941)
Equity-settled share-based payment expenses	(6)	(2)	(73)	(4)	-	-	(20)	(105)
Credit impairment (charge)/release	(135)	(107)	80	(112)	-	28	1	(245)

	Australia
	Retail
		Australia
		Commercial	Institutional
				New
				Zealand
					Suncorp
					Bank
						Pacific
							Group
							Centre
								Group
								Total
Financial position
	$m
		$m	$m	$m	$m	$m	$m	$m
Goodwill	100	-	1,261	1,617	-	-	-	2,978
Investments in associates	-	-	-	-	-	-	2,321	2,321
Total external assets	315,207	61,916	538,825	125,178	-	3,391	61,547	1,106,064
Total external liabilities	168,926	119,341	452,777	122,924	-	3,862	169,149	1,036,979

1.

The cash profit adjustment for economic hedges applies to the Institutional, New Zealand and Group Centre divisions with $305 million loss recognised in Other operating income and $88 million benefit

recognised in Income tax expense.

2.

The cash profit adjustment for economic hedges applies to the Group Centre division with $129 million loss recognised in Other operating income and $39 million benefit recognised in Income tax

expense.

100 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

100

7. Segment reporting (continued)

Segment income by products and services

The primary sources of our external income across all divisions are interest income and other operating income, which includes net fee and commission

income, net foreign exchange earnings and other financial instruments income. The Australia Retail, Australia Commercial, New Zealand, Suncorp Bank,

and Pacific divisions derive income from products and services in retail and commercial banking. The Institutional division derives its income from

institutional products and market services. No single customer amounts to greater than 10% of the Group’s income.

Geographical information

The reportable segments operate across three geographical regions as follows:

• Australia Retail division - Australia

• Australia Commercial division - Australia

• Institutional division - all three geographical regions

• New Zealand division - New Zealand

• Suncorp Bank division - Australia

• Pacific division – Rest of World

• Group Centre division - all three geographical regions

The Rest of World geography includes Asia, Pacific, Europe and the Americas.

The following table sets out total operating income earned and assets to be recovered in more than one year based on the geographical regions in which

the Group operates.

	Australia		New Zealand		Rest of World		Total
	2024	2023	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m	$m	$m
Total operating income
	12,794	12,689	4,400	4,463	3,327	3,326	20,521	20,478
Assets to be recovered in more than one year
1
	498,091	407,221	121,455	119,278	25,444	28,877	644,990	555,376

1.

Represents Net loans and advances based on the contractual maturity.

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Financial assets

Outlined below is a description of how we classify and measure financial assets as they apply to the note disclosures that follow.

Classification and measurement

Financial assets - general

There are three measurement classifications for financial assets under AASB 9 Financial Instruments (AASB 9): amortised cost, FVTPL and

FVOCI. Financial assets are classified into these measurement classifications on the basis of two criteria:

•

the business model within which the financial asset is managed; and

•

the contractual cash flow characteristics of the financial asset (specifically whether the contractual cash flows represent solely payments of

principal and interest).

The resultant financial asset classifications are as follows:

•

Amortised cost: Financial assets with contractual cash flows that comprise solely payments of principal and interest and which are held in a

business model whose objective is to collect their cash flows;

•

FVOCI: Financial assets with contractual cash flows that comprise solely payments of principal and interest and which are held in a business

model whose objective is to collect their cash flows or to sell the assets; and

•

FVTPL: Any other financial assets not falling into the categories above are measured at FVTPL.

Fair value option for financial assets

A financial asset may be irrevocably designated on initial recognition:

•

at FVTPL when the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise; or

•

at FVOCI for investments in equity securities, where that instrument is neither held for trading nor contingent consideration recognised by

an acquirer in a business combination.

8. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and other balances, as outlined below, that are convertible into cash with an insignificant risk of

changes in value and with remaining maturities of three months or less, including reverse repurchase agreements.

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Coins, notes and cash at bank
	1,196	1,070	843	667
Securities purchased under agreements to resell in less than 3 months	44,125	31,711	41,307	31,120
Balances with central banks
	69,024	105,689	59,609	94,389
Settlement balances owed to ANZ within 3 months
	36,620	29,684	35,529	28,232
Cash and cash equivalents
	150,965	168,154	137,288	154,408

102 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

102

9. Trading assets

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Government debt securities and notes
	35,276	28,074	28,796	23,144
Corporate and financial institution securities	4,057	3,885	3,365	2,914
Commodities
	6,399	4,881	6,243	4,471
Other securities
	23	164	23	164
Total
	45,755	37,004	38,427	30,693

Recognition and measurement

Trading assets are financial instruments or other assets we either:

•

Acquire principally for the purpose of selling in the short-term; or

•

Hold as part of a portfolio we manage for short-term profit making.

Trading assets include commodity inventories measured at fair value less cost to sell in accordance with the broker trader exemption under

AASB 102 Inventories.

We recognise purchases and sales of trading assets on trade date:

•

Initially, we measure them at fair value; and

•

Subsequently, we measure them in the Balance Sheet at their fair value with any change in fair value recognised in profit or loss.

Assets disclosed as Trading assets are subject to the general classification and measurement policy for Financial Assets outlined at the

commencement of the Group’s financial assets disclosures on page 102.

Key judgements and estimates

Judgement is required when applying the valuation techniques used to determine the fair value of trading assets not valued using quoted

market prices. Refer to Note 18 Fair value of financial assets and financial liabilities for further details.

2023

2024

28,074

164

3,885

4,881

Other securities

Government debt

securities and notes

Commodities

Corporate and financial

institution securities

35,276

23

4,057

6,399

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10. Derivative financial instruments

Consolidated

	Assets	Liabilities	Assets	Liabilities
	2024	2024	2023	2023
Fair value
	$m	$m	$m	$m
Derivative financial instruments - held for trading
	53,889	(54,798)	60,059	(57,210)
Derivative financial instruments - designated in hedging relationships
	481	(456)	347	(272)
Derivative financial instruments
	54,370	(55,254)	60,406	(57,482)

The Company

	Assets	Liabilities	Assets	Liabilities
	2024	2024	2023	2023
Fair value
	$m	$m	$m	$m
Derivative financial instruments - held for trading
	57,370	(57,257)	59,649	(57,256)
Derivative financial instruments - designated in hedging relationships
	257	(210)	340	(255)
Derivative financial instruments
	57,627	(57,467)	59,989	(57,511)

Features

Derivative financial instruments are contracts:

•

Whose value is derived from an underlying price index (or other variable) defined in the contract - sometimes the value is derived from more than one

variable;

•

That require little or no initial net investment; and

•

That are settled at a future date.

Movements in the price of the underlying variables, which cause the value of the contract to fluctuate, are reflected in the fair value of the derivative.

Purpose

The Group’s derivative financial instruments have been categorised as follows:

Trading	Derivatives held in order to:
•
	meet customer needs for managing their own risks.
•
	manage risks in the Group that are not in a designated hedge accounting relationship (some elements of balance
	sheet management).
•
	undertake market making and positioning activities to generate profits from short-term fluctuations in prices or margins.
Designated in Hedging
Relationships
	Derivatives designated into hedge accounting relationships in order to minimise profit or loss volatility by matching
	movements in underlying positions relating to:
•
	hedges of the Group’s exposures to interest rate risk and currency risk.
•
	hedges of other exposures relating to non-trading positions.
Types
The Group offers or uses four different types of derivative financial instruments:
Forwards	A contract documenting the rate of interest, or the currency exchange rate, to be paid or received on a notional principal
	amount at a future date.
Futures	An exchange traded contract in which the parties agree to buy or sell an asset in the future for a price agreed on the
	transaction date, with a net settlement in cash paid on the future date without physical delivery of the asset.
Swaps	A contract in which two parties exchange one series of cash flows for another.
Options	A contract in which the buyer of the contract has the right - but not the obligation - to buy (known as a ‘call option’) or to
	sell (known as a ‘put option’) an asset or instrument at a set price on a future date. The seller has the corresponding
	obligation to fulfil the transaction to sell or buy the asset or instrument if the buyer exercises the option.

104 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

104

10. Derivative financial instruments (continued)

Risks managed

The Group offers and uses the instruments described above to manage fluctuations in the following:

Foreign Exchange	Currencies at current or determined rates of exchange.
Interest Rate	Fixed or variable interest rates applying to money lent, deposited or borrowed.
Commodity	Soft commodities (that is, agricultural products such as wheat, coffee, cocoa and sugar) and hard commodities (that is,
	mined products such as gold, oil and gas).
Credit	Risk of default by customers or third parties.

The Group uses a number of central clearing counterparties and exchanges to settle derivative transactions. Different arrangements for posting of

collateral exist with these exchanges:

•

some transactions are subject to clearing arrangements which result in separate recognition of collateral assets and liabilities, with the carrying values

of the associated derivative assets and liabilities held at their fair value.

•

other transactions, are legally settled by the payment or receipt of collateral which reduces the carrying values of the related derivative instruments by

the amount paid or received.

Derivative financial instruments – held for trading

The majority of the Group’s derivative financial instruments are held for trading. The fair value of derivative financial instruments held for trading is:

Consolidated

	Assets	Liabilities	Assets	Liabilities
	2024	2024	2023	2023
Fair value
	$m	$m	$m	$m
Interest rate contracts
Forward rate agreements	1	(1)	-	-
Futures contracts
	80	(109)	294	(37)
Swap agreements
	8,258	(9,527)	10,815	(15,194)
Options
	1,263	(1,371)	1,805	(2,023)
Total
	9,602	(11,008)	12,914	(17,254)
Foreign exchange contracts
Spot and forward contracts	20,008	(21,445)	21,399	(19,580)
Swap agreements
	21,961	(19,612)	23,230	(18,172)
Options
	779	(835)	690	(1,120)
Total
	42,748	(41,892)	45,319	(38,872)
Commodity and other contracts	1,537	(1,896)	1,812	(1,067)
Credit default swaps	2	(2)	14	(17)
Derivative financial instruments - held for trading
1
	53,889	(54,798)	60,059	(57,210)

1.

Includes derivatives held for balance sheet management which are not designated into accounting hedge relationships.

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10. Derivative financial instruments (continued)

Derivative financial instruments – held for trading (continued)

The majority of the Company’s derivative financial instruments are held for trading. The fair value of derivative financial instruments held for trading is:

The Company

	Assets	Liabilities	Assets	Liabilities
	2024	2024	2023	2023
Fair Value
	$m	$m	$m	$m
Interest rate contracts
Forward rate agreements	1	(1)	2	(1)
Futures contracts
	75	(40)	259	(30)
Swap agreements
	10,063	(11,329)	11,324	(15,178)
Options
	1,261	(1,371)	1,807	(2,016)
Total
	11,400	(12,741)	13,392	(17,225)
Foreign exchange contracts
Spot and forward contracts	19,396	(20,141)	19,229	(17,595)
Swap agreements
	24,224	(21,611)	24,493	(20,216)
Options
	772	(829)	684	(1,110)
Total
	44,392	(42,581)	44,406	(38,921)
Commodity and other contracts	1,537	(1,896)	1,823	(1,078)
Credit default swaps	41	(39)	28	(32)
Derivative financial instruments - held for trading
1
	57,370	(57,257)	59,649	(57,256)

1.

Includes derivatives held for balance sheet management which are not designated into accounting hedge relationships.

106 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships

Under the accounting policy choice provided by AASB 9, the Group has continued to apply the hedge accounting requirements of AASB 139 Financial

Instruments: Recognition and Measurement (AASB 139).

There are three types of hedge accounting relationships the Group utilises:

	Fair value hedge	Cash flow hedge	Net investment hedge
Objective of this
hedging arrangement
	To hedge our exposure to changes to
	the fair value of a recognised asset or
	liability or unrecognised firm
	commitment caused by interest rate or
	foreign currency movements.
		To hedge our exposure to variability in
		cash flows of a recognised asset or
		liability, a firm commitment or a highly
		probable forecast transaction caused
		by interest rate, foreign currency and
		other price movements.
			To hedge our exposure to exchange
			rate differences arising from the
			translation of our foreign operations
			from their functional currency to
			Australian dollars.
Recognition of
effective hedge
portion
	The following are recognised in profit or
	loss at the same time:
	•
	all changes in the fair value of the
	underlying item relating to the
	hedged risk; and
	•
	the change in the fair value of the
	derivatives.
		We recognise the effective portion of
		changes in the fair value of derivatives
		designated as a cash flow hedge in the
		cash flow hedge reserve.
			We recognise the effective portion of
			changes in the fair value of the hedging
			instrument in the foreign currency
			translation reserve (FCTR).
Recognition of
ineffective hedge
portion
	Recognised immediately in Other operating income.
If a hedging
instrument expires, or
is sold, terminated, or
exercised; or no
longer qualifies for
hedge accounting
	When we recognise the hedged item in
	profit or loss, we recognise the related
	unamortised fair value hedge
	adjustment in profit or loss. This may
	occur over time if the hedged item is
	amortised to profit or loss as part of the
	effective yield over the period to
	maturity.
		Only when we recognise the hedged
		item in profit or loss is the amount
		previously deferred in the cash flow
		hedge reserve transferred to profit
		or loss.
			The amount we defer in the foreign
			currency translation reserve remains in
			equity and is transferred to profit or
			loss only when we dispose of, or
			partially dispose of, the foreign
			operation.
Hedged item sold or
repaid
	We recognise the unamortised fair
	value hedge adjustment immediately in
	profit or loss.
		Amounts accumulated in equity are
		transferred immediately to profit or
		loss.
			The gain or loss, or applicable
			proportion, we have recognised in
			equity is transferred to profit or loss on
			disposal or partial disposal of a foreign
			operation.

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10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The fair value of derivative financial instruments designated in hedging relationships is:

	2024			2023
Consolidated
	Nominal
	amount	Assets	Liabilities
				Nominal
				amount	Assets	Liabilities
	$m	$m	$m	$m	$m	$m
Fair value hedges
Foreign exchange spot and forward contracts	571	14	-	607	5	-
Interest rate swap agreements
	175,849	226	(253)	126,881	32	(195)
Interest rate futures contracts
	3,151	11	-	11,778	243	(9)
Cash flow hedges
Interest rate swap agreements	154,968	200	(196)	122,704	17	(48)
Foreign exchange swap agreements
	654	26	(7)	683	50	(19)
Foreign exchange spot and forward contracts
	81	4	-	-	-	-
Net investment hedges
Foreign exchange spot and forward contracts	92	-	-	47	-	(1)
Derivative financial instruments - designated in
hedging relationships
	335,366	481	(456)	262,700	347	(272)

	2024			2023
The Company
	Nominal
	amount	Assets	Liabilities
				Nominal
				amount	Assets	Liabilities
	$m	$m	$m	$m	$m	$m
Fair value hedges
Foreign exchange spot and forward contracts	571	14	-	607	5	-
Interest rate swap agreements
	144,667	198	(134)	101,587	32	(184)
Interest rate futures contracts
	3,151	11	-	11,778	243	(9)
Cash flow hedges
Interest rate swap agreements	92,998	4	(69)	89,173	10	(42)
Foreign exchange swap agreements
	654	26	(7)	683	50	(19)
Foreign exchange spot and forward contracts
	81	4	-	-	-	-
Net investment hedges
Foreign exchange spot and forward contracts	-	-	-	47	-	(1)
Derivative financial instruments - designated in
hedging relationships
	242,122	257	(210)	203,875	340	(255)

108 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

108

10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The maturity profile of the nominal amounts of our hedging instruments held is:

Consolidated
		Average
			Less than 3
			months
				3 to 12
				months
					1 to 5
					years
						After
						5 years	Total
Nominal amount
		Rate	$m	$m	$m	$m	$m
As at 30 September 2024
Fair value hedges
Interest rate	Interest rate	2.94%	10,202	17,387	86,096	65,315	179,000
Foreign exchange	HKD/AUD FX rate
		5.26	571	-	-	-	571
Cash flow hedges
Interest rate	Interest rate	3.11%	20,417	42,091	91,589	871	154,968
Foreign exchange
1
	AUD/USD FX rate
		0.74
			20	61	-	654	735
	USD/EUR FX rate
		0.91
Net investment hedges
Foreign exchange	NZD/AUD FX rate	1.09	-	92	-	-	92
As at 30 September 2023
Fair value hedges
Interest rate	Interest rate	2.38%
			2,314	10,533	79,350	46,462	138,659
Foreign exchange	HKD/AUD FX rate	5.02	607	-	-	-	607
Cash flow hedges
Interest rate	Interest rate	2.27%	7,573	37,630	76,359	1,142	122,704
Foreign exchange
1
	AUD/USD FX rate	0.74
			-	-	-	683	683
	USD/EUR FX rate	0.91
Net investment hedges
Foreign exchange	NZD/AUD FX rate	1.09
			-	47	-	-	47

1.

Hedges of foreign exchange risk cover multiple currency pairs. The table reflects the larger currency pairs only.

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10. Derivative Financial Instruments (continued)

Derivative Financial Instruments – designated in hedging relationships (continued)

The Company
		Average
			Less than 3
			months
				3 to 12
				months
					1 to 5
					years
						After
						5 years	Total
Nominal Amount
		Rate
			$m	$m	$m	$m	$m
As at 30 September 2024
Fair value hedges
Interest rate	Interest Rate	3.01%	9,860	14,596	65,270	58,092	147,818
Foreign exchange	HKD/AUD FX Rate
		5.26	571	-	-	-	571
Cash flow hedges
Interest rate	Interest Rate	2.55%	8,580	16,580	67,080	758	92,998
Foreign exchange
1
	AUD/USD FX Rate
		0.74
			20	61	-	654	735
	USD/EUR FX Rate
		0.91
Net investment hedges
Foreign exchange	NZD/AUD FX Rate	-	-	-	-	-	-
As at 30 September 2023
Fair value hedges
Interest rate	Interest Rate	2.49%	1,910	8,025	61,644	41,786	113,365
Foreign exchange	HKD/AUD FX Rate	5.02	607	-	-	-	607
Cash flow hedges
Interest rate	Interest Rate	1.78%
			3,154	22,353	62,577	1,089	89,173
Foreign exchange
1
	AUD/USD FX Rate	0.74
			-	-	-	683	683
	USD/EUR FX Rate	0.91
Net investment hedges
Foreign exchange	NZD/AUD FX Rate	1.09	-	47	-	-	47

1.

Hedges of foreign exchange risk cover multiple currency pairs. The table reflects the larger currency pairs only.

110 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

110

10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The impacts of ineffectiveness from our designated hedge relationships by type of hedge relationship and type of risk being hedged are:

		Ineffectiveness
				Amount reclassified
				from the cash flow
				hedge reserve or FCTR
				to profit or loss
				4
Consolidated
	Change in value
	of hedging
	instrument
	2
		Change in value
		of hedged item
			Hedge ineffectiveness
			recognised in profit or
			loss
			3
As at 30 September 2024	$m	$m	$m	$m
Fair value hedges
1
Interest rate	(2,922)	2,928	6	-
Foreign exchange
	36	(36)	-	-
Cash flow hedges
1
Interest rate
	2,175	(2,074)	101	(2)
Foreign exchange
	(3)	3	-	-
Net investment hedges
1
Foreign exchange	9	(9)	-	-
As at 30 September 2023
Fair value hedges
1
Interest rate	(846)	870	24	-
Foreign exchange	(4)	4	-	-
Cash flow hedges
1
Interest rate	280
		(239)	41	(13)
Foreign exchange	-	-	-	9
Net investment hedges
1
Foreign exchange	(39)	39	-	79

	Ineffectiveness
				Amount reclassified
				from the cash flow
				hedge reserve or FCTR
				to profit or loss
				4
	The Company
	Change in value
	of hedging
	instrument
	2
		Change in value
		of hedged item
			Hedge ineffectiveness
			recognised in profit or
			loss
			3
As at 30 September 2024	$m	$m	$m	$m
Fair value hedges
1
Interest rate	(2,811)	2,817	6	-
Foreign exchange
	36	(36)	-	-
Cash flow hedges
1
Interest rate
	1,994	(1,894)	100	(2)
Foreign exchange	(3)	3	-	-
Net investment hedges
1
Foreign exchange	-	-	-	-
As at 30 September 2023
Fair value hedges
1
Interest rate	(797)	814	17	-
Foreign exchange	(4)	4	-	-
Cash flow hedges
1
Interest rate	386
		(344)	42	(15)
Foreign exchange	-	-	-	9
Net investment hedges
1
Foreign exchange	(4)	4	-	-

1.

All hedging instruments are classified as derivative financial instruments.

2.

Changes in value of hedging instruments is before any adjustments for Settle to Market clearing arrangements.

3.

Recognised in Other operating income.

4.

Recognised in Net interest income and Other operating income.

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10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The hedged items in relation to the Group’s fair value hedges are:

			Carrying amount
						Accumulated fair value
						hedge adjustments on the
						hedged item
	Balance sheet		Assets	Liabilities	Assets	Liabilities
Consolidated	presentation	Hedged risk	$m	$m	$m	$m
As at 30 September 2024
Fixed rate loans and advances	Net loans and advances	Interest rate	1,546	-	(30)	-
Fixed rate debt issuance	Debt issuances	Interest rate
			-	(73,805)	-	1,284
Fixed rate investment securities at FVOCI
1
	Investment securities	Interest rate	97,838	-	625	-
Equity securities at FVOCI
1
	Investment securities	Foreign exchange	571	-	43	-
Total
			99,955	(73,805)	638	1,284
As at 30 September 2023
Fixed rate loans and advances	Net loans and advances	Interest rate	3,472	-	(139)	-
Fixed rate debt issuance	Debt issuances	Interest rate	-	(66,190)	-	4,163
Fixed rate investment securities at FVOCI
1
	Investment securities	Interest rate	61,082	-	(5,121)	-
Equity securities at FVOCI
1
	Investment securities	Foreign exchange	607	-	79	-
Total
			65,161	(66,190)	(5,181)	4,163

1.

The carrying amount of debt and equity instruments at FVOCI does not include the fair value hedge adjustment. The fair value hedge adjustment is included in other comprehensive income.

The cumulative amount of fair value hedge adjustments relating to ceased hedge relationships remaining on the Balance Sheet is $3 million

(2023: -$13 million).

The hedged items in relation to the Company’s fair value hedges are:

			Carrying amount
					Accumulated fair value
					hedge adjustments on the
					hedged item
	Balance sheet		Assets
				Liabilities	Assets	Liabilities
The Company	presentation	Hedged risk	$m	$m	$m	$m
As at 30 September 2024
Fixed rate loans and advances	Net loans and advances	Interest rate	1,546	-	(30)	-
Fixed rate debt issuance	Debt issuances	Interest rate
			-	(60,258)	-	904
Fixed rate investment securities at FVOCI
1
Investment securities	Interest rate		81,276	-	538	-
Equity securities at FVOCI
1
Investment securities	Foreign exchange		571	-	43	-
Total
			83,393	(60,258)	551	904
As at 30 September 2023
Fixed rate loans and advances	Net loans and advances	Interest rate	3,472	-	(139)	-
Fixed rate debt issuance	Debt issuances	Interest rate	-	(51,602)	-	3,025
Fixed rate investment securities at FVOCI
1
	Investment securities	Interest rate	52,336	-	(4,342)	-
Equity securities at FVOCI
1
	Investment securities	Foreign exchange	607	-	79	-
Total
			56,415	(51,602)	(4,402)	3,025

1.

The carrying amount of debt and equity instruments at FVOCI does not include the fair value hedge adjustment. The fair value hedge adjustment is included in other comprehensive income.

The cumulative amount of fair value hedge adjustments relating to ceased hedge relationships remaining on the Balance Sheet is $3 million

(2023: -$13 million).

Notes to the consolidated financial statements (continued) Australia and New Zealand Banking Group Limited 2024 Annual Report

112

10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The hedged items in relation to the Group’s and Company’s cash flow and net investment hedges are:

		Cash flow
		hedge reserve
				Foreign currency
				translation reserve
		Continuing
		hedges
			Discontinued
			hedges
				Continuing
				hedges
					Discontinued
					hedges
Consolidated	Hedged risk	$m	$m	$m	$m
As at 30 September 2024
Cash flow hedges
Floating rate loans and advances	Interest rate	(575)	-	-	-
Floating rate customer deposits	Interest rate
		(31)	-	-	-
Foreign currency debt issuances	Foreign exchange
		(7)	-	-	-
Highly probable forecast transactions	Foreign exchange
		4	-	-	-
Net investment hedges
Foreign operations	Foreign exchange	-	-	22	20
As at 30 September 2023
Cash flow hedges
Floating rate loans and advances	Interest rate	(3,482)	11	-	-
Floating rate customer deposits	Interest rate	794	(1)	-	-
Foreign currency debt issuances	Foreign exchange	-	-	-	-
Highly probable forecast transactions	Foreign exchange	-	-	-	-
Net investment hedges
Foreign operations	Foreign exchange	-
			-	12	49

		Cash flow
		hedge reserve
				Foreign currency
				translation reserve
		Continuing
		hedges
			Discontinued
			hedges
				Continuing
				hedges
					Discontinued
					hedges
The Company	Hedged risk	$m	$m	$m	$m
As at 30 September 2024
Cash flow hedges
Floating rate loans and advances	Interest rate	(820)	-	-	-
Floating rate customer deposits	Interest rate
		105	-	-	-
Foreign currency debt issuances	Foreign exchange
		(7)	-	-	-
Highly probable forecast transactions	Foreign exchange
		4	-	-	-
Net investment hedges
Foreign operations	Foreign exchange	-	-	-	-
As at 30 September 2023
Cash flow hedges
Floating rate loans and advances	Interest rate	(3,103)	2	-	-
Floating rate customer deposits	Interest rate	495	-	-	-
Foreign currency debt issuances	Foreign exchange	-	-	-	-
Highly probable forecast transactions	Foreign exchange	-	-	-	-
Net investment hedges
Foreign operations	Foreign exchange	-	-	12	49

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10. Derivative financial instruments (continued)

Derivative financial instruments – designated in hedging relationships (continued)

The table below details the reconciliation of the Group’s cash flow hedge reserve by risk type:

	Interest rate
		Foreign
		currency
			Total
Consolidated	$m	$m	$m
Balance at 1 October 2022	(2,028)	(8)	(2,036)
Fair value gains/(losses)	239	-	239
Transferred to profit or loss	(13)	9	(4)
Income taxes and others	(69)	(2)	(71)
Balance at 30 September 2023
	(1,871)	(1)	(1,872)
Fair value gains/(losses)	2,074	(3)	2,071
Transferred to profit or loss
	(2)	-	(2)
Income taxes and others
	(620)	1	(619)
Balance at 30 September 2024
	(419)	(3)	(422)

Hedges of net investments in a foreign operation resulted in a $9 million increase in FCTR during the year (2023: $40 million increase).

The table below details the reconciliation of the Company’s cash flow hedge reserve by risk type:

	Interest rate
		Foreign
		currency
			Total
The Company	$m	$m	$m
Balance at 1 October 2022	(2,053)	(8)	(2,061)
Fair value gains/(losses)	344	-	344
Transferred to profit or loss	(15)	9	(6)
Income taxes and others	(99)	(2)	(101)
Balance at 30 September 2023
	(1,823)	(1)	(1,824)
Fair value gains/(losses)	1,894	(3)	1,891
Transferred to profit or loss
	(2)	-	(2)
Income taxes and others
	(569)	1	(568)
Balance at 30 September 2024
	(500)	(3)	(503)

Hedges of net investments in a foreign operation resulted in nil impact in FCTR during the year (2023: $4 million decrease).

114 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

114

10. Derivative financial instruments (continued)

Recognition and measurement

Recognition
	Initially and at each reporting date, we recognise all derivatives at fair value. If the fair value of a derivative is
	positive, then we carry it as an asset, but if its value is negative, then we carry it as a liability.
	Valuation adjustments are integral in determining the fair value of derivatives. This includes:
	•
	a credit valuation adjustment to reflect the counterparty risk and/or event of default; and
	•
	a funding valuation adjustment to account for funding costs and benefits in the derivatives portfolio.
Derecognition of
assets and liabilities
	We remove derivative assets from our Balance Sheet when the contracts expire or we have transferred
	substantially all the risks and rewards of ownership. We remove derivative liabilities from our Balance Sheet
	when the Group’s contractual obligations are discharged, cancelled or expired.
	With respect to derivatives cleared through a central clearing counterparty or exchange, derivative assets or
	liabilities may be derecognised in accordance with the principle above when collateral is settled, depending
	on the legal arrangements in place for each instrument.
Impact on the
Income Statement
	The recognition of gains or losses on derivative financial instruments depends on whether the derivative is
	held for trading or is designated in a hedge accounting relationship. For derivative financial instruments held
	for trading, gains or losses from changes in the fair value are recognised in profit or loss.
	For an instrument designated in a hedge accounting relationship, the recognition of gains or losses depends
	on the nature of the item being hedged. Refer to the table on page 107 for details of the recognition
	approach applied for each type of hedge accounting relationship.
	Sources of hedge accounting ineffectiveness may arise from differences in the interest rate reference rate,
	margins, or rate set differences and differences in discounting between the hedged items and the hedging
	instruments.
Hedge effectiveness
	To qualify for hedge accounting under AASB 139, a hedge relationship is expected to be highly effective. A
	hedge relationship is highly effective only if the following conditions are met:
	•
	the hedge is expected to be highly effective in achieving offsetting changes in fair value or cash flows
	attributable to the hedged risk during the period for which the hedge is designated (prospective
	effectiveness); and
	•
	the actual results of the hedge are within the range of 80-125% (retrospective effectiveness).
	The Group monitors hedge effectiveness on a regular basis but at a minimum at each reporting date.

Key judgements and estimates

Judgement is required when we select the valuation techniques used to determine the fair value of derivatives, particularly the selection of

valuation inputs that are not readily observable, and the application of valuation adjustments to certain derivatives. Refer to Note 18 Fair value

of financial assets and financial liabilities for further details.

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11. Investment securities

	Consolidated		The Company
	2024	2023	2024	2023
	$m
		$m
			$m
				$m
Investment securities measured at FVOCI
Debt securities	131,944	88,271	107,388	76,320
Equity securities
	1,065	946	1,060	945
Investment securities measured at amortised cost
Debt securities	7,091	7,752	5,356	5,936
Investment securities measured at FVTPL
Debt securities	162	-	162	-
Total
	140,262	96,969	113,966	83,201

The maturity profile of investment securities is as follows:

Consolidated
	Less than 3
	months
		3 to 12
		months	1 to 5 years	After 5 years
					No
					maturity	Total
As at 30 September 2024	$m	$m	$m	$m	$m	$m
Government securities
	9,824	11,048	52,228	54,039	-	127,139
Corporate and financial institution securities	485	1,326	6,565	328	-	8,704
Other securities
	490	386	578	1,900	-	3,354
Equity securities
	-	-	-	-	1,065	1,065
Total
	10,799	12,760	59,371	56,267	1,065	140,262
As at 30 September 2023
Government securities	8,807
		10,233	29,482	36,081	-	84,603
Corporate and financial institution securities	358	1,205	5,973	58	-	7,594
Other securities	617	591	602	2,016	-	3,826
Equity securities	-	-	-	-	946	946
Total	9,782	12,029	36,057	38,155	946	96,969

During the year, the Group recognised a net gain of $8 million (2023: $9 million) in Other operating income from the recycling of gains/losses previously

recognised in Other comprehensive income in respect of debt securities at FVOCI.

2023

2024

84,603

3,826

7,594

946

127,139

Government securities

Corporate and financial

institution securities

Other securities

Equity securities

3,354

8,704

1,065

116 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

116

11. Investment securities (continued)

The Company
	Less than 3
	months
		3 to 12
		months	1 to 5 years	After 5 years
					No
					maturity	Total
As at 30 September 2024	$m	$m	$m	$m	$m	$m
Government securities
	9,213	8,454	38,158	46,719	-	102,544
Corporate and financial institution securities	484	976	5,249	328	-	7,037
Other securities
	490	386	578	1,871	-	3,325
Equity securities
	-	-	-	-	1,060	1,060
Total
	10,187	9,816	43,985	48,918	1,060	113,966
As at 30 September 2023
Government securities	7,665
		8,649	23,140	33,182	-	72,636
Corporate and financial institution securities	280	634	4,822	58	-	5,794
Other securities	617	591	602	2,016	-	3,826
Equity securities	-	-	-	-	945	945
Total	8,562	9,874	28,564	35,256	945	83,201

During the year, the Company recognised a net gain of $8 million (2023 net loss: $6 million) in Other operating income from the recycling of gains/losses

previously recognised in Other comprehensive income in respect of debt securities at FVOCI.

Recognition and measurement

Investment securities are those financial assets in security form (that is, transferable debt or equity instruments) that are not held for trading

purposes. By way of exception, bills of exchange (a form of security/transferable instrument) which are used to facilitate the Group’s customer

lending activities are classified as Loans and advances (rather than Investment securities) to better reflect the substance of the arrangement.

Equity investments not held for trading purposes may be designated at FVOCI on an instrument-by-instrument basis. If this election is made,

gains or losses are not reclassified from Other comprehensive income to profit or loss on disposal of the investment. However, gains or losses

may be reclassified within equity.

Assets disclosed as Investment securities are subject to the general classification and measurement policy for financial assets outlined at the

commencement of the Group’s financial asset disclosures on page 102. Additionally, expected credit losses associated with ‘Investment

securities - debt securities at amortised cost’ and ‘Investment securities - debt securities at FVOCI’ are recognised and measured in

accordance with the accounting policy outlined in Note 13 Allowance for expected credit losses. For ‘Investment securities - debt securities at

FVOCI’, the allowance for Expected Credit Loss (ECL) is recognised in the FVOCI reserve in equity with a corresponding charge to profit or loss.

Key judgements and estimates

Judgement is required when we select valuation techniques used to determine the fair value of assets not valued using quoted market prices,

particularly the selection of valuation inputs that are not readily observable. Refer to Note 18 Fair value of financial assets and financial liabilities

for further details.

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12. Net loans and advances

The following table provides details of Net loans and advances:

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Overdrafts
	6,109	5,552	4,701	4,516
Credit cards	6,713	6,805	5,571	5,630
Commercial bills
	4,401	4,682	4,401	4,682
Term loans – housing
	484,554	404,491	324,883	304,772
Term loans – non-housing
	301,284	285,458	248,498	242,403
Other
	924	1,292	845	1,244
Subtotal
	803,985	708,280	588,899	563,247
Unearned income
1
	(515)	(515)	(489)	(483)
Capitalised brokerage and other origination costs
1
	4,237	3,475	3,303	3,048
Gross loans and advances
	807,707	711,240	591,713	565,812
Allowance for expected credit losses (refer to Note 13)	(3,675)	(3,546)	(2,715)	(2,795)
Net loans and advances
	804,032	707,694	588,998	563,017
Residual contractual maturity:
Within one year	159,042	152,318	133,701	128,045
More than one year
	644,990	555,376	455,297	434,972
Net loans and advances
	804,032	707,694	588,998	563,017
Carried on Balance Sheet at:
Amortised cost	779,246	685,806	564,559	541,777
Fair value through profit or loss
	24,786	21,888	24,439	21,240
Net loans and advances
	804,032	707,694	588,998	563,017

1.

Amortised over the expected life of the loan.

Recognition and measurement

Loans and advances are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are

facilities the Group provides directly to customers or through third party channels.

Loans and advances are initially recognised at fair value plus transaction costs directly attributable to the issue of the loan or advance, which

are primarily brokerage and other origination costs which we amortise over the estimated life of the loan. Subsequently, we then measure

loans and advances at amortised cost using the effective interest rate method, net of any allowance for ECL, or at fair value when they are

specifically designated on initial recognition as FVTPL, are classified as held for sale or when held for trading. Refer to Note 18 Fair value of

financial assets and financial liabilities for further details.

We classify contracts to lease assets and hire purchase agreements as finance leases if they transfer substantially all the risks and rewards of

ownership of the asset to the customer or an unrelated third party. We include these facilities in ‘Other’ in the table above.

The Group enters into transactions in which it transfers financial assets that are recognised on its Balance Sheet. When the Group retains

substantially all of the risks and rewards of the transferred assets, the transferred assets remain on the Group’s Balance Sheet, however if

substantially all the risks and rewards are transferred, the Group derecognises the asset. If the risks and rewards are partially retained and

control over the asset is lost, the Group derecognises the asset. If control over the asset is not lost, the Group continues to recognise the asset

to the extent of its continuing involvement.

We separately recognise the rights and obligations retained, or created, in the transfer of assets as appropriate.

Assets disclosed as Net loans and advances are subject to the general classification and measurement policy for financial assets outlined on

page 102. Additionally, expected credit losses associated with loans and advances at amortised cost are recognised and measured in

accordance with the accounting policy outlined in Note 13 Allowance for expected credit losses.

Notes to the consolidated financial statements (continued) Australia and New Zealand Banking Group Limited 2024 Annual Report

118

13. Allowance for expected credit losses

Suncorp Bank acquisition related adjustment

The collectively assessed credit impairment charge for 2024 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 collectively assessed credit impairment charge recognised in the Group’s Income Statement.

	2024			2023
	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	3,180	366	3,546
Off-balance sheet commitments	841	5	846	817	10	827
Investment securities - debt securities at amortised cost
	34	-	34	35	-	35
Total
	4,247	308	4,555	4,032	376	4,408
Other comprehensive income
Investment securities - debt securities at FVOCI
1
	20	-	20	15	-	15

	2024
				2023
The Company
	Collectively
	assessed
	$m
		Individually
		assessed
		$m
			Total
			$m
				Collectively
				assessed
				$m
					Individually
					assessed
					$m
						Total
						$m
Net loans and advances at amortised cost	2,495	220	2,715	2,516	279	2,795
Off-balance sheet commitments	691	2	693	692	5	697
Investment securities - debt securities at amortised cost
	1	-	1	1	-	1
Total
	3,187	222	3,409	3,209	284	3,493
Other comprehensive income
Investment securities - debt securities at FVOCI
1
	14	-	14	12	-	12

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 for the year.

Net loans and advances - at amortised cost

Allowance for ECL is included in Net loans and advances.

			Stage 3
Consolidated
	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	155	(181)	(57)	83	-
New and increased provisions (net of releases)
2
	(89)	218	168	379	676
Write-backs
	-	-	-	(177)	(177)
Bad debts written off (excluding recoveries)
	-	-	-	(316)	(316)
Foreign currency translation and other movements
1
	(17)	(8)	3	(32)	(54)
As at 30 September 2024
	1,276	1,653	443	303	3,675

1.

Other movements include the impacts of discount unwind on individually assessed allowance for ECL or the impact of divestments completed during the year.

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).

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			Stage 3
The Company
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 1 October 2022	946	1,259	295	425	2,925
Transfer between stages	122	(118)	(83)	79	-
New and increased provisions (net of releases)	(43)	98	39	295	389
Write-backs	-	-	-	(192)	(192)
Bad debts written off (excluding recoveries)	-	-	-	(310)	(310)
Foreign currency translation and other movements
1
	1	-	-	(18)	(17)
As at 30 September 2023	1,026	1,239	251	279	2,795
Transfer between stages	115	(140)	(48)	73	-
New and increased provisions (net of releases)	(121)	51	137	294	361
Write-backs
	-	-	-	(132)	(132)
Bad debts written off (excluding recoveries)
	-	-	-	(274)	(274)
Foreign currency translation and other movements
1
	(14)	-	(1)	(20)	(35)
As at 30 September 2024
	1,006	1,150	339	220	2,715

1.

Other movements include the impacts of discount unwind on individually assessed allowance for ECL or the impact of divestments completed during the year.

Off-balance sheet commitments - undrawn and contingent facilities

Allowance for ECL is included in Other provisions.

			Stage 3
Consolidated
	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	(17)	(1)	-	-
New and increased provisions (net of releases)	26	13	1	3	43
Write-backs
	-	-	-	(7)	(7)
Foreign currency translation and other movements
1
	(16)	(2)	2	(1)	(17)
As at 30 September 2024
	658	156	27	5	846

1.

Other movements include impact of divestments completed during the year.

Notes to the consolidated financial statements (continued) Australia and New Zealand Banking Group Limited 2024 Annual Report

120

13. Allowance for expected credit losses (continued)

			Stage 3
The Company
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 1 October 2022	530	112	26	5	673
Transfer between stages	27	(26)	(3)	2	-
New and increased provisions (net of releases)	(10)	35	(2)	-	23
Write-backs	-	-	-	(2)	(2)
Foreign currency translation and other movements	3	-	-	-	3
As at 30 September 2023	550	121	21	5	697
Transfer between stages	15	(13)	(2)	-	-
New and increased provisions (net of releases)	23	(11)	3	-	15
Write-backs
	-	-	-	(3)	(3)
Foreign currency translation
	(15)	(1)	-	-	(16)
As at 30 September 2024
	573	96	22	2	693

Investment securities - debt securities at amortised cost

Allowance for ECL is included in Investment securities.

			Stage 3
Consolidated
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 30 September 2023	35	-	-	-	35
As at 30 September 2024	34	-	-	-	34

			Stage 3
The Company
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 30 September 2023	1	-	-	-	1
As at 30 September 2024	1	-	-	-	1

Investment securities - debt securities at FVOCI

As FVOCI assets are measured at fair value, there is no separate allowance for ECL. Instead, the allowance for ECL is recognised in Other

comprehensive income with a corresponding charge to profit or loss.

			Stage 3
Consolidated
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 30 September 2023	15	-	-	-	15
As at 30 September 2024	20	-	-	-	20

			Stage 3
The Company
	Stage 1
	$m
		Stage 2
		$m
			Collectively
			assessed
			$m
				Individually
				assessed
				$m
					Total
					$m
As at 30 September 2023	12	-	-	-	12
As at 30 September 2024	14	-	-	-	14

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13. Allowance for expected credit losses (continued)

Credit impairment charge - Income Statement

Credit impairment charge/(release) analysis

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
New and increased provisions (net of releases)
1,2
- Collectively assessed	262	152	11	41
- Individually assessed
	465	476	367	376
Write-backs
3
	(184)	(216)	(135)	(194)
Recoveries of amounts previously written-off
	(137)	(167)	(117)	(148)
Total credit impairment charge
	406	245	126	75

1.

Includes the impact of transfers between collectively assessed and individually assessed.

2.

New and increased provisions (net of releases) includes:

		Consolidated				The Company
	2024		2023		2024		2023
	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	214	462	106	472	(6)	367	15	374
Off-balance sheet commitments	40	3	43	4	15	-	21	2
Investment securities - debt securities at amortised cost	3	-	(1)	-	(1)	-	-	-
Investment securities - debt securities at FVOCI	5	-	4	-	3	-	5	-
Total	262	465	152	476	11	367	41	376

3.

Consists of write-backs in Net loans and advances at amortised cost of $177 million (2023: $212 million) for the Group and $132 million (2023: $192 million) for the Company, and Off-balance sheet

commitments of $7 million (2023: $4 million) for the Group and $3 million (2023: $2 million) for the Company.

The contractual amount outstanding on financial assets that were written off during the year and that are still subject to enforcement activity is

$136 million (2023: $147 million) for the Group, and $116 million (2023: $133 million) for the Company.

122 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

13. Allowance for expected credit losses

(continued)

Recognition and measurement

Expected credit loss model

The measurement of expected credit losses reflects an unbiased, probability weighted prediction which evaluates a range of scenarios and

takes into account the time value of money, past events, current conditions and forecasts of future economic conditions.

Expected credit losses are either measured over 12 months or the expected lifetime of the financial asset, depending on credit deterioration

since origination, according to the following three-stage approach:

•

Stage 1: At the origination of a financial asset, and 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.

Expected credit losses are estimated on a collective basis for exposures in Stage 1 and Stage 2, and on either a collective or individual basis

when transferred to Stage 3.

For financial assets that are credit-impaired on initial recognition, lifetime ECL are incorporated into the calculation of the effective interest rate

on initial recognition. Consequently, these assets do not carry an expected credit loss allowance on initial recognition. The amount recognised

as a provision for credit losses after initial recognition is equal to the change in the lifetime expected credit loss since initial recognition.

Measurement of expected credit loss

ECL is calculated as the product of the following credit risk factors at a facility level, discounted to incorporate the time value of money:

•

Probability of default (PD) - the estimate of the likelihood that a borrower will default over a given period;

•

Exposure at default (EAD) - the expected balance sheet exposure at default taking into account repayments of principal and interest,

expected additional drawdowns and accrued interest; and

•

Loss given default (LGD) - 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.

These credit risk factors are adjusted for current and forward-looking information through the use of macroeconomic variables.

Expected life

When estimating ECL for exposures in Stage 2 and 3, the Group considers the expected lifetime over which it is exposed to credit risk.

For non-retail portfolios, the Group uses the maximum contractual period as the expected lifetime for non-revolving credit facilities. For non-

retail revolving credit facilities, such as corporate lines of credit, the expected life reflects the Group’s contractual right to withdraw a facility as

part of a contractually agreed annual review, after taking into account the applicable notice period.

For retail portfolios, the expected lifetime is determined using a behavioural term, taking into account expected prepayment behaviour and

events that give rise to substantial modifications.

Definition of default, credit impaired and write-offs

The definition of default used in measuring ECL is aligned to the definition used for internal credit risk management purposes across all

portfolios. This definition is also in line with the regulatory definition of default. Default occurs when there are indicators that a debtor is unlikely

to fully satisfy contractual credit obligations to the Group, or the exposure is 90 days past due.

Financial assets, including those that are well secured, are considered credit impaired for financial reporting purposes when they default.

When there is no realistic probability of recovery, loans are written off against the related impairment allowance on completion of the Group’s

internal processes and when all reasonably expected recoveries have been collected. In subsequent periods, any recoveries of amounts

previously written-off are recorded as a release to the credit impairment charge in the Income Statement.

Modified financial assets

If the contractual terms of a financial asset are modified or an existing financial asset is replaced with a new one for either credit or commercial

reasons, an assessment is made to determine if the changes to the terms of the existing financial asset are considered substantial. This

assessment considers both changes in cash flows arising from the modified terms as well as changes in the overall instrument risk profile; for

example, changes in the principal (credit limit), term, or type of underlying collateral. Where a modification is considered non-substantial, the

existing financial asset is not derecognised and its date of origination continues to be used to determine SICR. Where a modification is

considered substantial, the existing financial asset is derecognised and a new financial asset is recognised at its fair value on the modification

date, which also becomes the date of origination used to determine SICR for this new asset.

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Significant increase in credit risk

Stage 2 assets are those that have experienced a SICR since origination. In determining what constitutes a SICR, the Group considers both

qualitative and quantitative information:

i. Internal credit rating grade

For the majority of portfolios, the primary indicator of a SICR is a significant deterioration in the internal credit rating grade of a facility since

origination and is measured by the application of thresholds.

For non-retail portfolios, a SICR is determined by comparing the Customer Credit Rating (CCR) applicable to a facility at reporting date to

the CCR at origination of that facility. A CCR is assigned to each borrower which reflects the PD of the borrower and incorporates both

borrower and non-borrower specific information, including forward-looking information. CCRs are subject to review at least annually or

more frequently when an event occurs which could affect the credit risk of the customer.

For retail portfolios, a SICR is determined, depending on the type of facility, by either comparing the scenario weighted lifetime PD at the

reporting date to that at origination, or by reference to customer behavioural score thresholds. The scenario weighted lifetime probability of

default may increase significantly if:

•

there has been a deterioration in the economic outlook, or an increase in economic uncertainty; or

•

there has been a deterioration in the customer’s overall credit position, or ability to manage their credit obligations.

ii. Backstop criteria

The Group uses 30 days past due arrears as a backstop criterion for both non-retail and retail portfolios. For retail portfolios only, facilities

are required to demonstrate three to six months of good payment behaviour prior to being allocated back to Stage 1.

Forward-looking information

Forward-looking information is incorporated into both our assessment of whether a financial asset has experienced a SICR since origination

and in our estimate of ECL. In applying forward-looking information for estimating ECL, the Group considers four probability-weighted forecast

economic scenarios as follows:

i. Base case scenario

The base case scenario is the Group’s view of future macroeconomic conditions. It reflects the same basis of assumptions used by

management for strategic planning and budgeting, and also informs the Group Internal Capital Adequacy Assessment Process which is

the process the Group applies in strategic and capital planning over a 3-year time horizon;

ii. Upside and iii. Downside scenarios

The upside and downside scenarios are fixed by reference to average economic cycle conditions (that is, they are not based on the

economic conditions prevailing at balance date) and are based on a combination of more optimistic (in the case of the upside) and

pessimistic (in the case of the downside) economic events and uncertainty over long term horizons; and

iv. Severe downside scenario

The severe scenario assumes a deep economic downturn, both domestically and globally. Forecast macroeconomic variables for such a

scenario are developed by ANZ Research - Economics (ANZ Economics), reflecting a plausible scenario unfolding over a 5-year period

given current economic conditions. These assumptions have been revised in 2024, reflecting an escalation of geopolitical tensions,

persistent inflation, and worsening national budget positions.

The four scenarios are described in terms of macroeconomic variables used in the PD, LGD and EAD models (collectively the ECL models)

depending on the lending portfolio and country of the borrower. Examples of the macroeconomic variables include unemployment rates,

Gross Domestic Product (GDP) growth rates, residential property price indices, commercial property price indices and consumer price indices.

Probability weighting of each scenario is determined by management considering the risks and uncertainties surrounding the base case

economic scenario, as well as specific portfolio considerations where required. The Group Asset and Liability Committee (GALCO) is

responsible for reviewing and approving the base case economic scenario and the Credit and Market Risk Committee (CMRC) approves the

probability weights applied to each scenario.

Where applicable, temporary adjustments may be made to account for situations where known or expected risks have not been adequately

addressed in the modelling process. CMRC is responsible for approving such adjustments.

Recognition and measurement (continued)

124 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

124

13. Allowance for expected credit losses

(continued)

Key judgements and estimates

Collectively assessed allowance for expected credit losses

In estimating collectively assessed ECL, the Group makes judgements and assumptions in relation to:

•

the selection of an estimation technique or modelling methodology; and

•

the selection of inputs for those models, and the interdependencies between those inputs.

The following table summarises the key judgements and assumptions in relation to the model inputs and the interdependencies between

those inputs, and highlights significant changes during the current period.

The judgements and associated assumptions have been made within the context of the uncertainty as to how various factors might impact

the global economy and reflect historical experience and other factors that are considered to be relevant, including expectations of future

events that are believed to be reasonable under the circumstances. The Group’s ECL estimates are inherently uncertain and, as a result, actual

results may differ from these estimates.

Judgement/Assumption	Description	Considerations for the year ended 30 September 2024
Determining when a SICR
has occurred or reversed
	In the measurement of ECL, judgement is involved
	in determining whether there has been a SICR
	since initial recognition of a loan, which would
	result in it moving from Stage 1 to Stage 2. This is
	a key area of judgement since transition from
	Stage 1 to Stage 2 increases the ECL from an
	allowance based on the PD in the next 12
	months, to an allowance for lifetime ECL.
	Subsequent decreases in credit risk resulting in
	transition from Stage 2 to Stage 1 may similarly
	result in significant changes in the ECL allowance.
	The setting of precise SICR trigger points requires
	judgement which may have a material impact
	upon the size of the ECL allowance. The Group
	monitors the effectiveness of SICR criteria on an
	ongoing basis.
		The determination of SICR was consistent with prior
		periods.
Measuring both 12-
month and lifetime
expected credit losses
	The PD, LGD and EAD factors used in determining
	ECL are point-in-time measures reflecting the
	relevant forward-looking information determined
	by management. Judgement is involved in
	determining which forward-looking information is
	relevant for particular lending portfolios and for
	determining each portfolio’s point-in-time
	sensitivity.
	In addition, judgement is required where
	behavioural characteristics are applied in
	estimating the lifetime of a facility which is used in
	measuring ECL.
		The PD, LGD and EAD models are subject to the Group’s
		model risk policy that stipulates periodic model monitoring
		and re-validation, and defines approval procedures and
		authorities according to model materiality.
		There were no material changes to the policy.
Base case economic
forecast
	The Group derives a forward-looking ‘base case’
	economic scenario which reflects ANZ
	Economics’ view of future macroeconomic
	conditions.
		There have been no changes to the types of forward-
		looking variables (key economic drivers) used as model
		inputs.
		As at 30 September 2024, the base case assumptions
		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.
		The expected outcomes of key economic drivers for the
		base case scenario at 30 September 2024 are described
		below under the heading “Base case economic forecast
		assumptions”.

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Judgement/Assumption	Description	Considerations for the year ended 30 September 2024
Probability weighting of
each economic scenario
(base case, upside,
downside and severe
downside scenarios)
1
	Probability weighting of each economic scenario
	is determined by management considering the
	risks and uncertainties surrounding the base case
	economic scenario at each measurement date.
	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.
		Probability weightings in New Zealand shifted from
		downside to upside scenarios during the current period
		reflecting increasing confidence in economic recovery with
		high-frequency data providing early indication that the
		economy is responding to monetary easing.
		Probability weightings in Australia and Rest of World
		remain unchanged from the prior period, reflecting our
		assessment of the continuing downside risks from the
		impact of higher interest rates and inflation in these
		economies.
		The probability weightings for current and prior periods are
		as detailed in the section below under the heading
		‘Probability weightings’.
Management temporary
adjustments
	Management temporary adjustments to the ECL
	allowance are used in circumstances where it is
	judged that our existing inputs, assumptions and
	model techniques do not capture all the risk
	factors relevant to our lending portfolios.
	Emerging local or global macroeconomic,
	microeconomic or political events, and natural
	disasters that are not incorporated into our
	current parameters, risk ratings, or forward-
	looking information are examples of such
	circumstances.
		Management have continued to apply adjustments to
		accommodate uncertainty associated with higher inflation
		and interest rates. Management overlays have been made
		for risks particular to home loans, credit cards and
		commercial lending in Australia, and for mortgages and
		commercial lending in New Zealand. The total amount of
		adjustments has decreased from the prior period as
		anticipated risks are now represented in the portfolio
		credit profiles.
		Management has considered and concluded no
		temporary adjustment is required at 30 September 2024
		to the ECL in relation to climate or weather related events
		during the period.

1.

The upside and downside scenarios are fixed by reference to average economic cycle conditions (that is, they are not based on the economic conditions prevailing at balance date) and are

based on a combination of more optimistic (in the case of the upside) and pessimistic (in the case of the downside) economic conditions.

Base case economic forecast assumptions

Continuing uncertainties described above increase the risk of the economic forecast resulting in an understatement or overstatement of the

ECL balance.

The economic drivers of the base case economic forecasts, reflective of ANZ Economics’ view of future macroeconomic conditions used at

30 September 2024 are set out below. For the years following the near term forecasts below, the ECL models apply simplified assumptions

for the economic conditions to calculate lifetime loss.

		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 average % 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 average % change)	3.1	2.2	1.8
Rest of World
GDP (annual % change)	2.3	1.5	1.9
Consumer price index (annual average % change)	3.1	2.4	2.1

Key judgements and estimates (continued)

126 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

126

13. Allowance for expected credit losses

(continued)

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 average base case weighting has remained unchanged at 46% (2023: 46%) as the upside and downside scenario weightings have been

revised. The average upside case weighting has increased to 1% (2023: 0%), and the average downside case weighting has decreased to

40% (2023: 41%).

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:

	Consolidated		The Company
	2024	2023	2024	2023
Base	46%	46%	45%	45%
Upside	1%	0%	0%	0%
Downside	40%	41%	42%	42%
Severe downside	13%	13%	13%	13%

ECL - Sensitivity analysis

Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future

periods, expected credit losses reported by the Group should be considered as a best estimate within a range of possible estimates.

The table below illustrates the sensitivity of collectively assessed ECL to key factors used in determining it as at 30 September 2024:

	Consolidated		The Company
	ECL
	$m
		Impact
		$m
			ECL
			$m
				Impact
				$m
If 1% of Stage 1 facilities were included in Stage 2	4,328	81	3,255	68
If 1% of Stage 2 facilities were included in Stage 1	4,241	(6)	3,183	(4)
100% upside scenario	1,502	(2,745)	1,129	(2,058)
100% base scenario	1,951	(2,296)	1,419	(1,768)
100% downside scenario	3,580	(667)	2,599	(588)
100% severe downside scenario	10,142	5,895	7,683	4,496

Individually assessed allowance for expected credit losses

In estimating individually assessed ECL, the Group makes judgements and assumptions in relation to expected repayments, the realisable

value of collateral, business prospects for the customer, competing claims and the likely cost and duration of the work-out process.

Judgements and assumptions in respect of these matters have been updated to reflect amongst other things, the uncertainties described

above.

Key judgements and estimates (continued)

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Financial liabilities

Outlined below is a description of how we classify and measure financial liabilities relevant to the note disclosures that follow.

Classification and measurement

Financial liabilities

Financial liabilities are measured at amortised cost, or FVTPL when they are held for trading. Additionally, financial liabilities can be designated at

FVTPL where:

• the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise;

• a group of financial liabilities are managed and their performance are evaluated on a fair value basis, in accordance with a documented risk

management strategy; or

• the financial liability contains one or more embedded derivatives unless:

a) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract; or

b) the embedded derivative is closely related to the host financial liability.

Where financial liabilities are designated as measured at fair value, gains or losses relating to changes in the entity’s own credit risk are

included in Other comprehensive income, except where doing so would create or enlarge an accounting mismatch in profit or loss.

128 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

128

14. Deposits and other borrowings

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Certificates of deposit
	42,206	41,919	35,434	39,426
Term deposits	273,516	247,893	199,943	196,309
On demand and short term deposits
	383,014	356,601	288,228	297,195
Deposits not bearing interest
	60,104	42,906	41,386	24,456
Deposits from banks & securities sold under repurchase agreements
	98,550	92,562	94,513	86,464
Commercial paper and other borrowings
	47,776	33,322	44,366	31,225
Deposits and other borrowings
1
	905,166	815,203	703,870	675,075
Residual contractual maturity:
Within one year	894,658	805,808	699,192	671,395
More than one year
	10,508	9,395	4,678	3,680
Deposits and other borrowings
	905,166	815,203	703,870	675,075
Carried on Balance Sheet at:
Amortised cost	862,165	781,314	662,910	643,868
Fair value through profit or loss
	43,001	33,889	40,960	31,207
Deposits and other borrowings
	905,166	815,203	703,870	675,075

1.

Customer deposits balance of $716,634 million (2023: $647,400 million) for the Group and $529,557 million (2023: $517,960 million) for the Company includes Term deposits, On demand and short

term deposits and Deposits not bearing interest.

Recognition and measurement

For deposits and other borrowings that:

• are not designated at FVTPL on initial recognition, we measure them at amortised cost and recognise their interest expense using the

effective interest rate method; and

• are managed on a fair value basis, reduce or eliminate an accounting mismatch or contain an embedded derivative, we designate them as

measured at FVTPL.

Refer to Note 18 Fair value of financial assets and financial liabilities for further details.

For deposits and other borrowings designated at fair value we recognise the amount of fair value gain or loss attributable to changes in the

Group’s own credit risk in Other comprehensive income in retained earnings. Any remaining amount of fair value gain or loss we recognise

directly in profit or loss. Once we have recognised an amount in other comprehensive income, we do not later reclassify it to profit or loss.

Securities sold under repurchase agreements represent a liability to repurchase the financial assets that remain on our balance sheet since the

risks and rewards of ownership remain with the Group. Over the life of the repurchase agreement, we recognise the difference between the

sale price and the repurchase price and charge it to interest expense in profit or loss.

20232024

Certificates of deposit

Term deposits

On demand and short

term deposits

Deposits not bearing interest

Deposits from banks & securities sold

under repurchase agreements

247,893

356,601

42,906

33,322

92,562

Commercial paper and

other borrowings

41,919

273,516

383,014

60,104

47,776

98,550

42,206

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15. Payables and other liabilities

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Payables and accruals
	7,243	5,811	4,989	4,582
Liabilities at fair value
1
	6,023	5,267	5,677	4,922
Lease liabilities
	1,784	1,767	1,402	1,531
Trail commission liabilities
	2,055	1,469	1,606	1,469
Other liabilities
	1,489	1,670	800	775
Payables and other liabilities
	18,594	15,984	14,474	13,279

1.

Relate to securities sold short classified as held for trading and measured at FVTPL.

Recognition and measurement

The Group recognises liabilities when there is a present obligation to transfer economic resources as a result of past events.

Below is the measurement basis for each item classified as other liabilities:

• Payables, accruals and other liabilities are measured at the contractual amount payable or the best estimate of consideration required to

settle the payable.

• Liabilities at fair value relate to securities sold short, which we classify as held for trading and measure at FVTPL based on quoted prices in

active markets.

• Lease liabilities are initially measured at the present value of the future lease payments using the Group’s incremental borrowing rate at the

lease commencement date. The carrying amount is then subsequently adjusted to reflect the interest on the lease liability, lease payments

that have been made and any lease reassessments or modifications.

• Trail commission liabilities are measured based on the present value of expected future trail commission payments taking into consideration

average behavioural loan life and outstanding balances of broker originated loans.

130 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

16. Debt issuances

The Group, primarily via ANZBGL and some of its banking subsidiaries (including ANZ Bank New Zealand and Norfina Limited (Suncorp Bank)), uses a

variety of funding programmes to issue senior debt (including covered bonds and securitisations) and subordinated debt. The difference between senior

debt and subordinated debt is that, in a winding up of an issuer, holders of senior debt of that issuer rank in priority to holders of subordinated debt of that

issuer. Subordinated debt will be repaid by the relevant issuer only after the repayment of claims of its depositors and other creditors (including the senior

debt holders) of that issuer.

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Senior debt
	94,152	63,233	72,183	50,671
Covered bonds	18,931	18,223	13,853	15,084
Securitisation
	3,640	880	-	-
Total unsubordinated debt
	116,723	82,336	86,036	65,755
Subordinated debt
- ANZBGL Additional Tier 1 capital
	8,277	8,232	8,330	8,287
- ANZBGL Tier 2 capital
	28,584	23,707	28,584	23,707
- Other subordinated debt securities
	2,804	1,739	-	464
Total subordinated debt
	39,665	33,678	36,914	32,458
Total debt issued	156,388	116,014	122,950	98,213
Residual contractual maturity
1
:
Within one year	35,107	21,746	28,751	18,499
More than one year
	119,090	92,856	92,751	78,245
No maturity date (instruments in perpetuity)
	2,191	1,412	1,448	1,469
Total debt issued
	156,388	116,014	122,950	98,213
Carried on Balance Sheet at:
Amortised cost	154,572	114,678	120,155	95,881
Fair value through profit or loss
	1,816	1,336	2,795	2,332
Total debt issued
	156,388	116,014	122,950	98,213

1.

Based on the final maturity date or, in the case of Additional Tier 1 capital securities, the mandatory conversion date (if any).

Total debt issued by currency

The table below shows the Group’s issued debt by currency of issue, which broadly represents the debt holders’ base location.

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
USD United States dollars
	45,512	32,723	37,381	24,074
EUR Euro	26,325	26,990	20,911	21,356
AUD Australian dollars
	69,420	47,043	51,234	46,123
NZD New Zealand dollars
	1,074	1,575	65	43
JPY Japanese yen
	2,609	1,993	2,609	1,993
CHF Swiss francs
	683	1,039	-	-
AUD Pounds sterling
	8,543	2,230	8,543	2,230
HKD Hong Kong dollars
	1,403	1,407	1,403	1,407
Other Chinese yuan and Singapore dollars
	819	1,014	804	987
Total debt issued
	156,388	116,014	122,950	98,213

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16. Debt issuances

Subordinated debt

Subordinated debt is primarily issued externally by the Group out of its banking subsidiaries, ANZBGL and ANZ Bank New Zealand. ANZ Holdings (New

Zealand) Limited also issued $800 million of perpetual subordinated debt in September 2024. The externally issued subordinated debt constitutes

subordinated debt of both the Group and the relevant issuer.

At 30 September 2024, all subordinated debt issued by ANZBGL qualifies as regulatory capital for ANZBGL. Depending on their terms and conditions, the

subordinated debt instruments issued by ANZBGL are classified as either Additional Tier 1 (AT1) capital for ANZBGL (in the case of the ANZ Capital Notes

(ANZ CN) and ANZ Capital Securities (ANZ CS)) or Tier 2 capital for ANZBGL (in the case of the term subordinated notes) for APRA’s capital adequacy

purposes. Subordinated debt issued by ANZ Holdings (New Zealand) Limited or ANZ Bank New Zealand does not constitute regulatory capital for the

Group for APRA’s capital adequacy purposes.

Subordinated debt issued by ANZ Bank New Zealand will constitute tier 2 capital for ANZ Bank New Zealand for the purposes of the Reserve Bank of New

Zealand’s (RBNZ) capital requirements. Subordinated debt issued by ANZ Holdings (New Zealand) Limited does not constitute regulatory capital for the

RBNZ’s capital adequacy purposes.

AT1 capital

All outstanding AT1 capital instruments issued by ANZBGL are Basel III fully compliant instruments (refer to Note 24 Capital management for further

information about Basel III) for APRA’s capital adequacy purposes. Each of the ANZ CN and ANZ CS rank equally with each other.

Distributions on the AT1 capital instruments are non-cumulative and subject to the issuer’s absolute discretion and certain payment conditions (including

regulatory requirements). Distributions on ANZ CNs are franked in line with the franking applied to ANZGHL’s ordinary shares.

Where specified, the AT1 capital instruments provide the issuer with an early redemption or conversion option on a specified date and in certain other

circumstances (such as a tax or regulatory event). This redemption option is subject to APRA’s prior written approval.

Each of the AT1 capital instruments will immediately convert into a variable number of ANZGHL’s ordinary shares (based on the average market price of

the shares immediately prior to conversion less a 1% discount, subject to a maximum conversion number of ANZGHL’s ordinary shares) if:

•

ANZBGL’s Common Equity Tier 1 capital ratios are equal to or less than 5.125% - known as a Common Equity Capital Trigger Event; or

•

APRA notifies ANZBGL that, without the conversion or write-off of certain securities or a public sector injection of capital (or equivalent support), it

considers that ANZBGL would become non-viable – known as a Non-Viability Trigger Event.

Where specified, AT1 capital instruments mandatorily convert into a variable number of ANZGHL’s ordinary shares (based on the average market price of

the shares immediately prior to conversion less a 1% discount):

•

on a specified mandatory conversion date; or

•

on an earlier date under certain circumstances as set out in the terms.

However, this mandatory conversion is deferred for a specified period if certain conversion tests are not met.

If the AT1 capital securities convert, and the holders receive ANZGHL ordinary shares, then:

•

the AT1 capital securities are transferred by the holders to ANZGHL for their face value;

•

ANZBGL shall redeem the securities and simultaneously issue ordinary shares to its parent ANZ BH Pty Ltd (based on ANZBGL’s share price calculated

by reference to its consolidated net assets, subject to a maximum conversion number); and

•

ANZ BH Pty Ltd will issue shares to ANZGHL (based on ANZ BH Pty Ltd’s share price calculated by reference to its consolidated net assets, subject to a

maximum conversion number).

Preference shares issued by ANZ Bank New Zealand will constitute AT1 capital for ANZ Bank New Zealand for the purposes of the RBNZ’s capital

requirements, however they will not constitute AT1 capital for the Group as the terms of the preference shares do not satisfy APRA’s capital requirements.

Externally issued preference shares are included within non-controlling interests in Note 23 Shareholders’ equity.

The tables below show key details of the ANZBGL’s AT1 capital instruments on issue at 30 September in both the current and prior years:

			Consolidated		The Company
			2024	2023	2024	2023
			$m	$m	$m	$m
ANZBGL's Additional Tier 1 capital (perpetual subordinated securities)
1
ANZ Capital Notes
AUD	1,622m	ANZ CN4
		2
			-	1,621	-	1,621
AUD	931m	ANZ CN5
			931	929	931	929
AUD	1,500m	ANZ CN6
			1,490	1,489	1,490	1,489
AUD	1,310m	ANZ CN7
			1,300	1,298	1,300	1,298
AUD	1,500m	ANZ CN8
			1,485	1,483	1,483	1,481
AUD	1,700m	ANZ CN9
			1,680	-	1,678	-
ANZ Capital Securities
USD	1,000m	ANZ Capital Securities	1,391	1,412	1,448	1,469
Total ANZBGL Additional Tier 1 capital
3
			8,277	8,232	8,330	8,287

1.

Carrying values are net of issuance costs.

2.

All of the ANZ CN4 were redeemed on 20 March 2024 with approximately $905 million of the proceeds from redemption reinvested into ANZ CN9 on the same date.

3.

This forms part of ANZBGL’s qualifying AT1 capital. Refer to Note 24 Capital management for further details.

132 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

132

16. Debt issuances (continued)

ANZ Capital Notes

	ANZ CN4	ANZ CN5	ANZ CN6
Issuer
	ANZBGL	ANZBGL	ANZBGL
Issue date
	27 September 2016	28 September 2017	8 July 2021
Issue amount
	$1,622 million	$931 million	$1,500 million
Face value per note
	$100	$100	$100
Distribution frequency
	Quarterly in arrears	Quarterly in arrears	Quarterly in arrears
Distribution rate
	Floating rate: (90 day Bank
	Bill rate+4.7%)x(1-Australian
	corporate tax rate)
		Floating rate: (90 day Bank
		Bill rate+3.8%)x(1-Australian
		corporate tax rate)
			Floating rate: (90 day Bank
			Bill rate+3.0%)x(1-Australian
			corporate tax rate)
Issuer’s early redemption or conversion option
	20 March 2024
	1
		20 March 2025	20 March 2028
Mandatory conversion date
	20 March 2026
	2
		20 March 2027	20 September 2030
Common Equity Capital Trigger Event
	Yes	Yes	Yes
Non-Viability Trigger Event
	Yes	Yes	Yes
Carrying value (net of issue costs)
	nil	$931 million	$1,490 million
	(2023: $1,621 million)	(2023: $929 million)	(2023: $1,489 million)

	ANZ CN7	ANZ CN8	ANZ CN9
Issuer
	ANZBGL	ANZBGL	ANZBGL
Issue date
	24 March 2022	24 March 2023	20 March 2024
Issue amount
	$1,310 million	$1,500 million	$1,700 million
Face value per note
	$100	$100	$100
Distribution frequency
	Quarterly in arrears	Quarterly in arrears	Quarterly in arrears
Distribution rate
	Floating rate: (90 day Bank
	Bill rate+2.7%)x(1-Australian
	corporate tax rate)
		Floating rate: (90 day Bank
		Bill rate+2.75%)x(1-Australian
		corporate tax rate)
			Floating rate: (90 day Bank
			Bill rate+2.9%)x(1-Australian
			corporate tax rate)
Issuer’s early redemption or conversion option
	20 March 2029	20 March 2030	20 March 2031
Mandatory conversion date
	20 September 2031	20 September 2032	20 September 2033
Common Equity Capital Trigger Event
	Yes	Yes	Yes
Non-Viability Trigger Event
	Yes	Yes	Yes
Carrying value (net of issue costs)
	$1,300 million	$1,485 million	$1,680 million
	(2023: $1,298 million)	(2023: $1,483 million)	(2023: nil)

1.

All of the ANZ CN4 were redeemed on 20 March 2024 with approximately $905 million of the proceeds from redemption reinvested into ANZ CN9 on the same date.

2.

The mandatory conversion date is no longer applicable as all of ANZ CN4 have been redeemed.

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16. Debt issuances (continued)

ANZ Capital Securities

Issuer	ANZBGL, acting through its London branch
Issue date	15 June 2016
Issue amount	USD 1,000 million
Face value	Minimum denomination of USD 200,000 and an integral multiple of USD 1,000 above that
Interest frequency	Semi-annually in arrears
Interest rate
	Fixed at 6.75% p.a. until 15 June 2026. Reset on 15 June 2026 and each 5 year anniversary
	to a floating rate: 5 year USD mid-market swap rate + 5.168%
Issuer’s early redemption option	15 June 2026 and each 5 year anniversary
Common Equity Capital Trigger Event	Yes
Non-Viability Trigger Event	Yes
Carrying value (net of issue costs)	$1,391 million (2023: $1,412 million)

134 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

134

16. Debt issuances (continued)

Tier 2 capital

Convertible term subordinated notes issued by ANZBGL are Basel III fully compliant instruments for APRA’s capital adequacy purposes. If a Non-Viability

Trigger Event occurs, each of the convertible term subordinated notes will immediately convert into ANZGHL ordinary shares (based on the average

market price of the ANZGHL shares immediately prior to conversion less a 1% discount, subject to a maximum conversion number).

If the Tier 2 capital securities convert, and the holders receive ANZGHL ordinary shares, then ANZBGL shall issue ordinary shares to its parent ANZ BH

Pty Ltd (based on ANZBGL’s share price calculated by reference to its consolidated net assets, subject to a maximum conversion number) and ANZ BH

Pty Ltd will issue shares to ANZGHL (calculated on the same basis).

The table below shows the Tier 2 capital subordinated debt issued by ANZBGL at 30 September in the current and prior year:

					Consolidated		The Company
			Next optional call date –	Interest
					2024	2023	2024	2023
Currency	Face value	Maturity	subject to APRA’s prior approval	rate
					$m	$m	$m	$m
ANZBGL Tier 2 capital (term subordinated notes)
USD	800m	2024	N/A	Fixed	-	1,220	-	1,220
JPY	20,000m	2026	N/A	Fixed
					203	207	203	207
USD	1,500m	2026	N/A	Fixed
					2,089	2,125	2,089	2,125
AUD	225m	2032	2027	Fixed
					224	225	224	225
AUD	1,750m	2029	2024	Floating
					-	1,750	-	1,750
EUR
1
	1,000m	2029	2024	Fixed	1,600	1,555	1,600	1,555
AUD	265m	2039	N/A	Fixed
					189	170	189	170
USD	1,250m	2030	2025	Fixed
					1,764	1,808	1,764	1,808
AUD	1,250m	2031	2026	Floating
					1,250	1,250	1,250	1,250
USD	1,500m	2035	2030	Fixed
					1,845	1,786	1,845	1,786
AUD	330m	2040	N/A	Fixed
					225	202	225	202
AUD	195m	2040	N/A	Fixed
					131	117	131	117
EUR	750m	2031	2026	Fixed
					1,154	1,104	1,154	1,104
AUD	500m	2031	2026	Fixed
					904	830	904	830
AUD	1,450m	2032	2027	Fixed
					1,440	1,400	1,440	1,400
AUD	300m	2032	2027	Floating
					290	300	290	300
JPY	59,400m	2032	2027	Fixed
					597	606	597	606
SGD	600m	2032	2027	Fixed
					684	659	684	659
AUD	900m	2034	2029	Fixed
					907	871	907	871
USD	1,250m	2032	N/A	Fixed
					1,817	1,803	1,817	1,803
EUR	1,000m	2033	2028	Fixed
					1,642	1,594	1,642	1,594
AUD	1,000m	2038	2033	Fixed
					1,007	975	1,007	975
AUD	275m	2033	2028	Fixed
					275	275	275	275
AUD	875m	2033	2028	Floating
					867	875	867	875
AUD	1,434m	2034	2029	Floating
					1,415	-	1,415	-
AUD	850m	2034	2029	Fixed
					850	-	850	-
USD	1,000m	2034	2029	Fixed
					1,478	-	1,478	-
AUD	1,900m	2039	2034	Fixed
					1,947	-	1,947	-
USD	1,250m	2035	2034	Fixed
					1,790	-	1,790	-
Total ANZBGL Tier 2 capital
2,3
					28,584	23,707	28,584	23,707

1.

The EUR 1,000m subordinated notes will be redeemed on 21 November 2024.

2.

Carrying values are net of issuance costs, and, where applicable, include fair value hedge accounting adjustments.

3.

This forms part of ANZBGL’s qualifying Tier 2 capital. Refer to Note 24 Capital management for further details.

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Other subordinated debt securities

The term subordinated notes issued by ANZ Bank New Zealand constitute tier 2 capital under RBNZ requirements. However, they do not (among other

things) contain a Non-Viability Trigger Event and therefore do not meet APRA’s requirements for Tier 2 capital instruments in order to qualify as regulatory

capital for the Group.

ANZ Holdings (New Zealand) Limited externally issued $800m perpetual subordinated notes in September 2024, however, they do not constitute tier 2

capital for either APRA’s or RBNZ’s capital adequacy purposes.

					Consolidated		The Company
				Interest
					2024	2023	2024	2023
Currency	Face value	Maturity	Next optional call date
			1
				rate	$m	$m	$m	$m
Non-Basel III compliant perpetual subordinated notes issued by ANZBGL
2
USD	300m	Perpetual
			Each semi-annual interest payment
			date
				Floating	-	464	-	464
Perpetual subordinated notes issued by ANZ Holdings (New Zealand) Limited
3
AUD	800m	Perpetual	2030	Floating	800	-	-	-
Term subordinated notes issued by ANZ Bank New Zealand Limited
NZD	600m	2031	2026	Fixed	549	555	-	-
USD	500m	2032	2027	Fixed
					708	720	-	-
USD	500m	2034	2029	Fixed
					747	-	-	-
Other subordinated debt
4
					2,804	1,739	-	464

1.

Subject to APRA’s or RBNZ’s prior approval (as applicable).

2.

The USD 300 million perpetual subordinated notes were redeemed by ANZBGL on 31 October 2023.

3.

The perpetual subordinated notes were issued by ANZ Holdings (New Zealand) Limited on 18 September 2024 with the proceeds invested in perpetual preference shares issued internally by ANZ Bank

New Zealand (which constitute additional tier 1 capital for ANZ Bank New Zealand for the purposes of RBNZ’s capital requirements but not for the purposes of APRA’s capital requirements).

4.

ANZ Bank New Zealand also externally issued NZD 550 million of perpetual preference shares on 18 July 2022 and NZD 275 million of perpetual preference shares on 19 March 2024. These perpetual

preference shares constitute AT1 capital for ANZ Bank New Zealand for the purposes of RBNZ’s capital requirements but not for the purposes of APRA’s capital requirements. These preference shares

are included within non-controlling interests in Note 23 Shareholders’ equity.

Recognition and measurement

Debt issuances are initially recognised at fair value and are subsequently measured at amortised cost, except where designated at FVTPL.

Interest expense on debt issuances is recognised using the effective interest rate method. Where the group enters into a fair value hedge

accounting relationship, the fair value attributable to the hedged risk is reflected in adjustments to the carrying value of the debt.

Subordinated debt with capital-based conversion features (i.e. Common Equity Capital Trigger Events or Non-Viability Trigger Events) are

considered to contain embedded derivatives that we account for separately at FVTPL. The embedded derivatives arise because the number

of shares issued on conversion following any of those trigger events is subject to the maximum conversion number, however they have no

significant value as of the reporting date given the remote nature of those trigger events

.

136 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management

Risk management framework and model

Introduction

The use of financial instruments is fundamental to the Group’s businesses of providing banking and other financial services to our customers. The

associated financial risks (primarily credit, market, and liquidity risks) are a significant portion of the Group’s key material risks.

We disclose details of all key material risks impacting the Group, and further information on the Group’s risk management activities, in the Governance and

Risk Management sections of this Annual Report.

This note details the Group’s financial risk management policies, processes and quantitative disclosures in relation to the key financial risks.

Key material financial risks	Key sections applicable to this risk
Credit risk
The risk of financial loss resulting from:
•
a counterparty failing to fulfil its obligations; or
•
a decrease in credit quality of a counterparty resulting in a
financial loss.
Credit risk incorporates the risks associated with us lending to
customers who could be impacted by climate change, changes to
laws, regulations, or other policies adopted by governments or
regulatory authorities. Climate change impacts include both physical
risks (climate- or weather-related events) and transition risks
resulting from the adjustment to a low emissions
economy. Transition risks include resultant changes to laws,
regulations and policies noted above.
	•
	Credit risk overview, management and control responsibilities
	•
	Maximum exposure to credit risk
	•
	Credit quality
	•
	Concentrations of credit risk
	•
	Collateral management
Market risk
The risk to the Group’s earnings arising from:
•
changes in interest rates, foreign exchange rates, credit spreads,
volatility and correlations; or
•
fluctuations in bond, commodity or equity prices.
	•
	Market risk overview, management and control responsibilities
	•
	Measurement of market risk
	•
	Traded and non-traded market risk
	•
	Equity securities designated at FVOCI
	•
	Foreign currency risk – structural exposure
Liquidity and funding risk
The risk that the Group is unable to meet payment obligations as
they fall due, including:
•
repaying depositors or maturing wholesale debt; or
•
the Group having insufficient capacity to fund increases in assets.
	•
	Liquidity risk overview, management and control responsibilities
	•
	Key areas of measurement for liquidity risk
	•
	Liquidity risk outcomes
	•
	Residual contractual maturity analysis of the Group’s liabilities

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Overview

An overview of our risk management framework

This overview is provided to aid the users of the financial statements in understanding the context of the financial disclosures required under AASB 7

Financial Instruments: Disclosures. It should be read in conjunction with the Governance and Risk Management sections of this Annual Report.

The Board is responsible for establishing and overseeing the Group’s Risk Management Framework (RMF). The Board has delegated authority to the

Board Risk Committee (BRC) to develop and monitor compliance with the Group’s risk management policies. The BRC reports regularly to the Board on its

activities.

The Board approves the strategic objectives of the Group including:

•

the Risk Appetite Statement (RAS), which sets out the Board’s expectations regarding the degree of risk that the Group is prepared to accept in pursuit

of its strategic objectives and business plan; and

•

the Risk Management Strategy (RMS), which describes the Group’s strategy for managing risks and the key elements of the RMF that give effect to this

strategy. This includes a description of each material risk, and an overview of how the RMF addresses each risk, with reference to the relevant policies,

standards and procedures. It also includes information on how the Group identifies, measures, evaluates, monitors, reports and controls or mitigates

material risks.

The Group, through its training and management standards and procedures, aims to maintain a disciplined and robust control environment in which all

employees understand their roles and obligations. At ANZ, risk is everyone’s responsibility.

The Group has an independent risk management function, headed by the Chief Risk Officer who:

•

is responsible for overseeing the risk profile and the risk management framework;

•

can effectively challenge activities and decisions that materially affect the Group’s risk profile; and

•

has an independent reporting line to the BRC to enable the appropriate escalation of issues of concern.

The Internal Audit Function reports directly to the Board Audit Committee (BAC). Internal Audit provides:

•

an independent evaluation of the Group’s RMF annually that seeks to ensure compliance with, and the effectiveness of, the risk management

framework;

•

facilitation of a comprehensive review every three years that seeks to ensure the appropriateness, effectiveness and adequacy of the risk

management framework; and

•

recommendations to improve the framework and/or work practices to strengthen the effectiveness of day-to-day operations.

138 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

138

17. Financial risk management (continued)

Credit risk

Credit risk overview, management and control responsibilities

Granting credit facilities to customers is one of the Group’s major sources of income. As this activity is also a principal risk, the Group dedicates

considerable resources to its management. The Group assumes credit risk in a wide range of lending and other activities in diverse markets and in many

jurisdictions. Credit risks arise from traditional lending to customers as well as from interbank, treasury, trade finance and capital markets activities around

the world.

Our credit risk management framework ensures we apply a consistent approach across the Group when we measure, monitor and manage the credit risk

appetite set by the Board. The Board is assisted and advised by the BRC in discharging its duty to oversee credit risk. The BRC:

x

sets the credit risk appetite and credit strategies; and

x

approves credit transactions beyond the discretion of executive management.

We quantify credit risk through an internal credit rating system (masterscales) to ensure consistency across exposure types and to provide a consistent

framework for reporting and analysis. The system uses models and other tools to measure the following for customer exposures:

Probability of Default (PD)	Expressed by a Customer Credit Rating (CCR), reflecting the Group’s assessment of a customer’s ability to
	service and repay debt.
Exposure at Default (EAD)	The expected balance sheet exposure at default taking into account repayments of principal and interest,
	expected additional drawdowns and accrued interest at the time of default.
Loss Given Default (LGD)	Expressed by a Security Indicator (SI) ranging from A to G. The SI is calculated by reference to the
	percentage of loan covered by security which the Group can realise if a customer defaults. The A-G scale
	is supplemented by a range of other SIs which cover factors such as cash cover and sovereign backing.
	For retail and some small business lending, we group exposures into large homogenous pools – and the
	LGD is assigned at the pool level.

Our specialist credit risk teams develop and validate the Group’s PD and LGD rating models. The outputs from these models drive our day-to-day credit

risk management decisions including origination, pricing, approval levels, regulatory capital adequacy, economic capital allocation, and credit provisioning.

All customers with whom the Group has a credit relationship are assigned a CCR at origination via either of the following assessment approaches:

Large and more complex lending	Retail and some small business lending
Rating models provide a consistent and structured assessment, with
judgement required around the use of out-of-model factors. We
handle credit approval on a dual approval basis, jointly with the
business writer and an independent credit officer.
	Automated assessment of credit applications using a combination of
	scoring (application and behavioural), policy rules and external credit
	reporting information. If the application does not meet the automated
	assessment criteria, then it is subject to manual assessment.

We use the Group’s internal CCRs to manage the credit quality of financial assets. To enable wider comparisons, the Group’s CCRs are mapped to

external rating agency scales as follows:

Credit Quality
Description	Internal CCR	ANZ Customer Requirements
			Moody’s
			Ratings
				S&P Global
				Ratings
Strong	CCR 0+ to 4-	Demonstrated superior stability in their operating and financial
		performance over the long-term, and whose earnings capacity
		is not significantly vulnerable to foreseeable events.
			Aaa - Baa3	AAA - BBB-
Satisfactory	CCR 5+ to 6-	Demonstrated sound operational and financial stability over the
		medium to long-term, even though some may be susceptible to
		cyclical trends or variability in earnings.
			Ba1 - B1	BB
				+
				- B+
Weak	CCR 7+ to 8=	Demonstrated some operational and financial instability, with
		variability and uncertainty in profitability and liquidity projected to
		continue over the short and possibly medium term.
			B2 - Caa	B
				- CCC
Defaulted	CCR 8- to 10	When doubt arises as to the collectability of a credit facility, the
		financial instrument (or ‘the facility’) is classified as defaulted.
			N/A	N/A

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17. Financial risk management (continued)

Credit risk (continued)

Maximum exposure to credit risk

For financial assets recognised on the Balance Sheet, the maximum exposure to credit risk is the carrying amount. In certain circumstances there may be

differences between the carrying amounts reported on the Balance Sheet and the amounts reported in the tables below. Principally, these differences

arise in respect of financial assets that are subject to risks other than credit risk, such as equity instruments which are primarily subject to market risk, or

bank notes and coins.

For undrawn facilities, this maximum exposure to credit risk is the full amount of the committed facilities. For contingent exposures, the maximum exposure

to credit risk is the maximum amount the Group would have to pay if the instrument is called upon.

The table below shows our maximum exposure to credit risk of on-balance sheet and off-balance sheet positions before taking account of any collateral

held or other credit enhancements.

	Reported		Excluded
			1
					Maximum exposure
					to credit risk
	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m
On-balance sheet positions
Net loans and advances	804,032	707,694	-	-	804,032	707,694
Other financial assets:
Cash and cash equivalents	150,965	168,154	1,196	1,070	149,769	167,084
Settlement balances owed to ANZ
	5,484	9,349	5,484	9,349	-	-
Collateral paid
	10,090	8,558	-	-	10,090	8,558
Trading assets
	45,755	37,004	6,399	4,881	39,356	32,123
Derivative financial instruments
	54,370	60,406	-	-	54,370	60,406
Investment securities
- debt securities at amortised cost	7,091	7,752	-	-	7,091	7,752
- debt securities at FVOCI
	131,944	88,271	-	-	131,944	88,271
- equity securities at FVOCI
	1,065	946	1,065	946	-	-
- debt securities at FVTPL
	162	-	-	-	162	-
Regulatory deposits
	665	646	-	-	665	646
Other financial assets
2
	4,547	4,417	-	-	4,547	4,417
Total other financial assets
	412,138	385,503	14,144	16,246	397,994	369,257
Subtotal	1,216,170	1,093,197	14,144	16,246	1,202,026	1,076,951
Off-balance sheet positions
Undrawn and contingent facilities
3
	298,152	290,055	-	-	298,152	290,055
Total
	1,514,322	1,383,252	14,144	16,246	1,500,178	1,367,006

1.

Coins, notes and cash at bank within Cash and cash equivalents; trade dated assets within Settlement balances owed to ANZ; precious metal exposures and carbon credits within Trading assets; and

equity securities within Investment securities were excluded as they do not have credit risk exposure.

2.

Other financial assets mainly comprise accrued interest and acceptances.

3.

Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed and individually assessed allowance for ECL.

Notes to the consolidated financial statements (continued) Australia and New Zealand Banking Group Limited 2024 Annual Report

140

17. Financial risk management (continued)

Credit risk (continued)

	Reported		Excluded
			1
					Maximum exposure
					to credit risk
	2024	2023	2024	2023	2024	2023
The Company
	$m	$m	$m	$m	$m	$m
On-balance sheet positions
Net loans and advances	588,998	563,017	-	-	588,998	563,017
Other financial assets:
Cash and cash equivalents	137,288	154,408	843	667	136,445	153,741
Settlement balances owed to ANZ
	5,019	8,935	5,019	8,935	-	-
Collateral paid
	8,797	7,717	-	-	8,797	7,717
Trading assets
	38,427	30,693	6,243	4,472	32,184	26,221
Derivative financial instruments
	57,627	59,989	-	-	57,627	59,989
Investment securities
- debt securities at amortised cost	5,356	5,936	-	-	5,356	5,936
- debt securities at FVOCI
	107,388	76,320	-	-	107,388	76,320
- equity securities at FVOCI
	1,060	945	1,060	945	-	-
- debt securities at FVTPL
	162	-	-	-	162	-
Regulatory deposits
	222	284	-	-	222	284
Due from controlled entities
	24,315	26,067	-	-	24,315	26,067
Other financial assets
2
	3,090	3,024	-	-	3,090	3,024
Total other financial assets	388,751	374,318	13,165	15,019	375,586	359,299
Subtotal	977,749	937,335	13,165	15,019	964,584	922,316
Off-balance sheet positions
Undrawn and contingent facilities
3
	249,548	252,415	-	-	249,548	252,415
Total
	1,227,297	1,189,750	13,165	15,019	1,214,132	1,174,731

1.

Coins, notes and cash at bank within Cash and cash equivalents; trade dated assets within Settlement balances owed to ANZ; precious metal exposures, and carbon credits within Trading assets; and

equity securities within Investment securities were excluded as they do not have credit risk exposure.

2.

Other financial assets mainly comprise accrued interest and acceptances.

3.

Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed and individually assessed allowance for expected credit losses.

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17. Financial risk management (continued)

Credit risk (continued)

Credit quality

An analysis of the Group’s credit risk exposure is presented in the following tables based on the Group’s internal credit quality rating by stage without

taking account of the effects of any collateral or other credit enhancements:

Net loans and advances

			Stage 3
	Stage 1
		Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
Consolidated
	$m
		$m	$m	$m	$m
As at 30 September 2024
Strong	485,243	17,072	-	-	502,315
Satisfactory
	188,825	46,940	-	-	235,765
Weak
	15,538	18,222	-	-	33,760
Defaulted
	-	-	5,976	832	6,808
Gross loans and advances at amortised cost
	689,606	82,234	5,976	832	778,648
Allowance for ECL	(1,276)	(1,653)	(443)	(303)	(3,675)
Net loans and advances at amortised cost
	688,330	80,581	5,533	529	774,973
Coverage ratio	0.19%	2.01%	7.41%	36.42%	0.47%
Loans and advances at FVTPL					24,786
Loans and advances purchased credit impaired
1
					551
Unearned income
					(515)
Capitalised brokerage and other origination costs
					4,237
Net carrying amount
					804,032
As at 30 September 2023
Strong	411,583
		17,063	-	-	428,646
Satisfactory	193,170	37,977	-	-	231,147
Weak	11,306	10,398	-	-	21,704
Defaulted	-	-	3,858	1,037	4,895
Gross loans and advances at amortised cost	616,059	65,438	3,858	1,037	686,392
Allowance for ECL	(1,227)	(1,624)	(329)	(366)	(3,546)
Net loans and advances at amortised cost	614,832	63,814	3,529	671	682,846
Coverage ratio	0.20%	2.48%	8.53%	35.29%	0.52%
Loans and advances at FVTPL					21,888
Unearned income					(515)
Capitalised brokerage and other origination costs					3,475
Net carrying amount					707,694

1.

Represents Stage 3 exposures from Suncorp Bank at the date of acquisition recognised net of allowance for ECL.

142 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Credit risk (continued)

Net loans and advances

			Stage 3
	Stage 1	Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
The Company
	$m
		$m	$m	$m	$m
As at 30 September 2024
Strong	366,329	14,061	-	-	380,390
Satisfactory
	121,820	33,813	-	-	155,633
Weak
	11,433	11,945	-	-	23,378
Defaulted
	-	-	4,574	485	5,059
Gross loans and advances at amortised cost
	499,582	59,819	4,574	485	564,460
Allowance for ECL	(1,006)	(1,150)	(339)	(220)	(2,715)
Net loans and advances at amortised cost
	498,576	58,669	4,235	265	561,745
Coverage ratio	0.20%	1.92%	7.41%	45.36%	0.48%
Loans and advances at FVTPL					24,439
Unearned income					(489)
Capitalised brokerage and other origination costs
					3,303
Net carrying amount
					588,998
As at 30 September 2023
Strong	315,206	11,682	-	-	326,888
Satisfactory	160,357	31,769	-	-	192,126
Weak	10,906	8,362	-	-	19,268
Defaulted	-	-	2,994	731	3,725
Gross loans and advances at amortised cost	486,469	51,813	2,994	731	542,007
Allowance for ECL	(1,026)	(1,239)	(251)	(279)	(2,795)
Net loans and advances at amortised cost	485,443	50,574	2,743	452	539,212
Coverage ratio	0.21%	2.39%	8.38%	38.17%	0.52%
Loans and advances at FVTPL					21,240
Unearned income					(483)
Capitalised brokerage and other origination costs					3,048
Net carrying amount					563,017

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Credit risk (continued)

Off-balance sheet commitments - undrawn and contingent facilities

			Stage 3
	Stage 1
		Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
Consolidated	$m	$m	$m	$m	$m
As at 30 September 2024
Strong	200,720	1,497	-	-	202,217
Satisfactory
	26,496	3,249	-	-	29,745
Weak
	880	931	-	-	1,811
Defaulted
	-	-	101	26	127
Gross undrawn and contingent facilities subject to ECL	228,096	5,677	101	26	233,900
Allowance for ECL included in Other provisions (refer to Note 22)	(658)	(156)	(27)	(5)	(846)
Net undrawn and contingent facilities subject to ECL
	227,438	5,521	74	21	233,054
Coverage ratio	0.29%	2.75%	26.73%	19.23%	0.36%
Undrawn and contingent facilities not subject to ECL
1
					65,098
Net undrawn and contingent facilities					298,152
As at 30 September 2023
Strong	189,980	1,234	-	-	191,214
Satisfactory	30,007	4,276	-	-	34,283
Weak	975	746	-	-	1,721
Defaulted	-	-	79	47	126
Gross undrawn and contingent facilities subject to ECL	220,962	6,256	79	47	227,344
Allowance for ECL included in Other provisions (refer to Note 22)	(630)	(162)	(25)	(10)	(827)
Net undrawn and contingent facilities subject to ECL	220,332	6,094	54	37	226,517
Coverage ratio	0.29%	2.59%	31.65%	21.28%	0.36%
Undrawn and contingent facilities not subject to ECL
1
					63,538
Net undrawn and contingent facilities					290,055

1.

Commitments that can be unconditionally cancelled at any time without notice.

144 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Credit risk (continued)

Off-balance sheet commitments - undrawn and contingent facilities

			Stage 3
	Stage 1	Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
The Company
	$m
		$m	$m	$m	$m
As at 30 September 2024
Strong	169,168	1,317	-	-	170,485
Satisfactory
	21,053	2,225	-	-	23,278
Weak
	668	522	-	-	1,190
Defaulted
	-	-	66	17	83
Gross undrawn and contingent facilities subject to ECL
	190,889	4,064	66	17	195,036
Allowance for ECL included in Other provisions (refer to Note 22)	(573)	(96)	(22)	(2)	(693)
Net undrawn and contingent facilities subject to ECL
	190,316	3,968	44	15	194,343
Coverage ratio	0.30%	2.36%	33.33%	11.76%	0.36%
Undrawn and contingent facilities not subject to ECL
1
					55,205
Net undrawn and contingent facilities					249,548
As at 30 September 2023
Strong	167,251	1,065	-	-	168,316
Satisfactory	25,966	3,554	-	-	29,520
Weak	753	466	-	-	1,219
Defaulted	-	-	64	35	99
Gross undrawn and contingent facilities subject to ECL	193,970	5,085	64	35	199,154
Allowance for ECL included in Other provisions (refer to Note 22)	(550)	(121)	(21)	(5)	(697)
Net undrawn and contingent facilities subject to ECL	193,420	4,964	43	30	198,457
Coverage ratio	0.28%	2.38%	32.81%	14.29%	0.35%
Undrawn and contingent facilities not subject to ECL
1
					53,958
Net undrawn and contingent facilities					252,415

1.

Commitments that can be unconditionally cancelled at any time without notice.

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Credit risk (continued)

Investment securities - debt securities at amortised cost

			Stage 3
	Stage 1
		Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
Consolidated	$m	$m	$m	$m	$m
As at 30 September 2024
Strong	5,535	-	-	-	5,535
Satisfactory
	72	-	-	-	72
Weak
	1,518	-	-	-	1,518
Gross investment securities - debt securities at amortised cost
	7,125	-	-	-	7,125
Allowance for ECL	(34)	-	-	-	(34)
Net investment securities - debt securities at amortised cost	7,091	-	-	-	7,091
Coverage ratio	0.48%	-	-	-	0.48%
As at 30 September 2023
Strong	6,117	-	-	-	6,117
Satisfactory	112	-	-	-	112
Weak	1,558	-	-	-	1558
Gross investment securities - debt securities at amortised cost	7,787	-	-	-	7,787
Allowance for ECL	(35)	-	-	-	(35)
Net investment securities - debt securities at amortised cost	7,752	-	-	-	7,752
Coverage ratio	0.45%	-	-	-	0.45%

			Stage 3
	Stage 1	Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
The Company
	$m
		$m	$m	$m	$m
As at 30 September 2024
Strong	5,273	-	-	-	5,273
Satisfactory
	41	-	-	-	41
Weak
	43	-	-	-	43
Gross investment securities - debt securities at amortised cost
	5,357	-	-	-	5,357
Allowance for ECL	(1)	-	-	-	(1)
Net investment securities - debt securities at amortised cost
	5,356	-	-	-	5,356
Coverage ratio	0.02%	-	-	-	0.02%
As at 30 September 2023
Strong	5,796	-	-	-	5,796
Satisfactory	97	-	-	-	97
Weak	44	-	-	-	44
Gross investment securities - debt securities at amortised cost	5,937	-	-	-	5,937
Allowance for ECL	(1)	-	-	-	(1)
Net investment securities - debt securities at amortised cost	5,936	-	-	-	5,936
Coverage ratio	0.02%	-	-	-	0.02%

146 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Credit risk (continued)

Investment securities - debt securities at FVOCI

			Stage 3
	Stage 1
		Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
Consolidated	$m	$m	$m	$m	$m
As at 30 September 2024
Strong	131,944	-	-	-	131,944
Satisfactory
	-	-	-	-	-
Investment securities - debt securities at FVOCI
	131,944	-	-	-	131,944
Allowance for ECL recognised in Other comprehensive income	(20)	-	-	-	(20)
Coverage ratio
	0.02%	-	-	-	0.02%
As at 30 September 2023
Strong	88,271
		-	-	-	88,271
Satisfactory	-	-	-	-	-
Investment securities - debt securities at FVOCI	88,271	-	-	-	88,271
Allowance for ECL recognised in Other comprehensive income	(15)	-	-	-	(15)
Coverage ratio	0.02%	-	-	-	0.02%

			Stage 3
	Stage 1	Stage 2
			Collectively
			assessed
				Individually
				assessed
					Total
The Company	$m	$m	$m	$m	$m
As at 30 September 2024
Strong	107,388	-	-	-	107,388
Satisfactory
	-	-	-	-	-
Investment securities - debt securities at FVOCI
	107,388	-	-	-	107,388
Allowance for ECL recognised in Other comprehensive income	(14)	-	-	-	(14)
Coverage ratio
	0.01%	-	-	-	0.01%
As at 30 September 2023
Strong	76,320	-	-	-	76,320
Satisfactory	-	-	-	-	-
Investment securities - debt securities at FVOCI	76,320	-	-	-	76,320
Allowance for ECL recognised in Other comprehensive income	(12)	-	-	-	(12)
Coverage ratio	0.02%	-	-	-	0.02%

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17. Financial risk management (continued)

Credit risk (continued)

Other financial assets

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Strong
	250,471	270,012	255,180	274,741
Satisfactory
1
	7,954	2,579	7,474	2,022
Weak
	534	604	188	280
Defaulted
	-	-	-	-
Total carrying amount
	258,959	273,195	262,842	277,043

1.

Includes Investment Securities - debt securities at FVTPL of $162 million (2023: nil) for the Group and $162 million (2023: nil) for the Company.

Concentrations of credit risk

Credit risk becomes concentrated when a number of customers are engaged in similar activities, have similar economic characteristics, or have similar

activities within the same geographic region – therefore, they may be similarly affected by changes in economic or other conditions. The Group monitors

its credit portfolio to manage risk concentration and rebalance the portfolio. The Group also applies single customer counterparty limits to protect against

unacceptably large exposures to one single customer.

Composition of financial instruments that give rise to credit risk by industry group are presented below

:

	Loans		Other financial
					Off-balance sheet
					credit related
	and advances		assets		commitments		Total
Consolidated
	2024	2023	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m	$m	$m
Agriculture, forestry, fishing and mining
	41,558	35,797	888	612	16,187	16,707	58,633	53,116
Business services	6,015	8,138	132	207	8,469	7,003	14,616	15,348
Construction
	4,594	5,506	29	36	8,806	7,212	13,429	12,754
Electricity, gas and water supply
	8,517	8,626	839	463	12,742	11,837	22,098	20,926
Entertainment, leisure and tourism
	13,326	13,486	94	78	3,941	3,889	17,361	17,453
Financial, investment and insurance
	80,270	77,454	242,832	278,218	61,229	62,409	384,331	418,081
Government and official institutions
	15,861	8,300	122,570	80,544	1,214	1,075	139,645	89,919
Manufacturing
	27,470	30,261	708	1,287	46,004	47,302	74,182	78,850
Personal lending
	485,404	392,702	1,527	1,394	62,513	59,185	549,444	453,281
Property services
	60,613	58,064	1,496	439	20,349	17,503	82,458	76,006
Retail trade
	9,300	12,900	85	113	8,150	8,131	17,535	21,144
Transport and storage
	10,764	12,110	817	369	9,099	9,215	20,680	21,694
Wholesale trade
	13,078	12,538	501	660	25,149	25,783	38,728	38,981
Other
	27,215	32,398	25,510	4,872	15,146	13,631	67,871	50,901
Gross total
	803,985	708,280	398,028	369,292	298,998	290,882	1,501,011	1,368,454
Allowance for ECL	(3,675)	(3,546)	(34)	(35)	(846)	(827)	(4,555)	(4,408)
Subtotal	800,310	704,734	397,994	369,257	298,152	290,055	1,496,456	1,364,046
Unearned income	(515)	(515)	-	-	-	-	(515)	(515)
Capitalised brokerage and other origination costs	4,237	3,475	-	-	-	-	4,237	3,475
Maximum exposure to credit risk
	804,032	707,694	397,994	369,257	298,152	290,055	1,500,178	1,367,006

148 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Credit risk (continued)

Composition of financial instruments that give rise to credit risk by industry group are presented below:

	Loans		Otherfinancial
					Off-balance sheet
					credit related
	and advances		assets		commitments		Total
The Company
	2024	2023	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m	$m	$m
Agriculture, forestry, fishing and mining
	21,971	20,622	865	586	14,165	15,198	37,001	36,406
Business services	4,738	7,165	119	183	7,684	6,237	12,541	13,585
Construction
	2,727	4,545	21	30	7,362	6,038	10,110	10,613
Electricity, gas and water supply
	7,921	7,956	474	302	11,273	10,409	19,668	18,667
Entertainment, leisure and tourism
	10,803	11,721	84	67	3,391	3,390	14,278	15,178
Financial, investment and insurance
	77,887	74,836	250,700	282,701	57,699	58,806	386,286	416,343
Government and official institutions
	15,837	8,294	95,487	68,361	455	384	111,779	77,039
Manufacturing
	23,448	26,394	576	935	39,430	40,027	63,454	67,356
Personal lending
	336,576	303,801	1,478	1,347	41,208	47,961	379,262	353,109
Property services
	44,419	44,903	1,349	368	18,059	15,794	63,827	61,065
Retail trade
	7,011	11,099	78	85	7,177	7,342	14,266	18,526
Transport and storage
	9,629	10,968	624	288	8,242	8,331	18,495	19,587
Wholesale trade
	10,835	10,320	414	480	21,926	22,385	33,175	33,185
Other
	15,097	20,623	23,318	3,567	12,170	10,810	50,585	35,000
Gross total
	588,899	563,247	375,587	359,300	250,241	253,112	1,214,727	1,175,659
Allowance for ECL	(2,715)	(2,795)	(1)	(1)	(693)	(697)	(3,409)	(3,493)
Subtotal	586,184	560,452	375,586	359,299	249,548	252,415	1,211,318	1,172,166
Unearned income	(489)	(483)	-	-	-	-	(489)	(483)
Capitalised brokerage and other origination costs	3,303	3,048	-	-	-	-	3,303	3,048
Maximum exposure to credit risk	588,998	563,017	375,586	359,299	249,548	252,415	1,214,132	1,174,731

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17. Financial risk management (continued)

Credit risk (continued)

Collateral management

We use collateral for on and off-balance sheet exposures to mitigate credit risk if a counterparty cannot meet its repayment obligations. Where there is

sufficient collateral, an expected credit loss is not recognised. This is largely the case for certain lending products, such as margin loans and reverse

repurchase agreements that are secured by the securities purchased using the lending. For some products, the collateral provided by customers is

fundamental to the product’s structuring, so it is not strictly the secondary source of repayment - for example, lending secured by trade receivables is

typically repaid by the collection of those receivables. During the period there was no change in our collateral policies.

The nature of collateral or security held for the relevant classes of financial assets is as follows:

Net loans and advances

Loans - housing and
personal
	Housing loans are secured by mortgage(s) over property and additional security may take the form of
	guarantees and deposits.
	Personal lending (including credit cards and overdrafts) is predominantly unsecured. If we take security, then it
	is restricted to eligible vehicles, motor homes and other assets.
Loans - business	Business loans may be secured, partially secured or unsecured. Typically, we take security by way of a
	mortgage over property and/or a charge over the business or other assets.
	If appropriate, we may take other security to mitigate the credit risk, such as guarantees, standby letters of
	credit or derivative protection.
Other financial assets
Trading assets, Investment
securities, Derivatives and
Other financial assets
	For trading assets, we do not seek collateral directly from the issuer or counterparty. However, the collateral
	may be implicit in the terms of the instrument (for example, with an asset-backed security). The terms of debt
	securities may include collateralisation.
	For derivatives we will have large individual exposures to single name counterparties such as central clearing
	houses, financial institutions, and other institutional clients. Open derivative positions with these counterparties
	are aggregated and cash collateral (or other forms of eligible collateral) is exchanged daily through the
	respective Credit Support Annex agreements. The collateral is provided by the counterparty when their position
	is out of the money (or provided to the counterparty by the Group when our position is out of the money).
	Credit risk will remain where the full amount of the derivative exposure is not covered by any collateral.
Off-balance sheet positions
Undrawn and contingent
facilities
	Collateral for off-balance sheet positions is mainly held against undrawn facilities, and they are typically
	performance bonds or guarantees. Undrawn facilities that are secured include housing loans secured by
	mortgages over residential property and business lending secured by commercial real estate and/or charges
	over business assets.

The table below shows the estimated value of collateral we hold and the net unsecured portion of credit exposures:

	Maximum exposure to credit risk		Total value of collateral
			1
					Unsecured portion of
					credit exposure
	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m
Net loans and advances
	804,032	707,694	667,130	569,283	136,902	138,411
Other financial assets	397,994	369,257	51,732	38,612	346,262	330,645
Off-balance sheet positions
	298,152	290,055	80,258	65,723	217,894	224,332
Total
	1,500,178	1,367,006	799,120	673,618	701,058	693,388

	Maximum exposure to credit risk		Total value of collateral
			1
					Unsecured portion of
					credit exposure
	2024	2023	2024	2023	2024	2023
The Company
	$m	$m	$m	$m	$m	$m
Net loans and advances
	588,998	563,017	463,804	436,544	125,194	126,473
Other financial assets	375,586	359,299	46,950	35,542	328,636	323,757
Off-balance sheet positions
	249,548	252,415	52,804	50,880	196,744	201,535
Total
	1,214,132	1,174,731	563,558	522,966	650,574	651,765

1.

In estimating the value of collateral for housing loans, customers are assumed to be meeting their insurance obligations for the properties over which the mortgages are secured.

150 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Market risk

Market risk overview, management and control responsibilities

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 BRC delegates responsibility for day-to-day management of both market risks and compliance with market risk policies to the Credit and Market Risk

Committee (CMRC) and the Group Asset and Liability Committee (GALCO).

Within overall strategies and policies established by the BRC, business units and risk management have joint responsibility for the control of market risk at

the Group level. The Market Risk team (a specialist risk management unit independent of the business) allocates market risk limits at various levels and

monitors and reports on them daily. This detailed framework allocates individual limits to manage and control exposures using risk factors and profit and

loss limits.

Management, measurement and reporting of market risk is undertaken in two broad categories

:

Traded Market Risk	Non-Traded Market Risk
Risk of loss from changes in the value of financial instruments due to
movements in price factors for both physical and derivative trading
positions. Principal risk categories monitored are:
1.
Currency risk – potential loss arising from changes in foreign
exchange rates or their implied volatilities.
2.
Interest rate risk – potential loss from changes in market interest
rates or their implied volatilities.
3.
Credit spread risk – potential loss arising from a movement in
margin or spread relative to a benchmark.
4.
Commodity risk – potential loss arising from changes in
commodity prices or their implied volatilities.
5.
Equity risk – potential loss arising from changes in equity prices.
	Risk of loss associated with the management of non-traded interest rate risk,
	liquidity risk and foreign exchange exposures. This includes interest rate risk in
	the banking book. This risk of loss arises from adverse changes in the overall
	and relative level of interest rates for different tenors, differences in the actual
	versus expected net interest margin, and the potential valuation risk associated
	with embedded options in financial instruments and bank products.

Measurement of market risk

We primarily manage and control 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. We use historical changes in market rates, prices and volatilities over a 500 business day window using a one-day holding period.

Back testing is used to ensure our VaR models remain accurate.

The Group measures VaR at a 99% confidence interval which means there is a 99% chance that a loss will not exceed the VaR for the relevant holding

period.

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17. Financial risk management (continued)

Market risk (continued)

Traded and non-traded market risk

Traded market risk

The table below shows the traded market risk VaR on a diversified basis by risk categories

:

	Total
	Group
					Total Group (excl. Suncorp Bank)
					2
	2024
			2024				2023
Consolidated
	As at	As at
			High for
			year
				Low for
				year
					Average
					for year	As at
							High for
							year
								Low for
								year
									Average
									for year
	$m	$m	$m	$m	$m	$m	$m	$m
									$m
Traded value at risk 99% confidence
Foreign exchange	3.2
		3.2	11.5	2.2	5.0	2.8	6.2	1.6	3.0
Interest rate
	6.5
		6.4	19.2	4.8	8.7	6.7	18.3	5.1	8.5
Credit
	5.7
		5.7	8.1	4.2	6.7	5.9	7.7	2.5	4.5
Commodities
	3.3
		3.3	5.0	1.8	2.9	4.0	6.6	1.8	3.0
Equity
	-
		-	-	-	-	-	-	-	-
Diversification benefit
1
	(10.0)
		(9.9)	n/a	n/a	(10.2)	(9.7)	n/a	n/a	(8.1)
Total VaR
	8.7
		8.7	22.5	8.0	13.1	9.7	18.2	7.2	10.9

		2024				2023
The Company
	As at
		High for
		year
			Low for
			year
				Average
				for year	As at
						High for
						year
							Low for
							year
								Average
								for year
	$m	$m	$m	$m	$m	$m	$m	$m
Traded value at risk 99% confidence
Foreign exchange	3.4	7.7	1.9	4.4	2.6	6.0	1.5	2.8
Interest rate
	5.6	18.4	4.7	8.5	6.3	15.5	4.8	8.0
Credit
	5.5	7.9	4.2	6.4	5.6	7.1	1.9	4.3
Commodity
	2.6	5.0	1.6	2.5	2.1	4.5	1.1	2.7
Equity
	-	-	-	-	-	-	-	-
Diversification benefit
1
	(9.0)	n/a	n/a	(9.2)	(8.6)	n/a	n/a	(7.8)
Total VaR
	8.1	24.6	6.7	12.6	8.0	16.2	6.7	10.0

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.

Excludes the 2 months of immaterial Suncorp Bank VaR impacts post-acquisition.

152 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued

Market risk (continued)

Traded and non-traded market risk (continued)

Non-traded market risk

Balance sheet risk management

The principal objectives of balance sheet risk management are to maintain acceptable levels of interest rate and liquidity risk to mitigate the negative

impact of movements in interest rates on the earnings and market value of the Group’s banking book, while ensuring the Group maintains sufficient

liquidity to meet its obligations as they fall due.

Interest rate risk management

Non-traded interest rate risk relates to the potential adverse impact of changes in market interest rates on the Group’s future Net interest income. This risk

arises from two principal sources, namely mismatches between the repricing dates of interest bearing assets and liabilities; and the investment of capital

and other non-interest bearing liabilities and assets. Interest rate risk is reported using VaR and scenario analysis (based on the impact of a 1% rate

shock). The table below shows VaR figures for non-traded interest rate risk for the combined Group as well as Australia, New Zealand and Rest of World

geographies which are calculated separately.

	Total
	Group
					Total Group (excl. Suncorp Bank)
					2
	2024
			2024				2023
Consolidated
	As at	As at
			High for
			year
				Low for
				year
					Average
					for year	As at
							High for
							year
								Low for
								year
									Average
									for year
	$m
		$m	$m	$m	$m	$m	$m	$m	$m
Non-traded value at risk 99% confidence
Australia	96.8
		97.7	97.7	70.8	78.9	81.2	93.2	72.0	82.2
New Zealand
	27.4
		27.4	28.2	24.3	25.9	35.3	35.3	26.1	31.1
Rest of World
	32.9
		32.9	39.5	29.0	34.8	32.2	32.8	23.2	27.9
Diversification benefit
1
	(62.2)
		(63.0)	n/a	n/a	(46.9)	(52.6)	n/a	n/a	(45.6)
Total VaR	94.9	95.0	99.5	81.3	92.7	96.1	101.5	86.4	95.6

		2024				2023
The Company
	As at
		High for
		year
			Low for
			year
				Average
				for year	As at
						High for
						year
							Low for
							year
								Average
								for year
	$m	$m	$m	$m	$m	$m	$m	$m
Non-traded value at risk 99% confidence
Australia	97.7	97.7	70.8	78.9	81.2	93.2	72.0	82.2
New Zealand
	0.0	0.1	0.0	0.0	0.0	0.1	0.0	0.0
Rest of World
	33.5	39.7	31.1	36.6	34.0	34.5	23.7	28.4
Diversification benefit
1
	(37.8)	n/a	n/a	(31.8)	(30.5)	n/a	n/a	(26.6)
Total VaR
	93.4	93.4	74.2	83.7	84.7	92.4	76.4	84.0

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.

Excludes the 2 months of immaterial Suncorp Bank VaR impacts post-acquisition.

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17. Financial risk management (continued)

Market risk (continued)

We undertake scenario analysis to stress test the impact of extreme events on the Group’s market risk exposures (excluding Suncorp Bank). We model a

1% overnight parallel positive shift in the yield curve to determine the potential impact on our 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.

The table below shows the outcome of this risk measure for the current and previous financial years, expressed as a percentage of reported Net interest

income.

	Consolidated		The Company
	2024	2023	2024	2023
Impact of 1% rate shock on the next 12 months' net interest income
As at period end	0.68%	0.96%	0.38%	0.73%
Maximum exposure
	1.20%	1.17%	1.06%	0.90%
Minimum exposure
	0.27%	0.38%	0.09%	0.02%
Average exposure (in absolute terms)
	0.78%	0.80%	0.61%	0.56%

Equity securities designated at FVOCI

Our investment securities contain equity investment holdings which predominantly comprise Bank of Tianjin and other unlisted equities. The market risk

impact on these equity investments is not captured by the Group’s VaR processes for traded and non-traded market risks. Therefore, the Group regularly

reviews the valuations of the investments within the portfolio and assesses whether the investments are appropriately measured based on the recognition

and measurement policies set out in Note 11 Investment securities.

Foreign currency risk – structural exposures

Our investment of capital in foreign operations - for example, branches, subsidiaries or associates with functional currencies other than the Australian

Dollar - exposes the Group to the risk of changes in foreign exchange rates. Variations in the value of these foreign operations arising as a result of

exchange differences are reflected in the foreign currency translation reserve in equity. Where considered appropriate, the Group enters into hedges of

the foreign exchange exposures from its foreign operations.

Similarly, the Group may enter into economic hedges against larger foreign exchange denominated revenue streams (primarily New Zealand Dollar, US

Dollar and US Dollar correlated). The primary objective of hedging is to ensure that, if practical, the effect of changes in foreign exchange rates on the

consolidated capital ratios are minimised.

154 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Liquidity and funding risk

Liquidity risk overview, management and control responsibilities

Liquidity risk is the risk that the Group is either:

• unable to meet its payment obligations (including repaying depositors or maturing wholesale debt) when they fall due; or

• does not have the appropriate amount, tenor and composition of funding and liquidity to fund increases in its assets.

Management of liquidity and funding risks are overseen by GALCO. The Group’s liquidity and funding risks are governed by a set of Board-approved

principles and include:

• maintaining the ability to meet all payment obligations in the immediate term;

• ensuring that the Group maintains Board-approved ‘survival horizons’ under a range of idiosyncratic, and general market, liquidity stress scenarios, at a

country and Group-wide level, to meet cash flow obligations over the short to medium term;

• maintaining strength in the Group’s balance sheet structure to ensure long term resilience in the liquidity and funding risk profile;

• ensuring the liquidity management framework is compatible with local regulatory requirements;

• preparing daily liquidity reports and scenario analysis to quantify the Group’s positions;

• targeting a diversified funding base to avoid undue concentrations by investor type, maturity, market source and currency;

• holding a portfolio of high quality liquid assets to protect against adverse funding conditions and to support day-to-day operations; and

• establishing detailed contingency plans to cover different liquidity crisis events.

The Group operates under a non-operating holding company 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.

A separate liquidity policy has been established for ANZGHL and ANZBGL Group to reflect the differing nature of liquidity risk inherent in each business

model. ANZGHL will ensure that the parent entity and ANZ Non-Bank Group holds sufficient cash reserves to meet operating and financing requirements.

Key areas of measurement for liquidity risk

Scenario modelling of funding sources

Group’s liquidity risk appetite is defined by a range of regulatory 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

Group holds a portfolio of high quality (unencumbered) liquid assets to protect Group’s liquidity position in a severely stressed environment and to meet

regulatory requirements. High quality liquid assets comprise three categories consistent with Basel III LCR requirements:

• Highest-quality liquid assets - cash and 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 - 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 that the RBNZ will accept in its domestic market operations and asset qualifying as collateral for the

CLF.

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.

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Liquidity and funding risk (continued)

Liquidity risk outcomes

1

Liquidity Coverage Ratio - ANZBGL’s Liquidity Coverage Ratio (LCR) averaged 133% for 2024, (2023: 130%) and above the regulatory minimum of

100%.

Net Stable Funding Ratio - ANZBGL’s Net Stable Funding Ratio (NSFR) as at 30 September 2024 was 116% (2023: 116%), above the regulatory

minimum of 100%.



This information is not within the scope of the external audit of the Group Financial Report by the Group’s external auditor, KPMG. The Liquidity Coverage Ratio and Net Stable Funding Ratio are non-IFRS

disclosures and are disclosed as part of the Group's APS 330 Public Disclosure and disclosed in APRA Reporting Form ARF 210 Liquidity which will be subject to specific procedures in accordance with

Prudential Standard APS 310 Audit and Related Matters.

Liquidity crisis contingency planning

Group maintains APRA-endorsed liquidity crisis contingency plans for analysing and responding to a liquidity threatening event at a country and Group-

wide level. Key liquidity contingency crisis planning requirements and guidelines include:

Ongoing business management	Early signs/ mild stress	Severe stress
• establish crisis/severity levels
• liquidity limits
• early warning indicators
	• monitoring and review
	• management actions not requiring
	business rationalisation
		• activate contingency funding plans
		• management actions for altering asset and liability
		behaviour

Assigned responsibility for internal and external communications and the appropriate timing to communicate

Since the precise nature of any stress event cannot be known in advance, we design the plans to be flexible to the nature and severity of the stress event

with multiple variables able to be accommodated in any plan

.

Group funding

The Group monitors the composition and stability of its funding so that it remains within the Group’s funding risk appetite. This approach ensures that an

appropriate proportion of the Group’s assets are funded by stable funding sources, including customer deposits; longer-dated wholesale funding (with a

remaining term exceeding one year); and equity.

Funding plans prepared	Considerations in preparing funding plans
• 3 year strategic plan prepared annually
• annual funding plan as part of the Group’s planning
process
• forecasting in light of actual results as a calibration to the
annual plan
	• customer balance sheet growth
	• changes in wholesale funding including: targeted funding volumes; markets;
	investors; tenors; and currencies for senior, secured, subordinated, hybrid
	transactions and market conditions
	•
	liquidity stress testing

RBA term funding facility

As an additional source of funding, in March 2020, the RBA announced a Term Funding Facility (TFF) for the banking system to support lending to

Australian businesses. The TFF is a three-year secured funding facility to ADIs at a fixed rate of 0.25% for drawdowns up to 4 November 2020, and

reduced to 0.10% for new drawdowns from 4 November 2020 onwards. The TFF was closed to drawdowns on 30 June 2021.

As at 30 September 2024, there was nil drawn under the RBA’s TFF, as it was fully repaid in the 2024 financial year (2023: $8.1 billion).

RBNZ funding for lending programme and term lending facility

Between May 2020 and July 2021, the RBNZ made funds available under a Term Lending Facility (TLF) to promote lending to businesses. The TLF is a

five-year secured funding facility for New Zealand banks at a fixed rate of 0.25%.

In November 2020 the RBNZ announced a Funding for Lending Programme (FLP) which aimed to lower the cost of borrowing for New Zealand

businesses and households. The FLP is a three-year secured funding facility for New Zealand banks at a floating rate of the New Zealand Official Cash

Rate (OCR). New Zealand banks were able to obtain initial funding of up to 4% of their lending to New Zealand resident households, non-financial

businesses and non-profit institutions serving households as at 31 October 2020 (eligible loans). The initial allocation closed on 6 June 2022. An additional

allocation of up to 2% of eligible loans was available, subject to certain conditions until 6 December 2022.

As at 30 September 2024, ANZ Bank New Zealand had drawn $0.2 billion under the TLF (2023: $0.3 billion) and $2.3 billion under the FLP

(2023: $3.2 billion).

156 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

17. Financial risk management (continued)

Liquidity and funding risk (continued)

Residual contractual maturity analysis of the group’s liabilities

The tables below provide residual contractual maturity analysis of financial liabilities as at 30 September within relevant maturity groupings. All outstanding

debt issuance and subordinated debt is profiled on the earliest date on which the Group may be required to pay. All at-call liabilities are reported in the

‘Less than 3 months’ category unless there is a longer minimum notice period. The amounts represent principal and interest cash flows and therefore may

differ from equivalent amounts reported on Balance Sheet.

It should be noted that this is not how the Group manages its liquidity risk. The management of this risk is detailed on page 155.

	Less than
	3 months
		3 to 12
		months
			1 to 5
			years
				After
				5 years
					Total
Consolidated
	$m
		$m	$m	$m	$m
As at 30 September 2024
Settlement balances owed by ANZ	16,188	-	-	-	16,188
Collateral received
	6,583	-	-	-	6,583
Deposits and other borrowings
	744,041	158,247	11,040	199	913,527
Liability for acceptances
	425	-	-	-	425
Debt issuances
1
	8,327	36,858	112,728	20,384	178,297
Derivative liabilities (excluding those held for balance sheet management)
2
	47,622	-	-	-	47,622
Lease liabilities
	105	313	917	947	2,282
Derivative assets and liabilities (balance sheet management)
3
- Funding:
Receive leg	(66,248)	(60,183)	(83,371)	(14,359)	(224,161)
Pay leg
	66,981	60,260	84,472	14,661	226,374
- Other balance sheet management:
Receive leg	(189,769)	(42,388)	(36,763)	(21,831)	(290,751)
Pay leg
	185,946	40,718	33,393	19,266	279,323

As at 30 September 2023
Settlement balances owed by ANZ	19,267	-	-	-	19,267
Collateral received	10,382	-	-	-	10,382
Deposits and other borrowings	674,762	137,488	9,762	241	822,253
Liability for acceptances	646	-	-	-	646
Debt issuances
1
	4,738	23,908	88,270	16,017	132,933
Derivative liabilities (excluding those held for balance sheet management)
2
	48,150	-	-	-	48,150
Lease liabilities	100	264	872	743	1,979
Derivative assets and liabilities (balance sheet management)
3
- Funding:
Receive leg	(29,459)
		(40,907)	(90,906)	(14,001)	(175,273)
Pay leg	28,852	41,385	90,230	13,986	174,453
- Other balance sheet management:
Receive leg	(142,289)	(44,586)	(35,720)	(19,866)	(242,461)
Pay leg	138,899	42,867	34,198	19,872	235,836

1.

Callable wholesale debt instruments have been included at their next call date. Balance includes subordinated debt instruments that may be settled in cash or in equity, at the option of the Group and

subordinated debt issued by ANZ New Zealand which constitutes Tier 2 capital under RBNZ requirements but does not qualify as the APRA Tier 2 requirements.

2.

The full mark-to-market after any adjustments for Settle to Market of derivative liabilities (excluding those held for balance sheet management) is included in the ‘Less than 3 months’ category.

3.

Includes derivatives designated into hedging relationships of $456 million (2023: $272 million) and $7,176 million (2023: $9,060 million) categorised as held for trading but form part of the Group’s

balance sheet managed activities.

At 30 September 2024, $249,988 million (2023: $240,711 million) of the Group’s undrawn facilities and $49,010 million (2023: $50,171 million) of its

issued guarantees mature in less than 1 year, based on the earliest date on which the Group may be required to pay.

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Liquidity and funding risk (continued)

	Less than
	3 months
		3 to 12
		months
			1 to 5
			years
				After
				5 years
					Total
The Company
	$m
		$m	$m	$m	$m
As at 30 September 2024
Settlement balances owed by ANZ	11,317	-	-	-	11,317
Collateral received
	6,061	-	-	-	6,061
Deposits and other borrowings
	589,605	114,499	4,813	197	709,114
Liability for acceptances
	329	-	-	-	329
Debt issuances
1
	6,780	30,135	86,529	17,705	141,149
Derivative liabilities (excluding those held for balance sheet management)
2
	52,979	-	-	-	52,979
Lease liabilities
	84	249	685	768	1,786
Derivative assets and liabilities (balance sheet management)
3
- Funding:
Receive leg	(63,238)	(52,317)	(65,194)	(12,371)	(193,120)
Pay leg
	63,728	52,291	66,280	12,677	194,976
- Other balance sheet management:
Receive leg	(185,273)	(36,714)	(29,311)	(20,391)	(271,689)
Pay leg
	181,397	35,094	26,075	17,776	260,342

As at 30 September 2023
Settlement balances owed by ANZ	16,574	-	-	-	16,574
Collateral received	9,452	-	-	-	9,452
Deposits and other borrowings	567,239	109,010	3,718	232	680,199
Liability for acceptances	391	-	-	-	391
Debt issuances
1
	4,321	20,669	75,192	13,297	113,479
Derivative liabilities (excluding those held for balance sheet management)
2
	53,111	-	-	-	53,111
Lease liabilities	80	207	715	725	1,727
Derivative assets and liabilities (balance sheet management)
3
- Funding:
Receive leg	(26,321)
		(31,549)	(70,627)	(10,871)	(139,368)
Pay leg	25,602	31,952	69,816	10,860	138,230
- Other balance sheet management:
Receive leg	(136,668)	(38,700)	(27,047)	(18,876)	(221,291)
Pay leg	133,496	37,540	26,247	18,914	216,197

1.

Callable wholesale debt instruments have been included at their next call date. Balance includes subordinated debt instruments that may be settled in cash or in equity, at the option of the Company.

2.

The full mark-to-market after any adjustments for Settle to Market of derivative liabilities (excluding those held for balance sheet management) is included in the ‘Less than 3 months’ category.

3.

Includes derivatives designated into hedging relationships of $210 million (2023: $255 million) and $4,278 million (2023: $4,145 million) categorised as held for trading but form part of the Company’s

balance sheet managed activities.

At 30 September 2024, $216,838 million (2023: $206,405 million) of the Company’s undrawn facilities and $45,770 million (2023: $46,707 million) of its

issued guarantees mature in less than 1 year, based on the earliest date on which the Company may be required to pay.

158 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

18. Fair value of financial assets and financial liabilities

Classification of financial assets and financial liabilities

The Group recognises and measures financial instruments at either fair value or amortised cost, with a significant number of financial instruments on the

Balance Sheet at fair value.

Fair value is the best estimate of the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market

participants at the measurement date.

The following tables set out the classification of financial assets and liabilities according to their measurement bases together with their carrying amounts

as recognised on the Balance Sheet.

			2024			2023
		At amortised
		cost
			At fair
			value	Total
					At amortised
					cost
						At fair
						value
							Total
Consolidated	Note
		$m	$m	$m	$m	$m	$m
Financial assets
Cash and cash equivalents	8	113,710	37,255	150,965	140,588	27,566	168,154
Settlement balances owed to ANZ
		5,484	-	5,484	9,349	-	9,349
Collateral paid
		10,090	-	10,090	8,558	-	8,558
Trading assets	9
		-	45,755	45,755	-	37,004	37,004
Derivative financial instruments	10
		-	54,370	54,370	-	60,406	60,406
Investment securities	11
		7,091	133,171	140,262	7,752	89,217	96,969
Net loans and advances	12
		779,246	24,786	804,032	685,806	21,888	707,694
Regulatory deposits
		665	-	665	646	-	646
Other financial assets
		4,547	-	4,547	4,417	-	4,417
Total
		920,833	295,337	1,216,170	857,116	236,081	1,093,197
Financial liabilities
Settlement balances owed by ANZ		16,188	-	16,188	19,267	-	19,267
Collateral received
		6,583	-	6,583	10,382	-	10,382
Deposits and other borrowings	14
		862,165	43,001	905,166	781,314	33,889	815,203
Derivative financial instruments	10
		-	55,254	55,254	-	57,482	57,482
Payables and other liabilities	15
		12,571	6,023	18,594	10,717	5,267	15,984
Debt issuances	16
		154,572	1,816	156,388	114,678	1,336	116,014
Total
		1,052,079	106,094	1,158,173	936,358	97,974	1,034,332

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18. Fair value of financial assets and financial liabilities

;

continued)

Classification of financial assets and financial liabilities

(continued)

			2024			2023
		At amortised
		cost
			At fair
			value	Total
					At amortised
					cost
						At fair
						value
							Total
The Company	Note	$m	$m	$m	$m	$m	$m
Financial assets
Cash and cash equivalents	8	100,892	36,396	137,288	127,309	27,099	154,408
Settlement balances owed to ANZ
		5,019	-	5,019	8,935	-	8,935
Collateral paid
		8,797	-	8,797	7,717	-	7,717
Trading assets	9
		-	38,427	38,427	-	30,693	30,693
Derivative financial instruments	10
		-	57,627	57,627	-	59,989	59,989
Investment securities	11
		5,356	108,610	113,966	5,936	77,265	83,201
Net loans and advances	12
		564,559	24,439	588,998	541,777	21,240	563,017
Regulatory deposits
		222	-	222	284	-	284
Due from controlled entities
		21,864	2,451	24,315	24,173	1,894	26,067
Other financial assets
		3,090	-	3,090	3,024	-	3,024
Total
		709,799	267,950	977,749	719,155	218,180	937,335
Financial liabilities
Settlement balances owed by ANZ		11,317	-	11,317	16,574	-	16,574
Collateral received
		6,061	-	6,061	9,452	-	9,452
Deposits and other borrowings	14
		662,910	40,960	703,870	643,868	31,207	675,075
Derivative financial instruments	10
		-	57,467	57,467	-	57,511	57,511
Due to controlled entities
		25,560	100	25,660	26,737	157	26,894
Payables and other liabilities	15
		8,797	5,677	14,474	8,357	4,922	13,279
Debt issuances	16
		120,155	2,795	122,950	95,881	2,332	98,213
Total
		834,800	106,999	941,799	800,869	96,129	896,998

160 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

18. Fair value of financial assets and financial liabilities (continued)

Financial assets and financial liabilities measured at fair value

The fair valuation of financial assets and financial liabilities is generally determined at the individual instrument level.

If the Group holds offsetting risk positions, then the portfolio exception in AASB 13 Fair Value Measurement (AASB 13) is used to measure the fair value of

such groups of financial assets and financial liabilities. The Group measures the portfolio based on the price that would be received to sell a net long

position (an asset) for a particular risk exposure, or to transfer a net short position (a liability) for a particular risk exposure.

Fair value designation

The Group designates certain loans and advances, deposits and other borrowings and debt issuances as fair value through profit or loss:

•

where they contain separable embedded derivatives and are managed on a fair value basis, the total fair value movements are recognised in profit or

loss in the same period as the movement on any associated hedging instruments; or

•

in order to eliminate an accounting mismatch which would arise if the assets or liabilities were otherwise carried at amortised cost. This mismatch

arises due to measuring the derivative financial instruments (used to mitigate interest rate risk of these assets or liabilities) at fair value through profit or

loss.

The Group’s approach ensures that it recognises the fair value movements on the assets or liabilities in profit or loss in the same period as the movement

on the associated derivatives.

The Group may also designate certain loans and advances, deposits and other borrowings and debt issuances as fair value through profit or loss where

they are managed on a fair value basis to align the measurement with how the financial instruments are managed.

Fair value approach and valuation techniques

The Group uses valuation techniques to estimate the fair value of assets and liabilities for recognition, measurement and disclosure purposes where no

quoted price in an active market for that asset or liability exists. This includes the following:

Asset or liability	Fair value approach
Financial instruments classified as:
- Derivative financial assets and
financial liabilities (including trading
and non-trading)
- Repurchase agreements < 90 days
- Net loans and advances
- Deposits and other borrowings
- Debt issuances
	Discounted cash flow techniques are used whereby contractual future cash flows of the instrument are
	discounted using wholesale market interest rates, or market borrowing rates for debt or loans with
	similar maturities or yield curves appropriate for the remaining term to maturity.
Other financial instruments held for
trading:
- Securities sold short
- Debt and equity securities
	Valuation techniques are used that incorporate observable market inputs for financial instruments with
	similar credit risk, maturity and yield characteristics.
	Equity securities where an active market does not exist are measured using comparable company
	valuation multiples (such as price-to-book ratios).
Financial instruments classified as:
- Investment securities – debt or equity
	Valuation techniques use comparable multiples (such as price-to-book ratios) or discounted cashflow
	(DCF) techniques incorporating, to the extent possible, observable inputs from instruments with similar
	characteristics.

There were no significant changes to valuation approaches during the current or prior periods.

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18. Fair value of financial assets and financial liabilities (continued)

Fair value hierarchy

The Group categorises assets and liabilities carried at fair value into a fair value hierarchy in accordance with AASB 13 based on the observability of inputs

used to measure the fair value:

• Level 1 - valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or

indirectly; and

• Level 3 - valuations where significant unobservable inputs are used to measure the fair value of the asset or liability.

There were no significant changes to levelling approaches during the current or prior periods. The following table presents assets and liabilities carried at

fair value in accordance with the fair value hierarchy:

				Fair value measurements
	Quoted price in active
	markets
	(Level 1)
			Using observable
			inputs
			(Level 2)
					Using unobservable
					inputs
					(Level 3)		Total
	2024	2023	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m	$m	$m
Assets
Cash and cash equivalents (measured at fair value)	-	-	37,255	27,566	-	-	37,255	27,566
Trading assets
1
	31,507	26,388	14,233	10,614	15	2	45,755	37,004
Derivative financial instruments
1
	131	935	54,214	59,448	25	23	54,370	60,406
Investment securities
1
	111,060	71,355	21,055	16,924	1,056	938	133,171	89,217
Net loans and advances
	-	-	24,429	21,159	357	729	24,786	21,888
Total
	142,698	98,678	151,186	135,711	1,453	1,692	295,337	236,081
Liabilities
Deposits and other borrowings (designated at fair value)	-	-	43,001	33,889	-	-	43,001	33,889
Derivative financial instruments
1
	393	218	54,846	57,241	15	23	55,254	57,482
Payables and other liabilities
	5,804	4,841	219	426	-	-	6,023	5,267
Debt issuances (designated at fair value)
	-	-	1,816	1,336	-	-	1,816	1,336
Total
	6,197	5,059	99,882	92,892	15	23	106,094	97,974

1.

During 2024, $1,119 million of assets were transferred from Level 1 to Level 2 (2023: $3,624 million transferred from Level 1 to Level 2) and $4,913 million of assets were transferred from Level 2 to

Level 1 (2023: $1,452 million transferred from Level 2 to Level 1) for the Group due to a change in the observability of market price and/or valuation inputs. There were no other material transfers

between Level 1, Level 2 and Level 3 during the year. Transfers into and out of levels are measured at the beginning of the reporting period in which the transfer occurred, and do not include assets and

liabilities acquired as part of Suncorp Bank.

			Fair value measurements
	Quoted price in active
	markets
	(Level 1)
			Using observable
			inputs
			(Level 2)
					Using unobservable
					inputs
					(Level 3)		Total
	2024	2023	2024	2023	2024	2023	2024	2023
The Company
	$m	$m	$m	$m	$m	$m	$m	$m
Assets
Cash and cash equivalents (measured at fair value)	-	-	36,396	27,099	-	-	36,396	27,099
Trading assets
1
	27,048	22,264	11,364	8,427	15	2	38,427	30,693
Derivative financial instruments
1
	126	900	57,477	59,066	24	23	57,627	59,989
Investment securities
1
	90,608	63,879	16,951	12,449	1,051	937	108,610	77,265
Net loans and advances
	-	-	24,082	20,511	357	729	24,439	21,240
Due from controlled entities
	246	-	2,205	1,894	-	-	2,451	1,894
Total
	118,028	87,043	148,475	129,446	1,447	1,691	267,950	218,180
Liabilities
Deposits and other borrowings (designated at fair value)	-	-	40,960	31,207	-	-	40,960	31,207
Derivative financial instruments
1
	324	210	57,131	57,287	12	14	57,467	57,511
Payables and other liabilities
	5,473	4,500	204	422	-	-	5,677	4,922
Debt issuances (designated at fair value)
	-	-	2,795	2,332	-	-	2,795	2,332
Due to controlled entities
	-	-	100	157	-	-	100	157
Total
	5,797	4,710	101,190	91,405	12	14	106,999	96,129

1.

During 2024, $1,119 million of assets were transferred from Level 1 to Level 2 (2023: $2,139 million transferred from Level 1 to Level 2) and $2,622 million of assets were transferred from Level 2 to

Level 1 (2023: $1,155 million transferred from Level 2 to Level 1) due to a change in the observability of market price and/or valuation inputs. There were no other material transfers between Level 1,

Level 2 and Level 3 during the year. Transfers into and out of levels are measured at the beginning of the reporting period in which the transfer occurred.

162 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

18. Fair value of financial assets and financial liabilities (continued)

Fair value measurement incorporating unobservable market data

Level 3 fair value measurements

Level 3 financial instruments are a net asset of $1,438 million (2023: $1,669 million) for the Group and $1,435 million (2023: $1,676 million) for the

Company. The assets and liabilities which incorporate significant unobservable inputs are:

•

equity and debt securities for which there is no active market or traded prices cannot be observed;

•

loans and advances measured at fair value for which there is no observable market data; and

•

derivatives referencing market rates that cannot be observed primarily due to lack of market activity.

Level 3 transfers

During the year, there were no material transfers into or out of Level 3 for the Group and the Company (2023: $218 million of loans and advances

measured at fair value were transferred from Level 2 to Level 3 for the Group and the Company).

The material Level 3 financial instruments as at 30 September 2024 are listed as below:

i)

Investment securities - equity holdings classified as FVOCI

Bank of Tianjin (BoT)

The Group holds an investment in the Bank of Tianjin. The investment is valued based on comparative price-to-book (P/B) multiples (a P/B multiple is the

ratio of the market value of equity to the book value of equity). The extent of judgement applied in determining the appropriate multiple and comparator

group from which the multiple is derived resulted in the Level 3 classification. As at 30 September 2024, the BoT equity holding balance was $958 million

(2023: $849 million). The increase in the BoT fair valuation was due to an increase in the P/B multiple used in the valuation and foreign currency translation

impacts.

Other equity investments

The Group holds $98 million (2023: $89 million) and the Company holds $93 million (2023: $87 million) of unlisted equities classified as FVOCI, for which

there are no active markets or traded prices available, resulting in a Level 3 classification. The increase in unlisted equity holdings balance was mainly due

to new purchases during the year and foreign currency translation impacts.

ii)

Net loans and advances - classified as FVTPL

Syndicated loans

The Group holds $357 million (2023: $729 million) of syndicated loans for sale which are measured at FVTPL for which there is no observable market

data available. The decrease in the Level 3 loan balances was mainly due to scheduled repayments as well as foreign currency translation impacts.

Sensitivity to Level 3 data inputs

When we make assumptions due to significant inputs to a valuation not being directly observable (Level 3 inputs), then changing these assumptions

changes the Group’s estimate of the instrument’s fair value. Favourable and unfavourable changes are determined by changing the primary unobservable

parameters used to derive the fair valuation.

Investment securities - equity holdings

The valuations of the equity investments are sensitive to variations in selected unobservable inputs, with valuation techniques used including P/B multiples

and discounted cashflow techniques. If for example, a 10% increase or decrease to the primary input into the valuations were to occur (such as the P/B

multiple), it would result in a $106 million increase or decrease in the fair value of the portfolio, which would be recognised in shareholders’ equity in the

Group ($105 million for the Company), with no impact to net profit or loss.

Net loans and advances

Syndicated loan valuations are sensitive to credit spreads in determining their fair valuation. For the syndicated loans which are primarily investment grade

loans, an increase or decrease in credit spreads would have an immaterial impact on net profit or net assets of the Group. For the remaining syndicated

loans, the Group may, where deemed necessary, utilise Credit Risk Insurance to mitigate the credit risks associated with those loans. The effect of this

would also result in an immaterial impact to the net profit or net assets of the Group.

Other

The remaining Level 3 balance is immaterial and changes in inputs have a minimal impact on net profit and net assets of the Group.

Deferred fair value gains and losses

Where fair value is determined using unobservable inputs significant to the fair value of a financial instrument, the Group does not immediately recognise

the difference between the transaction price and the amount determined based on the valuation technique (day one gain or loss) in profit or loss. After

initial recognition, the Group recognises the deferred amount in profit or loss on a straight-line basis over the life of the transaction or until all inputs

become observable. Day one gains and losses which have been deferred are not material.

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18. Fair value of financial assets and financial liabilities (continued)

Financial assets and financial liabilities not measured at fair value

The financial assets and financial liabilities listed below are carried at amortised cost on the Group’s Balance Sheet. While this is the value at which we

expect the assets will be realised and the liabilities settled, the Group provides an estimate of the fair value of the financial assets and financial liabilities at

balance date in the tables below.

Fair values of financial assets and liabilities carried at amortised cost not included in the tables below approximate their carrying values. These financial

assets and liabilities are either short term in nature or are floating rate instruments that are re-priced to market interest rates on or near the end of the

reporting period.

			Categorised into fair value hierarchy
			Quoted price in
			active markets
					Using observable
					inputs
							Using unobservable
							inputs
	At amortised cost		(Level 1)		(Level 2)		(Level 3)		Total fair value
	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Investment securities	7,091	7,752	-	-	7,078	7,712	-	-	7,078	7,712
Net loans and advances
	779,246	685,806	-	-	17,693	19,619	761,657	664,120	779,350	683,739
Total
	786,337	693,558	-	-	24,771	27,331	761,657	664,120	786,428	691,451
Financial liabilities
Deposits and other borrowings	862,165	781,314	-	-	862,368	781,106	-	-	862,368	781,106
Debt issuances
	154,572	114,678	32,244	30,786	123,667	83,867	-	-	155,911	114,653
Total
	1,016,737	895,992	32,244	30,786	986,035	864,973	-	-	1,018,279	895,759

				Categorised into fair value hierarchy
			Quoted price in
			active markets
					Using observable
					inputs
							Using unobservable
							inputs
	At amortised cost		(Level 1)		(Level 2)		(Level 3)		Total fair value
	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023
The Company
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Investment securities	5,356	5,936	-	-	5,355	5,896	-	-	5,355	5,896
Net loans and advances
	564,559	541,777	-	-	17,335	19,224	547,021	521,474	564,356	540,698
Total
	569,915	547,713	-	-	22,690	25,120	547,021	521,474	569,711	546,594
Financial liabilities
Deposits and other borrowings	662,910	643,868	-	-	662,965	643,755	-	-	662,965	643,755
Debt issuances
	120,155	95,881	29,758	28,496	91,466	67,309	-	-	121,224	95,805
Total
	783,065	739,749	29,758	28,496	754,431	711,064	-	-	784,189	739,560

164 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

18. Fair value of financial assets and financial liabilities (continued)

Financial assets and financial liabilities not measured at fair value (continued)

The following table sets out the Group’s basis of estimating the fair values of financial assets and liabilities carried at amortised cost where the carrying

value is not typically a reasonable approximation of fair value

.

Financial asset and liability	Fair value approach
Investment securities - debt securities
at amortised cost
	Calculated based on quoted market prices or observable inputs as applicable. If quoted market prices are
	not available, we use a discounted cash flow model using a yield curve appropriate for the remaining term
	to maturity of the debt instrument. The fair value reflects adjustments to credit spreads applicable for that
	instrument.
Net loans and advances to banks	Discounted cash flows using prevailing market rates for loans with similar credit quality.
Net loans and advances to customers	Present value of future cash flows, discounted using a curve that incorporates changes in wholesale
	market rates, the Group’s cost of wholesale funding and the customer margin, as appropriate.
Deposit liability without a specified
maturity or at call
	The amount payable on demand at the reporting date. We do not adjust the fair value for any value we
	expect the Group to derive from retaining the deposit for a future period.
Interest bearing fixed maturity deposits
and other borrowings and acceptances
with quoted market rates
	Market borrowing rates of interest for debt with a similar maturity are used to discount contractual cash
	flows to derive the fair value.
Debt issuance	s Calculated based on quoted market prices or observable inputs as applicable. If quoted market prices are
	not available, we use a discounted cash flow model using a yield curve appropriate for the remaining term
	to maturity of the debt instrument. The fair value reflects adjustments to credit spreads applicable to the
	Group for that instrument.

Key judgements and estimates

A significant portion of financial instruments are carried on the Balance Sheet at fair value. The Group therefore regularly evaluates the key

valuation assumptions used in the determination of the fair valuation of financial instruments incorporated within the financial statements, as

this can involve a high degree of judgement and estimation in determining the carrying values at the balance date.

In determining the fair valuation of financial instruments, the Group has considered the impact of related economic and market conditions on

fair value measurement assumptions and the appropriateness of valuation inputs in these estimates, notably valuation adjustments, as well as

the impact of these matters on the classification of financial instruments in the fair value hierarchy.

Most of the valuation models the Group uses employ only observable market data as inputs. For certain financial instruments, we may use

data that is not readily observable in current markets. If we use unobservable market data, then we need to exercise more judgement to

determine fair value depending on the significance of the unobservable input to the overall valuation. Generally, we derive unobservable inputs

from other relevant market data and compare them to observed transaction prices where available. When establishing the fair value of a

financial instrument using a valuation technique, the Group also considers any required valuation adjustments in determining the fair value. We

may apply adjustments (such as credit valuation adjustments and funding valuation adjustments – refer to Note 10 Derivative financial

instruments) to reflect the Group’s assessment of factors that market participants would consider in determining fair value of a particular

financial instrument.

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19. Assets charged as security for liabilities and collateral accepted as security for assets

The following disclosure excludes the amounts presented as collateral paid and received in the Balance Sheet that relate to derivative liabilities and

derivative assets respectively. The terms and conditions of those collateral agreements are included in the standard Credit Support Annex that forms part

of the International Swaps and Derivatives Association Master Agreement under which most of our derivatives are executed.

Assets charged as security for liabilities

Assets charged as security for liabilities include the following types of instruments:

•

securities provided as collateral for repurchase transactions. These transactions are governed by standard industry agreements;

•

specified residential mortgages provided as security for notes and bonds issued to investors as part of the Group’s covered bond programs;

•

collateral provided to central banks; and

•

collateral provided to clearing houses.

The carrying amount of assets pledged as security are as follows:

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Securities sold under arrangements to repurchase
1
	45,709	47,552	41,384	42,002
Residential mortgages provided as security for covered bonds	34,235	31,188	21,027	21,017
Other
	6,339	6,152	6,203	6,077

1.

The amounts disclosed as securities sold under arrangements to repurchase include both:

•

assets pledged as security which continue to be recognised on the Group's Balance Sheet; and

•

assets repledged, which are included in the disclosure below.

Collateral accepted as security for assets

The Group has received collateral associated with various financial transactions. Under certain arrangements the Group has the right to sell, or to repledge,

the collateral received. These arrangements are governed by standard industry agreements.

The fair value of collateral we have received and that which we have sold or repledged is as follows:

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Fair value of assets which can be sold or repledged
	68,145	52,184	65,329	51,519
Fair value of assets sold or repledged	39,699	33,493	39,058	33,218

166 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

20. Offsetting

We offset financial assets and financial liabilities on the Balance Sheet (in accordance with AASB 132 Financial Instruments: Presentation) when there is:

• a current legally enforceable right to set off the recognised amounts in all circumstances; and

• an intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability simultaneously.

The following table identifies financial assets and financial liabilities which have not been offset but are subject to enforceable master netting agreements

(or similar arrangements) and the related amounts not offset in the Balance Sheet. We have not taken into account the effect of over-collateralisation.

			Amount subject to master netting agreement or similar
	Total amounts
	recognised
	in the
	Balance Sheet
		Amounts not
		subject to
		master netting
		agreement or
		similar
			Total
				Financial
				instruments
				4
					Financial
					collateral
					(received)/
					pledged
					4
						Net amount
Consolidated
	$m
		$m	$m	$m	$m	$m
As at 30 September 2024
Derivative financial assets
1
	54,370	(3,534)	50,836	(38,192)	(7,702)	4,942
Reverse repurchase, securities borrowing and
similar agreements
2
- at amortised cost	6,870	(1,258)	5,612	-	(5,606)	6
- at fair value through profit or loss	57,032	(12,183)	44,849	(1,957)	(42,830)	62
Total financial assets	118,272	(16,975)	101,297	(40,149)	(56,138)	5,010
Derivative financial liabilities
1
	(55,254)	2,881	(52,373)	38,192	6,244	(7,937)
Repurchase, securities lending and similar
agreements
3
- at amortised cost	(4,675)	2,168	(2,507)	-	2,507	-
- at fair value through profit or loss	(39,640)	14,185	(25,455)	1,957	23,484	(14)
Total financial liabilities	(99,569)	19,234	(80,335)	40,149	32,235	(7,951)
As at 30 September 2023
Derivative financial assets
1
	60,406	(3,290)	57,116	(38,070)	(13,049)	5,997
Reverse repurchase, securities borrowing and
similar agreements
2
- at amortised cost	4,145
		(124)	4,021	-	(4,021)	-
- at fair value through profit or loss	44,088	(10,505)	33,583	(2,401)	(31,182)	-
Total financial assets	108,639	(13,919)	94,720	(40,471)	(48,252)	5,997
Derivative financial liabilities
1
	(57,482)	5,096	(52,386)	38,070	6,547	(7,769)
Repurchase, securities lending and similar
agreements
3
- at amortised cost	(12,744)
		1,117	(11,627)	-	11,627	-
- at fair value through profit or loss	(31,710)	13,304	(18,406)	2,401	16,005	-
Total financial liabilities	(101,936)	19,517	(82,419)	40,471	34,179	(7,769)

1.

Derivative assets and liabilities recognised in the Balance Sheet reflect the impact of certain central clearing collateral arrangements, whereby collateral that qualifies as legal settlement has reduced the

carrying value of those associated derivative balances.

2.

Reverse repurchase agreements:

•

with less than 90 days to maturity are presented in the Balance Sheet within Cash and cash equivalents; or

•

with 90 days or more to maturity are presented in the Balance Sheet within Net loans and advances.

3.

Repurchase agreements are presented on the Balance Sheet within Deposits and other borrowings.

4.

The amount of financial instruments and financial collateral disclosed is limited to the net balance sheet exposure of the relevant financial assets or liabilities, and any over-collateralisation is excluded

from the tables.

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20. Offsetting (continued)

			Amount subject to master netting agreement or similar
	Total amounts
	recognised
	in the
	Balance Sheet
		Amounts not
		subject to
		master netting
		agreement or
		similar
			Total
				Financial
				instruments
				4
					Financial
					collateral
					(received)/
					pledged
					4
						Net amount
The Company
	$m
		$m	$m	$m	$m	$m
As at 30 September 2024
Derivative financial assets
1
	57,627	(2,527)	55,100	(43,360)	(7,258)	4,482
Reverse repurchase, securities borrowing and
similar agreements
2
- at amortised cost	4,911	(600)	4,311	-	(4,307)	4
- at fair value through profit or loss	56,173	(11,596)	44,577	(1,685)	(42,830)	62
Total financial assets	118,711	(14,723)	103,988	(45,045)	(54,395)	4,548
Derivative financial liabilities
1
	(57,467)	1,594	(55,873)	43,360	5,577	(6,936)
Repurchase, securities lending and similar
agreements
3
- at amortised cost	(2,103)	2,103	-	-	-	-
- at fair value through profit or loss	(38,903)	14,099	(24,804)	1,685	23,106	(13)
Total financial liabilities	(98,473)	17,796	(80,677)	45,045	28,683	(6,949)
As at 30 September 2023
Derivative financial assets
1
59,989	(1,096)	58,893	(41,574)	(11,716)	5,603
Reverse repurchase, securities borrowing and
similar agreements
2
- at amortised cost	4,021
		-	4,021	-	(4,021)	-
- at fair value through profit or loss	43,553	(10,143)	33,410	(2,248)	(31,162)	-
Total financial assets	107,563	(11,239)	96,324	(43,822)	(46,899)	5,603
Derivative financial liabilities
1
	(57,511)	2,760	(54,751)	41,574	6,356	(6,821)
Repurchase, securities lending and similar
agreements
3
- at amortised cost	(8,955)
		865	(8,090)	-	8,090	-
- at fair value through profit or loss	(31,125)	12,872	(18,253)	2,248	16,005	-
Total financial liabilities	(97,591)	16,497	(81,094)	43,822	30,451	(6,821)

1.

Derivative assets and liabilities recognised in the Balance Sheet reflect the impact of certain central clearing collateral arrangements, whereby collateral that qualifies as legal settlement has reduced the

carrying value of those associated derivative balances.

2.

Reverse repurchase agreements:

• with less than 90 days to maturity are presented in the Balance Sheet within Cash and cash equivalents; or

• with 90 days or more to maturity are presented in the Balance Sheet within Net loans and advances.

3.

Repurchase agreements are presented on the Balance Sheet within Deposits and other borrowings.

4.

The amount of financial instruments and financial collateral disclosed is limited to the net balance sheet exposure of the relevant financial assets or liabilities, and any over-collateralisation is excluded from

the tables

168 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

21. Goodwill and other intangible assets

	Goodwill
	1
			Software		Other Intangibles		Total
Consolidated
	2024	2023	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m	$m	$m
Balance at start of year
	2,978	2,906	913	896	70	75	3,961	3,877
Additions
2
	1,402	-	430	332	-	-	1,832	332
Amortisation expense
3
	-	-	(319)	(316)	-	(2)	(319)	(318)
Impairment expense
	-	-	(9)	-	(7)	-	(16)	-
Written-off on disposal/exit
4
	-	(78)	-	-	-	(7)	-	(85)
Foreign currency exchange difference
	(37)	150	-	1	-	4	(37)	155
Balance at end of year
	4,343	2,978	1,015	913	63	70	5,421	3,961
Cost
5
	4,343	2,978	7,975	8,127	69	78	12,387	11,183
Accumulated amortisation	n/a	n/a	(6,960)	(7,214)	(6)	(8)	(6,966)	(7,222)
Carrying amount
	4,343	2,978	1,015	913	63	70	5,421	3,961

	Goodwill
	1
			Software		Other Intangibles		Total
The Company
	2024	2023	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m	$m	$m
Balance at start of year
	62	62	873	872	-	1	935	935
Additions	-	-	343	310	-	-	343	310
Amortisation expense
	-	-	(274)	(310)	-	(1)	(274)	(311)
Impairment expense
	-	-	(9)	-	-	-	(9)	-
Foreign currency exchange difference
	-	-	-	1	-	-	-	1
Balance at end of year
	62	62	933	873	-	-	995	935
Cost
5
	62	62	7,630	7,800	6	7	7,698	7,869
Accumulated amortisation	n/a	n/a	(6,697)	(6,927)	(6)	(7)	(6,703)	(6,934)
Carrying amount
	62	62	933	873	-	-	995	935

1.

Goodwill excludes notional goodwill in equity accounted investments.

2.

2024 includes $1,402 million of provisional goodwill and $103 million of provisional intangibles on acquisition of Suncorp Bank.

3.

2024 includes $36 million of accelerated amortisation expense from Suncorp Bank on alignment to the Group’s software capitalisation policy.

4.

2023 includes goodwill written-off on disposal of Cashrewards to ANZ NBH Pty Ltd.

5.

Includes impact of foreign currency translation differences.

Impairment testing for cash generating units containing goodwill

Goodwill acquired in a business combination is tested for impairment annually and whenever there are indicators of potential impairment. Goodwill is

allocated at the date of acquisition to the cash generating unit (CGU) or group of CGUs that are expected to benefit from the synergies of the related

business combination.

Goodwill is considered to be impaired if the carrying amount of the relevant CGU exceeds its recoverable amount. We estimate the recoverable amount of

each CGU to which goodwill is allocated using a fair value less costs of disposal (FVLCOD) approach, with a value-in-use (VIU) assessment performed

where the FVLCOD is less than the carrying amount.

Goodwill is allocated to the following CGUs based on the lowest level at which goodwill is monitored

.

Cash generating units:
	2024
	$m
		2023
		$m
Australia Retail
	100	100
Institutional
	1,245	1,261
New Zealand
	1,596	1,617
Suncorp Bank
	1,402	-

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21. Goodwill and other intangible assets (continued)

We estimate the FVLCOD of each CGU to which goodwill is allocated by applying observable price earnings multiples of comparable companies to the

estimated future maintainable earnings of each CGU. A deduction is then made for estimated costs of disposal. The valuation is considered to be level 3

in the fair value hierarchy due to unobservable inputs used in the valuation.

Management’s approach and the key assumptions used in determining FVLCOD are as follows:

Key assumption	Approach to determining the value (or values) for each key assumption
Future maintainable earnings	Future maintainable earnings for each CGU is estimated as the sum of:
	•
	The Group’s 2025 financial plan for each CGU; and
	•
	An allocation of the central costs recorded outside of the CGUs to which goodwill is allocated.
	Where relevant, adjustments are made to the Group’s financial plan to reflect the long-term expectations for
	items such as expected credit losses.
Price/Earnings (P/E) multiple	P/E multiples applicable to each CGU have been derived from a comparator group of publicly traded
	companies, and include a 30% control premium, discussed below.
	In the case of the New Zealand and Institutional CGUs, management has made downwards adjustments to
	P/E multiples to address specific factors relevant to those CGUs.
	A control premium has been applied which recognises the increased consideration a potential acquirer
	would be willing to pay in order to gain sufficient ownership to achieve control over the relevant activities of
	the CGU. For each CGU, the control premium has been estimated as 30% of the comparator group P/E
	multiple based on historical transactions.
Costs of disposal	Costs of disposal have been estimated as 2% of the fair value of the CGU based on those observed from
	historical and recent transactions.

Our impairment testing did not result in the impairment of goodwill as at 30 September 2024.

The FVLCOD estimates for each CGU are sensitive to assumptions about P/E multiples, future maintainable earnings and control premium (30%).

However, each CGU would continue to show a surplus in recoverable amount over carrying amount even where other reasonably possible alternative

estimates were used.

170 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

21. Goodwill and other intangible assets (continued)

Recognition and measurement

The table below details how we recognise and measure different intangible assets:

	Goodwill	Software	Other Intangibles
Definition
	Excess amount the Group has
	paid in acquiring a business
	over the fair value of the
	identifiable assets and liabilities
	acquired.
		Purchased software owned by the Group is
		capitalised.
		Internal and external costs incurred in
		building software and computer systems
		costing greater than $20 million are
		capitalised as assets. Those less than $20
		million are expensed in the year in which the
		costs are incurred.
		Costs incurred in planning or evaluating
		software proposals or in maintaining
		systems after implementation are
		not capitalised.
			Management fee rights arising
			from acquisition of funds
			management business and other
			intangible assets arising from
			contractual rights.
Carrying value
	Cost less any accumulated
	impairment losses.
	Allocated to the cash
	generating unit to which the
	acquisition relates.
		Initially, measured at cost or if acquired in a
		business combination at the acquisition date
		fair value.
		Subsequently, carried at cost less
		accumulated amortisation and impairment
		losses.
			Initially, measured at fair value at
			acquisition.
			Subsequently, carried at cost less
			accumulated amortisation and
			impairment losses.
Useful life
	Indefinite.
	Goodwill is reviewed for
	impairment at least annually or
	when there is an indication of
	impairment.
		Except for major core infrastructure,
		amortised over periods between
		2-5 years; however major core infrastructure
		may be amortised over 7 years subject to
		approval by the Audit Committee.
		Purchased software is amortised over 2
		years unless it is considered integral to other
		assets with a longer useful life.
			Management fee rights with an
			indefinite life are reviewed for
			impairment at least annually or
			when there is an indication of
			impairment. Other intangible
			assets are amortised over 3 years.
Depreciation
method
	Not applicable.	Straight-line method.	Not applicable to indefinite life
			intangible assets. Straight-line
			method for assets with a finite life.

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21. Goodwill and other intangible assets (continued)

Key judgements and estimates

Management judgement is used to assess the recoverable value of goodwill and other intangible assets, and the useful economic life of an

asset, or whether an asset has an indefinite life. We reassess the recoverability of the carrying value at each reporting date.

Goodwill

A number of key judgements are required in the determination of whether or not a goodwill balance is impaired including:

• the level at which goodwill is allocated – consistent with prior periods the CGUs to which goodwill is allocated are the Group’s revenue

generating segments that benefit from relevant historical business combinations generating goodwill.

• determination of the carrying amount of each CGU which includes an allocation, on a reasonable and consistent basis, of corporate assets

and liabilities that are not directly attributable to the CGUs to which goodwill is allocated.

• assessment of the recoverable amount of each CGU including:

R selection of the model used to determine the fair value – the Group has used the market multiple approach to estimate the fair

value; and

R selection of the key assumptions in respect of future maintainable earnings, the P/E multiple applied, including selection of an

appropriate comparator group and determination of an appropriate control premium, and costs of disposal as described above.

Software and other intangible assets

At each reporting date, software and other intangible assets are assessed for indicators of impairment and, where such indicators are

identified, an impairment assessment is performed. In the event that an asset’s carrying amount is determined to be greater than its

recoverable amount, the carrying amount of the asset is written down immediately. Those assets not yet ready for use are tested for

impairment annually.

In addition, the expected useful lives of intangible assets are assessed at each reporting date. The assessment requires management

judgement, and in relation to our software assets, a number of factors can influence the expected useful lives. These factors include changes

to business strategy, significant divestments and the pace of technological change.

172 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

22. Other provisions

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
ECL allowance on undrawn and contingent facilities
1
	846	827	693	697
Customer remediation	394	459	333	425
Restructuring costs
	80	98	70	83
Non-lending losses, frauds and forgeries
	90	73	77	62
Other
	174	257	146	232
Total other provisions
	1,584	1,714	1,319	1,499

1.

Refer to note 13 Allowance for expected credit losses for movement analysis.

	Customer
	remediation
		Restructuring
		costs
			Non-lending
			losses, frauds
			and forgeries
				Other
Consolidated
	$m
		$m	$m	$m
Balance at 1 October 2023
	459	98	73	257
New and increased provisions made during the year	158	160	22	36
Provisions used during the year
	(178)	(142)	(5)	(50)
Unused amounts reversed during the year
	(45)	(36)	-	(69)
Balance at 30 September 2024
	394	80	90	174

	Customer
	remediation
		Restructuring
		costs
			Non-lending
			losses, frauds
			and forgeries
				Other
The Company
	$m
		$m	$m	$m
Balance at 1 October 2023
	425	83	62	232
New and increased provisions made during the year	108	145	29	32
Provisions used during the year
	(163)	(124)	(14)	(49)
Unused amounts reversed during the year
	(37)	(34)	-	(69)
Balance at 30 September 2024	333	70	77	146

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22. Other provisions (continued)

Customer remediation

Customer remediation includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims,

penalties and litigation costs and outcomes.

Restructuring costs

Provisions for restructuring costs arise from activities related to changes in the scope of business undertaken by the Group or the manner in which that

business is undertaken and include employee termination benefits. Costs relating to on-going activities are not provided for and are expensed as incurred.

Non-lending losses, frauds and forgeries

Non-lending losses include losses arising from certain legal actions not directly related to amounts of principal outstanding for loans and advances and

losses arising from forgeries, frauds and the correction of operational issues. The amounts recognised are the best estimate of the consideration required

to settle the present obligation at the reporting date, taking into account the risks and uncertainties that surround the events and circumstances that

affect the provision.

Other

Other provisions comprise various other provisions including workers compensation, make-good provisions associated with leased premises, warranties

and indemnities provided in connection with various disposals of businesses and assets, and contingent liabilities recognised as part of a business

combination.

Recognition and measurement

The Group recognises provisions when there is a present obligation arising from a past event, an outflow of economic resources is probable,

and the amount of the provision can be measured reliably.

The amount recognised is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into

account the risks and uncertainties surrounding the timing and amount of the obligation. Where a provision is measured using the estimated

cash flows required to settle the present obligation, its carrying amount is the present value of those cash flows

.

Key judgements and estimates

The Group holds provisions for various obligations including customer remediation, restructuring costs, non-lending losses, frauds and forgeries

and litigation related claims. These provisions involve judgements regarding the timing and outcome of future events, including estimates of

expenditure required to satisfy such obligations. Where relevant, expert legal advice has been obtained and, in light of such advice, provisions

and/or disclosures as deemed appropriate have been made.

In relation to customer remediation, determining the amount of the provisions, which represent management’s best estimate of the cost of

settling the identified matters, requires the exercise of significant judgement. It will often be necessary to form a view on a number of different

assumptions, including the number of impacted customers, the average refund per customer, the associated remediation project costs, and

the implications of regulatory exposures and customer claims having regard to their specific facts and circumstances. There is a heightened

level of estimation uncertainty where the customer remediation provision relates to a legal proceeding or matter. The appropriateness of the

underlying assumptions is reviewed on a regular basis against actual experience and other relevant evidence including expert legal advice, and

adjustments are made to the provisions where appropriate.

174 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

23. Shareholders’ equity

Shareholders' equity

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Ordinary share capital
	27,065	29,082	26,988	29,005
Reserves
Foreign currency translation reserve
1
	(360)	570	(341)	58
Share option reserve
	105	82	105	82
FVOCI reserve
	(979)	(554)	(937)	(538)
Cash flow hedge reserve
	(422)	(1,872)	(503)	(1,824)
Transactions with non-controlling interests reserve
	(22)	(22)	-	-
Total reserves
	(1,678)	(1,796)	(1,676)	(2,222)
Retained earnings	42,602	41,277	39,184	34,195
Share capital and reserves attributable to shareholders of the Company
	67,989	68,563	64,496	60,978
Non-controlling interests
2
	771	522	-	-
Total shareholders’ equity
	68,760	69,085	64,496	60,978

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 profit or loss, resulting in a $22 million

gain recognised in Other operating income in 2024 (2023: $43 million gain).

2.

ANZ Bank New Zealand issued $256 million of perpetual preference shares in 2024 that are considered non-controlling interests to the Group.

Ordinary share capital

The table below details the movement in ordinary shares and share capital for the year

.

	2024		2023
Consolidated
	Number of
	shares	$m
			Number of
			shares
				$m
Balance at start of the year	3,003,366,782	29,082	2,989,923,751	28,797
Dividend reinvestment plan issuances	-	-	8,406,978	206
Bonus option plan
	-	-	1,657,422	-
Employee share and option plans
	-	(17)	3,378,631	79
Capital return
	-	(2,000)	-	-
Balance at end of year
	3,003,366,782	27,065	3,003,366,782	29,082

	2024		2023
The Company
	Number of
	shares	$m
			Number of
			shares
				$m
Balance at start of the year	3,003,366,782	29,005	2,989,923,751	28,720
Dividend reinvestment plan issuances	-	-	8,406,978	206
Bonus option plan
	-	-	1,657,422	-
Employee share and option plans
	-	(17)	3,378,631	79
Capital return
	-	(2,000)	-	-
Balance at end of year
	3,003,366,782	26,988	3,003,366,782	29,005

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23. Shareholders’ equity (continued)

Non-controlling interests

	Profit attributable to
	non-controlling interests
			Equity attributable to
			non-controlling interests
					Dividend paid to
					non-controlling interests
	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m
ANZ Bank New Zealand PPS
1
	32	26	758	512	32	26
Other	3	2	13	10	-	1
Total
	35	28	771	522	32	27

1.

On 19 March 2024, ANZ Bank New Zealand Limited issued $256 million (NZD275 million) of PPS.

ANZ Bank New Zealand Preference Shares

Perpetual Preference Shares (PPS) externally issued by ANZ Bank New Zealand Limited (ANZ Bank New Zealand), a member of the Group, are considered

non-controlling interests of the Group.

The key terms of the PPS are as follows:

PPS dividends

Holders of PPS are entitled to receive dividends that are discretionary, non-cumulative and subject to conditions. If a PPS dividend is not paid, there are

certain restrictions on the ability of ANZ Bank New Zealand to pay a dividend on its ordinary shares. Holders of the PPS have no other rights participate in

the profits or property of ANZ Bank New Zealand.

Redemption features

Holders of PPS have no right to require that the PPS be redeemed. ANZ Bank New Zealand may, at its option, redeem all of the PPS on an optional

redemption date (being each scheduled quarterly dividend payment date from the first optional redemption date), or at any time following the occurrence

of a tax event or regulatory event, subject to prior written approval of RBNZ and certain other conditions being met.

176 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

23. Shareholders’ equity (continued)

Recognition and measurement

Ordinary shares
	Ordinary shares have no par value. They entitle holders to receive dividends, or proceeds available
	on winding up of the Company, in proportion to the number of fully paid ordinary shares held. They
	are recognised at the amount paid per ordinary share net of directly attributable costs. Every holder
	of fully paid ordinary shares present at a meeting of the Company in person, or by proxy, is entitled
	to:
	• on a show of hands, one vote; and
	• on a poll, one vote, for each share held.
Treasury shares
	Treasury shares are shares in the Company which:
	• the ANZ Employee Share Acquisition Plan purchases on market and have not yet distributed, or
	• the Company issues to the ANZ Employee Share Acquisition Plan and have not yet been
	distributed.
	Treasury shares are deducted from share capital and excluded from the weighted average number
	of ordinary shares used in the earnings per share calculations.
Reserves:
Foreign currency translation reserve
	Includes differences arising on translation of assets and liabilities into Australian dollars when the
	functional currency of a foreign operation (including subsidiaries and branches) is not Australian
	dollars. In this reserve, we reflect any offsetting gains or losses on hedging these exposures,
	together with any tax effect.
Cash flow hedge reserve	Includes fair value gains and losses associated with the effective portion of designated cash flow
	hedging instruments together with any tax effect.
FVOCI reserve	Includes changes in the fair value of certain debt securities and equity securities included within
	Investment Securities together with any tax effect.
	In respect of debt securities classified as measured at FVOCI, the FVOCI reserve records
	accumulated changes in fair value arising subsequent to initial recognition, except for those relating
	to allowance for ECL, interest income and foreign currency exchange gains and losses which are
	recognised in profit or loss. As debt securities at FVOCI are recorded at fair value, the balance of
	the FVOCI reserve is net of the ECL allowance associated with such assets. When a debt security
	measured at FVOCI is derecognised, the cumulative gain or loss recognised in the FVOCI reserve in
	respect of that security is reclassified to profit or loss and presented in other operating income.
	In respect of the equity securities classified as measured at FVOCI, the FVOCI reserve records
	accumulated changes in fair value arising subsequent to initial recognition (including any related
	foreign exchange gains or losses). When an equity security measured at FVOCI is derecognised,
	the cumulative gain or loss recognised in the FVOCI reserve in respect of that security is not
	recycled to profit or loss.
Share option reserve	Includes amounts which arise on the recognition of share-based compensation expense.
Transactions with non-controlling
interests reserve
	Includes the impact of transactions with non-controlling shareholders in their capacity as
	shareholders.
Non-controlling interests
	Share in the net assets of controlled entities attributable to equity interests which the Group does
	not own directly or indirectly.

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24. Capital management

Capital management framework

The Group’s capital management framework includes managing capital at Level 1 and Level 2.

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 the Group operating at or above APRAs expectation for Domestic Systematically Important Banks (D-SIBs) following the

implementation of APRA’s Capital Reform.

All requirements were satisfied as at 30 September 2024.

Capital management strategy

The Group’s capital management strategy aims to protect the interests of depositors, creditors and shareholders. We achieve this through an Internal

Capital Adequacy Assessment Process (ICAAP) whereby the Group conducts detailed strategic and capital planning over a 3-year time horizon.

The process involves:

• forecasting economic variables, financial performance of divisions and the financial impact of new strategic initiatives to be implemented during the

planning period;

• performing stress tests under different economic scenarios to determine the level of additional capital (stress capital buffer) needed to absorb losses

that may be experienced under an economic downturn;

• reviewing capital position and targets against the Group’s risk profile; and

• developing a capital plan, taking into account capital ratio targets, ECM requirements, current and future capital issuances requirements and options

around capital products, timing and markets to execute the capital plan under differing market and economic conditions.

The capital plan is approved by the Board and updated as required. The Board and senior management are provided with regular updates of the Group’s

capital position. Any material actions required to ensure ongoing prudent capital management are submitted to the Board for approval. Throughout the

year, the Group maintained compliance with all the regulatory requirements related to Capital Adequacy in the jurisdictions in which it operates.

178 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

24. Capital management (continued

Regulatory environment

Australia

As the ANZ Bank Group is an Authorised Deposit-taking Institution (ADI) in Australia, it is primarily regulated by APRA under the Banking Act 1959 (Cth).

ANZ Bank Group must comply with the minimum regulatory capital requirements, prudential capital ratios and specific reporting levels that APRA sets and

which are consistent with the global Basel III capital framework. This is the common framework for determining the appropriate level of bank regulatory

capital as set by the Basel Committee on Banking Supervision. APRA minimum requirements are summarised below:

Regulatory capital definition
Common Equity Tier 1 (CET1) Capital	Tier 1 Capital	Tier 2 Capital	Total Capital
Shareholders’ equity adjusted for
specific items.
	CET1 capital plus certain securities
	with complying loss absorbing
	characteristics known as Additional
	Tier 1 capital.
		Subordinated debt instruments which
		have a minimum term of 5 years at
		issue date.
			Tier 1 plus Tier 2 capital.

Minimum Prudential Capital Ratios (PCRs)
CET1 Ratio	Tier 1 Ratio	Total Capital Ratio
CET1 capital divided by total risk
weighted assets must be at least 4.5%.
	Tier 1 capital divided by total risk
	weighted assets must be at least
	6.0%.
		Total capital divided by total risk
		weighted assets must be at least
		8.0%. For D-SIBs, Total Capital Ratio
		must be of at least 11% from 1st Jan
		2024. Refer below for details.

Reporting Levels
Level 1	Level 2	Level 3
The ADI on a stand-alone basis (that is
ANZBGL and specified subsidiaries
which are consolidated to form the
ADI’s Extended Licensed Entity).
	The consolidated Group less
	certain subsidiaries and associates
	that are excluded under prudential
	standards.
		A conglomerate ANZGHL Group at the widest level.

As at 30 September 2024, APRA also requires the ADI to hold additional CET1 buffers as follows:

• a capital conservation buffer (CCB) of 4.75% which is inclusive of the additional 1% surcharge for domestically systemically important banks (D-SIBs).

APRA has determined that ANZ is a D-SIB.

• a countercyclical capital buffer which is set on a jurisdictional basis. The requirement is currently set at 1% for Australia.

Additionally in December 2021, APRA announced that it requires all D-SIBs including the Group to increase its minimum total capital ratio requirement by

3% of RWA by January 2024, and a further 1.5% of RWA by January 2026 (total increase of 4.5%). APRA expects this to be predominantly met by Tier 2

capital, with an equivalent decrease in other senior funding. The Group is on track to meet these requirements as at reporting date.

In September 2024, APRA also 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 changes are

proposed to come into effect from January 2027 with the main change being replacing the current requirement for 1.5% of Additional Tier 1 capital (AT1)

with 0.25% of CET1 capital and 1.25% of Tier 2 capital.

Insurance and funds management

As required by APRA’s Prudential Standards, insurance and funds management activities are:

• de-consolidated for the purposes of calculating capital adequacy; and

• excluded from the risk-based capital adequacy framework.

We deduct the investment in these controlled entities 100% from CET1 capital, and if we include any profits from these activities in the ANZ Bank Group’s

results, then we exclude them from the determination of CET1 capital to the extent they have not been remitted.

Outside Australia

In addition to APRA, the Group’s branch operations and major banking subsidiary operations are also overseen by local regulators such as the Reserve

Bank of New Zealand, the US Federal Reserve, the UK Prudential Regulation Authority, the Monetary Authority of Singapore, the Hong Kong Monetary

Authority and the China Banking and Insurance Regulatory Commission. They may impose minimum capital levels on operations in their individual

jurisdictions.

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24. Capital management

(continued)

ANZ Bank Group

1

The following table provides details of ANZ Bank Group’s capital adequacy ratios at 30 September:

	Consolidated
	2024	2023
	$m	$m
Qualifying capital
Tier 1
Shareholders' equity and non-controlling interests
	68,760	69,085
Prudential adjustments to shareholders' equity
	(721)	(396)
Gross Common Equity Tier 1 capital
	68,039	68,689
Deductions	(13,570)	(10,895)
Common Equity Tier 1 capital
	54,469	57,794
Additional Tier 1 capital
2
	8,207	8,232
Tier 1 capital
	62,676	66,026
Tier 2 capital
3
	29,189	24,959
Total qualifying capital
	91,865	90,985
Capital adequacy ratios (Level 2)
Common Equity Tier 1	12.2%	13.3%
Tier 1
	14.0%	15.2%
Tier 2
	6.5%	5.8%
Total capital ratio
	20.6%	21.0%
Risk weighted assets
	446,582	433,327

1.

This information is not within the scope of the external audit of the Group Financial Report by the Group’s external auditor, KPMG. The information presented in this table is a regulatory requirement

disclosed in Part A of ARF 110 Capital Adequacy which will be subject to audit in accordance with Prudential Standard APS 310 Audit and Related Matters.

2.

This includes Additional Tier 1 capital of $8,207 million (2023: $8,232 million) (refer to Note 16 Debt issuances) including a regulatory adjustments and deductions of -$70 million (2023: nil)

3.

This includes Tier 2 capital of $28,584 million (2023: 23,707 million) (refer to Note 16 Debt issuances), a general reserve for impairment of financial assets of $1,711 million (2023: $1,776 million) and

regulatory adjustments and deductions of -$1,107 million (2023: -$524 million)

180 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

25. Controlled entities

The ultimate parent of the Group is ANZ Group Holdings Limited
	Incorporated in
	Australia
		Nature of Business
		Banking
The Group holds 100% of the voting interests in all controlled entities, unless noted otherwise.
The material controlled entities of the Group are:
Australia and New Zealand Banking Group Ltd	Australia	Banking
SBGH Limited	Australia	Banking
ANZ Bank (Vietnam) Limited
1
	Vietnam	Banking
ANZ Funds Pty Ltd	Australia	Holding Company
ANZ Bank (Kiribati) Limited
1
(75% ownership)	Kiribati	Banking
ANZ Bank (Samoa) Limited
1
	Samoa	Banking
ANZ Bank (Vanuatu) Limited
2
	Vanuatu	Banking
ANZ Holdings (New Zealand) Limited
1
	New Zealand	Holding Company
ANZ Bank New Zealand Limited
1
	New Zealand	Banking
ANZ Investment Services (New Zealand) Limited
1
	New Zealand	Funds Management
ANZ New Zealand (Int’l) Limited
1
	New Zealand	Finance
ANZ New Zealand Investments Holdings Limited
1
	New Zealand	Holding Company
ANZ New Zealand Investments Limited
1
	New Zealand	Funds Management
ANZNZ Covered Bond Trust
1,3
	New Zealand	Finance
ANZ International Private Limited
1
	Singapore	HoldingCompany
ANZcover Insurance Private Ltd
1
	Singapore	Captive-Insurance
ANZ Lenders Mortgage Insurance Pty Ltd	Australia	Mortgage Insurance
ANZ Residential Covered Bond Trust
3
	Australia	Finance
Australia and New Zealand Bank (China) Company Limited
1
	China	Banking
Australia and New Zealand Banking Group (PNG) Limited
1
	Papua New Guinea	Banking
Citizens Bancorp	Guam	Holding Company
ANZ Guam Inc	Guam	Banking
Institutional Securitisation Services Limited	Australia	Securitisation Manager
PT Bank ANZ Indonesia
1
(99% ownership)	Indonesia	Banking

1.

Audited by overseas KPMG firms — either as part of the Group audit, or for standalone financial statements as required.

2.

Audited by Law Partners.

3.

Not owned by the Group. Control exists as the Group retains substantially all the risks and rewards of the operations.

Changes to material controlled entities

On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. Refer to Note 34 Suncorp

Bank acquisition for further details.

Citizens Bancorp and ANZ Guam Inc have ceased business as at 30 September 2024.

Significant restrictions

Controlled entities that are subject to prudential regulation may be required to maintain minimum capital or other regulatory requirements which may, from

time to time, limit the entity’s ability to transfer assets, pay dividends or make other capital distributions to the parent entity or to other entities in the Group.

The Group manages such restrictions within our risk management framework, as outlined in Note 17 Financial risk management and our capital

management strategy, as outlined in Note 24 Capital management.

As at 30 September 2024, restrictions on the ability of an entity within the Group to transfer assets, pay dividends or make other capital distributions to

other entities in the Group were not material to the liquidity or capital management of the Group.

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25. Controlled entities (continued)

Recognition and measurement

The Group’s subsidiaries are those entities it controls through:

• being exposed to, or having rights to, variable returns from the entity; and

• being able to affect those returns through its power over the entity.

The Group assesses whether it has power over those entities by examining the Group’s existing rights to direct the relevant activities of the

entity.

If the Group sells or acquires subsidiaries during the year, it includes their operating results in the Group results to the date of disposal or from

the date of acquisition. When the Group’s control ceases, it derecognises the assets and liabilities of the subsidiary, any related non-controlling

interest and other components of equity.

If the Group’s ownership interest in a subsidiary changes in a way that does not result in a loss of control, then the Group accounts for that as

a transaction with equity holders in their capacity as equity holders.

All transactions between Group entities are eliminated on consolidation.

182 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

26. Investment in associates

Significant associates of the Group are:

		Ordinary share
		interest
				Carrying amount $m
Name of entity	Principal activity
		2024	2023	2024	2023
AMMB Holdings Berhad (AmBank)
1
	Banking and insurance	0%	22%	-	881
PT Bank Pan Indonesia (PT Panin)	Consumer and business bank	39%	39%	1,415	1,440
Total carrying value of associates
2
				1,415	2,321

1.

The Group fully disposed its interest in AmBank in 2024.

2.

Includes the impact of foreign currency translation recognised in the foreign currency translation reserve.

Financial information on significant associates

Set out below is the summarised financial information of each associate that is significant to the Group. The summarised financial information is based on

the associates’ IFRS financial information and may require the use of unaudited financial information as each associate has a different financial year to the

Group (PT Panin 31 December, AmBank 31 March).

	AMMB Holdings
	Berhad
	1
			PT Bank Pan
			Indonesia
Principal place of business and country of incorporation	Malaysia		Indonesia
	2024	2023	2024	2023
	$m	$m	$m	$m
Summarised results
Operating income	-	1,517	1,062	1,273
Profit/(Loss) for the year
	-	545	218	372
Other comprehensive income/(loss)	-	87	(41)	24
Total comprehensive income/(loss)
	-	632	177	396
Less: Total comprehensive (income)/loss attributable to non–controlling
interests
	-	(8)	(19)	(69)
Total comprehensive income/(loss) attributable to owners of associate
	-	624	158	327
Summarised financial position
Total assets
2
	-	62,057	20,616	20,498
Total liabilities
2
	-	58,015	16,078	16,928
Total net assets
2
	-	4,042	4,538	3,570
Less: Non-controlling interests of associate	-	(301)	(353)	(348)
Net assets attributable to owners of associate
	-	3,741	4,185	3,222
Reconciliation to carrying amount of Group's interest in associate
3
Carrying amount at the beginning of the year	881	790	1,440	1,318
Investment
	-	-	-	-
Group's share of total comprehensive income/(loss)
	69	138	42	138
Dividends received from associate
	(14)	(42)	-	-
Foreign currency translation reserve adjustments
	(21)	(5)	(67)	(16)
Partial disposal of investment
	(668)	-	-	-
Loss on partial disposal of investment
	(21)	-	-	-
Foreign currency translation reserve reclassified to profit or loss
	(5)	-	-	-
Less: Carrying value reclassified as Investment securities
	(221)	-	-	-
Carrying amount at the end of the year	-	881	1,415	1,440
Market value of Group's investment in associate
4
	-	875	1,448	1,167

1.

On 6 March 2024, the Group partially disposed of its interest in AmBank, reducing its investment by $668 million and its ordinary share interest from 22% to 5%. Following the decrease in ownership, the

Group ceased equity accounting for AmBank and reclassified the investment as Investment securities at fair value through other comprehensive income. On 31 May 2024, the Group disposed of its

remaining 5% interest in AmBank.

2.

Includes market value adjustments (including goodwill) the Group made at the time of acquisition (and adjustments for any differences in accounting policies).

3.

For AmBank this includes movements up to cessation of equity accounting.

4.

Market value is based on a price per share at reporting date and does not include any adjustments for the size of our holding.

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26. Investment in associates (continued)

Impairment assessment

The Group assesses the carrying value of its associates investments for impairment indicators. The impairment assessment of non-lending assets

identified that one of the Group’s associated investments PT Panin had indicators of impairment as a result of its carrying value exceeding its fair value less

costs of disposal (FVLCD) at times throughout the year. No impairment was recognised as its carrying value was supported by its FVLCD at 30 September

2024.

Recognition and measurement

An associate is an entity for which the Group has significant influence over its operating and financial policies but which it does not control. The

Group accounts for associates using the equity method. Its investments in associates are carried at cost plus the post-acquisition share of

changes in the associate’s net assets less accumulated impairments. Dividends the Group receives from associates are recognised as a

reduction in the carrying amount of the investment. The Group includes goodwill recognised by the associate in the carrying amount of the

investment. It does not individually test the goodwill incorporated in the associates carrying amount for impairment.

At least at each reporting date, the Group reviews investments in associates for any indication of impairment. If an indication of impairment

exists, then the Group determines the recoverable amount of the associate using the higher of:

• the associate’s fair value less cost of disposal; and

• its value-in-use (VIU).

We use a discounted cash flow methodology, and when applicable, other methodologies (such as capitalisation of earnings methodology), to

determine the recoverable amount when determining a VIU.

Key judgements and estimates

Investments in associates and joint ventures are assessed at each reporting date and tested for impairment when there is an indication that

the investment may be impaired. In addition, the Group is required to assess at each reporting date whether the recoverable amount of the

Group’s investment has increased to such a level as to support the reversal of any prior period impairments.

184 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

27. Structured entities

A Structured Entity (SE) is an entity that has been designed such that voting or similar rights are not the dominant factor in determining who controls the

entity. SEs are generally established with restrictions on their ongoing activities in order to achieve narrow and well defined objectives.

SEs are classified as subsidiaries and consolidated when control exists. If the Group does not control a SE, then it is not consolidated. This note provides

information on both consolidated and unconsolidated SEs.

The Group’s involvement with SEs is as follows:

Type	Details
Securitisation	The Group establishes SEs to securitise customer loans and advances that it has originated, in order to diversify
	sources of funding for liquidity management. Securitisation programs include customer loans and advances
	assigned to bankruptcy remote SEs to provide either security for obligations payable on notes issued by the SEs
	to external investors or create assets held by the Group eligible for repurchase agreements with applicable central
	banks.
	The Group retains control over these SEs and therefore they are consolidated. Refer to Note 28 Transfers of
	financial assets for further details.
	The Group also establishes SEs on behalf of customers to securitise their loans or receivables. The Group may
	manage these securitisation vehicles or provide liquidity or other support. Additionally, the Group may acquire
	interests in securitisation vehicles set up by third parties through holding securities issued by such entities. In
	limited circumstances where control exists, the Group consolidates the SE.
Covered bond issuances	Certain loans and advances have been assigned to bankruptcy remote SEs to provide security for issuances of
	debt securities by the Group. The Group retains control over these SEs and therefore they are consolidated. Refer
	to Note 28 Transfers of financial assets for further details.
Structured finance arrangements	The Group is involved with SEs established:
	• in connection with structured lending transactions to facilitate debt syndication and/or to ring-fence collateral;
	and
	• to own assets that are leased to customers in structured leasing transactions.
	The Group may manage the SE, hold minor amounts of the SE’s capital, or provide risk management products
	(derivatives) to the SE. In most instances, the Group does not control these SEs. In limited circumstances where
	control exists, the Group consolidates the SE.
Funds management activities	The Group is the scheme manager for a number of Managed Investment Schemes (MIS) in New Zealand. These
	MIS are financed through the issue of units to investors and the Group considers them to be SEs. The Group’s
	interests in these MIS are limited to receiving fees for services or providing risk management products
	(derivatives). These interests do not create significant exposures that would allow the Group to control the funds.
	Therefore, these MIS are not consolidated.

Consolidated structured entities

Financial or other support provided to consolidated structured entities

The Group provides financial support to consolidated SEs as outlined below.

Securitisation and covered bond
issuances
	The Group provides lending facilities, derivatives and commitments to these SEs and/or holds debt instruments
	they have issued.
Structured finance arrangements	The assets held by these SEs are normally pledged as collateral for financing provided. Certain consolidated SEs
	are financed entirely by the Group while others are financed by syndicated loan facilities in which the Group is a
	participant. The financing provided by the Group includes lending facilities where the Group’s exposure is limited to
	the amount of the loan and any undrawn amount. Additionally, the Group has provided Letters of Support to these
	consolidated SEs confirming that the Group will not demand repayment of the financing provided for the ensuing
	12 month period.

The Group did not provide any non-contractual support to consolidated SEs during the year (2023: nil). Other than as disclosed above, the Group does

not have any current intention to provide financial or other support to consolidated SEs.

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27. Structured entities (continued)

Unconsolidated structured entities

Group’s interest in unconsolidated structured entities

An ‘interest’ in an unconsolidated SE is any form of contractual or non-contractual involvement with a SE that exposes the Group to variability of returns

from the performance of that SE. These interests include, but are not limited to: holdings of debt or equity securities; derivatives that pass-on risks specific

to the performance of the SE, lending, loan commitments, financial guarantees, and fees from funds management activities.

For the purpose of disclosing interests in unconsolidated SEs:

•

no disclosure is made if the Group’s involvement is not more than a passive interest - for example: when the Group’s involvement constitutes a typical

customer-supplier relationship. On this basis, exposures to unconsolidated SEs that arise from lending, trading and investing activities are not

considered disclosable interests - unless the design of the structured entity allows the Group to participate in decisions about the relevant activities

(being those that significantly affect the entity’s returns).

•

‘interests’ do not include derivatives intended to expose the Group to market-risk (rather than performance risk specific to the SE) or derivatives

through which the Group creates, rather than absorbs, variability of the unconsolidated SE (such as purchase of credit protection under a credit default

swap).

The table below sets out the Group’s interests in unconsolidated SEs together with the maximum exposure to loss that could arise from

those interests:

	Securitisation		Structured finance		Total
	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m
On-balance sheet interests
Investment securities	1,819	2,070	-	-	1,819	2,070
Gross loans and advances
	11,447	10,367	23	24	11,470	10,391
Total on-balance sheet
	13,266	12,437	23	24	13,289	12,461
Off-balance sheet interests
Commitments (facilities undrawn)	2,279	3,270	-	-	2,279	3,270
Guarantees
	50	50	-	-	50	50
Total off-balance sheet
	2,329	3,320	-	-	2,329	3,320
Maximum exposure to loss	15,595	15,757	23	24	15,618	15,781

In addition to the interests above, the Group earned funds management fees from unconsolidated investment funds of $184 million

(2023: $177 million) during the year.

The Group’s maximum exposure to loss represents the maximum amount of loss that the Group could incur as a result of its involvement with

unconsolidated SEs if loss events were to take place - regardless of the probability of occurrence. This does not in any way represent the actual losses

expected to be incurred. Furthermore, the maximum exposure to loss is stated gross of the effects of hedging and collateral arrangements entered into to

mitigate the Group’s exposure to loss.

The maximum exposure to loss has been determined as:

x the carrying amount of Investment securities measured at amortised cost; and

x the carrying amount plus the undrawn amount of any committed loans and advances.

The size of unconsolidated SEs is indicated by total assets which vary by SE with the largest single SE having a value of approximately $4.7 billion.

The Group did not provide any non-contractual support to unconsolidated SEs during the year (2023: nil) nor does it have any current intention to provide

financial or other support to unconsolidated SEs.

186 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

27. Structured entities (continued)

Sponsored unconsolidated structured entities

The Group may also sponsor unconsolidated SEs in which it has no disclosable interest.

For the purposes of this disclosure, the Group considers itself the ‘sponsor’ of an unconsolidated SE if it is the primary party involved in the design and

establishment of that SE and:

• the Group is the major user of that SE; or

• the Group’s name appears in the name of that SE, or on its products; or

• the Group provides implicit or explicit guarantees of that SE’s performance.

The Group has sponsored the ANZ PIE Fund in New Zealand, which invests only in deposits with ANZ Bank New Zealand. The Group does not provide any

implicit or explicit guarantees of the capital value or performance of investments in the ANZ PIE Fund. There was no income received from, nor assets

transferred to, this entity during the year.

Key judgements and estimates

Significant judgement is required in assessing whether the Group has control over Structured Entities. Judgement is required to determine the

existence of:

• power over the relevant activities (being those that significantly affect the entity’s returns); and

• exposure to variable returns of the entity.

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28. Transfers of financial assets

In the normal course of business the Group enters into transactions where it transfers financial assets directly to third parties or to SEs. These transfers

may result in the Group fully, or partially, derecognising those financial assets - depending on the Group’s exposure to the risks and rewards or control

over the transferred assets. If the Group retains substantially all of the risk and rewards of a transferred asset, the transfer does not qualify for

derecognition and the asset remains on the Group’s Balance Sheet in its entirety.

Securitisations

Net loans and advances include residential mortgages securitised under the Group’s securitisation programs which are assigned to bankruptcy remote

SEs to provide security for obligations payable on the notes issued by the SEs. The holders of the issued notes have full recourse to the pool of residential

mortgages which have been securitised and the Group cannot otherwise pledge or dispose of the transferred assets.

In some instances, the Group is also the holder of the securitised notes issued by the SEs. In addition, the Group is entitled to any residual income of the

SEs and sometimes enters into derivatives with the SEs. The Group retains the risks and rewards of the residential mortgages and continues to recognise

the mortgages as financial assets.

The Group is exposed to variable returns from its involvement with these securitisation SEs and has the ability to affect those returns through its power

over the SEs activities. The SEs are therefore consolidated by the Group.

Covered bonds

The Group operates various global covered bond programs to raise funding in its primary markets. Net loans and advances include residential mortgages

assigned to bankruptcy remote SEs associated with these covered bond programs. In respect of each program, a covered bond guarantor has

guaranteed payments of interest and principal pursuant to a guarantee which is secured over its assets, including these residential mortgages.

Substantially all of the assets of each covered bond guarantor consist of that covered bond guarantor’s equitable interests in mortgage loans secured by

residential real estate.

The covered bond holders have dual recourse to the issuer and the cover pool of assets. The issuer cannot otherwise pledge or dispose of the

transferred assets, however, subject to legal arrangements it may repurchase and substitute assets as long as the required cover is maintained.

The Group is required to maintain the cover pool at a level sufficient to cover the bond obligations. In addition, the Group is entitled to any residual income

of the covered bond SEs (after all payments to the covered bond holders and external parties) and enters into derivatives with the SEs. The Group retains

the majority of the risks and rewards of the residential mortgages and continues to recognise the mortgages as financial assets.

The Group is exposed to variable returns from its involvement with the covered bond SEs and has the ability to affect those returns through its power over

the SEs activities. The SEs are therefore consolidated by the Group. The covered bonds issued externally are included within debt issuances.

Repurchase agreements

When the Group sells securities subject to repurchase agreements under which we retain substantially all the risks and rewards of ownership, then those

assets do not qualify for derecognition. An associated liability is recognised for the consideration received from the counterparty.

Structured finance arrangements

The Group arranges funding for certain customer transactions through structured leasing. These transactions are recognised on Group’s Balance Sheet

as lease receivables or loans. At times, other financial institutions participate in the funding of these arrangements. This participation involves a

proportionate transfer of the rights to the assets recognised by the Group. The participating banks have limited recourse to the leased assets and related

proceeds. Where the Group continues to be exposed to some of the risks of the transferred assets through a derivative or other continuing involvement,

the Group does not derecognise the lease receivable or loan. Instead, the Group recognises an associated liability representing its obligations to the

participating financial institutions.

The tables below set out the balance of assets transferred that do not qualify for derecognition, along with the associated liabilities.

	Securitisations
		1,2
			Covered bonds
					Repurchase
					agreements
							Structured finance
							arrangements
	2024	2023	2024	2023	2024	2023	2024	2023
Consolidated
	$m	$m	$m	$m	$m	$m	$m	$m
Current carrying amount of assets transferred
	3,730	886	34,235	31,188	45,709	47,552	15	27
Carrying amount of associated liabilities	3,640	880	18,931	18,223	44,315	44,454	15	27

	Securitisations
		1,2
			Covered bonds
					Repurchase
					agreements
							Structured finance
							arrangements
	2024	2023	2024	2023	2024	2023	2024	2023
The Company
	$m	$m	$m	$m	$m	$m	$m	$m
Current carrying amount of assets transferred
	714	886	21,027	21,017	41,384	42,002	-	-
Carrying amount of associated liabilities	714	886	21,027	21,017	41,006	40,080	-	-

1.

Does not include transfers to internal structured entities where there are no external investors.

2.

The securitisation noteholders have recourse only to the pool of residential mortgages which have been securitised. The carrying value of securitised assets and the associated liabilities approximates their

fair value.

188 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

29. Superannuation and post employment benefit obligations

Set out below is a summary of amounts recognised in the Balance Sheet in respect of the defined benefit superannuation schemes:

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Defined benefit obligation and scheme assets
Present value of funded defined benefit obligation	(998)	(959)	(873)	(839)
Fair value of scheme assets
	1,150	1,131	1,003	991
Net defined benefit asset
	152	172	130	152
As represented in the Balance Sheet
Net liabilities arising from defined benefit obligations included in Payables and
other liabilities
	(4)	(4)	(4)	(4)
Net assets arising from defined benefit obligations included in Other assets
	156	176	134	156
Net defined benefit asset
	152	172	130	152
Weighted average duration of the benefit payments reflected in the defined
benefit obligation (years)
	11.3	11.4	10.9	10.9

As at the most recent reporting dates of the schemes, the aggregate surplus of net market value of assets over the value of accrued benefits on a

funding basis was $71 million (2023: $53 million surplus). In 2024, the Group made defined benefit contributions totaling $2 million (2023: $2 million). It

expects to make contributions of approximately $2 million next financial year.

Governance of the schemes and funding of the defined benefit sections

The main defined benefit superannuation schemes in which the Group participates operate under trust law and are managed and administered on behalf

of the members in accordance with the terms of the relevant trust deed and rules and all relevant legislation. These schemes have corporate trustees,

which are wholly owned subsidiaries of the Group. The trustees are the legal owners of the assets, which are held separately from the assets of the

Group, and are responsible for setting investment policy and agreeing funding requirements with the employer through the triennial actuarial valuation

process.

The Group has defined benefit arrangements in Australia, Japan, New Zealand, Philippines, Taiwan and United Kingdom. The defined benefit section of the

ANZ Australian Staff Superannuation Scheme, the ANZ UK Staff Pension Scheme and the ANZ National Retirement Scheme in New Zealand are the three

largest plans. They have been closed to new members since 1987, 2004 and 1991 respectively. None of the schemes had a material deficit, or surplus,

at the last funding valuation. The Group has no present liability under any of the schemes’ trust deeds to fund a deficit (measured on a funding basis). A

contingent liability of the Group may arise if any of the schemes were wound up.

On 24 June 2024, the trustees of the ANZ UK Staff Pension Scheme (Scheme) executed a AUD 455 million bulk annuity insurance policy. The insurance

policy was purchased using the existing assets of the Scheme. The transaction secured an insurance asset that fully matches pension liabilities of the

Scheme and is therefore measured at an amount that matches the insured scheme liabilities. The Group retains ultimate responsibility for the benefits

provided to the Scheme members. In accordance with AASB 119 Employee Benefits, the impact of this transaction was to record a remeasurement loss

of AUD 15 million in other comprehensive income.

Recognition and measurement

Defined benefit superannuation schemes

The Group operates a small number of defined benefit schemes. Independent actuaries calculate the liability and expenses related to

providing benefits to employees under each defined benefit scheme. They use the Projected Unit Credit Method to value the liabilities. The

balance sheet includes:

• a defined benefit liability if the obligation is greater than the fair value of the schemes assets; and

• an asset (capped to its recoverable amount) if the fair value of the assets is greater than the obligation.

In each reporting period, the movements in the net defined benefit liability are recognised as follows:

• the net movement relating to the current period’s service cost, net interest on the defined benefit liability, past service costs and other costs

(such as the effects of any curtailments and settlements) as operating expenses;

• remeasurements of the net defined benefit liability (which comprise actuarial gains and losses and return on scheme assets, excluding

interest income included in net interest) directly in retained earnings through other comprehensive income; and

• contributions of the Group directly against the net defined benefit position.

Defined contribution superannuation schemes

The Group operates a number of defined contribution schemes. It also contributes (according to local law, in the various countries in which it

operates) to Government and other plans that have the characteristics of defined contribution plans. The Group’s contributions to these

schemes are recognised as personnel expenses when they are incurred

.

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29. Superannuation and post employment benefit obligations (continued)

Key judgements and estimates

The main assumptions we use in valuing defined benefit obligations are listed in the table below. A change to any assumptions, or applying

different assumptions, could have an effect on the Statement of Other Comprehensive Income and Balance Sheet

.

			Sensitivity analysis
			change in significant
			assumptions
				Increase/(decrease) in
				defined benefit obligation
				2024
				$m
					2023
					$m
Consolidated
	2024	2023
Discount rate (% p.a.)	1.5-5.35
		1.15-5.6	0.5% increase	(45)	(43)
Future salary increases (% p.a.)	2.0-3.7
		2.0-3.5
Future pension indexation
In payment (% p.a.)/In deferment (% p.a.)	2.3-3.3/2.8
		2.9-3.4/2.8	0.5% increase	36	34
Life expectancy at age 60 for current pensioners			1 year increase
				34	33
– Males (years)	26.3-28.4
		26.3-28.3
– Females (years)	29.3-30.3
		29.2-30.2

			Sensitivity analysis
			change in significant
			assumptions
				Increase/(decrease) in
				defined benefit obligation
				2024
				$m
					2023
					$m
The Company
	2024	2023
Discount rate (% p.a.)	5.0-5.35
		5.5-5.6	0.5% increase	(39)	(38)
Future salary increases (% p.a.)	3.5
		3.5
Future pension indexation
In payment (% p.a.)/In deferment (% p.a.)	2.6-3.3/2.8
		2.9-3.3/2.8	0.5% increase
				30
					29
Life expectancy at age 60 for current pensioners			1 year increase
				30
					29
– Males (years)	26.3-28.4
		26.3-28.3
– Females (years)	29.3-30.3
		29.2-30.2

190 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

30. Employee share and option plans

The Group operates a number of employee share and option schemes under the ANZ Employee Share Acquisition Plan and the ANZ Share Option Plan

which are operated by the Company. These are Group share-based payment arrangements under which shares in ANZGHL (ANZ shares) are allocated or

granted to employees of the Group.

ANZ Employee Share Acquisition Plan

ANZ Employee Share Acquisition Plan schemes that operated during 2024 and 2023 were the Deferred Share Plan and the Variable Pay to Shares (VPS)

Offer. The ANZ Incentive Plan (ANZIP) (the variable remuneration plan operating across the Group) has Short Term Variable Remuneration or Variable

Remuneration delivered under the Deferred Share Plan or ANZ Share Option Plan for eligible employees.

Deferred Share Plan

i) ANZ Incentive Plan (ANZIP) – Short Term Variable Remuneration (STVR) and Variable Remuneration (VR) – deferred shares

Award Type
	STVR (deferred shares)	STVR/VR historical (deferred
		shares)
			VR (deferred shares)	VR historical (deferred
				shares)
Eligibility
	Chief Executive Officer (CEO), Group Executive Committee
	(ExCo) and Group General Manager Internal Audit (GGM IA)
	1
	.
			All other employees (excluding select roles in the United
			Kingdom (UK)/China/Hong Kong (HK)
			2
			).
Financial Year (FY)
of grant
	2023 and 2022 Performance
	and Remuneration Review
	(PRR): granted in FY24 &
	FY23
		Historical grants: on foot
		during FY24 & FY23
			Grants from 1 Oct 2023:
			granted in FY24
				2023 and 2022 PRR:
				granted in FY24 & FY23
				Historical grants: on foot
				during FY24 & FY23
Grant approach	50% of the CEO, ExCo and
	GGM IA’s Short Term Variable
	Remuneration (STVR)
	deferred as shares.
		50% of the CEO’s STVR, 25%
		of ExCo’s Variable
		Remuneration (VR) (except for
		the Chief Risk Officer (CRO)),
		and 33% of the CRO and
		GGM IA’s VR, deferred as
		shares.
			If VR is at or exceeds AUD
			125,000, then 40% of total
			VR amount is deferred as
			shares.
				If VR is at or exceeds AUD
				100,000, then 60% of total
				VR amount is deferred as
				shares.
Conditions
	Deferred over years two and three, where year 1 includes the
	performance period (i.e., 1 October to 30 September). Granted
	in late November.
			Deferred over a minimum of
			four years (including the
			performance period), vesting
			no faster than on a pro-rata
			basis and only after two
			years (i.e., 33% year two,
			33% year three, 34% year
			four).
				Deferred over years two,
				three and four, where year 1
				includes the performance
				period. Granted in late
				November.
Allocation value	Deferred shares granted
	based on the Volume
	Weighted Average Price
	(VWAP) of ANZ shares traded
	on the ASX in the five trading
	days leading up to and
	including 1 October.
		Deferred shares granted based on the VWAP of ANZ shares traded on the ASX in the five
		trading days leading up to and including the date of grant.

1.

All ANZGHL/ANZBGL Financial Accountability Regime (FAR) Accountable Executives.

2.

Specific deferral arrangements also exist under ANZIP for roles defined as specific country level Material Risk Takers (MRTs), in line with local regulatory requirements.

i

i) Exceptional circumstances

Remuneration
forgone
	In exceptional circumstances, we grant deferred shares to certain employees when they start with the Group to
	compensate them for remuneration they have forgone from their previous employer. The vesting period generally
	aligns with the remaining vesting period of the remuneration they have forgone, and therefore varies between grants.
Retention	We may grant deferred shares to high performing employees who are regarded as a significant retention risk to the
	Group.

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30. Employee share and option plans (continued)

iii) Further information

Cessation
	Unless the Board
	1
	decides otherwise, employees forfeit their unvested deferred shares if they resign, are terminated on
	notice, or are dismissed for serious misconduct. The deferred shares may be held in trust beyond the deferral period.
Dividends
	Dividends are reinvested in the Dividend Reinvestment Plan.
Instrument
	Deferred share rights may be granted instead of deferred shares in some countries as locally appropriate (see deferred
	share rights Section).
Expensing value (fair
value)
	We expense the fair value of deferred shares on a straight-line basis over the relevant vesting period and we recognise
	the expense as a share-based compensation expense with a corresponding increase in equity. Deferred shares are
	expensed based on the one-day VWAP at the date of grant.
2024 and 2023 grants
	During the 2024 year, we granted 2,863,800 deferred shares (2023: 2,244,181) with a weighted average allocation
	value of $24.45 (2023: $24.37).
Downward adjustment
	Deferred shares remain at risk and the Board has the discretion to adjust the number of deferred shares downwards,
	including to zero at any time before the vesting date (malus), and limited to select employees
	2
	, recovery post vesting
	(i.e., clawback). The Group’s downward adjustment provisions are detailed in Section 4.5 of the 2024 Remuneration
	Report.
	Board discretion was exercised to apply malus to 4,138 deferred shares in 2024 (2023: nil).

1.

References to ‘the Board’ throughout this note means the Boards of ANZGHL and ANZBGL.

2.

Clawback applies to the CEO, ExCo and GGM IA (for awards granted in the 2023 and 2024 financial years), and to select senior employees in jurisdictions where clawback regulations apply.

Variable Pay to Shares (VPS) Offer

Eligibility, grant
approach and
conditions
	VPS provides employees in Australia the opportunity to receive up to $1,000 worth of ANZ shares with concessional
	tax treatment (where criteria are met). All ANZ shares are held by a custodian or nominee appointed by the Trustee on
	the Trustee’s behalf and are restricted for 3 years. During this time employees benefit from dividend payments which
	are reinvested through the Dividend Reinvestment Plan (DRP) and have voting entitlements. After the restriction period
	has been reached the shares can sold or transferred.
Allocation value
	Granted based on the VWAP of ANZ shares traded on the ASX in the five trading days leading up to and including the
	date of grant.
Expensing value
(fair value)
	Expensed based on the one-day VWAP at the date of grant.
2024 grants
	During the 2024 year, we granted 51,619 shares on 22 November 2023 (2023: 55,600) at an issue price of $24.20
	(2023: $24.46).

Expensing of the ANZ Employee Share Acquisition Plan

Expensing value
(fair value)
	The fair value of shares we granted during 2024 under the Deferred Share Plan and VPS Offer, measured as at the
	date of grant of the shares, is $71.4 million (2023: $56.5 million) based on 2,915,419 shares
	(2023: 2,299,781) with a weighted average VWAP of $24.48 (2023: $24.57).

192 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

30. Employee share and option plans (continued)

ANZ Share Option Plan

Allocation
	We may grant selected employees options/rights which entitle them to acquire fully paid ordinary ANZ shares at a
	fixed price at the time the options/rights vest. Voting and dividend rights will be attached to the ordinary shares
	allocated on exercise of the options/rights.
	Each option/right entitles the holder to one ordinary share subject to the terms and conditions imposed on grant.
	Exercise price of options, determined in accordance with the rules of the plan, is generally based on the VWAP of the
	shares traded on the ASX in the week leading up to and including the date of grant. For rights, the exercise price is nil.
Rules
	Prior to the exercise of the option/right, if ANZ changes its share capital due to a bonus share issue, pro-rata new
	share issue or reorganisation, the following adjustments are required:
	• Issue of bonus shares - When the holder exercises their option, they are also entitled to be issued the number of
	bonus shares they would have been entitled to had they held the underlying shares at the time of the bonus issue;
	• Pro-rata share offer - We will adjust the exercise price of the option in the manner set out in the ASX Listing Rules;
	and
	• Reorganisation - In respect of rights, if there is a bonus issue or reorganisation of ANZ’s share capital, then the
	Board may adjust the number of rights or the number of underlying shares so that there is no advantage or
	disadvantage to the holder.
	Holders otherwise have no other entitlements to participate:
	• in any new issue of ANZ securities before they exercise their options/rights; or
	• in a share issue of a body corporate other than ANZ (such as a subsidiary).
	Any portion of the award which vests may, at the Boards discretion, be satisfied by a cash equivalent payment rather
	than shares.
Expensing value
(fair value)
	We expense the fair value of options/rights on a straight-line basis over the relevant vesting period and we recognise
	the expense as a share-based compensation expense with a corresponding increase in equity. Factors considered in
	determining the fair value include: the market performance conditions, share price volatility, life of the instrument,
	dividend yield, and share price at grant date.
Satisfying vesting
	Any portion of the award of options/rights (that have met the applicable time and performance conditions) may be
	satisfied by a cash equivalent payment rather than shares at Board discretion.
	In financial year 2024, all deferred share rights were satisfied through a share allocation, other than 95,968 deferred
	share rights (2023: 70,231) for which a cash payment was made.
	100% of the performance rights (PR) granted in late 2019 (2019 PR award) were lapsed, as the performance hurdles
	were not met when tested in November 2023 – the end of the performance period. There were no PR due to vest in
	financial year 2023, as a result of a change in the performance period from three years to four years.
Cessation
	The provisions that apply if the employee’s employment ends are in Section 8.2.3 of the 2024 Remuneration Report.
Downward adjustment
	As per Deferred Share Plan.

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30. Employee share and option plans (continued)

Option plans that operated during 2024 and 2023

i) Long Term Variable Remuneration (LTVR) and Variable Remuneration (VR) - restricted rights (RR), performance rights (PR), and deferred share

rights (DSR)

Award Type	LTVR (RR & PR)	LTVR / VR historical (PR)	ANZIP VR (DSR)	ANZIP historical VR (DSR)
Eligibility	CEO, ExCo and GGM IA
	1
		CEO and ExCo
		1
			All other employees (excluding select roles in the
			UK/China/HK
			2
			) in countries where DSR may be granted
			instead of deferred shares
FY of grant	2023 and 2022 PRR: granted
	in FY24 & FY23
		Historical grants: on foot during
		FY24 & FY23
			Grants from 1 Oct
			2023: granted in FY24
				2023 and 2022 PRR:
				granted in FY24 & FY23
				Historical grants: on foot
				during FY24 & FY23
Grant approach	50% of the CEO and ExCo’s
	(except for the CRO) LTVR was
	received as RR and 50% as PR.
	100% of the CRO and GGM
	IA’s LTVR was received as RR.
		100% of the CEO’s LTVR and
		50% of ExCo’s VR (except for
		the CRO who received 50% VR
		as DSR instead) was received
		as PR.
			If VR is at or exceeds
			AUD 125,000, then
			40% of total VR amount
			is deferred.
				If VR is at or exceeds AUD
				100,000, then 60% of total
				VR amount is deferred.
Conditions	RR and PR provide a right to
	acquire one ordinary ANZ share
	at nil cost – subject to time and
	performance conditions.
	Awarded subject to:
	• RR: pre grant assessment
	(risk-based measures)
	• RR and PR: shareholder
	approval at Annual General
	Meeting (AGM) for CEO
	award
	Performance condition tested
	at end of four-year
	performance period:
	• RR: pre vest assessment
	(risk-based measures)
	• PR: relative and absolute
	Total Shareholder Return
	(TSR) hurdles
	Deferral period
	3
	= four-year
	performance period
	(commencing 1 October) +
	holding period (which
	commences the day after end
	of performance period and
	finishes on the 4
	th
	, 5
	th
	or 6
	th
	anniversary of grants (CEO only
	for year 6)).
	Further details provided in
	Section 9.1 of the 2024
	Remuneration Report.
		Awarded at the end of the year
		subject to shareholder
		approval at AGM for CEO
		award.
		PR performance condition
		tested (relative and absolute
		TSR hurdles) at the end of
		four-year performance period.
		The four-year performance
		period commenced on 22
		November to 21 November
		four years later.
		The deferral period is four
		years.
		Further details are provided in
		Section 5.2.3a of the 2021
		Remuneration Report.
			DSR provide a right to
			acquire one ordinary
			ANZ share at nil cost
			after a specified vesting
			period.
			Deferred over a
			minimum of four years
			(including the
			performance period),
			vesting no faster than
			on a pro-rata basis and
			only after two years (i.e.,
			33% year two, 33%
			year three, 34% year
			four).
				DSR provide a right to
				acquire one ordinary ANZ
				share at nil cost after a
				specified vesting period.
				Deferred over years two,
				three and four, where year 1
				includes the performance
				period.
Allocation	value Face value of ANZ shares traded on the ASX in the five trading
	days leading up to and including 1 October (beginning of the
	financial year).
			The fair value at the date of grant is used to determine
			the number of DSR to be allocated and is also used for
			expensing purposes. The fair value is adjusted for the
			absence of dividends during the vesting period.

1.

All ANZGHL/ANZBGL FAR Accountable Executives.

2.

Specific deferral arrangements also exist under ANZIP for roles defined as specific country level MRTs, in line with local regulatory requirements.

3.

A dividend equivalent payment (DEP) is paid in cash at the end of the relevant deferral period, but is only made to the extent that all or part of the underlying rights meet the relevant performance

condition and vest to the individual. Dividend equivalents accrue over the full deferral period for RR, and only during the holding period for PR.

194 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

30. Employee share and option plans (continued)

Award Type	LTVR (RR & PR)	LTVR / VR historical (PR)	ANZIP VR (DSR)	ANZIP historical VR (DSR)
Allocation timing	LTVR awarded around late November/December (subject to
	shareholder approval for CEO).
			Granted in late November.
	Start of FY	End of FY
2024 grants	During 2024, we granted
	376,821 RR and 313,156 PR
	(2023: 393,419 RR and
	325,880 PR).
			During 2024, we granted 3,588,912 DSR (no
			performance hurdles)
			(2023: 2,386,278).
Downward
adjustment
	Board discretion was not exercised to apply malus or clawback
	to any RR or PR in 2024 (2023: nil PR).
			Board discretion was not exercised to apply malus or
			clawback to any deferred share rights in 2024
			(2023: nil).

ii) Exceptional circumstances

Remuneration forgone

As per Deferred Share Plan in countries where DSR may be granted instead of deferred shares.

Retention

Options, deferred share rights, restricted rights and performance rights on issue

As at 7 November 2024, there were 487 holders of 6,177,236 DSR on issue, 11 holders of 739,812 RR on issue and 11 holders of 1,427,926 PR on

issue.

Options/rights movements

This table shows the options/rights over unissued ANZ shares and their related weighted average (WA) exercise prices as at the beginning and end of

2024 and the movements during 2024:

	Opening
	balance
	1 Oct 2023	Granted	Forfeited
			1
				Expired	Exercised
						Closing
						balance
						30 Sep 2024
Number of options/rights
	6,719,516	4,278,889	(632,985)	0	(2,014,320)	8,351,100
WA exercise price
	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
WA closing share price						$27.34
WA remaining contractual life						1.8 years
WA exercise price of all exercisable
options/rights outstanding
						$0.00
Outstanding exercisable options/rights						118,965

This table shows the options/rights over unissued ANZ shares and their related weighted average exercise prices as at the beginning and end of 2023

and the movements during 2023:

	Opening
	balance
	1 Oct 2022	Granted	Forfeited
			1
				Expired	Exercised
						Closing
						balance
						30 Sep 2023
Number of options/rights	6,209,040	3,105,577	(428,483)	0	(2,166,618)	6,719,516
WA exercise price	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
WA closing share price
						$24.30
WA remaining contractual life						1.9 years
WA exercise price of all exercisable
options/rights outstanding
						$0.00
Outstanding exercisable options/rights						124,377

1.

Refers to any circumstance where equity can be forfeited (for example on cessation, downward adjustment or performance conditions not met).

All of the shares issued as a result of the exercise of options/rights during 2024 and 2023, were issued at a nil exercise price.

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30. Employee share and option plans (continued)

As at the date of the signing of the Directors’ Report on 7 November 2024:

• no options/rights over ordinary shares have been granted since the end of 2024; and

• 6,126 shares issued as a result of the exercise of options/rights since the end of 2024, all with a nil exercise price.

Fair value assumptions

When determining the fair value, we apply the standard market techniques for valuation, including Monte Carlo and/or Black Scholes pricing models. We

do so in accordance with the requirements of AASB 2 Share-based Payments. The models take into account early exercise of vested equity, non-

transferability and internal/external performance hurdles (if any).

The table below shows the significant assumptions we used as inputs into our fair value calculation of instruments granted during the period. We present

the values as weighted averages, but the specific values we use for each allocation are the ones we use for the fair value calculation.

		2024
					2023
	Deferred
	share
	rights
		Restricted
		rights
			Performance
			rights
				Deferred
				share
				rights
					Restricted
					rights
						Performance
						rights
Exercise price ($)	0.00	0.00	0.00	0.00	0.00	0.00
Share closing price at grant date ($)	24.38	24.66	24.60	24.67	24.54	24.51
Expected volatility of ANZ share price (%)
1
	19.98	20.0	20.0	20.0	20.0	20.0
Equity term (years)	2.1	6.6	6.6	2.1	6.6	6.6
Vesting period (years)	2.0	4.6	4.6	2.0	4.6	4.6
Expected life (years)	2.0	4.6	4.6	2.0	4.6	4.6
Expected dividend yield (%)	6.5	6.5	6.5	6.25	6.25	6.25
Risk free interest rate (%)	4.18	4.03	4.05	3.20	3.36	3.36
Fair value ($)	21.44	10.32	18.44	21.81	18.61	9.85

1.

Expected volatility represents a measure of the amount by which ANZ’s share price is expected to fluctuate over the life of the rights. The measure of volatility used in the model is the annualised standard

deviation of the continuously compounded rates of return on the historical share price over a defined period of time preceding the date of grant. This historical average annualised volatility is then used to

estimate a reasonable expected volatility over the expected life of the rights.

Satisfying equity awards

All shares underpinning equity awards may be purchased on market, reallocated or be newly issued shares, or a combination.

The equity we purchased on market during the 2024 financial year (either under the ANZ Employee Share Acquisition Plan and the ANZ Share Option

Plan, or to satisfy options or rights) for all employees amounted to 5,211,778 shares at an average price of $24.17 per share (2023: 816,023 shares at

an average price of $24.35 per share).

196 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

31. Related party disclosures

Key Management Personnel compensation

Key Management Personnel (KMP) are Directors of ANZBGL (whether executive directors or otherwise), and those personnel with a key responsibility for

the strategic direction and management of the Group (i.e., members of the Group Executive Committee (ExCo)) who have Financial Accountability Regime

(FAR) accountability and who report to the CEO. KMP compensation included within total personnel expenses in Note 4 Operating expenses is as follows:

	Consolidated
	2024	2023
		1
	$'000	$'000
Short-term benefits
	20,017	21,072
Post-employment benefits	572	483
Other long-term benefits
	280	212
Termination benefits
	-	31
Share-based payments
	11,199	8,303
Total
	32,068	30,101

1.

Includes former disclosed KMP until the end of their employment.

Key Management Personnel loan transactions

Loans made to KMP are made in the ordinary course of business and on normal commercial terms and conditions that are no more favourable than those

given to other employees or customers, including the term of the loan, security required and the interest rate. No amounts have been written off during the

period, or individual provisions raised in respect of these balances. Details of the terms and conditions of lending products can be found on anz.com. The

aggregate balance of loans (including credit card balances) made, guaranteed or secured, and undrawn facilities to KMP including their related parties,

were as follows:

	Consolidated		The Company
	2024	2023	2024	2023
	$'000	$'000	$'000	$'000
Loans advanced
1
	23,447	30,555	13,211	20,150
Undrawn facilities
1
	2,319	1,685	1,995	1,373
Interest charged
2
	1,078	1,346	778	523

1.

Balances are as at balance date (for KMP in office at balance date) or at the date of cessation of former KMP. Comparative balances have been adjusted for balances relating to new KMP, or KMP who

departed in the prior year.

2.

Interest charged is for all KMP’s during the period.

Key Management Personnel holdings of ANZ securities

KMP, including their related parties, held the Company’s subordinated debt and shares, share rights and options over shares in ANZGHL directly, indirectly

or beneficially as shown below

:

	Consolidated
	2024	2023
	Number	Number
Shares, options and rights
1
	3,613,895	3,410,800
Subordinated debt
1
	20,180	21,140

1.

Balances are as at balance date (for KMP in office at balance date) or at the date of cessation of former KMP. Comparative balances have been adjusted for balances relating to new KMP, or KMP who

departed in the prior year.

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31. Related party disclosures (continued)

Other transactions of Key Management Personnel and their related parties

The aggregate of deposits of KMP and their related parties with the Group were $44 million (2023: $41 million) and with the Company were $30 million

(2023: $27 million).

Other transactions with KMP and their related parties include amounts paid to the Group in respect of investment management service fees, brokerage

and bank fees and charges. The Group has reimbursed KMP for the costs incurred for security and secretarial services associated with the performance

of their duties. These transactions are conducted on normal commercial terms and conditions no more favourable than those given to other employees or

customers. Gifts were provided to KMP, including on their retirement, amounting to $7,005 during the year (2023: $2,476).

Associates

We disclose significant associates in Note 26 Investments in associates. During the course of the financial year, transactions conducted with all associates

were on terms equivalent to those made on an arm’s length basis.

	Consolidated		The Company
	2024	2023	2024	2023
	$'000	$'000	$'000	$'000
Amounts receivable from associates
	19	13	-	-
Amounts payable to associates	1,064	990	-	-
Interest revenue from associates
	-	9,391	-	7,860
Interest expense to associates
	76	353	-	307
Other revenue from associates
	-	5,816	-	5,816
Other expenses paid to associates
	2,933	3,088	-	704
Dividend income from associates
	13,771	42,316	-	-
Undrawn facilities
1
	919	931	-	-

1.

Comparatives have been amended to include unutilised limits from revolving credit facilities.

There have been no material guarantees given or received. No amounts receivable from associates have been written-off during the period, nor individual

provisions raised in respect of these balances.

Subsidiaries

We disclose material controlled entities in Note 25 Controlled entities. During the financial year, subsidiaries conducted transactions with each other and

with associates on terms equivalent to those on an arm’s length basis. As at 30 September 2024, we consider all outstanding amounts on these

transactions to be fully collectible.

Other intragroup transactions include providing management and administrative services, staff training, data processing facilities, transfer of tax losses,

and the leasing of premises and equipment. The Company also issued letters of comfort and guarantees in respect of certain subsidiaries in the normal

course of business.

198 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

31. Related Party Disclosures (continued)

Related Entities

Transactions with related entities include leasing arrangements, funding activities, deposits and tax funding arrangements.

These transactions are conducted on terms equivalent to those on an arm’s length basis. As at 30 September 2024, we consider all outstanding amounts

on these transactions to be fully recoverable.

The following balances with related ANZ Group entities were outstanding at 30 September:

	2024
	$m
		2023
		$m
Amounts due from ultimate controlling entity
	36	85
Amounts due from other related entities
	755	696
Amounts due to ultimate controlling entity
	10	1
Amount due to parent entity
	47	-
Amounts due to other related entities
	315	270
Deposits from ultimate controlling entity
	1,258	183
Deposits from other related entities
	165	111
Undrawn facilities for other related entities	105	31

The following transactions occurred with related ANZ Group entities:

	2024
	$m
		2023
		$m
Dividend paid to parent entity
	5,267	4,387
Capital return to parent entity
	2,039	-
Interest paid to ultimate controlling entity
	28	6
Interest paid to other related entities
	45	26
Other expenses paid to other related entities
	7	-
Interest received from other related entities
	64	42
Other revenue received from other related entities
	34	18

In addition, ANZBGL has right-of-use assets of $536 million (2023: $689 million) and lease liabilities of $672 million (2023: $815 million) with ANZ Group

Services Pty Ltd at 30 September 2024. For the year ended 30 September 2024, the associated depreciation on the right-of-use assets was $43 million

(2023: $36 million) and interest paid on the lease liabilities was $29 million (2023: $15 million) (the interest paid on lease liabilities has been included in the

table above within interest paid to other related entities).

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32. Commitments, contingent liabilities and contingent assets

Credit related commitments and contingencies

	Consolidated		The Company
	2024	2023	2024	2023
	$m	$m	$m	$m
Contract amount of:
Undrawn facilities	249,988	240,711	204,782	206,405
Guarantees and letters of credit
	22,509	23,556	19,515	20,816
Performance related contingencies
	26,501	26,615	25,944	25,891
Total
	298,998	290,882	250,241	253,112

Undrawn facilities

The majority of undrawn facilities are subject to customers maintaining specific credit and other requirements or conditions. Many of these facilities are

expected to be only partially used, and others may never be used at all. As such, the total of the nominal principal amounts is not necessarily

representative of future liquidity risks or future cash requirements. Based on the earliest date on which the Group may be required to pay, the full amount

of undrawn facilities for the Group mature within 12 months.

Guarantees, letters of credit and performance related contingencies

Guarantees, letters of credit and performance related contingencies relate to transactions that the Group has entered into as principal.

Letters of credit involve the Group issuing letters of credit guaranteeing payment in favour of an exporter. They are secured against an underlying

shipment of goods or backed by a confirmatory letter of credit from another bank.

Performance-related contingencies are liabilities that oblige the Group to make payments to a third party if the customer fails to fulfil its non-monetary

obligations under the contract.

To reflect the risks associated with these transactions, we apply the same credit origination, portfolio management and collateral requirements that we

apply to loans. The contract amount represents the maximum potential amount that we could lose if the counterparty fails to meet its financial obligations.

As the facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements. Based on the earliest date

on which the Group may be required to pay, the full amount of guarantees and letters of credit and performance-related contingencies for the Group

mature within 12 months.

Other contingent liabilities

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 (refer to Note 22 Other provisions) and/or disclosures as deemed appropriate have been made. In some

instances we have not disclosed the estimated financial impact of the individual items either because it is not practicable to do so or because such

disclosure may prejudice the interests of the Group.

A description of contingent liabilities and contingent assets as at 30 September 2024 is set out below.

Regulatory and customer exposures

The Group regularly engages with its domestic and international regulators and other statutory and supervisory bodies. The nature of these regulatory

interactions can be wide ranging and include regulatory investigations, surveillance and reviews, reportable situations, formal and informal inquiries and

regulatory supervisory activities in Australia and globally. The Group also receives notices and requests for information from its regulators and other bodies

from time to time as part of both industry-wide and Group-specific reviews and makes disclosures to its regulators at its own instigation.

There has been a recent increase in the number of matters on which the Group has engaged with its regulators. Recent interactions relate to matters

including:

• markets transactions and data reporting;

• anti-money laundering and counter-terrorism financing obligations, processes and procedures; and

• non-financial risk management practices including customer service processes relating to complaints, hardship and deceased estates, compliance

with mandatory reporting obligations, the application of interest and fees on certain products and the financial accountability regime.

The possible exposures associated with the Group’s regulatory interactions may include civil enforcement actions, criminal proceedings, fines and

penalties, imposition of capital or liquidity requirements, customer remediation, the requirement to conduct independent reviews, sanctions or the exercise

of other regulatory powers.

There may also be exposures to customers, third parties and shareholders which are additional to any regulatory exposures. These could include class

actions or claims for compensation or other remedies.

The outcomes and total costs associated with these possible regulatory, customer and other exposures remain uncertain.

200 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

32. Commitments, contingent liabilities and contingent assets (continued)

Other contingent liabilities (continued)

South African rate action

In February 2017, the South African Competition Commission commenced proceedings against local and international banks including the Company

alleging breaches of the cartel provisions of the South African Competition Act in respect of trading in the South African rand. The potential civil penalty or

other financial impact is uncertain.

Esanda dealer car loan litigation

In August 2020, a class action was brought against the Company alleging unfair conduct, misleading or deceptive conduct and equitable mistake in

relation to the use of flex commissions in dealer arranged Esanda car loans. An agreement to settle the claim was reached in October 2024. The

Company will pay $85 million in settlement, which is covered by existing provisions held at 30 September 2024. The settlement is without admission of

liability and remains subject to court approval.

Onepath superannuation litigation

In December 2020, a class action was brought against OnePath Custodians, OnePath Life and the Company alleging that OnePath Custodians breached

its obligations under superannuation legislation, and its duties as trustee, in respect of superannuation investments and fees. The claim also alleges that

the Company was involved in some of OnePath Custodians’ investment breaches. An agreement to settle the claim was reached in October 2024. The

Company will contribute $14 million to the settlement, which is covered by existing provisions held at 30 September 2024. The settlement is without

admission of liability and remains subject to court approval.

New Zealand loan information litigation

In September 2021, a representative proceeding was brought against ANZ Bank New Zealand Limited, alleging breaches of disclosure requirements

under consumer credit legislation in respect of variation letters sent to certain loan customers. ANZ Bank New Zealand Limited is defending the allegations.

Credit cards litigation

In November 2021, a class action was brought against the Company alleging that certain interest terms in credit card contracts were unfair contract

terms and that it was unconscionable for the Company to rely on them. An agreement to settle the claim was reached in March 2024. The Company will

pay $57.5 million in settlement, which is covered by existing provisions held at 30 September 2024. The settlement is without admission of liability and

remains subject to court approval.

Security recovery actions

Various claims have been made or are anticipated, arising from security recovery actions taken to resolve impaired assets. These claims will be defended.

Warranties, indemnities and performance management fees

The Group has provided warranties, indemnities and other commitments in favour of the seller/purchaser and other persons in connection with various

acquisitions/disposals of businesses and assets and other transactions, covering a range of matters and risks. It is exposed to claims under those

warranties, indemnities and commitments, some of which are currently active. The outcomes and total costs associated with these exposures remain

uncertain.

The Group has entered an arrangement to pay performance management fees to external fund managers in the event predetermined performance

criteria are satisfied in relation to certain Group investments. The satisfaction of the performance criteria and associated performance management fee

remains uncertain.

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32. Commitments, contingent liabilities and contingent assets (continued)

Other contingent liabilities (continued)

Clearing and settlement obligations

Certain group companies have a commitment to comply with rules governing various clearing and settlement arrangements which could result in a credit

risk exposure and loss if another member institution fails to settle its payment clearing activities. The Group’s potential exposure arising from these

arrangements is unquantifiable in advance.

Certain group companies hold memberships of central clearing houses, including ASX Clear (Futures), London Clearing House (LCH) SwapClear, Korea

Exchange (KRX), Hong Kong Exchange (HKEX), the Clearing Corporation of India, Taiwan Futures Exchange and the Shanghai Clearing House. These

memberships allow the relevant group company to centrally clear derivative instruments in line with cross-border regulatory requirements. Common to all

of these memberships is the requirement for the relevant group company to make default fund contributions. In the event of a default by another

member, the relevant group company could potentially be required to commit additional default fund contributions which are unquantifiable in advance.

Parent entity guarantees

Certain group companies have issued letters of comfort and guarantees in respect of certain subsidiaries in the normal course of business. Under these

letters and guarantees, the issuing entity undertakes to ensure that those subsidiaries continue to meet their financial obligations, subject to certain

conditions including that the subsidiary remains a controlled entity.

Sale of Grindlays business

On 31 July 2000, the Company completed the sale to Standard Chartered Bank (SCB) of ANZ Grindlays Bank Limited (Grindlays) and certain other

businesses. The Company provided warranties and indemnities relating to those businesses.

The indemnified matters include civil penalty proceedings and criminal prosecutions brought by Indian authorities against Grindlays and certain of its

officers, in relation to certain transactions conducted in 1991 that are alleged to have breached the Foreign Exchange Regulation Act, 1973. Civil penalties

were imposed in 2007 which are the subject of ongoing appeals.

Contingent assets

National Housing Bank

The Company is pursuing recovery of the proceeds of certain disputed cheques which were credited to the account of a former Grindlays customer in

the early 1990s.

The disputed cheques were drawn on the National Housing Bank (NHB) in India. Proceedings between Grindlays and NHB concerning the proceeds of the

cheques were resolved in early 2002.

Recovery is now being pursued from the estate of the Grindlays customer who received the cheque proceeds. Any amounts recovered are to be shared

between the Company and NHB.

202 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

33. Auditor fees

	Consolidated		The Company
	2024	2023	2024	2023
	$’000	$’000	$’000	$’000
KPMG Australia
Audit or review of financial reports	11,016	9,567	10,486	9,134
Audit-related services
1
	4,597	3,882	4,528	3,808
Non-audit services
2
	27	10	27	10
Total
3
	15,640	13,459	15,041	12,952
Overseas related practices of KPMG Australia
Audit or review of financial reports	5,930	6,157	2,058	1,994
Audit-related services
1
	2,191	1,933	809	911
Non-audit services
2
	153	95	-	-
Total
	8,274	8,185	2,867	2,905
Total auditor fees
4
	23,914	21,644	17,908	15,857

1.

Group audit-related services comprise prudential and regulatory services of $4.16 million (2023: $4.11 million), comfort letters $0.72 million (2023: $0.57 million) and other services $1.91 million

(2023: $1.14 million). Company audit-related services comprise prudential and regulatory services of $3.76 million (2023: $3.69 million), comfort letters $0.68 million (2023: $0.53 million) and other

services $0.90 million (2023: $0.50 million).

2.

The nature of non-audit services for the Group includes methodology, procedural, operational and administrative reviews. Further details are provided in the Directors’ Report.

3.

Inclusive of goods and services tax.

4.

Total auditor fees do not include fees paid to other audit firms where KPMG is in joint audit arrangement or not the auditor amounting to $0.80 million (2023: $0.55 million) for the Group. Total fees paid to

other audit firms where KPMG is in a joint audit arrangement or not the auditor amounting to $0.56 million (2023: $0.45 million) for the Company.

Under Group policy, KPMG Australia or any of its related practices are allowed to provide assurance and other audit-related services that, while outside the

scope of the statutory audit, are consistent with the role of an external auditor. These include prudential and regulatory reviews requested by regulators

such as APRA. Any other services that are not audit or audit-related services are non-audit services. Group policy allows certain non-audit services to be

provided where the service would not contravene auditor independence requirements. KPMG Australia or any of its related practices may not provide

services that are perceived to be in conflict with the role of the external auditor or breach auditor independence. These include consulting advice and

subcontracting of operational activities normally undertaken by management, and engagements where the external auditor may ultimately be required to

express an opinion on its own work.

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34.

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.

	2024
Assets acquired and liabilities assumed as at acquisition date (provisional)
	$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 ~$6,900 million

respectively.

The Group incurred acquisition-related costs of $21 million (2023: $12 million) on legal fees and due diligence costs, recognised in Other operating

expenses in the Income Statement.

204 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report

34.

Suncorp Bank acquisition (continued)

Recognition and measurement

Business combinations are accounted for using the acquisition method of accounting. The cost of acquisition is measured at the fair value

of the transferred consideration, including where relevant, any contingent consideration. Acquisition-related costs are expensed when

incurred. Identifiable assets and liabilities, along with contingent consideration, are valued at their fair values on the acquisition date.

Goodwill is calculated as the excess of the consideration over the net of identifiable assets and liabilities. The acquired business operations

are included in our financial statements from the acquisition date.

35. Events since the end of the financial year

Other than matters outlined in the Financial Report, there have been no significant events from 30 September 2024 to the date of signing this report.

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